Survival of the Fittest

A Glimpse of the Future

This blog takes a closer look at Microsoft from a corporate strategy stand point- Where they were, where they are, and what they will become. What happens when you’re too good. Well, if you ask Darwin 500 years ago he might label you as the king of the jungle. If you ask anyone with a PC today they will probably mention Microsoft (Mac users temporarly aside). Economically speaking, competition leads companies to maximize efficiency through perpetual excellence. Who is to blame for Microsoft’s ability to manipulate markets and competitors. Critics have been accusing them of the 3 E’s: “Embracing, extending, and extinguishing”. The logic behind this is that Microsoft initially embracing a competitive product, extends this product to make it their own, and then adopts a new set of standards (compatible only with Microsoft), eventually extinguishing the competition. Some find this monopolistic, to keep it brief, I call it gaining market share.

It is no mystery that Microsoft today is virtually unstoppable. Perhaps it is a coincidence, the PAC-MAN logo; Chewing up and spitting out competitors and businesses for decades. Politics aside, they are an empire that has not only conquered the software development market, but has branched out into computer hardware (ex: Microsoft mouse, keyboard), home entertainment (ex: Xbox, Zune, MSN TV), MSNBC, MSN web portal, Bing, etc.

The big question today facing the mega giant is what’s next? The answer for those non-tech discerners is a new direction. Where is the innovation? Microsoft needs to get the internet right. With a lot of struggling brands such as Bing and MSN the company is failing to integrate successfully into the net. The Microsoft.Net platform announced a few years ago as a vision for the future is turning out to be just a vision. With a lot of cash (approx. USD 35 billion) Microsoft is in a good position to consolidate through acquisition. If unable to penetrate the internet perhaps they should consider acquiring someone who IS good at it. One thing is certain however, for the time being they do not need the extra profits or synergies, but to retain their spot in the long-run they might.