The Technology Bifurcation will be everyone’s loss: The Chief Executive Officer of Microsoft Corporation, Steve Ballmer, has stated that the coming years will witness a “democratization” of Microsoft. This is a remarkable statement. What we mean by democratization is the reduction in costs and the elimination of the “monopoly” mentality which has governed Microsoft for many years. What we mean is that, for the foreseeable future, Microsoft will become less the monopoly that it has become to date.
The Bifurcation will not however be for everyone’s benefit. Many who are concerned about the future of Microsoft will be happy to see the company go into the hands of a new CEO with an outsider’s perspective on the company. Others, on the other hand, will not want to see the demise of a company they hold so dear.
Some will see the Technology Bifurcation as the death of Microsoft. They will point to the fact that Microsoft’s recent products such as the Vista operating system have failed to sell well. They will also argue that the company is being left behind by its competitors due to its reliance on software patents which are a deterrent to competition and innovation. Such people will also argue that Microsoft’s business model, especially in relation to its massive Windows based PC operating systems, is flawed and will fail as a result of the Bifurcation.
Others will view the Bifurcation as a good thing for Microsoft. They will argue that if Microsoft moves away from its reliance on proprietary software then it will free it up to pursue opportunities that are not available with the use of proprietary software. This in itself will benefit the market and the economy as more companies will be able to compete on a level playing field.
Indeed, Microsoft now has an opportunity to re-imagine itself as a developer of software products that compete directly with its biggest competitors, namely Apple and Linux. These two companies currently dominate the market because they can do so without relying on expensive proprietary software. However, it is unlikely that they will do so because, as far as I am aware, there are no such plans at the moment.
In any event, Microsoft will find itself in a position where it will be left behind by its rivals who are able to make a profit in the marketplace without having to use proprietary software. This, in itself, should provide incentive for the company to start thinking about its products again but will also serve to discourage the company from pursuing policies that are bound to lead to failure. its demise.
One aspect of the Bifurcation that will be welcomed by some will be the fact that the restructuring will not only open up the door to greater competition, but will also open the door to better distribution channels. Microsoft, in particular, will be able to enter new markets. Some will welcome this as it will help to keep prices down in order to drive more customers to the company. Others will fear that the introduction of competition will make the price of Microsoft’s product higher, thereby driving sales prices even higher and the company further out of reach.
Some people will view the Bifurcation as an opportunity to attack Microsoft’s pricing model and other practices which have been used to keep the price of its products too high. Some will welcome the introduction of the Xbox as an opportunity to reduce Microsoft’s dominance in the gaming market.
But, as we saw with the launch of the PlayStation in North America, Sony will be facing stiff competition in this new market. Some will view this as a good opportunity to drive more consumers to the PlayStation’s home turf, but others will view the PlayStation as too strong a competitor to allow Microsoft to capture a large portion of the market, leaving the door wide open for Microsoft to get into the living room with the PlayStation.
Software is one of the pillars of Microsoft’s success in the past and its future. The company has had a great deal of success in the past using proprietary software that made the price of its products too high, resulting in the creation of Microsoft Office for the PC and the Xbox.
In the end, the Bifurcation will be a great opportunity for Microsoft, but not necessarily an opportunity for its competition. I would rather see a re-examination of the strategies which the company has used in the past to gain the technological advantage and then to adopt a new strategy that allows the company to compete successfully in the marketplace.