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Microsoft is unquestionably the most influential player in the IT industry. Simply uttering the word Microsoft can trigger emotionally charged – and often stock – outbursts from the most sedate people.

But before we determine whether Microsoft can be considered bad for business, let us establish whether Microsoft is simply bad.

For a start, it is the biggest kid in the playground. This is a burden that someone has to carry, whether they like it or not. So we cannot blame Microsoft for being number one.

There is no question that Microsoft flexes its muscles to full effect. But if we look at the world of sport, which is not so different from business, is not that just the nature of the game?

The interventionists think the law should rein in Microsoft. The free-marketers believe that Darwinian principles will dictate what is best for the market.

Many will be surprised to hear that IBM was considered Microsoftesque in its practices some decades ago. Perhaps in years to come, people will be surprised to hear that Microsoft was once like Google, or whoever takes over the “most-maligned” mantle.

So Microsoft’s dominance may be just a passing phase. In this light Microsoft is neither good nor bad.

So is Microsoft bad for business? When I started out in IT, the combined key press “Control + C” resulted in different effects depending on the application in use. In one application it would mean “copy the highlighted text”. In another it would mean “format the hard disk”. This in part made the pre-Microsoft era of IT so exciting. None the less, I am grateful to Microsoft for standardising the desktop.

This standardisation has also delivered the benefit of user portability. Staff can quickly get up to speed on new Windows applications because they immediately know how to, for example, open files and look up the help text. MS Office is the de facto standard for office document formats. This enables organisations to communicate seamlessly with each other. Microsoft knows this and so prices its offerings just short of the defection tipping-point.

Microsoft’s lack of innovation is also good for business. Its skill is in commercialising the innovation of others. Cruel though this is, it ensures that good market research and robust funding underpin the product.

Some aspects of Microsoft’s business practices are possibly less healthy, most notably its attempts to bundle everything into the operating system. Once government lawyers get round to understanding what an operating system is supposed to do, they will conclude the associated trials with greater speed.

Then again, Microsoft has gone to great lengths to make its software backwardly compatible. This is to be applauded, as it allows old applications to run on newer versions of Windows. The downside is that the “undocumented security features” of older versions of Windows and Internet Explorer remain in place. Given Microsoft’s foray into anti-virus software, it might appear it is creating its own business ecosystem.

Open source, in essence free community-produced software, is strongly disliked by Microsoft. It undermines the software industry and is used by the “Anybody But Microsoft” club to niggle Microsoft.

For many techies, open source is a religion sweeping the industry. In reality, much of it is amateur-hour software development sponsored by Microsoft’s rivals. Should they lose interest in it, then open source is likely to slide to sub-industry standards.

So Microsoft may be acting in the interest of business by weeding it out.

As mentioned, Microsoft has worked out how hard to squeeze its customers on pricing before they start to squeal. It has calculated the cost of moving from MS Office to an alternative solution and has priced its offering just below the squeal-point.

MS Office does not really deliver competitive advantage, but its absence will certainly be the source of competitive disadvantage.

Having said that, Microsoft is venturing into the enterprise applications marketplace, more associated with SAP and Oracle. There is a competitive advantage in using this type of software. However, its use across the organisation is akin to outsourcing one’s corporate nervous system.

Some may feel this offers Microsoft too much control. It could now potentially squeeze them beyond the squealing point, because by controlling the nervous system, it can control the company’s ability to squeal.

Whether this is good or bad for business, it is up to the boardroom to ensure that their relationship with their strategic IT vendors is one of buyer-supplier rather than predator-lunch.

Ade McCormack (ade@auridian.com) founded Auridian, which helps organisations get best value from their IT. He is also author of “IT Demystified”.

Copyright The Financial Times Limited 2017. All rights reserved.
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