How Microsoft Phases Out Products

Although Microsoft often cancels products in good times, declining revenues and cost containment may accelerate this process, increasing the risk that customers and partners could bet on a product that’s later eliminated. Characteristics that make a product vulnerable include overlap with better-selling or more strategic products, reduced market opportunities, failure to thrive, and entrenched competitors that pose no threat to other core Microsoft businesses. The company uses several methods to cancel or scale back development, some of which allow customers and partners to preserve their investments better than others.

A Continuous Process

Although their numbers appear to have swelled recently, product cancellations are nothing new at Microsoft. The company frequently discontinues outdated or underperforming products and reallocates resources in response to strategic shifts or market changes. In particular, Microsoft often allows multiple product teams to work on similar technologies, and then picks a “winner” and scales back development on the others.