Linked by Thom Holwerda on Mon 8th Apr 2013 18:16 UTC
Microsoft "After years of domination, Microsoft is finally facing serious threats at the cores of its business, Office and Windows. Consumers and businesses alike are largely purchasing devices based on their capabilities and form factors rather than the software contained within. Windows is slowly becoming commoditized and Microsoft's traditional allies are looking at Android and Chrome OS as viable alternatives, a trend that threatens the Windows monopoly. Microsoft faces a tricky balancing act as it faces a future that's very different from its existing business." Good article by Tom Warren.
Permalink for comment 557969
To read all comments associated with this story, please click here.
A fork in the road?
by Tony Swash on Mon 8th Apr 2013 19:28 UTC
Tony Swash
Member since:
2009-08-22

The article was very interesting but I could not see clearly how Microsoft hopes to grow in the new tech environments. Microsoft's problem is this: it is selling almost no software in the mobile device markets and at the same time those mobile markets are driving down the price of software. If Microsoft lowers prices in it's old market to remain competitive and to encourage the sale of devices using it's software it will shrink the scale and profitability of that legacy business. That would be a viable strategy if Microsoft was making up the squeeze on software prices by increasing scale by selling into the new device markets, but it is precisely that which it has failed to do. If Microsoft never manages to become a player of significance in the device markets and is left with it's legacy businesses it will see those legacy businesses shrink over time because it will be impossible to sell OS and software licences at the sorts of prices and mark ups it has got used to. It is a very, very tricky strategic situation for Microsoft.

The obvious option is to abandon the ambition of being an OS player in the new markets, drop the notion of using productivity apps like Office as an OS leverage, and become instead a supplier of iOS and Android software. A very difficult thing for Microsoft to swallow and they probably could not do it with Ballmer in charge. I am sure releasing a well designed touch version of Office for iOS (instead of retaining Office as a Windows RT and Windows Phone exclusive) will be the first indicator that they have reluctantly started down that path.

Reply Score: 3