Microsoft’s big innovation problem

What are the chances? Just a few weeks after Apple ousted iOS head Scott Forstall, Microsoft has dumped one of its own executives.

It’s a shocking move. Steven Sinofsky, a veteran of more than a decade, president of the Windows Division from 2009 and largely tipped to take over the top job when Steve Ballmer steps aside, said it was time for him to “take a step back from my responsibilities”.

It’s curious this decision comes just as Windows 8 is getting off the ground. Then again, given how badly both Surface and Windows 8 have been received, it’s maybe not that strange.

Perhaps, above all else, this is a lesson about innovation.

Sinofsky was responsible for the development of Windows 8. Through the entire process, he managed all the details – and he was even a driving force behind the company’s agenda to make Windows 8 split between the “Metro” view and the traditional desktop. It’s a strategy that’s been criticised plenty in the lead-up to Windows 8’s release.

Now, Microsoft says this isn’t a firing. But it’s extremely questionable that a key Windows executive would leave the tech giant just as its new operating system – which it claims is the best ever – is getting off the ground.

Just like Forstall, Sinofsky butted heads at Microsoft. Reuters reports he clashed with Bill Gates, who remains the company’s chairman, and ran into trouble with Steve Ballmer once or twice.

The markets aren’t so happy either, and shares fell 3% after the announcement was made. It’s easy to understand why.

Sinofsky was by all accounts a ruthless leader. He didn’t put up with people slacking off and was always searching for new ideas. Whether or not Windows 8 is a success, he at least oversaw a change in Microsoft’s direction.

Now, Steve Ballmer is left with not much else. He’s been notoriously wrong on all things to do with technology, unable to forecast significant industry changes. He’s slow to move, and as this telling Vanity Fair piece revealed earlier this year, may be hurting Microsoft’s ability to innovate through burdensome corporate structures, like firing anyone at the wrong end of a bell curve.

Innovate. That’s the key word there.

It was recently reported that Apple is spending more money on research and development than it ever has before. Microsoft, on the other hand, has released a new version of Windows that is by all accounts a step forward, and two steps back, from the previous versions.

Apart from Office, could you name another area where Microsoft has completely dominated the market?

The loss of Sinofsky is not the main issue here. It’s the fact that Steve Ballmer still remains in the top job. Under his watch, Microsoft simply hasn’t been able to innovate.

In short, the wrong Steve has been targeted here.

In a time when businesses, even SMEs, are experiencing changes month to month, putting an emphasis on innovation is critical. With Steve Ballmer at the helm, I’m not sure any innovation from Microsoft will come quickly enough.

You can follow Patrick Stafford on Twitter @pdstafford.