Microsoft Playing "Follow the Leader"?

The big buzz around tech today is Microsoft's annual financial analyst meeting held yesterday. At the meeting, Microsoft trotted out a line of execs and talked about how rosy their company future is. My favorite version of the proceedings comes from BoomTown reporter Kara Swisher (summed up in her piece today: Slide Presentations From Microsoft's Financial Analyst Meeting). The most stunning revelation for me is that Microsoft seems not to get it at all.

CEO Steve Ballmer touts "slates" and "Windows Phone 7" while saying that Apple has sold more iPads than he wanted them to. His comments about the marketplace make it obvious that he has no idea how to lead or how to innovate. What Microsoft is doing is struggling to figure out which latest craze to follow, and they are now in the middle of a series of utter failures to innovate or compete on a number of products in multiple markets.

For example, their Xbox game system, while beloved by customers, loses money. They have had a string of embarrassments, from Windows Vista to the Microsoft Kin phones that lasted less than 90 days on the market. If it wasn't for their long-term cash cows of Windows and Office, Microsoft would be in serious financial trouble. As it is, they are right where many giant companies before them have been... before those companies either reinvented themselves or died. If it takes Microsoft longer than 24 months to introduce their next major version of Windows, they'll be in even more financial trouble. After all, the cloud may make operating systems virtually unimportant, rendering their big cash cow moot.

Regardless, innovation doesn't come from following others. It comes from imagining what could be, picturing how people would love to live, and then providing products that spark their creativity, imagination, and productivity.

Does that sound like any companies you know?

Competition is good for everyone, especially consumers. If Microsoft doesn't find a way to become a leader again, someone else will. In the meantime, Microsoft management will fight to keep from becoming completely irrelevant, and hurt consumers on their way down. Limiting the innovations of others and creating irrelevant products is a waste of time and energy, but it's the common path of the increasingly irrelevant.

Microsoft, it's time to lead, follow, or get out of the way.