Say Goodbye To Microsoft

In the beginning, Microsoft’s business model was simple. They made the Windows operating system and licensed it to manufacturers, who then put it on their various computing machines. In the mid-nineties, Windows gained critical mass with businesses which, in turn, led to the adoption of the Windows operating system by consumers. The PC OS Wars were not just won by Microsoft, they were decisively won by Microsoft. Every other company that made competing PC operating systems was annihilated, save Apple, which only held on by the skin of their teeth.

Microsoft’s original audacious vision was a computer on every desk. (Importantly, that vision later became corrupted and transformed into “Windows” on every desk.) By the turn of the century, Microsoft had, for all intents and purposes, accomplished their mission. Now what?

A company that feels it has reached its goal will quickly stagnate and lose its vitality. ~ Ingvar Kamprad

When Money Is Your Guide, You Are Lost

Steve Ballmer has often said his goal was to make money. And he did. But making money is the means, not the ends.

Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver. ~ Ayn Rand

I’m a HUGE fan of companies making money. Money is the way one keeps score. But money is not the game. And the game’s the thing.

To fulfill a dream, to be allowed to sweat over lonely labor, to be given a chance to create, is the meat and potatoes of life. The money is the gravy. ~ Bette Davis

A business that makes nothing but money is a poor kind of business. ~ Henry Ford

There are people around here who start companies just to make money, but the great companies, well, that’s not what they’re about. ~ Steve Jobs

Money is a great incentive, but when it becomes your main incentive, it attracts the wrong kind of people.

You cannot motivate the best people with money. Money is just a way to keep score. The best people in any field are motivated by passion. ~ Eric S. Raymond

If a company values profits more than its vision, it will first lose its vision and then, ironically, it will lose its profits too. Money is an excellent servant but it is a terrible master.

Microsoft’s Lost Decade

Microsoft desperately tried to get into phones, tablets, watches and TVs but they missed and they missed badly. This is where their subtle shift from “a computer running a Microsoft operating system on every desk” to “a computer running Windows on every desk” came back to haunt them.

Where it is a duty to worship the sun it is pretty sure to be a crime to examine the laws of heat. ~ John Viscount Morley

At Microsoft, Windows was the Sun and anyone who espoused anything else was a heretic that had to be hunted down and eliminated.

Rather than try to create an operating system right for the various emerging form factors, Microsoft insisted — over and over and over again — on trying to shoehorn Windows onto every form factor. The results were disastrous.

The Mobile Wars Were Over Before Microsoft Even Entered The Fray

iOS and Android won the mobile OS wars as decisively as Microsoft had won the PC OS wars.

First, iOS and Android got out to a huge lead long before Microsoft was able to respond with Windows Phone 7 (then 8) and Windows RT and Windows 8.

Second, Google undercut Microsoft’s licensing model by giving their Android OS away for free.

Microsoft – like World War II Japanese soldiers stranded on deserted islands – continued to pretend the war was ongoing while everyone else went about the business of post-war reconstruction. Not only had Microsoft lost the post-PC wars, but their insistence the world was still fighting the PC wars jeopardized their possibilities in the post-post-PC world, as well.

Microsoft’s Anti-Strategy

Strategy is about choices, about making the hard decisions and about focus. Microsoft’s response to iOS and Android might be described as an anti-strategy. They chose not to choose, they decided not to decide, they focused on everything (which is to say that they focused on nothing).

Microsoft wanted to be Google so they created Bing Microsoft wanted to be Microsoft so they licensed their OS software Microsoft wanted to be a monopoly so they ported their desktop OS to tablets Microsoft wanted to be iOS so they created Windows Phone 7, then 8 Microsoft wanted to be in tablets so the created Windows RT Microsoft wanted to be the iPad so they created the Surface Microsoft wanted to be Apple so they restructured their company along functional lines Microsoft wanted to be the iPhone so they bought Nokia

Be yourself. The world worships the original. ~ Ingrid Bergman

The secret of change is to focus all of your energy, not on fighting the old, but on building the new.

The key to success is to focus our conscious mind on things we desire, not things we fear. ~ Brian Tracy

We believe in saying no to thousands of projects so that we can really focus on the few that are truly important and meaningful to us. ~ Tim Cook, Acting Apple CEO, January 2009 FQ1 2009 Earnings Call

Microsoft didn’t play to their strengths. Instead, they entered every game and tried to compete everywhere.

If you don’t have a competitive advantage, don’t compete. ~ Jack Welch

Microsoft didn’t want to narrow its options. Instead, they wanted to be everything to everybody. They didn’t want to be anything in particular so they produced nothing anybody particularly wanted.

CAPTION: The very epitome of a Microsoft product — chicken-flavored vegetable ham.

Conclusion

Honest criticism is hard to take, particularly from a relative, a friend, an acquaintance, or a stranger. ~ Franklin P. Jones

The recipe that made Microsoft dominant is not the recipe that will make them relevant again. Say goodbye to Microsoft…

…the new Microsoft has arrived.

Next week, I’ll look at Microsoft’s new strategy and analyze its potential and its potential pitfalls. (SPOILER ALERT: So far, I like what I’m seeing.)