How do big companies get themselves to a point where they can no longer innovate, or spot seismic shifts in their marketplace?
As I finished reading Charles Arthur’s book, Digital Wars: Apple, Google, Microsoft and the Battle for the Internet, Clintons Cards was the latest British retailer to fail, seemingly incapable of reacting to the changing marketplace of greetings cards sales. Just like others such as HMV before it, their management seemed either incapable of understanding, or unwilling to acknowledge, the magnitude of changes afoot in their sector.
Arthur, technology editor at the Guardian newspaper, tells the story of how Microsoft, Apple, and Google have fought it out over the last decade or so, as the internet and search took off and the world went increasingly online. So it’s all about technology, really? Well, no, because it’s also about how Microsoft kept looking at the world through its old prism, a world made comfortable by the fact that they generated probably $40 from every Windows PC sold, and then profited further by selling their Office suite as the default business application set.
But, just like the retailers mentioned above, they failed to understand or react adequately to the changes around them. The book tells how Microsoft blew millions trying to make a search engine that would equal Google. Then spent millions trying to build an MP3 player and online music sales system that might equal the iPod and iTunes. And finally (and maybe there’s something exciting to be announced shortly – but I doubt it) how it has spent many of the last months promising a touch screen operating system that will match the ergonomics of the iPad.
Microsoft is not unique. The book also details how the arrival of the iPhone disrupted the success of a whole number of mobile handset makers. Remember Nokia, Ericsson, Motorola and BlackBerry, when they delivered the phones everyone wanted? Again, these people saw the newcomer as a novelty, not a threat – until it was too late.
The book is written in a pacy, very easy to read style, with plenty of quotes and inside information. It tells of a time of exciting change, but its most intriguing aspect is how the corporate culture of the three firms differs so substantially. Apple and Google both seem set on doing things their way, not conscious of rivals because they have no intention of thinking like everyone else, or of slowing down in their quest for ever better solutions.
Will even these companies eventually get hidebound in corporate politics, and fail? Can Apple succeed without Jobs? In five years time will we all be using Facebook phones, and Twitter tablets? Have a chip in our wrist? One thing’s for sure, predictions are dangerous – but there will be the moment for the next chapter of the story, sometime soon.