Microsoft – When did they become an also ran

Being someone who has just reached 35, I can clearly remember that no conversation about computer in my lifetime was ever held without Microsoft coming into the picture. My first experience was with DOS and later with Windows 3.1. Then came 95, 98, XP, Vista and 7 (Yes I deliberately left out Windows Me. Too big an embarrassment).

With XP being installed on 95% of the computer, it seemed as if Microsoft will sit on top of the heap for quite a long time. Slowly but steadily Microsoft started flexing its muscles and try new things XBox, Windows Live, Sharepoint, Silverlight etc. It seemed as if Microsoft just wanted to kill every other company in the business. Microsoft was trying to capture all the markets and kill all the bigwigs. During this period slowly but steadily an old foe, whom they had given a new breath of life (http://news.cnet.com/2100-1001-202143.html) was slowly building some products which would soon become mainstream. Yes it was Apple with its iPod.

iPod was a huge success beyond anybody could imagine. Within few years they captured most of the market for portable MP3 players. It was helped by the mistakes made by companies like Sony. iTunes was a terrible piece of software but was a great companion to iPod. By 2006 they were making huge money with these devices. But that was the time when mobile phones started coming out with MP3 player functionality. Everybody expected Apple to take iPod to the next level by venturing into the mobile phone market. 2007 saw the release of the first iPhone and mobile phones were not the same again. It set new standards of usability and brought in such a cool factor. There were some people who couldnt see how it was going to change the mobile phone market. One of them was Steve Ballmer (http://www.electronista.com/articles/07/04/30/ballmer.on.iphone/). It is OK if an analyst makes such a mistake but not when you are the CEO of a competing company.  Ballmer soon joined Michael Dell in the history books for misquotes about Apple.

Bill Gates was preaching about tablet computer for long time. Microsoft and co made many attempts at mass market tablet computer but sadly none clicked. 2010 turned out to be the turning point when Apple introduced iPad. Initially dismissed by many as just a large iPod it soon clicked and went onto sell more than 15 million units in 2010. Bumper sales with good margins made sure that Apple made lots of money. This helped them dislodge Microsoft from the throne it was occupying for long long time as the most valuable tech company.

http://www.google.co.uk//finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=Logarithmic&chdeh=0&chfdeh=0&chdet=1299358560548&chddm=996659&chls=IntervalBasedLine&cmpto=NASDAQ:MSFT&cmptdms=0&q=NASDAQ:AAPL&ntsp=0

Meanwhile Microsoft was fighting a losing battle against Google on the web front. It was losing search market and also losing all the gains it made in the browser market. It invested huge money and resources in fighting with Sony and Nintendo. Vista came out and it was a big disappointment. That was followed by Windows 7 which got good reviews but many people were of the opinion that Windows 7 was what Windows Vista should have been.

Mobile OS is another area where MS was losing out. With better processors and emerging technologies, smartphones were becoming mainstream. Apple with iOS and Google’s Android was setting the market on fire. Suddenly the old bigwigs like MS, Symbain and Blackberry were found wanting for innovation. MS went back to blackboard and came out with Windows Phone 7. Unfortunately the result is less than spectacular. The Samsung update fiasco was really bad press which only made things difficult.

Tablets have changes a lot since Apple introduced the original iPad. Multi-core processors and innovative OS has made them good enough to replace the desktop or laptop for most people. MS sure cannot afford to lose out this market as it would be bad for its dominance on personal computing. They cannot count on the revenue from Office to keep growing as Google is busy attacking there with Google Apps and Chrome OS.

Microsoft in the next few quarters will have to fight on many fronts like desktop OS, mobile OS, gaming console, enterprise application etc. Steve Ballmer’s success as a CEO will be judged by how he leads MS in the next few years. They surely dont want Google and Facebook to overtake them in market valuation. Interesting time ahead and I sure dont want to be in Ballmers seat.