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Can Microsoft Get Back into the Game?

This article is more than 10 years old.

I know, I know. Microsoft is the world's largest software company. Its Windows OS and Office Productivity Suite remain leaders in most ways that you can measure them.  But the truth of the matter is that the company has lost its luster in recent years and some would say it has also lost its relevance. There has been a long, steady decline, lasting more than a dozen years since the days when the Redmond

giant ruled the Earth, striking holy terror into both competitors and its own customers. Today, it may still have the heft of a fierce giant, but its past muscle has turned to paunch in the eyes of many observers.

Lately, however, there have been signs the giant is getting in shape for a comeback and it might be a good idea to take them seriously.

The biggest to date was the "release preview" announcement of its new Surface tablet computer. Clearly aimed at Apple, the vague announcement generated praise and even  speculation on why Surface may be better than iPad.

The term "release preview"means there isn't really a product yet, and the company could get away with omitting such details as the price, or exact date of availability. It also makes one wonder if Microsoft is following Apple, Google, Amazon and probably Facebook into the hardware business.

Acer founder Stan Shih thinks it is just a temporary tactic. If so, it seems to me an expensive and distracting ploy. But even so, the world seems to me to be a little more interesting with Microsoft stepping back into the game.

It's interesting to see Microsoft in a challenger position. On its way up, Microsoft was a devastating competitor. It either out-played or out-smarted scores of companies, including an earlier Apple. Warning that it would acquire or destroy any company in its path, stood as king of the technology mountain, mercilessly kicking ny challengers of any size.

Opposition to Microsoft reshaped how technology developed and opened the window for the likes of Google, Facebook and the new improved Apple. More than that, a whole generation of young people have grown up and entered both the workplace and the marketplace without giving Microsoft much thought other than as the maker of Xbox games.

During the last decade, Microsoft has remained a large, but decreasingly relevant factor on the center stage where innovation matters far more than standardization and where productivity applications have been eclipsed by mobile apps.

But now the giant seems to have awakened. It is developing and acquiring interesting technologies. It is trying to get back into the game just when people were starting to discount it as a player.

Surface is the most recent--and interest-- play. But there have been quite a few others. To name some:

  • Last week rumors abounded that Microsoft was about to acquire Yammer, the leading enterprise social networking platform, for $1.2 billion. While these rumors have ebbed, it would be an extremely smart and strategic move for Microsoft. Not only does Yammer have a very cool image in a very big space, but Yammer also instantly modernizes Microsoft's graying Office and Sharepoint product lines.
  • Bing, the company's search engine was upgraded to become far more social last month. I've been using it more recently and find I like it. I'm not sure how the controversial jiggering of algorithms  work, but I often like the results I get more than I do at Google. It alone is no game changer, but it appear to me that it will be a ground-closer for Microsoft in the search engine wars.
  • It bought Skype, the leader in video chat. It faces significant challenges in this area from Apple, Google and presumably Facebook and no one has figured out how to exactly prosper from this growing way to communicate, but by buying Skype it is a player in an area where users seem likely to spend more-and-more time.
All of this may culminate with the introduction of Windows 8 later this year. As a Macaholic, I have not paid much attention to the new operating system, but people closer to it, tell me that it will rival and perhaps overtake Apple's iOS when it comes out--but I am among those who will have to see it to believe it.
However, I think when Windows 8 and Surface are launched, it will be the culmination of a gathering storm that is likely to be remembered either as Microsoft's great comeback or  The Last Hurrah.
For you who doubt the comeback, Apple actually overcame greater odds and a weaker position to become the world's most valuable company. And like Apple of a decade ago, it's own sins caused the problem and its own ingenuity will pull it back into the game.
Microsoft declined because it built buggy products that were overly complicated and late to market. It eschewed acquiring promising startups that could not produce big revenue fast. It thought that social networks would be owned either by itself or a rival named AOL. It was simultaneously anti-competitive and complacent. It allowed a great many of its most promising technologists leave to join startups and fast-growing competitors.
In Last Hurrah scenario, this concerted effort will culminate in a dying gasp of a once powerful and corrupt entity.
In the great comeback scenario, however, Microsoft pulls off the biggest comeback since Steve Jobs returned to Apple. If it happens, users will have the greatest benefit. They will have more choices at lower prices and innovations will come to market even faster than they are doing right now.
Having learned from the sins of its past, Microsoft will be a kinder, gentler company. The era of Microsoft's decline will be forgotten like the pizza box version of the Macintosh.
I have not a clue, which of these possibilities will come to pass. Perhaps neither will. But I do think that it will be fun to watch and hopefully, we users will win no matter which way it unfolds.