eWEEK at 30: Microsoft Shapes PC Standard, but Stumbles in Post-PC World

By Pedro Hernandez  |  Posted 2014-01-31 Print this article Print

Microsoft also fell behind in mobile apps. The Google Android and Apple iOS app stores are home to millions of apps that generate billions of downloads. Microsoft's anemic Windows Store app marketplace today is still a shadow of its massive PC software ecosystem.  As more software companies and developers adopt a mobile-first approach, Microsoft risks taking a backseat to Google and Apple in terms of new software innovations.

Fortunately for the software giant, it isn't exactly standing still.

Microsoft is currently finalizing its $7.1 billion acquisition of Nokia's handset business. While Windows Phone's share of the global smartphone market hovers in the single-digit range, it is making encouraging gains in some emerging markets and Europe.

Taking a page from the mobile playbook of Apple—a company with its own device manufacturing unit—Microsoft is banking on Nokia to put the "device" in its new Devices and Services strategy. On the tablet front, Surface is picking up steam after a disastrous debut that led to a near-$1 billion write-off.

Nonetheless, Microsoft has a long way to go if it hopes to catch up to Android and iOS.

Microsoft hesitated again while Amazon made an early bet on cloud computing, with the 2002 launch of Amazon Web Services. It goes without saying that today the online retailer is known as much for its cloud computing services as for its e-commerce and digital media business units, at least within the IT industry.

Similarly, Microsoft watched from the sidelines as customer relationship management (CRM) specialist Salesforce.com championed cloud-based delivery models for enterprise software with its mantra of "no software" and its claim that selling boxes of shrink-wrapped software was a dying business model. Salesforce grew rapidly as its market view came to pass even faster than anyone could have imagined. Today, it's raking in big revenues and edging ever closer to profitability.

It's easy to understand why Microsoft was standoffish during cloud computing's early days. Why risk killing its lucrative cash cows, which made billions for the company in software license sales?

Microsoft would go on to announce Windows Azure in 2008, years after rivals such as Salesforce and Google established their footholds on the cloud market. Today, while Microsoft may not spring first to mind when discussion turns to the cloud, it is catching up.

Microsoft's portfolio now includes the cloud-enabled Office 365 suite and its Dynamics CRM Online 2013 offering. Its infrastructure-as-a-service capabilities are growing by leaps and bounds to include support for Linux as well as host of virtual machine and virtual network options.

Not every Windows release was a success. Although Microsoft could be confident of selling millions of copies of each Windows version as a practical matter—traditionally, most consumer PCs ship with the latest edition of Windows—some were deemed outright failures despite their substantial installed bases on new PCs because enterprises and a majority of consumer PC owners refused to upgrade to them. It's a situation that is somewhat reminiscent of the fabled Star Trek odd/even movie curse among science fiction movie aficionados.

Released in 2000, Windows ME (a.k.a. the Millennium Edition and number 2 in eWEEK's Top 10 Microsoft Flops) threatened to shred all of the goodwill that the company built up with Windows 95 and 98. For many an unfortunate Windows user, the buggy, crash-prone upgrade became the delayed manifestation of the Y2K bug that dominated headlines the year before.

A year later, Microsoft would release Windows XP. A hit in every sense, particularly after the SP2 update, XP continues to endure even as Microsoft cuts support for the OS. Things were going well until the ghost of Windows ME resurfaced in the form of Windows Vista.



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