Microsoft’s fate: The conclusion

By: ispeculatornew
Date posted: 06.22.2009 (5:00 am) | Write a Comment  (13 Comments)

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microsoftSo after 6 articles about Microsoft, the time has come to finally look at what this all means. To be certain, being a major company that dominated the computer world brought in a lot of companies whose main goal was to get back some market share in whatever way possible.

Seeing that, Microsoft started some pre-emptive strikes trying to gain some market ground in gaming, portable music players and search. But while it did have some early success in some including gaming for example, not much money has come out of these ventures so far. The XBox made an impressive run against Sony’s Playstation but was not prepared for a rivalry with the Nintendo WII. Other ventures such as the Zune have been draining the cash flow of the company with few future positive prospects.

But the more worrying part for Microsoft executives is that it is increasingly losing ground in its more vital and important business segments. While losing ground in the browser war has been hurting and certainly not positive as it searches for a more dominant place on the world wide web. But the critical battle will take place in a few months or years as many companies prepare to battle with Microsoft in the critical Office suite but even more critical is the prospect of Google’s Android entering in competition with Windows. Could it happen?? Unfortunately, it would be a major mistake to underestimate Google and Microsoft would know.

Know those ticking bombs that you see in movies all the time? Microsoft should be hearing it right now. It’s no secret. The only way that Microsoft manages to venture into all these different segments and get a reasonable shot with high quality products is because of the high cash flows that are generated through Microsoft Office and Microsoft Windows. If ever Google was able to build a viable solution to Microsoft’s products, it would probably be willing to offer its products for little offering a major incentive for corporations to start switching or at least have some negotiating power. And to Microsoft, that would be a major major problem. There is no going around, it could mean the end of Microsoft as we know it.

There are few alternatives in my opinion. Microsoft must pursue a few strategies:

#1-Improve its operating systems and office suite, it might only delay things but for Microsoft, that is the key
#2-Find a viable alternative income stream – Bing, Zune, etc, are good potentials. Microsoft should speed things up in both in terms of time and money in order to become comeptitive in other areas.

It’s too early to tell how things will end and right now Microsoft seems to know that they need a sense of urgency. I would be one who would certainly consider buying Microsoft right now simply because I would the company a 2-3 year span to generate some significant earnings out of its core business areas… What do you think? Any opinions on the matter?

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  1. Comment by Frank — June 22, 2009 @ 8:09 am

    Great series man!!! LIke I said before, MSFT will have to deploy time and money in order to stay in the game!

    They need to show more leadership in the future. They also need to think long-term but they evolve in a fast-growing industry. It’s not going to be easy! That’s for sure. But knowing Bill Gates (ok he’s not my friend), but he’s a hard worker and he won’t let down his company. Yeah I would buy some stocks of MSFT!

  2. Comment by IS — June 23, 2009 @ 3:26 am

    @Frank – hmm yes but Bill Gates is spending less and less time with Microsoft as he focuses on his charity – but I think Microsoft has been making important steps recently in acquiring talent, something it was losing a lot of in recent years…

  3. Comment by OneDay — June 22, 2009 @ 3:28 pm

    With strong products such as Office 2010, Windows Server 2008 and an upgrade to Windows Mobile, Microsoft can outperform the others. Microsoft noted before that by fixing the top 20% of the most reported bugs, 80% percent of the errors and crashes would be eliminated (wiki). MSFT can continue by focusing on its strengths.

    Although global recession and intense competition in all of Microsoft’s markets, MSFT has a positioning advantage 1- diversified distribution, as its sells into the retail and distributor channels 2- great new innovations like Windows 7, Windows Azure, Office Web applications.

    A strong BUY for me too 😉

  4. Comment by IS — June 23, 2009 @ 3:25 am

    @OneDay – Good point, that is one area where I think it will make a difference. Even if Google does offer competitive products, it is difficult to imagine that they could be selling their products through as efficient of a distribution channel for a few years, so that will give a little more time:)

  5. Comment by Simpless — June 22, 2009 @ 3:33 pm

    what Jim Cramer is saying about MSFT? *just kidding* lol

    Good series IS!

  6. Comment by IS — June 23, 2009 @ 3:23 am

    @Simpless – LOL…yeah not sure and I do not care really, do you?:)

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  9. Comment by Simpless — June 23, 2009 @ 9:53 am

    hehe not really!

  10. Comment by Frank — June 23, 2009 @ 11:47 am

    Ok Bill Gates is committed to his charity. But Microsoft is Bill’s baby. Maybe he has to take more leadership on the board. As the chairman, I am sure he is advising the CEO/board on matters relating to strategy and operations. He knows the industry; he can define the problems and propose some great solutions!

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  12. Comment by Dandy — June 27, 2009 @ 5:06 am

    When it comes to Microsoft they have to be more sympathetic towards their users. They need to make their operating systems play nice with each other and not break inter-operations.

  13. Comment by Frank — December 23, 2009 @ 2:24 pm

    Another hit for MSFT by a canadian software firm. Ouch! David defeats Goliath. Microsoft must stop selling word because “Goliath” lost its appeal of a $200 million patent-infringement verdict.

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