It seems a little ironic to me, that for one of the most valuable companies on this software-dependant planet of ours, it would be the increasing size of an industry in which that it once led the way, that would scupper its progress. But, that does appear to be the case, at least from this cushy position on which no immense pressure rests, in the instance of Microsoft’s apparent ‘demise’. I find it hard to describe it as such, considering the company still turns over $60bn every year, however there is more than an inkling amongst technology pundits that Microsoft’s dominance in the software industry, has at last ceased, at least partially.
But why? What mistakes were made that led to such a seemingly impossible conclusion? Well, consider the changes that have occurred within the consumer technology industry as a whole, and we can find a potential explanation. Where once, there was a battle of who could make the best PC’s, who could make the best software, who could make the best phones, for example, the general mood amongst consumers now, hints that what they’re looking for, is who makes the best ‘ecosystem’.
Now ‘ecosystem’ is a term that’s been bandied around a lot more in recent months and years than ever before, and that fact alone gives this theory some credence, as what’s on the punter’s lips, is more than likely what’s going to make them dip into their wallets. Even if it is Rebecca Black – you might remember her recent – short-lived – surge to the top of the iTunes downloads charts.
For this reason, Microsoft, a mere software company with no real standing in the hardware world, has been left behind, as they’ve repeatedly struggled to gain a foothold in the mobile sector so easily dominated by Apple and Google. It’s also the reason that rather than talking about HP, Samsung, HTC competing with Apple, we’ve begun talking about Google, or Android, competing with Apple instead. And furthermore, it’s the reason why Google has yet to really put a stamp on the PC industry, despite impressive sales figures of it’s recently launched Chromebooks, running the cloud-based Chrome OS.
Consider the hypothetical merger of Google and Microsoft. Obviously it’s one that will never come to fruition, nor has it been talked about, but the dominance enjoyed as a result would span the entire consumer technology industry. PC’s, phones, tablets (though admittedly Honeycomb hasn’t enjoyed the most rewarding of starts in life). However, this could be the scale of the success brought if Google and/or Microsoft had managed to build a proper ecosystem, before the term was coined.
This is potentially the level of success enjoyed by Apple at the moment, the company that is undoubtedly going to report record earnings next quarter after the launch of the iPhone 5, latest round of iPods, iOS 5, iCloud and OS X ‘Lion’ all within a matter of months. What Apple has done is create a binding environment of gadgets and ‘app stores’ that pretty much ensure that once you’re in, you’re in. It’s a great business model for profit seeking investors, and one that has seen its fair share of copycats, including Microsoft and Google, believe it or not.
Microsoft is just now set to begin pushing its Windows Phone, Windows 8 on tablets and Windows 8 app store, though the latter pair won’t take off until at least next year. Windows Phone has endured a troubled start, if reports are to be believed, and the desperation for a solution to this scalability-bred issue is becoming more and more apparent, with leading figures in the company even suggest dropping the ‘Windows’ brand altogether, though the integrity of this information is far from concrete.
It’s almost become a standing joke that Microsoft is late to the party, though rather than making a grand, drunken yet impressive entrance like a rich high school jock from a low budget chick flick, tries to sneak in the back door and con consumers into believing they have the next big thing. So far, it hasn’t washed.
Having said that, I don’t believe the problems Microsoft faces were ever avoidable. Perhaps they had the ideas up their sleeves since the 80’s, though I doubt it very much, but Apple has had a far greater grounding for success built on the fact that they make their own hardware and software together. Microsoft made huge success licensing software to third-party manufacturers, and has now hit a stumbling block because they haven’t been able to innovate the hardware that has become even more closely-knit with the software that runs on it.
Be it coincidence, bad management or just sheer bad luck, Microsoft faces a mammoth problem in preparing its ‘ecosystem’ for the masses. Whether the solution lies in a rebranding of its key services, and the merging of them as suggested, is far from me to foresee, however one thing is clear: They can’t get by just in one area anymore, nor can anyone as HP has found out and attempted to solve by buying Palm and subsequently webOS. There is a fight to be fought on all fronts and like the devices in it, the industry as a whole has converged, and as Apple’s recent financial reports suggest, the consumer technology industry is more valuable, more overwhelming, but in this case potentially more destructive, than ever.