Microsoft Gives Up on Innovation: From Software to Insurance


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On December 8, 2016, Microsoft apparently gave up on creating innovative new server software. Instead, it became an insurance company. Perhaps the Chairman spent too much time with Mr. Buffett, hearing about the great profits in insurance? 

On December 8, 2016, Microsoft announced in a badly written, poorly thought out blog post that it was extending support for both WS2008 and SQL Server 2008 for another 6 full years, until 2026. This post was authored by Mark Jewett, Senior Director of Cloud Platform Marketing, and Tiffany Wissner, Senior Director of Data Platform Marketing at Microsoft. "[Premium Assurance] helps you continue to meet compliance requirements and ensure security on systems you aren't ready to update," wrote Jewett and Wissner. The catch:

  • Premium Assurance provides security updates only for "Critical" and "Important" flaws.
  • Premium Assurance can only be added to licenses with active Software Assurance. Some licenses, for example, licenses purchased via a Microsoft Open licensing deal, are ineligible.
  • You need to start buying the insurance in early 2017 to get coverage at a fair price. Microsoft will discount Premium Assurance for the first 2 to 2.5 years of availability, a ploy to get companies to commit. Buy later in 2017, and the cost goes up by 58%. See the datasheet for details.
  • You pay every year for a decade.

I’m not a fan of insurance - I don’t like being worth more dead than alive. Life insurance, from my perspective, is a bet against yourself. The new Microsoft insurance scheme is a bet against innovation. Now, every inertia-driven ISV and IT organization can tell its customers running on servers that are already 8 years old: what you have is what you get - for the next decade. In other words, I have more important stuff to do. Not impressive.

Despite Microsoft’s claims that it helps its partners and customers move forward, move to the cloud, use containers and unlock new platforms like Hololens, the insurance business is proof that it is stuck in the past. All Microsoft's innovative and new technology runs only on the newest versions of its software. Not every customer is going to be fooled into the insurance plan. Many are likely to see through it.

The bottom line is that if you want to be the leader in any business, you need to innovate or your business will be disrupted by new entrants with new technology. In 2026, you had better not be running on WS2008 or SQL 2008 (which will be a doddering 18 years old by then). The original coders of those systems will likely be retired and enjoying their pensions by then.

 

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