Mighty Microsoft Looks Vulnerable These Days
5. Android OS
As Microsoft toiled away with Windows Mobile 6.5, Google's Android operating system stole market share. The result is a battle between the two tech giants for supremacy in the software side of mobile. Worst of all for Microsoft, Google's Android operating system continues to gain market share as consumers realize it's a viable alternative to the iPhone. A key component in Microsoft's strategy this year must be to stymie Android's growth and get to work on stealing market share from Google. If it can't, Microsoft could find itself in a precarious position.
6. Windows Vista
It might sound odd that an operating system that was replaced last year would be included in a list of challenges Microsoft faces this year. But Windows Vista is still fresh on the minds of enterprise customers that are trying to determine if Windows 7 will have the same issues its predecessor did as time goes on or if it's trustworthy. Some are also waiting for Service Pack 1 to be released, so they know that the new operating system is more robust. Windows Vista was extremely damaging to Microsoft, and the company has been forced to deal with its aftermath for far too long. Going forward, it needs to do everything it can to make enterprise customers (and even consumers) forget that Vista existed.
7. A potential netbook takeover
Microsoft did a tremendous job overcoming Linux to dominate the netbook market. It realized at the right time that the space was growing and it needed to take control. But netbooks are under siege. Consumers, attempting to find a product that can bridge the gap between their mobile phones and their laptops, could opt for an iPad over a netbook. That's troubling for Microsoft. There's no guarantee that the software giant can dominate the tablet space. And since the iPad is likely to lead tablets going forward, the only way to overcome the netbook takeover is to grab as much tablet share as possible and hold on to it at all cost. Good luck.
8. Google Search improvements
Although Google won't admit it, the company is facing increased pressure from Microsoft's Bing search engine. Perhaps that's why Google has done quite a bit over the past couple months to improve its Web offerings and keep people coming back to its search. On Microsoft's side, it needs to be prepared for any improvements Google makes to search and attempt to improve upon those going forward. Search is a key battleground for Microsoft, and it could mean the difference between Web profitability and being kept out of the profitable advertising market. As Google improves its search, Microsoft must respond with Bing.
9. Increased focus on the cloud
Speaking of Google, the company is doubling-down on its move to the cloud. It most recently improved Google Docs to appeal to those folks that might not require the power of Microsoft Office. That's a problem for Microsoft. Currently, the company is heavily invested in desktop-based applications. Google, on the other hand, has realized that the future is online and bringing as much functionality to Web apps as possible is the best move. Microsoft needs to follow suit. It's easy to say that Office and Windows will be successful over the next five years, but will they enjoy success after that? It's up for debate without cloud integration.
10. Its own insecurity
These days it seems Microsoft lacks a certain swagger that Apple and even Google enjoy, which it is ironic because it was accused on many fronts of displaying too much swagger and arrogance in the not too distant past. Now the company sometimes seems scared to go all the way with products. It also tries to stay conservative when the market is asking for more. As we move further into 2010, Microsoft needs to strip the insecurity and take risks. What does it have to lose? The company has billions in cash on hand, and Office and Windows are cash cows. Now is the time for Microsoft to push the envelope and be more than the software company that makes Windows and Office. Insecurity is only holding Microsoft back, and it's giving Apple and Google the upper hand. That's unacceptable.