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To: Patrick Smith who wrote (29639)	12/16/1998 4:19:00 PM
From: Bill Evans	Read Replies (1) \| Respond to of 30240

How Microsoft Took the 'Win' Out of Windows Jesse Berst, Editorial Director ZDNet AnchorDesk So I'm sitting in my office, as the CEO of a start-up demonstrates his new software. It's a utility that makes a much-needed improvement to Windows. And I'm thinking to myself: Good idea Good technology Good team of people No chance in hell And that's when it hit me. Microsoft has killed the Windows software industry. Made it so difficult to win that tech talent and tech money are going elsewhere. As a result, we're seeing fewer and fewer smart ideas for new Windows software. When smart ideas do crop up, as in the case above, development funds prove tough to attract. And even when a company with a smart idea scrapes together enough money, the retail channel won't support its product. Such stagnation was not, of course, Microsoft's original intention. In the beginning, the software giant built platforms -- tools and operating systems -- upon which developers could create great products. Microsoft was focused on helping developers succeed. Its strategy went like this: Help developers create great products Customers buy the platform to get the great products More developers migrate to the platform to gain access to the customers Cycle repeats Microsoft earns zillions In order to jump-start the cycle, Microsoft started creating products itself. No good mouse? Microsoft built one. Not enough applications? Microsoft made them. When these products sold well, the company realized, "Hey, we've tapped into a huge market." Then Microsoft got greedy. Its Windows team and products teams began to cooperate. (Microsoft enemies would say "collude.") Microsoft products got a head start over their competitors and special marketing treatment. A new goal was born: Keep all the good markets for ourselves Let developers fight for the crumbs we don't want And that's where the Windows industry stands today. Paralyzed by the perception that Microsoft owns all but the most picayune opportunities -- and will crush any company that proves otherwise. In response, venture capital is pouring into every tech sector except the Windows arena. Ooops! Now Microsoft is worried it has succeeded itself into failure. Hoping to remedy the situation, President Steve Ballmer recently traipsed through Silicon Valley and pleaded with venture capitalists to support Windows products. In addition, small-time companies now receive audiences with once-untouchable Microsoft execs, who are suddenly desperate for success stories to showcase. I've even heard Microsoft is considering getting into the venture capital game itself, to fund independent Windows developers.