You really have to wonder whether Microsoft has any sense of strategic momentum given its decision to delay the release of its new operating system, Longhorn, until early-2006. Even when it does come out, Longhorn will be a minor upgrade over XP. Then, you have Microsoft's controversial XP Service Pack 2, which is supposed to fix all the wrongs within XP. The big problem, however, is the computer community is torn over whether to install the upgrade because it is incompatible with many software applications. You figure Microsoft would have figured that out before it issued such a major release. Maybe it's arrogance, maybe it's ignorance or maybe it's incompetence but it ain't smart. It has been suggested that Microsoft split itself into different unit or simply issue a huge cash dividend and wind down the company. What route you want to fantasize about, there is something rotten within Microsoft. This is a company that has struggled, despite its market dominance, to come up with another killer app beyond Office and Internet Explorer. Investments in the online, cable and gaming sectors have not been major successes. It is hard to tell whether Bill Gates and Steve Ballmer have lost their competitive zest. Whatever it is, there are signs Microsoft may need a Lou Gerstner-like executive to come in and shake things up.
Hey Mark, Microsoft is suffering from too much baggage in their OS. The big problem is that for years they have sacrificed stability and security to preserve backwards compatibility. There have been a lot of stories over the years about how Microsoft would put hacks into the OS to keep backwards-compatibility for major 3rd party applications, even though the apps were bending the rules in how they worked with the OS. They reached a point where all these hacks are causing security problems and they desperately need to shore up their security…so some of the compatibility needs to be sacrificed. SP2 is a step in the right direction – if the OS isn't secure it won't matter what apps run on it. There are folks in the industry who have a test they like to run – take a brand new machine with a base Windows XP installation and no patches, connect it directly to the internet and time how long it takes for the OS to be infected by a virus or worm. That time is now down to about 20 minutes in most cases, which is less time then it takes to download and install the patches needed to secure the OS (depending on your bandwidth, of course). The OS is not just insecure….it's become incapable of being secured by most users. Things are bad enough that MS is going to have to step on a few toes to get things fixed.
(Aron)
Microsoft is a company that completely missed the significance of the Internet, and only its monopolistic power saved it. Once it realized the extent of its blunder, Microsoft distributed its browser product for free, using that as a wedge to pry its way into the most important information technology of the past decade or more.
In its defense against US antitrust charges, Microsoft often whined that it needed “freedom to innovate.” Would you not think that, with its virtual monopoly in PC operating systems and office productivity applications and its over 50 billion in cash reserves, Microsoft has enough freedom to innovate and just once could come up with something really new and really useful? Think of the numerous information technology categories that exist and try to pick one that Microsoft has pioneered. I think you'll find that those they did not copy they bought.