I’m a big admirer of Bill Gates. He made the most of his lucky break when IBM, like a woolly mammoth thinking it would be nice to enjoy a warm day once in a while, chose to outsource the very operating system that ran its boxes. Chairman Bill created a global empire and perhaps for a time the only company on Earth that really mattered. Then he funded an enormous charitable foundation and has improved lives all over the world with his generous giving.
That said, does anybody who is not a partner or an analyst of MSFT (or an employee or contractor of MSFT) think a whole lot about Microsoft anymore? Or care what they do? It’s all the more remarkable a turn of events considering how MSFT was forced to withstand an anti-trust suit not long ago. David Boies took them on and lost. Then he went ahead and lost the case for Al Gore. He is having much more luck these days with tolerance for gay marriage – but none of that has anything to do with a diminished and relatively unimportant Microsoft.
Layoffs: 18,000 at MSFT
Recently Microsoft announced it is laying off 18,000 workers, the most in its history.
How many big software companies are laying off workers? How many cloud companies? How many big data companies? How many marketing automation companies? I don’t know for certain, but the answer is (except for lean start-ups that never get beyond hatchling stage) likely very few or none.
What’s going on?
I am not a Microsoft analyst but I do live in a world where I am forced to use Microsoft products. And I am going to take a wild guess and suggest that their increasing irrelevance has something to do with Microsoft’s historical inability to ever come up with a product people loved, or even very much liked. Yes, we all use Word, unless we use Apache Open Office or Google Docs. Yes, Microsoft servers are embedded in IT departments the world over. And thousands of technicians make good money making sure these rather clunky, buggy products work. And they do work.
Microsoft has a history of studying the market and then using its tremendous resources to come up with products that no one buys. Remember Zune, which was supposed to compete with the iPod? How about the seemingly endless releases of different types of laptablets that are wonders of mechanical engineering, and using a “single OS for everything” but where you hardly ever see anyone using one? What about the Microsoft OS for mobile? How much market share does that have? I would hazard a guess it is infinitesimal. (Microsoft defenders, please comment below).
An article at TUAW July 25, 2014 called “Microsoft Still Doesn’t Get Why the iPhone Succeeded” suggests Microsoft focuses too much on “work” and “productivity” for mobile, where the market is looking for “fun” stuff like taking pictures, editing them, sharing them, creating content, and a little bit of writing. Granted, the article comes from a pro-Apple source. But Microsoft is talking about spreadsheets on a mobile device, and it isn’t catching on.
What about Windows? Having successfully appropriated the icon-driven interface from Apple, MSFT went on to create a bloated monster of an OS that works, until it doesn’t. How many readers have Windows horror stories? Stuff that just doesn’t work. Stuff that gets lost. Product keys that are needed suddenly when they had never been needed before. Looping choices that never lead anywhere and the only way out is to reboot. Windows is still huge with techies because it’s what corporate America uses, and indeed Windows is pretty good these days (though I cannot say much for the whacky behavior found in Windows 8); but face it MSFT: the Mac OS is better for almost everyone who needs a laptop or a desktop. Notice I said almost.
Microsoft’s mediocrity in innovation goes back a ways.
In the early days of the Internet – the mid-1990s – Microsoft came out with a platform called MSN (MicroSoft Network), which was a sort of AOL (then already in decline) designed to either compete with or kill the Internet. Think of it as a mark of exceptional hubris that they believed they could compete with the Internet!
Today, MSN’s only incarnation beyond products at the MSFT company itself is as a meaningless part of a name for a cable news company, MSNBC, which was supposed to be a world-beating alliance between a software giant and a media giant but that split up some time ago. Well, anyway, we’ve got Rachel Maddow.
Microsoft is also well behind the market leaders in cloud services. Yes, they have a cloud service, and they are improving it rapidly. But the leaders are Amazon and Google; and meanwhile Microsoft continues to make money by licensing its bloated and inferior OS to every non-Apple PC maker. This, too, is heading in the wrong direction for Microsoft, as more and more activity takes place on computers that are not PCs or even desktops. And Microsoft does not have a dog in that hunt, or at least not one near the head of the pack.
Further, how many big Internet companies these days rely on Microsoft very much? Does Amazon? Does Facebook? Does Google? Does Shapchat? How many apps are built on the Microsoft platform? Not a lot.
Microsoft Is Here to Stay
Is Microsoft going away? Not a chance. They have lots and lots of money to spend, and as long as there is a PC there will be a Microsoft. But they’re a diminished company in many important ways (see above) and no one really clamors for their products (OK, Xbox). In all likelihood Microsoft will continue to float its giant ship in the waters of commerce, but most eyes will be on the speedboat races taking place between mobile and smart devices and clouds and robots and big data.
Now for an embarrassing disclosure: Because PC laptops are functional and cheap and I need it only for very basic tasks, I am writing this on one, using a very frustrating version of Windows 8 – but I said it above: as long as there are PCs and budget considerations, there will be Windows (and Microsoft).