A couple of years ago, I stumbled across a few issues of a company newsletter I’d written back in 1999, when I was running a seed fund targeting startups founded by graduate students or undergrads. Each edition of that newsletter included a “here’s something cool and new” segment, where I highlighted such new-fangled ideas as a search engine called Google, or an email pager soon to be called a Blackberry.
Recently, however, I came across a few more issues of that newsletter, most of which have also proved the test of time. Consider this short piece, for example, from February 2000, where I float the radical notion that ever-dominant Microsoft might one day face real threats – not from antitrust litigation over their unshakable monopoly (as an antitrust trial was, at that point, underway), but rather from companies moving more and more of the OS to the cloud:
By now, Bill probably isn’t a happy camper. First, Judge Thomas Penfield Jackson unleashes a scathing findings of fact. Then the states and the Justice Department recommend chopping up Microsoft and monitoring it’s activities. Of course, in the short term, Microsoft will probably come out on top – by all indications, the appeals court will overturn a Jackson ruling before things get too ugly. In the long term, however, Microsoft’s problems are far from over.
Consider sites like XDrive, which allows users to store documents online, or AnyDay.com, an online personal information manager. Like the new browser-based email sites, these companies are busy moving operating system functionality onto the web. From a user perspective, moving the OS into the browser is great. Imagine being able to sit down in front of any web connected computer and accessing all of your own applications and documents. For anyone who uses a different computer at work and at home, or who travels frequently, an online OS would be the best thing since sliced bread.
For Microsoft, however, a web OS is bad, bad news. If the only software you need on your computer is a simple web browser, then the new breed of super-cheap internet appliances could very easily give the Windows/Intel cartel a run for their money. And Microsoft can’t effectively enter into the web OS competition themselves without cannibalizing their traditional OS sales base.
Sure, Microsoft won’t be out of business any time soon. But like the smug mainframe manufacturers who poo-pooed PCs, Bill and Co. may not always be top dog. On the other hand, perhaps we here at Paradigm Blue should have faith in Microsoft’s ability to pull through. After all, it is a student startup.