Why is Microsoft Always Late to the Party?

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There’s no arguing Microsoft’s success in the PC industry: its primary platform is so deeply embedded in personal computing that it’s been able to leverage some arguably monopolistic powers with regards to bundled applications. And just as Windows rules the desktop, Windows Mobile once ruled the smartphone, giving Redmond an enviable position — for a time — in the world of operating systems. Yet now Microsoft finds itself in a rather unenviable position on numerous fronts, with yesterday’s Surface launch representing yet another vertical wherein the company finds itself one of the underdogs.

In Surface, Microsoft has decided to come at Apple yet again, and the results last time were not all that promising. While the Zune program probably left the company some valuable knowledge with respect to multimedia management software, the iPod-competing hardware never took off as hoped, and was eventually canned. Windows Phone isn’t seeing nearly the market share that Windows Mobile did, and obviously Live is a distant second in the search wars. But how did this happen? How could a company which so thoroughly dominated in one product category be so late to the game in many others?

According to anecdotal evidence, the wait-and-see approach is far from accidental: it’s actually a fundamental company strategy. As the story goes, Microsoft sees it as beneficial to watch a category develop and mature before it attempts to penetrate a given market. The strategy makes some sense; why risk a ton of resources on an unproven product when you can let other players train the consumer, and then move in with considerable financial backing. However, the risk can also be where the reward is. Apple didn’t get rich in the MP3 and tablet markets by being a follower, but rather, a leader. And the one category in which Apple’s success is more moderate — PCs — happens to be the one in which Microsoft made the right moves, early on.

There’s also more than one precedent here. Facebook was not the first big social network, or even the second. Android rolled into the smartphone game like a snowball, gradually building up share and dwarfing the competition. Even Microsoft itself was able to slowly take over the video game industry after initially getting almost no slice of the market from Nintendo or Sony. In other words, Redmond may simply have adopted a tried-and-true business strategy. The fact that some of its businesses aren’t market leaders right now may only mean that we’re not looking at them with the same long-term perspective that Microsoft does.

The next obvious question, then, is whether or not Microsoft will ever end up opening up a product category again as it did with Windows on the desktop. Yes, it has produced plenty of other winners, but most of them have not come close to living up to the marquee product which defined the brand. It’s certainly possible for a company to survive many years without truly shaking up an industry: Samsung and LG are good examples of corporations which generally follow a safe path of well-defined product categories. Then again, neither of those companies has ever had the market-moving power of an Apple or a Microsoft. Ultimately the next decade or so will be quite telling; can Redmond regain its former glory by being a market follower, or does becoming the top technology company in the US require a market leader?

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About The Author
Evan Blass
Evan is no longer associated with Pocketnow. The below contact form will redirect to a general mailbox.