Ben Gilbert: belief

Transcript context

…That is true for all the traditional reasons in the XP timeframe. The reason it was also true in part one of our Microsoft series. It’s even more true as Microsoft becomes an enterprise company because Windows is at the heart of the enterprise agreement. The whole value prop of all of our server technologies is they work great with your Windows devices on your network. There are strong incentives everywhere for Microsoft to ensure that Windows is the standardized platform that everyone wants to have on their PCs because it makes everything else work. Of course, they’re going to release a new version of Office that shows off the latest and greatest of Windows. I think this XP timeframe is the showcase moment of when that was a great strategy and we’ll contrast that later. The other thing to know about this XP timeframe is last episode we talked about the incredible secular growth trend of the PC that was this crazy tailwind for Microsoft. One of the greatest tailwinds you could ride in business history, PC shipments, I believe the stat, David, was that they grew 98% per year over the 11 years between the founding and 1975 and the IPO in 1986. The crazier thing is even as late as 2001 with Windows XP, they were still riding this tailwind. The US household penetration of personal computers—again, flashing back pre-IPO—was only 8%. That whole doubling year over year over year, by Microsoft’s IPO, they still only got to around 10% of penetrating the US. By 1997—13 years later—it grew to 37%. After a couple of years of XP being in market 2003, it had grown to 62%. I think the craziest stat is actually that last one, 2003 feels like a modern moment in history, but PCs were still only in 62% of US homes. Wow. That’s crazy.…

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