Apple and Microsoft
Yesterday’s news that Apple’s market value slightly eclipsed Microsoft’s was significant and in my haste to get out a post on it, I may not have been able to apply all of my analytical effort so I want to try again.
First, to cover basics, the market value of a company is simply the value of a share times all of the shares outstanding. A company’s market value fluctuates daily with the rise and fall of its share price. Today will undoubtedly be different. You can find the values in the original New York Times article that my post referenced.
What’s significant about this news is not simply that Apple overtook Microsoft by a little bit on a hot spring day. But if you view Microsoft as filling the niche once occupied by IBM as the technology supplier to business and if you view Apple as the technology supplier to consumers many things come into focus.
For instance, Microsoft has been a relative laggard in providing what might be called creature comforts for computer users. It was late to the game with Windows after Apple had deployed the Macintosh, late to deliver CRM and it was late to deliver a software as a service (SaaS) offering. Nothing wrong with that, Microsoft simply demands a clear business purpose before launching into a new area.
On the other hand, though, Apple has brought to market numerous new categories of devices starting with the iPod that changed the way we live. Forget devices that start with “i” for the moment and think about Garage Band and iMovie. They are examples of ways that Apple has changed the way creative people work and in the process these tools have democratized some formerly stodgy businesses. Then there’s iTunes and if you want to talk about (formerly) stodgy businesses, you need only look at the music industry.
Of course Apple is not alone in this democratic revolution, you have to include companies like Salesforce.com and the hundreds of partner companies it has spawned and Adobe whose products run across platforms today but whose origins are Mac.
So if you look at the marketplace today, the fact that Apple is worth a bit more than Microsoft says that the end customer is becoming more important than the corporation. What we do on our iPads, iPhones, iPods and their imitators (some of which run a Microsoft OS) is as economically important as what we do on our desktops and laptops.
Last week at Sapphire, SAP’s user conference in Orlando, we saw a company doing many things but one of the more important things SAP did was to fully acknowledge the importance of the customer and promise to put the customer more in the center of what it does as an enterprise software company. Sage did some of the same things at their conference, Insights. At the time, I referred to these and other things happening in our industry as the triumph of CRM but in a sense, it was also the triumph of Apple, just a week before Wall Street made it official.