Microsoft's malaise

Unless you have just returned from Mars you will have heard about the massive drop in revenue for the once omnipotent software manufacturer, with the inevitable sacking of 5,000 staff and 15% of it's temporary/contract staff, my heart goes out to those guys.

I have be discussing this with friends for a long while, and this is not remotely surprising to me, just the length of time it has taken for the adjustment. I will caveat everything else I discuss here with the facts that in the last quarter, Microsoft still made 3 billion, so it is not even vaguely likely to be going bust any time soon, but the rate of descent is going to accelerate.

However, it has become apparent for several years that they have stopped innovating and are constantly late to the party with every product. Vista, was five years late, and what a mess, it couldn't have been more out of tune with the hardware paradigm shift that was taking place in 2008.People wanted greener, smaller, compact machines, that did just enough web stuff to make them useful, with excellent battery life. What were the people at Redmond doing to have missed an entire market that last year should millions of units, not very much obviously.

Cloud computing has been around for a while, and to be fair MS had a simply offering in the early days, namely Hotmail, but they just didn't develop it or move it forward at all in any meaningful way, so along comes Google and steals all their clothes. Again they are now trying to play catchup again. Where are all the bolt on apps and services that you now get with Google?

Internet Explorer, through it's monopoly installation on every machine sold, held a 95% market share once, that is now down to under 70% and falling rapidly as Mozilla,Opera,Safari and Google Chrome all take large chunks out of the pie. IE7 was a bad copy of Firefox, and people have just been moving away in their millions. According to spread firefox, today will see 800,000,000 downloads of the Firefox software.

They have released Office 2007 , without really talking to the customers and again there has been a lot of negative feedback about thee new ribbon look. Customers who use 10% of the functionality of this product have started asking why do I need a new version, what is it offering me for all the time and effort required to change. Many have moved to open office, and are now very happy knowing they will never be forced to upgrade.

Recently we have seen yet another round of nasty worms and viruses hit the base operating system, causing businesses lots of expenses on upgrades, checking their defenses etc etc. No operating system is free of problems, but if you use Microsoft products, the problems are relentless and continuous.

When you role all of these issues up, they do start to show the picture of a very large company who is starting to do things by committee, and all of these symptoms reflect that. As IBM before them, I now fully expect them to still be around but slowly move into the technology background. As many people have invested heavily in their technology, you are not about to throw that out, but they have become less and less relevant as a technology innovator.

The future is with the open source, and as more and more companies shift away from the Microsoft proprietary lock in, and the costs savings that spring from that. The cost savings with open source virtualisation being offered by companies like Amazon and Google show us clearly where and how the shift is happening in the cloud. With Netbooks costing £150 , why would you possibly want to spend £350 on Microsoft office? The desktops will go the same way, with massive energy savings and cost savings on applications. With the current economic problems, businesses will take no FUD while their competitors are making use of those massive cost savings.

The IT landscape is definitely changing and the role that Microsoft are going to play in that will change. The role for open source is increasing on a daily basis in every area, and that snowball is only gaining momentum.