When you bring yourself to think who has been consistently on top of the worlds notorious richest man list, the founder of Microsoft comes up, Bill Gates. He has amassed a vast fortune with his company, being the virtual leader of digital interaction through Windows OS and less so through Microsoft Office. He held the power of the value chain of the computing industry, at a critical bottleneck, software. Thus every PC sold (apart from Mac and several other OS such as Linux) had pass by and get the Windows stamp. The only other player to hold a similar power position within the industry was Intel with their processing chips, though they faced more competition. The rest of the value chain was a bunch of hardware producers that offered relatively similar products while competing on price.
What allowed Microsoft to do this? Well they took advantage of technology and how it allowed people to have access to it through the PC. Something had to run these PC's and therefore Microsoft hegemony becoming a platform and cementing itself deeply into the industry. This has been true from the early 90's till 2010, the year that marked a shift in the personal computing industry; another newer kind of device outsold PC's for the first time in history, the Smartphone.
This all happened because the phone industry was able to flourish on its own being no competition to Microsoft and eventually through R&D technology gave manufacturers the ability (such as Microsoft had with Windows) to offer more and more modern devices that allowed users to access the internet and solve their personal informational requirements. Unequivocally similar to history past, software was the real key to success and fast forward to today and the players are Apple with its proprietary SW and HW, Android with their own SW, while a whole host of manufactures develop phones to be used with this SW and then there's everybody else, which is where Microsoft is situated.
They key question is whether Microsoft should be worried that their traditional cash cow business in under threat. Common sense would say yes, since for the majority of users (excluding power users which use high resource applications) can satisfy their computational needs on these devices, as well as numbers that have seen a decrease in sales in PC and increase in Smartphones and experts and analyst opinions agree that this will be the case. Of course Microsoft's behavior confirms it as well, partnering with Nokia and acquiring Skype. On a side note, but I will not go into this, because it is another matter, Google is also attacking directly Windows OS in their own platform with Chrome based OS.
So how does a multi billion dollar platform and industry pillar seem to die in such a relatively quick manner. The first thing is that consumer behavior is a determining factor, and how they respond to new offers in the market determines which player can survive and which not. Another more interesting note is that acquiring a power position in the Value Chain of an industry will not guarantee you success perpetually; after you win a certain standard war or establish a platform the threat may come from a totally external source of the industry, as cellphones were to PC's. Microsoft has established a proven successful distribution chain with its products and a solid manner of capturing value, but they failed to see how customer behavior will dictate the future of it. Another key learning from this is timing, if Microsoft had switched to the smartphone\PDA model before 3G networks and other technological advances had occurred they would probably had failure, since shifting your position in a distribution network or value chain will only make sense when the numbers and context make sense.
I would like to quote a rather known quote but nonetheless a useful one: "Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!" So said the queen to Alice, but what Lewis Carroll forgot to mention, at least in context to this discussion is that it does matter towards where, when and with what you run towards customers.
I would like the following sites for their research provided:
http://www.pcmag.com/article2/0,2817,2379665,00.asp
http://voices.washingtonpost.com/posttech/2010/11/smartphone_sales_to_pass_compu.html
http://www.huffingtonpost.com/2010/03/11/smartphone-sales-could-ov_n_494990.html
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