Where next, Microsoft?

Apple is a retail aggregator. They own client details of customers of thousands of retailers including over 500-million active credit card numbers. Google sells highly targeted advertising, and gives away stuff in the cause of crowdsourcing their target database. Amazon sells scalable infrastructure, prototyped by building an unprofitable web bookstore.

Microsoft sells software. and is trying to figure out what Apple got right in 1977, forgetting that’s not actually what made them successful. Buying Nokia doesn’t fix that.

Apple, Google and Amazon have a lot in common – highly scalable infrastructure, a market that relies on massive net outreach, and a rapidly evolving product line. But they are not really in the same business.

Microsoft needs to stop thinking of itself as a desktop software supplier, and find a new niche that works for the post-PC world. Owning Nokia’s handset business may be a step in that direction, but they need to change their thinking radically to get there.

Apple had it easy in a way: their computer business was never going to take off in a way that would make them a market leader, so inventing new niches that attacked the economics of their old market was not a show-stopper. Microsoft, on the other hand, has to worry about such things as what a $10 version of Microsoft Office on the Surface (or Android or iOS) does for the credibility of their desktop pricing. That doesn’t mean Microsoft has no options – but an option that looks like Windows on a phone isn’t a good one.

There’s a huge wide open world of opportunity out there for anyone who can operate at scale and can connect with the mass market. That’s their challenge: to find such a connection.