Zero-Sum Game

I just read this essay (by way of Apple’s role in Microsoft’s downfall) by Paul Graham of Y Combinator explaining why he feels that Microsoft is dead.

This essay is thoughtful, and lists four reasons why Microsoft is in trouble. Broadly, these are:

• Google has taken a clear lead in the search market and is using that capital to enter other markets.
• Gmail showed how much you could do with AJAX. I think it has been somewhat overtaken now, but it laid solid groundwork for others to build on.
• Broadband internet has really changed where you put the bulk of an application.
• And Apple with OS X.

What bothers me about this is that is seems to assume a zero-sum game, in that one company’s gain is another company’s loss. I have to agree that there is a shift happening, but I don’t agree that Microsoft is dead, they still own over 70% of the browser market,90% of the desktops, 99% of the office productivity market, and are a strength to be reckoned with in the games market. Finally we all know what happened to Netscape when it became a threat on their radar.

It also bothers me that this essay is very dichotomous, you either “rules” or you are “dead”, no room for shades of grey here. Real life does not work like that. There are plenty of companies out there other than Google or Microsoft, making plenty of good money selling plenty of useful services.

Finally he concludes:

I already know what the reaction to this essay will be. Half the readers will say that Microsoft is still an enormously profitable company, and that I should be more careful about drawing conclusions based on what a few people think in our insular little “Web 2.0″ bubble. The other half, the younger half, will complain that this is old news.

Again a dichotomy, yuck…

And I would argue that the younger half don’t really care more than complaining that this is old news. They don’t really care because Microsoft is behaving itself after being subjected to a long, painful and embarrassing anti-trust trial, something I am sure they don’t want to revisit in a hurry, so they are not nearly as aggressive as they used to be.