Is Microsoft Losing Marketshare?
Microsoft's Markets are Changing Faster than it can Respond
Established companies are having to play catch-up with their younger Internet competitors. Are Microsoft's competitors too quick for them?
Ten years ago Microsoft had a large mindshare. If someone wanted an operating system, office productivity or enterprise software, Microsoft was a brand that was at the forefront of their mind. Since the rise of the Internet, and the movement of software and services into the Internet era, Microsoft's mindshare has decreased. How will this affect the computing industry and Microsoft and what can they do about it?
Microsoft Is Not an Internet Brand
Microsoft is not an Internet brand. When thinking of web products, Google, Facebook and YouTube spring to mind. When considering a mobile phone, Nokia and the iPhone are top of the list. Music player? iPod.
Since the advent of the Internet, the computing market has become an ever expanding and complex Web-service and product marketplace. Microsoft has failed to keep up with this complexity and the shift toward the Web-accessible application.
Web-Search Makes Every Customer a Neighbour
The situation is made worse because of Web-search. Today, customers can search and find the right service or product for them. Before Internet search, companies had to ensure that if a customer had a particular product need (an operating system or a soft drink), they would automatically think Microsoft or Pepsi. Web-search changed all of this. It is now trivial to find the right service or product. There is no need to think of a major supplier, the best supplier for each user's needs can be found by searching online. The Internet has made all companies equally close to the consumer and equally easy to find.
It is not only because of the Internet that Microsoft is suffering. Linux has been effectively marketed and companies now consider it to be a serious alternative to Microsoft. Linux offers the unique advantage of being able to alter its computer code. This isn't possible with Microsoft's Windows operating system, although Microsoft may be taking some steps to open-source some of its server protocols. If Google’s Android takes off it may become the Windows of the cell phone, damaging Microsoft’s share of the mobile device market.
Can Microsoft Purchase Its Way to a New Future?
What can Microsoft do about this? One approach is to purchase a company that is an Internet brand and Yahoo is certainly one. This will bring Microsoft much needed kudos as well as Yahoo’s Internet services and online advertisements businesses. Such a combined company may be the only serious contender to Google's dominance over the next five years.
Microsoft can purchase its way into other markets. However, the problem with doing this is that the culture of any purchased company will be swallowed up by the Microsoft machine. As soon as the company is rebranded as part of Microsoft the company can lose its cool Internet branding.
Even once Microsoft has bought its way into a number of Internet sectors (Yahoo representing a large number of them), Microsoft will still be Microsoft. Google is the Internet brand. And it is this perception that Microsoft must break in order for it to survive in the new, web-based computing future.
Will Yahoo Solve Microsoft’s Problems?
Microsoft’s position is precarious. The computing industry is going to fragment. Rather than be dominated by a handful of major players, there will be space for a large number of suppliers who will meet the needs of the global market via the Internet. Even if Microsoft buys Yahoo, the trend is to taking applications online. New computing is around the corner. Microsoft is playing catch-up. Can they succeed?
