Microsoft is not DEC

Some have pointed out the comparisons of Microsoft to the long-ago champion of mini-computers DEC.

The commonalities seem to be:

• DEC and Microsoft were both large
• DEC and Microsoft had strong cultures
• DEC missed the PC market; Microsoft is missing the mobile market
• DEC and Microsoft changed their CEOs

Yet there are differences:

DEC was a major player; Microsoft set the standard DEC had a successful business in minicomputers but was not a standard-setter (except perhaps for terminals). There were significant competitors in the minicomputer market, including Data General, HP, and even IBM. Microsoft, on the other hand, has set the standard for desktop computing for the past two decades. It has an established customer base that remains loyal to and locked into the Windows ecosystem.

DEC moved slowly; Microsoft is moving quickly DEC made cautious steps towards microcomputers, introducing the PRO-325 and PRO-350 computers which were small versions of PDP-11 processors running a variant of RT-11, a proprietary and (more importantly) non-PC-DOS operating system. DEC also offered the Rainbow which ran MS-DOS but did not offer the "100 percent PC compatibility" required for most software. Neither the PRO and Rainbow computers saw much popularity. Microsoft, in contrast, is offering cloud services with Azure and seeing market acceptance. Microsoft's Surface tablets and Windows Phones (considered quite good by those who use them, and quite bad by those who don't) do parallel DEC's offerings in their popularity, and this will be a problem for Microsoft if they choose to keep offering hardware.

The IBM PC set a new standard; mobile/cloud has no standard The IBM PC defined a new standard for microcomputers (the new market). Overnight, businesses settled on the PC as the unit of computing, with PC-DOS as the operating system and Lotus 1-2-3 as the spreadsheet. The mobile/cloud environment has no comparable standard hardware or software. Apple and Android are competing for hardware (Apple has higher revenue while Android has higher unit sales) and Amazon.com is dominant in the cloud services space but not a standards-setter. (The industry is not cloning the AWS interface.)

PCs replaced minicomputers; mobile/cloud complements PCs Minicomputers were expensive and PCs (except for the very early microcomputers) were able to perform the same functions as minicomputers. PCs could perform word processing, numerical analysis with spreadsheets (a bonus, actually), data storage and reporting, and development in common languages such as BASIC, FORTRAN, Pascal, C, and even COBOL. Tablets do not replace PCs; data entry, numeric analysis, and software development remains on the PC platform. The mobile/cloud technology expands the set of solutions, offering new possibilities.

Comparing Microsoft to DEC is a nice thought experiment, but the situations are different. Was DEC under stress, and is Microsoft under stress? Undoubtedly. Can Microsoft learn from DEC's demise? Possibly. But Microsoft's situation is not identical to DEC's, and the lessons from the former must be read with care.