The business world is a vicious one, where friendships do not apply and the rules are ‘anything goes’. As a matter of fact, the broader a company gets, the more aggressive it has to become in terms of business plans and strategies.
One of the very few leaders who know all about that world first hand, is Microsoft. Literally, Bill Gate’s brainchild had become so good at rivalries that they actually came up with a name for one of their business strategies. It’s the Embrace, extend, and extinguish strategy which describes how the company enters product categories involving widely used standards, extends those standards with proprietary capabilities, and then uses those differences to disadvantage its competitors.
According to Microsoft’s marketing executive Chris Capossela, one of Silicon Valley’s big 3 is changing its approach when it comes to everything corporate, to something much more collaborative.
As Chris explained during an interview with Cheddar, “We’ve moved away from that competitive focus that I think we’ve had in the past. We need to bring our products on the platforms that our customers are using. So Office on the iPad or iPhone, Minecraft on every platform, that’s just a natural thing for us to do”.
Capossela’s opinion seems to be reflected by the company’s latest CEO as well, Satya Nadella, who reportedly instrumented the shift from the old structure to the new one. Basically, Microsoft now seems to believe that it should focus all of its efforts to wherever the customers show interest and demand. Currently that’s on software and cloud services.
In the old days of Bill Gates and Steve Jobs, there was a noble rivalry, or better yet a love-hate relationship if you like. The two often helped each other but the main goal for each one respectively was to outdo the other.
Those days seem to be gone. As Chris mentioned in the same interview, Microsoft is the first one to officially stir the wheel, but all companies in the high tech industry have already started changing course. One can tell that judging by the types of agreements they make. During Cheddar’s interview the marketing exec mentioned a paradox, where Google uses Microsoft’s VS code developer tool. Same thing goes for Apple, which orders its premium quality iPhone screens from Samsung.
It’s a general truth that competition helps people, products and ideas grow. The concept of trying to surpass your rivals is a pretty efficient motivation that drives change and improvement. Or at least things used to be like that. Perhaps the high-tech industry has now reached a point where further improvement can only come through collective efforts, rather than speed races on who will come up with the next big trend.
If you’re not into theoretical stuff, then perhaps you can see the same thing through Microsoft’s earning announcement for Q3 2018, which was published on Tuesday, April 26. The most important points are that the company reported revenues of $26.82 billion, vs. $25.77 billion as was expected by analysts, according to Thomson Reuters. In addition, most of that revenue came from software, including Office 365 and Azure which had 93% revenue growth.
What are your thoughts on Microsoft’s new business strategy? Let us know in the comments below!