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Friday, October 22, 2004These Days, Microsoft Isn't So Scary Via BweekFew analysts would have predicted that Microsoft might share the key computer code that powers its dominant Office productivity software with dozens of foreign governments and international agencies.A host of alternatives from StarOffice, OpenOffice, and other pretenders can do much of what Microsoft Office now does, and at a fraction of the price. Despite, Microsoft office's superiority ,enjoying a near monopoly on the desktop market for word processing, spread sheets, and other basic office software, the move to defend Office is one more sign that Microsoft is no longer an unstoppable force .Computing power is shifting away from the desktop, where Microsoft still dominates. Business customers more and more treat software as a commodity and a service. The inability of Microsoft's own massive research efforts to divine the next big thing in IT also has left Redmond in no better position to capture the future than small startups or smaller competitors.As innovations in desktop and laptop PCs lag while innovations in smaller, yet increasingly powerful, handheld devices continues to flourish. While Microsoft remains a front-runner to provide software for those devices, it has failed to lock up the dominant market share in any category. Equally important in Redmond's waning influence has been the declining profitability and revenue growth of the software sector as a whole. That's come courtesy of the creeping commoditization of a field where more and more companies are all too happy to give away their product in exchange for service deals down the road, and where the products themselves have become more interchangeable. Java and new emerging standards for mail communications are denting Microsoft's influence. Merrill's Maynard says, "Microsoft still has the critical mass and the franchise of Windows and Office, but there are fundamental changes going on in how we computer and how businesses get value out of IT.". He further points out that many of these trends, including the rise of on-demand computing models, and software as a service, putting more computing power into the networks, are somewhat antithetical to the Microsoft model. Tim O'Reily in the open source paradign shift writes, "The premise is that free and open source developers are in much the same position today that IBM was in 1981 when it changed the rules of the computer industry, but failed to understand the consequences of the change, allowing others to reap the benefits. Most existing proprietary software vendors are no better off, playing by the old rules while the new rules are reshaping the industry around them". | |
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