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Accessible Computing

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This quarterly publication is a quarterly journal that publishes refereed articles addressing issues of computing as it impacts the lives of people with disabilities. The journal will be of particular interest to SIGACCESS members and delegrates to its affiliated conference (i.e., ASSETS), as well as other international accessibility conferences.

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move much beyond the PC platform. Indeed, Windows desktop and server and the Office suite still account for nearly 80% of Microsoft’s revenues and almost all its profits. Ballmer is under particular pressure because Microsoft’s share price is lower today than it was a decade ago (though this is also true of Intel, Cisco, Nokia, and a host of other high-tech firms). And archrival Apple, despite the small (but rising) global market share of the Macintosh personal computer, and despite its near bankruptcy only a few years ago, has been growing at 50% a year and vaulted past Microsoft in market value during 2010. Apple is growing so fast because it has become a major player in consumer electronics as well as cellphones and digital content distribution. On the strength of its high-mar-gin digital service platforms (iTunes, App Store, and iCloud), Apple may someday match or surpass Microsoft in profitability. Reproducing digital bits is much less costly than reproducing hardware boxes.

But we tend not to give Microsoft enough credit for its accomplishments. It remains the most profitable of the high-tech giants, including Apple and Google. It has survived radically disruptive technological transitions and daunting business-model challenges (character-based to graphical computing, the Internet, the Software as a Service model, cloud computing, mobile computing, and social networking). It has survived antitrust scrutiny and violations (remember Netscape?). Nevertheless, Microsoft continues to “print money,” relying on the enormously profitable gross margins of the packaged software business. And change is always in the works at Microsoft, albeit slowly. Billions of dollars in losses (“ investment”) from MSN and Bing over the past 15 years has prepared Microsoft for the online world funded by advertising revenue. It learned from the Longhorn/ Vista debacle how to break up Windows into smaller, more manageable chunks, which can also help deliver new Internet and cloud services. Its Windows Azure cloud offering and SaaS versions of some products have had good receptions in the marketplace and are competitive, though not dominant.

What Microsoft needs to do is what IBM, Google, and Apple have done—

evolve beyond the slow-growing PC industry and move to newer, faster-growing markets, as well as integrate the new technologies. Microsoft’s decision in early 2011 to buy Skype is one move, although an expensive one, to get access to new customers. Other moves include Microsoft’s alliance with Nokia to take over its future smartphone software and an earlier alliance with RIM to take over the search business on the BlackBerry smartphones. An even bolder move would be for Microsoft to convince RIM to replace its aging operating system with Windows and combine this business with Nokia’s smartphones.

The lesson here? Platform leadership can be both a blessing and a curse. Gates’ major mistake (back in the late 1990s) was probably to insist that Microsoft remain a Windows company, rather than become a broader platform company. Microsoft engineers tried to force Windows onto the new platforms, the Internet, and then mobile phones, rather than create optimized software from scratch and then link the new platforms back to Windows. Microsoft also cut down Windows for the Xbox, but did not retain Windows compatibility. Of course, Windows on the desktop is the modern-day equivalent of a gold mine. It is not difficult to understand why Gates and Ballmer have been so reluctant to cannibalize this business. Apple, by contrast, was never wedded to the original Mac platform, which failed as a business in the 1980s and 1990s anyway. It later replaced the first Mac OS with NeXT software, which was based on Unix. But Apple did remain wedded to its remarkable capabilities in user interface design and visionary product innovation. Those skills are the basis for Apple’s business success with the iPod, iPhone, iTunes, and iPad and its remarkable transformation into a global platform leader on multiple integrated devices. But we shall need a few years to see how well Apple copes with it own platform leader’s dilemma.

 

Michael A. Cusumano ( [e-mail]) is a professor at the Mit sloan school of Management and school of engineering and author of Staying Power: Six Enduring Principles for Managing Strategy and Innovation in an Unpredictable World (oxford university press, 2010).