Today Microsoft shareholders voted down the proposal for the company to invest in bitcoin. When it was reported Microsoft shareholders were going to vote on bitcoin strategy last month, it was a welcome news for many in crypto world. This seemed like an no-brainer move for a company like Microsoft. Unfortunately, shareholders decided to side with the board and rejected the bitcoin strategy. This was expected outcome. Not because bitcoin strategy is not a good fit the the company business, but because Microsoft is known for making big mistakes when it comes to new technologies. The story of the Microsoft is an interesting one. It has many instances of massive success, but also display obvious business decision blunders. In my opinion, Microsoft has made another blunder with rejecting bitcoin strategy. We will most likely see them playing a catching up gain in the future, as they have done many times in the past.
Microsoft have established itself as a global technology company that have contributed a lot into the advancements in computers and technology. However, much of their success relies on what have been built in the past. Windows, MS Office software, Azure cloud are very old technologies. While their use is still widespread, they don't do a good job of innovating these products either. Their ability to establish relationships with companies around the world made it possible to retain their market share even with not so impressive improvements and innovations. Another reason is the IT specialists that work for many companies have been trained in these technologies and often find it difficult to change to different one. Success is a success. They have done well here. However, there are many failures as well and most are due to inability of the company leadership to recognize the technological innovation and trends.
Among major failures in Microsoft's business decisions history is their ability to gain market share in digital music, digital products, web search, social media, online ads, mobile devices, and many more. Remember Bing? Does anybody use Bing today? When MS realized they missed their opportunity with search engine, they went big with Bing and spends tens of billions to make it relevant. They even made a deal with Yahoo. Both failed. It is not like they didn't see the importance of the internet, search, and knowledge base. This was too obvious and clear for them. Their leadership have spoken how next big thing was the internet before internet was the big thing. They had software in works. They were in the right path. But they couldn't really see what search was and how to achieve it. Remember MS Zune? Only after they saw how Apple was innovating with digital music and digital products and devices, MS decided to get in. Again after billions of dollars wasted on the project it was cancelled. Their journey to gain any market share with mobile tech was probably the most embracing ones. First they laughed at iPhone and Apple, then they decided to join, spent tens of billions, partnered with Nokia, and failed again. Any Microsoft mobile phones today? There are many stories like this where Microsoft failed big time when they could be a significant players in any of these markets. Lack of vision, arrogance, and inability to innovate resulted in MS becoming irrelevant in these spaces.
I believe bitcoin is another big space where Microsoft had an opportunity to participate early on and make the best of it. However, once again lack of vision, arrogance and inability to embrace the innovation prevented them taking this path at this time. There will come a time when MS will reconsider their position, but it may just be too lake. They will play a catch up again, but won't result in any significant benefits for the company. Of course, bitcoin strategy is different than being part of creating new products, new technologies that they can control. Perhaps that's why they have chosen not to embrace it. Being a decentralized technology, could have actually produce more benefits for Microsoft. While the bitcoin investment proposal was mainly about buying bitcoin with 1-5% profits, I see much more benefits beyond treasury and investments. There is no doubt their treasury could benefit with long term investment in bitcoin. 5% could serves as hedge against inflation, anything more could help to position the value of their assets at much higher values in the future that they could spend in many more interesting innovations. Shareholders would see nice returns on their investments, but also the company would be more competitive in the innovation space. But the most important thing I believe Microsoft could benefit from is in bitcoin as a technology. Having decent amount in their custody and developing solutions in this space would keep the company relevant in crypto space. Many tech companies are missing out at this time, but a winner will emerge. Then it will be too late.
Microsoft had different leadership since Bill Gates stopped actively running the company. Steve Ballmer would try to gain market share in everything, but would come in too late. Many examples above are failures under Ballmer's leadership. Satya Nadella have made some changes that brought a little bit more focus for the company. Instead of being spread out focusing many different areas, Nadella cancelled many projects and made it company's main focus to dedicate resources on things that have been working. For example, emphasis on cloud computing and advancements in Azure technologies have played a big role in recent success. Especially with the deal the have made with openAI put them in a good position with AI technologies. It is a shame how they couldn't be pioneers in AI themselves as one of the biggest software company with tons of money and developer resources. They did the next big thing, continued building the infrastructure needed for developing AI technologies, and made good deals with right players. But that is about it. There is much more Microsoft can brag about as recent innovations. After multiple iterations of Windows updates they seem to got something stable out now. Even that is not much of an innovation, but rather correcting the previously made mistakes.
With all what Microsoft have done, with all the leadership they have had, Microsoft is not a good company. It is not people's company. They don't built products to enable people to create. Apple does that. Microsoft always have focused on how much money they can get out of everything they do, while retaining monopoly, while retaining control over all the products the release. They aren't the greatest company in the world. A lot of things seems too phony and fake about what they are and what they do. Bitcoin could also have been a first step in rebuilding their reputation, and the vision. This could also be seen as joining people's movement towards transparency, better money, beneficial tech. Not today.
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