WinInfo Daily UPDATE, December 27, 2004

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In the News

- Opinion: 2004 Was the Year Everything Changed for Microsoft

==== In the News ====

by Paul Thurrott, [email protected]

Opinion: 2004 Was the Year Everything Changed for Microsoft

Remember that software colossus called Microsoft? It was known as the 800-pound gorilla of the PC industry, a recalcitrant monopolist that could send competitors careening out of business simply by announcing that it was entering a particular market. Well, that Microsoft is dead. And its death has little to do with the company changing its ways to become a better corporate citizen and partner. Instead, Microsoft has grown lazy, complacent, and fat--arguably another IBM, a company Microsoft never intended to emulate. And rather than exit markets when Microsoft jumps in, the company's competitors are now watching Microsoft to see where it's heading, then jumping in with both feet. More often than not, Microsoft's tiny competitors get to market first and reap the rewards.
There are so many examples of this phenomenon that it's difficult to even picture a world in which companies such as Apple Computer, Digital Research, Go, IBM, Lotus, and WordPerfect ceded entire markets to Microsoft. But as recently as this week, a court in Europe was arguing that Microsoft's anticompetitive practices were harming competition, which is laughable when you consider the markets that the European Union (EU) is worried about: Media players, which Apple--not Microsoft--now dominates despite Microsoft's blatant product bundling; and server software, which non-Microsoft Linux- and UNIX-based solutions--not the software giant's Windows Server product line--largely dominate.
Microsoft's US antitrust trial determined that the company had illegally bundled Microsoft Internet Explorer (IE) with Windows and, as a result, drove Netscape out of business. Those in the know, however, realize that internal immaturity, more so than Microsoft, arguably caused Netscape's business troubles. Today's successor to Netscape, the Mozilla Foundation, has found a way to compete with the moribund IE by offering a smaller, faster, and more innovative browser that's based, ironically, on Netscape's original products.
But consider some more recent examples. When Microsoft executives revealed the company's Longhorn plans at Microsoft Professional Developers Conference (PDC) 2003, company representatives confided to me that they were nervous about giving out too much product plan information that far ahead of Longhorn's actual release. The problem, they said, was that smaller, faster competitors could come to market with similar solutions far ahead of Longhorn. And because the increasingly awkward Microsoft delayed Longhorn again and again, that's exactly what happened.
The company since dropped WinFS, the everything-but-the-kitchen-sink search technology, from both Longhorn and Longhorn Server and will now--maybe--ship it at some undefined time in the distant future. But after Microsoft essentially legitimized instant desktop search by revealing that it was originally working on the technology for WinFS in Longhorn, the company's competitors stepped up to the plate and began launching similar product plans. In mid-2005, Apple will ship an instant desktop search feature for Mac OS X called Spotlight, and companies such as Copernic, Google, and X1 have jumped in to satisfy the needs of Windows users who are tired of waiting for Longhorn. Whereas we're now inundated by these solutions, 10 years ago there would have been a huge void until Microsoft delivered its own solution.
No, Microsoft obviously didn't "invent" instant desktop search. But publicly revealing how strategically important the technology is clearly prompted other companies to get moving on their own solutions. These companies saw an opening, not a threat, in Microsoft's product plans.
There are interesting exceptions to Microsoft's general inability to deliver products and technologies. A small team in Microsoft's MSN unit recently unveiled a beta version of an instant desktop search product, MSN Toolbar Suite, which delivers on much of the Longhorn search vision but does so for currently shipping versions of Windows (see the first URL below for my preview on the SuperSte for Windows). The MSN team, notably, is off campus and separate from the rest of Microsoft's Redmond-area buildings. And to deliver the much-needed security-oriented Windows XP Service Pack 2 (SP2) release in a decisive fashion, Microsoft turned to a small "virtual team" that operated outside the bounds of the company's typically hierarchical structure (see the second URL below for my exclusive showcase article about this event). Overall, however, the gap between what Microsoft would like to do and what it can actually deliver appears to be widening, which suggests, to me at least, that the company is floundering somewhat.
Is Microsoft, like IBM before it, suddenly so large that it can no longer move quickly and deliver on new product opportunities? I think that's fairly obvious. What's less obvious is the way that Microsoft's competitors have started cherry-picking from Microsoft's product plans. Having a grand vision is one thing. But delivering on that vision is another thing entirely.

MSN Toolbar Suite Preview

Windows XP Service Pack 2: The Inside Story

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