Major Microsoft Change Slated --Did We Learn From History?

In July '08, Craig Mundie and Ray Ozzie will each be taking over a portion of Bill Gates' role at Microsoft, as the Chairman steps down. This will be a major change in Microsoft that may have an impact on the entire industry.

A "slightly similar" situation has happened in the past, when Apple Computer (now Apple Incorporated) Partner and Co-Founder Steve Jobs [2] was ousted from the company by the board of directors and then CEO John Sculley. Apple started to fall behind in industrial development. The Apple line of computers were slowly being phased out while the Macintosh line kept taking more and more power away from the Apple line. Unfortunately, there wasn't enough major changes in the Macintosh line, which was focused mostly on "Portable Computers," which seemed to hit it's prime with the Macintosh SE and Color Classic. Inevitably, Scully was removed from his position of CEO and replaced with Michael Spindler, who further compounded Apple's problems, including problems areas such as allowing other companies to develop "clone" systems that were not developed by Apple, continuing research into a new OS (Code named: Copland) and failed negotiations of a take over with companies IBM, Phillips, and Sun.

While this was going on in the early 1990s, Microsoft was perfecting it's Windows, improving on Windows 3.1 with 3.11, NT, and 95.

With the industry being geared toward freedom of thought and design, having one primary company stressing innovation within it's own set boundaries while also having a concept of "Think Different" [2] ended up being counter intuitive. By the late 90s, when Windows 95 and later Windows 98 were gaining market share from new computer users and Macintosh people that had converted to Windows, either by necessity or by preference, began to dramatically gain power is when forecasts of Apple's demise began to circulate, citing them as a computer company that just didn't understand modern thinking in the IT industry.

With the limited changes with Mac OS, decreasing market share to Windows, and increasing financial problems, Mac became a minor player in the industry by the late 1990s, when Microsoft's Windows reached 90% market share for the first time. In 1996, Spindler was replaced by Gil Amelio [2], Apple's shortest lived CEO.

Many people link this "down-swing" of Apple's status directly to Apple's longest running and then CEO --Scully. Mac OS 7 (1991 to 1997) was in it's final life, it's foundation (System 6) and age was making programming difficult and implementation of new hardware concepts increasingly challenging. Scully attempted to implement Mac OS 8, its development starting back during the days of System 6, however the project, known as Copland suffered from stagnation...

Eventually ignored by Apple itself, the Copland project finally dried off in 1996 as Apple began talks with the now defunct Be Incorporated for development of a new Mac OS. However, the Copland project wasn't a total loss however, its features that were favored were slowly integrated into OS 7, while the development of a new OS was abandoned for purchasing of a third party OS that would be purchased by Apple Computer.

Then the shock came. Be Inc. refused to settle for anything lower than $400 Million for Be OS, while Apple refused to pay more than $125 Million for it, by some, the cost of $125 million was considered to be three times as much as it was worth; citing bad blood between then Be CEO Jean-Louis Gassée (a former Apple official) and Apple Computer. Due to the stressors of encountering such resistance and lack of development of Mac OS 8, Amelio turned to NeXT. A NeXTSTEP OS and Mac OS merger was quite unexpected by the Macintosh industry, whom cited concern over the NeXT CEO and the short duration of negotiations between Apple Computer and NeXT Computer.

The primary concern of Apple Fanatics was the similarities between the Be negotiations and the NeXT negotiations... After Apple Partner and Co-Founder Steve Jobs was forced out of Apple, he founded NeXT, and began work on a new OS concepts and design. Based on the UNIX Mach kernel and BSD Source, the system was slated to revolutionize the OS market. However, differently from Be, and once again a failing of Steve Jobs' business model, the proprietary foundations of NeXT held the company back; NeXT being designed to only run on NeXTSTEP computers, with their high price tag (of around $10,000) limited adaption, and the company was struggling to keep itself afloat. One desperate move after another was made to try to keep the OS going, and then along came Apple... Desperate for a new OS, Jobs required Apple to pay through the nose of NeXT Computers. It isn't clear exactly how much Apple had to pay for NeXT, but it is commonly believed to be at least $375 Million, but no higher than $450 Million; however NeXT also required approximately 1 million shares of Apple for the merger, and placing Jobs as the interim CEO for Apple in 1999.

The story is sweet and simple from there on. Apple released Mac OS 9 shortly after Jobs took over as interim CEO. iMac, iTool (now, .Mac), iTunes and later OS X (based on NeXT) was integrated into Apple's line up, as Steve Jobs took over as Apple's present CEO in 2000.

It is now considered that Steve Jobs saved Apple from folding in 2000, it was an expensive and long term process, but with the salvation of Apple comes a new line of thinking for the IT industry: how dangerous is it to have a major software player have huge changes with its founders? This concept came up when Bill Gates stepped down from CEO to chief software architect and Chairman of the Board, placing Steve Balmer as CEO; allowing Bill Gates to further reduce his role in Microsoft, eventually removing from all day-to-day activity at the business. Bill Gates has slated Ray Ozzie [2] for "day-to-day management" of Microsoft and Craig Mundie [2] as "chief research and strategy officer." While it remains to be seen what will Develop for Bill Gates and Microsoft come 2008, it's ramifications won't be obvious for several years after.

This will definitely be an interesting turning point for Microsoft, and the IT industry in general.