Don’t call it a comeback, Microsoft’s been in the game for years
It’s not quite the story of a once fierce Giant who ruled the land and as a result of overindulgence, grew fat with profit and lazy with innovation then slipped into a deep sleep for over a decade only to awake refocused, recharged and ready to fight. But it’s close.
A Brief History of Microsoft:
Our story’s giant started with a nerd. Founded in 1975 by a Harvard dropout, Mr. Bill Gates, and his fellow college dropout buddy, Mr. Paul Allen. Then called Micro-soft, their company would begin immediately redefining innovation as well as the microprocessor programming industry as a whole. And so IBM (remember them?) took notice and in 1980, licensed the renamed Microsoft company to write the operating software for the IBM P.C. With this call up to the big leagues, Gates and Allen would grab another Harvard friend, a solid numbers man, to run the business side of things: cue Mr. Steve Ballmer. First came MS-DOS, then came Windows, then came Windows 95. Bill Gates was the richest man in world, antitrust and monopolies were becoming buzzwords around the company and Microsoft controlled 86.3% of the P.C.’s in the world.
The Lost Decade
But, as happens in these tales, our hero grew too self-indulgent and seemed to forget how unstable the tech market can be. What works best now will undoubtedly work better or differently with future shifts in technology. As IBM found out when Microsoft entered the picture, and Microsoft was about to learn, if you hesitate in this game, you fall behind. Nevertheless, for various reasons excellently highlighted in Vanity Fair’s article Microsoft’s Lost Decade, Microsoft would not pull the trigger on another breakout success for some time, and competitors began emerging from the shadows to begin taking more and more bites at the resting predator.
Music players, smartphones, tablets, e-readers, etc. had Microsoft tripping over their own feet for years. In some cases, like the e-reader, Microsoft even had the jump on the technology, but failed to see the vision through. Company policies and management strategies have been proposed as the catalyst in the years of inactivity Microsoft would face. Innovation played second fiddle to climbing the ladder and kicking the hands off the rungs of whoever was following you up.
And then there was the stack-ranking. If you know what I’m talking about, then you’re already shaking your head. A questionable managerial practice where bureaucracy reigns supreme. Cited as ‘the most destructive process inside of Microsoft’ stack ranking basically worked by grading your team on a curve with a certain percentage of top performers, good performers, average performers, below average performers and then poor performers. Everyone had to make the list somewhere. And that’s where the trouble starts. Apparently this makes people work to not get fired, not to create the next best thing. Internal competitions, brown-nosing, mud-slinging and even sabotage became office etiquette. As expected, innovation suffered. People didn’t want to work with people who were smarter than them. It became less about improving your work and more about improving your relationships with the higher-ups.
Their competitors were not having the same problems. Apple had brought back Steve Jobs who wasted no time in sending a shock wave through the tech world, turning conventions and familiar concepts on their heads. iTunes, iPods, iPhones, iPads, etc. Each release left Microsoft scrambling in their wake. And off the strength of an increasingly connected world, another formidable opponent known as Google had risen out of the dot-com ashes and was making a fortune figuring out what consumers needed before they even knew they needed it.
But our story isn’t about Apple’s device dominance or Google’s search supremacy, it’s about a once great company that was now an underdog; a company that finally took a moment from spinning in circles, collected its breath, regrouped, refocused and rebranded. This is a story of rebirth.
Microsoft: A Technology Underdog?
Fast forward to 2012: A new technological landscape is ruled by new giants who are shaping the industry. 1998’s banner year for Microsoft has come and gone (where Microsoft reported a market capitalization of $344.6 billion to Apple’s $5.54 billion and Google’s $10 million). Microsoft’s once 95% share of all operating systems has dropped to a meager 30%. Apple and Google are having their way with the tech market, while Microsoft is forced to watch. For a brief period in the summer of 2011, Apple even had more money than the US Government. Google had swelled at an enormous pace that once seemed implausible to both Microsoft and Apple and they had expertly transitioned their search success into a smartphone revolution with the Android operating system. Microsoft found itself playing a repetitive game of catch up with Apple’s iOS platform and Google’s Android. Failed acquisitions, late releases and under-performing products had Ballmer’s company constantly wiping clean the dry-erase board and try-trying again.
At this point, Microsoft has been late to almost every party in the innovation world since the creation of Windows, leaving them to grasp at pre-existing concepts and desperately twist them into their own style – which has left mostly negative results, a notable example being the Zune music player. Microsoft must shudder as they recall the fraught efforts made to catch up with the iPod and catch a piece of the music player pie. Other products had taken longer than desired to show their worth (ie. the Xbox gaming system).
Their music player had failed, their first attempt at entering the world of smartphones with Windows Phone 7 was met with minimal success, and their software updates were coming every three years or longer. One thing was clear: Microsoft can continue to putter along with their 30% share of the market or they can get up and start fighting for a bigger piece of the pie.
Microsoft’s Secret Weapon
Microsoft may not receive the attention that Apple and Google do. They may not have the devoted following that Apple has. They may not be used in daily vernacular as a common action verb like Google. And thanks to its floundering past, Microsoft may not be beloved by the Wall Street community. But Microsoft has retained one critical fan throughout the years: the workplace.
And that has been enough to float a company for years – updating flagship products found in almost every office like Windows, Outlook, Office, SharePoint, SQL, etc. And don’t forget about the partners that sell them. The partner eco-system brings in buckets of cash for Microsoft. All the companies reselling licensing, building value-added add-on products and selling implementation and customization services have kept Microsoft as the dominant platform-provider in the business world and allowed them to stay in the ring with the rest of the technological giants. These businesses have remained cash cows for Microsoft and allowed the company to want for nothing in the meantime – except for perhaps our old friend, innovation.
Yes, Apple has blatantly set the innovation stage, but things are getting interesting as Microsoft begins moving from an understudy to playing a more prominent role.
Microsoft Prepares for Battle
“Microsoft remains relevant,” says Frank Gillett, an analyst at Forrester and the lead on the report Microsoft: The Next Five Years, “Anyone who says different is talking rubbish. They matter; they have a very important part to play. But they’ve gone from being the only game in town, being firmly in the driver’s seat, to constantly wrestling with two other drivers for the wheel.”
For the last two years, Microsoft has been suiting up for battle. Every Microsoft and technology conference over these years has carried whispers of new Microsoft products to place the company’s hands back on the wheel. A new OS is coming. A tablet is coming. A smartphone is coming. Along with acquisitions aplenty, the time for bold moves has returned and Microsoft is no longer shying away from competition.
And while they may not have the best track record with acquisitions, MS has zeroed in on the top technology trends with recent endeavors. Since 2011, Microsoft has added to their social arsenal with Skype ($8.5 billion) and Yammer ($1.2 billion) and to their cloud movement with StorSimple (undisclosed amount).
The company seems to have finally taken notice of the technology trends that consumers are feasting upon. Intuitive software to complement consumer movements. Hardware to complement software. A product that moves with the consumer (ie. the smartphone and tablet universe).
Thanks to its presence in the office place, Microsoft has demonstrated its strength and longevity in the consumer market. Microsoft, as always, brings with it an army of partners as their marketing megaphone and places a sure foot into the arena as they broaden their focus to devices and services, not just software. In 2012, Microsoft has stepped confidently out of the shadows, forcing competitors to take notice, as they now place their necks and the company name on the line.
Much like Sandlot viewers marveled at Benny ‘The Jet’ Rodriguez and his PC Flyers as they attempted to retrieve the baseball from the beast, technology pundits are watching in amazement as Microsoft attempts to pull off the Three Screen Strategy. Microsoft has made it clear they are going after the multi-screen generation with Cloud integration for TVs, phones/tablets and PCs.
Data is king and consumers are more and more looking to the cloud to help them store and manage their data. And the recent SharePoint Conference 2012 in Vegas made it clear that the cloud is the future. Microsoft’s cloud collaboration for business, Office 365, was pushed at every turn. So, while Apple has set the pace for producing products that integrate consumer data across their devices, now it’s Microsoft’s turn to try.
How Microsoft is Going to Do It
By embracing these tech trends. The cloud is the future; multi-touch tablets are the future; integration between devices is the future. Microsoft is looking beyond the workplace and is ready to secure their place in the user’s personal life as well.
Well, Microsoft still has the PC on lock down Windows has remained tried and true through the years and the recent release of Windows 8 operating system demonstrates Microsoft’s commitment to social and cloud integration with their products. Adoption is key and at the Microsoft Build developer conference, CEO Ballmer announced that “In just the last three days, we have sold four million Windows 8 upgrades.”
The Windows Surface RT tablet (which has the Windows 8 operating system built in) has entered the playground with every intention to deck the first bully it encounters. Thin, sleek, attractive and powerful with great storage capabilities. Windows Surface shows a shine of innovation as well as it is the first tablet with the ability to be docked with a computer. And it integrates with Xbox 360.
Speaking of, Xbox 360 took a minute to prove its worth to Microsoft, but it’s now a common fixture in the living room. Gone is Zune, replaced with Xbox Music where users can create playlists and stream or download music. Microsoft is combing through their past and ironing out their future.
Windows Phone 8 is the last piece of the puzzle to connect a user to their data. The new version of Microsoft’s smartphone operating system has the tech world talking. They have their own twist on familiar smartphone features like turn-by-turn navigation, apps, and even a free Wi-Fi finder. Metro UI will be prominent, allowing for ‘live’ tiles to update with real time information. The WP8 promises to bring the focus back to the business user, which may be why a recent study of IT Managers said that almost half planned on standardizing their company’s mobile platform on devices running the Microsoft operating system.
With big, lavish updates on their best-selling business tools like Microsoft Office 2013, Microsoft SharePoint 2013, Microsoft SQL Server 2012, etc., one thing is certain:
The Return of Microsoft
Fresh off the launch of Windows 8 OS, the Windows Surface RT tablet, and a refreshed line of Business products, Microsoft is looking revitalized and ready for battle. Everything is looking up, even Bing is doing better than worse. With a major release in almost every division of the company, Microsoft is ready to take the market by storm.
And while Google and Apple began a legal shoving match over some Apple features on the new iOS6, Microsoft was slowly nursing itself back to health with a new rebranding process. Almost overnight, a new logo, website and style were introduced. The world was introduced to the Metro design language: a clean yet simple graphic design with a focus on typography and large text while allowing for animation among the flat tiles used in the design language. Microsoft wasted little time in integrating this UI across the board for all of their products including Xbox 360, their website, and especially, Windows 8.
The Microsoft commercials help create the image of the cool kid being back in town. Internet Explorer 8’s commercial welcomes you to a more beautiful web with Alex Clare’s Too Close. A song that had practically bombed for the DJ, after Microsoft’s advertisement, became a best-selling single. It was followed soon after with the Microsoft Surface “Movement” Commercial that called upon an accomplished action director Jon M. Chu to make the Surface look like the coolest device this world has ever seen. Based on advertisements alone, Microsoft has already won.
The marketing push has already made the look familiar, and the products are already producing praise while the piece of the pie slowly but surely grows bigger. So, call it a comeback if you like, but Microsoft, the once-great innovator, is ready to show you that they’ve been here the whole time.
And so our story ends on a cliffhanger. With a protagonist trudging through the hero’s journey – facing challenges that ultimately send them into the abyss, then overcoming odds and emerging transformed, ready for adventure once more… but without a final act. Microsoft’s moves have placed them back in the game, and the tech industry watches in anticipation as they redefine what they’re made of.
With a mission statement that reads “At Microsoft, our mission and values are to help people and businesses throughout the world to realize their full potential…,” Microsoft is ready to once more bring innovation and production to full tilt and become the example of realized potential.