Apple vs. Microsoft: Using Chess As An Analogy

Nine years ago, Apple’s market cap was $17 billion. At that time, Microsoft was over 30 times larger than Apple with a market cap of $586 billion. Today Microsoft has a market cap only 1.5 times bigger than Apple’s and if trends continue, Apple could surpass Microsoft within a couple of years. How could such a massive reversal of fortune take place in a relatively short amount of time? This continuing shift was again highlighted as Apple beat projections yesterday and Microsoft failed to meet projections in an announcement released this morning.

I think the difference in the two companies is vision. Let’s use the game of chess as an analogy. Apple seems to think like a grandmaster and is able to see the scenarios far in advance of the present. Apple is not just creating products; they are creating strategies and scenarios and then designing wonderful products to fulfill those strategies and scenarios. Microsoft, on the other hand, seems to lack this vision. Microsoft plays like an intermediate chess player with the ability to see only a few moves ahead.

Apple plays brilliant game-changing offense. Microsoft plays defense and tries to protect all of its players on the board – not really doing justice to any of them in a remarkable way. Apple seems to be building a company based on where the game is going. Microsoft seems to be hanging on to the game the way it was.

Microsoft is still an incredible company. Even though it failed to meet the street’s predictions, it did manage to take in over $13 billion in revenue this last quarter! What is needed while it remains a strong company, is a way to get its mojo back. That’s the vision thing, and vision begins at the highest echelons of the company. If they don’t find that vision soon, one of these days, they’ll hear Apple (and others) say: Checkmate!