Gates Strikes Back

In the last 30 years, Microsoft has dominated almost every aspect of the computer industry. A variety of different players have come and gone, usually with little or no long-term impact on the company, but there have been a few different scares that the software giant has always seemed to conquer. A recent article in Fortune magazine looks at Microsoft and the changes that are now being implemented by the company to remain competitive in todays Internet-based world.

There are four important, history-making steps that Microsoft has made. In 1990, Windows 3.0 was released to the PC world to compete with the user-friendly Macintosh computers. Macintosh still enjoys less than ten percent of the overall market, and the success of this very first version of Windows is a big part of it. Users are used to the program and have almost no trouble moving to new Windows versions as they are released. In 1995, the Internet is an ever-growing phenomenon and with it comes the new threat of Netscape. Although it probably cost them in the millions to fight the federal court’s antitrust charges, Microsoft was able to crush Netscape. Internet Explorer, which now comes with every version of Windows (IE 7.0 is about to be released), accounts for over 60% of all browsers used. The release of .Net in 2000 didn’t have the same result as the previously mentioned moves. The .Net product still works best with Windows computers while the rival software, Sun’s Java, works well on all computers. In 2005, the Internet and the two of the biggest and best websites in the world have started to put the pressure on Microsoft. But, never to be outdone,┬? Gates strikes back.

The latest move by Microsoft might be the toughest to make and the biggest risk yet for the company. Google and Yahoo!, the Internet giants that hold the #1 and #2 spots for total Internet traffic, are the biggest threats that Microsoft has seen. To tackle these formidable opponents, Gates has released a secret weapon - Ray Ozzie, the programmer who created Lotus Notes. Instead of taking the lead roll in the bold move to make everything Microsoft does have a web-presence, Ray Ozzie has taken the reigns and will help the software company capitalize on the power of Internet advertising as the focus of the new strategy.

The Internet has allowed companies like Google and Yahoo! to take advantage of the shortcomings of installed software. Updates can be made instantly to in one place, rather than on millions of individual PC’s,┬? and the potential of a userbase can be utilized in a way that is more financially rewarding - through advertising. The software industry is estimated to be a $120Billion dollar industry worldwide. Advertising is though to be around half a┬? trillion dollars.

In the next few years, Microsoft will look to make moves that almost no other company in the world can match in magnitude. A global network of server farms will be one of the first important steps in allowing the integration of commonly used┬? Microsoft software into the Internet. Soon, Live Drive will be released. Users will be given unlimited storage for everything digital - photos and images, video, data and documents, and anything else imaginable. Microsoft Windows and Office, with new versions to be released in 2007, will soon have important components available on the online. Ads will supplement the revenues of software sales. Already, marketers from major companies like Nestle and Toyota have been contacted about online ads. Media will be the new way to make money.

Some of the first steps have already been taken. Windows Live, Windows Live Local, and Windows Live Expo┬? are three websites that will be important in the shift to an Internet-based Microsoft. New changes will continue to be as bold and drastic, and will align the company to better compete with Google and Yahoo! and other online companies. Dave Winder wrote in his blog that MS is “willing to change in order to win.” We’ve started to see the change, now we wait and see who will win.

3 Responses to “Gates Strikes Back”

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