How the anti-trust regulators won, and how Microsoft can now fight back


Kantar has tweeted the above table, which gives a very interesting insight into what devices consumers own.

Despite the wide variety of devices owned by individual consumers in each country, it is very clear that by far the most owned devices are desktop and laptops, which are very likely to be running Windows in the European countries listed (+85% of installed base).

Despite this the relevance of Windows and Microsoft is very regularly questioned by the press, particularly with the rise of smartphones.

The fact is of course that Microsoft was on course to dominate computing in the early 2000’s, until they were neutered by the American DOJ, who nearly broke up the company in 2001 over browser bundling (no wonder Microsoft’s browser development stopped in 2001 with IE6 for 5 years), and the European Commission, who levied massive fines rather regularly. (e.g in 2004, when the European Commission fined Microsoft €497 million and ordered Microsoft to provide a version of Windows without Windows Media Player, saying Microsoft “broke European Union competition law by leveraging its near monopoly in the market for PC operating systems onto the markets for work group server operating systems and for media players”).

This has stopped Microsoft from aggressively growing influence by acquisition, like Google is with purchases like Softcard, Waze, Dropcam, Nest, Motorola and more and of bundling services such as their own music and video offerings like Apple does with iTunes.

While journalists love to discount the influence of the DoJ and are happy to believe the anti-trust strictures placed on Microsoft had no effect, and that their competitors rose without opposition merely on their own merit, I think it is clear Microsoft hands were bound until 2009, when the restrictions finally expired.

Since then Microsoft has been able to make such moves as buy Nokia’s handset division and grow their cloud offerings aggressively.  The legacy of antitrust action against Microsoft has however cast a long shadow, with Microsoft’s competitors firmly entrenched in the consumer market.

So now, with still such a large installed base, how can Microsoft regain influence? Windows 10 is certainly a move to reduce the fragmentation and finally get Microsoft’s bundled services in front of consumers, such as Xbox Music, Video, Skype and the Windows Store.

The next step I believe should be acquisition of popular consumer services, examples of which we can already see in their recent purchase of popular iOS apps such as Acompli, Sunrise and Prismatic. Microsoft should continue with purchases of successful services such as Spotify ($5.7 billion), Sonos (several billion), and Fitbit ($300 million), amongst many others, including home automation and wearables companies.

With Apple nearing a trillion dollars in valuation and Apple and Google widely engaging in bundling their accessories and services it would be difficult to argue new anti-trust grounds against Microsoft, meaning they should be able to act more or less unopposed.

I believe Microsoft can once again make Windows, already a central part of consumers lives, the most relevant one, but it can only happen if Microsoft acts aggressively now, before they fall off the top of tables such as the one above.

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