Every time Microsoft (NADSAQ:MSFT) lost a market and woke up one or two years after they start half-hearted attempts to regain the market. This generated cash holes like Bing or Windows Mobile, but hardly any market champions.
Why? Simply put, being the first in the market matters, and Microsoft simply could not come with a product that is superior and is supported for a superior business model. For example, Google’s search is simply better than Bing, and while Microsoft was chasing Symbian, Apple and Android came to the market with a new phone concept that changed the Phone market at its very foundation.
With ARM chips growing in power, someone saw that the tiny chips were powerful enough to run bigger devices, and so tablets were born. They were not small PCs like Microsoft envisioned, but more like bigger smartphones, enhancing the experience that users had with iOS and Android.
With Search and smartphones it was just a question of investing where Wall Street saw the money going. With tablets, things are a bit different. While tablets are not a full substitute for the PC, people will do more and more things that they used to do on a PC instead on a tablet. Yes, they are expensive, but they are practical, thinner, and lighter than PCs. Want to simply surf the web? Better do it on your sofa than sitting at a table with your laptop. Want to reproduce 1080p video? Every next generation tablet promises to do so. And it only gets worse if you look a few years down the road.
In doing that, the tablet is posed to hit Windows, Microsoft’s biggest cash cow. Microsoft needed to put a foot on that market fast. And they are committed to do so, and investing heavily this time.
First Microsoft started to develop Windows Phone 7, a fairly good OS for mobile phones, but (there is always a but when talking about Microsoft) the OS was again bounded to a more stringent set of rules and a draconian DRM scheme and could not lure the big players to champion the phone. The results? Another fiasco. But at least this time they have a good OS for mobile phones and their alliance with Nokia might start to bear fruit by next year.
Then Microsoft decided it had enough waiting for Intel’s wonder chip and decided that the next windows will be available on ARM platform. While compatibility with PC windows applications will probably suffer, Microsoft decided that it would be better to start in the market as soon as possible than to wait for a Intel chip that will be superior to ARM’s offerings, a thing that we might see only in 2013.
Microsoft is walking in a very thin line with Windows 8. They must improve what is praised as a solid and polished version of windows to keep the PC attractive as a platform and at the same time develop a version of the same OS that has an edge over future versions of Apple’s iOS and Android, and it must run well on x86 and ARM. This is a challenge for a company known for its slow development cycle. Microsoft’s obsession with backward compatibility, a must have in the enterprise market, is a hindrance in the mobile market. Microsoft will have to get rid of this mentality if it is to succeed.
Some investors are questioning Microsoft’s leadership, and they might be right. Microsoft needs someone capable of overhauling the company’s development philosophy. Microsoft’s development cycle works very well in the PC market, where they are pretty much alone, but in the mobile market, every edge counts so incremental improvements are a question of life or death. It must also stop punishing the users for the sake of DRM. It must become agile at development and a juggernaut in marketing products. More importantly, they must care about their customers. We hope that years of monopolistic behaviour has not killed Microsoft’s capacity to do that small list of tasks.S|A