Home > Computers and Internet > Betting on Microsoft, the Underdog of Today’s Tech Sector

Betting on Microsoft, the Underdog of Today’s Tech Sector

09-Dec-06 10:32 pm EDT Leave a comment Go to comments

Dare we say it aloud? As 2006 winds down, Microsoft has emerged as being the perceived ‘loser’ in the struggle for the Internet’s most influential company – won at such great cost in the late 1990’s amidst the throngs of lawyers trying to argue that Microsoft was too successful. That it had achieved what every corporation dreams of achieving – a monopoly in certain aspects of the software industry with Internet software being the crown jewel. Sun, Oracle, Netscape – all argued vigorously that Microsoft was too powerful and could use its power to inevitably maintain an anti-competitive stranglehold on the market which would only undermine innovation. Despite most of the lawsuits against the software giant being either lost or settled out of court, that’s not what’s happened in the end…

Is Microsoft really losing the war of market dominance over Internet software? To be realistic, Microsoft is still doing very well and is in no real danger of being the #1 choice for a goodly number of functional paradigms, despite Google emerging as a beacon of ".com" success both pre and post-bubble-burst. But as I’ve already stated, it’s not entirely about stock price, quarterly or even annual earnings reports. Rather, it is a war of perception that Microsoft is losing – and most certainly not the war of dominance in key areas of the software market.

The main lynch-pins holding up that market dominance are:

  • Internet Explorer. Although there have been advances made by one-time upstart browser "Mozilla Firefox", IE still is the undisputed browser of choice on desktops in both home and business, worldwide. While IE doesn’t make money directly (as it’s distributed free of charge), it acts as a facilitator to integrating much of the desktop and laptop computer’s functionality to other software, which is in many cases both revenue-generating and simultaneously instrumental in denying would-be competitor products from seeming as attractive. (eg. Microsoft Office products can be automated via the Internet through Internet Explorer in ways that are far more difficult to achieve with say, Corel WodPerfect and Mozilla Firefox; each of which is created by different companies following different technical architectures and deelopment lifecycles.)
  • Microsoft Office. While this is not exclusively an Internet software suite, Google has recently introduced free "beta" office productivity software titled simply as "Goolge Docs" and "Google Spreadsheets"; both of which appear to be (among other things) a value-add to tempt users’ to stay tuned-in to Google’s web properties…all of which serve the ultimate mission for Google: a means to generate advertising revenue. Even so, Google hasn’t yet come close to eclipsing Office, elements of which are the de facto standard in office productivity functionality. And this is likely to remain the case for the forseeable future. Note here that seemingly in response to Google’s innovation of "on-line office productivity software", Microsoft has introduced its "Live!" product line which includes on-line versions of several office apps.
  • Microsoft Windows Live! Messenger. Instant messaging has recently (in the past 2 to 5 years) emerged as another key battleground for Internet software dominance. Ironically, Microsoft appears to be using its Messenger applet as a tool mostly for generating advertising revenue whereas Google, which normally leverages its software products to steer its users to the all-important goal of generating impressions for its advertising services, has seemingly produced Google Talk as an answer to other industry players, so there’s some presence in the messaging space in case Google decides to pursue this functionality further in pursuit of its corporate objectives. Messenger (successor to the original MSN Messenger) is extremely popular and is second only to America Online’s Instant Messener (AIM), in terms of user-base.
  • "BackOffice" Software Products. Once upon a time, there was a suite of applications called "Microsoft BackOffice" which has since been retired as a group, but not seperately. These products included titles like "SQL Server" and "Internet Information Server", both of which are still either first or second in their respective functional paradigms, depending on who you ask and when. Regardless, Google has made absolutely no effort to create server appliances of its own, beyond its recent offerings in the indexing services technology space, where it’s generally perceived to have undisputed mastery based on its "Google Search" web property – the Internet’s leading search engine as everyone knows. Microsoft offers two competing search technologies; both of which are now bundled with Windows – Index Server and Windows Live! Search (for desktop users).

This list could be made to be considerably longer, but suffice to say that in terms of market share, Google really has nothing on Microsoft save for its indexing service technology.

So with financials that would be the envy of most any company on Earth, and leadership in virtually every key area of Internet functionality past, present or future (search notwithstanding), any assertion that Microsoft is "losing" to Google must reasonably be dismissed as far more perception than fact. Google has certainly done very well at the things its tried to do, for the most part. It would be going too far to say Google’s efforts are failure-free; I’m still waiting for its Froogle to out-sell eBay, and the move to make printed books searchable this year has run into some potentially disasterous legal hurdles relating to copyright. But Google has shown itself to be very adaptable and responsive to emerging trends on the Internet. And it’s not surprising to hear a Microsoft VP making comments to the effect of sounding a little envious. But that’s hardly a white flag…and every company to come along and lay claim to being the David that would slay the software Goliath has found itself out of play shortly thereafter. I can particuarly remember people saying Netscape was gonna pose a serious threat to Microsoft…which for a while it might have. Until Microsoft did what it too has some skill doing – adapting.

Google vs. Microsoft is to be sure and interesitng match-up and Google will likely not go the way of Netscape or others even less successful. But there’s plenty of opportunity for Microsoft to yet fight off Google as a competitor…when it finally shows up to the table to truly compete. 😉

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Terry Glavin

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