Microsoft's 13 worst missteps of all time

DOS 4.0, Zune, and Windows 8 are but a few of the landmarks among 25 years of failures Redmond-style

Over the years, Microsoft's made some incredibly good moves, even if they felt like mistakes at the time: mashing Word and Excel into Office; offering Sabeer Bhatia and cohorts $400 million for a year-old startup; blending Windows 98 and NT to form Windows 2000; sticking a weird Israeli motion sensor on a game box; buying Skype for an unconscionable amount of money. (The jury's still out on the last one.)

Along the way, Microsoft has had more than its fair share of bad mistakes; 2012 alone was among the most tumultuous years in Microsoft history I can recall. This year you can bet that Redmond will do everything in its power to prove 2012 naysayers wrong. To do so, Microsoft must learn from the following dirty baker's dozen of its most dreck-laden decisions, the ones that have had the very worst consequences, from a customer's point of view.

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Microsoft misstep No. 12: The evil cuties Bob, Clippy, and RoverSymbolized by a big yellow blob with nerdy glasses, Microsoft Bob -- code-named "Utopia" -- stands as the quintessential Microsoft failure by which all others must be measured. In a departure from the menu-based interface for Windows 95, which was released seven months after Bob, Microsoft Bob's main screen looked like a cartoon living room, with graphic links to a word processor, finance application, calendar, Rolodex, checkbook, and other programs. Click on the grandfather clock's face and the calendar program appeared. Click on the envelope and the email program sprang to life -- Bob cut a special deal with MCI Mail whereby, for just $5 per month, a Bob owner could send up to 15 emails per month, absolutely free.

Customers could add tiles, er, shortcuts to new applications installed on their Bob-ified computer, and the shortcuts' pictures would appear in the immersive Start menu, uh, cartoon living room, inside picture frames or shipping crates. The living room could be personalized with various colors, decorations, and themes. Stop me if this sounds too familiar.

The eponymous Bob himself looked a lot like Bill Gates -- at least, as much as a smiley face with glasses can resemble the world's greatest philanthropist. Microsoft Bob shipped with cartoon helpers bearing distinctive appearances and personalities: Scuzz the Rat ("Couldn't care less about you. Seldom offers help."); a dog named Rover ("Easy to work with, friendly and helpful. Tries to be your best friend."); Chaos the Cat; Digger the worm; Shelly the turtle; Java the coffee-swigging dinosaur; and a half-dozen more.

Released in 1995 and abandoned in 1996, Bob didn't live very long, but he left quite a legacy -- I mean, in addition to his obvious design influences on Windows 8.

The Rover cartoon helper in Bob appeared, unchanged, as the Search Companion in Windows XP's Windows Explorer. Rover and his similarly designed cohorts -- Merlin the magician, Earl the surfer, and Courtney (the courtesan?) -- offered to help perform local searches on the Windows XP desktop.

More insidious, a perky offshoot known as Clippy "It looks like you're writing a ransom note. Would you like help?" appeared in Office 97. Clippy (and the Dot, Hoverbot, the Einstein-reminiscent Genius, Scribble the cat, Power Pup, Links the cat, Rocky the dog, and Will as in Shakespeare) shipped with Office 97, 2000, and 2003, only to be tossed out on his curled ear with the arrival of Office 2007 and its equally cloying Ribbon interface. I note in passing that Steve Sinofsky was in charge of those Clippy-fied versions of Office.

Another big legacy for Microsoft Bob: Melinda French, product manager for Microsoft Bob, became Mrs. Bill Gates in 1994, while development on Bob was in its final stages. Melinda's a very private person, a driving force for the Bill & Melinda Gates Foundation. Even the people who put together their wedding had to sign NDAs.

After the luggable MacBrick and the Sony Walkman, but before the iPad, came Apple's iPod, and that's where Microsoft's Zune enters the picture. Apple scored big successes with the iPod in 2002 and 2003. Microsoft started designing the Zune -- portable player, Windows software, music service to compete with the iPod and iTunes -- around the same time. By the time Zune came to market in 2006, Apple already had the iPhone under development. The iPhone ultimately rolled over the iPod, the Zune, and just about every piece of portable consumer electronics ever made. After years of sales that hovered near zero, Microsoft officially killed the Zune in June 2012, with the Zune services side morphing into Xbox Music and Xbox Video -- two products best known to Windows consumers for sporting their own tiles on the Windows 8 Metro Start screen.

Microsoft didn't just miss the boat with Zune. It watched and waved and heckled as the boat roared past. In 2007, Steve Ballmer told USA Today, "Now we'll get a chance to go through this again in phones and music players. There's no chance that the iPhone is going to get any significant market share. No chance. It's a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I'd prefer to have our software in 60 percent or 70 percent or 80 percent of them, than I would to have 2 percent or 3 percent, which is what Apple might get."

Of course, Apple's income from the iPhone currently exceeds Microsoft's income -- from all sources.

Ballmer was right about one thing. We got a chance to watch consumer markets unfold with phones and music players. Zune failed miserably. Windows Mobile accounted for 15.7 percent of the U.S. mobile market in January 2010, according to comScore, but in two years Microsoft's flagship mobile product slipped to 3.9 percent. Outside the United States, Windows Mobile never amounted to half a hill of beans.

Then there was the Kin, the short-lived square-ish mobile phone with social networking aspirations. In a move reminiscent of "The Cat in the Hat," in 2010, we were offered Kin One and Kin Two. Like Thing One and Thing Two, the Kin was locked in a software box -- a client-server architecture that didn't allow third-party apps -- although the hardware was based on an ARM design. Verizon started selling Thing One and Thing Two in May 2010; 48 days later, Verizon gave up and sent all of its unsold Kins back to Microsoft.

Last month, Wired ran a series of leaked internal Microsoft videos that show pre-release testing of the Kin, and the results were devastating: Testers couldn't figure out how to perform even the most basic functions. If you bought a phone, you would expect to be able to make a call with it, right? Silly mortals. Heaven only knows why Microsoft continued the project.

Then there's the tablet debacle. Bill Gates talked about the Tablet PC in his Comdex Fall 2000 keynote, and Tablet PC general manager Alexandra Loeb gave the details in a Microsoft press release from November 2000:

No compromises. Immersive. Twelve years ago. Thankfully, she didn't mention "fast" or "fluid."

The first Windows XP Tablet PC Edition tablets appeared in 2002 and drew loud applause from a small group of fans, along with skepticism from many corners. Ultimately, the market spoke. Windows Tablet PC hardly rates a footnote.

Did Microsoft learn its lesson? Consider that in 2006, Microsoft hooked up with Intel and Samsung to work on Project Origami, the Ultra-Mobile PC (UMPC) effort that culminated in a small handful of touch-sensitive machines, some of which ran Windows Tablet PC Edition. Slow, clunky, battery-deprived, and almost universally despised, the Origamis hardly broke the consumer surface.

Then came the Microsoft Courier, arguably Microsoft's most innovative mobile device to date: dual 7-inch touchscreens, hinged in the middle as a book; high-resolution (for the time) camera. Nobody knows for sure, but reports say it would've weighed about a pound, sported Wi-Fi, an inductive charger, and a Home button, driven by an ARM Nvidia Tegra processor. The tile-less Infinite Journal interface would look more like a diary and offer touch or stylus access to a contact list, task organizer, free-form drawing program, email, browser, and maybe even an e-reader.

Reports of the Courier began circulating in 2008, just after the Origami went down in flames and shortly before rumors started leaking about the iPad. As best as anyone can tell, the project was killed in 2010, soon after the first iPad shipped. Ballmer spiked it in a shoot-out between the Courier's biggest proponent J Allard and Steve Sinofsky, who was busy consolidating his vision of Windows 8 on a tablet and didn't want to get sidetracked (or sideswiped) by the Windows CE-based Courier. Ultimately, Sinofsky won, the Courier died, and both J Allard and his boss Robbie Bach left Microsoft shortly after, a brain bust that has significant repercussions to this day.

Does Microsoft "get" consumer mobile? A couple of decades and multiple billions of dollars later, that's still a pertinent question. You can draw your own conclusions.

Whistler, better known as Windows XP, came as a breath of fresh air. Built on the Windows NT kernel, XP's reign ran unopposed from its release in 2001, until the appearance of Vista in 2007. Segue to the hisses and boos.

Vista, I'm told, is still listed in the Encarta dictionary as a profane word (or it would be, if Encarta hadn't bit the bucket in 2009). Released to businesses in 2006 and consumers in 2007, Vista tried to improve on XP's security, but only succeeded in alienating an entire generation of Windows users.

Then came Windows 7, and all was right with the world once again. Proponents of the "good Windows, bad Windows" analysis claim that consumer versions of Windows run from great to lousy and back again. That's certainly a discernible trend from Windows 98 onward.

That's the promise. The reality was less impressive. Ultimate contained Windows DreamScene, a handful of videos to be used as desktop wallpaper; Hold 'Em Poker; three extra sound packs; and a puzzle game starring a robot -- and was later released free. The, uh, loyal Microsoft customers who spent an extra $100 for Vista Ultimate got burned big time.

Microsoft learned its lesson. Windows 7 Ultimate, under Sinofsky, only promised -- and delivered -- a combination of all the features in Win7 Home Premium and Professional. The loyal customers were never compensated.

In the halcyon days of Windows 95, 98, and 2000, anyone installing Windows had to provide a serial number. The serial numbers weren't checked against a master database, so the same serial number could be used to install multiple copies of Windows.

With the consumer version of Windows XP, Microsoft added a validation step, where a specific serial number was matched against a key constructed from serial numbers from PC components. The resulting combination is checked against a central database. Changing your motherboard or network card, or in some cases other combinations of hardware, triggered a revalidation. Fail the validation, and Windows wouldn't work -- you had to call Microsoft to beg for forgiveness.

Hardware manufacturers had a different process for activating machines before they shipped. Volume licensees were given serial numbers that worked in bulk.

Windows XP SP1 cut customers some slack: It added a three-day grace period, so you could continue to use your Windows PC for three days while trying to get it reactivated.

Then the offal hit the fan. Over the course of several years, in many confusing steps, Microsoft rolled out its Genuine Advantage program to all Windows XP and later versions.

The earliest versions of WGA included a program called WGA Notifications that runs whenever you log on and validates your Windows license. They also included an ActiveX control that validated your license every time you tried to download specific Microsoft products, including Internet Explorer 7 and Microsoft Security Essentials. You were also prohibited from using Windows Update to get security patches (although you could download Critical patches manually). WGA reached its nadir in Windows Vista, where failing the WGA check meant your machine was put into "reduced-functionality mode," where you could go onto the Web for an hour at a stretch, before Windows locks up.

Predictably, the validation servers borked; false positives came to light. Microsoft got caught shipping data from unsuspecting PC users to the Microsoft servers once a day. Windows Genuine Spyware became the nom de guerre.

Howls, lawsuits, threats, cracks, and generally furious customers eventually drove Microsoft to backtrack. Reduced-functionality mode evolved into a paper tiger, with harmless balloon notifications about ungeniune wayward ways, and an irritating tendency to turn the desktop wallpaper black.

In Windows 7, WGA became Windows Activation Technology, no doubt to avoid the venom aimed at its predecessor. The newly renamed copy protection scheme retains its toothless nature, even in Windows 8. Microsoft can learn from its mistakes.

That's worse than crazy. It's self-destructive.

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