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Microsoft, Google, Lewis And Clark

Hungry, wet and freezing, the Lewis and Clark party stumbled through the Bitterroot Mountains in September 1805 searching for the Columbia River and its outlet to the sea. “To our inexpressible joy,” wrote Meriwether Lewis on Sept. 19, they finally spied the prairies of the river basin where they would find food and salvation.

I know how he felt. Off in the distance, I think I see the edge of the Microsoft wilderness in which business computing has been wandering for years. I can’t wait to get there.

Microsoft built a business empire selling things people had to have rather than things people wanted to have. It began, of course, with the DOS operating system for the original IBM personal computer. When that machine and its successors and clones took over the business computing world, Microsoft had its critical tool to dominate other areas of computing.

First came applications. Excel was a weak spreadsheet competitor to Lotus 1-2-3 through most of the 1980s, even though the industry joke about Microsoft’s sabotage attempts was, “The OS ain’t done until Lotus won’t run.” Microsoft also had second-rate DOS software in the word processing and database categories, which rounded out the Big Three of that era.

The shift to Windows and Microsoft’s practice of bundling its applications into the Office package, which it pressed computer manufacturers to distribute, finally doomed most of its competitors to irrelevance. When the Internet took off in the mid-1990s, Microsoft pushed aside the pioneering Netscape browser by building Internet Explorer into Windows, leading to years of antitrust litigation.

At least, through those years, Microsoft made steady if slow progress improving its operating systems. Windows 2000 finally got most computer users off the antiquated DOS architecture and was, arguably, the best OS Microsoft ever produced. Windows XP, introduced in 2003, was mainly a repackaged Windows 2000, while Windows Vista in 2007 was for all practical purposes a failure. None of these successive versions has fixed Windows’ propensity for crashes, conflicts and security holes. And, over time, Microsoft has become steadily more restrictive in how it lets users use its products. Modern Windows versions, for example, do not let you “virtualize” your machine so you can move your computing onto a server.

Microsoft now is targeting the rollout of yet another Windows, dubbed Windows 7, for October 22. Cover your ears if you don’t want to be deafened by the hype.

But Microsoft’s dominance is slipping away. Linux has made only small inroads among individual users but has produced a major dent in the market for corporate servers. Apple has been gaining market share with its Macintosh machines and OS X operating systems, which have steadily outpaced Windows in modernization. The growing importance of the Internet makes local-machine applications less important overall, at least at home. All most people need these days is a browser and an email client. An entire range of low-cost, low-powered “netbook” machines has evolved to fill that niche.

Business applications, like the tax and portfolio management software we use at our firm, still need to run on a local operating system. Software makers still write for Windows because that is where the market is. So most business users must continue to buy Microsoft operating systems whether they want to or not. This is true for small business servers as well as for desktop machines.

But it may not be true for long. Efforts have been underway for some time to allow Windows-based programs to run under other operating systems, such as OS X and Linux. Our office will be experimenting with one of these “Windows translators,” known as WINE, soon. Once we don’t need Windows to run Windows applications, it will be bye-bye Windows.

Also, Google announced earlier this month that it is developing its own operating system, called Chrome (not to be confused with the Google browser of the same name). Initially the new system will target simple netbook-type systems. But the big strategic threat to Microsoft here is that Google has the resources, lacking until now, to pour into a WINE-type effort to make business-oriented Windows apps run on Chrome. This likely is the most serious challenge Microsoft has ever faced.

Microsoft products helped give birth to an unprecedented era of information availability and business productivity. Ordinarily, I would feel considerable loyalty to an enterprise that achieved so much. But Microsoft’s business practices and indifference to customers engendered the opposite sentiment. They are a company I do business with only when I have to, not because I want to. I am looking for a way out of the wilderness.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.

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