It isn’t fending off an emerging challenge to its monopoly. And it can’t extend its dominance into new sectors. Is this the AT&T syndrome?it’s been a tough year for the software giant, with headaches ranging from allegations of patent infringements to billion-dollar lawsuits to European and Japanese antitrust actions. Following their brush with federal antitrust regulators, Bill Gates and Steve Ballmer don’t appear to have regained the kind of momentum—and respect—the company once enjoyed.On the competitive front, the company’s server business is losing market share to Linux-based servers, and its core Windows operating system is being challenged by Linux, particularly overseas. Microsoft also is losing money with Xbox, its stab at Sony’s PlayStation 2 game console; and its Internet MSN venture is losing subscribers, down 1 million between October 2002 and October 2003. Goldman Sachs managing director Rick Sherlund says Microsoft’s dominance at the desktop is slipping, albeit slightly. “Linux is taking opportunities away from Microsoft on the server side and the next target is the desktop,” Sherlund says. “(Linux backers) are trying to get their act together now and over the next couple years will do just that. The small percentage of the marketplace that doesn’t like Microsoft will want to take a chance to do something different, and that will translate into a couple of market share percentage point losses for Microsoft.” A very insightful article.
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