Contrary to the critics, I believe Microsoft deserves more credit for innovation than it has received, especially in recent years.
Just a few of the neglected innovations are the gamers' dream player, Xbox, the amazing Kinect, the Zune media player software, the cloud virtualization service Azure, the web-based suite Office 365, the stunningly elegant Windows Phone 7, the upcoming Windows 8 and the newly announced tablet Surface.
But wait... aren't all of these products knock offs of better known and more successful competing products? And who says they're so innovative anyway?
Microsoft, the Fast Follower
Windows 7 (and its unfairly maligned predecessor, Vista) in some respects responded to Apple's OS X, which upped the ante in visual polish. Microsoft could not so easily abandon its corporate users by providing no backwards compatibility.
Likewise, the Xbox responded to the market opportunities demonstrated by Nintendo and Sony. Windows Media Player and the Zune player stepped up to the challenge of iTunes. Azure responded to VMware and Amazon. Office 365 was an answer to the threat posed by Google Docs. Windows Phone 7 reinvented the clunky Windows Mobile after the iPhone revolutionized the phone interface. And Surface, the latest Microsoft announcement, comes late on the heels of the iPad and the Kindle Fire, as well as a host of tablets running Android and even the Blackberry OS.
In this familiar storyline, Microsoft is the "fast follower", chasing after the true innovators and beating them only because of its war chest of cash and its cutthroat tactics. Farewell, Netscape. Goodbye, Real Player.
Calling Microsoft a fast follower oversimplifies, at once selling Microsoft short and giving too much credit to the competition.
Apple did not invent the user-friendly operating system. Xerox PARC did. The iPod was not the first portable digital music player. That credit goes to the MPMan from 1997.
Even Netscape Navigator, which prompted Microsoft to push the limits of monopoly power, wasn't the first web browser. Its history traces back through xmosaic to NCSA Mosaic, and from there back to ViolaWW, which inspired Marc Andreesen and Eric Bina, who enthusiastically copied the idea. Even then, there were alternatives, namely Erwise and WorldWideWeb.
Microsoft's competitors generally can't claim ultimate original inventor status for their products either.
Microsoft, the Innovator
A common criticism of Microsoft is that the company doesn't really innovate; it copies with a few minor changes, often for the worse. Again, unfair and overly simplistic. Innovation consists of more than wowing the world and inspiring fandom.
In my taxonomy of innovation, innovation can be split up into three types: sustaining, disruptive or revolutionary. Briefly, sustaining innovations enhance features and make minor improvements. E.g., iOS 6 adds a range of mostly minor features to iOS 5. Disruptive innovations change what attributes matter in a product, appealing to different users. Revolutionary innovations, like the Kindle e-reader, create a whole new product category.
Moreover, innovation differs from mere creativity and the more developed application of creativity known as invention.
Where does Microsoft fit within the taxonomy? Clearly not in the revolutionary category. That's why many people don't credit Microsoft with innovation. And most Apple products don't qualify as revolutionary either.
What about disruptive? As a large company with two major sources of income -- the Windows operating system and Microsoft Office -- Microsoft devotes more effort to avoiding being disrupted by new companies than to disrupting markets itself.
By the standards of sustaining innovation, Microsoft is in fact a powerhouse. Every year, Microsoft earns more revenue from patent licensing -- of its own patents as well as acquired patents -- than all but a handful of brand name Silicon Valley startups. For example, phones running Google's Android operating system use Microsoft technology to the tune of $444 million per year.
In each product release, Microsoft adds in more minor innovations per release than most users ever realize or appreciate. And it doesn't merely copy the competition. It attempts to, and very often does, improve upon existing products.
To take one example, Windows Phone does not copy either the iPhone or Android in its layout or style. When displayed side by side, the new Windows Phone makes both the iPhone and Android look more like the old Windows Mobile, with little desktop computer-style icons with names underneath. The animation effects also have a fresh liveliness to them. Microsoft also integrated Facebook and Twitter deeply into its phone, linking them into its contact app called People, and making it easy to create a home icon for your favorites.
Whether any of this makes you want to change phones or not, the point is that Microsoft has innovated.
Office 365 presents another example. Microsoft's answer to Google Docs (which, incidentally, was not developed by Google, but acquired), Office 365 brings the rich ribbon interface to the web. The software handles Microsoft Office file formats vastly better than Google Docs, and supports richer formatting, as well as seamless transitioning from editing in the browser to editing in the desktop version of the software. Microsoft has innovated in many ways, with the aim not only to defend its core office suite, but also to address the reality that the world is migrating to hosted software.
A third example: the Zune media player. Originally built to support the Zune portable player, the Zune software radically reinvents the style of interface common to iTunes, Windows Media Player, WinAmp, Real Player and other media software. The Zune interface anticipates the Surface tablet and Windows 8. It's certainly an innovation, fresh and original and executed better than the overwhelming majority of new software products.
That said, Microsoft primarily engages in sustaining innovation. And the same is true of any large, successful company, including Apple. Mostly Apple updates its product line of music players, laptop computers, and operating system with relatively minor feature additions. Only rarely does anything more radically innovative come along. That's by design.
Innovation and Commercial Success
At this point, Microsoft critics may be willing to concede that the company does innovate, and copiously. But what about successfully?
Within a business as large as Microsoft, many smaller products launch every year, and some of the best of them would be household names if they were separate companies rather than divisions within a larger whole. Take Xbox, for instance. Or data center virtualization. Microsoft has acquired and developed internally some lucrative business lines that have the potential to disrupt its core business. Although Office 365 developed in part as a response to the threat of Google Docs, it may yet turn out to be disruptive.
The Xbox and Xbox 360 have sold tens of millions of units worldwide, far more than the Apple TV box. Xbox users watch movies and play games in a market that, so far, comparatively, Apple has barely touched. With the next iteration of the Xbox, Microsoft may well stay out ahead of the upcoming Apple TV set.
As for the phone, tablet and television spaces, Microsoft's future success remains open for speculation. Perhaps time will prove the critics right. Perhaps Microsoft will struggle to acquire meaningful market share in these key markets.
To my previous taxonomy of innovation, I should add one more variable: successful innovations and unsuccessful ones.
Innovation is not equal to commercial success, as anyone who has worked on a promising but failed product can tell you. In the ranks of the Fortune 500, a lack of innovation may be a limitation to growth. By contrast, Silicon Valley and New York City startups are bursting with innovation. What they need is not more innovation, but a better match with markets.
As soon as investors recognize the extent of the mismatch, expect a correction in stock prices and venture funding. When the music stops, companies like Microsoft, with deep cash reserves, will keep right on innovating.
Related posts:
Revolutionary vs. Disruptive Innovation
What's the Recipe for Innovation?
Creativity, Invention, Innovation
In this familiar storyline, Microsoft is the "fast follower", chasing after the true innovators and beating them only because of its war chest of cash and its cutthroat tactics. Farewell, Netscape. Goodbye, Real Player.
Calling Microsoft a fast follower oversimplifies, at once selling Microsoft short and giving too much credit to the competition.
Apple did not invent the user-friendly operating system. Xerox PARC did. The iPod was not the first portable digital music player. That credit goes to the MPMan from 1997.
Even Netscape Navigator, which prompted Microsoft to push the limits of monopoly power, wasn't the first web browser. Its history traces back through xmosaic to NCSA Mosaic, and from there back to ViolaWW, which inspired Marc Andreesen and Eric Bina, who enthusiastically copied the idea. Even then, there were alternatives, namely Erwise and WorldWideWeb.
Microsoft's competitors generally can't claim ultimate original inventor status for their products either.
Microsoft, the Innovator
A common criticism of Microsoft is that the company doesn't really innovate; it copies with a few minor changes, often for the worse. Again, unfair and overly simplistic. Innovation consists of more than wowing the world and inspiring fandom.
In my taxonomy of innovation, innovation can be split up into three types: sustaining, disruptive or revolutionary. Briefly, sustaining innovations enhance features and make minor improvements. E.g., iOS 6 adds a range of mostly minor features to iOS 5. Disruptive innovations change what attributes matter in a product, appealing to different users. Revolutionary innovations, like the Kindle e-reader, create a whole new product category.
Moreover, innovation differs from mere creativity and the more developed application of creativity known as invention.
Where does Microsoft fit within the taxonomy? Clearly not in the revolutionary category. That's why many people don't credit Microsoft with innovation. And most Apple products don't qualify as revolutionary either.
What about disruptive? As a large company with two major sources of income -- the Windows operating system and Microsoft Office -- Microsoft devotes more effort to avoiding being disrupted by new companies than to disrupting markets itself.
By the standards of sustaining innovation, Microsoft is in fact a powerhouse. Every year, Microsoft earns more revenue from patent licensing -- of its own patents as well as acquired patents -- than all but a handful of brand name Silicon Valley startups. For example, phones running Google's Android operating system use Microsoft technology to the tune of $444 million per year.
In each product release, Microsoft adds in more minor innovations per release than most users ever realize or appreciate. And it doesn't merely copy the competition. It attempts to, and very often does, improve upon existing products.
To take one example, Windows Phone does not copy either the iPhone or Android in its layout or style. When displayed side by side, the new Windows Phone makes both the iPhone and Android look more like the old Windows Mobile, with little desktop computer-style icons with names underneath. The animation effects also have a fresh liveliness to them. Microsoft also integrated Facebook and Twitter deeply into its phone, linking them into its contact app called People, and making it easy to create a home icon for your favorites.
Whether any of this makes you want to change phones or not, the point is that Microsoft has innovated.
Office 365 presents another example. Microsoft's answer to Google Docs (which, incidentally, was not developed by Google, but acquired), Office 365 brings the rich ribbon interface to the web. The software handles Microsoft Office file formats vastly better than Google Docs, and supports richer formatting, as well as seamless transitioning from editing in the browser to editing in the desktop version of the software. Microsoft has innovated in many ways, with the aim not only to defend its core office suite, but also to address the reality that the world is migrating to hosted software.
That said, Microsoft primarily engages in sustaining innovation. And the same is true of any large, successful company, including Apple. Mostly Apple updates its product line of music players, laptop computers, and operating system with relatively minor feature additions. Only rarely does anything more radically innovative come along. That's by design.
Innovation and Commercial Success
At this point, Microsoft critics may be willing to concede that the company does innovate, and copiously. But what about successfully?
Within a business as large as Microsoft, many smaller products launch every year, and some of the best of them would be household names if they were separate companies rather than divisions within a larger whole. Take Xbox, for instance. Or data center virtualization. Microsoft has acquired and developed internally some lucrative business lines that have the potential to disrupt its core business. Although Office 365 developed in part as a response to the threat of Google Docs, it may yet turn out to be disruptive.
The Xbox and Xbox 360 have sold tens of millions of units worldwide, far more than the Apple TV box. Xbox users watch movies and play games in a market that, so far, comparatively, Apple has barely touched. With the next iteration of the Xbox, Microsoft may well stay out ahead of the upcoming Apple TV set.As for the phone, tablet and television spaces, Microsoft's future success remains open for speculation. Perhaps time will prove the critics right. Perhaps Microsoft will struggle to acquire meaningful market share in these key markets.
To my previous taxonomy of innovation, I should add one more variable: successful innovations and unsuccessful ones.
Innovation is not equal to commercial success, as anyone who has worked on a promising but failed product can tell you. In the ranks of the Fortune 500, a lack of innovation may be a limitation to growth. By contrast, Silicon Valley and New York City startups are bursting with innovation. What they need is not more innovation, but a better match with markets.
As soon as investors recognize the extent of the mismatch, expect a correction in stock prices and venture funding. When the music stops, companies like Microsoft, with deep cash reserves, will keep right on innovating.
Related posts:
Revolutionary vs. Disruptive Innovation
What's the Recipe for Innovation?
Creativity, Invention, Innovation
good analysis
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ReplyDelete- vijay
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