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For Microsoft’s productivity applications, the break came when the world transitioned from text-based DOS applications to graphical user interfaces, in the mid-1980s. But as the industry shifted from text to graphical interfaces, it created an opening, as every application needed to be rewritten to support the new paradigm of dropdown menus, icons, toolbars, and the mouse. While Microsoft redesigned and rethought their applications, their competitors were too stuck in the old world, and so Word and Excel leapfrogged their competitors. Then in an ensuing stroke of product marketing genius, it was combined into the Microsoft Office suite, which promptly became a colossus. Much effort was put toward making each application within the suite work with each other. For example, an Excel chart would be embedded within a Microsoft Word document—this was called Object Linking and Embedding (OLE)—which made the combination of the products more powerful. In other words, the product really matters, and bundling can provide a huge distribution advantage, but it can only go so far. It’s an echo of what we now see in the internet age, where Twitter might drive users to its now-defunct livestreaming platform Periscope, or Google might push everyone to use Google Meet. It can work, but only when the product is great. This is part of why the concept of bundling as been around forever—the McDonald’s Happy Meal was launched in the 1970s, and cable companies have been bundling TV channels since their start. But at the heart of these bundling stories are important, iconic products that reinvent the market.
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