When Microsoft first voiced its vision for a post-PC world at Comdex in 2000, I’m pretty sure that view did not include looking up at other technology companies.
But that’s exactly where Microsoft found itself on Oct. 1, when Google’s market capitalization eclipsed that of Microsoft. Both, of course, trail Apple, the world’s most valuable company. Apple passed Microsoft in 2010 with sales of iPhones and iPads. Now, Google has passed Microsoft by offering software that makes computing over the Internet easier and less expensive than on desktop machines.
The latter point is most interesting, because Microsoft saw this handwriting on the wall as early as 2000. At Comdex that year, Microsoft founder Bill Gates made it clear that the desktop would not be the primary focus for computing. He discussed Tablet PC, and Pocket PC, Microsoft’s branded foray into what would evolve from the PDA market into the smartphone market.
Gates expounded on .NET, which would enable network-based computing and further move the desktop from a computing powerhouse to an access point into this broader network. J.D. Hildebrand, then a columnist for SD Times, smartly observed: “Microsoft’s unbreakable lock on market leadership is tied to the desktop personal computer. Take away the PC, and Microsoft’s just another wannabe for the next paradigm. A wannabe with a gazillion dollars in the bank.”
Hildebrand saw Linux as the threat to Microsoft at that time because of its growth in server rooms. And no doubt Linux is a strong player there. But it is Android and iOS that are driving the tablet and smartphone markets. And these companies now, too, have a gazillion dollars in the bank.
So now, Microsoft finds itself in the unenviable position of having to play catch-up. If you’re a Microsoft stockholder, this borders on unconscionable. Microsoft saw this move away from desktop-centric computing more than a decade ago, but, because of its inability to ever break from its installed base, and its need to make everything backward compatible with everything, failed to successfully act on Gates’ Comdex vision.
But the company is now beginning to compete by putting products where its vision is.
Finally, at the end of October, it released Windows 8, an operating system designed to help shift customers from the traditional desktop to a mobile world of cloud-based applications and enhanced user experiences involving touch and motions. It represents such a departure from the current desktop interface that it might reinvigorate the desktop, as some pundits have posited. Or it might actually do the opposite and drive folks away from Microsoft altogether, as others have suggested. And, will it perform better than Vista?
On the tablet side, Microsoft spoke of Surface in June of this year, but even then, current CEO Steve Ballmer said, “Because of Windows 8, the Surface is a PC.” Still trying to be all things to all people. Released late last month, the Surface is larger than an iPad, has a USB 2.0 port that the iPad does not have, but lags badly behind the iPad in load time for applications… not a good way to win the “user experience” war. Don’t forget, it’s also running Windows RT, the slimmed-down version of Windows 8, which is brand new. Microsoft’s track record with new OS releases hasn’t been great out of the gate.
And what of Windows phones? Here again, the vision’s been spelled out, but bringing them to market has been a nightmare. After fits and starts with hardware manufacturers, it’s now being reported that Microsoft is working on its own branded hardware device.
Azure? In the cloud space, Microsoft was beaten to the punch on infrastructure (Amazon) and Platform-as-a-Service (IBM, Oracle and Salesforce have offerings, as does VMware). It does have a strong Software-as-a-Service offering with Office 365, and that could be the wild card in retaining the installed base as they move to mobile devices.
Perhaps the surest sign that Microsoft has a lot of work to do is the number of MacBooks, iPads, iPhones and Android phones you see among Microsoft technology workers. Companies in which Microsoft seemingly had a lock on over technology now have to appease the “BYOD” crowd and support the growing non-Microsoft technologies permeating among their workers.
Gates handed his vision off to Ballmer, who took the reins in January of 2000. In the ensuing dozen years, under his watch, Microsoft has slipped to the point that in May, Forbes magazine named Ballmer the worst CEO of any publicly traded company.
The question still to be answered is, will Microsoft’s initiatives be enough to save the company from falling behind any further, and will they be enough to save Steve Ballmer’s job?
David Rubinstein is editor-in-chief of SD Times.