“How does a dominant company go from master of the market to irrelevant niche player? The example generally proffered at this point is Ford and GM. At one time Ford owned the American car market yet a scant few years later Ford found themselves looking up at GM. It is an interesting an enlightening exercise but not the most relevant to the world of computers. Hence a look at other companies that were once dominant then marginalized is obviously in order,” Chris Seibold writes for Apple Matters.
“Microsoft is primarily a software company so an inspection of a once giant, now nearly failed, software company is in order. There is no better example for this case than Wordperfect. At one time Wordperfect was synonymous with word processing, they made a reasonably good product and had a great name but now your are lucky to stumble across anyone who actually remembers using the once ubiquitous program let alone find someone who still uses the now venerable application. So were did Wordperfect go wrong? The app missed the Windows boat. When Microsoft Word was on Version 2 Word Perfect was just limping over to Windows,” Seibold writes.
“Lateness was not the only problem facing Wordperfect, they also had to contend with the fact that the key combinations that worked so well in DOS didn’t work as flawlessly in Windows. As more and more people switched to Microsoft Word Wordperfect began a slow spiral to obscurity,” Seibold writes. “Expecting Microsoft to make mistakes of the same magnitude of the makers of Wordperfect is a bit of stretch. You’d have to imagine things like an incredibly late version of Windows, one that was not only late but a release that didn’t offer any real incentive to upgrade and, further, failed to deliver on many of the promised features while the competition keeps churning out ever better products…. Wait a minute… Apple might be on to something here!”
Full article here.
Related MacDailyNews articles:
Microsoft’s Windows ‘Vista’ too little, too late; could be rough times ahead for Redmond – July 28, 2005 (“If Windows has only a third of U.S. desktops 10 years from now, historians will point to 2005-2006 as the period when Microsoft fumbled the ball for good.”)
How can this possibly apply to Apple? There are a number of very smart people who earnestly believe that Intel has a plethora of technological advances they are unable to implement because of Microsoft’s overarching desire for backwards compatibility.
Exactly!
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Erster Pfosten
CPU sales 1980
CPU sales 1990
CPU sales 1996-present
CPU sales 2006-2015?
chart could be a sine-wave
aka: tsunami crashes thru redmond’s vista
You know the writer’s on crack when he’s linking Ford to the phrase “irrelevant niche player.” Say what you want about Ford’s declining fortunes, but this writer’s basic premise is fundamentally wrong.
The time is ripe. Steve came back with a plan. Gates didn’t stand a chance.
Microsoft is not about to do a “word Perfect”. As a matter of fact, i think most analyst has it all wrong when they are focusing on windows and Vista. That fight is over. MS has 95% of that market, and are not about to loose it. BUT, the way Microsoft is fighting to win in the corporate space is not by making Windows better. (They should cause it stinks) What Microsoft is trying to do is another captive strategic move that will lock the corporate space to MS for the unforeseen future. MS is fighting on areas. Nr 1 is in the server arena and nr 2 is in integrating server and desktop product in such a way both functionally and pricewise that it will be almost impossible not to go for the whole productrange. Its difficult to find products that are less sexy than what Microsoft have, but it is also very difficult to find competitors that are even close strategically. MS has more feet on the street than anyone in the business, more partners than anyone, better pricingstrategy than anyone etc. The products stinks, but thats about all they got wrong. Apples history goes to tell (sadly) that it is not about product superiority.
big jerk: The first paragraph quoted says that this is not a relevant comparison.
He uses WordPerfect but that is also not relevant. Microsuck’s failures will be a totally different a delicious animal to witness. In fact all MS’s failures have not yet hurt it because they had no competition once Jobs exited Apple.
Microsoft’s stronghold over WordPerfect and Lotus 123 for that matter was entirely based in the OS development and timing to market of a ‘working’ Windows version.
If Apple can wrench the OS stranglehold away from MS on the desktop (as thegovernment failed to do in the courts), then MS products will have to compete on a level playing field. May will still succeed (Word, Excel), but many will fail (IE, PPoint, Access).
It’s the Mac OS that will gain big time and therefore the Macintosh computer. Micro$oft will stay dominant (51% is dominant) because of he IT people and corporate cheapness.
I think a better car analogy would be Ford and Toyota. I still don’t think of Toyota as “dominant”, but when you look at the numbers, they’ve got the marketshare and it is growing fast, in the US and worldwide.
Ford forgot about innovation. They are getting better. The cars are better. If you’ve given up on them, take another look. Ford has a long way to come as a company if they don’t want to fail entirely though.
A big difference between Ford and Microsoft, though is that Microsoft has an incredible number of Very Smart People ™. Not just in the US, but in Europe and China, where a position in MS is coveted and enormously competitive. Ford does not have this. Ford has a culture of people just doing their job, trying to save money at best, but not innovating.
Ford ACTS like a company in decline. Microsoft acts like a research firm. They seem to be having a great deal of difficulty bringing good products to market. That may be due to over-engineering, but it’s probably not because of a lack of interest. Microsoft lacks direction and vision. The name Vista shows that they are desperate for some vision. Bill Gates has a great many interests in people and technology, but is having trouble with a single vision of the future.
Apple’s greatest strength is the visionary Steve Jobs. Steve has an uncanny ability to take a heck of a lot of ideas and put a very few of them together in a synergistic way that is astounding. I don’t think Microsoft, or many other companies can comete with that.
We’re seeing the same thing with Ford and Toyota, but Toyota may be more like Walmart than Apple in this case. Toyota does it cheaper and more thoughtfully, but isn’t really visionary. Perhaps an even better analogy is NASA versus Scaled Composites. Scaled has a visionary in Burt Rutan. They are niche, but are growing VERY fast. They have a completely different way of approaching a problem than NASA.
NASA on the other hand has lots of Very Smart People, but are getting old. Some 60% are >50 years old. less than 4% are < 30 years old. I see no future for NASA. Without direct domestic competition NASA has been flying the Space Shuttle for billions of dollars per flight at this point.
NASA must shed this crippling legacy just as Microsoft must shed the crippling legacy of Windows, just as Apple shed the legacy of Mac OS 9 and 680X0. Intel probably wishes to shed the legacy of x86. If we don’t strive for the future the past will drag us down. India and China are going to eat the US and Europe in 15-20 years if big changes in US corporate culture don’t occur Very Soon!
He’s right in the fact that Ford was #1 and lost it.
GM has been #1 for 73 years and is about to loose it to Toyota.
I’m sure there is a lesson in here somewhere. Probably that, just because you are #1 don’t assume you’ll stay there forever without working hard and innovating. Hubris takes over when the much desired #1 position is attained, we have sure seen it with M$ they think they ARE the end all be all of the computer world, and that THEY should determine which direction it should take, but innovation isn’t linear just like the tangent that Apple took (iPod) that is helping to turn things around.
I would not say that “Steve came back with a plan”. He may have had a plan. but i don’t think it included the iPod and the Mini. He just got lucky.
that was very lucid naraas. nicely done!
A pleasure to read some of the intelligent comment on this thread, to the point that I feel no need to add my happence worth. Cheers.
Naraa Haras,
Nicely put, and nice post. To add to your point, Microsoft does have a very large number of VERY smart people, but most observers make the mistake of considering Microsoft a monolithic software organization. They are far from monolithic, and they are no longer really a software company. They are a now marketing company that happens to produce software.
It’s more accurate to think of them as a Balkanized federation of competing interests, with Gates acting the part of Marshal Tito. Gates actively </i>encourages</i> the disparate divisions to compete in a sort of Darwinian struggle, with the winning products being those that most conform to Gates strategy of remaining dominant, </i>not</i> the ones that are best, or most innovative. This means the ones that most promote vendor lock-in, and then the marketing battalions and spin teams, the true power brokers of Microsoft, take over.
Microsoft has lately been having problems attracting and retaining the best and brightest for this reason. Bright, enthusiastic minds are seeing their work marginalized or subordinated to the marketing imperative, and while they may receive generous financial compensation, they don’t feel fullfilled. Many bright folks see the monetary rewards as secondary to their work. Google, on the other hand, is attracting many top minds because they are perceived as being more focused on innovation, not domination. Dominance is merely a side-effect of their innovation.
JCL, VMS, CP/M, DOS, DomainOS, SunOS, Windows, OSX(?),
OS changes with time. It is just fact of life. OSX or Linux may replace Windows. There is probably another OS brewing up somewhere in this world getting ready replace which ever OS that replaces Windows.
Naraa Haras wrote “Toyota may be more like Walmart than Apple in this case. Toyota does it cheaper and more thoughtfully, but isn’t really visionary.”
Hybrid, VVTi, VVTL, VVTD, etc. May be you should visit their research lab web site at http://www.tytlabs.co.jp.
I forgot to discuss the topic
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As to whether Apple can slay the Microsoft Windows giant, it’s certainly possible, particularly if Microsoft continues to stumble with Vista. Historians like to point out that Hannibal’s devastating victory over the Romans at the Battle of Cannae in 216 B.C. (wherein an inferior Carthaginian force, in an unfavorable tactical position, completely overwhelmed and destroyed an entire, vastly larger, Roman army) was due not only to Hannibal’s unquestioned brilliance as a general, but also to the remarkable incompetence of the Roman commander, Varro. In other words, Apple has to continue to do everything right, and Microsoft everything wrong.
But it’s important to remember that Microsoft is now vastly more than just Windows, just as the Roman army at Cannae was not Rome. Windows may possibly lose its dominance, but it’s a mistake to think that Microsoft would wither away if this came to pass.
I agree, very nicely done Naraa Haras, except for the one point you made about Toyota not innovating. Not to get into a car discussion on a computer site, but, Toyota, Honda, and others seem to be a good analogy for the MS Apple comparison.
While GM and Ford were only concentrating on making huge behemoths of vehicles i.e., doing the “same ol’ same ol'” on different frames (Windows). Toyota and others were innovating in technology to make the car more efficient, and end user friendly (Apple, and to a lesser extent Linux).
Also, very nice to see some more intelligent posts on MDN for once. Instead of the “Macs rule Winders Drool” tripe that I sometimes see on here.
Me: I think you’re right – Steve got lucky. He was also lucky back in the ’70s when Apple made the Apple ][.
Regarding cars:
I for one, won’t buy a Toyota, ever.
Many years ago, a friend of mine bought a brand new Toyota of a new model, and as with all new cars, there was found to be bugs… The flaw in this case I think was timing chain related (I can’t quite recall – let’s just say it is). So, my friend books in his quarterly service, and notes to himself that the milage he’s done is quite a few thousand less than that recommended by Toyota to have the timing chain checked over due to this bug. The mechanics were quite busy, so weren’t able to service his car for two weeks.
Of course, what happens? During the two weeks, the problem rears it’s ugly head and screws my mate’s motor up – AU$3,500 in repairs. He complains to Toyota who won’t have a bar of it and won’t pay for the repairs, despite a) knowing it was a design flaw b) the milage was less than their recommendations and c) he’d already booked the car in for the service to have this bug taken care of. (what I don’t know is if the car was under warranty – prob. not as I think this happened before the half decade warranties now offered.)
Great customer service eh? So of course, being the dutiful citizen he is, warns everyone away from Toyota based upon the fact that they wouldn’t freely fix a wrecked motor from an already acknowledged design flaw which caused several thousand dollars in damage to his motor.
About the car company analogy, I’ve always felt that a car is like a computer. I’d like the computer to last as long as possible (at least 5 years). It will depreciate almost immediately, and be replaced months later by something (even slightly) more advanced. As for Apple becoming #1 again, I’d like to see that, but it’d be extremely hard to do. I think once GM became #1. Ford never regained that position.
I still lament that with WordPerfect changing hands so many times, it never updated its word processor to MacOS. Perhaps a MacOS version can be revived, in anticipation for next year’s Intel CPUs. I hope Apple can continue to release advanced hardware and software in a timely fashion.
The WordPerfect analogy isn’t quite right. The WordPerfect company was bought by Novell, but all Novell really wanted was the e-mail component, which ended up becoming GroupWise. Novell did nothing to develop WordPerfect, and then they sold it to Corel, who finally got it cought up to speed on the Windows platform, but by then it was too late. The market had spoken.
I still wish Corel hadn’t botched WordPerfect for the Mac. They tried too hard to make it like Microsoft Word rather than revelling in the differences that still make it a far superior word processor. I know I’m a rare animal. In my ideal alternate universe, Macs are found on many corporate desktops running WordPerfect 12 for the Mac.
Jens, Microsoft had a 90+% monopoly in Internet Explorer, with the browser wars long over. Along came Firefox, and now they are in the 80% range, and dropping every month. Monopolies, even Microsoft’s, can be successfully challenged, if their holder makes enough mistakes and enough users miserable, and a hot new contender arises that promises to make the users happy.
If you think Microsoft has business contacts, what about Oracle? They are practically Mr. Enterprise. Oracle is not only using Apple’s Xserve in house, but they are actively promoting it in connection with their products, to potential customers. Corporations that would not touch Apple alone are more likely to consider it with Oracle vouching for it.
Apple’s server offering Xserve has complete support for J2EE built in (just add a database of your choice, and Oracle would be glad to sell you one). Since OS X Server is built on open source, it also supports the AMP stack (a rising star in the enterprise world) as well as Linux (LAMP) can, only with easy to use configuration tools. There is even support for Open Directory, NT domain services, and distributed computing. Xserve plays nicely with Windows and Linux, as well as Mac. It scales well, from workstation, to powering some top supercomputers. Apple’s support is great, and the server is low cost. What more do you want?
Yes, I know all about Microsoft’s little control freak games, and their desire for a 1,000 year reign over the computer world. The name of Microsoft Research Project Millennium (aka Longhorn, in very crippled form as Vista) gives the game away. I don’t see them winning though, not with the way LAMP is scaring Microsoft, and not with Apple’s market share (and all important mind-share) gains in the enterprise.
Microsoft talks a lot about TCO, but what kind of TCO do their solutions have in a world of megavirus and megaworm attacks, rising push toward identity theft regulation (and accompanying lawsuits)? When Microsoft TCO become so expensive that no company can afford their lock-in schemes, Microsoft will go out with the trash, and the door will open to more secure offerings.
Apple is a different company than they were in the past, thanks to Steve Jobs. Apple isn’t alone anymore, either. There’s Linux, Apache, MySql, Open/Star Office, Firefox, Java, Sony and Nintendo, the entire Open Source community with its many corporate friends, and many more. It’s gang up on Microsoft time, with every battle on every front reopened at once and up for grabs. Microsoft, which can’t even get their “operating system for the next millennium” done on spec or on time, is caught with their pants and guard down. Customer anger is rising beyond the boiling point. Microsoft’s competitors have a new strategy: be excellent and pile on the big bad guy en masse.
Steve Ballmer: We have a strategy to handle this. Rest assured, we have had our focus groups on it for months now, and they have proposed a new name for our strategy sure to get us sued by the company down the street…
Bill Gates: Run!
Steve Ballmer: Developers, Developers, Developers, Heeelp!!!
[Muffled cries are heard as competitors and angry mob of customers bearing iTorches pile on from all sides.]
Never Buying Toyota,
Toyota uses timing belts not timing chains. Your rant is a classic example of FUD.