OSNews

Microsoft has an obvious problem on their hands. They have attempted to differentiate their software business so much that they can't make a change in one area without affecting another. The problem is that it will be very difficult to find the decisions that will be beneficial in all aspects of their business.

So, who should Microsoft compete with? Should they compete with Mac and Linux? Should they compete with Google and Yahoo? Should they compete with someone else? Is Windows still as valuable today as it was in the past, or should they shift their focus to Office or other products? Should they offer a free consumer version to retain mindshare while asking a larger premium for a commercial license (maybe through paid support) in a manner similar to what some Linux companies do?

Companies like Google and Yahoo have shown that the internet is a very attractive place to be in business. The possibilities for success can be incredible. Unfortunately, predicting success for an internet strategy can be difficult. The internet does provide a vehicle for marketing subscription based services though. People don't inherently think that they own what is on the internet.

Regardless of what the internet has to offer Microsoft, Windows and Office have been major contributors to Microsoft's success in the past. If they move toward an internet-centric business, does it weaken Windows by moving their strategy away from core strengths and opening them up to competition that is already strong? If Microsoft doesn't go with an internet services approach, will they be able to continue to compete with Mac and Linux in the face of antitrust concerns?

Businesses and consumers alike have begun to realize that single-source practices can have more than short term effects in the computing world. By relying on a single vendor for the majority of software needs, companies become increasingly dependent on that vendor due to the potentially high costs of changing vendors. Should Microsoft become more flexible and open in an effort to ameliorate corporate concerns of software lock-in. Would that flexibility simply hasten moves toward competitors' offerings. Will it matter what Microsoft does if companies decide to adopt a policy to limit the potential for lock-in?

I don't think that the majority of consumers or businesses will abandon Windows in the near future, but the poor response to Vista does not bode well for the long term outlook of Windows. At least, I would say that unless Microsoft is very savvy about how they develop and market Windows 7, Windows' marketshare could actually drop below 90% within three years.