Microsoft is 30 years old! The company took over a baseball stadium in Seattle and bussed in 16,000 Microsofties for an orgasmic celebration of Chairman Bill’s vision of world domination. It must have seemed a long way from Albuquerque, New Mexico, where Gates and friend Paul Allen registered a start-up called Micro-Soft ‘the hyphen dissolved almost instantly’ to produce software for the Altair 8080, and the world’s first programmable ‘micro’ computer.
He had a dream of ‘a computer on every desk and in every home’, every one of them running Microsoft software. To appreciate how close he came to achieving this vision, take a walk through the business district of any town or city. Peer into an office window and you see PCs everywhere – sometimes thousands in a single building. And the vast majority of them are, indeed, running Microsoft software.
And then think of the revenue stream implied by this. Remember that nowadays the software licenses for Windows and Microsoft Office can account for up to two-thirds of the cost of a machine. Think of all that money flowing to a single address in Seattle. And of the fact that once the software is written, it costs zilch to stamp out copies. Truly, there never was a money-making machine like Microsoft.
Gates, along with Allen, had dropped out of Harvard the moment he learned about the Altair, convinced that the personal computer would bring about a revolution, and determined not to miss out on it.
And yet … even as the champagne flowed in Redmond, things did not seem quite right. The share price is flat – and has been so for quite a while. A company that was famously lean; mean and agile has become sluggish as it wades through the treacle that all large corporations accumulate. The next release of Windows – now called Vista – has been repeatedly delayed, and when it arrives will be only a shadow of its predicted self.
Microsoft has grown up, and is beginning to experience the mixed blessings of corporate middle age. On the one hand there is the respectability and status of being the most famous company in the world after Disney, and the complacency that comes from having $50 billion in the bank. On the other hand, there’s the furring of the corporate arteries, the slowing of reflexes and the dawning realization that you are no longer the coolest kid on the block.
It is getting harder and harder to persuade customers to upgrade from older versions of Office and Windows to new, updated releases. The threat of Open Source software grows by the hour, and although it hasn’t yet reached the average user’s desktop, it has foiled Microsoft’s attempts to capture the server market.
Internet Explorer is losing market share to the open source upstart Firefox. The European Commission has refused to buckle under pressure and is continuing to insist that Microsoft un-bundle its Media Player software from versions of Windows sold in Europe, and make details of the necessary programming interfaces available to competitors.
In an interview with the Wall Street Journal, Steve Ballmer Microsoft’s CEO explained the changes in standard-issue corpo-babble. The reorganization, he said, was part of driving software-based services in competition with anybody else who thinks they are going to use that strategy to get ahead in the marketplace. We are not the only guy who’s going to try to deliver software that has a service-based component. We need to get there aggressively and quickly.
Microsoft’s motto is: Where do you want to go today might just be more appropriate.