10 Reasons Why Microsofts Tech Dominance Is Over

by Don Reisinger

Microsoft Office is one of the software giant’s core businesses. It brings in a substantial profit for the company each year. But as online alternatives continue to crop up, Microsoft is left to wonder if it has what it takes to maintain such dominance. In the near future, Microsoft Office will stay on top. But as more consumers and enterprise customers move online, they will be searching for alternatives to just about everything. Arguably the best office alternative online comes from Google’s Docs application. And as Google continues pushing consumers to the Web, it might only be a matter of time before its offering snags serious market share.

There’s no debating that Microsoft’s Bing search engine is gaining market share at a rapid rate. But it’s still far behind Google. That’s a problem for Microsoft. Search is the gateway to major advertising dollars. The more people use a search engine, the more likely advertisers are to opt for that service’s advertising platform. It’s simple business. For now, that means most of the advertising dollars will flow to Google. If Microsoft can steal some serious market share away, advertisers might turn to the software giant. But the chances of that happening anytime soon are slim.

Speaking of Google, it just seems to keep growing. Aside from search and advertising, the Web giant is now competing in the mobile market, has plans to offer a 1G-bps network and will even try its luck in the ebook space. All the while, it’s turning a profit that few companies can beat, and it has a stock price that Microsoft could only dream about. As Google keeps growing, it only means more trouble for Microsoft. A stronger Google is an even more dangerous Google. And Microsoft knows it.

Microsoft is trying desperately to be a player in the mobile market. But since the iPhone hit store shelves, the company has had an increasingly more difficult time at it. And although it plans to release two Kin smartphones and Windows Phone 7 this year, there’s little chance that those platforms will be able to match the iPhone in any way. Apple’s smartphone is a major success in the mobile space. And as it continues to gain market share, it might make it harder for Microsoft to catch up—especially with the products it plans to sell.

Microsoft has tried its hand in the entertainment market with varying degrees of success. In the gaming industry, it’s doing extremely well. But in the mobile-entertainment space, its progress leaves much to be desired. Currently, the iPod holds a dominant market share in personal media players. And although the Zune is a fine device that many Microsoft fans can get behind, it isn’t an iPod. And it never will be. It might be time for Microsoft to get out of the PMP space before it wastes any more cash.

Microsoft’s Internet Explorer once enjoyed over 90 percent market share. But just last week, its market share slipped below 60 percent. Part of that is due to the pressure the European Union has put on Microsoft, forcing it to give Windows users the option of downloading one of a dozen different browsers upon booting up. Users are also realizing that other browsers might provide more secure and reliable functionality. And in the process, Internet Explorer is losing its standing as the natural go-to Web browser.

As the iPad has shown, tablets are well on their way to becoming the next big product sector in the tech industry. And yet, as the iPad continues to sell well, Microsoft doesn’t have a significant option in the market to combat Apple. That’s not a good thing. As Apple CEO Steve Jobs has shown time again, he can get into a market first with innovative software and developer support and dominate. And as Microsoft has shown, it can’t compete with Apple if it’s late. Tablets are the future, and Microsoft is missing it.

Just a few years ago, on-premises and desktop software still reigned supreme in the market. But today, all that has changed. Now, the craze in both consumer and enterprise markets surrounds cloud computing. More and more companies are trying to move their services online as consumers realize that the future of software is decidedly on the Web. That can only mean one thing for Microsoft: trouble. And it means only one thing for Google: even better profits.

Windows Mobile was once one of Microsoft’s key businesses. It allowed the company to parlay its success in enterprise software into the mobile market by appealing to companies that wanted to keep employees productive while on the go. But as RIM offered a more compelling alternative, Windows Mobile started slipping. And then the iPhone came out and ruined the platform. Now, Windows Mobile is a headache for Microsoft that just won’t go away.

Microsoft isn’t the company that it once was. Years ago, Bill Gates would go out in interviews and make it clear to everyone that if any company could keep the tech industry growing vibrantly, it was Microsoft. He and his employees had a certain swagger that said, “We’re the best in this business, and we all know it.” Today, that swagger is gone. Microsoft is no longer the dominant player in the industry, and it knows it all too well. Microsoft fears Google, it’s worried about Apple, and it’s suspect of its future. It’s scared. And that’s not a trait of a dominant company.