Strategic Inflection Point: The Diminishing Importance of Windows

For the last two months, I’ve been struggling with an intellectual problem.

Generally, it concerns the question of where the microcomputer desktop market, and, small business computing market are heading. Throughout all of my professional career in IT, the predominance of Microsoft has been unquestioned in the microcomputer desktop and small business server space. This isn’t to diminish the role of competitors Apple, Sun, or LINUX but it is a reflection on the reality of Microsoft’s pervasive influence. However, I’m quite certain that we’re in the midst of a sea change in Microsoft’s domination of these market places.

When I teach graduate IT strategy courses, I ask my students to look for Strategic Inflection Points (SIP’s). These are conditions when management strategy in terms of actions and principles seem to come out of alignment. What management says and does are seemingly inconsistent. SIP’s are also conditions when one can witness the decline of a post-paradigmatic technology design. Contention arises in the market place. Old ideas are challenged by new ideas. In terms of Porter’s 5-Forces, new entrants and substitution effects disrupt the rivalry amongst competitors and throw the competitive balance into an unpredictable state. And more rapid cannibalistic effects happen as companies attempt to innovate ahead of others and retire products early just to gain the new dominant technology design.

When it comes to the microcomputer desktop and small business server market, I see SIP forces at work. Windows Vista – and I don’t think I’m too far out on a limb here – will be a flop and a disaster for Ballmer. Consumers aren’t motivated to upgrade and value proposition is extraordinarily weak. Similarly, Microsoft Office 2007 suffers from the same problem; new looks are great but small business doesn’t need new learning curves to use a word processor. Consumers want more web integration, a bit-level delivery and supply chain, subscription-based licensing, and more mobile computing options. Consumers are more savvy, aware of their choices, and becoming increasingly competent with new interface models from exposure to the web. The consumer isn’t intimidated by new ways of getting things done and they have a stronger appreciation for real value.

When I look at this SIP – the diminishing importance of Windows as a common desktop metaphor and API (Application Programming Interface) library – I cannot help but be rocked by its consequences. The decline of Windows means that the market is entering another creator/destroyer phase – where do my skillsets, as an MCSE, fit into a picture where Microsoft’s importance becomes increasingly irrelevant? And how are companies, organizations, governments responding to this?

Municipal and state governments the world over are investing heavily in open source to avoid steep software licensing fees and to gain better control over their financial obligation in this area; being forced to upgrade and pay Microsoft every two years for productivity applications and operating systems stiffles innovation and sucks up needed capital. Online services like Google, Yahoo, Zoho, iTunes are captivatingly interconnected and profitable yet without software licensing models. The Open Office Document standard and the OpenOffice product is making significant impressions in terms of productivity applications, looking and feeling just like the MsOffice Suite yet also requiring no licensing. And Linux – the extraordinary diversity in metaphors and ideas – is becoming just as simple to use, deploy, and troubleshoot as Windows.

So, the point being, how will the market respond? How will Microsoft respond? How will Apple respond? What do small businesses want or need? How will that change commercial and residential computing? And how radical a change will there be? Do I spend resources in understanding and learning Vista and Longhorn, or, do I start picking up Ubantu and MySQL?

My intellectual problem is this: when a SIP happens, the new doesn’t simply replace the old – both are synergized into a new design that becomes an acceptable norm. Windows may still be around in ten years but it will be substantially different from what it is today, perhaps even going the same track as Apple with a Linux kernel.

Where to go, what to do. That’s the problem… but it’s also the greatest path to opportunity that we’ve probably seen in decades in the PC market. The opportunity to set the next design.

R
www.micklerandassociates.com

Name (required)

Mail (will not be published) (required)

Website