Can Microsoft Regain Its Technology Goliath Status?

By Jessica Davis  |  Print this article Print

Back in the day, Microsoft was frequently second or third to market with a hot new technology, and yet ultimately beat the market-leading competitor handily. But iPhone, iPad, Google and other forces have put Microsoft's dominance in question. Can this tech giant make the comeback it needs to recover its status as unbeatable?

Anyone who has been around for more than a few years in the technology industry can remember when Microsoft was a Goliath that couldn’t be taken down.  The company dominated the technology industry and toppled those companies who dared to threaten its market share.  And that’s not because Microsoft was ever first to market with technology. No, not at all.

For instance, Apple came first selling a computer with a graphical user interface. Before that we lived in a world of command-line interfaces such as DOS. But once Apple showed how it could be done and that people wanted it, Microsoft brought to market the ever clunky Windows 3.x which crashed if you looked at it sideways. Then came Windows 95, and the rest was history. Microsoft owned the user interface again.

Remember Lotus 123? The Lotus spreadsheet drove sales of the IBM PC in the 1980s. But Microsoft came along with Excel and ultimately won.

And what about exploiting the wonder that was the world wide web in the mid-1990s. Wonder boy entrepreneur  Marc Andreessen came along, creator of what would become the Netscape Naviagator web browser, and founded Netscape, quickly threatening Microsoft with the promise that users could access their documents and files via a browser no matter what operating system they were using. Netscape’s initial public offering in 1995 achieved nearly a record for a first day gain and valued the company at about $2.9 billion.

But Microsoft  with its huge development resources soon improved its Internet Explorer web browser enough to best Netscape Navigator. And Microsoft began offering some web server technologies for free, killing Netscape’s own web server pricing. Netscape couldn’t compete.

Microsoft’s strategy has always involved being second or third to market after a technology had already proven a hit with users. Microsoft would launch with an inferior product and improve on it until its features and pricing beat the market-leading competition. Another key aspect to Microsoft’s strategy was owning the user interface.  Microsoft was laser focused on identifying the interface or functionality that inspired users and then offering its own version of that. When users lived in the operating system it was Windows. When it was about productivity applications it was Office. When it was email, Microsoft introduced Outlook on the client side. And when it was a web browser Microsoft came out with IE.

Fast forward to today. Microsoft was very late to the smartphone game. PCs still reigned supreme when Apple introduced iPhone. Now users are more attached to their smartphones than their PCs, a shift that has diminished Microsoft’s influence in the technology market. Meanwhile, Netscape’s vision of accessing applications via a web browser is being realized – by Google. Google Apps may not match Microsoft Office feature by feature. But more people are paying attention to it now than a year ago. The rise of Google Apps is also a hit to Microsoft’s Goliath status.

Microsoft has always been considered a channel-friendly company, and many  IT solution provider partners of Microsoft are vastly disappointed by the software giant’s recent missteps and miscalculations. Neither Apple nor Google offers as robust a channel program. Partners want Microsoft to succeed.  But what happened to the Goliath that Microsoft once was? Sure, Windows and Office and other Microsoft technologies still remain huge. But the old Microsoft wouldn’t have put up with its tech giant status being threatened.

And on the eve of Microsoft’s Worldwide Partner Conference, we are left to wonder, can Microsoft come back from behind to own the smartphone, cloud applications and tablet markets where users live now?  Will Microsoft executives surprise us with announcements of new innovations and brilliant strategies?  I hope so.  But I doubt it.

Jessica Davis covers the channel for eWeek and Channel Insider. Her technology journalism career began well before anyone heard of the World Wide Web and has included stints at Infoworld, Electronic News/EDN, and the Philadelphia Business Journal. Her work has also appeared on CNN and Forbes.com. She has covered hardware, software and networking, as well as the business side of technology. She has won several journalism awards, including a national ASBPE award for best staff-written column, and was named Marketing Computers hardest working tech journalist on their inaugural list of top tech journalists. Jessica can be reached at jessica.davis@ziffdavisenterprise.com