Having failed to challenge Google where it matters most — in online advertising — it has been reduced to bulking up by buying Google’s nearest but still distant competitor. In many ways, the company has become exactly what Bill Gates used to fear the most — sluggish, bureaucratic, slow to respond to new forms of competition — just as I.B.M. was when Microsoft convinced that era’s tech behemoth to use Microsoft’s operating system in its new personal computer.A Giant Bid That Shows How Tired the Giant Is - New York Times
Here we are nearly 27 years later, and Microsoft’s core product is still its operating system, now called Windows — that and its suite of applications, called Office, that run on Windows. They generate billions of dollars annually for the company. The most recent version of Windows, released almost exactly a year ago, has already been installed in 100 million computers. Yet in technology, 27 years is a lifetime, and there is a powerful sense that while it has spent enormous effort over the years protecting its monopoly, the world has passed it by. In particular, the technology world now centers on the Internet, where Google reigns supreme, and Microsoft has never succeeded in making serious inroads.
Besides, the old strategies that once worked so well for Microsoft — strategies that worked when the world still revolved around Windows — have no place in this new world. I
Today, Microsoft lacks both the weaponry and the nimbleness to compete with Google. Its operating system monopoly gives it no advantages in this battle. People can use Microsoft’s operating system and browser to get to the Internet — and to Google — or they can use Apple’s. It truly doesn’t matter. Meanwhile, with every new Internet fad, like the current frenzy over social networking, Microsoft is invariably caught flat-footed and has to race to just get a foot in the game. But that’s always the way it is when companies get big — and it is why real innovation always comes from small companies that don’t have a predetermined mind-set, or monopoly profits to protect."
It is amazing that despite all the talks about big goals, about "finding the next billion $ market opportunity for Microsoft" - I experienced strong tendency to keep change out ... and not that much willingness to explore new ways doing business in order to reach new targets.
As impressive as Microsoft's position in operating systems and office applications is, it seems like this success also provides a trap for the company that just doesn't seem to find an effective way driving a substantial enough level of market innovations in adjacent or new markets.
I am wondering how this bid plays out. Plus: if this merger really happens - will it play out as a turning point for Microsoft that doesn't just add new people, customers and lines of code to their business - but also new ways of driving innovation?