From the early days of Microsoft Basic and MS-DOS to the modern era of Windows 11 and Copilot, Microsoft has come a long way. However, throughout its journey, it has faced many setbacks that have cost the company billions. We’ll look at some of those mistakes and what the tech giant has learned from them.
Windows 8: update too fast
With Windows 8, Microsoft overhauled the operating system to provide a unified experience across devices. One major change was replacing the traditional Start menu with a Start screen with live tiles, targeting the growing market for touchscreen devices. However, these drastic interface changes disrupted long-time desktop users, myself included.
Windows 8 was widely criticized as one of the worst versions of Windows and failed to meet expected adoption rates. After facing user backlash, Microsoft recognized that making too many changes quickly was counterproductive. They addressed these concerns by reintroducing familiar features in Windows 8.1, an update that helped partially restore their reputation.
Learning from the hard experience of Windows 8, Microsoft understood the importance of gradual evolution and preserving the most beloved features. This approach was evident in Windows 10, which combined the best of Windows 7 and Windows 8. Even in Windows 11, the company has avoided significant changes from Windows 10.
Not innovating in Internet Explorer
Released in 1995, Internet Explorer (IE) was a web browser developed by Microsoft. Due to the fact that it came bundled with the Windows operating system, the browser gained a wide user base and maintained market dominance for years. However, Microsoft’s complacent attitude led to a lack of innovation in IE and issues related to security and speed began to arise.
As development lagged, vulnerabilities plagued the browser, allowing more nimble competitors like Google Chrome (mostly) and Mozilla Firefox to capture a huge chunk of the market.
Although Microsoft was never able to fully revive Internet Explorer’s former glory, this experience influenced the development of Microsoft Edge, a more standards-compliant, secure, and high-performance browser. To avoid past mistakes, Microsoft is committed to continued innovation with Edge.
Microsoft’s decision to rebuild Edge with the popular Chromium engine in 2020 reflects its commitment to learning from past experiences.
Windows Phone: lack of developer support
Microsoft made a bid to enter the smartphone market by introducing Windows Phone in 2010. With its unique tile-based interface and numerous cutting-edge features, it aimed to compete with iOS and Android. Microsoft’s entry came late, making it difficult to gain ground against the already established giants.
Due to the small user base, developers did not see much reason to create apps for Windows Phone and many popular apps never made it to the platform. Unlike Apple, which strictly controls hardware and software, Windows Phone had to deal with a variety of hardware configurations from different manufacturers.
Despite suffering billions in losses, Microsoft continued to compete in the mobile space by acquiring Nokia’s mobile division. This expensive acquisition did not bear the expected results. These experiences taught Microsoft the importance of early market entry, strong hardware and software integration, and OEM support.
After this particularly costly lesson, Microsoft shifted its attention from mobile hardware to creating and improving cross-platform services and applications like Office and OneDrive. Microsoft launched these apps on iOS and Android and they are some of the company’s biggest hits.
Mixer: compete with the best players
Initially called Beam, Mixer was a live streaming platform that Microsoft acquired to compete with Twitch and YouTube Gaming. Despite offering low latency streaming and better technology, Mixer struggled to gain a decent market share due to the dominance of existing players.
The company attempted to attract viewers by making exclusive deals with top players like Shroud, but failed to build a strong community of viewers and streamers. Mixer’s late entry into the market hindered its user growth, leading to its closure in 2020.
The experience with Mixer taught Microsoft valuable lessons about the challenges of entering established markets. With the closure of Mixer, Microsoft partnered with Facebook Gaming to help its streamers transition to a new platform, supporting their community and redirecting resources to other strategic areas.
Since then, Microsoft never ventured into live streaming again and instead focused on improving its other platforms and services.
Clippy – Annoying and useless assistant
Clippy, also known as Clippit, was a virtual assistant introduced in Office 97. It was intended to help users with tasks, but it often misinterpreted their intentions and appeared uninvited. Instead of being useful, users found it intrusive and annoying. Due to the negative impact on the Microsoft Office experience, it was removed in Office 2007.
Despite learning from Clippy’s failure, Microsoft did not fully apply these lessons to later projects like Cortana. Although less intrusive, Cortana struggled with user adoption due to its limited functionality and integration compared to its competitors. Persistent oversight in understanding user needs contributed to Cortana’s failure.
To avoid the mistakes of previous assistants, Microsoft introduced Copilot (its artificial intelligence assistant) in a much more timely manner and has integrated it into most of its products and services. However, Copilot faces some resistance from users, similar to other AI assistants on the market.
Can Copilot achieve the balance between utility and discretion that users want? Will Copilot succeed where Clippy and Cortana failed?
Zune: late entry and lack of differentiation
Launched in 2006, Zune was Microsoft’s digital media player, designed to capture the growing digital media space and compete with established products like Apple’s iPod. Despite featuring solid hardware and innovative features like wireless syncing, the Zune failed to capture significant market share.
The Zune’s late entry into the market, at a time when the iPod was already well established, hampered its success. A major factor contributing to the Zune’s failure was its lack of a compelling ecosystem, similar to Apple’s iTunes, and its design did not innovate or offer more than what was already available from existing brands.
Learning from this failure, Microsoft has improved its approach to developing hardware products, such as the Surface line. The company focused on improving hardware design, integrating ecosystems more effectively, and including unique and diverse features to better compete in the market.
These are some of the biggest mistakes Microsoft has made; They have cost the company billions of dollars, not to mention huge amounts of time, human resources and credibility. While these mistakes have influenced future decisions, it remains to be seen whether the company has fully absorbed all the lessons from its past mistakes.
The only real test will be whether Microsoft will face similar significant setbacks in the future.
