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Why is Microsoft Sinking?

E-mail Print PDF years back Microsoft was the number one giant. Today it is still strong and sturdy, but clear symptoms are visible that Microsoft is destined to sink. Consider following reasons:


#1. Their business model is a dead-end. - Back when Microsoft first started business in 1980, software as a commodity was still a fuzzy concept. Computers, themselves, were flying off the shelves, and of course you bought game cartridges for game consoles, but what little computer software was being sold in the early 1980’s was worth a few dollars at the most. And then came “Micro-soft” - a BASIC interpreter on a floppy disk in a zip-lock plastic baggy! But somehow, it caught on.

Now, in 2007, the concept of software as a commodity is rapidly wearing off again. Today, it’s all about the service and maintenance - something that Microsoft isn’t prepared to deal with.


#2. They flunk at Web 2.0. - Another shift in the technology market is the much-hyped web app. When you can get more and more of your programs to download from a server and run in a web browser, your whole operating system - as far as what needs to be installed on your computer goes - can be a life-support system for a web browser. You can even get a full operating system to run in your browser! Meanwhile, the biggest stake they have ever had in the Internet user-space is Internet Explorer.


#3. They’re running out of friends. - First off, they’ve been brought up on multiple anti-trust charges in both the United States and Europe, plus been the subject of 130 lawsuits besides. Now consider that IBM, their former friend, now values Linux above Microsoft. And then there’s Sun, Apple, Google, and Oracle, who are flat-out competitors to Microsoft while favoring at least open source, if not Linux proper. Even Adobe is starting to look like a competitor with Microsoft, with nearly a one-to-one mapping of what Adobe and Microsoft each offer.


#4. They only have a couple of cash cows to work with. - Yes, it’s easy to look good when you consider their dominance on the desktop and office programs - but that’s their two products that they stay afloat on is Windows and Office. What about the other ventures of Microsoft? Is MSN taking over share from Google and Yahoo? Did the Zune beat the iPod? How many of you bought Microsoft Surface? Web servers? Nope, Apache rules that roost. OK, so what about the XBox? Yes! The XBox is selling well… at a loss.

At this point, it is becoming apparent that Microsoft had better cling to that operating system and office suite, because every time they step into another market, they get their head handed to them.


#5. People are hating on Vista. - We didn’t even see this many people mad about Windows ME.


#6. Their stock isn’t rising any more. - This is not to say “this week”, but rather over the last seven years. This chart shows a clear picture. You see the stock value climbing steadily until right at the year 2000 - then it fell gradually and has puttered along at a level rate ever since. Microsoft was once the most profitable stock you could trade, but with a seven year slump, that magic spell seems to be irrevocably broken.


#7. PC makers are starting to turn their backs on Microsoft. - Sure, small-time markets have offered alternatives to Microsoft, but when a giant PC seller like Dell starts selling Ubuntu machines, that’s another big sign. HP has followed suit.


Five months ago, noted tech industry guru Paul Graham declared Microsoft dead. People laughed and even I was skeptical, but now that we see the further developments that have happened since that time, it may turn out that Paul Graham has the last laugh, yet.


Source: Ask Rea Maor



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