Tuesday, October 11, 2005

Microsoft is old school

Or you might even say "slow school". Microsoft got their one big break about 30 years ago, when IBM thought it was a great idea to outsource the production of an operating system for their new computers. What turned out to be a grave mistake by IBM was also the greatest thing that ever happened to Microsoft. It gave them their glory days, but these are over now.

The operating system turned out to be the largest strategic advantage the next thirty years in computing history - period. This and mainly this made Microsoft what it is today, or what it was 6 years ago (the stock price has been flat since then). The strategic advantage gave Microsoft the ability to dominate almost all other applications related to the personal computer. They were not necessarily the best, but they could either price their way into the market like they did with Office and Explore or muscle their way with better knowledge of upcoming features in the operating system than their competitors. Office was very cheap when there was still competitors around, and Explore remains free till this day. But what about Open Office - its free - isn't that competition? No not yet! It doesn't have the distribution, but that's what we will see through Google most likely.

So where does that leave Microsoft today - a lean mean customer oriented machine ready for the ever changing future? No not really. They did great because of their strategic advantage, but they were never great and profitable because of superior products. Bill Gates was a great strategist, but never a great innovator. Explore is a copy of Netscape. Office is a copy of Wordperfect, Lotus 1-2-3 and more. Even Windows graphical interface was originally a copy of Apple's interface.

Internet changes the landscape. Power is shifting away from Microsoft due to one single very important fact: The most lucrative business in Internet and fastest growing area of matter in the IT world is NOT under influence by the operating system: Search. Microsoft can't control this - but have to fight their way into it, and be chosen by the consumer for once (first time?) and they are not doing all that well. It might come with a heavy integration into everything in the Vista operating system due for launch late next year, but it remains to be seen. That would be the old muscle approach.

Microsoft has never been competitive beyond their strategic advantage of the operating system and the next 5 years or so will show this. Its a large, heavy, slow, non-innovative, old school company of the time before Internet. This is a new playing field - Microsoft you don't belong here - or prove us otherwise!


Anonymous said...

Your blog is a waste of time.

Anders Kargaard Jensen said...

Haha.. nice one.. people would often say something like that, when they now, you are right. Sometime the truth hurts - Microsoft just never has been or never will be neither efficient or innovative..

Inactivist said...

Good points. I've never thought of MS as particularly innovative, and it has succeeded in large part due to a guaranteed revenue stream (much like Electronic Arts, which earns huge revenues due to owning the distribution channels).

Another perspective: Netscape is (was!) a copy of (inspired by) the NCSA Mosaic browser. Internet Explorer, in the early days, was actually based on a copy of the NCSA browser (Spyglass Mosaic).
and Here

Apple Mac GUI is a "copy" (inspired by) Xerox research and prior work.
and here
and here

Everything's a copy of something - very little original stuff out there.

Even the Mighty Google is not truly an original idea; it's an improvement on something someone else did first.

Anders Kargaard Jensen said...

Hi Rumpole!

Pretty good stuff there - you know the bits and pieces I must say ;)

I think its very true.. most is a copy of something..

Thanks for the information - I will check out those links!