10 Missed Opportunities: How Microsoft Could Have Dominated
Microsoft's Innovation Paradox
Contrary to popular perception, Microsoft possesses a substantial history of groundbreaking products and concepts.
However, the company has repeatedly struggled with successful implementation and market follow-through.
A History of Missed Opportunities
Currently, Microsoft is focused on regaining lost ground with initiatives like Windows 8, Windows Phone, and the Surface line of tablets.
But a crucial question arises: what factors led Microsoft to a position where it needed to play catch-up with its rivals?
The company’s journey reveals a pattern of inventive ideas hampered by execution challenges.
This has allowed competitors to capitalize on opportunities that Microsoft initially identified.
Examining the Roots of the Problem
Understanding the origins of this situation is vital for assessing Microsoft’s future trajectory.
It requires a look back at the decisions and strategies that shaped the company’s path.
Analyzing past successes and failures can provide valuable insights.
These insights can help determine whether Microsoft can overcome its historical hurdles and reassert its position as a leading innovator.
Image by ToddABishop on Flickr
eReaders
Amazon is widely recognized as the innovator of the eReader market through its popular Kindle devices, fundamentally changing how books are published and consumed.
However, Microsoft possessed the potential to launch an eReader device nearly a decade prior to Amazon’s entry into the field.
A functional eReader prototype was developed by Microsoft’s engineers as early as 1998.
A Missed Opportunity
Details of this early device surfaced in a Vanity Fair report examining Microsoft’s period of stalled innovation.
The article reveals that when presented to Bill Gates, the prototype received a negative assessment and was ultimately rejected.
According to a programmer involved in the project, Gates disapproved of the user interface, finding it dissimilar to the Windows operating system.
"Microsoft had a prototype e-reader ready to go in 1998, but when the technology group presented it to Bill Gates he promptly gave it a thumbs-down, saying it wasn't right for Microsoft. "He didn't like the user interface, because it didn't look like Windows," a programmer involved in the project recalls."
Microsoft Reader
Rather than pursuing dedicated eReader hardware, Microsoft channeled its efforts into creating Microsoft Reader.
This software application, designed for Windows, allowed users to read eBooks.
Despite its initial development, Microsoft Reader failed to gain significant traction and was eventually discontinued in 2012.
The project ultimately did not achieve the widespread impact of the Kindle and other dedicated eReader devices.
Smartphones Take 1: Windows Mobile
While Apple is often credited with popularizing the smartphone, they weren't the originators of the concept. It was Apple’s refined interface that ultimately propelled smartphones into widespread public demand, establishing them as essential devices. Prior to the iPhone, Microsoft had already developed its own smartphone platform, known as Windows Mobile.
Following the iPhone's 2007 debut, Steve Ballmer, then CEO of Microsoft, expressed his skepticism:
"A $500 price point, even with a subsidy and service plan? I maintain that this represents the most costly phone available, and its lack of a physical keyboard renders it unsuitable for business users and efficient email communication.…
Our strategic direction is well-defined. We currently offer robust Windows Mobile devices. I am confident in our approach, and I believe it is highly effective.…
Currently, we are distributing millions of phones annually. Apple, in contrast, has not sold a single phone this year. Within six months, they will introduce the most expensive phone ever seen in the market. We shall observe how the competitive landscape evolves."
Windows Mobile represented Microsoft’s initial response to the iPhone. The subsequent outcome, however, demonstrated a clear disparity in competitive strength.
What became of Microsoft’s substantial sales of Windows Mobile devices? At the time, Windows Mobile held the position of the second most prevalent smartphone platform, trailing only Nokia’s Symbian OS and surpassing Blackberry. However, it lacked an intuitive interface – featuring a Start menu, taskbar, and even a Windows registry.
The system was primarily intended for operation with a keyboard or stylus, rather than direct finger-based touch interaction. Furthermore, a dedicated app store wasn't introduced until 2009. Regardless of the contributing factors, Microsoft ultimately failed to capitalize on its significant lead over Apple in delivering a truly competitive product.
Image by gailjadehamilton on Flickr
Kin: Microsoft's Second Foray into Mobile
Though largely forgotten today, the Kin represents Microsoft’s second effort to challenge the dominance of Apple’s iPhone. The categorization of Microsoft’s Kin as a true smartphone platform remains a point of contention. Microsoft itself positioned these devices as "social phones."
The Kin was specifically engineered for individuals heavily engaged with social networking services, providing web browsing capabilities but restricting users from installing additional applications. Notably, Kin devices lacked gaming functionality entirely. Despite these limitations, the Kin launched on Verizon Wireless with a data plan mirroring the cost of contemporary smartphone plans.
A Brief and Unsuccessful Market Entry
Verizon began offering the Kin for sale on May 6, 2010, almost three years following the debut of the original iPhone. However, within a mere two months, sales proved insufficient to sustain the product.
Verizon ceased distribution of the Kin and returned all remaining inventory to Microsoft. While the monthly service costs were comparable to those of iPhone and Android devices, the Kin’s capabilities were significantly less robust, hindering its ability to effectively compete.
Usability Issues and Internal Concerns
Released internal Microsoft videos documenting Kin usability testing reveal a concerningly sluggish and unresponsive user interface. A confidential source within Microsoft divulged to Business Insider:
"The launch event held on campus likely exceeded the total revenue generated by the product itself."
This statement underscores the significant financial disparity between the Kin’s development and marketing expenses and its ultimately disappointing commercial performance.
The Kin’s failure serves as a cautionary tale regarding the importance of user experience and competitive functionality in the rapidly evolving mobile technology landscape.
TabletsWhile not the originator of the tablet concept, Microsoft had been actively pursuing tablet development for a considerable period prior to Apple's successful introduction of the iPad. As early as 2002, Microsoft launched "Windows XP Tablet PC Edition," a full eight years before the iPad’s debut.
Microsoft’s initial vision centered on adapting the existing Windows desktop operating system for tablet use, retaining features like the taskbar and Start menu, alongside small touch-sensitive controls. A stylus was included with these tablets, enabling handwriting input and precise manipulation of the Windows interface.
Notably, Microsoft did not prioritize the development of an operating system or software specifically tailored for tablets. Though touch input was supported, it was primarily intended for use with the stylus, rather than direct finger interaction.
The release of Windows 8 and the Microsoft Surface tablets did not represent Microsoft’s first attempt to compete with the iPad. Weeks before Apple’s announcement, Microsoft unveiled the HP Slate running Windows 7.
Even following the iPad’s unveiling, Steve Ballmer expressed confidence that the HP Slate represented a more advanced product. The HP Slate was designed to operate a complete desktop operating system – Windows 7 – without a customized touch interface.
Users would interact with the standard Start menu, taskbar, and traditional Windows applications using their fingers. A subsequent New York Times report provided insight into the challenges faced during the HP Slate’s development:
"Ultimately, the H.P. tablet proved to be bulky, the Intel processor caused overheating issues, and software and screen hardware integration was problematic, resulting in lag during touch interactions…
H.P. voiced frustration with Microsoft’s limited efforts to optimize Windows software for touch-screen devices, citing issues with the keyboard software and the small size of on-screen icons."
Furthermore, Microsoft’s Courier project, an innovative tablet PC prototype that garnered significant attention, was also ultimately discontinued before reaching the market.
The Courier represented another opportunity for Microsoft to establish a foothold in the emerging tablet market.
Web Browsers: Internet Explorer
Within the tech community, Internet Explorer is not generally regarded as a pioneering browser. While iterations like Internet Explorer 9 and 10 represented advancements, the browser struggled to maintain parity with contemporary options, having been previously eclipsed by Mozilla Firefox and Google Chrome.
Surprisingly, Internet Explorer once held a position of genuine innovation. The technology known as "AJAX," which enables websites such as Gmail to update data dynamically without full page reloads, facilitating interactive web applications, was initially implemented by Internet Explorer.
The browser was, for a time, a leader in its field. However, Microsoft ultimately failed to capitalize on this advantage. Following the release of Internet Explorer 6 in 2001, and achieving a 95% market share, development efforts were curtailed.
Resources were redirected from Internet Explorer to alternative projects, including Silverlight. Consequently, Internet Explorer became associated with users unfamiliar with alternatives like Mozilla Firefox.
A resurgence in competitiveness wasn't seen until the launch of Internet Explorer 9 in 2011 – a decade after Internet Explorer 6. (Internet Explorer 7 introduced tabs and minor features, but remained fundamentally similar to IE 6. Internet Explorer 8 also lacked substantial improvements.)
Internet Explorer possessed the potential to be a leading, innovative browser, but Microsoft ceased active development after gaining initial dominance, only resuming significant work once trailing its competitors.
Further information regarding the unfortunate history of missed opportunities with Internet Explorer can be found by reading HTG Explains: Why Do So Many Geeks Hate Internet Explorer?
Web-Based Email: Hotmail
In 1997, Hotmail was acquired by Microsoft. The launch of Gmail by Google occurred in 2004, a full seven years afterward. Upon its release, Gmail presented a significant advancement over Hotmail, boasting a more streamlined user interface.
Key features included threaded conversations, substantially increased storage capacity, and a highly effective system for filtering unwanted messages. Consequently, a large number of internet users transitioned to Gmail, recognizing its clear advantages.
Hotmail has undergone improvements over time, and Microsoft’s Outlook.com now offers a level of competition with Gmail in several areas. Nevertheless, Gmail continues to be widely regarded as the better option, particularly within the tech-savvy community.
A Missed Opportunity
The current situation wasn't inevitable. Microsoft possessed a seven-year advantage in the market and had the potential to develop Hotmail into the platform that Gmail ultimately became.
However, development on Hotmail slowed, and the company reacted slowly to the disruptive changes introduced by Gmail to the webmail landscape. This resulted in Microsoft losing its initial advantage and facing ongoing challenges in reclaiming market leadership.
This pattern reflects a recurring theme: Microsoft initially leading in a technology sector, only to subsequently fall behind due to a lack of sustained innovation and responsiveness to market shifts.
PC Gaming: Games for Windows Live
Valve’s Steam is often considered the leading digital distribution platform for PC games. This platform delivers a comprehensive experience, encompassing a game store, achievement tracking, friend lists, chat functionality, and social networking features.
Microsoft also provides a PC game store, known as Games for Windows Live (GFWL), offering similar functionalities like friends lists, achievements, and chat. Launched in 2007, GFWL initially required users to subscribe to a monthly fee for online multiplayer access.
This subscription model proved unpopular with PC gamers, as comparable services were already available without charge. While Microsoft later removed the subscription requirement, the initial implementation left a negative impression.
The GFWL online store, now rebranded as the Xbox Games Store for PC, remains relatively limited in its game selection. Furthermore, gamers frequently encounter issues when purchasing titles with GFWL integration from other stores, such as Steam.
These issues often manifest as game instability, lost save data, and cryptic error messages that necessitate manual troubleshooting within the Windows operating system. Compatibility problems have also been reported, with some games failing to function correctly on Windows 8 without a specific GFWL update.
Consequently, a significant portion of the PC gaming community views GFWL unfavorably and actively requests developers to avoid its inclusion in future games. GFWL has become synonymous with a frustrating user experience.
Given Microsoft’s position as the creator of the Windows PC platform, the lack of a compelling, Steam-competitive gaming experience is puzzling. A robust and user-friendly platform could have solidified Microsoft’s dominance in the PC gaming space.
Instead, GFWL has alienated PC gamers, potentially driving them towards alternative platforms. Valve, capitalizing on its established presence on Windows, is actively developing Linux as a potential competitor to Windows for PC gaming.
The situation presents a missed opportunity for Microsoft to cultivate loyalty within the PC gaming community.
Smart Watches
Currently, smart watches are experiencing significant popularity, particularly within technology news outlets. Beyond the existing Pebble, initially funded through Kickstarter, major corporations including Apple, Google, Samsung, Sony, and Microsoft are reportedly developing their own wearable devices.
Interestingly, Microsoft previously developed a smart watch system called SPOT, but it was ultimately discontinued in 2008. The reasons for its failure remain open to speculation – it may have lacked a compelling user experience, suffered from inadequate marketing, or faced resistance to its subscription model. Alternatively, the SPOT watch could simply have been released before the market was ready.
Regardless, Microsoft has not capitalized on its initial foray into the smart watch arena.
A Look Back at Microsoft SPOT
The SPOT watch, launched years prior, represented an early attempt at connected wearable technology.
It offered features like displaying information pushed from the user’s PC, but ultimately failed to gain widespread adoption.
Several factors likely contributed to this outcome, including cost and limited functionality.
Image by Betsy Weber on Flickr
- The image depicts a historical perspective on Microsoft's early involvement in smart watch technology.
- It visually represents the SPOT watch and its place in the evolution of wearable devices.
Smart watches represent a rapidly evolving technology, and the current wave of development suggests a strong future for these devices.
Operating Systems: Longhorn
The development of Microsoft’s Longhorn operating system encountered significant difficulties. After a three-year period of work, the entire project was scrapped, and a fresh start was initiated, ultimately leading to the creation of Windows Vista.
Features that were heavily promoted, such as WinFS – a file system based on a database – never came to fruition.
Concurrent with Longhorn’s development, Apple unveiled its new operating system, “Tiger,” in June 2004. A Vanity Fair report detailed that Longhorn, at the time of Tiger’s announcement, experienced extremely slow boot times.
Specifically, it reportedly required up to ten minutes to start and was plagued by instability and frequent crashes.
The same article revealed the internal reaction within Microsoft. It was observed that Apple’s Tiger successfully implemented many of the features planned for Longhorn, but with a functional and stable execution.
Apple had achieved stability and release of features Microsoft was struggling with, prompting Microsoft to abandon its current trajectory and recommence development.
A more successful Longhorn development process could have enabled Microsoft to more effectively compete with Apple’s OS X. While Windows XP enjoyed widespread popularity, OS X Tiger demonstrably represented a more advanced operating system.
Even following the release of Windows Vista – after a six-year development cycle – the operating system received largely negative reviews from critics.
Image courtesy of Mikhail Esteves on Flickr.
PC Hardware
Apple’s Macbook Pro, featuring a retina display, represents a robust and meticulously crafted device. It boasts a high-DPI screen and a superior trackpad experience.
Within Google’s Chrome OS environment, the Chromebook Pixel stands as a premium laptop option. Its display quality surpasses even that of the Macbook Pro.
Currently, the Windows PC landscape lacks a comparable offering to the Macbook Pro or Chromebook Pixel. This is particularly true for users seeking a durable laptop accompanied by comprehensive support.
While Macs represent a significant investment, Apple provides direct service options through its retail stores. This allows for convenient repairs should issues arise.
PC manufacturers typically do not extend this level of direct support. Users often must ship their devices for repair or replacement, which can be disruptive if the laptop is essential for daily use.
Microsoft's Response
Recognizing the shortcomings of PC hardware in comparison to Apple’s offerings, Microsoft has introduced its own Surface line of devices.
These Surface devices are characterized by their high-quality construction and the absence of pre-installed bloatware.
Despite this effort, a true competitor to the Macbook Pro, or even the Chromebook Pixel, remains elusive within the broader PC ecosystem.
A trend towards minimizing costs has led PC manufacturers to compromise on software quality, build integrity, and customer support.
Innovation and Execution
Microsoft has historically demonstrated a capacity for innovation, frequently pioneering new market segments.
However, the company has often struggled to fully capitalize on these initial advancements, allowing competitors to ultimately gain market dominance.
Consumer perceptions of the Microsoft brand present challenges for the adoption of products like Windows 8 and Windows Phone.
These perceptions create an uphill battle for gaining widespread acceptance in the consumer market.
- Key Takeaway: The PC market needs to prioritize quality and support to compete with Apple and Google.