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Innovation Strategy

Microsoft understands what being an OS in 2020 means (maybe)

As a major surprise, Microsoft at the end of 2018 turns out to have now a higher market cap than Apple. Although Microsoft doesn’t manage to have the same customer’s reach that Apple commands in B2C, the Redmond firm managed to regain its leadership in B2B… even maybe in parts of the business that you don’t see coming!

I was discussing a few weeks ago how Alibaba is swiftly becoming the default operating system of retail stores in China. Reframing your perception from what was an e-commerce platform 10 years ago, to something with much deeper and global strategic intent is challenging. It is very interesting to see that Microsoft (as a traditional PC operating system and cloud platform) is moving in the same direction in the US.

It might seem easier to understand as well. Going from one type of OS to another one presents indisputable challenges, but makes sense product-wise. I won’t dispute that. But if you end up thinking that Microsoft could be in better strategic position to do that you’d be dead wrong.

Being an operating system is not about running computers anymore, even if you include mobile phones and tablets as ‘computers’ by 2019 standards. It’s also not only about running more distributed hardware such as TVs, connected devices, fridges or cars. The 2020 to 2030 battlefield that is shaping up is running ‘everything’. This is the prize that the GAFAs and BATXs are now seeking: being the last remaining OS for everything we do from sharing the pics of our babies, to ordering pizzas or shopping for fresh vegetables, or even healthcare.

It is thrilling that Microsoft seems to seriously get in this game now. But fighting off Amazon or Alibaba, which are on top of their game at not only digital operations (cloud, payment, big data) but also physical operations (supply chain), will be quite a tall order.

Happy new year, and buckle up because 2020 will be interesting!

By Philippe Méda

Philippe has been training about 200 startups a year since 2007, consulted for dozens of multinationals on rupture innovation or corporate incubation. He also teaches innovation in key MBA programs in Paris and Shanghai.