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Microsoft's Mid-Life Crisis

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After Thomas Watson Jr. retired from IBM, the company spent nearly two decades in drift, becoming vulnerable to the first "kid with a clue" who came along.

Fellow named Gates.

Now the generational shoe is on the other foot. Microsoft (MSFT) is going through its own mid-life crisis. Under Gates' successor, classmate Steve Ballmer, Microsoft has gone through strategies the way a Bloomingdale's shopper goes through sweaters.

Ballmer told ReadWriteWeb recently Microsoft will now become a consumer hardware company, building its own lines of tablets and game machines. This just as it prepares to bet the company on Windows 8, which depends heavily on hardware partners for its success.

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Being closer to 60 than 50 myself, this next sentence is hard to write. What Microsoft needs to do most is to get younger.

As Yankee Group founder Howard Anderson wrote recently at Information WeekMicrosoft is now 37. The problem is that most top managers joined near that founding, when analysts complained the company needed "adult supervision."

Anderson identifies Microsoft's problem as "hubris," the idea that it's bulletproof. Its cloud still wins in surveys of developers, as Information Week reports. Its Surface tablet may be priced competitively with the Apple iPad, as Business Insider notes.

That's not good enough.

Here is something I've told my kids since they were little. My father's generation created TV, but my generation defined it. My generation created the Internet, but your generation will define it.

Only by growing up with something, and taking it for granted, can you really see its flaws. My kids grew up with the Internet as a normal part of their lives. They see its flaws more clearly than I do.

Microsoft today is a disparate collection of businesses, all led by guys my age and even older. Microsoft has lost the hunger and is just hanging on, trying to tweak what the industry's leaders have and patenting it, going off in all sorts of directions.

Microsoft needs to trust someone under 30.

The PC and Internet eras look mature to us geezers, as I'm sure TV looked mature to the old men running it in the 1970s. But it was just starting. Young entrepreneurs like Ted Turner were just then thinking about how to transform it, with satellites, into 500 channels of nothing-on, turning broadcasting into narrowcasting.

Such people exist in today's Internet universe as well.

Some even work at Microsoft. The company has recently patented ideas like whacking a phone to turn it off, described at theFinancial Review, and an immersive full-room display like a Star Trek Holodeck, described by Ars Technica.

Microsoft Research is becoming like Xerox' old Palo Alto Research Center (PARC) -- that's not a compliment, as Stanford University reveals here. The company badly needs to invent a new future, and bring it to market under a new generation of leaders, before Bill & Steve become historical figures like the Bill & Dave of Hewlett-Packard did.

Time passes everyone by. What separates corporations from people is the potential immortality of raising up a new generation of leaders. In Redmond, that's overdue.

--Written by Dana Blackenhorn for TheStreet. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage. At the time of publication, Blankenhorn was long MSFT, but no longer knows why.