A Brief History of how Microsoft (and others) Changed the World… Part 2

On July 7, 2011 I posted the first instalment of what started out as a short article for BackBone Magazine, and soon developed (and continues to morph) into something else completely.  You can read the first part here: https://garvis.ca/2011/07/07/a-brief-history-of-how-microsoft-and-others-changed-the-world-part-1/

This is the second part of the article, and it starts to get interesting if you are interested in the history of the most significant industry of the last quarter-century.  If you have not read the first section I recommend you do before proceeding, but there will not be a test at the end, only context throughout.I hope you enjoy this trip down memory lane, and look forward to your comments and feedback! –M

In November, 1985 Microsoft revealed its new platform – Windows. It would take another ten years until they revealed what most people consider the first truly user-friendly version; in August 1995 Bill Gates launched Windows 95, and with all of its beauty, bells, and whistles, it remains an industry joke that his demo machines crashed (and that you needed to press Start to turn it off). Of course Windows 95 was still considered a home version, and although it was for the first time included in the same box, required an underlying version of MS-DOS to load before it did.

Shortly thereafter Windows NT was launched. NT was a pure business operating system that would allow IT administrators to control much of it centrally. It was their goal, however, to bring these two platforms together into one single environment. In late 2001 that would become a reality with Windows XP, which although it did have a Home Edition and a Professional Edition, sat on the same kernel.

Windows XP was the first operating system that most people would use, and by that we mean that shortly after its release the world of ‘personal computers’ hit a tipping point, and during the ten years that followed its release all of the pieces of the history of an industry would come together – computers, the Internet, interconnected applications – to a point where nearly everyone in the developed world has and uses a computer, and people who short years before would have handed tasks such as e-mailing and writing documents to secretaries are now doing it all themselves. Grandmothers who just a few years before were afraid of computers are using Facebook and Skype to stay in touch not only their immediate families but also with friends and family far and wide. The (developed) world is on-line, and while so many of the tools we use to make our lives easier are not from Microsoft, without Microsoft Windows – a single platform so pervasive so as to run on over ninety percent of desktop computers (as well as some seventy-five percent of servers) it would be difficult to see how all of these changes – indeed how the tipping point that allowed them all to happen – could have happened without Microsoft.

With that being said, the single most popular commercial software package (or software family, as there are different editions) that gets installed on Windows-based computers is Microsoft Office. The Office Suite at its core consists of a word processor (Microsoft Word), spreadsheet (Microsoft Excel), and presentation package (Microsoft PowerPoint). There are competitive packages to each of these, as well as to the plethora of applications that are included in various other editions of the package. Some of these, such as Open Office, are even free. Yet corporations continue to buy licenses for the Microsoft offering. It is certainly not because corporations are fiscally irresponsible, it is simply that the products are designed to work together from the ground up, and while Open Office on Windows was brought over from the open-source world, Office was built specifically for Windows, by the company that makes Windows. As the industry continues to evolve ‘into the cloud’ Microsoft has invested heavily in web-integration of the suite, including the ability to store and work on documents on-line, as well as both private- and public-cloud versions of the most popular applications of the Office suite. They were not the first to release on-line, subscription-based (or free) applications… but no other company offers the level of on-line and local integration that allows the end-user to work how he wants, where he wants.

It has been twenty years since the deal with IBM, and the vast majority of computers sold today are still sold with a license for a Microsoft OS. Whether you spent three hundred dollars on a netbook with Windows Home Basic or several thousand dollars on a high-performance workstation with Windows Ultimate, a few dollars of your purchase price goes directly to Microsoft. Those bundled licenses, called original equipment manufacturer (OEM) licenses, are the least expensive way to purchase the product; with that being said, Microsoft may be the only company in the world that sells products for a cost of ‘It Depends…’. Is the OEM version of the product any different than the retail (FPP, for Full Package Product) one? Not in any way that most users would notice – but legally it makes all the difference in the world. The OEM ‘SKU’ (pronounced skew) of Windows, or any other Microsoft software available in OEM, has no upgrade rights (it cannot be used to upgrade a previous version of the OS), and is tied to the hardware (specifically to the motherboard and CPU). If those components are replaced – whether due to a hardware failure or the desire to upgrade or whatever other reason – the OS is no longer legal for use. While the writer is not sure how large computer resellers handle this issue for warranty replacements, he has heard of too many smaller Partners and resellers who shirk this issue, whether inadvertently due to ignorance, or blatantly with full knowledge of the legality.

If it is true that over the years, dating back to the original IBM PCs, a significant percentage of Microsoft software has been pirated, it is easy to surmise that as the largest software company in the world they have lost billions of dollars to illegal software sales. In fact, it is entirely possible (although difficult if not impossible to quantify) that the Microsoft Corporation has been the single most stolen from entity in the modern world (we will leave the pillaging of villages and civilizations from the Israelites through the Aztecs & Mayans pride of place… for now). In all likelihood dating back to the original MS-DOS there have been Billions of dollars in pirated or otherwise unlicensed Microsoft software installed.

Imagine someone stealing a Billion Dollars in cars from Toyota… or a Billion Dollars in diamonds from deBoers… or a Billion Dollars in televisions from Sony. These companies would actually suffer a two-fold loss – not only have they lost that amount in saleable merchandise, but they have also lost the same amount because the consumers of those stolen products don’t actually have to purchase them from the manufacturer. It would be, in a word, devastating.

While Microsoft is severely anti-piracy, and while that crime does affect them, the cost is nowhere near what it would be to almost any other industry. The reasoning is twofold:

1) While Microsoft manufactures and delivers a product, it is not the box that costs money, but rather the software – easily and very cheaply reproducible –within that box that is the product. So if a car manufacturer loses half the value of the sale cost for a stolen car, Microsoft – any software company, really – loses the cost of the box.

2) A large percentage of people who use pirated software who would not pay for the product if they had to.

Still, Microsoft (and other software vendors) go to great lengths to prevent illegal usage of their products, and they are right to do so. At the same time, they give away huge amounts of software, both to their partners but also to developing nations It has been twenty years since the deal with IBM, and the vast majority of computers sold today are still sold with a license for a Microsoft OS. , and give bigger discounts on them,

One of the reasons that Microsoft has been so successful seems counter-intuitive to a company selling products. They simply make it difficult (and in some cases impossible) to buy product or receive support directly from them.

From very early on Microsoft has relied on others to sell their product. They are by no means the first to do business that way, but they have spent years developing a partner ecostructure that promotes, evangelizes, sells, and supports their products. You can still buy Microsoft products – at least, many of them – from retail outlets. However the vast majority of Microsoft products solutions are sold by Partners.  The ‘channel’ has grown up with a love-hate relationship with Microsoft, and there are people who would say that Microsoft does not treat their Partners fairly – certainly they admit (or I have heard a corporate vice-president admit at a Partner event) that Microsoft does not treat all of its partners equally.  However this seemingly unhealthy relationship may be, it is hard to overlook the fact that there are thousands of companies that have made a very good living reselling Microsoft solutions.

To be continued… stay tuned!

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