Microsoft : Tough Challenges Ahead

We recently covered Robert young's view that the internet has a deflationary effect on every industry it touches, whether it be financial services, travel, printing & publishing, media & entertainment, or telephony. Google’s strategic plan it seems is to obviously leverage deflation to its own advantage. He adds, "Google’s recent moves show that they are using “free” to gradually devalue of Microsoft’s assets, and thus its market cap. This is part of a mutation of the OS into a whole new animal. Google with their desire to build a comprehensive “platform will make Microsoft’s entire strategic plan and mission, which revolves around the continued proliferation and dominance of the desktop PC operating system, obsolete by making Google itself the (virtual)operating system". While writing on the topic Future Of Microsoft, I wrote that Microsoft is lucky that currently there is no one alternative that can dislodge it in key arena's - starting particularly in the desktop segment. This blog also highlighted Bandwidth's likely impact on Microsoft. Knowledge @wharton looks at issues that make Microsoft scared of Google. The article points out that Google’s search engine is so ubiquitous that it is now a part of the lexicon of hard-core knowledge workers and casual web users alike. Google also has become a gateway to the Internet and taken steps to develop various desktop applications. All these raise the specter that Microsoft may witness the erosion of its control over the platform for the next generation of software application development. Microsoft recently announced a major reorganizationdesigned to streamline the company's huge bureaucracy and make the firm more nimble. Microsoft has also suffered the embarrassment of watching key employees defect to Google. Microsoft's success has been due in large part to its realization two decades ago that control of the operating system on personal computers would give it a great amount of leverage over PCs. Most companies in the 1980s saw the operating system as a pure commodity product, but Microsoft understood that it held the keys to the kingdom. This dominance of the Windows operating system means that if you're a developer of a major software application, you need to deliver a product for Windows. This means software developers must use the programming capabilities provided by Windows - its API." As dreamt by Marc Andreessen, the core platform could be moved to a higher level, & technology gurus could establish a web-based platform that runs in the browser and is written in the language of the browser rather than the language of the operating system.
The API of Google Maps lets developers embed Google Maps in their own web pages using JavaScript.Google is not the only company offering products and services that run on a web platform. Most of these applications are written in the web browser. Meaning these can work equally well on Windows, Mac or Linux. The operating system may eventually become the commodity that people in the 1980s thought it would be, and that's bad news for Microsoft.Kevin Werbach says as the Internet becomes more of an essential part of the computing experience and the network becomes a central link in the user's experience, that poses a challenge to Windows and software programs like Office, which has higher profit margins than Windows itself. Google for most part is OS agnostic and takes the control away from Microsoft. It's not clear how much Microsoft actually believes that the web is the platform of the future. The internet tidal wave is certainly going to shake up Microsoft in more than can be visualized.