"Microsoft's Lost Decade"

Tuesday, July 24, 2012

Vanity Fair contributing editor Kurt Eichenwald talks about how Microsoft went from leading the computer industry to watching Apple surpass it with iPods and iPads. His article "Microsoft's Lost Decade" appears in the July issue of Vanity Fair.


Kurt Eichenwald

Comments [28]

Marie K from Pittsburgh

Microsoft had created windows mobile in 2000. It was initially created for "palm pilot" type devises, but was created into mobile phone in 2003, The iphone was released in 2007. People need to stop saying Microsoft never had a smart phone before the iphone.

Jul. 25 2012 03:24 PM
Jon from LI

@Henry from Manhattan
I still use Windows and I still see it pretty much everywhere I go. Microsoft isn't going away any time soon. They do need to free up their employees because the Windows and Office juggernaut can't sustain them. Most of the people I know are still running XP because they haven't felt the need to upgrade their hardware in a few years. That used to be a lot of guaranteed revenue every year that's starting to disappear.

Microsoft has a lot of smart people that could probably compete very well with any startup if they had the freedom to do it. It's obvious that management is the problem but how do you rework a 100k employee company to let the innovation start? Splitting the company would just create two companies with the same culture problems.

Jul. 24 2012 04:07 PM
Henry from Manhattan

I agree with you Jon from LI.

Microsoft is facing stiff competition from every direction in nearly every market. No, not just Apple, which is arguably less of a threat. I think Google is far more of a direct threat, at least in terms of Microsoft’s core market.

That makes things difficult for Microsoft, sure, but that’s what competition means.

Jon from LI said,
“With those two you could almost argue that MS was first to cool and the new companies are going to profit from now on.”

That’s tricky because people would cite (arguably better) office suites and Internet browsers that were around before Microsoft got in the game.

Here’s a random thought.
Remember a decade ago when computer pundits were predicting the demise of Windows to Linux. Even with a free alternative to Windows, that sure didn’t happen.

Jul. 24 2012 02:51 PM
Henry from Manhattan

Isn’t Microsoft Windows still installed on a majority of personal computers (not including smart phones and tablets)? Didn’t Microsoft sell a bazillion copies of Windows 7 with perception of the product being generally positive? (Unless you or one of the type of people who just hate everything Microsoft does).

Isn’t Microsoft Office still the standard productivity suite? It’s even successful on Mac computers. Didn’t the interface receive an innovative overhaul a few years ago? (Love it or hate it is not the point.)

Doesn’t Microsoft have a successful gaming platform with the Xbox with 30% of market share? Remember, they started with nothing in the face of entrenched competitors Sony, Nintendo, and (on the outs) Sega. All they had to leverage was their experience with the PC being a gaming platform but the game console hardware was a risk.

While late to the game, is the Microsoft Surface (tablet) and new touch interface operating system with integrated keyboard cover not innovative? Love it or hate it, it doesn’t copy Apple’s interface. It still has a change at securing some market share because the iPad doesn’t really have any strong competition (no one is really buying those other brand tablets). It may come down to a price war and Microsoft may be able to win it.

The market share of Internet Explorer has fallen, but Microsoft is facing competition from multiple competitors with heavyweights like Google. IE still hovers around 30%.

Again, late to the game, but the operating system of Windows Phone is not an iPhone clone.

If it weren’t for Bing, there would be no real competitor against Google. Yes, Bing isn’t doing well, but at least Microsoft has skin in the game.

Just because Microsoft doesn’t have a lion share of a single market as it did with Windows 95, doesn’t mean that they are failing horribly.

Jul. 24 2012 02:39 PM
Jon from LI

@Henry from Manhattan
Office is getting a lot of pressure from Google Docs and others now.
Internet Explorer was ignored for a long time and has fallen behind Firefox and Chrome.

With those two you could almost argue that MS was first to cool and the new companies are going to profit from now on.

Xbox is doing well but if you look at the division's history it has been bleeding money for a long time. They have decent quarters and they have market share but MS has lost billions on Xbox overall.

Jul. 24 2012 02:27 PM
Edward from Washington Heights AKA pretentious Hudson Heights

Chuck from NJ said:
"Bing is a significantly better search engine than Google!"

Why? What does Bing do better than Google?

I use google because it's the first site I think of when I need to find something on the Internet.

Jul. 24 2012 02:10 PM
Edward from Washington Heights AKA pretentious Hudson Heights

Charles from Carmel, NY said:

"Before that, Microsoft had more or less stolen its main ideas from competitors, Windows from Apple and Word from Word Perfect, and so on."

True. Also Apple based their Mac OS, the mouse, WYSIWYG from Xerox PARC.

Hewlett Packard copied the Macintosh interface for some of their products - Logic Analyzers.

Jul. 24 2012 02:07 PM
Farid from New York, NY (Upper West side)

Microsoft was NEVER an inovator. They were placed in commanding position unwittingly by IBM in early eighties, and the only thing they "innovated" was their ruthlesness in imposing their illegal monopoly.

What is happing right now is that the PC is going the way of mainframes, minicomputers, workstations and the like. Five years from now, every body will be using tanlets and other tiny little devices running IOS and Android. Therefore, Windows monopoly becomes essentially irrelvant. And that is good for everyone.

Jul. 24 2012 02:04 PM
Henry from Manhattan

For the love of WNYC...

Kurt Eichenwald, please stop comparing Microsoft against Apple!

The whole premise is flawed!

They are doing largely different things, though, sure, there is some overlap in some markets here and there, but I make the argument, "Oh, Apple doesnt' have a successful gaming platform like Microsoft, what a failure!"

And yes, Apple once tried to sell a gaming console.

Jul. 24 2012 02:01 PM
Mike from Tribeca

Apropos of nothing, a very interesting review of Walter Isaacson's bio of Steve Jobs (and of Jobs' life and career in general) can be found at the NY Review of Books...

Jul. 24 2012 01:58 PM
Chuck from NJ

Shut down Bing? The guest must be kidding...Bing is a significantly better search engine than Google!

Jul. 24 2012 01:58 PM
John A

And PPC itself was a reboot, and ADB was tossed for USB, and the Apple II was completely disregarded by Mac, and a dozen more. Disrespecting their own tech past with their future - big thing at Apple.

Jul. 24 2012 01:57 PM
Charles from Carmel, NY

Before the landmark antitrust settlement, Microsoft was a monopoly and (current CEO) Steve Ballmer was the thuggish enforcer, who chaired yearly meetings at which competitors were told which little slivers of software development the 800-pound gorilla was not interested in and therefore would be safe for the other guys to develop. Before that, Microsoft had more or less stolen its main ideas from competitors, Windows from Apple and Word from Word Perfect, and so on. Why would anyone even want this company to succeede?

Jul. 24 2012 01:57 PM
Henry from Manhattan

“Last to cool, first to profit” worked just fine with Windows. Worked just fine with Office. Worked fine with Internet Explorer. Works well enough with Xbox.

Jul. 24 2012 01:56 PM
jgarbuz from Queens

Personally, I think Apple has peaked. I doubt it has anyplace to go but down from here on in.

In the final analysis, the company with the most patents will survive and thrive in the long run, provided it has the right management. Apple has about 4,500 patents. Microsoft has about 20,000. IBM has about 70,000. IBM hardly makes anything anymore and just produces patents it licenses. Same with Xerox.

Apple is great, but it can't keep at this altitude for very long, IMO/

Jul. 24 2012 01:55 PM
Edward from Washington Heights AKA pretentious Hudson Heights

Apple made a big shift by changing the processor their computers were based on from the PowerPC to Intel - which also required a rewrite of some of their software to handle the newer processor.

Jul. 24 2012 01:52 PM
Henry from Manhattan

Kurt Eichenwald said,
"The iPhone outsells everything at Microsoft combined!"

Because Microsoft didn't want to sell smartphones!

Now we can argue if this is a mistake, but Microsoft has hardware vendors that it didn't want to piss off by entering a Microsoft branded product.

Why are we incessant on comparing Apple with Microsoft? They have always had different roles.

Jul. 24 2012 01:49 PM
Edward from Washington Heights AKA pretentious Hudson Heights

Microsoft also missed the MP3 player. The iPod is more popular than the Zune ever was.

Jul. 24 2012 01:49 PM
Edward from Washington Heights AKA pretentious Hudson Heights

Apple missed Twitter too.

Supposedly the Apple workplace is very competitive.

Steve Jobs wasn't known for his easy going nature.

Jul. 24 2012 01:45 PM

Microsoft has a great research department. Why the disconnect?

Jul. 24 2012 01:41 PM
Jon from LI

I lived in the Seattle area a decade ago and knew quite a few people that worked at Microsoft. The "rank and yank" review system has been around for a very long time and no one has ever liked it.

I think Ballmer gets too much blame for all of Microsoft's problems. The culture was established under Gates and I've always thought that his leadership was questionable. His focus on Office and Windows everywhere means that many ideas and opportunities are ignored because they might compete with these products. Gates didn't think the internet was going to be big (ignoring many voices within Microsoft) and reluctantly accepted it after Netscape took off. They need a giant culture shift to remain relevant.

Jul. 24 2012 01:37 PM
Henry from Manhattan

Sorry, my last comment should have read:

"The only direct hardware competition with Apple’s iPod was the Microsoft Zune"

iPod, not iPad.

Jul. 24 2012 01:27 PM
Henry from Manhattan

First of all, the comparison of Apple with Microsoft is always a little tenuous.

Apple historically wanted to make “the whole widget.” Microsoft historically wanted to make software and was content to license it out to hardware vendors. Let the Dell, HP, Compaq, SONY, etc, sell hardware. Apple doesn’t do that.

There’s some overlap, Apple does make operating systems and software (for it’s own widgets!), and Microsoft has dabbled with branded peripheral hardware and now is jumping into the “the whole widget” business (which began in earnest with it’s Xbox gaming platform), but that has not been its original model of success.

Until the recent release of the Microsoft Surface tablet a month ago and the future release of Windows phone, Microsoft has not sold a Microsoft branded personal desktop computer, notebook, PDA (remember those), or smart-phone.

The only direct hardware competition with Apple’s iPad was the Microsoft Zune, and sure, they were late to the game and Microsoft wasn’t really interested in running a music storefront, which was the real point of the iPod and arguably only something Apple, with it’s media influence, could pull off.

Jul. 24 2012 01:20 PM
John A

I have long been a software professional and nothing could get me to sign up at MS after seeing videos of Ballmer prancing the stage like a 12-year old.
We don't work 65+ hour weeks to support clowns.

Jul. 24 2012 01:12 PM
Edward from Washington Heights AKA pretentious Hudson Heights

Perhaps Microsoft needs someone with the tech vision of a Steve Jobs.

Was Steve Jobs the one who thought of "build me a device that does this" - and left the details of the implementation up to his inner circle and their subordinates?

The Apple team has the stuff that makes companies continue to thrive.

Bill Gates clearly lost his vision when he began to focus on how to donate his billions.

On the other hand I am turned off by the Apple Cult - like the Northface clothing cult.

Next time your are in a Starbucks, note how many people have Apple laptops versus other brands. Seems to me that Apple dominates. Not because Apple is better, but because it's fashionable - Tech Northface.

Jul. 24 2012 12:49 PM
jgarbuz from Queens

Microsoft was never really innovative, and had a long history of crushing or buying up the competition, and in producing buggy software, and so they really had the respect of either the techies or the esthetes. But Microsoft really didn't care as the public kept buying relatively cheaper PC's over the higher priced Apple Computers regardless of constant crashes and other reliability issues.

But for the majority of consumers, PC's were "good enough" for their needs if the price was low enough. But for professionals in the media, graphics, advertising, movies, etc., that small 4% became loyal consumers regardless of price, because they needed the ease of use, and much higher reliability that Apple Macs. They kept Apple afloat in the lean years. Meanwhile, Microsoft was raking in the big bucks off of its operating systems and most of their other ancillary ventures did not do well, except maybe Office, Word, and the Xbox eventually.

When Jobs came back, he took things in hand, and the rest is history. I predicted that Apple would survive when others said it was on its deathbed some 16 years ago, but even I never anticipated that it would become the highest valuated stock on Wall STreet.

Jul. 24 2012 12:11 PM
Micheal from Manhattan

Microsoft's stacked ranking practice is probably the disruptive internal employee management system that is stifling innovation and preventing the company from showing vision. The staff is locked in a "Survivor" mode of trying to keep their job so much that the pure act of creating technology and growing innovation becomes lost to this "dog eat dog" style of management ....

Jul. 24 2012 12:04 PM
John A

Amazing, amazing to me that the appearance of the Apple Tablet was rumored for over a year, and that mini netbooks were already around, and that Microsoft already had experience with tablet computing 10? years earlier, and Still there was no try at a Windows tablet, save one overpriced Dell. Somebody at Microsoft lost the will to live.

Jul. 24 2012 11:15 AM

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