Oh Microsoft!!

Microsoft stock gets battered post analyst reports says market reports. The 11% Friday drop on multiple downgrades after it reported earnings and guidance that that were below Wall Street forecasts is indeed a significant event that can’t be ignored. The company plans to up fiscal 2007 spending by about $2 billion to better compete with the likes of Google. I do not attach unduee importance to financial analysts report - I think in a majority of cases, they can do qualitatively better than what they do in terms of research and forecasts - but I recognise they play an important role and as such can't be ignored. As I see it, Microsoft, while trying to consolidate its strength in the windows centric desktop segment and work in a concerted way to gain marketshare in search and mobile spaces(It is losing in this space –for every advance that it reports, competitors seem to be moving far ahead), it has a huge opportunity in the enterprise space and it is clearly losing out by not investing in such areas – post the news of dropped out acquisition moves of SAP and the announcement of Project Green, besides some noise about Sharepoint & Dynamics, Microsoft has not done much. Microsoft can today become a significant force in the enterprise software -mid market segment and should be looking at offering on demand solutions centered around Great Plain, Navision, expand on Microsoft Dynamics series. Clearly its a testing time for Microsoft’s leadership. The world is truly changing - we do not need to look at any better example to demonstrate the case that history, cash & reserves are no more important compared to speed, innovation and dynamism.