The Fall of Microsoft
Microsoft’s business strategy can be defined as almost an exact opposite of Apple’s.
Apple strives to release products that are extremely polished; bug-free. Products that don’t have glitchly little eccentricities that can be worked around but are annoying. Apple doesn’t always hit this bullseye (witness the first few weeks of iPhone 2.0), but they seriously aim for it every time.
Microsoft habitually releases products that are buggy to the point of being virtually beta, then fixes those bugs over time — but maybe after a very long time, or even never.
Apple wants its interfaces to be as simple and intuitive as possible, while still enabling the users to do what they need and want to do.
Microsoft builds interfaces that are complex and cluttered, with gobs of features jumping at you from many different places at once.
Apple creates innovative, often radically new products. Apple searches for a product idea that is so far-out that no one is currently attempting it, then turns that idea into a real-world product that wows.
Microsoft either buys out a successful new product created by some other company — or creates a me-too imitation of that product, then leverages its OS dominance into dominance of that me-too product.
Apple publicly focuses on touting the quality and value of its present, available-for-immediate-purchase products, and keeps as silent as reasonably possible about its future plans.
Microsoft hard-hypes its future plans, to the point that many of those plans later turn out to be vaporware, or major letdowns when they are released long after their originally projected dates.
Apple embraces open standards when and where it thinks those standards will benefit its users.
Microsoft attempts to replace open standards with its own proprietary systems whenever it thinks it might be able to do so.
Business Strategy
All of the Microsoft behaviors described above are consequences of building a business around the ability to leverage current OS/Office dominance into future OS/Office dominance. By releasing a buggy, me-too product as soon as possible, you can start sabotaging the original’s foothold as soon as possible. By cluttering your interfaces with junky, redundant controls and in-your-face features, you can get captive users accustomed to many of those features to the point that they will be uncomfortable trying to switch to a system that doesn’t have them. By hyping future plans, you can discourage people from choosing currently-available non-Microsoft options. And by sabotaging open standards, you can create problems for anyone who tries to switch to another company’s system.
Transition
This tactic works only so long as OS dominance is maintained, and as long as each individual prong of the plan can be effectively implemented. But lately, several problems have eroded each of the planks of the Microsoft strategy:
Becoming accustomed to releasing unpolished products has created a quality slide at Microsoft that is starting to result in things so bad (i.e. Vista) that consumers and businesses simply refuse to use them (even if they keep using an older Microsoft product). This hurts Microsoft’s bottom line, and also draws attention to the high polish of the competition (i.e. Mac OS X).
As computing is seriously expanding into the mobile, pocket-computer field, the strategy of crowding your interface with cluttery features becomes untenable.
Perpetually adding on to legacy compatibility code worked great to maintain (via backward compatibility) Windows dominance in the desktop arena — but created an OS that can’t be realistically moved to any handheld device for the foreseeable future. WinCE and Windows Mobile are not really the same OS as desktop Windows, and therefore have no current-dominance-leverage to guarantee victory over alternatives. They have fared very poorly against those alternatives — and that was before anyone had even heard of an iPhone.
The consumer public and the business world have learned to expect Microsoft to tout future products that probably won’t live up to their hype, and so no longer feel intimidated by the prospect of buying into non-Microsoft technologies.
Consumers and business people also have learned to expect Microsoft to come out with proprietary replacements for open standards, and are now repulsed by such attempts to the point that they are unafraid to decline to use them.
Apple long loathed to be easily compatible with Windows, out of fear that doing so would send a message to its customers and developers that they may as well switch to Windows. That fear was unfounded, and Apple today is unafraid to purposely create Microsoft compatibility with its products (e.g. iTunes on Windows).
While the federal anti-trust prosecutions of Microsoft may not have truly remedied past anti-competitive actions, they did at least create an atmosphere in which blatant future acts will be immediately intolerated. For example, today’s Microsoft wouldn’t dare modify Windows so that it recognizes iTunes and refuses to run it, nor would they dare release a new version of Windows that always launches media files in Microsoft’s own media apps, regardless of user preference. Classic dominance-leverage tactics have become too legally dangerous.
In large part due to the above factors, Apple is gaining significant market share for the first time in decades, especially in laptops, and is embarassing Microsoft in handheld device share.
The Future
Once Microsoft’s OS dominance slips away, its whole business strategy dies with it. And then what will it do?
I submit that the difference in approach by Apple and Microsoft over the past fifteen years has attracted two very different types of people to the two companies. Apple now has most of the people who can and will efficiently fuel the Apple approach, whereas Microsoft is populated heavily with people who are a natural fit to the above-described Microsoft approach.
That means that once Microsoft can’t leverage dominance into more dominance, it will be totally blown away by Apple. iPod is the first example of this. iPhone is the second.
© 2010 Darel Rex Finley | design by