The End Of the Blockbuster?

This summer marks the anniversary of the debut of one of the biggest blockbusters of all time. No, I'm not talking about the 30th anniversary of the movie Jaws, which defined the summer phenomenon, but rather Windows 95, which shipped 10 years ago this month.

In all, Microsoft sold tens of millions of copies of Windows 95. And though it was hardly the first user interface with a graphical navigation system--Apple's Macintosh operating system was more than a decade old by the time Microsoft caught up in 1995--the software did bring a unified GUI to the masses. And for cheap. The software could be had for as little as $100, though it did require a bit more memory and/or a new processor to run the software. What it lacked in flash, it made up for in substance. It boasted a 32-bit TCP/IP stack, plug-and-play connectivity and other features that hardware makers and software developers alike rallied around.

By 1998, however, things changed. The Internet--a technology--suddenly became more important than Windows 95--a product. It largely remains that way to this day. Open-source software, for example, has had a greater impact on computing than any one product. And, it is the same for managed services, VoIP and business intelligence. That begs the question: Is the blockbuster product from any one company dead? Not according to Microsoft CEO Steve Ballmer, who, in a recent interview with VARBusiness, proclaimed the era of the blockbuster product wasn't over. (Perhaps he hasn't had time to see this summer's movie Fantastic Four.) "Our Office releases still tend to be blockbusters," he told VARBusiness.

Ballmer went on to muse that the Apple iPod was a blockbuster, or, as he put it, "was in one generation, anyway." But he conceded that no product before or since has had the kind of impact that Windows 95 had. "From a marketing, sales and technology perspective, the timing was almost perfect," he said.

Unfortunately for technology, no other single product comes close today. Even the ever-popular Blackberry hasn't done to communications what Windows 95 did for desktop PCs. To date, 3 million Blackberrys have been sold since their debut in 1998, as compared to Windows 95, which sold 1 million copies in the first week of its debut.

To be a true blockbuster in IT, a product not only has to sell a lot and command the attention of hundreds--if not thousands--of third-party companies, etc., it also must change an industry. That means either changing the way money changes hands, the manner in which leading players go about their businesses, and/or the consuming habits of buyers of such products. By that measure, only the Apple iPod comes close to being a true blockbuster. Coupled with Apple's iTunes music service, the iPod has changed the way millions of customers listen to music, choose music and buy music. And for that, Apple Computer, a nonentity in the music business just five years ago, has arguably done as much to change the music industry as Apple Corps Record did 40 years ago.

So, what about in IT? There's one company I think stands to have that kind of impact next, though it's not a major household name like Hewlett-Packard or Microsoft. It's not a runaway financial success yet (fiscal 2005 sales totaled only $176 million) or even a setter of standards that thousands of third parties have rallied around. No, it's a simple supplier of online financial-oriented business applications that serves only a few thousand customers and is adding just a few hundred customers more per year. Nonetheless, Salesforce.com is going to change the way businesses buy their software. This small company, with a market cap of just slightly more than $2 billion, is a blockbuster in the making. It's not quite there yet, but soon could very well be the next big thing.

What about Google, you ask? Interestingly, Ballmer, in that same VARBusiness interview, discussed Google and its blockbuster status. Despite its unbelievable market cap--Google is worth more than $80 billion--Ballmer says it still does only one thing well--search--and the search experience is getting worse of late, not better. While an admirable company, Google isn't yet the phenomenon people make it out to be. Sure, "Googling" people, businesses and other things has become a cultural phenomenon. But Google has yet to change the way things are done in our field.

Truth be told, it's a long way from Windows 95.

T.C. Doyle is senior executive editor at VARBusiness. You can reach him at [email protected].