I've been looking at Microsoft from the inside and outside, and I have finally figured out the company's big problem. (Photo from the BBC.)

It's a lack of entrepreneurs.

Microsoft hires smart people, who have good ideas. But Microsoft has just one entrepreneur. His name is Bill Gates. Everyone else is a manager.

This is why Microsoft is looking more and more like IBM. This is precisely what happened to IBM itself, as Tom Watson Jr. exhausted his Last Big Idea (the IBM 360), suffered some heart problems (he recovered), and left the company in 1971, aged 55.

IBM, in the 1970s, became bureaucratic, it became backward-looking, it devoted itself wholly to the interests of its big customers. It became vulnerable to the first kid to come along with a Clue.

How can Microsoft solve its mid-life crisis?

• Good steps have already been taken. When you don't have any ideas give your money away and hope someone else comes up with something.
• Buy something insanely great. Buy those companies for their entrepreneurs, not just their technology, then give them their head.
• Start looking for Microsoft's Lou Gerstner, a seasoned manager with a big new idea that can take the company to the next level.
• Forget this process of deciding "what should Microsoft do" about Opportunity A, B, or C. Think instead of how you can help others pursue opportunities.
• Look to grow THE market, not just your market.
• Think about wireless networking as a platform. Devices aren't platforms, platforms are platforms.

Now, what about the man himself?

Bill Gates has reached a stage in his life where, if he's to commit to anything, it should be something outside the Microsoft campus. Might I suggest he take that $3 billion dividend check and, instead of just processing it through his foundation (as he normally would) consider, again, a "Gates Institute" that can integrate computing, communications, and higher education? I'm thinking of a real college, or at least a graduate school, in Seattle or somewhere just outside it, that can attract outside money and do for the Moore's Law disciplines what my alma mater did for oil back in the 1940s?

In other words, Bill, it's time you built your school. (And if you need a writing instructor, I'm available.)