Hi Everybody, Today we are going to discuss ‘How Microsoft is killing its competition silently and become a Multi-billion dollar Company!’. So let’s start the discussion:-
On 18th of May in 1998, the US Department of Justice and the Attorney General's of 20 US states sued Microsoft for being a monopoly and illegally killing its competition in the computer market. And what followed next was one of the most historic cases in tech history, which lasted for two decades. And fast forwarding 23 years later (today), Microsoft is still killing its competition right in front of our eyes, and this could result into yet another historic lawsuit. Now, The questions are :
1) How did Microsoft kill its competition?
2) What exactly was their business strategy that turned Microsoft into such a powerful company?
3) What are the lessons that we need to learn from this iconic case study.
The Justice Department has charged Microsoft with engaging in anti-competitive designed to maintain its monopoly.
Do you agree that Internet Explorer is defined here correctly as Microsoft's web browser?
This is a story that dates back to 1994 America, when the computer revolution was just catching fire. This was a time when multinational corporates had accepted that computer was a powerful tool. And they already started having hundreds of computers in the offices, which was being used by the employees. These computers had already skyrocketed the productivity of these companies. So practically, computer has already become an integral part of the American business ecosystem.
Here are the most important events that happened in the computer revolution of America.
- On 12th of August 1981, IBM introduced its personal computer with Microsoft's 16-bit operating system, which was MS DOS 1.0, and this made Microsoft a tonne of revenue through licensing.
- On 1985, Microsoft was already clocking in a revenue of 140 million dollars.
- On 13th March 1986, Microsoft Stock goes incidentally up and turn Bill Gates into the youngest billionaire. This is record-breaking moment.
- On August 1989, Microsoft introduces the earliest version of Office suit applications, which then became the industry standard for businesses all across America.
- On May 1990, Microsoft launched Windows 3.0, which was a big leap into graphical user interface.
This is what made computers accessible to the common man, which was back then used only by the techies through code. As soon as this happened, the usage of computers exploded in the United States of America. This made Microsoft the most powerful competitor with Windows 3.0, which is selling at the rate of 1 million copies per month. Nearly 90% of all PC’s in the world ran on Microsoft operating system. This is when another dimension of the computer industry opened up and that was the internet. Therefore, in the early 1990's, we saw the rise of internet browser market. One of the most revolutionary browsers at that time was a browser called Netscape Navigator, which was launched in 1994. Netscape, at that time was loaded with features which were far ahead of its competition, they had the future of documents streaming, which allowed users to view the documents while it was being downloaded.
They have the feature of multiple downloads simultaneously. They also supported JPEG image format. This product was so revolutionary that even with a $49 subscription cost, they were able to capture up to 80% of the browser market share. Now the point to be noted over here is that, just like today without the internet your computer is mostly useless.
Back then in 1995, people started using computer just to use web browsers to connect to the internet. The operating system was just a bridge that connected the users to the web browsers. So practically, browsers were becoming more important than the operating system itself. Netscape went public on December 5th, 1995. Within a day, the company had hit a market cap of $2.2 billion. Just when they thought of becoming another legendary internet company, something happened within the next six years, the same billion-dollar company was almost reduced to nothing.
The question is, How is it even possible that such a big and innovative company went down so quickly?
Well, the answer to this question lies in an accurate phrase coming from the Department of Justice itself, which summarizes how Microsoft kills its competition. And it says, embrace, extend and exterminate. In 1994, Microsoft realized that they were too late to the internet boom, and the browsers are becoming more essential than the operating system. So in August 1995, when Microsoft launched Windows 95, they also included their own web browser called the Internet Explorer, and they made it the default browser for every PC sold. So when you start your computer, you could see the Internet Explorer right on your home screen. On top of that, Microsoft directly attack the most essential features of Netscape by launching something called ActiveX controls. This update made it impossible to easily download files on the internet, especially the Microsoft Office files. This seems to be a direct attack on Netscape prime features. Because 90% of the computers used MS Office, it became more and more difficult for them to use Netscape and other browsers. Then, Microsoft also removed the Internet Explorer from the add and remove tab, because of which neither the consumers nor the manufacturers could delete the Internet Explorer from the computers, and they made it available for free of cost.
So, this is how they first embraced the concept of internet browsers. Then they extended their products with features that do not support the competing products. Lastly, Microsoft used their dominance over the platform to promote their own product over its competition.
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