Enterprise IT Watch Blog

Nov 28 2011   4:14PM GMT

Has a fear of IT departments almost killed Microsoft?

Michael Morisy Michael Morisy Profile: Michael Morisy

In his normally Apple-centric podcast Hypercritical, John Siracusa recently tackled a different target: What ails Microsoft. While Windows 7 is doing better than Vista, the company’s dominance just isn’t what it used to be. Has the infamous Embrace, Extend, Extinguish business model finally run its course? Is Microsoft really circling (however slowly) the drain?

And are IT departments to blame?

The case against Microsoft

The main thrust of Siracusa’s argument is that Microsoft has spent the last several years just chasing: Chasing Netscape in the browser wars, chasing Sony in the console wars, chasing Amazon into the cloud, chasing Apple in the smartphone and tablet – wait, is it a war if one side can barely fire a shot?

Either way, things aren’t looking great for Microsoft’s long-term future, as smaller margins, customer unrest and new competitors rise. Siracusa points out that Microsoft hasn’t been passive through all this (see above), it’s just chased the wrong competitors. Were OS X and Linux really ever serious threats to Microsoft’s desktop dominance? No, but it poured massive resources into ensuring its continued dominance over them, only to have its core products made less relevant through other avenues (namely, web-based software and a revolutionized mobile landscape).

So not only was it playing catch up, but it was playing catch up in the wrong races. And the culture of Microsoft is such, Siracusa believes, that defining and executing well in new markets is almost impossible – thanks largely to its symbiotic (Is that an appropriately creepy word?) relationship with the world of IT.

If you’re not the customer, you’re the product

Siracusa notes that the personal market was never its bread and butter: Corporate IT was, whether it was mass-volume licensing deals, various server offerings or other big-money deals. Microsoft was so worried about this market leaving, the theory goes, that it would never push back very hard on its needs. Backwards compatibility to basically forever? Sure! A “classic” view so you don’t have to retrain your users? Why not.

And so the product lines became bloated, yes, but more importantly the company could not push out much that was creating new markets or ideas, since there was the risk it would cannibalize their own legacy businesses or tick off their legacy business customers. Because Microsoft prioritized pleasing corporate needs, even as the feature list grew (and grew), the products actually got to be worse or, in a good year, only incrementally better.

He then argues that Microsoft should have pushed back against IT – and it could have with near impunity. Nobody was going to leave Microsoft no matter what, so when it had the market in a stranglehold it should have set the agenda – not follow it.

But is that true? I was surprised at how poorly Vista did: A lot of IT departments did talk about ditching it, and many more just kept using XP with no plans to upgrade. Call it the “lost generation” of Microsoft: They didn’t tick off their customers by over-innovating, but by making a bad product, but the result was that IT did flex its muscle, and I wonder if it had tried to do so earlier whether one of the other enterprise players (HP? Dell?), so hungry for a high-margin opportunity, would have made a more credible attempt to compete.

I don’t know, but I think it’s a question open for debate. Let me know what you think in the commnets or at Michael@ITKnowledgeExchange.com.

Michael Morisy is the editorial director for ITKnowledgeExchange. He can be followed on Twitter or you can reach him at Michael@ITKnowledgeExchange.com.

2  Comments on this Post

 
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  • MarkWall
    The problem is that us customers of Microsoft have been treated as cash cows with artificially short lifecycles and massive business disruption by changing server OS' too often for little if any advantage to the customers. Years ago we moved to Linux servers to get away from these artificial lifecycles and we've never looked back. Our servers are more reliable and we aren't forced through major upheaval to get features we don't want. Another reason we're pushing back against Microsoft is their attempt to dominate the web with substandard servers and applications. IE won't work with well written web sites. Badly written web sites only work with IE. Windows 7 is a good operating system yet us Systems Managers dread the incredibly short lifecycle before Windows 8 comes out, no doubt with a whole new raft of incompatibilities with previous versions of Windows, incompatibilities with early Windows servers, databases etc etc. All artificial, all designed to treat us as cash cows. Linux servers running Samba, MySQL, Apache and PHP. They work. They last. We've just been forced to use a Windows server with MS SQL server for our accounts package. It took Microsoft 6 days to electronically deliver £3,500 of software. Speaks volumes for their ability with web based technologies.
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  • mpez0
    @MarkWall Who are the "us customers of Microsoft"? It isn't most of the people using Microsoft products; it isn't even the IT departments described in the main article. The big customers of Microsoft are the PC producers: HP, Dell, Lenovo, Gateway, etc. Sure, you can argue that IT departments and individual users are customers of those PC manufacturers, and thus indirectly Microsoft customers. But follow the money -- Microsoft is [I]very [/I]responsive to the expressed needs of those major vendors. The vendors will be [I]somewhat [/I]responsive to us end users (including IT departments), but only somewhat, because they generally don't have a small number of customers who provide the vast majority of their revenue. It's to neither MS nor your PC vendor's disadvantage to force you to rotate your PC hardware and software purchases. MS is more than happy to do this because their customers are extremely happy to have you buy lots of new PCs. It's only when the perceived advantage of the new package is as low as Vista's (despite MS's advertising), that there's enough pushback by end users through the PC vendors to have some effect. There's no mystery or conspiracy here; MS is trying to meet the needs of their major customers. It's just that most of the people who think they're MS customers really aren't.
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