Redmond Be Nimble, Redmond Be Quick

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Microsoft's past and future are intersecting this month, setting the company's more complacent present in stark contrast with its its early, hungry days. On Nov. 8, Microsoft launched Windows Phone 7, its latest attempt to make a mark in the mobile world.

Then, less than two weeks later, on Nov. 20, it marked the 25th anniversary of the launch of Windows. In the time between the Windows 1.0 and Windows Phone 7 launches, Microsoft has changed in ways that call into question whether it will ever again be able to match its success of the past 25 years.

When Microsoft released Windows 1.0 in November 1985, it was still a young, hungry company, barely 10 years old. The product that had cemented its success, MS-DOS, had been released only four years earlier.

Microsoft was in an enviable position -- young enough to easily change course and shift resources to new products, but stable enough not to face a cash-flow crunch. With a small product lineup, there was little internal red tape.

Windows 1.0 was begun in 1981 as a project called Interface Manager, and it was announced to the world in November 1983. When it finally was released two years later, not many people outside the trade press were paying attention. Windows was little more than an extension of DOS, which it had to run on top of, and offered few clear benefits. More often than not, rather than being purchased on its own, it was included as a runtime with programs like Excel.

Still, Microsoft recognized that the future of the PC was graphical, and it shifted resources to Windows, single-mindedly pursuing the new operating system even though it knew the payoff might not come for several years. Microsoft's big advantage was being nimble enough to outclass, out-program and out-market far larger companies, notably IBM. The payoff was big: Windows eventually achieved a near monopoly in the global operating systems market.

Slowing With Age

But Microsoft is nimble no more, and today it reacts to change more slowly than its competitors do. It's paying the price for that. Although Microsoft wasn't slow to enter the mobile market, it has been slow to recognize what consumers want and then to deliver it to them. The company was in the mobile market far ahead of Apple and Google, releasing an early version of its mobile operating system in 2001. Apple didn't get around to releasing the iPhone until 2007, and Google didn't release Android to phone makers until 2009. But because they paid more attention to what consumers wanted and to smartphone hardware advances, their mobile growth has been surging, while Microsoft's market share has shrunk.

Microsoft has simply not been able to develop a competitive mobile operating system until now, and it may be too late. The company certainly hasn't lacked resources, but turf wars have hampered its mobile efforts. In its earlier years, Microsoft would never have allowed competitors to take away its market. But political infighting, red tape and a diffuse focus allowed a major opportunity to slip away.

The question for Microsoft today is whether it will learn from the experiences of the past and regain that single-minded focus. If not, you can count Microsoft out of the mobile race, and what may become the world's biggest growth market.

Preston Gralla is a contributing editor for and the author of more than 35 books, including How the Internet Works (Que, 2006).

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