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Microsoft's Nightmare Scenario
unityxxx wrote to mention a News.com article about Microsoft's nightmare scenario - the Web as the next platform. From the article: "The nightmare is inching closer to reality and Microsoft execs are apparently paying attention to the decade-old alert. As part of a management shuffle, Microsoft said Tuesday it would make hosted services a more strategic part of the company and fold its MSN Web portal business into its platform product development group, where Windows is developed. Another memo, called 'Google--The Winner Takes All (And Not Just Search),' is also making the rounds. This internal memo, written in 2005, argues that Google threatens Microsoft and the company's crown jewel, Windows."
Digging in on the PC platform was a winning strategy, and still is at this point, but the rules will be changing sooner rather than later. When they do, will Microsoft be able to overcome its own inertia and innovate fast enough to stay in the game? Probably not, but the good news for Microsoft is that it doesn't have to...it just has to acquire a company that can. As it's been said ad nauseum here by myself and others, Microsoft isn't about innovation...haven't been for a while...in fact, whether they ever were is a subject for debate.
As for when this paridigm shift will occur, it won't be able to until broadband access is as cheap, plentiful, and above all, dependable as electricity or running water. Givin the fact that many areas of the world are still having issues with those, I'd wager we have a while to wait before the Web-as-platform paradigm really takes off.
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~ |rip/\/\aster /\/\onkey
From the post: as part of a management shuffle, Microsoft said Tuesday it would make hosted services a more strategic part of the company
I remember a few (several?) years back, this is the very thing Microsoft was proposing as a new business model and technology approach for their products. Interestingly, it's almost as if they'd considered this but deemed it unnecessary in light of their near world dominance and there never were any developments around it. Now, once again they're running scared and this time the threat could be real. I don't doubt their tenacity and ability to respond but I do hope at some point here they stumble badly enough that by the time they get back up the playing field will have leveled (even if only somewhat).
Interestingly in this case they're going to be playing catch up with a concept they first looked at.
N... Net.... Netsca.... damn, can't quite remember the name of that outfit...
If Jesus wants me it knows where to find me.
It's only a nightmare because there are free alternatives that do exactly what their software already does (and sometimes good enough to replace it for home users). But! Microsoft would *love* to host web-based application services (i.e. Office). It would enable them even greater control over the end-users and piracy and ends a lot of media creation and distribution costs.
They can still hold their stranglehold on the OS market but they could also gain tighter and higher profits on their software.
Will Google Office/Phone/Internet/Talk/Browser/etc take the OS market from Mircosoft? Who knows. But it could happen. If it doesn't, Microsoft better make damn sure that they are building the OS to be the best it can be to keep people from switching to GoogleOS and Apps.
And yes, I am still grumpy about the forced upgrade to XP yesterday.
If brevity is the soul of wit, then how does one explain Twitter?
The BBC have an article on the same theme today.
It's interesting that the article almost takes it as read that just about everything will become a service, and accepts the arguments from a senior marketing guy at a software-as-a-service firm apparently without question. I'm not sure I'd agree with that view; some applications have a lot of potential here, but AFAICS, others just... don't. What am I missing?
If you disagree, post your argument. (-1, Overrated) isn't your personal censorship tool for views you don't like.
Easy life over there at news.com -- pull up old articles from 1996, replace "Netscape" with "Google", "Marc Andreesen" with "Larry Page" and "bring your dog to work" with "20% of employees time working on their own projects". The "nightmare scenario" line in the headline, both here and there, even comes out of a Microsoft memo from 1995.
What I'm listening to now on Pandora...
The last time it was Netscape. So they cut the legs out from under them. The good news is they can't do the same to Google. They've already set the default home page to MSN. But people still go to Google.
Developers: We can use your help.
Referring to "Another memo, called 'Google--The Winner Takes All (And Not Just Search),' is also making the rounds. This internal memo, written in 2005, argues that Google threatens Microsoft and the company's crown jewel, Windows." It was about time for Microsoft to feel threated, but is Google really doing a good thing? Google used to be the company that all techies loved, but is that still really the case?
The web is an infrastructure that lets our individual machines communicate with one another. I very much doubt the web will be a viable platform anytime soon, for bandwidth reasons if nothing else.
I think about how I use programs like photoshop and flashmx when i'm developing web sites. There's no way those huge-ass programs are going to be hosted and downloaded/run on demand. On the other hand, I need connectivity to upload my work to the web and test/publish it. The internet facilitates a good deal of things we do, but there's no way it could be a platform anytime in my lifetime.
It's like the relationship vehicles and highways have. Everyone owns their own vehicle, and they're responsible for the good running condition of that vehicle, and the highway facilitates the usefulness of that vehicle.
Sony ha
For those who insist that Microsoft has not stymied but rather advanced personal computing, here's the best evidence yet that it ain't so. Had Microsoft been a real innovator, they would have invested in Internet technologies to their benefit back in 1995 and as such we would have likely been 10 years further down the road in terms of development and capabilities. But Microsoft, because of their monopoly position, chose to try and tighten their control across the OS and application space even further in an attempt to relegate the Internet phenomenon to an also ran status. Not only have they failed in this goal, they failed despite their best efforts (both legal and illegal). In spite of Microsoft's efforts the Internet is emerging as the dominant and preferred platform with open standards, open file formats, open source software, and uncontrolled by any single company.
Let's keep it that way, shall we?
The NSA: The only part of the US government that actually listens.
Yeah that's what I want, all my applications to be server side web-based. That way I can't stop them when they "call home" and report back things like what I'm searching for on the net, the names of the files I'm opening. And I can't stop them from a hacker switching out a DLL on the server side suddenly corrupting or infecting my data. AV and firewalls become useless at that point, and the way modern apps try agressively to monitor what you do and call home, I'm not comfortable with losing the ability to control them.
I'm Rick James with mod points biatch!
They could call it something catchy, like .NET!
So no worries for Microsoft. There'll always be a place for the operating system. In fact, web services simply create more opportunities for Microsoft. The more useful a computer is, the better they do. Microsoft just has to be perceived as providing enough value beyond a dumb Net terminal that it makes it worth it to buy a computer. Given the price difference between the two, it's not that difficult a proposition.
Sometimes it's best to just let stupid people be stupid.
Microsoft is trying to handle a lot threats at once. But the biggest one is really a combination of a number of other threats: Open Standards
Microsoft can't support Open Document Format in Office because they would lose a good part of their customer base. Web apps using standards such as Javascript, HTML, CSS, etc. are also a threat (part of the reason why IE is so incompatible with some of these standards). Linux, and the resurgance of nearly POSIX-compliant environments is another threat.
In every case, this means that it is far easier to support many different operating systems with a single application. So Microsoft is in trouble.
The real nightmare is the standardization of the platforms and file formats that impact Microsoft markets. Web apps are only a small part of this.
LedgerSMB: Open source Accounting/ERP
Microsoft: Oh noes! People are actually using the internet! Google: Well.. duh... that would be why y'know.. people develop for the internet Microsoft: But internet software doesn't care about our stranglehold! Google: And? Microsoft: We'll throw chairs at you! and lawyers! Google: Now you're just being silly. Microsoft: We'll have Balmer do a "rally" at Google. Shirtless. Google: NO! ANYTHING BUT THAT! WE QUIT! WE QUIT!
Code. Writing. Writing Code. Writing in general. What? They aren't -that- differnet.
I'm very excited about the possibility of this happening. However, before it does, I think we're going to need better and easier-to-use AJAX tools. Right now cranking out advanced web apps is mainly a text-editor proposition. There aren't any AJAX RAD/IDE tools, and there really aren't any good, easy-to-use, well-integrated tools that will generate the JS, HTML, CSS code necessary to make this happen...yet. Once it does, it will make life SO much easier. Among other things, JavaStations, which were a great idea (except for the fact that they ran Java instead of JavaScript, and were about ten years ahead of their time) drastically reduce the probability of virus, trjoan horse, and spyware infections. They're less complicated, and they're cheap.
Of course there still needs to be some underlying OS, and this approach doesn't appear ready to do everything a PC can do (flash games are ok, but they're not Unreal, but as the Japs say "Games are for Consoles". It would be so much easier to not have to deal with a tech support calls with every little stupid user problem because the Windows/OSX/Linux/whatever configurations are so different from each other.
So give me an AJAX tool that does what my existing GUI IDE/RAD does now, and I'm done building non-webbased apps.
Friends help you move. Real friends help you move bodies.
Never forget: 2 + 2 = 5 for extremely large values of 2.
Let me help you - .NET?
It wasn't designed for it. The web is meant as a documents platform. Trying to use it for applications is a recipie for security problems that'll make Windows look like fort knox, not to mention all the other problems that go with misusing a system like that. There are plenty of perfectly good systems for remote applications, X is great if you're willing to accept server-side execution, if you prefer client-side then for all its faults Java at least handles it with dedication and a modicum of security. Stop trying to make the web the medium for everything, there are 65535 other ports and superior specialised protocols.
I am trolling
Microsoft talks about innovation.
Google actually innovates.
2 years and no mod points. Join reddit. Because openness is good.
However it overlooks the point that Microsoft has extreme execution problems. Consider that even in the operating system "that was fanatically focused on" Microsoft lags Linux
Microsoft's real problem is that with a stagnant company they can't motivate their employees; so all the good ones leave for places like Google. Back when MSFT stock was doubling every few months, it was quite reasonable and fun for a microsoftie to work 18 hours and see his 1 million dollar option package multiply to 2 million and on to 10 million. Now, however, Balmer yells at his developers only to have them check their underwater options from Jan 2000 and realize it's just not worth it.
Could microsoft change? Yes, by sharing some of the billions of profits they make with their employees. But will they? Nope - they're busy saving that money for their shareholders.
If you're a decent engineer, there's no reason to work for microsoft anymore. You're far better off quitting, competing with them, and letting them buy you back. That's the only way to get your fair share of the billions that microsoft's been hording over the past few years.
And that is the problem with Microsoft today.
Yeah, I guess the web could be its own platform and ultimately give Windows (and Macs and Linux and...) a run for their money. Of course, that's assuming everyone with a computer has access to the Internet. Having your computer and running it purely as a web platform will do you no good if you don't have connectivity. The world isn't THAT connected yet. And even worse...just because you're connected doesn't mean you've got a broadband connection.
I guess in a way, Microsoft doesn't have that much to worry about. Not now at least. But they'd better start planning for the future for when we do get world-wide broadband Internet access.
"He uses statistics as a drunken man uses lampposts...for support rather than illumination." - Andrew Lang
Really, I'm confused by all tis talk of Google challenging Microsoft. Until Google launches a new Office suite or perhaps even a browser, I don't see what exactly is supposed to be hurting the guys at Redmond. What web sevices, other than hotmail (which hasn't gone away) and MSN does Microsoft depend on.
As soon as they gained victory over netscape their next plan of attack was to minimise the potential damage by web services. Their only solution was to break the standards so developers would have to choose sides or do mad trying to please both. Since they controlled the browser market anyone who chose standards over MS would obviously lose. If they created a web service for MS then there was no problem. MS is ready for thin clients, embeded devices, they would be on top of the next revolution. You can check your mail and file your taxes on your fridge, powerd by Microsoft.
So it breaks down into a browser war again. He who controls the viewer controls the world.
...is Microsoft itself. If it doesn't pull off some magic for this next release, I think it's going to have to lose to more innovative and competent OSes: OS X and KDE/Gnome on top of BSD/Linux.
Honestly, once you make the switch, the crappyness of Windows becomes so obvious that one wonders why people are putting up with it. I wholeheartedly regret not abandoning the Windows platform back when it was obvious Win98 wasn't much more than a GUI-glorified DOS. Biggest mistake I've made, in terms of lost productivity and expense of maintenance.
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Sounds pretty damn scary to me, too.
...to name a few problems individuals and corporations will have.
Why does everyone try to make the web more than what it is- an interactive information platform? Just because you CAN do something, doesn't mean you SHOULD.
Please help metamoderate.
Microsoft is boring. When's the last time microsoft produced a cool product that captured your imagination? What is vista? why should I care? office 12 ? Menus are now "ribbons" .. woo hoo
I can't wait to install that baby and stay up all night playing with it and then show it to all my friends and family.
When I read "google" in a headline, I pay more attention...I am thinking "what cool thing has google com up with now?" google earth, cool , installed it, showed it to my elderly parents and they were impressed; Adwords,Adsense - cool how can I earn some extra bucks playing with this.
google wifi? google tv? sounds interesting. Go Google.
Probably has something to do with Google's $88 billion market cap versus Microsoft's $38 billion cash on hand.
...and this is what's hurting them. Not what their competitors are doing.
In The Science Of Getting Rich, Wallace Wattles talks about how money is primarily made on the creative plane rather than the competitive plane; where the focus is on solving problems or adding real value to people's lives, not on knocking everyone else out of the race.
Microsoft's biggest problem in this regard is that everyone is seen as an enemy, and everything is seen as a threat. If Steve Ballmer actually had a brain in his head, he might realise a couple of things:-
1) Microsoft CAN'T be everywhere at once. It isn't possible. They can't be developing new operating systems, upgrading Office, creating development software, and conquering the Web all at once.
2) Because of 1, other companies are going to be in some computer-related niche somewhere.
3) While Microsoft are busy upgrading Windows or Office, if they want to have some kind of online service, what they could do is what I saw Yahoo doing a few years back. Instead of re-inventing the wheel with their own search, outsource to Google as a backend. Google are still going to have their own site, of course, but what this would mean is that Microsoft could market their own content (syndicated news and so on) on top of Google's search, and if Microsoft's extra content was good enough, they might find that MSN became more popular than Google's plain site anywayz.
4) In doing 3, Microsoft would still have a web presence, (which they want) people could keep using Google, (which they want) and both companies would make money. The reason why Steve Ballmer wouldn't accept an idea like this is because he is insistent on Microsoft completely cornering any and every market it enters, and if they keep doing this, eventually they will end up with nothing.
There are other reasons why Steve Ballmer should be fired, as I've said before...but the monopolistic attitude is the main one. If he is allowed to stay in charge and maintain it, it will eventually destroy the company, and possibly hurt a lot of other people in the process. The bottom line is that, contrary to the popular opinion on Slashdot, there was a time when Microsoft actually did do some genuine good...but with Ballmer at the helm, that is no longer possible. All he cares about is monopoly and economic self-preservation...not about providing a service.
Well, see, Google is valued at some 30 billion odd dollars. And is considered overpriced by most investment firms.
If Microsoft bought all of that, they would immediately lose a large amount of money, as they would have to buy out all of that stock, which would plummet in price if it was known that Microsoft bought it. Google isn't worth anything unless its owned by google- they're valued due to the whole "trust" thing. Plus, this assumes that over 51% of the available control share of the company is available. Publically traded doesn't automatically mean that a controlling margin is possible to aquire.
So yes.. it's possible that Microsoft could buy Google, but it'd be damned hard without risking alot of money, and could even be seen as illegal due to anti-trust laws (however shaky they are).
Code. Writing. Writing Code. Writing in general. What? They aren't -that- differnet.
You realize that for the longest time MSN.com used Google as it's search, same with AOL.com, and Yahoo. As more and more companies offer the same search power as google (pagerank is no secret now) Google will need to make it's actual search better...which seems to be the ONLY thing they don't focus on these days. Just like Microsoft, they are happy to sit at the top of the heap and not innovate, meanwhile going down all sorts of other rabbit holes that have nothing to do with search... Microsoft still has an advantage in "telling" people where they should search by default. Google can be gone as quick as Netscape until they offer something truly unique.
Web services aren't going to fly if consumers (and business consumers) don't like the idea. Has anyone got around to asking them? For a start, web services presuppose a level of infrastructure and sophistication that only the very wealthy currently enjoy. That isn't likely to change for decades, so what are Microsoft going to do until then? I guess web services may just turn out to mean a subscription model for MS Windows. Sigh.
... out in the boonies, all over the world ... folks are doing very nicely without infrastructure or gadgets. Pop one Ubuntu CD (or several other Linux single-CD distributions) into an old PC, half an hour later you have a completely modern operating system and scores of programs, including Open Office, coding environments, whatever. At nil cost. You can't compete with that. And what you can't compete with strikes me as a lot scarier than folks you can compete with (like Google) because they follow the same business rules that you do. But what do you do when it's a case of "Charlie don't surf"?
Meanwhile
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When a company first goes public people are excited and the possibilites are limitless. But as time goes by Google will be increasingly pressured to cut costs, lose the fat, concentrate on the core revenue earner (ads) and kill off any development projects that are not generating revenue, and maximize the revenue of popular features like Google Maps (expect to see advertising attached to the maps sometime in the near future).
What it comes down to is Google sells ads. That's its core business. Google is a media company. Reinventing a company is expensive and dangerous, few survive reinvention, that's why Google will always be a media company and Microsoft will always be a software company and Ford will always sell cars.
See, what the slashdo community calls "okay" and what Microsoft calls "okay" are not the same thing.
Slashdot see's work as work. You got to work, come up with a new idea, change a very small pocket of the world, make a paycheck and go home. This is their idea of fine and after Google gets done with MS this is exactly where MS will be, a company that is smaller but makes software, turns a profit, and goes on their merry way.
Microsoft see's work like any major company. We need growth, greater profits, more control, higher market share, more more more! If you aren't, you are either shrinking or just about to, because you won't be able to get capital if you aren't growing. The stock market is all about growth. Companies need to be turning more and more profits. If you aren't no one buys your stock and you don't get any capital.
The web will be a platform, not the platform. As a platform its far cheaper to develop and companies retain more control of their own creations if they develop it themselves. They create the application they want, market it to their niche, or use it internally to cut costs, and completely cut microsoft out of the equation. You can't use it for everything, but that's the point, there really isn't one answer for everything out there. Microsoft has been pushing their one size fits all philosophy but corporations are outgrowing that, like children outgrowing their shoes.
So as more web platforms are developed, fewer people buy windows solutions for their specific tasks. Some companies find that web based solutions may work on Linux or Mac, and decide to switch. Not everyone will do it, but there will be options, and corporations will take it.
Then Microsoft will lose revenue. They'll shrink. Windows will not be the choice for everyone. They'll scale back to a majority player, maybe retain a #1 status, but not the same dominant force. They'll effectively lose money and control. Microsoft is basically afraid of losing control and losing money. In that way they won't be fine. They won't be "Microsoft, ruler of the computer universe." Anything that threatens that is not fine to them.
"All great wisdom is contained in .signature files"
For some things, having the bulk of the app on a central server is definitly the way to go. I think a great example of this is Google Earth. Client side app for acessing the server data. Since you cant access it all at once theres no need to have the, probably, TBs of data on the local machine. On the other hand, having say, a word processor on a server would be a waste of bandwidth. Although it would be feasable if office weren't several GB, thats another thing all together...
"Sic Semper Tyrannosaurus Rex."
Not specifically directed at your comment, but it sure is surprising how much Microsoft defending has grown in Slashdot comments each year. Five years ago, everyone saw Microsoft's transparent practices clear as day. Today, in any Microsoft article, you get a bunch of +5 upmodded apologists claiming "Gee, whiz, Microsoft is swell...they will overcome...Windows is just great and works like a well-oiled machine (once you've installed vast layers of anti-virus, anti-spyware, firewall, and registry cleaner software)."
Just because this threat to Microsoft was recognized in 1995 and overcome doesn't mean the News.com article is a fluff piece. Google is a very, very real threat to Microsoft, is draining their employees, and killing their morale as Microsoft works overtime to update old cashcows while Google explores new territories. All Google has to do is release an online office suite that never needs to be installed and is always up to date, and Office will start to die off (see Salesforce.com versus Microsoft CRM).
Google is threatening their platform, and Apple is threatening their control over the digital media platform (and therefore Microsoft's bid to control the living room via media devices). Along with the creaking management structure, this is the beginning of a decline in their power.
"Sufferin' succotash."
Front page of todays WSJ had a great article on MSFT. It's a tale of two or three individuals that are making a change in the way MSFT develops software. There is some great stuff in there.
They are trying to consolidate the platform into a small core with more of an add-in technology--it looks like they are starting over with a different core based on an enterprise-only version of NT.
They also had some great new procedures like continual builds and automated testing. (Can you imagine that those are NEW in Microsoft??? What kind of stupid kid-games have they been playing???)
One concept I really liked was BUG-Jail. When too many bugs are found from a single developer, that developer is not allowed to write code for a while. They didn't say what they did with 'em, but I think an appropriate task would be to put them on the QA team for 6 months.
I wonder if some of the changes mentioned in this article are more a result of this restructuring...
Let me know when I can reliably use the keyboard shortcuts my hands have memorized over the last ~15 years. As in, command-shift-s to save as a new file. If I do that in a web app, what happens? Well, perhaps my browser tries to save the html file I'm viewing, not save the file I'm remotely editing. Or command-f -- what happens? Oh, the browser looks for matching text in the page, not the app.
And I know that you can make custom command shortcuts that the *app* not the browser responds to. But that's retarded. I have to now think of my shortcuts like nested namespaces? Is this the mnemonic for the hosted app or the host? No way.
ZUL is the best bet here, I and I applaud that effort. But traditional HTML web apps simply don't cut the mustard. They aren't applications, in my mind, if they don't behave the way applications have behaved for 20 years. And frankly, it's not like I need to just get with the program and accept the new. The new sucks, it isn't as good as what we've got today. I refuse to adapt to an inferior process.
Wake me up when they can make an app as rich as Flash MX, or Photoshop, or XCode run in a browser.
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Google is currently a marketing firm. If Google moves into the "web desktop" world and continues to be a direct marketeer, they will not please consumers for long. Business users, due to looming privacy and information security laws, will be prohibited from storing PII or other confidential data on 3rd party, public systems.
The one's to watch are firms developing toolsets like those of Salesforce.com and then selling local, turnkey solutions for businesses to host in their own data centers. MS has been talking about a subscription model for a decade now, and they could just as easily move this way.
BUT...hubris is a mighty nemesis. MS's current leadership is focused on monopoly above all else, and this limits their freedom of movement and ability to develop cool stuff for the sake of developing cool stuff. Everything is developed within the prism of how does this reinforce the monopoly. Bring a new breed of internet-savvy,leadership into MS, who can ignore monopoly to develop unbundled, boutique products (high margin, high "it-factor")and you will have a monster on your hands.
To be brutally honest, Google offers me nothing that I just "can't live without". They offer nothing that I have not seen before, although they do have elegent implementations. The best thing I can say about Google is that at least their directmarketing ads are not as annoying as Yahoo!, but at the end of the day they are a direct marketing firm whose sole purpose is to monitor my behavior and bombard me with ads. I despise that business model.
...is like turning on your TV, we will know that MS competitors free-but-advertisement-laiden services have transformed the web into a platform. Remember, the Google business model centers around advertisement, and so do the business models of most major television networks. That's not to say that software as a service isn't the new paradigm... but service as a platform is quite a ways off, and if it sucks because it's just like television, we should have seen it coming.
This is equally a problem for desktop Linux acceptance. As Linux pushes for the desktop, the desktop moves to the network ... no place for Linux to land if the desktop is gone. Of course, Linux might drive the lightweight access device but this is a far cry from Linux on the desktop.
Everything looks like a web service. I do not believe that Google is the end all and be all of computing, any more than I think that Microsoft is the end all and be all of computing either. My own feeling is that once we get the "the Network is the computer" sort of stuff out of our thinking and realize that actual usage is going to be some balance of locally hosted programs and data and Web-based applications and data, then we'll be able to make real progress.
Google Maps work because people don't want to allocate terabytes of storage for maps of the world. Web-based mail and homepages work because most people don't want the work of maintaining their own mail servers and web servers.
However that doesn't apply to an office suite, when you get down to it, or something using a local database on your machine. There aren't a huge number of advantages to hosting your office suite on a remote server and pulling the apps down the network when you want to run them, and there are a number of downsides.
I'm not saying that Google isn't going to become a major player in the web services business, or that MSN in time won't become an equally big player. But what I am saying is that locally hosted applications aren't going to go away either, and ultimately, the security of the PC depends on the security of the operating system running on it.
MS Office is by far the larger profit source for MS. Although it goes hand and hand with Windows and without the OS dominance, Office would fizzle. Which is what the argument is exactly I suppose. That if, or once, the Web becomes the platform for everything, MS Office would simply be another option. An option among many, and likely superior options. Still if Google "wins" or for that matter if anyone "wins", and topples MS as the dominant software giant. They will be the single most dominant provider but undoubtedly not as dominant as MS currently is. zbend
Sure, web apps may present some threat to Microsoft, but I don't see them as a nightmare scenario.
What I consider the first part of MS nightmare scenario is working itself out in Massachusets right now: the state government has established a policy on open formats and protocols that wipes out Microsoft's ability to lock people into applications. The second part will start rolling in within the next five years, as Open software starts to establish itself on the corporate desktop.
Microsoft's main profit center is the symbiotic lock-in between Office and Windows. Those two business units support all the other development Microsoft does. People buy Windows in order to run Office, and they buy Office because, among other things, they have to buy it to maintain the investment they've sunk in thousands of documents over the years.
Micorosft got rich targeting the corporate desktop, because that's the low-hanging fruit of the software industry. It offers large numbers of machines all doing basically the same thing. The required feature set is well-defined, and it tends to remain stable over the years. They managed to hold that market by locking users into Office with proprietary formats, and by making Windows a more or less necessary requirement for running Office.
Thing is, OSS is heading for the very same market, because once again, it's the low-hanging fruit of the industry. It's so easy to build a positive feedback cycle around an office suite that you'd almost have to work *not* to do it.
OSS applications are on the leading edge of being mature enough for regular desktop use, and as more people adopt them, you get more pressure to make them even more mature. Sooner or later (and getting sooner all the time), OSS products will be be seen by the regular public as suitable competition for Office and Windows.
When that happens, Microsoft's main revenue stream will be under attack by a set of products that can't be killed by normal business methods. And to be perfectly honest, Microsoft has a lousy track record of trying to diversify into other markets. Its core markets will start drying up, and it won't have any new markets to move into.. certainly not at a level that will replace what it's losing from its core markets, at any rate.
When the money goes, so does the support for peripheral development, experimental products, and just plain 800-pound-gorilla domination tactics. Microsoft won't have the resources to fight an indefinite war against Google, try to edge its way into the online music market, subsidize its Xbox foothold in the console market, and so on. It will have to tighten its belt and fight to hold its ground, and sit around watching opportunitiues pass by because it just can't afford to take a strong, committed risk outisde its core market.
*That's* Microsoft's biggest nightmare the way I see it.
If you're going to compare market caps, the compare *one* market cap with *another* market cap, not with an orange, cash in bank or whatever else. MSFT market cap = $270 billion.
Google as a real threat to MS' core business? This is alarmist nonsense.
The true threat to Windows continued prosperity is the Xbox 360 and the PS3.
PC sales have been dominated by growth since 1998 in two sectors:
1 - Home PCs
2 - Notebook sales (which has just this past year also shifted to personal use notebooks and away from business use notebooks as the main growth factor in main growth)
Business desktop sales no longer lead market growth and there is no reason to believe that is going to change anytime soon. There is simply no killer app which requires it. There are none on the horizon either.
The new sales of personal use PCs critically depends upon continued hardware evolution and "killer apps" to fuel demand for those platform upgrades. It is those upgrades which is the source of all Microsoft's future growth.
Home sales rely upon PC games as their primary killer app with evolving hardware requirements. It's that simple. Reduce demand for that natural hardware churn and you have a REAL problem with your bottom line in Redmond.
And that business is seriously imperiled.
Make no mistake: PC Game developement of Triple A titles is essentially dead in the water. And I don't mean maybe. I mean STONE COLD FUCKING DEAD. It's a mere FRACTION of what it was even five years ago. Piracy is the perceived problem and the publishers have bailed en masse from funding development for the PC platform in favour of the PS3 and Xbox.
We are NOT in a market lull in PC games. We are in a wholesale abandonment of the market by hundreds of game developers and virtually every software publisher. It's been happening for three years and the effects are really starting to show up now. From here on in for the next 36 months - it only gets worse and worse.
Introduce Windows Vista? To that market? Dream on guys. Dream on.
Without new PC Games fueling demand for new PCs - there is a vastly reduced need for new operating systems. Microsoft's sales of Windows Vista OS are already sharply imperiled.
If Redmond wants to worry - worry about that. Google is a hiccup in history. The disappearance of the renewable killer app which has fueled continuous platform upgrades, on the other hand, is a grave and serious problem for the entire PC industry.
They's better hope business takes to Skype in a hurry - or the whole industry is in for a wave of depening red ink and contracting sales.
.Robert