Looking Beyond Microsoft: Where Do You Want To Go Today?

In the first part, we have looked at the extent of Microsoft’s reach in Indian homes, offices and schools. We have also examined the waning usage of its products, thanks to the rise of innovative and free alternatives, compounded by people’s inclination to use a single device for work, pleasure and learning. Now let us look at the implications of technology usage in India and how the IT services industry can safeguard itself from falling into a rut by asking itself the same question Microsoft has asked the world for years!

Microsoft is firing blindly
Right now, Microsoft is like a headless monster whose pie is being eaten by two equally huge beasts – Apple and Google. Of course, Ballmer & Co. waged many wars in the recent past. They launched the Surface tablet to take on the iPad, pitted Windows Phone against iOS and set up Bing against Google. They fought on TV, they fought on YouTube and they fought in courtrooms. But all they’ve won so far is a horde of indifferent consumers. As a result, staff and investor morale has taken a beating – many insiders are complaining about the dearth of flexibility and death of innovation at Microsoft.

Microsoft finds itself grappling with a new world where the personal computer, on which it built its empire, has no place. The chaos is apparent even in their flagship business – Windows. Windows 8.1, Windows Phone 8 and Windows RT are indistinguishable from each other and need to be merged into one cohesive Windows.

But it has (nearly) endless ammo
However, it’s too early to write off Microsoft. Big companies don’t die easily. Apple has languished at the bottom of the industry for a decade and a half before it rose from the dead to become the world’s most valuable company.

Microsoft is still far above the rest with a market cap of $300 billion and cash piles of around $80 billion. Forbes contributor Mark Fidelman has gone as far as to suggest that the company will be bigger than Apple in three years’ time, spurred on by the One Microsoft initiative, which will give users and developers an integrated experience across the phone, tablet, PC, console and the TV.

The road ahead
There is a distinct possibility that Apple-quality smartphones and tablets will become commoditised. In such a scenario, software may once again dictate a user’s choice of hardware. However, Microsoft, or any other software company for that matter, will not be able to take advantage of such a shift.

Thanks to Apple and the Android, there are only two ways in which software proliferation may happen. One, it can be bundled together with the hardware to form an integrated system, which you can sell for a great profit, should it capture the public fancy. Two, it can be given away and opened up to the development community, which might well transform it into something bigger than you ever imagined. You can then try and figure out a way to churn out profit from it.

Companies can no longer do a Windows and make profit by selling unified software for other companies’ hardware because code is now a commodity. Indian tech firms have risen to prominence on the strength of their coding skills, unlike the Far East’s hardware manufacturing titans. So this is a slow but definite turn of events of which they need to take very serious note.

Trickle-up instead of trickle-down
Whatever Microsoft’s future might be, Indian homes and workplaces will have to extricate themselves from their dependency on Microsoft software and technology. So that when the world moves on to Android’s next delicacy, Google Docs, and whatever lies beyond that, we don’t find ourselves stuck in 1995. So that when kids in the US build their own apps and hacking code to change the rules of their favourite games, we, too, can pursue a national pastime other than Solitaire.

Change has to start from schools, colleges, institutes and offices. The process has begun, but not as a result of conscious effort; therefore, only a few are aware of it. On the education front, Aakash 2, the much-publicised and subsidised tablet for students, operates on Android 4.0. In the industry, small firms which used to be known as software companies, have leveraged the transformation of the Internet and rebranded themselves as Web & app development firms. PHP and other open source languages are becoming the mainstay of programming and coding in India, reducing the use of Microsoft’s .NET (which includes the once all-powerful Visual Basic) to just an option.

How change will impact us
The Indian IT industry should be able to comprehend these changes and must adapt quickly. Organisations and individuals in the US and Europe, places from where India gets the bulk of its back-office processing work, have moved on to more nimble platforms, devices, operating systems and productivity tools. But Indian firms, with their service-focused mindset, are always late adopters of technology (that has been tried and tested in the West) and that puts them at the risk of getting pushed to the bottom in terms of innovation and growth.

The local bigwigs – TCS, Infosys, Wipro and others – should be deeply concerned about the continued lack of innovation in their offerings. Being a profit-making, back-office mammoth that deals with technology any grandfather in the US and the UK can understand is not exactly a creative way to avoid the Fat, Dumb and Happy syndrome in the business.

To achieve great success, businesses need to embrace great failures and take on immense capital risk. Subroto Bagchi, co-founder of Mindtree, cited the development of a new drug or auto model as examples of initiatives that require billions of dollars in R&D just for the remote hope of hitting the mass market. That kind of funding doesn’t exist in India, especially in the early stages of product development.

TCS and Infosys have the capability to invest this kind of money, and have the potential to grow and retain intellectual property, as part of an innovation-through-experimentation process. But they choose to stick to the cheap-and-cheerful, well-trodden paths. The truth is that Indian companies mostly reflect the overwhelming public mindset – that of risk aversion.

Kiran Mazumdar-Shaw, CMD of Biocon, hit the nail right on the head in an attempt to answer if the next Apple or Google could be born in India:

Investors in India prefer predictable, imitative business models and me-too products, where they have the visibility of assured returns. Thus, Flipkart – which is modelled on Amazon.com – has received a lot of investor interest in India. On the other hand, business models that are truly innovative and untested find no takers among the investor community here.

Innovation, investment and marketing are the three legs on which businesses are built. Remove one and the tripod comes crumbling down. Bereft of innovation, Microsoft risks turning into just any other company. Closer home, Infosys is making similar mistakes.

It’s time we stop ‘looking up’ to people, companies, governments or technology and start ‘looking beyond’ them.