Internet Marketing Monitor
January 11, 2007
Filed Under (Microsoft, Opinion, Business Practices) by Matt / Derick on 01-11-2007

I was scanning my regular batch of daily news sources today and I ran across an article about a new "war" being waged in the corporate world.  The type of war isn't really important because the article itself didn't really interest me.  It did get me thinking about corporate warfare, though.  We hear that term thrown around a lot:  browser wars, desktop wars, mobile wars.  Inevitably, company names get tossed in and everyone rushes to make predictions and guess who will win the war.  Regardless of the type of war you're talking about, the internet world has its fair share of contenders… companies scouring the business sector over from top to bottom just looking for any opportunity to expand their reach, their power, and their wealth.  Who will win?  No one knows for sure.  But if you want to be right 100% of the time, your answer should always be something along the lines of:

"The winner of the [insert corporate war-type here] wars will either be Microsoft or [insert some new company name]."

To illustrate my point, let's take a little trip back in time… about 5 years or so… to the days when Microsoft had first released the Xbox.  People thought they were crazy for even entering the game console market.  What does Microsoft, a software company, know about creating game consoles?  Why would they even want to enter the market?  And do they really think they can make much headway?  You remember these questions, right?

What was the result of Microsoft's first Xbox?  If I remember correctly, a great many of them caught on fire or exploded or something.  Correct me on the specifics there.  The machines were buggy, froze often, and were pretty much slammed for their reliability by the press.  What did Microsoft do?  They stuck with it and kept making incremental improvements and tweaks and fixes.  And then came the Xbox 360.  It was the first to market, the first to really offer any nextgen games, and is, in the mind of many a reviewer and game player, the best game console available today.

Did they care that their entry into the console market was scoffed at?  Did they care that their stock took a hit when the original Xbox turned out to be a fire department's worst nightmare?  No.  They stuck with it, they worked on their product, and today you could make a pretty decent argument that Microsoft dominates the game console market.  And even if they don't dominate the market, in a relatively short amount of time they've become one of three major contenders.  And from what?  From scratch.  From nothing.  The other two players, Nintendo and Sony, have been at this for years, even decades.

It's this corporate mentality that forces me to never, ever count Microsoft out when it comes to winning corporate wars.  You could realistically call it a "don't care" philosophy to business.  They don't care if their stock takes a hit.  They don't care if their company is ridiculed by the press.  They don't care if their management team is made fun of or turned into bio-mechanical automatons icons at other websites.  Microsoft is a long haul company and once they set their mind to something, they keep at it.  Maybe they don't meet every deadline.  Maybe version one of a product is a horrible, motley mess of unreliable garbage.  But once they enter a market, you can count on them being in that market down the road.

Plus, they have the financial ability to enter a market full-force.  Microsoft can throw more financial muscle behind a project than most companies make in a year.  So they're out a few billion dollars.  What's that to Microsoft?

Finances play a bit part of my reasoning for saying that some new, unknown company would be the other likely winner of a new corporate war.  New companies don't have anything to risk and nothing to lose.  I mean… what really happens if they fail?  A company that no one has ever heard of disappears.  They don't usually have stockholders to answer to and that means Wall Street isn't an influence.  The only place a new company has to go is up.  Or out.

But that's exactly why the other existing internet players won't win any of these new battles for dominance.  Google… Yahoo… the rest of them.  They've got too much to lose by being risky and it takes risky business to win a war.  Yahoo doesn't have the financial backing to make much of an entry into too many markets.  And while Google has a few more bucks in the bank, they're too concerned with their stock price to play the risky business game.  They have far too much to lose and far too much face to save to stick their necks out very far.

Microsoft, on the other hand, doesn't care.  They'll stick their neck all the way out because they know it takes a close call or two before you hit it big.  They've shown time and again that being risky pays off.  Save for a few exceptions, they become a major player or even a dominator in just about every industry they enter.

Say what you will about Microsoft's business practices and their products.  I know I have.  But at the end of the day, a lot of corporate America could take a lesson or two from Microsoft.



Comments:
2 Comments posted on "Microsoft: The Winner of Any Corporate War"

[…] As I've said before, Microsoft is a long-haul company.  They don't release a product and expect it to be perfect.  They don't care if the first Zune is an utter failure because they're learning from the experience.  And I've talked about the first Xbox before, too.  Even when the things were catching fire, Microsoft didn't care (from a development standpoint… I'm sure they cared about the fire-starting itself).  They took what they learned, made enhancements, and now they all but dominate the game console market. […]


[…] making any broad conclusions just yet. I do agree with Compete’s Jeremy Crane - you should never count Microsoft out. But you should also look at any changes in market share (especially big ones) with a skeptical […]


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