It’s Time For Microsoft’s Second Inception

If you’ve watched television at all over the past two months, you’ve likely seen the trailer for Inception, the new film by Christopher Nolan. The trailer is great, and the film looks like it could be even better. In it, Leonardo DiCaprio plays Cobb, a special agent whose job it is to construct dreams in order to lure people inside and take their ideas — a tactic they call “inception”.

“An idea can transform the world and re-write all the rules. Which is why I have to steal it,” Cobb teases at one point in the trailer.

For whatever reason, the film and that premise got me thinking about Microsoft. More specifically, about some of the recent stories about yet more internal struggles at the company and the complete and utter failure of the Kin. It seems to me that Microsoft created one of these inceptions once in the 1980s. And it led to the company’s greatest success: Microsoft Windows. Now I think it’s time for a second inception.

Before I get into that, a bit of history.


If you’ve watched television at all over the past two months, you’ve likely seen the trailer for Inception, the new film by Christopher Nolan. The trailer is great, and the film looks like it could be even better. In it, Leonardo DiCaprio plays Cobb, a special agent whose job it is to construct dreams in order to lure people inside and take their ideas — a tactic they call “inception”.

An idea can transform the world and re-write all the rules. Which is why I have to steal it,” Cobb teases at one point in the trailer.

For whatever reason, the film and that premise got me thinking about Microsoft. More specifically, about some of the recent stories about yet more internal struggles at the company and the complete and utter failure of the Kin. It seems to me that Microsoft created one of these inceptions once in the 1980s. And it led to the company’s greatest success: Microsoft Windows. Now I think it’s time for a second inception.

Before I get into that, a bit of history.

For nearly 25 years now, the story has lingered that Microsoft stole the idea of Windows from Apple while working to develop software for the Lisa and Macintosh operating systems. The stories you hear generally seem to be a mixture of truth, urban legend, and fanboy fabrications at this point — but the fact is that Apple did sue Microsoft in 1988 for copyright infringement on the matter. After four years worth of arguments, Apple lost. They also lost the subsequent appeal (and they even tried to take it to the U.S. Supreme Court, but that was denied). But they didn’t lose because Windows wasn’t thought to be similar to Apple’s operating systems. They lost because the judge ruled that you couldn’t protect the concept of a graphical user interface or the desktop metaphor idea. And more specifically, Apple ran into problems because of a decision that then-CEO John Sculley made in 1985 to sign an agreement licensing certain parts of Apple’s GUI to Bill Gates for use in what would become Windows 1.0 (presumably without realizing exactly what he was doing).

Yes, you could make a similar charge against Apple — that they stole several GUI components from Xerox’s PARC labs. (There was a subsequent lawsuit of Apple by Xerox on these grounds, but that was largely seen as a tactical maneuver just in case Apple won the lawsuit against Microsoft.) But the fact is that Microsoft was working closely with Apple as a software partner while they developed the Lisa and Macintosh OSes. Microsoft clearly saw an idea that they liked and they took it for their own and never looked back. A perfect inception.

But now that idea is waning. Or rather, everyone is starting to recognize that the idea will be waning in the years to come. Make no mistake, Microsoft still makes a lot of money from Windows — and I do mean a lot. But Windows is not the future. By that I mean that the desktop metaphor GUI is slowly but surely being replaced by a rise of mobile and touchable devices. In other words, Microsoft needs a new idea.

The problem is that Microsoft hasn’t proven themselves to be capable of coming up with or executing such an idea on their own. Dozens of failed projects ranging from the original tablet PCs to SPOT watches to the Kin have been left in their wake. The fact that tablet computers are now exploding in popularity thanks to Apple’s iPad suggests that Microsoft, for whatever reason, has a hard time launching new, successful ideas on their own. Windows Mobile is another example of this. They were there early, much earlier than their main rivals. And now they’re getting trounced.

Instead, it may be time to piggyback off an idea again. To create a new inception, as it were. Lure someone in, take their idea — and take it to the next level. Microsoft has nothing if not a huge amount of resources. If they pick the right idea to take, they can once again transform the world — but they need the right idea.

Truth be told, Microsoft has been practicing this all along to varying degrees. Their two most recent successes, Xbox 360 and Bing, are ideas that Microsoft came late to. Yes, Microsoft had a search engine before Bing, but it was an afterthought. Same with Xbox; they were there far after other players had establish the home gaming console field. Though I will concede that the work Microsoft has done with Xbox Live is pretty revolutionary. Of course, that concept is credited as being created outside the main Redmond chamber.

Xbox is an interesting area for Microsoft right now. A report just yesterday indicated they may have made as much as a billion dollars in revenue off of Live in the past fiscal year. That’s impressive. But is that really going to be Microsoft’s next great project? Are they going to be a videogame and media portal company? Not that there’s anything wrong with that, but they probably can’t expect to be a company that’s the same size that they are now if that’s going to be their focus.

Maybe that next great idea hasn’t arisen yet for Microsoft. Or maybe that’s why we’re seeing a complete reboot of the Windows Mobile brand as Windows Phone? Mobile is the obvious choice for that next big idea. Hell, it already is a massively big idea (just ask Apple and Google). But it’s going to get even bigger. And mobile computing in particular is going to get more important to the fabric of society. Microsoft undoubtedly realizes this, and that’s why it’s okay that they’re re-entering the game so late. The big prize is still there for the taking.

But unlike with Windows 25 years ago, Microsoft faces one very big challenge this time around if mobile is the next great idea they’re going to pursue: Google. Google’s Android platform is more or less taking the role that Windows took during the PC wars of the 1980s. They’re the more open variety of Apple’s popular but closed idea. They’re the ones going for massive market share while Apple continues to prefer tight controls over its system.

Microsoft can’t get away with the licensing fees that they got PC vendors to pay for Windows this time around because the Android software is free. And again, Microsoft is already coming late to the game. So that leaves Microsoft with no clear outlet to make money in mobile since they’d neither be selling hardware nor selling software licenses (again, if they truly hope to compete with Android). What does that leave? Mobile search? Maybe — but again, that’s Google’s game plan and Microsoft is going to have a hard time playing catch up there.

The touchscreen tablet computing revolution is also a problematic area as Microsoft’s next idea. Again, there they’ll be facing both Apple and Google. The latter is starting to ramp up Android tablet ideas, and soon, Chrome OS too. Microsoft can offer a full-fledged OS (a flavor of Windows 7) to run on tablets — but will anyone want that? Or will native apps win out?

It’s certainly possible that the next idea Microsoft needs hasn’t arisen yet. And with Windows and Office continuing to be cash cows, they have some time. But the cash cows are going to start moving towards the pasture soon enough. And where will that leave Microsoft 10 years from now?

The idea Microsoft took 25 years ago is already starting to lose some of its luster. The company that got shafted in that maneuver, Apple, has since passed Microsoft in market cap. More importantly, they appear to be on the verge of passing them in quarterly revenues as well (though Microsoft will still undoubtedly have the edge in profits thanks to the huge margins on software).

There’s a case to be made that Microsoft can continue to dominate far longer on the enterprise side of things, which are generally slower to move on new computing trends. But at least some folks inside Microsoft don’t believe that Chief Software Architect Ray Ozzie cares about enterprise at all. CEO Steve Ballmer undoubtedly does, but he’s always been regarded more as a sales guy than a product visionary. Plus, he’s currently overseeing the entertainment division after their huge recent shakeup.

It’s just not clear where Microsoft’s second inception is going to come from. Where that big idea that will steer the company for the next 25 years is going to pop up. The only thing that is certain is that Microsoft needs that second inception.

As Arthur (Joseph Gordon-Levitt) says at one point in the Inception trailer, “The dream is collapsing.

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It's Time For Microsoft's Second Inception

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Autor: Gabriel Catalano - human being | (#IN).perfección®

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