This is the end of an era. Bill Gates’ momentous decision, a few decades ago, to focus on software rather than hardware and turn the Windows / Office combination into a universal platform propelled Microsoft to the top of the charts. Recently, a series of decisions have gravely undermined Gates’ legacy:
First, there was the decision to get into the hardware business with the Surface tablet. The recent $900m write-off has demonstrated how successful this has been.
Then, there was the decision to restrict users of iPad and Android tablets to an online version of Office, thereby abandoning the strategy of dominating the market with a universal platform. As the FT points out in a recent article, this decision opens the door for innovative competitors to seize on the dissatisfaction created by Microsoft’s restriction to lure customers into trying something new and fresh. Customers will soon realize that there is a life after Microsoft Office, and they may well find that after-life a lot more exciting than life in Powerpoint, Word and Excel.
Finally, there was the decision to go even further into hardware through the takeover of Nokia’s phone division, in a desperate attempt to secure a captive outlet for a Microsoft mobile operating system that has failed to attract any serious customer. The move basically means that Microsoft will try to sell an OS that nobody wants by ramming it into phones that nobody wants either.
In short, the advent of mobile computing has already broken the dominance of Windows operating system. The daft decision to restrict Office to Windows operated devices spells the end of the dominance of Office. And Microsoft strategic response to this shift of the software tectonic plates is to fall into the hardware trap they laid for IBM thirty years ago. It’s a Kodak moment!