10 Products Microsoft Should Fear

by Don Reisinger

Apple’s iPhone is undoubtedly one of the scariest products Microsoft will face over the coming years. Apple’s smartphone has revolutionized the mobile market, effectively setting the new standard for all new devices in the space. So far, Apple has focused mainly on the consumer market. But as time goes on, it will attract more and more companies. And in the process, Microsoft might be blocked out of both of those sectors. That all fails to mention that Microsoft doesn’t even have software on the market yet that can compete with iPhone OS. Yikes.

Google’s Search service is the key to all of its businesses. Google has used Search to bolster its market share in Web advertising, as well as increase use of its many other services. Microsoft, on the other hand, did little while Google’s search service was growing. Because of that, it currently holds a relatively small percentage of the search market and, in turn, a small portion of the advertising space. If Google’s Search platform continues to grow, it could spell even more trouble for Microsoft as the tech industry slowly, but surely, moves online.

Chrome OS is a wild card right now. Although the Web-based operating system is still months away and it will only be offered on netbooks, it could spell the beginning of the end for Windows’ reign in the software space. As more and more companies start moving to the cloud, individuals will do the same. If they find that Google’s Chrome OS is a viable alternative to Windows, they could opt for that instead.

The tablet market is in its infancy and, so far, only Apple’s iPad has been able to make a splash. But that’s a problem for Microsoft. In any market where Apple has been entrenched with innovative products, the company has fended off competition, including Microsoft. Although Ballmer and Company won’t like to hear it, Microsoft’s decision to come late to the tablet game seems awfully similar to its handling of the mobile-phone space, the music market and even search. Considering how valuable the tablet market could be over the coming years, the last thing Microsoft wants is to be cornered out of that profitable space.

Zoho doesn’t get the kind of media attention that major tech firms do, but its Docs service is one of the best Web-based productivity suites around. Of course, that doesn’t mean that Zoho will be able to take down Microsoft, but its innovations in that space will only help Google and other prominent competitors come up with ideas to face Microsoft. Plus, Zoho could contribute heavily to a general shift in the market from a desire for desktop-based software to Web-based alternatives.

Microsoft’s strategy in the mobile market was spot on for years. Rather than develop phones of its own, it simply partnered with vendors to bundle its software in devices. It worked. In recent years, Microsoft’s market share has been slipping, due to its inability to deliver software that could compete with iPhone OS. It has also been marginalized in the mobile market because of Google’s Android operating system, which, unlike Windows Mobile, delivers an iPhone-like experience to consumers. There’s no telling what Windows Phone 7 might be able to achieve in the mobile market, but unless Microsoft is smart, Android OS could be a major thorn in its side.

Currently, Google Docs isn’t capable of competing on the same level as Office, due to power and functionality issues. But over time, as Google continues to improve the software and users move to the Web, they might find that the company’s online suite bests Office. That possibility should be extremely disconcerting to Microsoft. The software giant relies heavily on Office to bolster its bottom line. If it starts losing revenue to a free, Web-based alternative, that won’t be good.

When Microsoft was ordered to give Europeans the option to choose between Internet Explorer and a dozen other browsers, some wondered how it would affect the company’s market share. Currently, it looks like Microsoft is feeling the effects of that order as several browsers are enjoying increased usage. But perhaps the biggest threat to Internet Explorer right now is Firefox. Mozilla’s browser is the world’s second most-popular Web browser behind Internet Explorer. Not only does it boast several features that best Microsoft’s browser, but it’s arguably more secure. As more people start using Firefox, they might find that Internet Explorer just doesn’t cut it anymore.

Windows might enjoy dominant market share in the operating-system market, but Mac OS X should be considered highly dangerous. Apple’s operating system has been more popular because of Apple’s prominence in the mainstream, as well as its willingness to innovate on software design. Luckily for Microsoft, Windows is the only viable operating system for enterprise customers. But in the consumer market, more people than ever are considering Mac OS X.

Advertising is the secret to success on the Web. Google knows it, and so does Microsoft. But so far, it’s Google that has been able to corner that space. The company makes billions of dollars every year on its advertising endeavors. And Microsoft, realizing that advertising is a key component in the future of its operation, is trying desperately to catch up. The only problem is, catching up to Google could be extremely difficult, if not impossible. As the industry relies more on the Internet, it could be Google, not Microsoft, that will see a significant piece of the advertising revenue generated from that shift.