Microsoft: Nothing ventured ...

Bill Gates, founder of Microsoft, once declared that to “win big you sometimes have to take big risks”. News that Microsoft is preparing to reverse elements of its new Windows 8 operating system may be an embarrassing setback to the group’s hopes of reinventing its ubiquitous software for the tablet age. Yet Steve Ballmer, Mr Gates’ chosen successor, was right to follow his mentor’s advice by taking the risk in the first place.

The ambition behind Windows 8 was laudable. Microsoft made personal computers accessible to millions with its user-friendly, simple-to-navigate Windows system. But few want to be tied to PCs or even the clamshell laptop any more. A new form of mobile computing is taking over where touchscreen tablets and smartphones rule. Windows 8, which went on sale last year, was meant to take Microsoft into that universe by replacing the simple icon desktop with tiles and – most egregiously, according to Windows fans – abolishing the Start button. To many, this is an indispensable navigation tool.

The annals are full of companies that have disappeared because they refused to take risks. Kodak is just one example of a group that failed to exploit its own innovation – the digital camera – for fear of upsetting its traditional market. But as the Financial Times’ Tim Harford has pointed out in his book, Adapt , disruptive innovations are disruptive precisely because the new technology does not appeal to traditional customers. Instead, it appeals to the customers of the future.

Microsoft has no option but to embrace change. Although it has an installed base of 1bn users, the iOS system developed by Apple and Google’s Android are catching up fast. PC sales are plunging as users migrate to mobile devices. No doubt more mistakes will be made in the race to secure the future. The key will be to recognise and rectify these before they damage the brand. The group at least responded more quickly to complaints on Windows 8 than it did with its flawed Vista system.

In the 13 years he has led the company, Mr Ballmer’s appetite for risk-taking has helped revive a climate of creativity that will be crucial for Microsoft’s future. No doubt the company’s famous self-confidence has been dented by the most recent experience. But he should not let this upset – and the cacophony of resulting criticism – deter him from exploring further revolution, or from braving new mistakes. The only innovations worth pursuing are those tried and tested by failure.