Skip to comments.How Microsoft Caused the DotCom Bubble and why their Skype ‘Hail Mary’ is irrelevant
Posted on 05/11/2011 7:45:01 PM PDT by aMorePerfectUnion
Since the mid-nineties, I have nurtured a thesis about the dotcom bubble, tech bust, and the role Microsoft played in it. The opportunity to discuss it has never came up.
That is, until Microsofts purchase of Skype yesterday.
I have long argued that while Microsoft might have begun life as a software firm, it long ago morphed into something that was more a very clever IP/marketing firm with a huge tactical legal advantage that gave rise to a monopoly, rather than a true technology company.
Microsoft remains hugely profitable today, but increasingly irrelevant. Their purchase of Skype is an attempt to buy back some relevance. They are the rich, uncool fat kid at school, trying desperately to buy their way into some popularity. On a spectrum of relevance, where would you place MSFT: Are they closer to Google or Apple or Facebook or Twitter, or are they more comparable to the Maytag repairman of the tech world?
Lets back up a bit, and look at Microsofts history, including the impact they had on other technology in the 1990s.
The first PC was given to the world in 1980 by IBM. The mainframe giant looked down upon the idea of a personal computer for home or even business use. The PC was insignificant, never to replace the big iron they made. In 1981, they happily outsourced the operating system to Gates geeks, who themselves outsourced the OS code writing. By 1982, MS-DOS was released.
Embedded within that original IBM deal was the seed of Microsofts vast fortunes. Microsofts true genius was in their license agreements of MS-DOS (and Windows) to computer manufacturers. They offered a variety of different licenses, but the version that charged the least per copy included a clever kicker: Microsoft had to be paid for every machine sold, regardless of whether MS-DOS was the operating system.
Of course, the PC makers gravitated to the cheapest option. Hence, that clever licensing trick led to both a monopoly in Operating Systems and an eventual FTC and Justice department Anti-Trust lawsuit.
Thus, Microsoft had their deal with the devil: Their lightning in a bottle was not some awesome technology or brilliant breakthrough it was a legal clause that led to enormous monopoly power. That was the prime basis of their success. They pre-installed Office in Windows, creating a second near monopoly and billions more in profits. They also had all sorts of dirty tricks, like undisclosed APIs that other software developers did not know of and could not use. They bullied competitors and friends alike. But that is another discussion entirely.
[The entire article is very well written - agree or disagree, MS-fanboy or MS-hater - especially the portions about the Cambrian explosion that occurred when the Internet was born and Microsoft's domination ended]
No, I think they vanish because Microsoft screws them up with their control freak “we will force people to use our stuff because there will be no alternative” marketing strategy.
Microsofts thinking is not “build a better mousetrap” it's “build the ONLY mouse trap”. The problem is that this no longer works as they now have competition they can't bully out of business.
I'm not a MS basher and I do like the company but there is truth to the Microsoft does not know how to innovate theory. I used to think they lost their way when they tangled with Netscape. Now I'm starting to think they were NEVER a true innovative technology company. Just look at the way they responded to the threat of Netscape competition and you quickly realize they were not interested in making a BETTER browser, they wanted to make the ONLY browser.
I agree. MS is good for the basic stuff like the OS, SQL server, Office, and that’s about it. Those things serve us all well. They try to branch out, but just never seem to be able to.
“I agree. MS is good for the basic stuff like the OS, SQL server, Office, and thats about it. Those things serve us all well. They try to branch out, but just never seem to be able to.”
The good news is MS does have lots of cash and resources to ultimately change their corporate culture and get back on the right track. The sooner the better. Hopefully Apple will bring out the best in Microsoft and vice versa.
because an apple is a PC. GOTCHYA!
I told you to sit down.
Do have to admit, you’re terribly amusing. Of course Apple was a PC (and still is.) So was Commodore’s PETs and CBMs, along with Tandy’s TRS80s (models I to III)
you ever heard the term “PC compatible”???
none of those you mentioned are.
sit boy, sit.
Sure, let's see you run Lotus 1-2-3 on your system. You'll need a 5 1/4" drive, a DOS version of 3.1 or prior (PCDOS, MSDOS, or DRDOS will work), and at least 64kb of ram. Guess what? Nothing's been 'PC Compatible' for a good decade, we do Windows now. Do I get a treat now?
your honor, may I submit one television commercial, written and paid for by apple computers...
“hi, I’m a PC. hi, I’m a mac...”
I rest my case.
do you get a treat??? um, no, you get a rolled up newspaper.
Under 55 and no XBox. FWIW
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