Disclosure: Microsoft is the author’s client.
Microsoft decision get out of mixed reality (presumably the leader and market maker in Augmented Reality with HoloLens) had a big surprise.and the Big investment in OpenAI and ChatGPT Given the company’s advanced internal AI efforts, it was equally astonishing.
What we’re looking at is a company ready for war, supposedly working to see what happened when the Internet, the iPhone, and Google came along. The rise of generative AI.
Microsoft may not succeed, but it’s not because they’re trying too hard. The appeal is whether an early and aggressive use of this technology will do better than past efforts to catch the wave from behind. It aggressively takes away from Netscape and is reminiscent of the Internet’s approach when Netscape didn’t survive.
Here’s how the coming generative AI war could affect Microsoft.
Mixed reality failure?
In many ways, Microsoft approached mixed reality (MR) the right way. At least at first it was. The company developed HoloLens as an industrial-grade product, albeit at an expensive price, and gained a foothold with customers such as Lawrence Livermore Laboratories. The effort was successfully marketed in aerospace, microprocessor FABS, general manufacturing, and even the military, with only marginal profits (although it ran into serious trouble in military trials). ).
Microsoft has approached virtual reality (VR) in a different way. It was more consumer-focused, but it used technology that didn’t meet minimum standards. invested more money than So while VR was definitely Microsoft’s failure, it could have been worse.
For a business to be meaningful to Microsoft, it must reach millions in sales. In AR, the company never seemed to reach those numbers. Problems include heavy headsets, lack of occlusion, ghost-like virtual objects, narrow field of view, poor battery life, lack of accurate hand he index, and unfocused applications. Still, it was arguably the best AR solution on the market. (If Microsoft invested more in marketing and had a critical mass of sales, things might have been different.)
Remember, Xbox lost a lot of money in the beginning too. But Microsoft fought to make it a success. Would you like to overcome the troubles of AR and VR together?
Simple: Generative AI has terrified companies.
Windows and MacOS — GUI Issues
In the early days of Microsoft, one major technology change ensured the company’s success. Computers began moving away from the command line and adopted the concept of Xerox’s Graphical User Interface (GUI). Apple is convinced his GUI is the future, and when the market began to move away from the command line, many big companies were horrified. IBM licensed DOS, Microsoft wrapped it in a Windows GUI, and the OS wars began.
A few years later, Microsoft had the upper hand with Windows 95. This was both an example of marketing excellence and a warning that the industry (especially Microsoft) still didn’t know how to handle the servicing requirements of an OS decoupled from hardware.
Microsoft got a lot stronger as a result of their efforts, but they did so by buying DOS rather than building it. Microsoft moved early, but was still chasing Apple.
battle of web browsers
Microsoft was taking a nap when Netscape was launched and the Internet became a reality. The company turned around by buying browsers to compete, successfully keeping its MSN efforts away from his CompuServe and AOL, and once again weathered the storm to the upper hand.
It didn’t help that Netscape’s management tried to pursue Microsoft’s market dominance by making the same kind of mistakes Microsoft would later make with the Zune. Netscape failed. Had Microsoft not turned around quickly and effectively, Netscape might not have made that mistake.
What made the difference compared to the obvious failures of Zune, Microsoft Phone, Plays-For-Sure, etc., was catching threats early, responding quickly, and funding the effort well. .
And now, generative AI
Generative AI, like the GUI OS wars, promises to change the way we interact with computers, and like the browser wars, promises to change the way we interact with remote services, thus potentially reshaping the technological landscape. is hidden. In fact, as it matures, it can become more devastating than the OS and browser wars combined.
If Microsoft wants to dominate now, it needs to acquire cutting-edge technology and focus company resources on: Establish a distinct competitive advantage across the Microsoft ecosystem..
From office products to telesales, the potential benefits of being able to talk to a computer should make the former more productive and the latter more cost-effective due to higher closing rates. Both are but a few examples of the disruptive potential of generative AI technology.
If generative AI hits the market, it could very well be the next Google, and tech companies that don’t adapt to the coming changes could go out of business. Microsoft wants to target the former and avoid the latter. That is why we are moving from marginal, long-term opportunities to generative AI.
decision, decision
Companies and their CEOs are often defined by the choices they make. While he was great when it came to running (and great as a person), former Microsoft CEO Steve Ballmer will forever be defined by his failed Yahoo merger (to Google). Failed acquisition of Nokia (in response to Apple) and the Zune.
Current CEO Satya Nadella has been defined by the massive success of Azure, but this is the first time he’s faced a major threat that requires a corporate pivot. Risks include: ChatGPT may not be the primary technology. Nadella could be underfunded for the shift. Or, as with mixed reality, you may have moved too quickly.
The last problem seems unlikely — funding appears to be aplenty. Given the nature of generative AI and its growing popularity, market-making requirements are relaxed.
Whether Nadella’s acceptance of ChatGPT is the right move remains to be seen, but it seems like a reasonable bet.
Ultimately, we see the company turn to war before it really begins. However, the results are not certain.
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