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So the company is in crisis and that crisis comes down to every one of those five stages of dealing with death as defined originally in 1969 by Elisabeth Kubler-Ross. These stages are denial, anger, bargaining, depression, and finally, acceptance. Microsoft has been in denial for most of the five years and $5 billion of Longhorn/Vista. They have been angry this entire time, too, at an establishment that just doesn't seem to understand the fragility of their empire and how breaking a few laws and destroying a few competitors is simply the price of survival at the top -- the price of American greatness. Microsoft has been bargaining for the past two-three years as it settles its debts to society, pretends to reform, and tries to figure a way out of its current mess. Depression has really hit Redmond in the last year and will continue to grow until well into the eventual period of acceptance, which has not yet begun.

But what would acceptance even mean for Microsoft? Well, it certainly isn't the acceptance of corporate death. It's the acceptance of the death of its business theory, which is unsustainable since it requires complete triumph, which is nearly impossible. That Microsoft did it once before was luck and a willingness to bargain with the Devil. But now luck is gone, leaving only the Devil, and that's not enough. Microsoft's entire theory of business must die and the essence of its current crisis is that the company hasn't yet realized or accepted that fact, and so it isn't yet in a position where it can even envision a successor theory.

This new business theory will come, but not until Microsoft has suffered more. As they say in Alcoholics Anonymous, first you must hit bottom.

- Robert X. Cringely

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