Speaking of Entrenched Tech Companies, Why Didn't Microsoft Die?
"Why didn't Microsoft die?" And what does that mean for other entrenched tech companies today? That's the question being asked by the New York Times' On Tech newsletter: For a decade or so, Microsoft botched so many significant technology trends that the company became a punchline. But Microsoft more than survived its epic mistakes. Today, it is (again) one of the tech world's superstars... Understanding Microsoft's staying power is relevant when considering an important current question: Are today's Big Tech superstars successful and popular because they're the best at what they do, or because they've become so powerful that they can coast on past successes? Ultimately the angst about Big Tech in 2021 — the antitrust lawsuits, the proposed new laws and the shouting — boils down to a debate about whether the hallmark of our digital lives is a dynamism that drives progress, or whether we actually have dynasties. And what I'm asking is, which one was Microsoft? Let me go back to Microsoft's dark days, which arguably stretched from the mid-2000s to 2014... The company failed to make a popular search engine, tried in vain to compete with Google in digital advertising and had little success selling its own smartphone operating systems or devices. And yet, even in the saddest years at Microsoft, the company made oodles of money. In 2013, the year that Steve Ballmer was semi-pushed to retire as chief executive, the company generated far more profit before taxes and some other costs — more than $27 billion — than Amazon did in 2020... On the healthy side of the ledger, Microsoft did at least one big thing right: cloud computing, which is one of the most important technologies of the past 15 years. That and a culture change were the foundations that morphed Microsoft from winning in spite of its strategy and products to winning because of them. This is the kind of corporate turnaround that we should want. I'll also say that Microsoft is different from its Big Tech peers in a way that might have made it more resilient. Businesses, not individuals, are Microsoft's customers and technology sold to organizations doesn't necessarily need to be good to win. And now the discouraging explanation: What if the lesson from Microsoft is that a fading star can leverage its size, savvy marketing and pull with customers to stay successful even if it makes meh products, loses its grip on new technologies and is plagued by flabby bureaucracy? Was Microsoft so big and powerful that it was invincible, at least long enough to come up with its next act? And are today's Facebook or Google comparable to a 2013 Microsoft — so entrenched that they can thrive even if they're not the best?
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