Calling the Preliminary Rounds for the Next Microsoft

Rob Enderle

Suddenly Microsoft seems to have an abundance of competitors when a few short years ago it was thought the company was unbeatable and that funding a Microsoft competitive offering, either inside a company or without, was foolish. What a difference a few years can make.


If you've been following the news and the rumors about Leopard, there are some big fights brewing, and while they both eventually target Microsoft, initially the big battles may be between the contenders.


Based on requests from users, Dell has indicated it will put SuSe Linux on a number of their business oriented machines and Apple is targeting this same market with Leopard.


On the office front, Google has updated Premier Apps into a much more robust product and is targeting both businesses and home users. Corel has responded with Lightning, which has a number of advantages over Google but clearly lacks the massive resources that Google now controls.


Over the next few days we'll take a look at each fight and see if we can determine what the future holds in store.


But first let's discuss why all of these folks suddenly believe that Microsoft is vulnerable, and we'll end with how likely it is that Microsoft, like IBM was before, is to be dethroned.


Microsoft's Bad Decade


Every large vendor I've ever covered seems to reach a stage in their development where they focus too much inside and executives are allowed to focus more on how they look rather than what they accomplish. Microsoft has had a number of sequential failures, ending in the first version of Zune, and recently Microsoft's premier products Windows and Office appeared to be put at risk.


For Vista, the product was delayed and then lost its way. It was then put back on track in a rush and what finally arrived was late and the surrounding ecosystem wasn't ready. For Office, because of concerns about Vista and probably also because so much of Vista was unstable for much of the development period (including which features would make it into the operating system), it wasn't the premier application that Office 95 had been in the previous cycle. The result lacks synergy and Office doesn't promote Vista or Vista Office, and the mixed messages aren't pushing sales.


This is not only a problem in the corporate market, where there appears to be little interest in either product, but in the consumer market as well, where much of the recent dialog is on the lack of XP machines for people to buy.


Toss on top of that the criticality of fourth quarter sales to the PC makers and the reality that Vista's delay probably reduced their own income by around 20 percent, contributing to the termination of Dell's CEO and the need to pull Michael Dell out of retirement, and you have a fertile ground for insurrection.


The AMD Lesson


The hardware makers had a similar problem with Intel just a short time ago and learned from each other how to deal with it. One after the other brought AMD into the mix as a competing offering and Intel, which had not been paying adequate attention to their needs, particularly when it came to the Core 2 Duo, suddenly perked up and started making changes, including moving the guy who came up with the Core 2 mess.


For background, that problem was too many different parts which confused the buyer, made a mess out of any sales models, and made logistics (particularly parts and finished goods inventories) a nightmare to manage. This was true even of Dell, who should have actually been competitively advantaged by this move, given they mostly build to order. There were enough systems pre-built even for them to drive them to consider AMD, and they now use the firm as effectively as most of the other vendors.


This lesson showcased a way that might work to get Microsoft's attention but, unlike Intel, there really isn't a similar vendor to AMD. Apple, the closest, actually competes with the OEMs broadly and, even if they were to license, folks have learned it isn't smart to partner with Apple, with both HP's and Motorola's recent failed partnerships for examples.


Next we'll chat about SuSe Linux and Apple Leopard, the first preliminary battle, and that will be followed by Google and Corel.

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