Microsoft has several products that are monopolies and hold dominant market share positions:
- Internet Explorer
As the Microsoft Empire continues to march on we are beginning to see the chinks in the armor. In the past we have written about The Downfall Of The Microsoft Empire. As we begin seeing increased competition, let us examine which of these products are beginning to show the most wear and which one is mostly likely to fall first.
Windows has been the force behind the Microsoft Empire. It is the operating system and platform that developers have used to launch their businesses. Enterprises have so much legacy software written for the Windows platform that it seems that they can hardly get rid of it and switch to other operating systems, such as Mac OS X, Linux, and Unix.
- Apple is seen as a rising challenger to Microsoft’s operating system monopoly. While, many might view Apple Mac OS X as having insignificant market share compared with Microsoft Windows, it did not take Microsoft long to beat IBM in the game. OS X is generally seen as having less security issues and often a superior platform.
- Linux has done damage on the server-side, already, with its vast use in data centers worldwide.
- Google is making users less dependent on operating systems — and more dependent on the web as the new platform — with it numerous web applications.
Office currently is available for the Windows and Mac OS X operating systems. The intriguing thing here is that Office is a monopoly that sits on top of the Windows monopoly and makes money. The Office file formats have become the universal file formats, crushing IBM’s Lotus and Corel’s Wordperfect.
- Apple iWork is a small-time challenger. While iWork contains programs such as Pages, Numbers, and KeyNote that are often easier to use and have much more eye candy, iWork is rarely adopted in the enterprise and hasn’t gained much traction beyond the niche market.
- Google Apps is gaining some serious traction in the startup, small-business world, and educational sectors. It is Google’s ambition to move consumers from the desktop to cloud computing with web applications. Google Apps with its GMail, Docs, and Calendar are sending serious competition Microsoft. So far, so good.
- OpenOffice & StarOffice is Sun Microsystems move to challenge Microsoft with an open-source office suite. So far it has millions of users world-wide, and has been the most successful in 3rd world countries.
- Zoho Office Suite is also a challenger to Microsoft Office. It has met relative success, along with Google, with moving office suites from the desktop to the web.
Microsoft Internet Explorer
Internet Explorer currently is available for the Windows operating system. Whereas, in the past, there was also a version for the Apple Mac OS X platform, that has been eliminated. Internet Explorer faces increasing competition from browsers such as Mozilla Firefox, Apple Safari, and Opera – all of which run on multiple operating systems.
Internet Explorer is the default web browser that is included with the Windows operating system. It, however, fails to generate much revenue, except to open to default websites such as Msn.com and Live.com. The Microsoft Online division is still in debt. Internet Explorer is not considered one of the Microsoft “cash cows” that Windows and Office are. Although, as more traffic moves to the web, the opportunity exists for Microsoft to earn more income from Internet Explorer, it has not so far earned significant income.
- Apple Safari is superior to Internet Explorer.
- Mozilla Firefox is superior to Internet Explorer.
- Opera is superior in performance to Internet Explorer, but does not always render websites the same.
Desktop Business Model
As you can see, Microsoft is facing attacks from all fronts. Microsoft’s main cash cows: Windows and Office are currently desktop applications. Microsoft has dominated the desktop scene for several decades. However, with current Internet startups and Google pushing, Microsoft has lagged with cloud computing and web applications. Microsoft has experimented with an web version of Office, but is hesitant to use that to replace desktop Office – as it might cannabilize it. On the online side, Internet Explorer is receiving, serious competition from browsers that are more secure and often much speedier.
The software business model that Microsoft set up was to build platform on top of platform. You can see that the Office and Internet Explorer platforms were built on top of the Windows platform. While that has been genius for many years, the shift to cloud computing on the Internet could make the desktop obsolete.
With no change in Microsoft’s existing business plan, I predict the monopolies to fall would be in this order:
- Internet Explorer as the competitors are coming on fast.
- Office is a file format standard and businesses everywhere have a common standard format. A monopoly that will be difficult to switch from until some competitor can guarantee true compatibility.
- Windows would be last to get overthrown as much of the software world is built using this platform, including Microsoft’s Office and Internet Explorer platforms. Windows is, perhaps, the most difficult monopoly to eliminate as the switching costs are high.
For Microsoft to remain protect their monopolies several things may be considered:
Make .NET Multi-Platform
- Expand their .NET platform to run across platforms and operating systems — same as Java platform.
- Write all products using .NET.
Multi-Platform Business Model
- Using .NET create a version of Office that runs on Linux/Unix and the Web (in addition to Windows and OS X).
- Create a version of Internet Explorer that runs on OS X, Linux/Unix (in addition to Windows). Make Internet Explorer more competitive to push other online money making ventures.
- Windows needs to be simplified from x number of different versions: Starter, Home Basic, Home Premium, Business, Enterprise, Ultimate, etc. down to 2 versions: Home and Professional. This will eliminate a lot of consumer and enterprise confusion on which version to purchase as well as requiring less development and maintenance effort on Microsoft’s side. Simplifying the product line can streamline the company and make it more agile.
- Invest in efficient data center technologies to deploy existing and future web applications in the cloud to compete with other Internet companies.
With a multi-platform strategy Microsoft can protect its current products for the foreseeable future. In addition, any future products (such as databases, CRM, social networks, etc.) can be quickly deployed to all the platforms listed above. With these moves Microsoft can defend its turf from would-be competitors.