Many people believe that Microsoft has a long history of passing on innovation in favor of leveraging its position of power to take away market share from those who do innovate. The rise of the Internet has changed the playing field, but has Microsoft turned a page with Windows 7, or is it still using that same old playbook that gave it two decades of pure dominance?
The operating system that Apple named “Tiger” was introduced in 2004, and many felt it was the finest to date produced by the California-based technology company. Its main competition was, of course, the powerhouse up in Redmond, Washington – a company that went by the name of Microsoft. While announcing Tiger at a technology conference, Apple had commissioned banners that hung from the walls and gleefully poked at the giant to the north; the banners read, “Redmond, start your photocopiers.”
That of course was a jab at Microsoft, who Apple (along with countless other software companies) had accused before of stealing its innovations. Apple had previously sued Microsoft over the initial Windows operating system, which Apple felt was far too close to the Macintosh approach to be ignored; defenders of Microsoft pointed out that Apple’s own hands were not clean, having “borrowed” the whole idea for the original Mac OS from Xerox.
No matter where Apple got the idea for the original Mas OS, there’s no denying that Apple has succeeded in launching revolutionary new technology products again and again: it created the personal computer, revolutionized the market a second time with the release of the Macintosh, dominated digital music with iTunes and the iPod, and now has launched a “smartphone” revolution in the United States with its iPhone. Most of Microsoft’s success has come from leveraging its position of power as the leading OS maker to sell its own versions of products that already existed. Microsoft seems less interested in innovation, and more interested in adapting and dominating.
The movie Pirates of Silicon Valley was released in 1999 before Apple had risen from the ashes of its historic fall at the hands of a more aggressive and better positioned Microsoft. In a memorable scene from the film, volatile Apple CEO Steve Jobs unloads in an encounter with Microsoft founder and CEO Bill Gates. Gates admits that there maybe be “a few similarities” between his new Windows OS and the Macintosh OS. “Similarities,” Jobs replies, “Try theft.”
Since the rise of the Internet, however, innovation has taken on a new form of prominence with technology companies. Some companies who have embraced innovation have seen wild success; Google decimated a number of far less sophisticated early players in Internet search, Facebook smashed a less aggressive MySpace, and of course Apple found its groove again with the iMac and, later, the iPod.
“Microsoft’s business model was based around waiting for others to innovate, then making cheap knockoffs of what others were selling,” wrote columnist Daniel Lyons recently for Newsweek. “Microsoft copied Apple to make Windows. They copied Lotus and WordPerfect to make Excel and Word, then bundled those apps into a low-cost suite called Office. They copied Netscape Navigator to make Internet Explorer, and then gave it away free, tied to Windows, and killed Netscape. But then the copycat model stopped working.”
Why did it stop working? Lyons says, and I agree, it was the rise of the Internet that threatened Redmond. Microsoft suddenly seemed unable to buy or muscle its way to the top with failed music projects and a disastrous Windows Vista. The rise of Open Source software also made its mark, since developers from around the globe now found it a lot easier to collaborate on projects like Open Office, Firefox and countless others. Fighting wars on a number of fronts, Microsoft found itself in a dire position; it was not irrelevant by any means, with more than 90% of the market share for personal computers, but was in danger of heading down that path if it didn’t start to make the right moves.
“Before the Internet came along, Microsoft ruled the computer industry,” Lyons wrote. “Tiny software companies lived in Microsoft’s shadow, and they knew that if their business struck gold, Microsoft would offer them an unpleasant choice: either sell your company to us for a pittance, or we’ll create software that mimics your product and put you out of business. Microsoft bullied rivals and business partners alike, until the latter squealed to the U.S. Department of Justice, which brought an antitrust case against the software giant, resulting in a judgment against Microsoft in 2002. These days nobody fears Microsoft. The company has become a stumbling, bumbling joke.”
Enter the Windows 7 operating system. The hype surrounding the release of this OS has been deafening, with Microsoft all but pleading with consumers that it has learned its lesson and reformed. But there are no really good signs yet that the hype has penetrated through to those consumers who aren’t rabid technology fans. In fact, any way you look at it the Mac’s market share has only increased slightly since the release of Windows 7, although it’s far too early to have a really good sense of what the OS will mean to Microsoft.
As the marketing battle heats up between the two archrivals, the real question might be if Microsoft has changed its approach to development, learned the lesson of a new Internet age, or if it’s still the same old company that lets others do the hard work.
Incredibly, Microsoft partner group manager Simon Aldous had this candid comment when talking about his company’s latest OS that might shed some insight into that question: “What we’ve tried to do with Windows 7 – whether it’s traditional format or in a touch format – is to create a Mac look and feel in terms of graphics.”
Others at Microsoft have since rushed to repair the damage, denying the validity of Aldous’s comments and insisting that he was flat wrong. But the comments have already served like a shot of euphoria to loyal Apple fans everywhere who have hopped up and down and pointed with glee at their latest smoking gun.
In the final climax of Pirates of Silicon Valley, Jobs and Gates square off in a private fictional encounter. After a heated exchange, Gates turns to leave and Jobs calls after him, “We’re better than you are. We have better stuff.” Gates stops and slowly turns to deliver the films final word on innovation in business. “You don’t get it Steve,” he says calmly. “That doesn’t matter.”
Time will tell if the fictional Gates was right.
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