Windows Is Dead, Google Killed It
ReutersMicrosoft founder Bill Gates speaks during a news conference in New Delhi in 2008.Windows is dead. Let’s all salute it — pour out a glass for it, burn a CD for it, reboot your PC one last time.
Windows had a good run. For a time, it powered the world. But that era is over.
It was killed by the unlikeliest of collaborations — Microsoft’s ancient enemies working over decades, in concert: Steve Jobs, Linus Torvalds, and most of all, two guys named Larry and Sergey.
Late on Monday, Microsoft announced its unsurprising $7.2 billion plan to buy Nokia’s smartphone division. Nokia is the world’s largest manufacturer of phones that run Microsoft’s Windows Phone operating system (which is a bit like pointing out that, at 5-foot-6, I’m the tallest member of my immediate family). Microsoft is buying Nokia in order to control both the hardware and sof this move, Microsoft promises, will improve the phones themselves and make them easier to sell.
But this is the antithesis of the company’s Windows strategy. Though Microsoft , when this deal is done, the thing sold as Windows won’t be what it’s always been — it won’t be software that runs on lots of companies’ hardware, a platform to unite disparate manufacturers’ devices. Instead, Windows will be much like Apple’s operating systems, iOS and Mac OS. Windows will be proprietary software attached to proprietary hardware — Microsoft’s code running on Microsoft’s devices.
for the deal, Microsoft makes a stirring case for vertical integration: for a single company that makes both mobile software and hardware together. By purchasing Nokia, Microsoft says it will be able to create better phones by reducing “friction” between hardware and software teams that now reside in separate companies. Combining the companies also improves marketing “efficiency” and “clarity” — Microsoft can sell a single Microsoft device that bakes in the best services from both firms (Skype, Office, Nokia’s mapping systems).
Finally, vertical integration helps Microsoft’s bottom line. Today, for every Windows-powered phone that Nokia sells, Microsoft gets less than $10 in software licensing fees. When it owns Nokia, Microsoft will be able to book profits on hardware, too. Rather than make less than $10 per phone, it will make more than $40.
Steve Jobs long pushed against Bill Gates’ idea that hardware and software should be made by different firms. And back in the PC era, Gates was right. Gates recognized that most computer users didn’t understand hardware. We couldn’t tell the difference — and didn’t really care much about — the processors, drives, displays, and other physical components that made up one PC versus another. As a result, making PC hardware was destined to be a bruising commodity business, with low brand recognition, constant price battles, and dwindling profits.
But software, Gates saw, was a different story. Software had a face. Software imprinted itself on users — once you learned one Windows PC, you understood every Windows PC. Unlike hardware, software enabled network effects: The more people who used Windows, the more attractive it became to developers, which meant more apps to make Windows computers more useful, which led to more users, and on and on. Finally, software was wildly, almost unimaginably profitable. After writing code once, you could copy it endlessly, at no marginal cost, for years to come — and make money on every single copy you sold.
But mobile devices altered that calculation. Today, hardware matters. Unlike in a PC that you kept hidden under your desk, the design of your mobile device affects its usefulness. Things like your phone’s weight or the way your tablet feels in your hand are all important considerations when you’ you won’t choose a phone based on software alone, and you might pay a premium for a device that’s particularly well-designed. In the mobile world, as Apple has proved, hardware can command just as much of a profit as software.
You might argue that once the basic design of a good phone or tablet becomes well known, lots of companies will copy it, and that hardware will again become a commodity. That’s the tide Apple is now battling against. At some point mobile components will become good enough and cheap enough that a $50 phone might function just as well as a $100 or $200 phone. When that happens, people will again start choosing devices by price, and hardware profits will dwindle to nothing. And, as happened with PCs, software, not hardware, will become the industry’s dominant business.
All that may well occur. (The fear of commoditized hardware explains Apple’s languishing share price.) But if mobile hardware does become a commodity and software once again becomes the determining factor in your choice of phone, we won’t see Microsoft profit from the shift. That’s because, in the last five years, a brutal, profit-destroying force has emerged in the tech world: Android.
Google’s mobile operating system — which is based on Linux, the open-source OS whose fans had long dreamed would destroy Windows — is free. Any mobile phone manufacturer can use and alter Android however it pleases. This accounts for Android’s stunning market share — close to
— and that market share gives Android the benefit of the network effects that once worked so well for Microsoft. Nokia was paying Microsoft $10 for every phone it sold, and in return it got an OS that can’t even run Instagram. Microsoft says that it wants to keep licensing Windows Phone to other manufacturers even after it purchases Nokia, but because they can always choose Android (which runs Instagram and everything else), few phone-makers are likely to take it up on that deal.
That’s why the Nokia purchase signals the end of Windows as a standalone business. There are now only two ways to sell software. Like Apple, you can make devices that integrate software and hardware together and hope to sell a single, unified, highly profitable product. Or, like Google, you can make software that you give away in the hopes of creating a huge platform from which you can make money in some other way (through ads, in Google’s case).
But you can’t do what Windows did — you can’t make profitable software on other companies’ commodity hardware. Thanks to Android, code is now a commodity, and Windows is dead.
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You May Also LikeNabil Hafez | LinkedIn
, , Recommendations10 people have recommended Nabil500+connectionsJoin LinkedIn & access Nabil's full profileJoin LinkedIn & access Nabil's full profile. It's free!As a LinkedIn member, you'll join 300 million other professionals who are sharing connections, ideas, and opportunities.See who you know in commonGet introducedContact Nabil directly500+connectionsDuke University - The Fuqua School of BusinessMarketing, Corporate Strategy2007 – 2009
BackgroundCurrently responsible for a $70M+ product portfolio working on high impact and high incidence neurology diagnostic products as well as pioneering integrated diagnostics at Quest Diagnostics
I spent eight years at the Broad Institute of MIT & Harvard, first managing a team that worked on finishing of the Human Genome Project then transitioning to work on developing next generation sequencing prototypes into genome center production scale platforms. Taking the experience gained at the Broad, I co-founded an NGS consulting company spending several years providing informatics, lab, and market consulting to pharmaceuticals, biotechs, and startups. I later joined GenomeQuest, an informatics company where I was Director of Healthcare Strategy and led product management and market strategy on their clinical informatics product. In this role, I also participated in a Centers For Disease Control (CDC) work group to standardize next generation sequencing for clinical use.
I hold an MBA from the Fuqua School of Business at Duke University, a MS in Bioinformatics from Brandeis University, and a BS in Biology from Binghamton University.ExperienceProduct Director, General Neurology & Integrated DiagnosticsProduct Manager, General Neurology% P&L responsibility for all Quest Neurology products, a $70M+ business with 150+ products.
% Responsible for strategic planning, upstream and downstream marketing, and commercialization – including business case and strategic rationale, market research, product launches, brand and price positioning, trade show strategy, and integrated marketing plan.
% Developed strategy and business case for future company-wide expansion into non-laboratory diagnostics.
% Created future molecular diagnostic strategy for Athena diagnostics in response to competitive pressures, internal company direction, and current market forces.
% Engaged with KOL’s on product concepts, physician education, webinar/speaker programs.
% Led initiative in a matrix environment to re-position and integrate the 50 person Athena Neurology commercial sales team into Quest with merged responsibility across product lines.
% Worked closely with Business Development on licensing, trademarks, and contracts.Director, Healthcare Strategy & Commercialization% Worked with CEO to create new strategy group to develop and capitalize on new business and growth opportunities and products in the healthcare sector.
% Conceived and generated plan for a new business opportunity that involved linking segregated data from physicians and clinical genetics labs to drive decision making within biomarker and translational groups at pharmaceutical companies.
% Conducted extensive due diligence with translational and biomarker leaders at major pharma and directors at clinical labs, and presented the plan to executives and the board of directors.
% Engaged in and managed partnerships to advance business case and create new product opportunities.Clinical Product Manager% Product manager for GQ-Dx; GenomeQuest’s clinical diagnostic software product.
% Conceptualized and created GQ-Dx and worked closely with customers to guide development efforts and bring next generation sequencing (NGS) to the clinic.
% Led development team efforts and developed company market and product strategy in the clinical marketplace.
% Coordinated efforts with sales, marketing team, and communications firm to launch effective diagnostic focused marketing campaigns.Senior Field Application Scientist% Worked closely with the sales team as the technical lead on customer engagements.
% Managed customer accounts, built relationships and provided support.Co-Founder, Principal% Co-founded a DNA sequencing technology consulting company with a team of molecular scientists to capitalize on an emerging market opportunity.
% Generated new business opportunities, managed engagements, wrote proposals, created presentations, and managed a network of consultants to address client needs.
% Prepared market assessment and strategy reports for clients.
% Informed, advised, and helped deploy new sequencing technologies at GlaxoSmithKline that increased throughput on drug development screening assays by a factor of 15.
% Conducted data and statistical analysis for the launch of a multi-million dollar start up (Raindance Technologies’) first product. .ContractorDeveloped an enterprise-wide web application to simplify the gathering, sharing, and analysis of competitive intelligence. The application collects public domain information from multiple curated data sources, integrates it, renders visualizations, and presents it in a consolidated and searchable view. This allows researchers and business development to piece together a picture of the competitive landscape and find unexploited areas for drug development or discover opportunities for in-licensing.Bioinformatics Project SpecialistBroad Institute of MIT/Harvard% Collaborated with vendors and internal stakeholders on prototyping, development, and systems integration of cutting edge next generation DNA sequencing technologies and infrastructure.
% Worked on the first publicly released Illumina (Solexa) NGS sequencing instrument
% Developed tools to process and visualize complex sequencing data and performed statistical analyses on large data sets.
% Built a central database to document and track all laboratory experimental designs.
% Acquired and deployed software platform enabling hundreds of researchers to col providing project tracking and transparency in addition to saving hundreds of hours of work.Process SupervisorBroad Institute of MIT and Harvard% Led a team with five direct reports and four second-tier employees responsible for process development and production operations in support of the Mouse Genome Project.
% Conceived and implemented new processes and orga boosting monthly data output by a factor of 40.
% Created new relational database, software, metrics, and cost models to track all production information used by management and analysts to measure performance and reduce costs.Coordinator% Managed and trained a team of 7 data analysts responsible for analyzing and correcting sequencing data towards successful completion of the Human Genome Project.
% Completed the most difficult parts of a 13 year, 20 institution, $3B worldwide government funded scientific effort on time under a tight and very public deadline.Data AnalystPerformed analysis of DNA sequence data. Doubled average Full Time Equivalent (FTE) output.Honors & AwardsExcellence in PartneringCDC - Centers for Disease Control and PreventionNext Generation Sequencing - Standardization of Clinical Testing Workgroup. For exemplary contributions to a framework for quality laboratory integration of genome sequencing technologies into healthcare delivery.CertificationsJMP Statistical Data ExplorationSASJMP ANOVA and RegressionSASJMP Design of ExperimentsSASMatlab & Matlab Image ProcessingMathworksCertified UNIX/Linux Systems AdministratorWorcester Polytechnic InstituteSkillsGenomicsProduct ManagementStrategic PlanningDNA sequencingBioinformaticsCommercializationStrategyBiotechnologyDNALifesciencesClinical DiagnosticsProduct MarketingCross-functional Team...Strategic ThinkingBusiness StrategyProduct StrategyMatrix LeadershipGeneticsData AnalysisMolecular BiologyStart-upsProgram ManagementInformaticsDrug DiscoveryComputational BiologyPersonalized MedicineMarket AnalysisProject ManagementAssay DevelopmentDrug DevelopmentNGSMarketing StrategyMarketingNext Generation...DiagnosticsProduct DevelopmentLife SciencesSupervisory SkillsMBATechnology DevelopmentStrategic ConsultingNeurologyPediatric NeurologyMolecular DiagnosticsMedical DiagnosticsHardware DiagnosticsPublicationsNatureNatureNatureNatureGenome ResearchEducationMBA, , Corporate StrategyMS, BS, ,
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People Also ViewedDirector, Esoteric Neurology at Athena Diagnostics, Inc.Senior Scientific Director, Quest DiagnosticsExecutive Director, Neurology Segment Solutions, Quest DiagnosticsSenior Director, Genetics at Quest Diagnostics Inc, Athena DiagnosticsCEO, GenomeQuest, Inc.Director of Bioinformatics at Quest DiagnosticsDirector, Product Management at Quest DiagnosticsPrincipal Translational Genomic Scientist at AstraZenecaResearch Fellow at Vertex Pharmaceuticals
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