Why Microsoft is still a tech superstar

Let me go back to Microsoft’s dark days, possibly stretching from the mid-2000s to 2014. Strangely, they weren’t that bad. Yes, Microsoft was so inelegant that the company was roasted in Apple TV commercials and a lot of people in the tech industry wanted nothing to do with it. The company failed to make a popular search engine, tried in vain to compete with Google on digital advertising, and had little success selling its own smartphone operating systems or devices.

And yet, even in Microsoft’s saddest years, the company made a ton of money. In 2013, the year Steve Ballmer was semi-pushed to retire as CEO, the company generated far more profit before taxes and some other costs – more than $ 27 billion – than Amazon in 2020.

No matter how much Microsoft’s software sucked, and much of what it did, many companies still needed to buy Windows computers, Microsoft’s email and document software, and its technology to run powerful back-end computers called servers. Microsoft used these much-needed products as leverage to branch out into profitable new lines of business, including software that replaced conventional corporate phone systems, databases, and file storage systems.

Microsoft wasn’t always good in those years, but it did pretty well. And more recently, Microsoft went from being afloat to being financially successful and relevant in cutting-edge technologies. So was this change a healthy or a discouraging sign?

On the healthy side of the ledger, Microsoft did at least one big thing right: cloud computing, which is one of the most important technologies of the last 15 years. That and a change in culture were the foundations that transformed Microsoft from winning despite its strategy and products to winning thanks to them. This is the kind of business change we should want.

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