Risk it all or…risk it all.
I’ve been thinking about Microsoft a bit lately. I usually don’t comment on Windows or Microsoft itself in my articles, and that sometimes bothers readers, particularly Mac users. There’s a certain thirst for blood that’s not satisfied when I criticize some aspect of an Apple product and then don’t immediately append a qualifier that emphasizes how much worse the Microsoft equivalent is.
This kind of constant Apple/Microsoft comparison may make for exciting reading, but it also tends to lead to uninteresting flame-fests in the discussion thread. My natural inclination is to compare whatever I’m reviewing to my own ideals, rather than to the competition. Some might consider that a less relevant approach than a truly objective competitive analysis, but such things are extremely rare.
Anyway, the upshot is that the "M" word rarely appears in my articles. Sometimes it seems like I’m living in an Apple bubble, oblivious to the machinations of the company that dominates the experience of the entire (+/- 5%) personal computer market. That’s definitely not the case. I follow Microsoft with great interest. While I’m not generally a fan of Microsoft’s products, I also can’t help but be fascinated by the company, particularly its reaction to competition.
Microsoft displaced IBM as the dominant player in the PC software market partially because IBM was arrogant and complacent. While Microsoft may appear just as arrogant today, the mood is very different inside the company. A culture of paranoia helps to keep the company on its toes at all times. Microsoft works hard to convince itself that its downfall is just one smart start-up away. That may be overstating the case, but in the broader sense, its true. It’s probably not a coincidence that the former CEO of the dominant player in the PC hardware market shared this world view: only the paranoid survive.
So Microsoft has the first step to continued market dominance down cold: recognize that you are vulnerable. The second part is more difficult: effectively neutralize threats in a timely manner. A peek at the scorecard shows that Microsoft has sometimes stumbled in this area, missing the importance of “that Internet thing” in a fairly embarrassing manner, for example. For a time, it looked like Netscape, Sun, AOL, and friends had Microsoft in a corner. But the Big Dog came through in the end. Hey, winning ugly is still winning, right?
Today, there’s a new batch of competitors charging the windmill. The reaction from Redmond has looked eerily familiar thus far. Strategic acquisitions, embrace, extend, and extinguish, posturing for the press, and, let it not be left unsaid, investing heavily in its own technically impressive new products and technologies. It’s a comprehensive approach that has worked in the past, and there’s little reason to think it won’t work this time as well.
That said, I can’t help but think that Microsoft, like IBM before it, is indeed afflicted with a deadly corporate disease of which it is totally unaware, one that might lead to its eventual downfall. As Microsoft has repeatedly demonstrated, corporate paranoia is a tremendous strength when it comes to defending a dominant market position. On any reasonable timeline—years, even decades—things look rosy.
Microsoft’s mistake is subtle, but potentially fatal. It’s the seemingly reasonable assumption that defending its market position is the most important goal of any corporate strategy. Microsoft will fail by succeeding. Through its competent, intelligent, practiced execution of a well-honed plan to maintain its dominance, Microsoft will assure its eventual demise.
Put simply, to win in the long run, Microsoft must be willing to risk losing it all. It must be willing to put all its chips on the table, to throw away decades of hard-fought victories, proven technologies, and market-leading products. It must be willing to do what the long-extinct corporate giants of the past were not.
This is in direct opposition to their historic defense of their position at all costs. Maybe not today, maybe not next year, but at some point, risking it all will be the correct choice—perhaps the only choice. Will Microsoft be willing to do it? More critically, will Microsoft even be aware that this is an option? Or will the minds in Redmond grind down their gears while attempting to choose from a set of options that does not contain the sole winning strategy?
And I’m not just talking about risking existing products and technologies during a bid to to replace them with radically improved versions. That’s important too. Arguably, it’s happening already with WinFX positioned to replace Win32. But it’s still essentially a defense of the status quo.
Someday, the only winning move for Microsoft will be to abandon its defense of Windows, Office, et al. Microsoft’s uncanny ability to win depends on its ability to control the game itself. Eventually, the game will change.
If you bought into the Internet bubble hype, you might think this has happened already. It hasn’t. Windows and Office are still very important, and the company that controls them is still the king of the hill. Netscape learned this the hard way. Maybe Google will too, we’ll see. But time is not on Microsoft’s side here. If it’s not Google that finally subverts the power structure of the industry, then it’ll be someone else…eventually.
Microsoft’s best bet is not to wait for this fateful day, but to bring it about itself. Failing that, it has to at least be ready and willing to do what’s necessary when the time comes. To meet even this lesser challenge, Microsoft must first acknowledge the existence of the doomsday option. The next step is to know when to act. And when the time finally comes, there needs to be at least one person at Microsoft who will quietly but forcefully advise the corporate leadership: “There is one place that we have not looked, and it is there, only there, that we shall find the answer.”
Abandon Windows and Office? Sure, it sounds like madness. But a Microsoft that’s unwilling to do so is destined to fade into obscurity as it successfully defends a platform and product that are uncontested not because they’re the best, but because they’re irrelevant.
This article originally appeared at Ars Technica. It is reproduced here with permission.