“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,” John Siracusa writes for Ars technica.
“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 it’s competent, intelligent, practiced execution of a well-honed plan to maintain its dominance, Microsoft will assure its eventual demise,” Siracusa writes.
“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,” Siracusa writes. “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?”
Full article here.
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Smeet first post
MS is on a long straight fall
all Hail King Jobes
i don’t like admitting it but MS will stick.. and for longer than anyone wishes. The large crowd hasn’t even heard of OS X and what it might be.. even if they have an ipod!
when vista arrives, os x will stand in the shade of a large mountain… .
I long for the day MS is gone, but they won’t for a long time… that’s the hard reality 🙁 MS is everywhere… literally…. dadgum
Moooh ha ha ha my plan is working. Soon my greatest secret weapon will be unleashed you’ll all be powerless to stop it! Your puny little Mac marketplace is no match for the DARK SIDE!
I like Microsoft bashers and I think this guy is a retard.
First Post
Tommy Boy is right – this dude is making no sense. Microsoft, or any other company in a market dominant position need not “risk it all” to maintain dominance. Sure, they cannot sit still as the market changes, but that doesn’t mean their only other option is to “throw away decades of hard work”.
MDN word: big
A concentrated and constant virus attack on Windows and Office in all their incarnations, past, present and future, could make Microsoft irrelevant in 3 or 4 years.
R.I.P Microsoft.
You will be missed… NOT!
(so long and thanks for all the fish!)
I think he has a good point – to maintain success, you need to keep succeeding, and that means destroying and reinventing yourself. Something that Airlines have not been able to do, as an example. There were many people who said simply “TWA (or Continental or etc…) is too big to completely disappear” and “everyone needs to fly, it’s not like travel by air is going anywhere” – well, people still fly, but airlines have been failing and shutting down.
A good example of destroying and reinventing yourself is what Steve has done at Apple. Clones? Kill ’em. Computers? Beige boxes? Dump them. Blue iMacs. Cubes. (even big industrial design failures have been good for Apple). iMacs are the most popular design of computer in a decade? Replace them with something else – new iMac lamp-style. New OS that’s a departure from OS 9. Really got your business humming? Switch to another chip architecture! Your iPod mini is your best selling model? It hasn’t even peaked yet in sales? Toss it. Give ’em something better.
These are huge risks, but with huge potential upside. And most of them have paid off big for Apple. Think Apple’s market share is too small? Just IMAGINE what it would be like if the OS was still in 9.x model and the computers looked like … well Dells, let’s say. Without the blueberry iMac, the iPod, OS X, and all these other innovations, Apple would be defunct by now.
If Windows wants to survive, much less thrive, it needs to start tossing off the old tired parts and start anew. Unfortunately, it has a huge mass with a lot of inertia, and that makes the task very difficult. The installed user base makes it even more difficult. It’s either innovate or die in today’s business world. Granted, Microsoft would take a long time to starve to death due to its fat reserves, but it could definitely happen, and don’t think it’s too far-fetched or just some fanboi fantasy. It’s just business.
All it takes is for enough business and personal users to find other sources to fulfill their needs. Once a critical threshold is crossed, then it’s a downhill ride to the boneyard.
The question is, can the marketplace find ready replacements for XP and Office that do everything they need? Will enough people adopt Linux and Mac? Will Open Office mature to the point where it can work for the masses?
Time will tell, but the next 18 months are shaping up to be a pretty entertaining soap opera.
re: me:
First Post
Tommy Boy is right – this dude is making no sense. Microsoft, or any other company in a market dominant position need not “risk it all” to maintain dominance. Sure, they cannot sit still as the market changes, but that doesn’t mean their only other option is to “throw away decades of hard work”.
—-
You obviously don’t know alot about business.
ALL companies, whether big mono-corporations or tiny one man companies all have one thing in common.
And that is to continually improve, innovate and create new cash streams.
Microsoft will have to make the choice eventutally of ditching it’s legacy to survive.
History is full of companies the size of Microsoft that went down because of what exactly Microsoft is doing.
Microsoft is re-active NOT pro-active in creating new markets.
This is why it is just a matter of time before it happens.
Just look at Quark and Adobe!
Quark was compliacent because it had 99% of the dtp market. What happens? They treat their customers like crap with inferior upgrades and crap customer service and vastly overpriced products (same as what Microsoft have been doing for 20 years) and along comes the under-dog (Adobe).
Adobe now has basically killed quark’s quark XPress with their cheaply priced Creative Suite. Quark cannot compete because for the last 10 years all they have been doing is patching their cash cow and not creating new products.
The same will happen with Microsoft and Apple. Microsoft has billions on cash and god know how many people working for them – but still cannot bring products to market as fast as smaller companies (e.g Apple).
And when they do the product is always inferior to the competition’s products which came out years before too.
If I was in charge of Microsoft I would be having alot of sleepless nights, because Apple, Google, Sony and Adobe amongst others are slowly tearing away at Microsoft, piece by piece on all fronts by creating more relevent, innovative and commercial products.
To prove this – compare the share prices of Microsoft and Apple.
Then you will see exactly what I mean.
Windows NT was an experiment to see if the masses would embrace a newer, more advanced system, albeit for a higher price.
Redmond heard their reply for cheap compatibility. Now MS is hurding all that legacy turd ranch along behind their new Vista.
Actually he DOES make sense …and points out that any kind of transition like this takes time. Microsoft has been, from its very beginning a late adopter of technologies. This has been both positive and negative for them. They’ve gained market dominance but got too big to remain agile. If you’ve seen some of the new online tools (still embryonic like http://www.numsum.com) and seen the latest version of the open source tools like OpenOffice it’s not hard to understand why Microsoft wrote that recent memo about the “sea change”. Microsoft as a company has been stung badly several times by being late to the party. They are late again but not AS late when it comes to providing online software tools. Their new initiative is still nascent, and clearly has some flaws. Unless they take some bigger risks and begin moving to change their business model (unless of course you LIKE the Software Assurance program) their market share will inevitably erode. Free software and free online tools to accomplish a huge number of tasks that previously would have required tools that sell for over $300 (think Excel and Word) will have an enormous impact on Microsoft.
Petey, PR:
EXACTLY. Well said.
Beleauguered?
Oops, sticky typing. That shoud read, “beleaguered?”
hd, I completely agree. Microsoft is not showing any signs of defeat, and although I’d love to see them die pityfully, they will not, at least not for a very very very long time.
I’ve said this before but it is worth repeating. Schwinn Bicycle is a good example.
Schwinn was for decades the big force in bicycles worldwide. They could dictate to tire makers and other sources what will and will not be made. The public viewed them as a maker of quality products with outstanding service.
But things changed. The company was big and it was hard to move on a dime. Their factories went from being state of the art to highly outdated as materials and welding technology changed. They were slow to react to the mountain bike craze, at first being dismissive because the idea didn’t originate with them. By the time they got on board it was too late to change the situation. The family owned business was lost in bankruptcy.
A couple of differences are important. Schwinn didn’t have the massive stockpile of cash that MS has – that might have enabled them to hold on longer. But, MS is much bigger and needs more cash just to maintain their overhead. Another difference is shareholders. Schwinn was privately owned so they only had to answer to the family. MS must answer, at some point, to shareholders.
The big boys can fall.
The bets have already been mad and Microsoft is a loser. Apple dumped the traditonal OS model it had been working with. It had years of hard work invested in the OS 9.x series, advertising, support systems, etc. Their bet was that a bullet proof, robust, industrial strength OS that only recently had become practical to run on current hardware, coupled to an Apple-style GUI was the future. Thus, OS X was born.
Microsoft had the same choice to make, and even appeared to be placing the right bet with Longhorn/Vista, but in the end they hedged and eventually backed away. Vista will be Win2000 service pack 5 or so, instead of a Windows GUI linked to a unix or linux kernel.
Was it Gates’ ego? Was it just too complicated? Were there simply too many pieces of persoanl turf to conserve? Probably all of these. I don’t think there is any one person or group at MS who still knows how Windows works. It’s simply too big and too complex. It’s out of control. But instead of killing the beast and starting over they’ve tried to erect yet another set of fences to tame it. Sad.
The basic premise is sound, evolution only happens when you have death in a system. No death, no change. By defending its castle, MS will not be able to evolve. Eventually it will die however, but perhaps too late for change …
MS is huge and its costs to run itself per month are as well. Once the market begins switching to Linux AND Mac OS x, and OpenOffice. MS will not have enough cash coming in to pay the 800lb. gorrilla that it is. Then they have to start trimming staff to keep the line black instead of red.
Lather rinse repeat….
I agree with the writer. MS will die from defensive disease. You only have to look at how little innovation comes from it to see the only thing it has left is the monopolistic legacy.
Something very Enron-like is going on at Microsoft. Just a hunch.
MS has a strong plan going forward in the b2b realm.
wait 3 years and they will be as strong as ever.
unix is nice, osx is pretty, but ms has and will improve upon their nice business tools. plus, .net is actually a nice platform.
ars technica vastly underestimates MS. so does everyone who thinks they are dying.
apple wins for consumers, ms for business.
“I don’t think there is any one person or group at MS who still knows how Windows works. It’s simply too big and too complex. It’s out of control. But instead of killing the beast and starting over they’ve tried to erect yet another set of fences to tame it. Sad.” –Zeke
Great analogy Zeke. It does seem puzzling at first that for Microsoft to succeed in the long term they must throw their current dominance out of the window. The Eastern idea that opposites such as success and defeat are often intertwined is often lost upon the western world.
History is full of examples of pseudo-monopolies being toppled by emerging technologies. 20 years ago Sony was king of portable audio and had a large share of the home entertainment market. Now the Walkman is defunct, with the iPod being the new king. 15 years ago nobody would have thought the phone companies would be going anywhere for a long time. Now landlines are pretty much irrelevant, with cell phones and voip.
Microsoft is trying to defend their turf, their dominance of OS and office applications. However, a new wave is coming, including traditional software that is vastly superior, and web-based software that is accessible and affordable (usually free). Microsoft must be willing to risk everything to compete with this new wave, possibly giving Windows and MS Office away for free. Even then it might not be able to compete due to outdated technology. Windows is like a 1979 Ford Pinto with 500,000 miles on it. MS must start over and get rid of that legacy, no matter who cries about backwards compatibility.
“A man is born gentle and weak.
At his death he is hard and stiff.
Green plants are tender and filled with sap.
At their death they are withered and dry.
Therefore the stiff and unbending is the disciple of death.
The gentle and yielding is the disciple of life.
Thus an army without flexibility never wins a battle.
A tree that is unbending is easily broken.
The hard and strong will fall.
The soft and weak will overcome.”
Lao Tsu
Tao Te Ching:76
Microsoft is re-active NOT pro-active in creating new markets
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Well to their credit.. they are pushing things like IPTV, Speech recog and Tablets.. things that other people do not succeed at, yet.
You know.. finding ways to install Windows on books, TV’s, furniture.. that kind of thing
IBM’s downfall??? That isn’t quite accurate. IBM has exited the personal computing platform with the sale of of that division to Lenovo, IBM is still alive and well.
You must think back to a time before computers ever existed to understand IBM. Upon their foundation, IBM wanted to make working easier and more productive for businesses. They worked with machines that helped achieve that. This included with typewriters, accounting machines and any number of other areas. They grew and shifted as market forces demanded, which in the 1950’s and 60’s included electronic computing, which then in the 70’s and 80′ included personal computing. Today, people rarely think of the IBM of old because they were so closely associated with computers.
IBM has had different computing divisions, supercomputers, microprocessing, personal (sold to Lenovo) etc. They also have a significant consulting practice that yields far greater revenues for the company than personal computing did. They’ve remained true to their orignal principle of trying to help companies make work easier and more productive by this shift over the last 10 years into consulting. They’ve found areas they fell they can provide a competitive advantage and entered that market. Just because they sold one divison (for a very generous sum) doesn’t mean it was the downfall for the company. Only a change in the image many people had of IBM.
Look at it in relation to Apple and the Apple II, the Mac and the iPod. When the Apple II faded from the scene, it still had sold more units than the Apple II or the Macintosh. When they dicontinued that, it didn’t spell the end for Apple. And with the iPod, how many time have we, the mac faithful, heard that Apple is going to only concentrate on only the iPod and the Mac will eventually die. You know it’s not true. The company is diversified in different products and will continue to grow, diserify and change over the next 5, 10, 20 etc years. Expect the Apple you know today to look very different than the one you see in the future.