Modest Microsoft

Microsoft has good reason to be jealous of Apple’s and Google’s successes. The software heavyweight, barely still capable of crushing all high tech competitors in its path, has lost some of its sparkle. In the shadow of Apple’s iPods and of the Web giant’s search engine, the company created by Bill Gates seems to be one or two revolutions late. Rich in the billions it may remain, but the Redmond behemoth is not what it used to be in dictating the rhythm of innovation. Henceforth, progress is moving on toward portable multimedia end devices, and data is being handled more and more on the Net by software houses and less and less on the PC. Microsoft used to be accused of having way too much power. We may be nearing the point of ascertaining they’re missing some.

From this evolution, much more suffered than chosen, the group managed by Steve Ballmer has decided to play a trump. Its relative weakness can become its strength. At a time where telecom operators are looking to put the brakes on Apple’s growing momentum and limit Google’s ambitions, Microsoft appears as an ally of circumstance.

With no opposing force, Apple is imposing its conditions on operators and software developers. With the success of its App Store platform, it has crept its way in between the operators and their clients to bill services directly. With Android, Google is, in turn, trying to make itself a key player in the mobile universe. It does of course offer its operating system to end device manufacturers, but it threatens to marginalize operators, reducing them to the simple role of a conduit. As a result, in a relatively stagnant market, margins and growth are at risk when being picked up by Apple and Google.

Modest by default, Microsoft has decided to lend a helping hand at the time of the launch of Windows Mobile 7. It is ready to bend over to the telecom giants’ wishes and to design end devices with and for them. It is also prepared to share the revenues with operators and software developers alike in a more generous way than Apple. Microsoft undoubtedly hasn’t given up all hegemonic temptation, but its loss of power obliges it to show more pragmatism. The challenge for this group, which isn’t in the habit of marrying modesty and success, will be to prove that it can.