Swallowing The Fish

Back when I joined Microsoft as the dev lead for the Combat Flight Sim team Bill Gates was CEO and the mission statement was pretty simple, "A computer on every desk and in every home", with the unspoken ending, running Microsoft software. By the time I joined Uber, Satya Nadella was CEO and the mission statement had gone through a few iterations and was "To empower every person and every organization on the planet to achieve more." Since then the company has changed even more. And that means that Microsoft was able to do something very few companies of its size and market position have been able to do.

When I started pretty much everything was in service to Windows or Office. SQL server and Developer Division were there, but mostly to get folks to buy Windows and develop software for it to, in today's terms, drive the flywheel. I started out in the games group, and we were there to give people a reason to buy Windows based computers. So much so that FlightSim was canceled because its CM was only in the millions.

And that's the Innovator's Dilemma. How does a company handle a small competitor when it can make more money focusing on high end customers and ignoring those small threats? That was the position Microsoft found itself in about 10 years ago. Windows/Office was making money hand over fist and enterprise sales for DevDiv and SQL were up. And that's where the investments were being made.

Meanwhile, online, subscription based delivery and cheaper, "good enough" options were showing up. Sure, Word and Excel could do more than the Google equivalents, but for many (most?) folks they were enough. Companies have run into these problems before. The history of tech companies is full of them. From hardware (DEC, Sun, Prime) compilers (Borland, Watcom, Metroworks), databases (Ashton Tate, Paradox), operating systems (Solaris, CP/M), and browsers (Netscape) to business software (Wordstar, WordPerfect, Visicalc, Lotus 123, Lotus Notes) there were lots of dominant players that disappeared. And in many of those cases it was Microsoft that replaced them.

So what did Microsoft do? They recognized that they needed to take a longer view. That there needed to be a short term hit to the bottom line to shift how things were done and what the goals were. They invested in new products and moving to newer business models. Or in other words, they paid down their technical debt

And that's an important takeaway. Don't get so tied into your current way of mode/idea that you don't look at new ideas.