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It’s an odd question, given that Microsoft has grown by one Google for each of the last four years and is reportedly sitting on $40bn in cash. This post is partly inspired growing use of Linux at home and by:

How Will Microsoft Respond to Linux Success?

I was sorry to read here of the cancellation of Microsoft’s Claimspace–an interesting software application that I mentioned a few weeks ago, and since when I’ve discovered something informed wombats already knew, how to rootle. (But, I like the term “hegemonic responsibilities”)

Microsoft hasn’t been slow to try to set global standards in other areas. A global standard document format e.g. While the desirability of Microsoft setting such a standard may be debatable, we can see the consequences of having even one too many standards in the tiresome HD DVD v Blu Ray battle. Sometimes a hegemon just makes life a lot simpler and easier and helps grow the market. It’s been a reasonable assumption for many years that Microsoft would continue its past dominance.

Now, it seems, there are signs that Microsoft’s days as a hegemon could be numbered. Take just a few trends

  • Digital rights management (DRM). Microsoft Vista is designed from the ground up to be a DRM-friendly operating system. It’s been called the longest suicide note in history. The market is moving away from DRM now, starting with Apple’s abandonment of it for music. It won’t go away entirely, nor will Microsoft. There will always be a market for ways of restricting access to content, but Microsoft control of a universal digital tollgate for DRM-protected content seems unlikely.
  • Software quality. Windows Vista just isn’t good enough! It’s better than XP but, at best, it’s still beta quality software. I discount ideological anti-Microsoft rhetoric, because market hegemons have a utility, but never my own experiences as a consumer. They fit quite well with this: Top 10 reasons to dump Windows (part 2, and 3). Vista is a disappointment and a fraction of what it was supposed to be. Free alternatives are improving in leaps and bounds. And the latest version of Office, Outlook especially, is easily the most crash prone version I have ever used, and things have not improved in 7 months, that’s a Linux generation. Also improving is a growing array of web applications (Zoho’s from India, e.g.). The quality, and now the visual polish and ease of use of what’s available for free is rising dramatically. Even Debian, the beard and sandals flavour of Linux, now looks slick — better even than Ubuntu.
  • Falling hardware costs. As computers get cheaper Microsoft’s share of the total cost keeps going up. They need to switch to a fixed percentage, somehow. They’re defending mind and market share with cheaper versions in developing countries. Free is hard to compete with, and harder when the free product is more reliable, available in several versions, is cutomisable etc. More and more handheld devices are running a version of Linux.
  • Software as a service. Lower hardware costs and increasingly pervasive and affordable data communications means people can, increasingly, access software online when they need it. Google is delivering here and Microsoft will have to do so more and more, and for “free” too. Thus the idea of a decisive battle between Windows and Linux on the desktop is somewhat exaggerated. It’s only one platform and accounts for only part of Microsoft’s revenues. However, Linux points to the future in many ways: a plethora of different interfaces but with underlying commonality.

Drawing together and extrapolating some trends occurring in different places, I would pay anyone, including Microsoft, for the following

  • A virtual machine hosting platform that could be reloaded and updated from the Internet, as well as run remotely, with my chosen operating system, applications and data (applications should be platform independent)
  • A single instance repository for digital objects (software applications and data), with optional encryption, for synchronization, sharing and backup, with versioning

Today Windows is a headache when it comes to installing and subscribing to software, managing media, serial numbers, updates, doing backups etc. Linux is much simpler. Select what you want and click to install from one or more repositories. The selection is customisable and with Ubuntu you can add your own packages to public archives, sharing them with others. Online backup is still in its early days but it’s a growing business.

Getting the software for free is not so important when it’s the management services that really add value. It won’t be long before a PC is free if you subscribe to these, much as phones are now. Could Microsoft do something like this?

Microsoft’s release today of a product called Silverlight, an alternative to Adobe’s Flash but which runs on Windows, Mac OS X and, in future, Linux, suggests that it will not try to defend a monolithic position but will try to offer Microsoft software services via the web. Embrace and extend indeed. This is also an attack on YouTube–Microsoft will host content for free! Let’s see what Google does with Jotspot. That will be interesting. And Microsoft’s new Windows Home Server software, that could be another huge business, or another attractive target for Linux, or both.

3 Responses to “What Can Microsoft Do To Survive?”

  1. Roads says:

    It must be simple to make money as Microsoft just by continuing to exist and sell pre-packaged software on all those new machines.

    I spent an interesting couple of months recently in the company of some alternative ‘Open Office’ software. An open source alternative to the Office suite of applications. Saved a couple of hundred squid.

    But did I, really ? It could do nearly all the important things. But the problem was, in useability and refinement terms it was just like going back to 1995, with Word and Excel 2.0. Never thought I’d welcome the Blue Monster back so wholeheartedly, but I did.

  2. Eats Wombats says:

    I have heard and read that Excel is the REAL stumbling block to migration for a lot of businesses, but I recall Lotus 1-2-3 (where did that go?!) looking pretty impregnable once. Open Office is indeed a bit like going back in time but I reckon I could write as good a novel in WordStar (or preferably XyWrite, never Word Perfect) as in Word. It’s still burnt into the nerve endings–from the days before function keys and WYSIWYG. Nothing lasts forever!

  3. [...] really think so, and there are several others out there who don’t think so, either. Over at Wombat Diet in a post titled “What Can Microsoft Do To Survive?”, some of the same points I touched [...]

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