Tim Bajarin is a wonderful and vastly experienced PC analyst, but his story, A Look Back and A Look Ahead for Microsoft misses the point as badly as Microsoft and Ballmer themselves did, and ironically, for much the same reason: only looking at the world through a PC lens.
Microsoft had a chance to remain relevant, and it wasn’t through smartphones and tablets. It was XBOX.
XBOX could have been the “gateway drug” to an entire Microsoft world for a whole generation. But Tim Bajarin doesn’t even mention it because, well, he has no sense of that generation and doesn’t see the opportunity any more than Microsoft themselves did. They could have led kids into “apps” as though they were playing video games, without ever having to tell them they weren’t just playing video games. In those “games” kids were speaking to each other (VoIP), taking on personas (social media), sharing things, and everything else that they now do routinely — except now they do it using software and services dominated by companies other than Microsoft. That could have been a full Microsoft-enabled and Microsoft-controlled experience. XBOX could have brought a Microsoft-led experience from the TV in the game-room to the kitchen, the living room, the car, and everywhere, thus arriving at the “Golden Age of Mobile” without ever entering the “smartphone war” at all, but rather creating a new battlefield, the way Apple did with iPhone.
But Ballmer’s Microsoft blew it. Instead they let Google and Apple dictate strategy, always reacting and wasting all their energy copying and defending against others instead of blazing a trail and leaving both companies, along with Facebook and Instagram, in the dust.
It wouldn’t have been easy. Microsoft would have had to execute, producing beautiful products that worked well, were reliable, and easy to use – not things for which the company is well known. But at least the opportunity was there. By failing to even try, that opportunity is now long gone. Much of the wins they had gained with XBOX they have now lost. People have moved on.
By not exploiting that XBOX window, Balmer will be leaving Microsoft with a much rougher road ahead. They have no monopoly to leverage, a diluted brand, and no easy distribution channel. They have to actually compete on merit and we saw what happens when they do that with Bing, Zune, and most recently, Surface. I think the idea that a new leader can save the day “with an understanding that mobile software must be at the center of their future” is almost comical, showing just how out of touch not only Microsoft is, but also their closest analysts. It might have been meaningful in 2004 or even 2008, but now it’s like saying “it’s time to get on that Internet thing.” Now it’s 2013. An “eye on mobile” is not enough. That ship has sailed. That is just another iteration of the “copy” strategy that has got them into this mess. Microsoft has to be a lot more bold than that. They have some really good engineers and researchers. What they really need is someone who can mine their R&D for the next post-post-PC opportunity. Instead of continuing to play catch-up, they need to lead for once.