Has Microsoft lost its bearings?

This is more than idle speculation. Their recent failures, when placed side-by-side, showing an interesting pattern and a prescription for peril.

The two mistakes are Vista and Yahoo, and together they show a company that has forsaken its core missions and is failing to defend their market position, in part by chasing things other than what made them great (well ... big) to begin with.

Microsoft's mission was to make the end-user computing experience standard and bearable. It doesn't matter if we are discussing MS-DOS, Windows, Office, or Internet Explorer. Long ago Microsoft rightly concluded that the user was important, that computing power was going personal, and that they should dominate the market.

They also were once a paranoid pack of profiteers and found ways of beating competition back to the point that various governments around the world intervened to prevent a desktop monopoly. Microsoft has lost that edge.

In recent years, Microsoft has chased other dreams. MP3 players, web properties, cell phones, cash registers (POS terminals), advertising, game boxes, and more. It can be argued that each of these is an end-user computing point. But each is a detachment from Microsoft's buttered bread — the desktop.

Resources and attention diverted to other products caused a lack of attention in the desktop arena. While Microsoft was failing to deliver with Vista, it was also failing to see how Linux would become the de facto operating system for the next generation of users in developing countries. While whelping Vista, Microsoft created nothing new or useful for the established market while forfeiting the emerging market.

They were too busy Chasing Jerry.

Dismayed by their own lackluster performance in the Internet portal and search arenas, Microsoft sought to buy position through buying Yahoo. Though there may be interesting, undisclosed synergies in the MicroHoo marriage, the mere transfer of assets added nothing to their core market, that being the desktop.

Imagine for a moment that instead of birthing a bloated inbred named Vista, Microsoft had worked diligently on making XP more Internet aware — that their operating system knew how to make the most of a global network of computers without the need to muck-about in a web browser ... that all web 2.0 technologies became an active part of the desktop experience, delivering intelligence to any/all desktop application — Microsoft's or anyone else's — providing that those applications ran on Windows.

This would be sticking to their vision, which is now walleyed.

It is too late to salvage Vista's reputation, and it might well be worth abandoning t and starting work on XP+. It is too late to salvage the Yahoo deal and might well be worth making the cell phone, Xbox, and PC collaborate. It might well be worth getting legal copies of XP onto every laptop flooding into Asia, Russia, and Latin America.

It might be better for Balmer to stick to his knitting.


Guy Smith is the chief consultant for Silicon Strategies Marketing. Guy brings a combination of technical, managerial and marketing experience to Silicon Strategies projects. Directly and as a consultant, Guy has worked with a variety of technology-producing organizations. A partial list of these technology firms include ORBiT Group (high-availability backup software), Telamon (wireless middleware), Wink Communications (interactive television), LogMeIn (remote desktop), FundNET (SaaS), Open-Xchange (groupware), VA Software (enterprise software), Virtual Iron (server virtualization), SUSE (Linux distributions and applications), BrainWave (application prototyping) and Novell.