Pre-Satya Microsoft had an odd combination of paranoia and blindness regarding the rise of browser applications.

Blindness: I was in a Microsoft VP’s office when he said he was downsizing the IE effort because “the browser is done”, enterprise users were satisfied, and consumers don’t generate significant Windows revenue. I think that was IE6.

Paranoia: I was present for many early-00s decisions where a Microsoft exec weakened the ability to write rich applications in the browser to avoid devaluing Win32. So they were at least scared of the idea of a “browser OS” in the abstract.

Although...at the same time, Office was pushing for browser application capabilities, which is where we got XHR, which is a big reason browser applications became practical. Sometimes you’d never guess Office and Windows were the same company.