What will Happen to a Giant

Joe Gillespie, Monday, July 6, 2009 @ 4:08 pm

Although I’ve seen so many players rise and fall over the years, what has inspired this post is the irony of what is happening to Microsoft. In the early years of my technology career it was Microsoft’s ownership of the PC O/S market that primarily allowed other compatible hardware manufacturers to create innovation and eventually marginalize IBM’s dominance of that market.

In the early years of PCs, the applications on top of the O/S weren’t even Microsoft applications. It was only later that Microsoft started developing their own applications and with them the predatory practice of squeezing out other application providers to rule the desktop.

Fast forward twenty years, and In many ways, they're a textbook case for two phenomena:  suffering the effects of incumbency (in Clayton Christensen's theory of disruptive innovation as articulated in The Innovator's Dilemma)  as well as case of technical debt.

Through some of their strong-handed practices and deep pockets Microsoft has been able to fend off and delay some of the threats from other vendors in the past but, in my opinion, it’s just a matter of time before that convergence of competitive forces brings them down a notch or two. In fact in my opinion it has already been happening on a number of fronts.

On the desktop and especially the mobile side Apple is making significant inroads. The iPhone is taking the high-end cellular phone market by storm, as essentially what will become a PC in a smaller handheld package and certainly owns the “cool factor” now. Although Apple on the desktop and laptop market still is primarily run only on its own hardware, it has adopted the Intel hardware architecture allowing Leopard to run LINUX or Windows under a VM.

The option of running legacy applications under a VM affords users more flexibility of applications while maintaining legacy ties. This is eroding the market for Microsoft’s Desktop Suites, as Open Office and other less expensive alternatives have matured and provide that basic functionality.

Microsoft’s gargantuan O/S suffers immensely from Worm and Viruses and from the negative effects imposed but the software layered on top to offer protection from those ills. On the server side Microsoft long-ago squeezed out Novell years ago but LINUX is still gaining market share here as well as a less expensive, more reliable, and more efficient O/S with less “bloatware”.

As far as the pressure from the Internet side of the equation, Steve Balmer said last week in Chicago that if he had one do over, it would be in the area of search technologies. Google and Amazon, both facilitated by the availability of Internet access from virtually everywhere, are in the process of moving as much functionality as possible to the Internet or the cloud.  Bing is a step in the right direction for Microsoft, but the jury is still out on whether it's too little too late.

While things are certainly changing, Microsoft is still very dominant player now and I’m not advocating that Microsoft is irrelevant or will be soon irrelevant any time soon. What I am saying is there is more than one player on the field now and it is having an impact regarding Microsoft’s market share and what Microsoft is able to charge for their applications. If not for Microsoft’s response to the competition that was initially started by Netscape, I doubt we’d be looking the fact today that any Vendor’s Browsers are free to download. Microsoft isn’t really falling but just losing its stranglehold on the IT world.

Related posts:

1. Contrasting Apple and Microsoft’s Product Strategy: A Tale of Two Spills
2. Sanity Amid the Tablet Hype
3. iPad: How big is the space between laptops and iPhones?
4. Betting Your Business on the iPhone
5. Where minimalism fails: The problem with Apple’s less-is-more approach

Comments (0)

business rules engines

Comments

• Leave a comment
• Comment feed for this post
• TrackBack URL

None so far.

Leave a comment