Fascinating. Daniel at Roughly Drafted has a new article, When will Apple release an App Store for Windows? While the article raises some interesting questions, after reading it, and the comments, it became clear that everyone, including Dan, has missed the main point. Let’s take a step back, and look at what Steve Jobs said:
You know, Apple was in very serious trouble. And what was really clear was that if the game was a zero-sum game where for Apple to win, Microsoft had to lose, then Apple was going to lose. But a lot of people’s heads were still in that place.
Steve was trying to prevent a war with Microsoft, a war that at that time, Apple couldn’t win. His main problem was that while Apple didn’t need to destroy Microsoft to win, Microsoft needed to destroy Apple to win. Whether you love or hate Apple for their policies, the company does not force you to buy from them. They give you an option, in fact a damned good option. If you don’t want to buy it, that’s fine, there are others who do. Apple has been adding value to the Mac platform for a long time, with things like the excellent Garage Band audio recording suite, which is the reason I switched to an Apple MacBook. There isn’t anything like it for Linux at the present time, and the Windows alternatives are far more expensive.
Microsoft is in a different position. Microsoft is an artificial monopoly. The only way an artificial monopoly can survive is by destroying competition. Google is a natural monopoly. Google doesn’t need to destroy the other search engine companies to survive, all it needs to do is continue to provide equal or better service, something that Google excels at.
What is an ‘artificial monopoly’? It’s a monopoly imposed on the consumer through anti-competitive acts. Microsoft’s illegal actions to maintain it’s artificial monopoly are well documented in the European Union Anti-Trust Case against Microsoft and the United States v. Microsoft (my thanks to PJ at Groklaw for hosting these files – they are fascinating to read). Without the ability to force almost everyone to buy Windows, Microsoft could not exist.
And that’s where the conflict comes from. Apple doesn’t need to destroy Microsoft to win, all that Apple has to do is maintain profitability. Apple does this by delivering well designed and engineered products that people like using, and are willing to buy. Microsoft does need to destroy Apple to win, because Apple computers (and phones, and IPods, and IPads, etc.) do not need Windows to operate, thus destroying Microsoft’s artificial monopoly. So Microsoft has no choice. It has to destroy Apple.
Now I don’t know if Steve believed what he was saying or not, when he said that Apple didn’t have to destroy Microsoft to win. It doesn’t really matter. What does matter is that Microsoft has to destroy Apple to win, it has no choice. In fact Microsoft has to destroy Apple, and any other competitors (Linux, BSD, Solaris) just to survive. Heck, Bill Gates has admitted that it’s war:
“What I can’t figure out is why he (Steve Jobs) is even trying (to be the CEO of Apple)? ” wondered Bill. “He knows he can’t win.”
When your competitor has to destroy you to survive, you have a limited number of choices. Turn your back, and let it drive in the knife, or fight back. Apple has been fighting passive/aggressive style for years. Mostly it’s worked. The Mac-PC ads are a good example of this. Never once did they directly say ‘Microsoft Windows is a piece of junk’, but they got the message across quite nicely, and with humor. Apple broke the Windows artificial monopoly by running those ads. They let a lot of people who’d never heard of Apple know that there was an alternative to Windows. In effect it was a declaration of war on Microsoft, even if the ad agency didn’t think of it that way.
Microsoft didn’t like the Mac-PC ads, but what could they do? They could ignore them, which they did for years, all the while loosing market share. They could attempt to fight back against them, which they did in the infamous Jerry Seifield-Bill Gates shoe commercial:
And Microsoft kept on loosing market share. Microsoft’s problem is that every point of operating sytem market share it looses, hurts it three times. A lost sale of Windows, means a potential lost sale of Office, and a potential lost sale of an Exchange Server seat. Microsoft has a lot of divisions, but only three make money. Windows & Windows Live Division, Microsoft Business Division, and Server and Tools (see Microsoft’s most recent 10Q for numbers). And two of the divisions, Microsoft Business Division, and Server and Tools, can’t exist without sales by Windows & Windows Live Division. When Windows & Windows Live Division loses market share, the other two divisions lose sales. Microsoft Windows at one point was the operating system on over 95% of computers sold. Apple is now claiming to hold a 20% market share in North America. The loss of 15% of market share has hit Microsoft’s stock price hard. What was once one of the fastest rising stocks on the market, has seen very little movement in the last ten years, while Apple’s stock price has soared.
And I’m not the only one who’s noticed, I wrote up an article the other day covering Business Insiders reports on the damage, going back to 2007.
There’s obviously more than just Apple involved. Linux has been killing Microsoft in the server market. In a lot of firms the only remaining Microsoft server is the Exchange mail server. Rim, Apple, Symbian, and Android tower over Microsoft in the smartphone segment. Nintendo has totally trashed Microsoft in the console gaming market. Google is so dominant in search that Microsoft has blown billions of dollars, even to the point of trying to pay people to use it’s search engine in a desperate bid to gain market share.
But the most visible damage, is the damage that Apple has done to Microsoft, and that damage is quickly turning Microsoft into a rabid dog. There’s only one way to handle a full blown case of rabies. You kill the animal. Fast. Before it bites someone, and by passing along the disease, kills them too.
What’s the best way for Apple to kill the rabid dog? Simple. Do what Dan suggests. Port Cocoa to Windows. Open a software store for Windows that only contains Cocoa apps. Provide a converter, that converts any OS X Cocoa application into a Windows Cocoa application. Make it easy for people to write cross platform apps, that will run on Windows and OS X. Leverage the same skills that Apple used in setting up the ITunes app store for IPods, and that they are using to set up the ITunes app store for Macs, to set up an ITunes app store for Windows. And then offer the IWork suite, Mail, and Calendar for Windows, at the same price as they offer it for OS X, and watch the defections from Office turn into a flood.
This has two effects, first, it torpedos Microsoft Business Division, the most profitable division that Microsoft has. Second, it eases the cost of migration for millions of more people, all of whom hate Windows, and don’t have the skills to install Linux. And if you don’t have the skills to install Linux yourself, you’ll probably buy Apple. Or maybe you’ll buy Dell, or HP, or Lenovo.
Apple would prefer that you buy Apple of course, but the company’s main problem isn’t the competing computer OEMS, it’s the rabid dog in Redmond. Microsoft has to kill Apple to remain alive, and there is no way Apple is going to give Microsoft a second chance (remember Windows 95 – Windows 95 was only possible because Apple had signed a deal with Microsoft which allowed Microsoft to use some Apple technology, and the agreement was open ended enough that Microsoft was able to convince a court that it allowed Microsoft to built it’s own GUI operating system).
Apple has no choice. While Apple can win without killing Microsoft, Microsoft can’t win without killing Apple. And Microsoft will kill Apple, unless Apple kills Microsoft first.
Saturday November 13, 2010
PS: Note that I’ve mostly left Linux out of this article. Microsoft also has to kill Linux. Oh, and I’ve mostly left Solaris out of this article. Microsoft has to kill Solaris too. And BSD. And ReactOS. And Blackberry OS. And Symbian. To quote Ambassador Londo Mollari, played to perfection by Peter Jurasik in the Television Series Babylon 5:
Only an idiot would fight a war on two fronts. Only the heir to the throne of the Kingdom of Idiots would fight a war on twelve fronts.
Have fun Microsoft.