The one thing I am constantly wary off is how benevolent academic institutions, especially the prestigious ones, are towards Microsoft. After all they do not want to tee off person(s) who could very well fund their next science building or programs. Knowledge@Wharton takes a look at Microsoft’s challenges and how it is poised to take advantage of the opportunities in front of it:
“The bigger story here is twofold: Microsoft’s continued fear that it may lose its power and pricing in operating systems, and Microsoft’s continued need to show rapid growth in a world in which it already owns nearly the entire market in its core product areas,” says Clemons.
What remains to be seen is whether Microsoft can make the right moves in its products and strategy to own a new market.
Does “right moves” mean more anti-trust violations? I suppose if Microsoft links everything in their operating system with Internet connections (maybe as I type something in Word it automatically saves a copy in Windows Live Office Word?) then people don’t need Zoho or Writely.
Kash Rangan asks:
“Can a tech company really have multiple core competencies, as Microsoft says it can?” asked Merrill Lynch analyst Kash Rangan in an August 2 research note. “Microsoft has a breadth of products and markets. Competing and winning in all of them seems to be a dizzying proposition that could tax even the most competent of management teams.”
Good question! Especially pertinent for a company that has traditionally addressed corporate requirements trying to battle in a world that is driven by consumer needs. Microsoft has never understood the consumer market and probably never will.
Peter Fader, Wharton professor, suggests that:
.. there is an opening for Microsoft. Apple’s DRM provisions, he notes, can be restrictive and its player doesn’t contain features other music players have — such as a built-in FM radio receiver or voice recorder, or the ability to use some of the major subscription music services.
Sorry Professor Fader: (1) the vast majority of iPod users prefer to listen to their own music (as evidenced by the disparity in the number of songs on their iPods and average number of songs purchased) and not a FM receiver, (2) the vast majority of iPod users do not want a voice recorder, (3) iTunes has sold a billion songs, while Napster, Yahoo, Real, and MSN all together have less than a million subscribers – the vast majority of music lovers want to own and hate the idea of rented music, and (4) 1 and 2 are available using iPod accessories and there is no indication that users want an integrated device.
This is a neat idea:
Microsoft is attacking vastly different markets, seeding a variety of potentially large opportunities,” he suggests. In these new markets, integration becomes more important since software that can’t connect with other devices can become irrelevant. That means that Microsoft has to become more of a “glue” company focusing on middleware, or software that is used to connect disparate applications.
The one problem is that Microsoft has shown an utter inability to play nice with others without displaying a psychopathic need to decimate successful or almost successful endeavors and build it themselves. So unless its Microsoft integrating and synchronizing Microsoft apps, this will be a repeat of the move from DOS to Windows 3.1 (secret APIs and cut-throat OEM deals). It will be a wonder if Microsoft can keep track of what’s new on the Internet last week much less where it’ll be next year.
Kevin Werbach is more optmistic:
Werbach, however, adds that the ability to connect various platforms may be within Microsoft’s reach. “Microsoft knows a thing or two about integrating platforms. Even though it only controlled the operating system, it was able to dictate the structure of the PC ecosystem for years. Making devices and services work together is an immense challenge, which no one, even Apple, has fully solved. Microsoft at least has the benefit of many years of working to make an astounding array of hardware and software co-exist with Windows.”
It could dictate the structure because it was a monopoly. It has diminished authority in the Internet standards driven era, which, by the way, it could have cornered by merely updating IE6.0 once it had crushed Netscape. Instead it chose to play the monopolistic winner to the hilt and ignored that market to its detriment.
The conclusion:
It’s hard to count Microsoft out, Clemons says. “The right question is whether or not Microsoft’s current dominance of the operating system market can be preserved over time and extended into different areas. So far the answer has been yes — and for a decade longer than my students expected.”
Aye! Not that old line. The best minds in the business and all they can come up with is, they’ve done it before so they can do it again? They better have strategy that is more than a wing and a prayer.
