Two Harvard Business School academics, Marco Iansiti and Alan MacCormack, say the secret of Microsoft's success is its platform strategy, which enables it to exploit its own intellectual property with the support of more than 40,000 partners. "Over time, as more and more partners signed up to use the model, developing applications for Microsoft's operating systems and using Microsoft's tools in the process, the power of the platform became evident. It was a win-win relationship — the community of development partners received benefits in terms of enhanced productivity, while Microsoft's position was strengthened through the deployment of products that were complementary to its own. This made it tough for competitors. They were not just going head-to-head with Microsoft's products — they were also competing against the repository of knowledge accumulating in Microsoft's component libraries," they say, in an e-mail interview.
Microsoft has also, they say, produced consistently good products. "We analyzed the development performance of Microsoft products for the past fifteen years. Our aim was to come up with an objective measure of performance — one that was unrelated to arguments about market power, monopoly position, or predatory tactics. This meant we excluded any consideration of measures like market share or profitability, and focused instead on the ratings given to Microsoft products by independent reviewers. We found that Microsoft products were consistently rated highly when compared to competitive offerings, a result that held true across different product categories and over time. On average, Microsoft products 'won' more than two-thirds of the competitive reviews we examined. Indeed, only once in fifteen years did Microsoft products fail to win more than 50% of these reviews. Given the number and diversity of competitors they faced in each different product category, this consistently high performance is striking."
Marco Iansiti is the David Sarnoff Professor of Business Administration at Harvard Business School, while Alan MacCormack is the Lumry Family Assistant Professor of Business Administration.
The Harvard study is consistent with earlier academic studies of how Microsoft wins, such as Winners, Losers & Microsoft by Stan J. Liebowitz, Professor of Managerial Economics, University of Texas, Dallas and Stephen E. Margolis, Professor of Economics and Business, North Carolina State University; and the much less impressive Microsoft Secrets by Richard W. Selby, from the University of California, Irvine, and Michael A. Cusumano, from MIT's Sloan School of Management.
Comment: I would have thought it was profoundly obvious that the GNU/Free Software/open source approach represented a serious threat to Microsoft both through developing an alternative platform strategy and systematically destroying the value of intellectual property. However, such ideas are beyond the understanding of the US legal system (noticeably, the self-important Judge Jackson) and, as far as I know, senior academics don't seem to have got around to addressing them yet.
