In the late 1990's and early 2000's Microsoft was both respected and feared, a company that could end competition in new markets simply by signaling its intention to enter those markets. Today, Microsoft is neither respected nor feared, and the company's entry into new markets is generally met with indifference if not outright derision. While there are a lot of reasons for this change, today I'd like to focus on what got lost in the transition to today's kinder and gentler Microsoft. And this missing piece is, I think, at the core of Microsoft's troubles.

Today in 2013, it's hard to even remember how dominant Microsoft was, how it held court over the rest of the industry. It's unimaginable, really. But the best way to understand that old vibe, even better than laboriously re-reading the many industry books that were written about the software giant between 1995 and 2002 or so, is to simply go and watch the movie Antitrust. It's a bad movie in many ways. But it is quite instructive.

Released in 2001 at the height of Microsoft's power, Antitrust tells the story of a very thinly-veiled alternate reality version of Microsoft, run by a tech messiah Bill Gates figure (Tim Robbins) and his right hand man, who is clearly modeled after Steve Ballmer. (He's even the right kind of bald. It's pretty obvious.) Like Microsoft, the firm in Antitrust ("NURV") rules the tech world with an iron fist, and its flagship product, Synapse (Windows) is behind schedule—oh, the drama of software creation—and the firm steals from the open source world (naturally) to get back on track. But in this fictional depiction of Microsoft, the firm also kills anyone who gets in its way, providing a more dramatic, thrilling and violent version of real life.

So what's my point?

Antitrust could only have happened because of the way in which Microsoft was perceived at the time of the movie's inception. In the very late 1990's and early 2000's, Microsoft was successful simply because it was. It had finally started releasing some truly excellent products—Windows 95, most notably, NT, and of course Office—but it was also using those successes to force itself into new markets in which it could have never otherwise competed. This is a more nebulous version of the "leveraging" issue that was at the heart of Microsoft's US antitrust travails, where Microsoft's leveraging of Windows, in a more specific example, allowed it to cram Internet Explorer down users' throats and dispense with the Netscape threat despite the inferiority of IE.

Antitrust is a movie, of course, and it has elements of Star Wars and other films, where a young protagonist in this case overthrows the evil Empire (Gates as a villain, or Darth Vader) with the help of the rebel alliance of open source: The source code to Synapse is released to the world and given away for free as the movie ends. Those aspects of the movie are not interesting to me, per se. But the situation at Microsoft which led to the creation of this movie is.

Put simply, Microsoft was in a position where it could do no wrong. It could enter new markets at all, and in doing so scare off any potential competitors, including those who had initially defined those markets. Profits from Windows and related projects provided a financial foundation no other firm could match, and even though Microsoft's solutions were in many cases inferior to that of the competition, it didn't matter.

I don't want to return to a world in which Microsoft can jam inferior products down users' throats. Indeed, this situation already exists today, but in Microsoft's place, we now have Apple and, to a lesser extent, Google as well. Apple can now just foist any product in the market and have it be successful regardless of merit. This is frustrating for those of us who actually care about technology, just as Microsoft's successes in the 1990's and 2000's were frustrating to those who now cheer on Apple.

And I want to be very clear here: This situation does not mean that everything Apple does is "bad" (or inferior), but it does mean that even the company's me-too products—like the iPhone 5C, a device that steals the Nokia Lumia look and feel and marries it to year-old iPhone internals—are celebrated and sell far beyond their natural attractiveness. Witness the expectations around a supposed Apple iWatch, which the firm has never confirmed or even mentioned: When Samsung announced its own watch initiative a few months back, every tech story about this development framed it as a response to what Apple was doing. Allegedly.

This is how Microsoft used to operate. Today, Apple does it: Be a big company but operate like it’s a much smaller company. A startup, really.

Indeed, the Apple of the 2000s to today is not the same company as the Apple of the previous two decades. They are in effect two completely different companies, the more recent one being a feisty startup. Microsoft, too, is not the same company it was before, but it has switched roles with Apple: Where Apple faced death in the late 1990's and became fast and decisive, Microsoft had already reached the pinnacle. It got soft, weak and slow.

Again, there are many reasons for Microsoft's change. We've discussed all that before. Again, I'm more interested in what was lost.

I think of it as audacity.

Audacity is what happens when then-Apple CEO Steve Jobs gets up on stage in 2007 and boldly announces to the world that Apple is about to change the world again. And then does it, in releasing the iPhone. Which changes everything.

Microsoft is not an audacious company. It used to be. And you can see that most clearly in the PDC 2003 introduction of the ill-fated Longhorn, which I mark as the most important milestone—and not the antitrust trial before it, as many might assume—in Microsoft's transition from leader to ... something else.

The people who carried the audacious gene at Microsoft are gone. An entire generation of Microsofties, now middle-aged, have sought to revive that old spirit elsewhere, and not at Microsoft, because the firm had grown too big, too slow, and too complex. There are too many to list here, but I'll note a few off the top of my head: NT architect Mark Lucovsky, who Dave Cutler once described as the only human being who could keep all of NT in his head at once, left to work at Google. Paul Maritz, also a key figure in the NT/Windows Server days, now runs VMWare. Ray Ozzie, who brought Microsoft the sync technology—not to mention the devices and services vision—on which Microsoft's entire client/cloud play now rests, left the company because no one would listen.

Today, the best of Microsoft is at competing firms, including Seattle-area companies like Amazon that simply move more quickly than does Microsoft. They left to find something that Microsoft lost. That thing that it lost was audacity.

By the way, for all the problems one can and should associate with Steven Sinofsky, I will give him this: His plan to reimagine Windows, still Microsoft's core project, as a new platform for mobile devices and cloud services is indeed bold and audacious. We can argue with the specifics of the strategy, the weird secrecy and the ham-handed way in which that regime communicated with the outside world and alienated its biggest supporters. But the sheer chutzpah of that single-minded determination is indeed in keeping with the Microsoft of old. It's a damn-the-complainers, let's-forge-ahead kind of attitude that is not interested in committees or feedback at all. It's what Steve Jobs would have done, if not exactly.

Don't misunderstand me: I don't think Sinofsky is right for Microsoft. He also brought a very divisive quality to Windows and triggered the further exodus of the talented executives and lower-level employees who are not quite needed at the firm. But the firm needs people who can be audacious, who can push through a vision for the future, who can make Microsoft lead again.

And here's the kicker: While acting like a scrappy startup was not, in fact, legal while wielding monopoly power, Microsoft no longer owns an OS platform monopoly. Indeed, in the new market for personal computing—which is smart phones plus  tablets plus PCs—Microsoft now holds the minority portion of the big three platforms: Google Android, Apple iOS and Windows. This means that the firm is no longer bound by the old rules. This means that its one-time inability not to act aggressively is no longer a weakness but a strength.

It's time for some audacity.