Beyond Microsoft: Prologue

Prologue — Victory to Defeat: 1994-2004

Ten Years in the Trenches

Microsoft’s obituary was first written in 1994. Companies like Netscape, Sun and Oracle were rising threats on the Internet. Yet Bill Gates rallied the troops and together our team faced down the “Internet tidal wave” that threatened to swamp our company.

By 1997, I was part of the horde of ex-Internet developers and business leaders who left Microsoft and worked as a consultant in the burgeoning Website development industry. Eventually I was asked to join Adobe Systems – creators of PhotoShop and Acrobat – to work on a new Internet Products Group, shipping development suites that would compete with creative tools like Microsoft FrontPage and Macromedia DreamWeaver. Adobe’s team were excited about new ideas in Internet protocols, security online and Web graphics. Microsoft had none of this excitement.

When I came back to Microsoft in 2003, I saw firsthand the results of the company’s neglect. Apparently, when our team won the browser battle, we hadn’t won the Web War inside the company. Instead, the leaders just allowed the New World of the Internet to infect the company, without innovating, and without making any money there.

My ten years in the software industry had taught me that neglect meant eventual failure, and I could see the future right then. Even as it continued to grow, it would die. I looked around me in 2004 and saw that Bill Gates’s once-vaunted company was doomed.

Internet Assimilation

Yet there was precedent for what was happening to Microsoft. Strategists had tried to colonize New Worlds before, with unforeseen and disturbing results.

In 1587, for example, a group of Englishmen decided that they’d conquer North America. They sent a flotilla of ships and a group of investors, who quickly built a fortified colony called Roanoke. The well-armed and provisioned settlers began to hunt wild turkey and grow new crops like corn and potatoes. They worked to be friends with Natives. They put roots down in the New World.

In fact, three years later, when the colony founder returned from England with new provisions, there was no colony left at Roanoke. The buildings had been left behind to rot, along with the English clothes and home utensils. No one was left; there wasn’t even a good-bye note. Years later, traders in the region would meet Natives with blue eyes and blond hair – some of whom could still read and write – but any other vestige of the English empire had long since faded from the minds of the settler’s descendants.

It’s called assimilation. And it happens to people gradually, and almost without them knowing it. They don’t know what they’ve lost. People are happy while it happens.

When Microsoft set out to conquer the New World of the Internet, they also posted a lonely outpost – the Internet Explorer browser. As an advance guard, the browser proved stronger than any opposing “born on the Internet” competitor. Yet gradually, the company let this colony drift into irrelevance: those who had worked on the browser either left the company – like Slivka – or used Microsoft Internet technologies elsewhere in the jungle – like me. And gradually, the flora and fauna of the Internet infested the company we’d left behind. When I came back to Microsoft, I saw assimilation all around me.

Microsoft was now a weak and overweight player, the rising seas of Internet services engulfing its cumbersome conservatism, destroying its once-solid Information Technology leadership. Today, from .Net and Windows Vista to office productivity and mobile devices, Microsoft is fumbling the future. In many ways, the company has already pulled the trigger on its own suicide bullet.

Predicting the Future

My task at several software companies has been predicting the future, and here’s my predication for you. Microsoft is a terminal case: now it’s only a matter of time.

The first part of this book describes in detail the inside story of how Microsoft self-destructed between 1994 and 2004; the second part of this book describes how the sea-change of Microsoft’s gradual demise between 2004 and 2014 opens up all sorts of possibilities for entrepreneurs looking to establish their own lucrative beach-heads in the rising sea of new software. The final section projects what the future of the software revolution will look like a further ten years out, between 2014 and 2024. Even more importantly, this last section demonstrates how to find profit vectors in that dynamic world.

There are hundreds of billions of dollars at stake as monolithic software monopolies like Microsoft gradually lose their global relevance and far-reaching power. Beyond Microsoft will show you how to take advantage of these emerging opportunities.

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