Microsoft Facing “The Perfect Storm”

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Sometimes it all comes together just right; sometimes it comes together all wrong.

Undeniably MS is THE  top dog in the OS PC market, and arguably the top dog in office apps. Let’s hand it to Bill Gates for being a shrewd and ruthless competitor who made good, helped in part be being in the right place at the right time with the right products. Some would call it luck (which I don’t believe).

Whatever alignment of stars and planets, MS dominated. The way things are aligning the last few years, could be MS may not be so lucky.

There have been studies about why successful companies fail, and basically it amounts to seeing the world through your own lens – a filter that interprets trends more to the past than the future. Trends may run against you, but according to your take on things, they’re not – you bend reality to fit your successful business model.

Then as some point it goes off-track and the scrambling starts.

Could be we’re seeing the first signs of the wheels coming off MS’s wagon.

First came Vista. MS is the proverbial super tanker – telegraph hard right rudder and you begin to see the first effects of a change in course 10 miles off. Vista was conceived under a scenario that expected more of everything – computing power, RAM, hard drive size etc. Consumers would have a PC that 20 years ago could have run the Pentagon.

In addition, MS ramped up its size such that an army of folks worked on Vista. Many of you are probably familiar with working in large organizations, and inevitably projects take on a life of their own, as power centers develop and fiefdoms become more the norm. All this led to what it widely regarded as MS’s OS debacle. The rescue effort (Windows 7) cleaned up the mess to some degree, but make no mistake – W7 is Son-of-Vista and shares the same bloat that mad it unusable in low-powered notebooks, aka netbooks.

The netbooks, for a variety of reasons, take off like a shot and MS scrambles to hold on to its dominant OS market. How? By keeping good old XP alive! Much beloved XP is still alive and well with consumers actually PAYING to downgrade from Vista – what a vote of confidence!

Netbooks are projected to be the PC growth segment this year, with forecasts showing an almost 100% increase in unit sales this year compared to 2008. These under-powered notebooks are not powerful enough to run Vista and Windows 7, for all its hype, will still take more resources to run on a netbook than XP. According to  this article, the core processes in Vista are about 50% higher than XP Pro. You can strip out as much as possible, but the fact remains that the Vista/W7 overhead is higher and performance suffers as CPU power decreases.

Third “cloud computing” starts to look less like vaporware and more like a reality. Google’s latest salvo breathes more life into web-centric computing than perhaps any single development to date. MS validates the cloud with its announcement to offer its popular office productivity products FREE to consumers – free! Seems to me this is a pretty radical move for a pay-software company and if anything makes Google’s web strategy top dog.

Couple this with the exploding growth of smartphones and smartphone apps and you start to get a picture of mobile computing where it has to be OS-light.

The de-centralization of the computing experience away from the desktop is not MS’s business model. The de-powering of the PC is anathema to the more-is-better eye-candy-rich OS development which typifies Vista/W7 is not a welcome trend. Moving apps to the web mitigates the need for high-horsepower PCs.

In short, there are trends which require MS to shift gears and think about a new business model. I would not count MS out, but new thinking sometimes does not come all that easily. Case in point – the recording and movie industries. However with Bill Gates taking a more passive role, maybe the MS change agents are in place already. Could be the new captain took the helm at the right time.


About Joe Citarella 242 Articles
Joe Citarella was one of the founders of in 1998. He contributed as a site administrator and writer for over 10 years before retiring. Joe played an integral part in building and sustaining the community.


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