Microsoft discovers the need for an ecosystem?

I believe that we have seen a significant change in Microsoft's philosophy in 2011, one that will lead to a number of changes in the software market.

Allow me to point to two events in the past year:

• The decision to support HTML5 and JavaScript as first-level development tools. This is a big change from the C#-centric world of .NET.
• The (somewhat quieter) decision to bundle InstallShield LE with Visual Studio, and drop the Microsoft-built install packager. This is also a big change in the "we supply everything" strategy.

These two changes mark a significant shift in Microsoft's strategy. For the past decades (since the introduction of Windows), Microsoft has had a strategy of being the sole source for all Windows-based software. Microsoft was determined to be the dominant supplier in every market, from operating system to office applications, from development applications to business applications.

This "provide everything" strategy has been successful. If you look at a random PC running Windows today, I expect that you will find that it runs Microsoft applications, with possibly a few home-grown applications and possible some applications from Adobe.

Here's a history of the big products in the Windows world:

• Microsoft made Word the best -- or at the least most popular -- word processor, beating the competition from WordStar, WordPerfect, and every other competitor.
• Microsoft made Excel the best -- or the most popular -- spreadsheet, winning the battle with Lotus 1-2-3 and defeating smaller competitors like Borland's Sprint.
• Microsoft's PowerPoint is the standard presentation software for Windows. There are no competitors to speak of.
• Microsoft's Access (and later, SQL Server) pushed aside all other database engines: dBase, Paradox, Reflex, R:base, dbVista, and others. A few small competitors (like Faircom) exist in niche markets. IBM's DB2 and Oracle's products still exist, but are less "Windows products" and more "Windows implementations" of multi-platform products.
• Microsoft made Visual Studio the IDE of choice, driving Borland out of the market.
• Microsoft purchased the SourceSafe product, integrated it with Visual Studio, and made it the dominate version control system for Windows. (Microsoft recently replaced the old SourceSafe product with Team Foundation Server.) Other players exist, but only as a small portion of the market.
• Microsoft overpowered Netscape, which re-incarnated itself as the open-source Mozilla project. Browsers are conspicuous in their plurality in Windows; no other major application has this status.
• Microsoft absorbed network functions into Windows. (Remember Novell Netware?)
• Microsoft absorbed virus-checking into Windows.
• Microsoft built media capabilities into Windows, eliminating third-party music players and video players.
• Microsoft developed SilverLight to compete with Adobe Flash, and has rolled out several successful, capable versions. I suspect that they would soon displace Adobe, had it not been for HTML5 trumping both Flash and SilverLight.

I'm charging of abuse of monopoly power, nor of using internal technical information to develop superior products. (Others have raised such issues.) I am looking at the results of Microsoft's actions, regardless of their methods. And the results are these: the Microsoft ecosystem is dying.

Compared to the ecosystem for the Apple iPhone/iPad market, the ecosystem for Microsoft is small. Lots of people, from individual developers to large companies, are developing apps for IOS. In contrast, few folks are building applications for Windows.

Comparing the Windows ecosystem of today against the Windows ecosystem of two decades ago shows the same pattern: fewer developers today.


This is no surprise. The only winning strategy in the commercial market is to become big. One cannot succeed by staying a small company. (Yes, I recognize that there are lots of small companies writing software for Windows. But are they successful? I humbly submit that they have plans to become larger, and are simply waiting for the "right market" or the "right opportunity".)


The problem with the Windows ecosystem is that Microsoft kills any company that becomes too large. (How large is "too large" is defined by Microsoft.) How can one even consider Windows as a long-term environment for a product? You either stay small or become large and get crushed by the Microsoft empire. And there are opportunities in the IOS and Android markets. Developers have noticed the possibilities.

And I think Microsoft has realized this.

The past few years Microsoft has been claiming that they have a large ecosystem; the claim is to impress (or soothe) corporate buyers. But looking at the products on the market and the attendance at Microsoft conferences and fairs (and looking closely at the demographics and not just the numbers) one can see that Microsoft is not winning the hearts of new developers.

I think that the ecosystem has been changing quietly over the past decade (since the introduction of Linux and the original iMac computers). Developers have been moving to the non-Microsoft platforms in response to the expense, the "buy one Microsoft thing and you need another Microsoft thing" dependencies of products, and the threat of competition from Microsoft.

After a decade of quiet changes, the difference is significant. Microsoft recognizes it, and realizes that they need to change.

I expect that Microsoft will change from a "we supply everything" shop and focus on items of strategic importance. Those items will be money-makers and important system components. Here's a plan for Microsoft:

• Keep Windows, but make significant revisions. Windows is necessary for the Microsoft world. The brand is valuable. Lots of customers are committed to it and are not willing to move to other platforms. But large customers want better security and easier administration, and small customers want lower expenses and easier administration.
• Keep ActiveDirectory. It competes with LDAP and is easier to administrate.
• Keep Exchange for large customers. Microsoft must offer a cloud-based e-mail/calendar solution for smaller customers.
• Keep parts of Microsoft Office. Word and Excel can compete with the Open Office and Libre Office products. Drop PowerPoint. Keep Visio.
• Keep Visual Studio and C#. Drop Visual Basic. Increase support for F#.
• Drop Internet Explorer. (It offers no strategic value, and other browsers do not harm Microsoft's web offerings.)
• Drop IIS. (It offers no strategic value.)
• Enhance SQL Server and Access (the front-end GUI) to support data in the cloud as well as local data. Provide data in the cloud so that customers need only Access on their hardware.
• Develop the Microsoft App Store (or whatever they call it) and allow others to sell applications.
• Develop an update system that updates all apps, not just the Microsoft-supplied programs.

The decision to drop products like Visual Basic, IE, and IIS may strike some as foolish. It may be my personal bias that dictates the decision for VB, but IE and IIS offer no revenue to Microsoft. The need for IE is long gone; the winning strategy is to have superior web applications, not control of the browser. Microsoft would be better focussing their efforts on superior web applications.

One risk of dropping these products is that once customers convert to other products they may see value in non-Microsoft products. By pushing customers to non-Microsoft products, Microsoft legitimizes non-Microsoft solutions. That is a risk that Microsoft must counter by providing superior value in the products it retains in its offerings.

Despite the risks, I think that this is a good direction for Microsoft. By letting non-Microsoft products thrive, Microsoft can restore developers' faith in the Microsoft ecosystem and encourage them to consider it for new projects. I see it as the best way for Microsoft to succeed.