Ever since the company was first founded in 1975, Microsoft has enjoyed a reputation as the flagship brand in the world of technology. Created by founders and childhood friends, Bill Gates and Paul Allen, the two put their skills and passion for computer programming to the test when they decided to invest in a computer business. After their initial business, Traf-O-Data, failed to make any big waves in the computer programming industry in 1974, their arduous and diligent journey led to them finally beginning to craft the building blocks for the company that would make them filthy rich. On April 4th, 1975, over 40 years ago, Microsoft was born with Gates helming the company as CEO. In that 40 years, Microsoft has risen and fallen through the ranks of the business world, but overall has been a successful company and the #1 largest software maker in the world as of 2011. However, while the worldwide mega-success of Microsoft cannot be denied, we cannot overlook the mistakes made by Microsoft that are typical for any successful person or brand can make.
Making a few poor business decisions comes with the territory of becoming a successful business person. As the saying goes, you can’t make an omelette without cracking a few eggs. While Microsoft did manage to shine through as the glimmering and tasty omelette that it is today, they still reek of the odor from the cracked egg shells on their doorsteps. Just like the skeletons in our closet, that filthy stench never goes anywhere. Microsoft has a great present and looks towards a promising future with even more success, but the company cannot ignore their past and this list is here to remind them of the long journey that brought them to where they are now. These are just a few bad business decisions that the good crew down at Microsoft probably regret.
15. Paying $500 Million for Danger, Inc.
Remember those mobile woes we mentioned about Microsoft? Well, this is one of them. At a time when the Sidekick mobile device was becoming popular, Microsoft decided capitalize by making a profit off of the cell phone boom. To do that, Microsoft decided to spend $500 million on Danger, Inc., Sidekick’s parent company, in 2008. From there, Microsoft’s answer to the mobile boom was the Microsoft Kin. The problem here was that by the time Kin was released in 2010, it’s software looked like a cheap, outdated piece of software. Turned out it was nothing but cheap, outdated software and consumers could tell straight away. That is why the Microsoft Kin device suffered so poorly in sales. After only 48 days on the market, Kin was discontinued on June 30th, 2010. After this investment, Microsoft was stuck with enough unsold phones to fill up a whole warehouse and a wasted $500 million they wish they had back.
14. Feud with Google
In 2005, then-CEO Steve Ballmer started an all out war with Google over them acquiring Kai-Fu Lee, a former Microsoft vice president, shortly after Lee had left Microsoft. Ballmer professed that Google’s new acquisition was in violation of Lee’s one year non-compete contract clause following his departure from Microsoft. It didn’t help that when Ballmer got word of this he was so furious at this that he actually vowed to kill Google. Unfortunately for Ballmer, not only did he fail to kill Google, but this petty feud kept Ballmer’s eyes off the bigger prize. While Ballmer was distracted with killing Google, Google were busy crafting and perfecting innovative technologies, like the Android phone which went on to take up 80% of the mobile phone market. Meanwhile, a mere 3% of the mobile phone market belongs to Microsoft Windows phones. Maybe if Ballmer had spent his time as wisely as Google did, maybe Microsoft would be the ones owning 80% of the mobile phone world right now.
13. Blacklisting Journalists
Journalism is an essential part of product advertising in the tech world. Many advertisers depend on the reviews, coverage, and reporting of journalists to get their products exposed to the public eye, hopefully in a positive light. Microsoft’s negative view of journalists during their earlier days may have hurt the way that consumers view Microsoft in terms of both their products and how they do business. According to John C. Dvorak, an American broadcast journalist in the tech field, Microsoft attempted to blacklist journalists like himself by classifying them as “sketchy,” “okay,” and “needs work” while especially targeting the “needs work” journalists back in the 1980s. Dvorak himself claims he was denied information about Windows because he was on a blacklist. Of course, Microsoft continues to deny that such blacklisting still exists or ever existed. Still, the speculation alone has made many consumers weary of Microsoft as a sketchy company.
12. Dealing with PRISM
In 2013, Microsoft was the first company to participate in the much-maligned PRISM surveillance program which collects internet communications and allowed for Microsoft to provide them with customer data. While Microsoft deny this to be true, leaked NSA documents obtained by both The Guardian and The Washington Post say otherwise. These leaks reveal that Microsoft helped the NSA evade its encryption to intercept web chats on Outlook.com and provided the NSA with access to unencrypted files on Outlook.com and Hotmail email. Microsoft also gave the NSA access to their users’ private data on OneDrive. When Microsoft users found out this information, not only did many feel livid that their most private information was being given away to the government without their knowledge, many lost trust in Microsoft for letting this invasion of privacy follow through without notifying their customers. While Microsoft may have only dealt with PRISM out of legal necessity, surely they must regret working with PRISM after losing the trust of so many customers.
11. Not Making Search Engines a Priority
We have spent a lot of time with this list criticizing the decisions that Microsoft made under Steve Ballmer’s leadership, but it’s important to note that he was not the only Microsoft CEO to make some terrible mistakes. For some of Microsoft’s worst blunders, we can look as far back as the company’s first CEO, Bill Gates. In 1998, Gates used Microsoft to introduce their first search engine, MSN Search. That same year, Google was founded. MSN Search was not even a fully developed search engine as it used results from a pre-existing search engine, Inktomi, and was a rather slow engine. Meanwhile, Google flourished as a fast and reliable search engine that made $348 million by 2002 and tripled that by 2003. Gates failed to see the billion-dollar potential of the search engine and it cost him dearly. Microsoft tried to play catch-up by rebranding MSN Search as Windows Live Search in 2008 and later Bing in 2009; neither were able to compete seriously with Google.
Speaking of Bing, while Bing has prevailed as being the second largest search engine in the world (still barely touching the benchmark made by Google), that high reward hasn’t come without high risks and for Microsoft; many of those high risks weren’t worth the money and time put into Bing. During its early inception, Microsoft spent more money on Bing than they actually earned from it as the search engine cost $2.5 billion more than Microsoft earned from it in 2011. Even outside of money, Bing has been heavily criticized by users for a number of reasons. One common criticism is Bing’s insistence to censor their search results in simplified Chinese characters. Speaking of search results, Bing has often been accused of copying from Google’s search results, which Microsoft has denied time and time again. Not to mention, many complain that Bing is all too slow to use. Again, maybe if Microsoft made a more serious attempt to innovate internet search engines early on in 1998, maybe they’d have more experience with fixing these issues.
9. MS-DOS 4.0
In 1986, the MS-DOS 4.0 was pre-announced and then demonstrated to the public by Microsoft. Booked for a later release, MS-DOS 4.0 was primed to be something groundbreaking for the tech industry. Instead, what we got were faulty and corrupted disks, bugs that damaged our computers, and fangled memory compartments. Early signs for early disappointment appeared when OEMs (original equipment manufacturers) like IBM lost enough interest in this DOS project that the software had to be released with a more scaled back version. In fact, IBM declined the product altogether because they felt it more necessary to focus on making improvements to the MS-DOS 3.x. All of the writings for a bad product were written on the wall. Either Microsoft failed to see them, or they panicked hard enough to release it anyway. Regardless, this was (and probably still is) a big embarrassment on Microsoft’s behalf that they struggled to recover from.
8. Making Steve Ballmer CEO
If you can’t take our word for it as far as what Microsoft’s biggest regrets were, maybe you’ll take the word of some of the businessmen who worked at Microsoft. When asked what was the worst decision that Bill Gates ever made during his tenure with Microsoft, former Microsoft employee and current CEO of Axosoft, Hamid Shojaee, commented that Gates’ worst decision was appointing Steve Ballmer as CEO of the company. Steve Balmer became Microsoft’s CEO in January 2000 and he left the company in 2014. According to Shoajee, Ballmer failed to make any significant innovations with the company “while all the existing stuff (Windows, IE, WinMobile, Exchange, Office, etc.) continued to become bloated to the point where an opening was made for a competitor to disrupt each of those categories.” Maybe that’s why Ballmer decided to retire from the company; failing to bring anything new to the table. At least his business endeavors prevailed following his Microsoft exit. After all, as of now, he owns the Los Angeles Clippers.
7. Failing to Make the Transition to Mobile
Dave Whetstone, a self-described mobile and social innovator, points his finger at Ballmer just as Hamid Shojaee did, but more than anything, Whetstone believes that Microsoft is hindered by its failures in the mobile world. In Whetstone’s mind, Microsoft essentially screwed themselves over by approaching mobile in the same way they did with PC and expecting the same sort of success. At the end of the day, it can be argued that it’s all technology regardless, but computer programming is in a far different breed than mobile. It would be impossible to achieve the same success with two different formats of tech. It wasn’t smart at all on Microsoft’s behalf to spend billions on mobile tech without a proper plan and given how little traction their early mobile pursuits garnered, it was a business endeavor that bit them in the backside. Of course, Microsoft recovered, but it’s easy to see why they may regret their initial approach to taking the mobile industry by storm.
6. Windows Vista
All this talk about Steve Ballmer reminds us that the former CEO has some regrets of his own in regards to his time with Microsoft. Upon retiring from the company, Ballmer admitted that the “loopedy-loo,” as he called it, from Longhorn to Vista was his biggest regret. Ballmer is referring to the long, strenuous process that came out of developing Windows Vista (codenamed Longhorn from 2001 until 2004). In all the years that it took to develop, Microsoft reset the system’s codebase halfway through development and dropped several of the features that the public found most exciting right before it was released. This overly ambitious product proved to be more difficult than originally planned as the company could not release Vista until long after it was originally planned. Expected to come out shortly after Windows XP was released, Vista didn’t hit the market until five years after. No wonder Ballmer regrets it so much.
From the sounds of it, Microsoft really loves competition. At least they did when it was helmed by former CEO Steve Ballmer, whose presence throughout this list is starting to become a running gag. This time, Microsoft took a crack at competing with Apple. In 2006, Apple was doing extremely well thanks to releasing the iPod just a few years prior. Feeling like Apple was stealing their thunder as a big name conglomerate among the tech industry, Microsoft released Zune in 2006. Zune was a portable media player device made in the same vein as the iPod, only not remotely as successful. It was hard enough for Zune to compete with the iPod due to Zune’s few freezing bugs that kept the device from being a hit with critics. Just a couple of years later, Apple released the iPhone and closed the book on Zune’s potential. Despite not being officially discontinued until a few years afterwards, Zune was as good as dead as soon as the iPhone arrived on the market. It really wasn’t much of Microsoft’s fault. It just boils down to bad timing on Microsoft’s behalf.
4. Cancelling Microsoft Courier
In 2010, Apple took a colossal leap in the tech department by introducing the world to the first iPad. This rousing innovation in technology set the tech industry ablaze and Apple haven’t looked back since. However, Microsoft could have easily reached that success first if they were to follow through with their own tablet, Microsoft Courier. In 2008, there were rumors and reports of a dual touchscreen booklet that had die-hard tech fans itching in their seats out of exciting. This sounded like a truly revolutionary and promising advancement in the world of technology and people could not wait to get their hands on it. However, while still in the early stages of development, the project was cancelled. Instead, Microsoft released the HP Slate 500 in 2010. While this tablet received mostly positive reviews, its success and praise could not compare to the iPad released around the same time. Against the iPad, the HP Slate didn’t stand a chance. Maybe Microsoft would have been able to challenge the iPad if they actually followed through with the Courier project.
3. Internet Explorer 6
What was supposed to be Microsoft’s next step in internet innovation quickly was revealed to be outdated before it even hit the market. As a whole, Internet Explorer has been the butt of a joke in recent years, but its 6th version especially received some major backlash. Not long after its August 27th, 2001 release, the vector gained a notorious reputation for its lack of security, slow speed at patching problems, and its widespread infection of computers across the globe. To this day, many have called Internet Explorer 6 one of the worst tech products of all time. Microsoft would upgrade the software five years later, but it proved to be five years too late. By then, Microsoft’s reputation had already been besmirched and many customers had lost faith in the company’s ability to produce great software. All things considered, it is very likely that Microsoft looks back on this investment and wishes they played their cards a little smarter when creating it.
2. Forcing Windows 10 Update
During the summer of 2015, Microsoft updated their latest version of Windows and the upgrade was met with a generally positive response. Not everybody had updated their program, but most that did enjoyed Windows 10 for what it was. Those who did not upgrade refused to do so mostly because they were comfortable with Windows 8.1. They had already been used to operating the previously established Windows software and did not see a need to upgrade. However, they did keep receiving messages to update and refused to update every time. That is until one fateful early 2016 where users received messages that Windows 10 will update on their computers whether they liked it or not. That’s exactly what happened. People had their trust in Microsoft shattered after the company forced their customers to do something they were so adamant about not doing. This is when many customers hopped off the Microsoft train and Microsoft probably wishes they handled the software update a little better.
1. Not Engaging with Politics/Government
This one comes directly from former longtime Microsoft executive, Brad Silverberg. Having served as the company’s SVP throughout the ’90s, Silverberg proclaimed in a recent Quora Q & A that he thought that Bill Gates’ worst decision as Microsoft CEO was that he didn’t engage in the political process as early as he should have. According to Silverberg, Bill’s whole attitude was that “the government should just go away and leave Microsoft alone.” Turns out the government weren’t so willing to leave Microsoft alone because by not properly engaging with the government, Gates inadvertently made Microsoft an enemy to the government. It created a disastrous domino effect that included a bunch of lawsuits against the company, including a 2000 case which ruled that Microsoft broke an antitrust law by unfairly bundling Internet Explorer with Windows. Microsoft settled in 2001, but many believe that it set Microsoft back a bit in the tech industry. Despite these setbacks being easily avoidable if Gates wasn’t so reluctant towards the government, Silverberg still respects Gates and cites him as one of the greatest CEOs ever.