Microsoft’s Slide Isn’t Surprising

It was quite a news item last week when Apple swiped from Microsoft’s head the crown for most valuable technology company. Supporters of Microsoft objected. Supporters of Apple rejoiced. Why was anybody surprised, though?

The Bill Gates era of dominating the computer business by taking advantage of a situation that required people to use the only game in town, ended just about 10 years ago when Gates stepped down as CEO. It’s anybody’s guess as to whether he left because he sensed the changed game or if the game changed in part because he left, but the timing coincided nonetheless. During Gates’s tenure at the top, Microsoft thrived by copying its competitors, outmarketing them, and leveraging the fact that it made the only operating system used by PCs. The need for files to be compatible guaranteed a steady stream of customers. Satisfaction was optional.

The industry isn’t like that anymore. Thanks to the rise of the internet, the walls of Microsoft’s PC monopoly crashed down around it. Compatibility as a reason to use Microsoft products disappeared, and once the company was subjected to the scrutiny of a customer free to choose the best product, it failed to retain much interest from any quarter. I should admit that the hands typing this are doing so on a Macintosh keyboard, but the reason for my conversion is what I just described. I grew tired of spending 15% of my work day fighting PC problems. I switched my entire office to Apple products, and can’t believe it took me so long. I actually enjoy working on my computer now. I would never have said that in my PC past.

I’m not alone in this. I attended the iPad launch at Apple’s Ginza store in Tokyo last Saturday, and it was breathtaking. The crowd surged in and out of the store like the wave of bodies at an airport or large amusement park or train platform. Faces lit up, voices oohed, and thousands of units by my estimation left the store under the arms of beaming new owners.

When was the last time you or anybody you know was excited by a Microsoft product? Aside from upgrades bloating hard drives with features nobody cares about, what do they even do anymore? Let’s see, they copied Sony to make the Xbox, they copied Google to make Bing, they copied the iPod to make the Zune, they copied Google’s ad system by trying to combine with Yahoo’s ad system, and Windows is still trying to catch up to the Mac OS. Nice resume. Instead of copying everybody badly, why doesn’t Microsoft spend some time figuring out what people want, and then developing it?

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  1. geoffrey
    Posted June 5, 2010 at 12:40 am | Permalink

    In some ways it is tragic to see what has happened to Microsoft in the last 5-10 years. In other ways, one has to look back at some of their shady, monopolistic practices from the 90s and think “what goes around, comes around.”

    I’m not a Microsoft fanboy by any means, but I don’t see them disappearing or losing significant maketshare. People may complain about their lack of innovation, but the fact remains that they still have over 80% share of the desktop PC market; I don’t see that going away. I recently built a new machine with Win7 and it’s pretty impressive.

    Nevertheless, Microsoft is losing ground in the desktop office suite with options like OpenOffice and GoogleDocs making serious headway. Our company recently dropped all support for MS Office, and now we must use OpenOffice (free) or buy MS Office out-of-pocket. Even with new releases like the forthcoming Office 2010, I don’t see Microsoft doing all that well. The bottom line is how many new Office releases do people need? Most would probably be fine with the version they bought 10 years ago. I wouldn’t trust GoogleDocs for anything private, but OpenOffice is pretty damn good and it gets better with every release.

    I think what I find most shocking about MS is their lack of innovation in the mobile phone market. Windows Mobile is pure junk. It’s slow. It’s buggy. The phones have no applications. I have a WinMo phone and never again. I know MS is pushing their new release of Window Phone 7, released sometime later this year, but too little, too late. There’s no way they’ll catch up with iPhone or Android. And if you read early press reports on WinPhone7, it’s turning out to be a trainwreck.

    Google and Apple are okay for me. Google’s privacy matters really concern me, so I pretty much only use it for search. Apple has way too much of a cult-following… BUT, they are marketing geniuses. They routinely convince people to pay a 50-100% premium on otherwise bland products (sorry, but the iPad is a joke). It will be interesting to see what the next couple years brings.

    • Posted June 5, 2010 at 9:04 am | Permalink

      Thanks for a great comment, Geoffrey. I’ll address the market share argument in a fresh article tomorrow morning. Here, I want to agree that OpenOffice and GoogleDocs are fantastic alternatives to Office. I, for one, have had no privacy issues with GDocs despite our using it more and more here in the office. For collaboration, especially quick to-do lists among team members, it can’t be beat. I can be working on a document of things to do while my designer is looking at it on her computer, and my changes flash right onto her document as she’s watching. Fabulous — and free!

      I agree about Microsoft’s bungling of the mobile phone market, but also search advertising and mobile music as well. They simply don’t have innovation in their corporate DNA, and it’s finally catching up to them now that the monopoly that made their lack of innovation moot is gone and people can choose where to spend their money.

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