Windows Product? Read the Innovator’s Dilemma now!

5th Jul, 2012

If your company or product is in anyway tied to Windows, you need to understand Clayton Christensen’s The Innovator’s Dilemma. Get it via this link, and I get a couple of cents.

While PC sales have been in decline recently, some have considered this more of a cyclical blip. Looking at the entire history of PC sales, Horace Dediu uses compelling numbers to starkly illustrate the rise and fall of Windows vs Apple. When looking at the gross data, it becomes clear the decline in PC sales is more structural. While this is of immediate concern for Microsoft and the PC manufacturers, the impact may be felt by your company sooner than you think. Dediu theorises:

Considering the near future, it’s safe to expect a “parity” of iOS+OS X vs. Windows within one or two years. The install base may remain larger for some time longer but the sales rate of alternatives will swamp it in due course.

The consequences are dire for Microsoft.

The numbers are pretty convincing. And dire for your own products. iOS and OS X are no longer platforms to consider for some alternate revenue. If you see the bulk of your revenue from Windows, you are on a path to having a niche product in decline. If Apple exceeds Windows in new sales in 1-2 years, the installed base of Windows will be in dramatic decline a couple of years later. As PC’s reach retirement age, more and more will be replaced by Macs and iPads. Possibly even Android and Surface tablets if they generate enough traction.

The biggest impact the iPad has had on the PC industry is finally achieving what Linux tried and failed at for two decades: Convincing everyone you don’t need a Windows PC to access the Internet and read your work email. Microsoft’s delay in responding to the iPhone and the iPad have let too many people experience computing without Windows and Office. People are beginning to realise on masse that its not only possible to function without Microsoft’s two cash cows, but desirable. The recent decline of Windows vs Apple is faster than the rise of Windows during the Internet boom of the late nineties.

If your company’s fortune is tied to the installed base of Windows, your are being disrupted right now. The next few years will be critical. You need take what you currently have in the bank and innovate new revenue streams as quickly as possible. Don’t be afraid to save money in the short term by reducing investment in additional Windows-only initiatives.

Via Daring Fireball.

Update • Microsoft just announced its first ever quarterly loss since going public. From the New York Times, 19th July, 2012

Sales in the PC market have stagnated as consumers have diverted their technology spending to more exciting technologies, including smartphones and tablet computers like the iPad.