The first company I want to discuss in our “Imagination and Courage” series is Microsoft. While it may not always be synonymous with “imagination,” one can certainly rely on Microsoft to pursue big ideas with bold determination—even if those ideas were first conceived elsewhere.
Over the past 25 years, Microsoft has ventured into video games, online services, search, music players, smartphones, cloud computing, virtual reality, AI, and numerous other technologies. You might challenge me by saying imagination and courage do not always guarantee success, as Microsoft did not achieve groundbreaking results in most of these areas. You would be right. However, Microsoft needed only one major breakthrough—whereas Intel serves as an example of what happens in its absence.
Both Microsoft and Intel dominated the PC industry, peaking during the dot-com bubble in 2000. However, Intel lacked the courage to explore emerging technology trends, and its stock has never regained the heights of that era. Had Microsoft remained solely focused on PCs, its trajectory might have been similar. Microsoft continuously refined its Windows operating system, making it arguably the most consumer-friendly desktop OS today. The issue, however, is that desktops are no longer the primary computing device for consumers.
At the same time, Microsoft boldly pursued various initiatives and ultimately found massive success in cloud computing. This single achievement compensated for its more modest performance elsewhere.
I recall one telling story: Microsoft CEO Steve Ballmer regularly met with leadership from various divisions, including Microsoft Research. In one such meeting, someone asked him what he wanted from Research. He replied that he wanted five new business models each year, though he would be satisfied with just one. Since I was deeply interested in business model innovation, his response stuck with me. My colleagues thought he was asking for very little, but I saw it differently—he was asking for something the entire industry produces only sporadically, yet expected a few hundred employees to generate annually. He also explained why a business model is the ultimate form of innovation.
Microsoft did not lack imagination, but it often hesitated to invest in its own visionary ideas until others did first. I have always approached problems from first principles, allowing me to visualize the future without being constrained by the present.
In 2002–03, I wrote a manuscript titled Global Universal Turing Tape, proposing that if Microsoft provided universal storage and computing to anyone worldwide, startups could operate as applications hosted on its servers, gaining ready-made users through Hotmail credentials. Unfortunately, I failed to gain traction—what I was missing was the business model.
Upon returning from a trip to India in 2003–04, I observed that mobile phone adoption had soared to 300 million in just ten years. In contrast, the country had only three million landline phones after a century of telephone technology. This represented a 1,000x acceleration, and upon my return, I wrote another manuscript arguing why Microsoft should invest in consumer smartphones. At the time, Microsoft’s primary focus was on overtaking BlackBerry, which catered to enterprise users.
This lesson is relevant again for Microsoft. The company has found early success in AI, much like it was leading the smartphone race until 2007. Microsoft had bet that smartphones were primarily an enterprise-first technology—similar to PCs—believing consumers would adopt them due to work-related needs. This assumption held until someone finally invented a consumer-first smartphone, overtaking Microsoft not just in mobile devices but across the entire tech industry. Had the assumption that smartphones were enterprise-first been correct, Microsoft would have won this race—exemplified by Palm Inc.’s decision to use Windows Mobile on its devices.
Now, a similar question arises in AI: Is AI primarily a consumer-first or enterprise-first technology, or will it evolve independently for both use cases?
I leave the audience with this question and would love to hear your thoughts and reasoning.
Disclaimer: The opinions expressed are solely my own and do not reflect those of my current or past employers.
Earlier posts in the series: Department of Imagination and Courage.
Blog post by Kamal Jain
Chief Scientist, Executive, Entrepreneur, Economist, Inventor, and Investor
Hitech Advisors
