Microsoft as IBM?

Daniel Lyons of Newsweek has an interesting article today on the performance of Microsoft over the past decade under Steve Ballmer. He refers to the period since 2000 as a lost decade. It is hard to disagree. Though Microsoft remains the giant of the tech world, it has become, Lyon notes

a bit of a joke. Yes, its Windows operating system still runs on more than 90 percent of PCs, and the Office application suite rules the desktop. But those are old markets. In new areas, Microsoft has stumbled. Apple created the iPod, and the iTunes store, and the iPhone. Google dominates Internet search, operates arguably the best e-mail system (Gmail) and represents a growing threat in mobile devices with Android. Amazon has grown to dominate online retail, then launched a thriving cloud-computing business (it rents out computer power and data storage), and capped it off with the Kindle e-reader. Microsoft's answers to these market leaders include the Zune music player, a dud; the Bing search engine, which is cool but won't kill Google; Windows Mobile, a smart-phone software platform that has been surpassed by others; and Azure, Microsoft's cloud-computing service, which arrives next year—four years behind Amazon.

For me, Vista was the end of the line. I understand the new Windows 7 is an excellent OS, but Microsoft was almost apologetic in its introduction; we screwed you with Vista and now we will sell you an expensive fix. But I left the office suite years ago. OpenOffice is a more than adequate substitute that is free.

Lyons is correct that MS will continue to dominate the OS and office suite markets (for those who insist on paying -- i.e. corporations). But this is not where the world is going. Apple will continue to capture the top end of Microsoft's market. But that market itself is shifting to other mobile devices (netbooks, smartphones etc.) where it has little presence. Like IBM, who ironically succumbed to new kid Microsoft a generation ago, it seems destined to control a market to no longer much matters.