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Battling The Borg: Why Many Companies Take On Microsoft And Lose

By Stuart J. Johnston
April 7, 1997

A couple of years ago, a friend of mine spotted a b umper sticker on a car at Microsoft's main Redmond campus that read: "We are Microsoft. Resistance is futile. We will assimilate."

The joke, echoing the refrain of the half-machine mutants of Star Trek: The Next Generation's Borg, showed that at least some people over there have enough of a sense of humor that they can laugh at themselves. Still, that bumper sticker probably didn't do anything to dissipate the industry's image of Microsoft as the Borg.

I often wonder, though, whether that isn't part of the point. Bill Gates makes a great target, whether for a slam from the CEO of a major competitor or for a spoof in a national cartoon strip.

In fact, Gates, with his often overbold statements, looks to me like a perfect cardboard cutout target for Microsoft's enemies. And to some extent, perhaps that is the point.

Over the years, a lot of companies have decided to go head-to-head with Microsoft. Virtually every one that did has come a cropper for the experience.

They've had lots of innovati ve strategies, but the principal element in all of them is that they position themselves as the counter to the "evil" Microsoft.

Even today, the most frequent statements from competitors express their dislike, disgust, hatred, etc., of Microsoft and how they are going to put Microsoft in its place.

In fact, since 1989 or so, numerous companies have publicly declared that they would defeat or destroy Microsoft, and numerous alliances have been formed among companies to do the same. These days they even have their own acronym: ABM -- Anybody But Microsoft.

In the first case, those companies that try to confront and defeat Microsoft should take a tip from philosopher George Santayana: "Those who cannot remember the past are condemned to repeat it."

In virtually all previous cases, competitors will try to fly lower to the ground than Microsoft, metaphorically, and sometimes financially speaking -- all the while watching Microsoft and not the ground. Meanwhile, Microsoft edges lower and lower, unti l its competitors eventually fly themselves into the ground.

In the second case, alliances of Microsoft's enemies have historically never been able to cooperate long enough to accomplish their aims. Because they compete among themselves, they eventually fall prey to petty rivalries and the coalition falls apart before anything substantive materializes. Once again, Microsoft wins by default.

My point is that no one creates winning product strategies by deciding, first and foremost, how to destroy the competition. You win by creating products that your customers want to buy at a price they want to pay. If that ends up weakening the competition, so much the better. Too many times, Microsoft's competitors get the two confused.

As unpopular as my view may be among the vendors out there, when Microsoft finally goes down, which may or may not be in the next 10 years, it will be pulled under by its own weight and not because of any little dogs yipping around its ankles.

For anyone who has forgotten, t he first rule of business is to serve your customers. And the second is to know -- clearly and concisely -- what business you are in. If you ignore either rule, you do so at your own risk.

For instance, put yourself in the customer's place. Say you buy a car from the biggest auto manufacturer because it has a strong name brand and your parents bought that make when you were young, and they were good cars. But this car breaks down frequently, or it uses too much gas at a time when the cost of gas skyrockets. Basically, it doesn't meet your needs.

Will you buy from that vendor again? Maybe. You might write the first experience off as a fluke. But if the same thing happens twice?

That's exactly how the U.S. auto business got itself in such a jam in the late 1970s and early 1980s -- by not meeting customers' needs while overseas competitors did. Foreign automakers provided small, relatively inexpensive, high-quality vehicles that got much better gas mileage than American-made cars.

What did the U. S. carmakers do first? They complained to the government about unfair competition, and there probably was some of that. But the real issue was that the carmakers had lost sight of both business rules.

When American carmakers did go back and grasp what customers wanted -- smaller, better-made, more-reliable, more-economical automobiles -- the customers returned in droves.

In the case of Microsoft's competitors, many of these challenges and alliances have been formed for the express purpose -- either said aloud or spoken under their breath -- of destroying Microsoft.

And that is their prime weakness. They don't have a real customer-driven purpose. Oh, yes, you can say that the purpose is to offer customers a choice, and that's great. I like fireworks on the Fourth of July, Mom, and apple pie as much as the next guy. But it's still a strategy to destroy another company, and that is a loser's strategy.

It's not the anger inherent in that message that bothers me. It's that it's a strategy that, by its very existence, makes the customer secondary. That dooms it to failure in the long run.

Customers vote with their checkbooks, and money has no ideology except its own -- i.e., the bottom line. The fact is that, in a very large part, those companies that are in trouble today, or those that have slipped from the top spots in their software categories, have gotten there because they got too fixated on Microsoft and didn't pay enough attention to meeting their customers' needs.

As I said at the top: Gates makes a very good cardboard, cutout target at which to throw darts. He makes bold statements that his competitors feel compelled to shout down. Maybe he does it intentionally because he knows that, in an industry where the heads of companies are almost as flamboyant as rock stars, few can resist trying to beat him at his own game.

And while he's got his opponents distracted, his employees will cheerfully steal away their customers. So, for those companies that want to stay on top, don't get sucke d in by the "destroy the Borg" mentality. Compete as hard as you can, but always do it by listening extremely carefully to your customers and meeting their needs.

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