Hey Microsoft, it's IBM deja vu… all over again
I’ve been watching this phenomenon happen now for a few years. In fact, because I think that James Governer is a better writer than me (ok, it’s not even close), I suggested for him to get rich writing this book….James, there’s still time.
Microsoft is facing what the old IBM faced in enough ways that it’s now not a conincidence. Since my due dilligence on this hasn’t been approved by anyone, I’ll just mention a few public similarities.
Back in the pre-PC mainframe heyday, IBM had what some would call proprietary architecture. The industry then revolted with of all things DOS/Windows, ethernet, distributed computing, etc. Now the roles have reversed and Windows is proprietary and IBM is pushing Open Standards. I guess it’s human nature to want to have control and to not want to be controlled.
IBM was the big bad corporation, Microsoft was the upstart that freed everyone from the data center. Now Microsofts server product is called Data Center.
IBM had some legal troubles with monopolistic behavior, I think Microsoft has it’s hands full with this distraction right now. I won’t go into distraction too much. I’ll leave it with if you take your eye off the ball, you can’t hit it.
These are merely symptoms of the condition though, here’s another. Yesterday, there was and organizational change in Redmond, Microsoft Management Undergoes Major Overhaul . I’ve been through 100’s of these changes in my career. Some really shook up a group and things took off (very few times did this happen), some were monumental failures (more often than not) and some were treading water (some things changed, but the results were about the same). One fact that is not lost on me is that when you’re killing the competition, or when things are working well, few teams will change their line up.
Re-inventing yourself is how a company can survive key times in their existance. Re-shuffling is not the same thing. IBM has had faced this a number of times (remember typewriters, 360, Akers to Gerstner, commitment to open), and now Microsoft may face an IBM sized challenge.
I spent a good part of the day with an analyst yesterday and we had this conversation (I’ll keep him anonymous for now). He rightly points out that one company doesn’t have to take away a big portion of the desktop OS market, but many companies can take a small piece causing the same erosion effect. Heck, even a shift in technology to something like a handheld device with lots of bandwidth can cause the OS to be irrelevant.
Other companies haven’t managed as well, remember DEC?
Microsoft has $50 billion cash sitting around, so they are not in financial trouble, so they could tread water for a long time. Managing shifts in technology is an issue, dealing with people and their loyalties (internal and external) is a bigger challenge. This is a fast and ever changing industry. It’s tough to keep up. My analyst pal and I also talked about the defining changes in history like from horse and buggy to trains, to cars, to planes.
The first closing I ever put on my email was this, change is the only thing that stays the same. Others point this out, it’s tough to get to number one, it’s tougher to stay there.
Everyone shoots at number one.
Will history repeat itself? Not exactly, but there are only a few big corporations and their problems, while not exact are similar.
I’d like to get in my DeLorean with a flux-capacitor and go back to the future to see what happens and how this works out. Maybe James will be rich enough to invite me to his new place in the Mediterranean that he can buy from book royalties?