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Woulda, Coulda, Shoulda! Did Microsoft Display its Allergy to Change When it Killed the Courier Tablet?

We’ve all done this, turned down the opportunity to try a new experience then later regretted the choice we made. The ones we can recall usually involved some negative consequences as well. Sometimes we just missed out on the fun, sometimes we missed out on much more. Sometimes, not often, there may even have been a second chance and we didn’t pass it up.

The history of business is filled with tales of companies that passed up ideas, products or services that later became great commercial successes. These stories only become memorable because some other company didn’t pass up the very same or a similar opportunity.

One company that truly benefitted from another passing up an opportunity was Microsoft when IBM decided that its future was in PC manufacturing, not software, and literally gave the operating system business away.

Ironically Microsoft may have done something similar in 2010 when it chose its past over a possible new future in the newly emerging tablet industry.

This past week in a brilliant two part story CNET reporter Jay Greene  provides the details behind the decision making process that led to the cancellation of Microsoft’s prototype tablet, Courier, and effectively kept Microsoft out of the tablet race and in the continued business of protecting its Windows franchise.

In ‘The inside story of how Microsoft killed its Courier tablet’ Greene documents a compelling exchange between Bill Gates and Courier project leader J Allard in which Gates began to sense that his team was not developing another form of PC:

“At one point during that meeting in early 2010 at Gates’ waterfront offices in Kirkland, Wash., Gates asked Allard how users get e-mail. Allard, Microsoft’s executive hipster charged with keeping tabs on computing trends, told Gates his team wasn’t trying to build another e-mail experience….Courier users could get e-mail from the Web, Allard said, according to sources familiar with the meeting…

…the device wasn’t intended to be a computer replacement; it was meant to complement PCs. …Courier was for the creative set, a gadget on which architects might begin to sketch building plans, or writers might begin to draft documents.

This is where Bill had an allergic reaction,” said one Courier worker who talked with an attendee of the meeting. As is his style in product reviews, Gates pressed Allard, challenging the logic of the approach.”

  • Characterizing something as “an allergic reaction” sounds an awful lot like Gates’ response was promoted by a strong allergyto Change when it came to offering the public anything that didn’t look like Windows.

 Greene goes on…

“It’s not hard to understand Gates’ response. Microsoft makes billions of dollars every year on its Exchange e-mail server software and its Outlook e-mail application. While heated debates are common in Microsoft’s development process, Gates’ concerns didn’t bode well for Courier. He conveyed his opinions to Ballmer, who was gathering data from others at the company as well.”

  • Many of us have been around situations in our own companies where some project or idea seemed to be sailing along until a senior executive expressed concern and suddenly the “rats start leaving the ship.”

And just like in your own company experience the story of Courier has an unfortunately predictable ending, as Greene reports…

Within a few weeks, Courier was cancelled because the product didn’t clearly align with the company’s Windows and Office franchises, according to sources.”

So what about this choice? Did Microsoft avoid a strategic misstep when cancelled Courier?

 

Since the cancellation of Courier in 2010 Apple has introduced and already updated its iPad tablet. According to Gartner Group there will be 63.3 million tablets sold in 2011, a year after their initial introduction. Projected sales for 2012 exceed 100 million units. two-thirds of these will be sold by Apple. By any count, that’s a lot of tablets and none of them produced by Microsoft.

 

 

But the loss of a place at the tablet table was not Microsoft’s only loss…Courier was cancelled and

“A few months after that, both Allard and Bach (Head of Microsoft’s Entertainment and Devices Group) announced plans to leave Microsoft, though both executives have said their decisions to move on were unrelated to the Courier cancellation.”

  • With the decision to cancel Courier Microsoft also lost the visionary leadership that had led to the products’ inception.

What does the future now hold for Microsoft? Time will tell. The Windows operating system is still the most familiar to most PC users and many would prefer to see it installed in new tablet models. So there is still a market for Microsoft but it has ceded a big head start to Apple in the tablet industry, a lead it is unlikely to ever challenge.

More importantly, for all of us this story offers yet one more example of the adage that you are never to brilliant to be blinded by your own success. As Jay Greene later says… 

“Courier’s death also offers a detailed look into Microsoft’s Darwinian approach to product development and the balancing act between protecting its old product franchises and creating new ones. The company, with 90,000 employees, has plenty of brilliant minds that can come up with revolutionary approaches to computing. But sometimes, their creativity is stalled by process, subsumed in other products, or even sacrificed to protect the company’s Windows and Office empires.”

  • If Microsoft can be stalled by its own allergyto Change it would appear that our own company will likely experience something similar at some point. Maybe it has already?

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