I worry about Microsoft. I am concerned about their future. I say this as a long-time follower and most-of-the-time fan.
 
I have used their products since near the beginning – I think I have a copy of Multiplan, one of their first applications, somewhere in a closet (for the Radio Shack TRS-80, a great and unsung historical computer). I spent hours and hours and hours using Microsoft DOS. I certainly have Windows 3.0 and every other operating system they’ve made. I consider Bill Gates one of the great businesspeople of all time.
 
I have also owned at least three Apple computers, and of course an iPod. An iPhone will be added once they are available on Verizon. But I am unlikely to become a regular Apple computer user. Maybe I am too much of a nerd: I find I have more control of my system in the world of “Wintel.” I also get a lot more hardware for my money, and have thousands invested in software, most of which would have to be repurchased to run on a Mac. I am not alone in these regards. 
 
Clearly, Steve Jobs is a design genius, and Microsoft has most of its competitive guns (advertising) aimed at Apple. Every passing day, at work, on airplanes, and in Starbucks, I see more and more laptops with Apple logos. It’s pretty obvious that Microsoft (and along with them Dell and HP) is gradually losing the battle for the consumer market.
 
But most of the business and much of the academic world still uses Microsoft software, and that is where I most worry about Microsoft’s future.
 
I first witnessed Microsoft up close when I gave a talk at their headquarters in 2001. I found the environment energizing. Nerds were everywhere, and they were engaged. The hallways were covered with artwork of the employees’ children – the “finest” of first grade art. People hung around water coolers and talked; you could sense their intensity.
 
It was only a few years later when I gave another talk, this time at their Silicon Valley campus. This time, people were intense, but they were intense in a more corporate, less entrepreneurial way. They talked of “deliverables” and other corporate gibberish. The walls were covered in art, but it was more expensive art selected either by an art department or an outside decorating firm. The entrepreneurial energy was no longer in the air to the same degree. I wondered “Is this the beginning of the end? Has this once-great enterprise begun to peak?”
 
Then, as a user, I began to see more and more cracks in their software. Things that seemed odd for a company which had done so much to improve the usability of software. While to this day I find Word and Excel virtual works of art, powerful yet easy to use, I cannot say the same of all of the company’s other products. 
 
Internet Explorer has become so unusable that I felt forced to abandon it a few weeks ago, and am now firmly ensconced in Firefox. I have searched in vain for a replacement for Outlook, which has gone downhill rapidly, and is plagued by problems. 
 
Vista is a dramatic fall from what I considered the company’s peak – NT 4.0 and its siblings. Of course this last one is the really scary one, since Microsoft’s heart is in the operating system business. While I always felt Linux was too nerdy even for me, it may lie in my future. I hear good things about the forthcoming Windows 7.0, but we customers can only take so much abuse before we just get tired and give up.
 
(My primary complaint about Microsoft software is that is has so little customizability, which should be its great advantage over Apple. Power users and near power users should be able to control their computing lives. Software by its nature has tremendous capability to be customized. So why is the bookmarking power of IE medieval and virtually unchanged from version to version? Why is Outlook inept at the simple memorization, filing, and transfer of email addresses? Why can’t I structure/skin my own dashboard and file management interface in Vista? Why does the system always assume I want to open the “Gary” documents folder, which I have never once used? And assume that every outboard hard drive I hang on my system only has iTunes on it which require genres and ratings? Why do menus have “customize” and “options” as separate and totally illogical listings? Has anyone at Microsoft ever thought about learning from Corel or Adobe?)
 
Keep in mind I want Microsoft to succeed. I have been privileged to work for them (speeches and seminars) and I feel blessed to have used their products when they were/are great. (I feel the same way about General Motors, where I also observed a great downward slide, especially in the 1980s.) 
 
Microsoft has done a great deal to create the world in which we live, to make entrepreneurship easier and less expensive, to provide critical tools to programmers and workers all over the world. Gates and Ballmer are two of the smartest and best leaders of the last 30 years.
 
But big companies seem to have trouble understanding and remembering that everything rides on making great products, and making them better every day. Maybe they just get bored with doing their fundamental job. Diversification (MSN, Zunes, and Xboxes), global expansion, big deals with big customers, shiny offices, the favor of Wall Street, reacting to competitors, and many other things that are not at the core of the enterprise can distract management and the Board from what really matters. Products and customers (individual “end-users”) are what matter. Understand who brought you to the dance – what product lines are at the soul of your business, and above all else protect and enhance that fortress.
 
I remember a few years ago I was working with an extremely bright group of Silicon Valley types who wanted to dream up and launch new businesses. Every Friday afternoon we met and brainstormed opportunities. A few times I said, “You know, IE is not that good, what about going after it?” Or I would talk about the obvious flaws in Outlook. And the bright young folks would look at me like I was crazy. How could you ever consider going up against the giant Microsoft? Whether you loved them or considered them “the evil empire,” you would be mad to entertain competing with them in their own backyard.
 
But we too easily forget that the people of Microsoft are only flesh and blood. Their organization can grow old and arthritic like any other. No one, no company is infallible. Yes, you have to be realistic about the power of their system, of their established distribution and their franchise with their customers. 
 
But there was a time when US Steel, the A&P, Sears, Kmart, General Motors, Citibank, IBM, DEC, RCA, Zenith, and Bell Telephone seemed invincible, too. All it took to dethrone them was one competitor with a more intense focus on the customer, one competitor who put all their energy into a better service or product, one competitor who ran circles around the elephant’s feet, one competitor who had the drive, desire and persistence to change the world.
 
Only time will tell whether Microsoft can recover its luster, or whether competitive operating and application software for Intel machines will prove to be one of the great competitive business opportunities of the next 10-20 years. Above all else, it is up to the people and leadership of Microsoft. The race is theirs to lose.


     


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2 COMMENTS

  1. While I am certainly not a fan of Microsoft I see nothing wrong any company fading away. That is the evolution of business. As we all have worked for companies that were strong one year and diminished to folding or being acquired years later. In my opinion the common denominator is not listening to the market. And it is evident that Microsoft (through the release of poorly designed and tested software) isn’t listening to what the people want, they believe they know what the people will want. The same with Blockbuster Video, Payless Shoesource, Smith & Hawken, Sears, etc, etc

  2. Thanks, Bill. As indicated, I am a big fan of Microsoft so I hate to see them fade. And while it is normal for companies to mature and often die (in one form or another), it seems awfully early in its life for this to happen to Microsoft. I also would be interested in your thoughts about Payless ShoeSource, a company I am very fond of, and I believe still the US’s biggest shoe store chain.
    Best,
    Gary

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