Microsoft's CES exodus: Non-event or major moment?

Fourteen years ago, another company's much-publicized exit from a different Vegas tech show had a lasting impact.

Now that Microsoft has declared that 2012 will be the last year that it has a booth at the Consumer Electronics Show and gives the conference's first keynote address, there are two possible scenarios that could play out.

Steve Ballmer introduces the Slate PC at CES 2010.
Steve Ballmer introduces the Slate PC at CES 2010. Microsoft

Here's the boring one: Nothing much happens. In 2013, some other large tech company happily snaps up the prime show-floor acreage that Microsoft has freed up. Someone other than Steve Ballmer does a big keynote the night before the show opens. CES, in other words, just keeps on being CES.

Here's the more eye-opening possibility: Microsoft starts a trend. The fact that it's decided that it can live without a CES presence gives other big tech companies permission to consider the same move. Some of them pull out of the show. Others follow. We're left with a CES that's far tinier than today's Vegas blockbuster.

Maybe, in a few years, we'd be left with no CES at all.

At first blush, talking about CES going away anytime soon sounds a little like predicting that Disneyland will close due to poor attendance, or that they'll decide to stop playing the Super Bowl. In 2011, some 2,700 companies took up 1.6 million square feet of CES exhibit space, and almost 150,000 attendees made the trek to Vegas. The thing is awe-inspiringly huge and successful.

And yet, there's precedent for the departure of a tech company mortally wounding a conference.

No I'm not talking about Apple's 2008 decision to stop participating in Macworld Expo. Even if Apple and Microsoft lost interest in big conferences for similar reasons, the situations are different: Apple was the subject of Macworld Expo, and Steve Jobs' keynotes there were front-page news. Microsoft is merely a big player at CES, not the company that defines the show.

(Besides, Macworld seems to have survived Apple's departure. albeit in much smaller form: Redubbed Macworld/iWorld, it's happening next month.)

The precedent I'm thinking about is IBM's 1997 decision to stop exhibiting at Comdex--the now-defunct Vegas tech show that was in many ways CES' November doppelganger--as of 1998. The news was startling at the time, since Comdex was so huge. I didn't know many people who liked exhibiting at the show or attending it--it cost a bundle to be at, which is why it was obscenely profitable for so long--but it felt mandatory.

When IBM opted out of Comdex and didn't live to regret the decision, other companies took notice and made similar moves. What did that do to the show?

Well, 1997's conference, the last one with an IBM presence, was Comdex's high point: Almost 2,500 exhibitors took up 1.35 million square feet of exhibit space, and 212,000 people attended the event. 1998's edition, the first one Big Blue chose to skip, was a tad smaller: 1,500 exhibitors filled 1.2 million square feet of space, and 200,0000 people attended.

From then on Comdex got smaller, and smaller, and smaller. By 2003, 550 exhibitors occupied 150,000 square feet of space, and just over 45,000 people showed up. I saw the whole show in about 90 minutes--it took up one corner of the cavernous Las Vegas Convention Center. And I think all of us who attended year instinctively knew there would be no Comdex 2004.

Now, IBM's defection didn't kill off Comdex all by itself. The show's decline surely stemmed in part from the rise of the Internet as an alternate means of marketing technology products. The 9/11 attacks didn't help, either: Lots of people skipped that year's event, held just two months later, and didn't come back in 2002 and 2003. Then there's the fact that Comdex's ownership changed repeatedly over just a few years. (Its final owner managed to go bankrupt before the show folded, a fate apparently brought on at least in part by mismanagement and overspending.) But by proving that Comdex was optional, IBM helped to render the show obsolete.

We don't yet know what sort of impact Microsoft's departure will have on CES. (Me, I hope it's minimal: I like attending the conference and seeing all that cool stuff all in one place.) Right now, the folks at other major tech companies who spend vast sums to exhibit at the show are surely considering Microsoft's bombshell and weighing their options. Their decisions over the next few years will determine whether we look back at the conclusion of the Microsoft era as a blip, or as the beginning of the end.

 

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