Ceding OS dominance could actually be liberating for the company
In my last eLAB, I talked about Microsoft and about what chance there was that wed be seeing our favorite monopolist build server software for Linux some time in the next few years.
drew a good deal of e-mail, and with the busy holidays fast approaching, this seemed like an excellent time for a cop-out, reader-response-oriented column.
We ended last time with the question, "Does Microsoft need to own the OS in order to make its killing?"
"Yes. Just look at their recent financial reports: the only places they made a major profit were Windoze and Office. I.e., their twin monopolies. Almost everything else theyre doing is a money-loser being subsidized by the monopoly profits."
Its a good point. According to recent SEC filings
, Microsoft has been losing money in every business unit except for Windows and Office, both of which generate handsome (or obscene, depending on your viewpoint) profits.
If an open-source platform, such as Linux, were able to displace Windows, itd mean that Microsoft would have to drastically adjust the way it makes its money, at least where Windows is concerned.
However, it seems to me that even in an environment where an open-computing platform carries the day, Microsoft would find a considerable market for its server, productivity and development tool software.
In fact, once freed of the need to maintain platform dominance, Microsoft would certainly see its market expanditd be able to, for example, make a version of ActiveSync for the Mac, enabling Pocket PC devices to better tap the gadget-loving, liberal-spending Apple demographic.
Microsofts applications business, anchored by Office, enjoys an extremely strong brand to begin with, and as the success for Office on the Mac has demonstrated, users that reject Microsoft as a platform provider enthusiastically shell out top dollar for Microsoft software. As another reader put it:
"All those PCs that might run Linux will still need word processing, spreadsheets, etc., and the semi-compatibility offered by Star Office and its siblings wont be good enough in the long run. To bring up an old slogan, why would I want something "just as good as a Xerox" if I can have a Xerox. If Linux really does start to take a significant bite out of the OS pie, I do think that when I need office apps, I wont have to settle for just as good as; I will be able to get MS Office Pro for Linux."
Of course, a strong brand wont obviate excellent product design and true differentiation. As synonymous as Xerox may be with copying, our photocopier here is a Panasonic. And MS Office monopoly or no, Im writing this column on Openoffice.org Writer.
Any new gadgets under your tree this year? Tell me all about it at email@example.com