Microsoft is not stodgy, just mature

Ross Peat says of competition: "Bring it on. let's go". Picture / Richard Robinson

There's an old saying that once you're on top, the only way to go is down.

Such is the fate some technology industry observers are predicting for Microsoft as newer and hungrier competitors take aim at its business.

The world's biggest software firm, they say, has become old, stodgy and vulnerable to faster, more innovative firms such as search engine king Google, or its traditional rival, Apple. If Microsoft isn't careful, it could lose much of its market power.

Microsoft New Zealand managing director Ross Peat welcomes the challenge with a cowboy-like: "Bring it on, let's go".

Competition is energising, he says, and while Google has done well, there is still room for innovation in the search field.

"There's a long way to go in terms of providing what people are really looking for.

"When they search for something, they're really looking for an answer, not a link or URL. We see a lot of opportunity to innovate in that space. We think we're just on the cusp of that from a technology perspective."

As for Microsoft being old and stodgy, he prefers the term "mature".

Peat started at Microsoft in 1992 and says the company was "very much the challenger" at the time.

It grew into its "adolescent" phase a few years later with the release of Windows 95 and it's only been in the past five years or so that is has really matured by branching into other areas and rethinking its approach.

"I think there's been a maturing in terms of the psychology of the organisation ... There was a lot of internal reflection about who we are, what we mean, what we can achieve in this worldwide market."

The same could be said for Peat. The 42-year-old is married with three children and spends much of his spare time as his family's "home network administrator". He's a serious man, but admits somewhat ashamedly to watching Desperate Housewives.

He majored in zoology at Otago University, then spent a year as a teacher. After that he spent three years travelling abroad where, among other things, he became a qualified truck driver in Australia. When he "got that out of his system", he returned home to work for IBM for nine years, before moving to Microsoft.

Now, his company faces the same problems faced by all mature firms - how to continue profit and revenue growth.

The answer, Peat says, is a two-pronged approach.

First up is the reorganisation of traditional business. The software company has been moving away from selling its products in boxes and more toward online delivery through its Live service, a method that introduces huge cost savings and increases the profitability of existing revenue streams.

Of course, high-quality broadband services are a necessary backbone for such a delivery model, and improvements to New Zealand's offerings are something Peat has reportedly pushed for behind closed doors.

On the record, Peat says a broadband solution needs to be found that pleases all parties, and that the current debate over the topic is great.

"We haven't been energetic enough about it in the past."

The second growth driver for Microsoft is its expansion into new markets, with the Xbox video game console and Origami "ultra-mobile PC" being good examples.

The Xbox and its successor, the 360, are key in that they've provided Microsoft with a foothold in the consumer electronics market.

Origami - a small computer that's bigger than a personal digital assistant but smaller than a laptop - is also "a category that's really going to grow legs."

The device is part of Microsoft's response to Apple's iPod music and video player. Peat likes the iPod, but says it's a single-use device whereas the Origami can perform just about any function a PC can.

ROSS PEAT

Next big thing in tech: Gene therapy and sequencing.
Favourite gadget: His iMate Smartphone.
Spare time: "I'm an outdoor guy, so I like to go skiing and fishing."
Alternative career: "It plays a little to my passion about education. It's not about being a teacher but it's being both a learner and a coach in some ways, but I can't put a job title around it."
Favourite sci-fi movie: The Matrix .