Despite coming up second in several major products and businesses through the years, Microsoft (MSFT -0.32%) has continued to remain successful. In this video clip from "The Rank" on Motley Fool Live, recorded on July 13, Fool.com contributor John Bromels discusses how second place has still been quite lucrative for the tech giant.
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John Bromels: Microsoft was getting dinged in the late oughts and early 20-teens about never being the No. 1, never being the original because of things like, is it No. 1 in search? No, that's Google [part of Alphabet (GOOGL -0.09%) (GOOG -0.02%)]. But Microsoft still came out with Bing, its own search engine. Microsoft comes out with its own Surface tablet to essentially compete with the iPad, which is, of course, the dominant player in that category. Microsoft was doing Microsoft Azure. It's not AWS, it's second.
The joke was that, well, Microsoft is coming out with all this stuff, but it's second in all of these things. It's never first. It's not the top in anything except for basically Office software. What gives? Of course, at the time, things weren't software as a service. It wasn't a subscription model. It was like you buy it for 300 bucks, and then you use it for years and years and years. So it wasn't necessarily the best source of recurring revenue.
But what I think people fail to realize is, hey, if you can be second in every single major area, that's still a lot of money you are going to make and a lot of stuff you can do. It doesn't matter that the Sony (SONY -0.46%) PlayStation beats the Xbox in features. A lot of people still own an Xbox, and a lot of people are still spending money with Microsoft because of it.
That I think is why I like Microsoft and think that it has room to run here is because I think it's going to capitalize on its current ecosystem, even if it's an ecosystem of second-place players. But it can still make a lot of money doing that and watch other companies develop new things and think, "Oh, hey, we can do that. Here's our second place offering," and still make money.