A Historical Perspective: The Irony of It All...
Microsoft has only one thing to thank for its success today: IBM. In 1980, IBM was getting its butt kicked in the exploding desktop computer market by companies like Commodore, Atari, and Apple. And IBM was in a big hurry to join the party. IBM had all the hardware plans for its new 8088 desktop computer in place, but the operating system software was a much different story. The problem was, IBM was a huge, bloated company with layer upon layer of management and bureaucracy that stood in the way to accomplishing anything quickly. Even IBM's own leadership optimistically guessed that it would take them 2-3 years to build a working operating system from scratch. Clearly this would not do. They had only one year to get their new computer to market, and IBM could not do it themselves.
In July 1980 the founder of a small software company called "Microsoft" answered a phone call and very soon after met with IBM's top executives. Bill Gates confidently said that only he could write the code they needed in the time available -- nobody else in the world was up to the task. But in order to do it, Microsoft wanted to keep full control of the software. This was completely unheard of -- a brash little programmer playing hardball with one of the richest companies in the world. However IBM realized they were stuck between a rock and hard place and Bill Gates was right. If they wanted their operating system within a year, they had to agree. So IBM and Microsoft entered into a deal that essentially saw IBM make money by selling the hardware, while Microsoft made money by selling IBM copies of their OS. IBM's PC was released on August 12, 1981 running exclusively on Microsoft software -- and the rest is history.
Of course almost 25 years later the irony is clear. In 2005 Microsoft has become IBM -- the bloated, bureaucratic dinosaur that now stands in the way of its own success. Admittedly developing Longhorn must be a massive undertaking, however so was MS-DOS 1.0 back in 1980. The development cycle of Longhorn is now five years (and counting) with no firm end in sight. Meanwhile the development time of virtually every other product is getting shorter and shorter. Perhaps Microsoft needs a history lesson, or at least a sharper focus on what it is really trying to accomplish. That is what Steve Jobs brought back to Apple, and that is what Microsoft now desperately needs.
In the ocean there's always a bigger fish. In technology there's always a smaller, faster, and more responsive competitor.