10 Things Microsoft Must Do to Succeed on the Web

By Don Reisinger  |  Posted 2010-06-08

10 Things Microsoft Must Do to Succeed on the Web

Microsoft isn't the kind of company that most folks would associate with the Internet. The software giant has been offering operating systems, browsers and office-productivity suites for years. These products are the foundation stones of its operation and the main reason why it generates billions of dollars in revenue each quarter. For its part, Microsoft has stayed true to its software roots.

The company has time and again said that it believes Windows and Office are central to its operation, and that won't be changing anytime soon. To some extent, Microsoft is right to follow that strategy. The software market is still strong for the company. 

But soon enough, that will change.

The Internet is today's battleground for Microsoft. As more companies start moving their operations to the cloud, Microsoft will need to be prepared to welcome them and keep them paying Microsoft for all the services they need.

So far, Microsoft has done a few things to prepare its operation for the Web, including launching Azure and improving Bing. But it needs to do much more if it wants to succeed on the Internet. Google is waiting, armed and ready to destroy Microsoft. Without the right strategy in place, the software giant will be just another victim of the search company. This is what Microsoft must do to succeed on the Web.

1. Get in on the cloud

The cloud is the future of the Internet. Microsoft knows it. Google knows it. And the enterprise knows it. Now it's just a matter of when the vast majority of users will start relying on the cloud to handle their operations. Luckily, Microsoft has brought Azure to the Web, helping to bolster its online business. But it needs to do more. The company needs to start to ramp up the rhetoric and make it clear that if and when companies and consumers want to move to the cloud, it will welcome them. Google is currently ahead in cloud-based alternatives. Microsoft cannot allow that to continue.

2. Stick with Bing

Bing is one of the most important aspects of Microsoft's Web strategy. The company's search tool has been gaining market share over the past year. It has caused Google to re-evaluate its own plans and come up with a new search design that looks awfully similar to Bing's. Going forward, Microsoft must keep the pressure on with Bing. Its search engine is striking a chord with Web users and its many other related services work extremely well. If Bing succeeds, Microsoft will succeed on the Web. 

3. Evaluate Google's strategy

It's important at this juncture for Microsoft to see what Google is really planning to do on the Internet. As much as Ballmer and Company don't want to hear it, Google is the leader on the Web. And that won't be changing anytime soon. Realizing that, Microsoft must be a step ahead of Google in every space. The only way to know if it's ahead is to evaluate what Google's Web strategy really is. Admittedly, it won't be easy, since Google typically keeps ideas close to the vest. But Microsoft must try. If it lets Google innovate beyond its own plans, it will spell trouble for the software giant's online chances.

4. Start acquiring companies

Microsoft needs to start acquiring companies. With billions of dollars in its coffers, there is no excuse for why Microsoft hasn't been acquiring Web companies as often as possible. The reality is, Microsoft doesn't understand the Web nearly as well as Google. But there are several Web firms that do get it. And they could be a valuable addition to Microsoft's Web efforts. Exactly what companies Microsoft should acquire is up to the company. But bolstering its search and Web services with feature-packed sites would be a good first step.

Microsoft Cant Prosper Forever with On-Premises Software


5. Be more than search

Bing currently stands at the center of Microsoft's Web strategy. Search is quickly becoming the key battleground on the Web, both from a market-share perspective and an advertising perspective. But that doesn't mean that it's the only thing that Microsoft can worry about. With any luck, Microsoft will be able to continue increasing its search market share, but also be able to satisfy customers looking for cloud solutions. It should also double down on its efforts with its Web-based Office suite. The Internet is about more than search. Microsoft must remember that.

6. Invest heavily in advertising

Advertising will eventually make or break Microsoft. Right now, Google is generating billions of dollars in revenue by virtue of its advertising efforts. And thanks to its recent acquisition of AdMob, it looks like the company will only increase its advertising revenue over the coming years. Microsoft isn't so lucky. The software company's advertising efforts are being dwarfed by Google's. And although it contends that it's working diligently to become a major advertising player, it's not close to achieving that goal. The future isn't so bright for Microsoft without a solid advertising platform.

7. Get into social networking

Social networking is an extremely important market. So far, Microsoft has dabbled in the space by investing some of its cash in Facebook for a small portion of ownership. But that's simply not enough. If Microsoft is to be successful on the Web, it needs to have a real social presence. That might mean that the company should acquire Facebook or Twitter outright. Admittedly, it would be an expensive proposition. But given the kind of revenue that Microsoft generates each quarter, it wouldn't be enough for investors to think twice. Social networking is integral to Microsoft's future Web performance. It can't forget that.

8. Accept that offline software will die

This one might come as a shock to Microsoft, but it's about time that it admits that offline software will eventually die. When that will happen is anyone's guess. It's entirely possible that the Web will provide a more robust experience than offline software in 10 years. If things don't go well, it could take 20 years. But in any case, offline software will eventually give way to the Internet. And when that happens, Microsoft must be prepared to capitalize on the changing market. Right now, it's not even close to being able to rely on the Internet for revenue growth. By accepting that offline software will eventually die, Microsoft can set its sights on the future. Until then, it will continue to focus too much of its effort in the wrong market.

9. Start playing nice with other browsers

Although Internet Explorer is still a top browser, Microsoft needs to stop trying to destroy every other browser on the market. Yes, Internet Explorer was once integral to the company's business, but today its influence is waning. And with competition and government regulators making it clear that Internet Explorer is more trouble than it's worth, the company's browser is catching more heat than ever. Microsoft needs to start playing nice with the browser competition and work diligently to improve Internet Explorer's many flaws. After all, the browser is the gateway to the Web. If Web users aren't relying on Internet Explorer, they probably won't be using Microsoft's Web services.

10. Remember entertainment

As a company that has spent its entire history trying to be the functional, productive alternative to other solutions, it might be difficult for Microsoft to realize that a key component of the Web is entertainment. But unless the software company finds a way to capitalize on that, it will have a difficult time in the cloud. More Web users than ever are streaming music, playing videos and enhancing their Web experience by enjoying entertainment. So far, Microsoft has done little to satisfy their desire. Meanwhile, Google owns YouTube, the world's largest repository of entertainment. Microsoft obviously can't acquire YouTube, but it should find ways to offer entertainment to users. It really does matter to Web users.

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