"Microsoft dead in the water"

John C. Dvorak, tech guru and regular of This Week in Tech and the Cranky Geeks podcast recently did a commentary opinion piece for MarketWatch on how Microsoft is currently dead in the water. In 8 points, he outlines how Microsoft has blown it with Office2007 and Windows Vista, its premier products, by repeatedly delaying release as well as lopping off all the features that stood to make either a significant upgrade.

I believe most of his points hold true merit with one exception: The Xbox360. From what financial reports bear witness of, the gaming division of Microsoft appears to be one of its most profitable divisions. Although not a hardcore gamer myself, the feedback I've heard from the unit has been phenomenal (minus the issue of the self-igniting behemoth power-block is uses). Dvorak's point #5 about the Xbox360 being produced in too few numbers way before Sony PS3 and Nintendo Revolution/Wii seems to be razzing MS for coming out with a product TOO EARLY(?). What he takes issue with, I am tempted to call smart marketing. MS is accomplishing two things by their early entry into the market and by supplying insufficient amounts of the hardware product: 1) They're gaining an earlier toe-hold in a competitive marketplace, something that will likely ENHANCE their market penetrance in the gaming division, and 2) They're reaping in dollars because they are maintaining its high market value. Supply-and-demand, right? Keep demand high by bottle-necking a luxury product.

I'd like to recharacterize the remainder of Dvorak's points, however. The mishaps with Longhorn/Vista, Office2007, and the constant struggle against Google are indicative of several things:

1. Complacency. Microsoft has become a large entity because of its prevalence in the market-place, but rather than using that momentum and funding to voraciously pursue and push new technologies, trends, and paradigms, they got somewhat complacent with their majority role. When other companies stepped up to the bar in remote application services, i.e.: Google, they spent several years dismissing these emergent technologies as a passing fad. When these competitors starting bearing rather large fruits, MS apparently woke from its stupor and moved straight to point #3 below.
   
2. Mismanagement. By now the greatest features originally touted in the OS that would replace XP have all but been stripped away. Although sporting a brand-new look and a revised Alt-Tab switching, the encouraging and allegedly quick WinFS will not be shipping with the plethora of Windows Vista versions to be sold (5+?). It does appear that the XAML/Avalon graphics engine will make it in, although there have been conflicting reports about its inclusion over the last two years. These kind of change-ups are dramatic: the company has invested thousands of man-hours in developing these technologies which were then deemed "not-ready" for implementation into the shipping version of the OS, which has now been further pushed back into 2007 past the Christmas season. These repeated blunders may be the result of poor communication between burdgeoning Microsoft divisions or short-sightedness/over-eagerness by higher-ups not understanding the true implications of the technologies in question. Regardless, these traits indicate a company where "the right hand doesn't know what the left is doing."
   
3. Panic. The rush to get MSN Live out the door seems a final realization that Google is really doing fantastic in the business sphere in the online search and application fields, moreso than Microsoft foresaw. Tension was already evident when Microsoft software engineer Mark Lukovsky resigned to seek work "elsewhere". This of course, lead to the infamous "chair-throwing" incident where Steve Ballmer, CEO of Microsoft was quoted as saying he vowed "to kill Google," further clarifying his stance with "I'm going to f***ing bury that guy, I have done it before, and I will do it again." - speaking of Google CEO Eric Schmidt. The "imminent" (ha!) release of Windows Vista/Longhorn has become its own subject of mockery as the schedule is regular in only one thing - delaying eventual release. The loss of a significant proportion of the most advertised features due to unreadiness by internal developers may be a contributing factor to the appointment of Steve Sinofsky, previously the division head for Office development, a move to bring the perpetually delayed OS back on track. This was a sign MS was truly trying taking seriously the repetitive stalls in trying to get Vista out the door, pulling the head of one company division to lead up another. Unfortunately, there must have been some significant issues with the OS because it has again been pushed back, this time into early 2007 where it will miss the Christmas season. This attitude of panic was also evidenced by the recent Microsoft campaigns, spending an enormous $210 million to rid itself of the "big company image" and unspecified amounts to assert itself as a cheaper and safer to run than Linux in the server realm, a point of much contention and debate.
   

The pitious thing about all this is the myriad third-party developers and engineers, hardware producers, manufacturers and retailers that will hurt from The Microsoft Syndrome. PC sales are already slumping as people opt out of purchasing a new computer uncertain of whether or not it will run the next-gen OS that may, or may not, arrive next year. Although the computer-purchasing momentum has been building greatly for the last two decades, sales may be quite dismal this Christmas season when buyers realize they're still buying an operating system that's more than 5 years old.

In order to remedy their situation Microsoft will have to undergo some major internal renovations. The hardest changes will be psychological, in moving beyond the corporate mentality of invincibility that is beginning to crumble. If Microsoft seeks to legitimately defend itself from Google and the ever-increasing awareness to open-source solutions and innovative competitors like Apple, they will have to be ever-vigilant, more progressive, and become more security-minded.