From: mike 


http://www.paulgraham.com/microsoft.html

===
A few days ago I suddenly realized Microsoft was dead. I was talking to a
young startup founder about how Google was different from Yahoo. I said
that Yahoo had been warped from the start by their fear of Microsoft. That
was why they'd positioned themselves as a "media company" instead
of a technology company. Then I looked at his face and realized he didn't
understand. It was as if I'd told him how much girls liked Barry Manilow in
the mid 80s. Barry who?

Microsoft? He didn't say anything, but I could tell he didn't quite believe
anyone would be frightened of them.

Microsoft cast a shadow over the software world for almost 20 years
starting in the late 80s. I can remember when it was IBM before them. I
mostly ignored this shadow. I never used Microsoft software, so it only
affected me indirectly—for example, in the spam I got from botnets. And
because I wasn't paying attention, I didn't notice when the shadow
disappeared.

But it's gone now. I can sense that. No one is even afraid of Microsoft
anymore. They still make a lot of money—so does IBM, for that matter. But
they're not dangerous.

When did Microsoft die, and of what? I know they seemed dangerous as late
as 2001, because I wrote an essay then about how they were less dangerous
than they seemed. I'd guess they were dead by 2005. I know when we started
Y Combinator we didn't worry about Microsoft as competition for the
startups we funded. In fact, we've never even invited them to the demo days
we organize for startups to present to investors. We invite Yahoo and
Google and some other Internet companies, but we've never bothered to
invite Microsoft. Nor has anyone there ever even sent us an email. They're
in a different world.

What killed them? Four things, I think, all of them occurring
simultaneously in the mid 2000s.

The most obvious is Google. There can only be one big man in town, and
they're clearly it. Google is the most dangerous company now by far, in
both the good and bad senses of the word. Microsoft can at best limp along
afterward.

When did Google take the lead? There will be a tendency to push it back to
their IPO in August 2004, but they weren't setting the terms of the debate
then. I'd say they took the lead in 2005. Gmail was one of the things that
put them over the edge. Gmail showed they could do more than search.

Gmail also showed how much you could do with web-based software, if you
took advantage of what later came to be called "Ajax." And that
was the second cause of Microsoft's death: everyone can see the desktop is
over. It now seems inevitable that applications will live on the web—not
just email, but everything, right up to Photoshop. Even Microsoft sees that
now.

Ironically, Microsoft unintentionally helped create Ajax. The x in Ajax is
from the XMLHttpRequest object, which lets the browser communicate with the
server in the background while displaying a page. (Originally the only way
to communicate with the server was to ask for a new page.) XMLHttpRequest
was created by Microsoft in the late 90s because they needed it for
Outlook. What they didn't realize was that it would be useful to a lot of
other people too—in fact, to anyone who wanted to make web apps work like
desktop ones.

The other critical component of Ajax is Javascript, the programming
language that runs in the browser. Microsoft saw the danger of Javascript
and tried to keep it broken for as long as they could. [1] But eventually
the open source world won, by producing Javascript libraries that grew over
the brokenness of Explorer the way a tree grows over barbed wire.

The third cause of Microsoft's death was broadband Internet. Anyone who
cares can have fast Internet access now. And the bigger the pipe to the
server, the less you need the desktop.

The last nail in the coffin came, of all places, from Apple. Thanks to OS
X, Apple has come back from the dead in a way that is extremely rare in
technology. [2] Their victory is so complete that I'm now surprised when I
come across a computer running Windows. Nearly all the people we fund at Y
Combinator use Apple laptops. It was the same in the audience at startup
school. All the computer people use Macs or Linux now. Windows is for
grandmas, like Macs used to be in the 90s. So not only does the desktop no
longer matter, no one who cares about computers uses Microsoft's anyway.

And of course Apple has Microsoft on the run in music too, with TV and
phones on the way.

I'm glad Microsoft is dead. They were like Nero or Commodus—evil in the way
only inherited power can make you. Because remember, the Microsoft monopoly
didn't begin with Microsoft. They got it from IBM. The software business
was overhung by a monopoly from about the mid-1950s to about 2005. For
practically its whole existence, that is. One of the reasons "Web
2.0" has such an air of euphoria about it is the feeling, conscious or
not, that this era of monopoly may finally be over.

Of course, as a hacker I can't help thinking about how something broken
could be fixed. Is there some way Microsoft could come back? In principle,
yes. To see how, envision two things: (a) the amount of cash Microsoft now
has on hand, and (b) Larry and Sergey making the rounds of all the search
engines ten years ago trying to sell the idea for Google for a million
dollars, and being turned down by everyone.

The surprising fact is, brilliant hackers—dangerously brilliant hackers—can
be had very cheaply, by the standards of a company as rich as Microsoft. So
if they wanted to be a contender again, this is how they could do it:
Buy all the good "Web 2.0" startups. They could get substantially
all of them for less than they'd have to pay for Facebook.

Put them all in a building in Silicon Valley, surrounded by lead shielding
to protect them from any contact with Redmond. I feel safe suggesting this,
because they'd never do it. Microsoft's biggest weakness is that they still
don't realize how much they suck. They still think they can write software
in house. Maybe they can, by the standards of the desktop world. But that
world ended a few years ago.

I already know what the reaction to this essay will be. Half the readers
will say that Microsoft is still an enormously profitable company, and that
I should be more careful about drawing conclusions based on what a few
people think in our insular little "Web 2.0" bubble. The other
half, the younger half, will complain that this is old news.



Notes

[1] It doesn't take a conscious effort to make software incompatible. All
you have to do is not work too hard at fixing bugs—which, if you're a big
company, you produce in copious quantities. The situation is analogous to
the writing of "literary theorists." Most don't try to be
obscure; they just don't make an effort to be clear. It wouldn't pay.

[2] In part because Steve Jobs got pushed out by John Sculley in a way
that's rare among technology companies. If Apple's board hadn't made that
blunder, they wouldn't have had to bounce back.
===


  /m

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