Ten years ago, at the end of 1994, I was still a confirmed Microsoft guy. Back then, Microsoft had climbed to the top by doing one thing exceedingly well: Listening to customers and delivering what they wanted. The software giant had never been a huge innovator; what it had done better than the rest was figure out the features and functionality most people wanted and then deliver them with an adequately intuitive user interface.
Although Microsoft used some questionable tactics, its killer instinct had a very positive side: The PC marketplace was by and large happy with the company's software. And Windows 95, Windows 2000, and Windows XP all added significant boosts in functionality. Even though I, like most people in the industry, believe that Microsoft went too far in bundling software, such as its Web browser, with Windows and coercing OEM PC makers to bundle Microsoft Office with their PCs, that isn't my biggest problem with the software giant.
My biggest problem is that Microsoft has become the new IBM. Back in 1978, when I got into this business, IBM was blithely unconcerned about the "man in the seat," the end user. It didn't even much care about the average "IS/MIS" guy. IBM's only real concern was the CFO or whoever approved the sale of large mainframe and mini systems. The IBM PC, when it came along in 1981, wasn't really focused on the end-user so much as it was an attempt to stave off the publicity generated by the likes of Apple and Radio Shack. IBM didn't really want to deal with the people who bought their 8088-based Personal Computer. Like Windows 3.0 a decade later, the IBM PC took off in ways that IBM didn't anticipate and wasn't at all prepared to manage. It made a series of blunders over the next several years, primarily because it was not a PC-market-focused company. Things like: how it licensed its operating system; the ill-fated IBM PC jr.; allowing Compaq to evolve unchecked; Microchannel architecture (MCA); and, the worst, how little commitment it made to its own PC operating system, OS/2.
Through it all, IBM showed supreme arrogance, flying in the face of established business principles and wisdom for evolving marketplaces. It acted as though it was above all that. In particular, the company was extremely non-responsive to the marketplace, other software and hardware makers, and the press.
IBM is a very different company today. In 2004 it spun off its low-profit margin PC business. Over the past three years it has embraced Linux, perhaps more than any other mainstream computer company. IBM has come around. It's actively remaking itself, and doing so by taking advantage of both its strengths and opportunities in the marketplace.
Microsoft, it seems, has lost the very thing that got it where it is: Its ability to compete and win. Now that it has largely won many of the marketplaces it targeted initially, it's increasingly neglecting those markets in favor of new areas that it really doesn't have much expertise in: online, set-top boxes, gaming boxes, digital media, and lots and lots of enterprise applications.
Move Over, Internet Explorer
The Web browser market is the classic example. After competing all-out for the Web browser marketplace--and winning, hands down--Microsoft has barely done anything but tweak its Internet Explorer. It won the browser wars, so now seven years later an outmoded Web browser is our standard. What's more, you can't download it any more for free; Microsoft has decided that you must get your initial copy of Internet Explorer for Windows by buying a copy of Windows. If ever there were an example of why competition must be safe-guarded in a free-market system, this is it.
November 9th marked the appearance of the first viable competitor to Internet Explorer since 1997, when Internet Explorer 4.0 was released. Mozilla Firefox is approaching 15 million downloads since the product was introduced about eight weeks ago. For the first time in years, Microsoft browser market share has dropped below 90%, according to OneStat. Another market-research firm, WebSideStory, placed IE's share at 91.8% as of December 3, 2004. Both firms show Firefox's market share rising.
But according to published reports, Mozilla's target for calendar year 2005 is for Firefox to surpass only 10% market share. I mention this to point out the sheer immensity of the advantage Microsoft has in browser share, because even if Firefox surpasses 10%, Internet Explorer would still likely be well over 80%.
In this David and Goliath story, the important battle isn't for the hearts and minds of end users; it's the battle for which browser is the de facto Web-client platform that runs enterprise applications. In other words, it's IT managers and CIOs who control the likelihood of whether Mozilla and other alternative browsers have a chance to succeed in the marketplace.
Enterprise applications designed to run clients as ActiveX or Microsoft JVM-specific apps in Internet Explorer could be re-written by enterprise app providers (whether inhouse or from third-party providers). IT organizations need to make this a priority, not just because it's the right thing to do but because it's the best thing for them over the long haul. There should be no one-horse software categories, even for clients like the lowly Web browser--no, especially not for such lowest-common-denominator categories.
By the same token, software makers need to work harder at this. ActiveX causes serious security problems for Microsoft, but it also cements the browser category for the software giant. Last June, Mozilla, Apple, Sun, Opera, Adobe, and Macromedia announced a partnership to update the open, scriptable plug-in model originally developed by Netscape, called NPAPI (Netscape Plugin Application Program Interface).
Microsoft long ago graduated to blue-chip status among U.S. technology corporations. And lately, the software giant is making the same kinds of mistakes as the mega-company it stood up to and bested in the name of desktop computing 25 years ago. There's more than enough room, though, for IBM, Microsoft, and the next-generation technology companies to exist side-by-side in literally scores of product and services categories. Long live the free-market system. And bring on the competition.
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