Software via the Internet: Microsoft in 'Cloud' Computing
The empire is preparing to strike back — again. — In 1995, Microsoft added a free Web browser to its operating system in an attempt to fend off new rivals, an effort ultimately blocked by the courts.
Context & Ripple Effects
This NYT piece lands two months after CNET reported that Microsoft's 'Cloud OS' was taking shape, turning an engineering story into a strategic one: the company that owns the desktop is preparing to deliver software over the internet rather than in boxes.
The Times frames it as a sequel by reaching back to 1995, when Microsoft bolted a free browser onto Windows to fend off upstart rivals — a bundling play the courts ultimately blocked. The analogy sets the stakes: the incumbent is again defending its operating-system franchise against a new delivery model, and regulators have already shown they will intervene when Windows is used as the weapon.
First-order effects
- Microsoft commits its flagship franchise to internet-delivered software, forcing the company to run a services business alongside the packaged-license model that still funds it.
- The move directly targets whatever share of computing workloads might migrate off the desktop, converting Windows from the product into the platform those services run on.
Second-order effects
- Rivals offering software over the web gain a well-funded adversary, and pricing pressure shifts toward free or ad-supported delivery models that Microsoft's license revenue cannot easily match.
- Because integration with Windows is how Microsoft historically competed, the approach invites renewed antitrust scrutiny — the 1995 browser bundling ended in court, not in victory.
Third-order effects
- If software delivery moves to the network, the industry's center of gravity shifts from selling perpetual licenses to operating always-on platforms, changing what an operating system company even is.
- A pattern of incumbents absorbing disruptive delivery models rather than blocking them points toward consolidation around a few firms able to fund global-scale data centers and services.
The trend: Software economics are pivoting from boxed licenses to internet-delivered services, with Microsoft's desktop monopoly being repositioned as the launch platform for that transition.