Thursday, April 05, 2007

Blue screen of death

Microsoft can claim to be one of the greatest achievements of all time... and one of the greatest disappointments.

Soon after it was founded in 1975, Microsoft's mission was to have "a computer on every desk and in every home, running Microsoft software".

Mission (near enough) accomplished.

So why the great disappointment?

It's not because of the infamous blue screen of death that frustrated users of Windows will see every time their system crashes.

It's because a company with more than $40 bln in revenue has failed to set itself a new mission.

This provides a lesson for companies like Google, which is currently riding the wave of success that Microsoft enjoyed over 20 year ago.


Watching the share price of a company tells you almost everything you need to know about it.

The stock of Microsoft charts both its great success and recent failures.

Going nowhere fast

Microsoft would seem to represent a typical company that has reached the "mature" stage of development, where growth is a thing of the past and its potential has already been fullfilled.

Not so fast.

Does it really make sense for a company that develops and manufactures computer software to already be past its prime when the 'information age' has only just begun?

I used to doubt it.

I thought, if Microsoft would change its mission to something like "a television in every home, running Microsoft software", then it would stand a chance.

But it never changed.

And then it was 1998 and Google arrived on the scene.

Now that it's competing with the likes of Google (not to mention Apple) it's become a lot more difficult for Microsoft to profitably branch out (e.g. Xbox flop), while preserving the core business.


Google is a company with more than $10 bln in revenue (thank you Microsoft!)

Google's mission is "to organize the world's information and make it universally accessible and useful."

Perhaps intentially, this mission is not much different to Microsoft's.

Perhaps not surprisingly, Google's share price has also taken off in a similar way to Microsoft in its early days.

Look familiar?

Everyone is very excited about Google. After all, it's a great achievement. A dissapointment sometimes perhaps (it doesn't always find what I'm looking for, but hey), but not as great a disappointment as Microsoft... yet!

If Google fails to change its mission as times change then it too will die a "blue screen of death", just like its ancestor.

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