Hi List,
This is a an article from Windows 2000 Magazine by Paul Thurrott (News
Editor). I found it quite interesting and sharing it with the list.
Have a nice weekend everyone,
-mansour...
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Although it's easy to attribute much of Microsoft's success over the
years to shady business practices, the company wasn't always in a
position of power, and its early success was an interesting mix of
savvy maneuvering and sheer luck. Throughout Microsoft's history, the
company has dodged bullet after bullet as potential competitors have
come and gone, never to be heard from again. The company's current
legal dispute with the federal government is seemingly the most
dangerous threat the company has faced, but I see signs that Microsoft
will land on its feet yet again, thanks to good, old-fashioned luck.
First, let's look at the history. As many of you already know,
Microsoft's current dominance is due largely to IBM's decision in the
early 1980s to include Microsoft's MS-DOS OS with IBM's first PC--and
the combination was wildly successful. Many people wonder how IBM could
have so easily handed over the "keys to the kingdom"--and basically
ceded control of the PC OS market to Microsoft. But that isn't what
happened. As is often the case with such legends, the real story of
Microsoft's success with MS-DOS is less dramatic. At the time,
Microsoft was simply a software development tools company, offering
versions of its BASIC, Fortran, Assembly language, and other
programming languages to one and all. In its bid to retain IBM's
business for the fledgling PC, Microsoft agreed to supply the company
with DOS only after a deal between IBM and Digital Research fell
through. The decision was just a smart business move.
But IBM didn't cede the market to Microsoft--far from it. Uncertain
whether the upstart company would be able to supply a viable PC OS, IBM
made sure that two other OS offerings--CPM/86 and a Pascal-based
system--were available at launch. Microsoft did what it could to make
its OS the software platform of choice, but given the CP/M-oriented
nature of the day, it's rather amazing that Microsoft's OS won out. The
rest, of course, is history: MS-DOS and its Windows successors are the
best-selling software titles of all time, and Microsoft's OS business
now accounts for 45 percent of its revenues. And the success of
DOS/Windows as a platform has given the company massive growth in
supporting areas: Microsoft's Office suite of productivity applications
makes even more money for the company than does Windows.
Luck aided Microsoft at other times in its history. In the late
1980s, Apple Computer, with its beautiful and simple Macintosh, was in
a position to dominate the PC industry. Third-party hardware developers
were waiting in the wings, hoping to license the Mac, and even
Microsoft prompted Apple to make a run for it (at the time, Microsoft
was making a killing from Mac software, and Windows wasn't going
anywhere). But bolstered by the insanely great margins on its hardware,
John Sculley's Apple surrendered long-term viability for short-term
profits and became an also-ran. When Microsoft effectively halted MS-
DOS development in the early 1990s, Digital Research released its DR-
DOS alternative, which sold amazingly well. DR-DOS's success prompted
Microsoft to announce MS-DOS 5.0, which the company couldn't deliver
for more than a year. And when Microsoft released MS-DOS 6.0, Stac
Electronics sued the company, charging Microsoft with violating its
patent for disk compression. Stac won a staggering sum in court, but
Microsoft settled with Stac, whose technology then appeared in the
final version of Microsoft's command line system, MS-DOS 6.22.
Novell bought WordPerfect Corporation (for a huge sum) and Borland's
Quattro Pro--hoping to offer a Microsoft Office alternative. After a
year, however, Novell sold WordPerfect, losing millions. Lotus
SmartSuite, meanwhile, which essentially invented the Office suite
concept, watched its market share erode because of a Microsoft bundle
that offered little true integration. Both Lotus and WordPerfect,
dominant in the DOS era, lost a technical "bet." As Microsoft put all
of its resources into Windows, Lotus and WordPerfect continued to push
their DOS products while they worked on OS/2-based successors. As OS/2
floundered in the market, so did third-party developers, and Lotus and
WordPerfect never fully recovered. By the time Lotus 1-2-3 and
WordPerfect had versions of their products for Windows, Microsoft Excel
and Word were entrenched.
In recent times, Netscape's implosion and inability to create
elegant software that you could upgrade easily did more to harm
Netscape than Microsoft ever did. And threats such as Java and the
Network Computer never materialized because of those products'
limitations, not because of Microsoft's perceived response. Going
forward, Microsoft is vulnerable in two key areas: 1) Linux, and 2) the
Department of Justice's (DOJ's) antitrust case against the company.
Given these vulnerabilities, Microsoft's future might look dim. But
much past evidence suggests that Microsoft could be victorious--more
because of competitors' mistakes than Microsoft's actions. Next week,
I'll examine those mistakes and consider how Microsoft might escape
unscathed because of them.
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