That almost seems like a silly question for a company 100,000 employees, two massive cash cows with Windows and Office, and what is probably the world’s best cloud service. Nevertheless, that’s what Bethany McLean is asking in a Vanity Fair interview with former Softie CEO Bill Gates and current Softie CEO Satya Nadella:
“The way I think about success is our relevance,” says Nadella.
Relevance, however, is exactly what Microsoft doesn’t have, according to its critics. “The Irrelevance of Microsoft” is actually the title of a blog post by an analyst named Benedict Evans, who works at the Silicon Valley venture-capital firm Andreessen Horowitz. On his blog, Evans pointed out that Microsoft’s share of all computing devices that we use to connect to the Internet, including P.C.’s, phones, and tablets, has plunged from 90 percent in 2009 to just around 20 percent today. This staggering drop occurred not because Microsoft lost ground in personal computers, on which its software still dominates, but rather because it has failed to adapt its products to smartphones, where all the growth is, and tablets. Even Microsoft’s new chairman of the board, a former IBM executive named John Thompson, told Fortune last winter that “there are some attributes to Microsoft today that do look vaguely like IBM circa 1990.”
During its ’80s and ’90s heyday, Microsoft wasn’t so much relevant as it was necessary. During the ’80s, the personal computer market was so fractured that individual companies made product lines which weren’t even compatible with their own other product lines. Commodore went from the PET to the VIC-20 to the C64 to the Plus 4 (remember that stinker?) to the C128, and only an awkward emulation mode allowed the C128 to run C64 software. The other computers might have well have come from different planets. Apple? Same story with the Apple II, Apple III (another stinker), Lisa, and Mac. By the early ’90s, Apple couldn’t even keep Mac OS fully modern.
But there was Microsoft, producing one OS and boatloads of good enough software for most anything running on a x86 chip. Then along came the internet, allowing anything to share data with anything, and Microsoft (after a late entry into the Browser Wars) was there to take advantage. The resulting network effects turned computers from little boxes people worked or played on by themselves, into a massive global productivity machine.
Whatever you think of Microsoft’s products then or now, somebody had to get done what Redmond got done, and we’re all better off for it. But Microsoft missed the boat repeatedly in mobile and tablets, and the company’s necessary job has been complete now for 15 years.
I don’t doubt Microsoft will be making a lot of money for a long time to come, but it will likely never be what it once was.