Why Microsoft Copies Apple (and Google)

2012.12.20   prev     next

FOR well over ten years now, Microsoft has reflexively copied successful products from Apple and Google (plus YouTube and Flash). And all these copies have utterly failed to unseat the market-dominant position of the original product that they were copying.

Why did Microsoft do that? Why are they still doing it? What follows is my theory. Note: I just said theory. Also called speculation. Rather than sprinkle this article liberally with “probably”s and “I think”s, and “I have to suspect”s — let’s just say it right here: I can’t prove any of this; but it’s my best guess as to the question’s answer. So don’t sue my poor ass, OK? Here goes:

Thorn

In the late 1980s and early ’90s, Bill Gates was, of course, delighted by the ascendancy of Windows to 95%+ market dominance, and tickled with the withering of Apple to sub-5% market share. And he was pleased with the ouster of Steve Jobs from Apple, and with Jobs’s replacement with corporate bozos who didn’t know what they were doing.

But none of that was enough: It bothered Gates tremendously that Windows was a second-rate copy of the Mac. It really got under his skin that Jobs had made that product first, and he (Gates) was just the one who copied it. And the only thing that could make up for that would be if Apple and the Mac were simply to die, like all those other non-Microsoft personal computing platforms had in the 1980s. Then people could start to forget that the Mac ever existed. Whole new generations of computer users could grow up knowing no more about the Mac than they do about home computers from Atari, Commodore, Tandy, and Texas Instruments. The Mac would be a footnote in a museum exhibit, and nobody would really know, or care to know, that Jobs did it first. The masses would look on Gates as the one who brought us Windows, the modern computing platform used by everyone, everywhere.

But year after year, Apple didn’t die. They stubbornly hung on with a few percentage points. And influential, creative people continued to use Macs. And this really, really disturbed Gates. The Mac’s continued survival was a thorn in Gates’s side, an ongoing reminder to him (and everyone else) of who really revolutionized computing in the 1980s.

But as the mid-1990s approached, Gates’s corporate analysts (spies?) reported to him that Apple was only a year or two from bankruptcy. And Gates relished the upcoming, long-overdue demise of his hated rival.

Resurrection

Then Jobs came back to Apple. At first, it looked like it might be just icing on the cake: Jobs would get to preside personally over Apple’s death. He would get to fail one more time.

Jobs, however, quickly pruned away the unprofitable parts of Apple, revamped the still-profitable main product line of Macs, got perennial cool-guy Jeff Goldblum doing TV spots — and suddenly, Apple wasn’t going to die. Not in the next few years, anyway. It was still in a tiny market-minority position, but it wasn’t on death’s door. It was, for the moment, healthy. And that irked Gates badly.

Then something really bad happened: The iPod came out. It was a solid hit. And it quickly became the overwhelming majority device in its space. And Gates’s analysts told him that though it might seem expensive at first blush — everyone at the time thought so — the iPod was actually competitively priced, and composed mostly of commoditized components. So now, Apple had a big, new revenue stream that nobody was likely to take away from them. Money they could use to develop even more great products. And at that point, Gates decided that running Microsoft wasn’t fun any more, and he resigned the CEO post and gave it to Steve Ballmer, his main sales guy.

Never You Betray

Why would he give the CEO-ship to Ballmer? Because he controls Ballmer. He tells Ballmer what to do (with regard to the highest-level product decisions), and Ballmer does it. Microsoft has a small board, Gates owns a healthy chunk of the company, and if Gates ever went to the board and said, “Ballmer’s not working out; he needs to go,” the board would immediately and happily comply, and Ballmer would be gone the next day. Whether Gates has enough control to keep Ballmer running Microsoft indefinitely is another matter, but he can get rid of him any time. So he can tell Ballmer what to do, and Ballmer has to do it.

Over the past ten years of Ballmer’s “reign,” Gates has ordered Ballmer to risk and spend anything and everything on trying (however vainly) to undermine and destroy Apple. Because that’s what Gates really wants. The slimness of the probability of actually achieving it is overwhelmed by his desire to make it happen. But Gates doesn’t have the burden of running the company day-to-day; Ballmer takes care of that. And every time the copy-Apple-at-any-cost strategy doesn’t work, it is Ballmer, not Gates, getting the public and historic blame. (And if it ever looks like it’s actually starting to work, then Gates can simply remove Ballmer, and become CEO again!)

Gates stayed on as “chief software architect” (or something) for several years, until the iPhone was announced in January 2007. And Gates asked his analysts, “Does the iPhone really do what Jobs showed in that demo?” (A lot of people didn’t believe it at the time.)

And the analysts came back with a resounding, “Yes, it apparently does.” And Gates quickly quit Microsoft altogether, to focus full-time on shaping his legacy image into “disease-fighting philanthropist” instead of “petty, lucky, rip-off artist.”

But he still controls his puppet CEO, Ballmer. And he still makes Ballmer continually squander the company’s riches on trying to subvert and destroy Apple (and secondarily Google). The dream that he might yet find a way to kill Apple after all this time is more important than Microsoft’s stock price, its shareholders, or even its long-term survival.

So there you have it.

Oh, and one more thing: The ouster of Steve Sinofsky was a defensive move by Gates (via Ballmer) to make Ballmer harder to replace. Just in case the rest of the board gets any ideas.

Update 2013.08.23 — After Ballmer announces the reorganization of the whole company to an Apple-like, non-divisional arrangement, the board decides they have had enough, and states that they are seeking a new CEO to replace Ballmer within the next twelve months.

Update 2013.08.26 — From Barb Darrow’s gigaom.com article, “On second thought, Ballmer’s exit doesn’t look all that smooth; report”:

Several former and one current Microsoft execs told me that there was no way Ballmer would step down unless Gates withdrew his long-time support — a contention that a Microsoft spokesman denied late Sunday night.

Earlier this summer, when asked about the possibility that Ballmer would step down in the face of mounting pressure from disgruntled shareholders, a former Microsoft VP said it would not happen because “Bill has his back.” Late last week, this executive said that must have changed — that the only way Ballmer would be leaving is that if Gates gave the all-clear.

Update 2013.10.01 — Three major Microsoft investors want Bill Gates to be ejected from the board, because his “presence on the board effectively blocks the adoption of new strategies and would limit the power of a new chief executive to make substantial changes.”

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