Will Microsoft Crumble In The New Era Of Tech Threats?

by Sam Dean - May. 24, 2010Comments (4)

Recently, numerous posts have been found on the web heralding the end of Microsoft, in a world where cloud-based initiatives are gaining traction, and Microsoft is seen as not grokking the cloud. One of the more visible of these arguments came from Marc Benioff, Salesforce.com's outspoken chairman and CEO, who was previously a top executive at Oracle. Benioff noted that Apple's market share is not far from Microsoft's, proclaimed that we are "entrenched in the world of Cloud 2," and pointed specifically to "the end of Microsoft." Neither the cloud nor Apple will erase Microsoft's own entrenchment so quickly, though, and part of the reason why has to do with prevalent plumbing, infrastructure and application needs at enterprises.

In a recent post, Matt Asay noted the following:

"Microsoft, after all, has a history of making dramatic changes in direction, changes that have saved it more than once from software obscurity. This was hammered home to me over the past few days in conversations with executives from a broad spectrum of the technology industry: hardware, software, and media. Each has an interest in seeing Microsoft buried, yet each suggested that Microsoft is on the path to resurgence."

These are good points, but it's also worth asking whether Microsoft really needs "dramatic changes in direction" to remain viable. The company's Windows 7 operating system is already a success, but is young enough that it's eventual entrenchment in businesses is only in its infancy. Many enterprises depend on the company's Exchange infrastructure as the lifeblood of their email and messaging strategies, and no matter how compatible with the Office suite alternative applications get, there are still compatibility problems with them.

In today's technology market we are so deluged with initiatives aimed at consumers that it is easy to forget that, years ago, Microsoft put its platform on more than 9 in 10 business desktops, and that entrenchment hasn't shifted much. The ecosystems of business applications for Windows is enormous and daunting to compete with. Benioff's citation of Apple's market share relative to Microsoft's doesn't include a complete analysis of Apple's focus on the consumer and Microsoft's continuing focus on business users.

The fact is, for cloud computing and new initiatives at companies such as Apple to really threaten Microsoft, businesses would have to be ready to ditch significant parts of their software infrastructures, which won't happen overnight. It won't happen for traning and support reasons, among others. Granted, Google is rapidly increasing its focus on enterprises, and that was very evident at Google I/O last week. But let's not forget that until Chrome OS arrives in a few months, Google doesn't even have a computer-centric operating system, and when Chrome OS does arrive, it's headed for netbooks.

Will Chrome OS be a viable server operating system for businesses, or include the essential, secure messaging plumbing that businesses need? No. Will it have much early relevance beyond netbooks? No. Do we have concrete proof that Google can support a computer-centric OS? No.

Apple, Google, open source projects, and important cloud players such as Salesforce are asking essential questions about future computing models, and innovating. This is great to see. But in businesses--such an essential part of the tech market--platelets don't shift overnight.

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by John Mullinax on May. 24, 2010

Hi, I think your article hits on something important - no new generation of computing has ever fully replaced the old one... e.g., people still run mainframes and mini computers. That said, there is no doubt that "the cloud" represents the next generation of computing, and Microsoft is fully committed to leading this move. Today, Microsoft offers apps as a service for collaboration (sharepoint) email (exchange), web conferencing (live meeting), and IM/presence (office communication server). These are fully supported, enterprise class services that let customers *choose* when and how to be on-premise or in the cloud. This collection of services is called Business Productivity Online Services (BPOS). There's also a CRM Dynamics Online that gives customer CRM Dynamics as a cloud service.

Additionally, Microsoft offers the Windows Azure Platform -- a full application platform in the cloud for others to build on. It's easy for small developers and partners to use, but also accomodate the needs of larger partners and the enterprise with things like support, interop / messaging across firewalls, federated identity management, systems management and monitoring, multiple licensing models, etc. It's a Platform-as-a-Service style cloud, so people can focus on their code and the intellectual property that gives them competitive advantage and relieves people of the burden of configuring and managing everything on top of a bare virtual machine as a pure Infrastructure cloud would. Manage apps, not machines, because that's where your value comes from.

There's even Platform-as-a-Service style relational DB service, which automatically scales and offers most of the core features of SQL Server called SQL Azure. No one else has anything like it, and it can let companies handle any level of traffic in a relational way in the cloud without worrying about clustering, failover, etc, because those things are built in.

Microsoft is fully embracing the cloud, but not suggesting customers blindly embrace the cloud. The cloud is perfect some things now, and will be perfect for more things tomorrow. People who tell a cloud-only story often do so becuase it's the only story they have. In the real world, where people still run mainframes, minicomputers, PC apps, client-server, web apps, mobile devices, and cloud apps, they need all this stuff to work together. Microsoft wants people to have choices about when to put stuff in the cloud, with a hoster, or on-premise, and to know that whatever choices they make it will all work well together.

Disclosure: I do work for Microsoft, but I'm posting this as my personal opinion.

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by Richard Carmody on May. 24, 2010

The key point here is that MSFT has a DEEP cash reserve. They continue to invest heavily in R&D and like @JohnMullinax pointed out, they have a viable offering in the cloud space. This is not a sprint... They will strike for sure. Let us see when and where and how!

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by an anonymous user on May. 24, 2010

Microsoft will be a player in the enterprise market forever.

Windows is synonymous with business - period.

Google and other cloud services are nice and all but nobody big wants their data under Google's complete and total control.

While it can be argued that a company's files are only as accessible as your licenses with Microsoft are current, at least (and if somewhat ironically), you would still be able to open, edit, save, your MS office docs via Google Docs, IBM's open office, or open office, etc.

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by Confused. on May. 24, 2010

OK, so I'm missing something.

Cloud computing fits a niche, but taking over? Really?

I don't see the benefit yet.

Too expensive for the little guy. Too expensive for the BIG guy.

And really only affordable for organizations that have wildly fluctuating demand.

As far as dominant and M$ goes?? The only thing that stops many of us from jumping to new stuff is the need to support legacy apps that only work on M$.

I have to upgrade everything this year. It's no more expensive to go Mac (in fact it's cheaper) for 50 or so workstations. To support Win 7, I need all new computers, and new domain controllers and 2008 and the associated CALs.. If it weren't for a couple legacy programs we have tens of thousands of dollars invested in I'd switch next month.

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