Microsoft’s Biggest Competitors? (Premium)

A recent Quartz article uses data from Microsoft’s annual 10-K regulatory filings to determine which companies, over time, where the firm’s “biggest competitors.” The theory here is that those companies mentioned the most over Microsoft’s lifetime make the cut.

It’s an interesting idea. But it’s also wrong. Which you can see by which companies came out on top: IBM, Apple, and Oracle, in that order.

Each, certainly, is or was a competitor. But virtually none of them were viable competitors during much of the times in which each came up in Microsoft’s annual 10-K filings.

For example, IBM and Microsoft were primary partners from about 1980 through 1990, when their OS/2 partnership dissolved thanks to the success of Windows. But they continued to partner in a different manner through 2005, when IBM sold its PC business to Lenovo: Until that time, Microsoft supplied the OS for IBM’s PCs, and for much of that time, IBM sold Windows-compatible software.

So when were IBM and Microsoft “competitors”? Only very briefly, from about 1990 through 1995, when OS/2 finally unraveled as a major concern. And OS/2 never seriously threatened Windows.

Apple is a more nuanced story, of course, but the Mac never seriously challenged Windows, especially since Apple was falling apart under Michael Spindler just as Windows took over the world. By the time Microsoft shipped Windows 95, the Mac was toast, and Apple almost went bankrupt in the late 1990s. In more recent years, the Mac experienced a resurgence under Steve Jobs, but it again never seriously challenged Windows. For all the “I’m a Mac, I’m a PC” ads and Microsoft’s antitrust distractions, Mac market share never ever hit the double digits. It was always been a bit player when the PC was the primary personal computing device.

But there’s another side to this coin: Apple under Steve Jobs did see great success in MP3 players (iPods) and smartphones (iPhone) and some success in tablets (iPad), wearables (Apple Watch), and even music subscription services (Apple Music). Microsoft fielded entries in all of those markets, sometimes multiple times, but never seriously challenged Apple. So they were “competitors,” of a sort. But Apple ran away with each of those markets, far outclassing anything Microsoft offered. (Whether you feel that Surface competes directly with iPad, Mac, or both, whatever. It has never seriously harmed any Apple business.)

And Oracle? Spare me. Yes, both Oracle and Microsoft make enterprise-class databases, and yes, they are competitors. But where databases are Oracle‘s central business, they’ve always been just part of a more diversified product offering at Microsoft, first with its on-premises server products and more recently with its private and public cloud offerings.

No, these companies do not in any way reflect Microsoft’s biggest competitors over the years. Instead, they’re just part of a longer list of companies that Microsoft has directly tangled with. In fact, it is a measure of Microsoft’s long-term successes that many simply forget which companies—and, in the case of Linux and some open source solutions, which technologies—were the real concerns. The real threats. The actual competition.

A list off the top of my head, in rough chronological order.

BASIC (various). Microsoft’s initial offering was a version of the BASIC programming language for the Altair computer, and the firm quickly spread its BASIC to every microcomputer on earth. In doing so, it was edging out any competing versions of BASIC, many of which were technologically superior.

Digital Research. Microsoft used a C/PM rip-off called 86-DOS to create a clone of Digital Research’s operating system called PC-DOS and then MS-DOS. But while history is what it is, PC-DOS wasn’t the only offering on IBM’s first PCs, and it was entirely possible that one of the other choices, CP/M 86 or a Pascal-based OS, could have emerged as the de facto choice. Microsoft succeeded largely by aggressively pushing MS-DOS on IBM CP clones.

Lotus, WordPerfect, Ashton-Tate, Borland, many others. When other firms created office productivity suites combining the most popular word processing, spreadsheet, and database software into a single purchase, Microsoft copied them and then purchased many more applications to pad out its suite. It then worked to ensure that its own offerings would work better on MS-DOS and then Windows, the platforms it owned and controlled.

GO and pen computing. When GO Corporation introduced its PenPoint OS in 1991, Microsoft responded by claiming that it would add pen computing capabilities to Windows. It did create something called Windows for Pen Computing that went nowhere, but the threat was enough to kill GO. And Microsoft didn’t release a real pen computing system until 2002, when it shipped Windows XP Tablet PC Edition.

Netscape. When Netscape threatened to knee-cap Windows by turning the web into an applications platform, Microsoft responded with Bill Gates’ “Internet tidal wave” memo and the integration of web technologies into Windows. This was perhaps its most successful comeback: Within just a few years, Netscape was effectively dead, Internet Explorer controlled the web, and Microsoft found itself under renewed antitrust scrutiny.

Sun and Java. Sun said that the “network was the computer” a decade before that was real, and it likewise understood the beauty of “write once, run anywhere,” with Java, a concept that is still waiting for fruition. Microsoft responded to this by usurping Java and then by creating .NET. In fact, it took Java so seriously that it was going to .NET-ize everything it sold, and it was even going to rename Windows, briefly, to Windows .NET.

Palm. When personal digital assistants (PDAs) finally matured in the mid-to-late 1990s, Microsoft responded as it always did in those days, by adapting Windows to new classes of devices that included both PDAs and Handheld PCs (HPCs). Microsoft’s Windows CE and its follow-ups like Pocket PC and Windows Mobile did finally beat Palm. But they later collapsed in the face of stronger competition from smartphones, first from RIM and Nokia, and later from Apple.

Linux and open source. Linux tested Microsoft in two key markets—the PC client, with netbooks, and servers—and Microsoft issued strong responses to both. The firm quickly beat back the netbook threat with Windows XP Starter, which was released when Windows Vista was current. And it made strong headway against Linux on servers, at least in the Fortune 500. At first.

Sony and Nintendo. When asked what Microsoft’s most feared competitor was in the late 1990s, CEO Bill Gates responded with an unexpected entry: Nintendo. Microsoft first entered the video game market with its WinG and then DirectX technologies for Windows, and then more formally with Windows CE for the Sega Dreamcast. But when Sega folded its hardware consoles, Microsoft came up with Xbox, setting the stage for a decade and a half of competing against—and losing to—both Sony and Nintendo.

Google. In many markets, Google is to Microsoft what Microsoft was to its predecessors: A lower-cost (usually free) and simpler alternative. No, Microsoft can’t really compete with Search, though it’s tried. But Google has aggressively gone after so many core Microsoft businesses, that it’s impossible to discount it as a major threat. And it doesn’t hurt that Google, illogically, is scared to death of Microsoft, even today.

Amazon. In Microsoft’s most recent era, there no bigger or stronger competitor than Amazon AWS. It’s so big, in fact, that Microsoft invents a business called “commercial cloud” every quarter so it can appear to better compete with Amazon.

There are more, of course, but those are the ones that come immediately to mind. And all are, in their own ways, far bigger deals than IBM, Apple, or Oracle, though Microsoft’s losing obsession with Apple in the second Steve Jobs era is rightfully a reminder that things, by that point, had changed quite a bit.