The strategy conversation you can only have here
Too big. Too powerful. Too much of a monopoly. Too much money. Too many clever people. Too much momentum. Too arrogant to see the writing on the wall? When I learnt rugby at school I was taught that the bigger they are the harder they fall. Could this be the case with Microsoft? And are the events of the last month starting to have an effect on the software giant.
Bill Gates certainly sounded under threat at a Microsoft shareholder meeting last Friday. In his first public response to an anti-Microsoft conference convened by American consumer activist Ralph Nader, Gates called the offensive on his company over the past month 'a witch hunt'. "Microsoft has a great story to tell," he said. "This is not a country where success and great products should be punished."
The month in review:
First Sun Microsystems sued them for not complying with their Java specifications and including a few of their own Microsoft proprietary items in the code distributed to Microsoft clients. There's hot debate on both sides of this argument and there is certainly a camp that believes the trial will be more of a marketing effort for Sun than a fight for the merits of the case.
Be this as it may, Microsoft have had to stand up in public and make a stand. Their argument was clear, why should they include the bits of Sun's software which allow it be run on other platforms besides it's own Windows operating system?
Fair enough but a week later Janet Reno and the United States Department of Justice (DOJ) filed papers against Microsoft for not complying with their agreement of two years previous. In the filing they mentioned that Compaq wanted to pre-install Netscape Navigator on computers they sold rather than Microsoft's Internet Explorer. Microsoft told them to get lost and if they did install Netscape's product instead of their own then they would lose their access to install Windows on any computer.
Microsoft's strong position in the market obviously allows it to pick and choose which agreements to follow by the letter and which to fight in court. The DOJ asked for a million dollars a day. Petty cash to a company the size of Microsoft.
Neither the Sun nor the DOJ case is likely to make a dent in Microsoft's business in the short term. It does however play havoc with Microsoft's carefully nurtured public relations image. Despite the PR efforts though, people seem to treat Microsoft in the same way as they do the insurance industry. It is a necessary evil. You have to have it but if there were another choice we'd all rather take that.
While everyone is buying MS products this is not a problem. It does however make their position in the market quite precarious. The problem is if they get side-tracked while fighting off attackers on all sides (DOJ, Sun, The everyone but Microsoft lobby, other competitors and Ralph Nader) and competitors are able to position their products as a viable alternative then the transition could be very sudden. There aren't many of us who stick with our insurance companies because of loyalty. If someone offered us better cover at a better price, we'd change tomorrow.
Microsoft is not likely to disappear in the near future. Nature does however work in cycles and if I were Bill Gates, I would be looking to understand how I'm going to ride the downhill cycle that may just be appearing on the horizon. With his tremendous skill and energy I'm sure he could use the downward trend as rejuvenation for the company that he has built so successfully.