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Om Malik wrote an interesting short article last week on Microsoft's efforts online and how they continue to bleed market share even as they funnel vast amounts of cash into their loss-making online division. http://gigaom.com/2008/11/26/why-microsoft-fails-to-win-online/ Om talks about Microsoft's structural issues and the gimmicky marketing of the Live search engine. I see plenty of other problems for Microsoft as an organisation. On the consumer OS front there is no single competitor ready to snatch a big chunk of the market but I see a number of things happening: · Mark Shuttleworth is putting a lot of cash behind Ubuntu and I expect it to improve dramatically in terms of ease of use. · Mac OS will increase market share due to increase in Mac sales. · Mac OS may be licensed for PC use in the future. · One or more virtualisation packages may evolve into an OS-type platform. · I expect Google to eventually release a platform aimed at Windows, probably a suite of web services bolted onto a Google flavour of Linux. · As mobile devices become increasingly important, Symbian and Android will become major competitors to Windows. · As free alternatives (open-source and ad-supported) proliferate, and the importance of the OS diminishes, Microsoft will be forced to reduce OS revenue per user or stop charging completely. · Disruptive things I can't predict will happen but I doubt they will favour Microsoft and its dated business model. Outside of the consumer OS market, Microsoft have other challenges: · Their cash-cow, Office (inc Exchange), is under attack from free/cheap web services and software packages like Google Apps, Zoho, Zimbra, StarOffice, OpenOffice. · Window Server 2008 looks like a decent product but Linux will continue to make inroads in the datacentre. · Oracle and MyQL are causing problems for SQL Server. · I have doubts about the quality of Microsoft's leadership at the highest level. I think Bill Gates is already being missed. Today, Microsoft is worth as much as Google and Apple combined. I think that ratio will change radically over the next 5 years unless Microsoft make some major changes. Greg |