Microsoft is comfortable in the corporate IT world. Everything has predicable release cycles because this is what the corporate world expects. Actually it is almost an unspoken demand and it percolates through all of Microsoft and its product release cycles.

For the most part this firm release cycle of two years has been a kind of common ground between the needs of the corporate world, which would have liked it to be longer, and the needs to keep the company name in front of the general consumer. One just has to look at the version releases of the two main products of the company, that being Windows and Office.

Corporation probably would have liked, and still do, a longer release cycle – in the order of four to five years – because the cost of capital outlay. This is the main reason why we still see major companies still using XP and IE6 along with their natural reticence to change itself.

On the other hand the consumers from the early days of DOS and Windows is a mixed bag of both those dying to try out the newest and coolest as soon as they can get their hands on it and then those who would only change when they bought new hardware.

While the corporate IT world hasn’t changed in regards for its desire for a long and stable upgrade cycle the consumer world is changing. It is changing because of the effect of the Web and how rapidly it changes. After all look at how fast things like Facebook and Twitter have taken hold and affected not only the Web but also the software and hardware we use.

The mobile world is a constant cycle of yearly upgrades as new technologies are rapidly prototyped and then brought to market. We have desktops, laptops, netbooks, smartphones and now a renewed interest in slates all clamoring for our attention. All these things change on a yearly basis, or less and so does our expectations of the software that drives them.

But Microsoft doesn’t do short release cycles because for them everything has to go by a timetable that their corporate customers can count on. It is because of this ever increasing sharp division between corporate and consumer needs that Microsoft needs to totally rethink how is separates its different divisions in relation to the targeted end user needs.

Nowhere has this been more obvious that the shit-kicking that Microsoft is taking in the mobile market. Even Ballmer himself has admitted that they screwed up and missed a generation in the mobile business (many, including myself, would say it is worse than that). The problem is that they still haven’t moved from that most basic release cycle mindset that has gotten them into this trouble with the consumer market.

Over at the WMPoweruser blog they asked the question: Does version 1.0 of WP7 need a front facing camera? Their reasoning being that they were coming into a market dominated by new versions of the iPhone and a new version of Android almost guaranteed to drop before WP7 hits. To me the more important question was if comparing a v1.0 to an already mature product was even fair.

However the fact that we even are asking questions is an example of how Microsoft is going to have to change its mindset when it comes to release cycles. As Paul Thurrott wrote in his post about the Kin

But I think the key to competing with the iPhones of the world will hinge in part on a constant updating of these specifications. In fact, the release of the iPhone 4 this year, with its amazingly high resolution screen and gyroscope, both of which impressively outclass Microsoft’s minimum specs for Windows Phone–speaks to this need. As each model year comes around–and I do think we need to think in those terms–the Windows Phone specs need to evolve to meet competitive threats.

Microsoft needs to understand that its business, if it is going to stay relevant, needs to become a two-headed beast. It can continue on with the status quo when it comes to the corporate world, hell they could increase the time of the release cycle and further enamor themselves with their corporate customers.

But when it comes to the consumers – you and me – they are going to have to take the famous web startup mantra of  launch early and iterate often to heart. This applies not only to something like Windows Phone 7 but also to things like Windows Live. After all how long has it taken them to develop and rollout Wave 4 of their social network during which Google has launched Buzz, Facebook has made more changes than you can count, and Twitter has grown non-stop.

It’s not like all those services didn’t have major problems but they have survived and continued to grow all the while Windows Live Wave 4 continues to rollout its beta. Microsoft’s strength with the corporate world is that predictability and reliance on timed cycles. It doesn’t have that same strength with the consumer and it is being beaten by far nimbler companies in this area, and this includes Apple.

Today’s consumer market is totally different than the early days of Microsoft and in this new consumer market Microsoft is in many ways no different than the hundreds of startups that we hear about every day. The only problem is that Microsoft doesn’t see itself this way and that is one of its biggest weaknesses it needs to comes to grip with.

Sooner rather than later.

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