The Decline of Microsoft: The Clues Seem to Be Obvious

Despite recent impressive profits (see: Microsoft's huge Q1: profit up 51%, revenue up 25%) and the continuing robust sales of its cash-cow operating system Windows, the future for Microsoft seems unfavorable, at least in the opinion of Paul McDougall who referred to it recently as an end-stage company (see: Microsoft Looking Like An End-Stage Company). Below is the key quote from his recent column:

Microsoft's defenders, and Microsoft itself, point to the company's lock on the PC operating system market (more than 90%) as proof it's still a dominant player that controls a bunker from which it can generate piles of cash and withstand reversals in other segments. But that's just whistling past the graveyard, spouting a tune written from backward-looking data not particularly useful for gauging the impact that hugely disruptive new products like tablets and smartphones and even tablet-smartphone hybrids are about to have on Microsoft's place in IT. Market research group NPD recently found that 13% of iPad users bought the Apple OS-based device instead of a Windows PC. That's a hugely significant number for a product that didn't even exist a year ago. Just wait until it gets more features, and comes down in price. And do you know anyone under 30 who uses anything but a phone for the bulk their personal computing and communications needs these days? Microsoft's Windows Phone 7 will hit stores in November, but most analysts believe the offering, though slick in many respects, is too little, too late to meaningful bolster the company's meager 5% share of the mobile OS market.

Relating McDougall's comments to my personal used of information technology, I spend more than 90% of my computer-time working in the cloud, mainly using Gmail, browsing the web, and writing this blog. I recently purchased an iPad and also use it extensively for email as well as web-browsing. This device is taking healthcare by storm and, with iPhones/Androids, will be the primary means by which physicians and nurses interact with hospital EMRs. Google has been suggesting that browsers like Chrome will be the operating systems of tomorrow and I think that they are probably right. Because the operating systems on smart phones are largely hidden from sight, they may actually become invisible to most users. I wouldn't accept a new Windows Phone 7 if someone gave it to me. Taking all of this into consideration, I personally don't envision Microsoft as a major player in my future computer life.

Comments

[Doug Mitchell, MD]

A release candidate of Google's brower-based Chrome OS you mentioned is available for download (it took some digging!) at http://sites.google.com/site/chromeoslinux/

It seems slick from the little time I've had to play with it.

[Steve Potts]

Great post. The handhelds will continue the healthy and necessary conflict between security (PCs in the IT department) and innovation (pathologists on their iPads).

Someone really needs to build a killer made-for-the iPAD digital pathology app. Generally most people have just ported over from PC based environments. I would like to see a vendor start from scratch with a handheld in mind and do something mind-blowing.

Gmail and all the other Google suite of tools are powerful, I do a ton of my online work on them too. But a privacy leak on Gmail similar to what has happened with Hotmail (e.g. "I was mugged in country X, please send money" sent to all my contacts) would soon change that. So far Google has avoided security leaks like this.

Steve Potts
Digital Pathology Services