Everyone’s favorite kicking-boy lately is Microsoft, and it’s easy to see why.
Mobile is a disaster, Bing is having issues catching Google, the slate/tablet revolution started by Bill Gates has bypassed Windows … in so many ways Microsoft just feels so yesterday.
Last week Microsoft execs clarified how they view their business, and how they’ve structured around future growth and relevance. They’re focusing on 8 core businesses, they said:
- Xbox and TV
- Bing
- Office
- Windows Server
- Windows Phone
- Windows
- Business users
- SQL Server
Let’s leave alone for now the question of whether a company can focus on 8 things simultaneously. It’s pretty clear Apple doesn’t … but Microsoft is a big company with a lot of people. Perhaps they can make it work.
Which of the 8 look like good opportunities and growth areas?
Xbox and TV
Xbox is a runaway success for Microsoft. It hasn’t totally crushed Sony, but it has done very well. And the online revenues seem incredibly strong … a billion-dollar yearly take in online revenue alone. TV? Hmmm … not so much. I imagine there will be some convergence here, however, and with expanding online connectivity, Xbox is a growing franchise.
Bing
I think the whole tech world is a little surprised by Bing. No, it’s not grabbing huge share with both hands … but it does seem to be growing share slowly. The key question to me is: will Bing ever shake off the dust and start growing 2-3% of market share per month? That is what would seriously threaten Google … but it doesn’t seem likely. That said … Bing is a qualified success so far with decent prospects.
Office
Office is the office today … almost every professional in North America and Europe, and plenty beyond those places, uses it. In my mind this is one of the most threatened Microsoft business pillars: OpenOffice, Google Docs, and numerous other wannabes threaten the huge Office revenues. This is a decreasing business, even with Office live, IMHO.
Windows Server
Somehow, Windows Server has been taking share from Linux over some of the past few quarters. That said, I’d put Server in the same category as Office: not going to be a significant growth engine of the future for Windows.
In an increasingly heterogenous desktop and mobile environment, and with much cheaper alternatives … good luck.
Windows Phone
You cannot count out a contender with the resources and partners that Microsoft still has … but seriously. iPhone on the high end, Android on the middle and high ends, BlackBerry, Symbian, WebOS … this is an increasingly crowded marketplace. And Windows Phone is WAY behind. Ditto the previous comment … good luck!
Windows
Windows is still a massive enterprise, but most of the installed base is XP. That’s in one sense an opportunity for Win7, but in another sense a testament to the growing irrelevance of desktop applications. The browser-based operating system is a growing reality.
Google will merge Android and Chrome. Apple will continue its hold on the high-end and aesthetically-conscious consumer. Linux is fighting at the low-end and the ideological fringe.
And meanwhile … the web keeps absorbing more and more of what used to be desktop functionality. Windows is a great cash cow, and will remain as such for a long time, but it’s not the growth engine of the future.
Business users
Selling to business is hard, but Microsoft has it down pat. And, with business intelligence tools and other enterprise pick-ups acquired over the past 5 years, Microsoft has the potential to really grow this space.
There are still many competitors, but not everyone is going to outsource their business apps to Marc Benioff, or run everything on SAP or Oracle … and even if cloud computing starts to dominate, Windows has a pretty capable answer in Azure. I’d put this as a growth engine for Microsoft. The downside is that I think it will be harder to achieve lock-in here than on the desktop, so this may not be as secure a business as Office and Windows have been for the past 20 years.
SQL Server
I’m a little biased here, being most web-based, but I don’t know anyone who’s doing anything cool who is using SQL Server. There are just so many cheap/good options available right now, and expensive/good as well.
I’d have a hard time rating this as a growth opportunity for Microsoft … especially as they are losing the developer-lockin that they once had, since the mobile revolution is sucking them all into Apple’s and Google’s universes. Good luck here too.
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Tallying it up …
5 of the 8 are not obviously going to be growth engines for the future … at least not at the scale that Office and Windows have been for Microsoft … and significant threats face their other 3.
In other words, don’t expect Microsoft to stop being the favored kicking-boy of technology pundits anytime soon.