Dear Microsoft, who are you and where are you going?

In the early 80', little did IBM know what will be the results of outsourcing creating a version of CP/M operating system for PCs to a small company named Microsoft.

Microsoft got an unusual opportunity and used that opportunity to the greatest possible extent, becoming a new giant.

IBM certainly has a reason to believe that said contract was not the best one for IBM.

And that giant was for years a relatively uninteresting company. It had two legs, Windows and Office, and was busy with making those products de facto standard of moderns, office work, and at the same time fiercely fighting everything that could pose a threat to its position. According to leaked documents, MSFT was very afraid of the open source movement, and employed a number of different strategies to fight with it, amongst which we had spreading fear, uncertainty and doubt about open source, using intellectual property and a tactic named “Embrace, Extend, Exterminate”.

Fast forward a couple of years, the market seemed to saturate, profits started falling, so did stock prices, and Satya Nadella was announced to be the new MSFT CEO.

Mr. Nadella turned out to save MSFT from sinking into oblivion. He adopted cloud, and did something that made the hell freeze; he announced that:

He did even more — he integrated Linux into Windows, and released Visual Studio for Linux. In the Android domain, MSFT also released a number of great applications.

In addition to that, companies like Casio or Toyota stroke licensing partnerships to build better products.

From this perspective, Microsoft seems to be represented in a quite positive light.

But there is the other perspective…

Unfortunately, the reality is that every positive aspect mentioned earlier may be an incarnation of the “Embrace, Extend, Exterminate” approach.

Great choice of apps created by Microsoft and running on Linux and Android means users will be shielded from their operating systems, and at one point OSes will not matter to them.

Licensing partnerships are sometimes even today perceived as patent extortion. So if this is really the case, MSFT may at one point start drawing money from all the devices, no matter what OS they run. This is quite a nice lump of money, given increasing number of smart devices up there.

Given all that, three scenarios are possible:

Scenario I: A good citizen — This is the most favourable scenario, where Microsoft stays as it appears right now — very focused on customers and delivering great products.

Scenario II: Time master — Microsoft continues shielding users from the operating system, and threatens smaller companies with IP to sign licensing partnerships. After a while, MSFT earns more money from IP partnerships than from Windows licensing. In other words, it becomes a more sophisticated version of a patent troll. Still not bad.

Scenario III: Earthquake — Microsoft executes Scenario II, but does not stop there. It buys Canonical, and performs the extend and extinguish play. It slowly promotes proprietary Linux apps, making them de facto standards, and then pulls the plug, giving users no other option than to migrate to Windows.

The worst part is that if Scenario III is happening, we will not know it until the ‘extinguish’ phase.

By the way — for every player in this game — situational awareness is must-have skill today, because companies play games, and big companies play big games. If you do not want to be part of someones game, you need to understand what is going on. Learn it here.