As Microsoft prepares to bring Nokia devices running its Windows Phone 7 operating system to market and continues to plan the future of its Windows operating system, the company finds itself in a difficult position. Apple, Google, and several other companies are wreaking havoc on different parts of the software giant’s operation. And now, there is concern in Redmond that it won’t be able to turn its business around anytime soon. At this point, Microsoft is facing more threats to its business than ever before. And for the first time, the software giant won’t be able to simply use its power and influence to take on all the companies in the marketplace that could potentially take it to task. Simply put, this is a very difficult time for Microsoft, and the company’s future as a dominant force is, for once, in doubt. Here’s a look at the disruptive threats Microsoft must face down.
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Google’s Android Platform
One of Microsoft’s biggest threats is Google’s Android platform. The search giant’s mobile operating system is catching on with people across the globe. Microsoft could very well find its Windows Phone 7 OS, which hasn’t caught on yet, far behind Google’s platform. If that happens, Microsoft could lose key vendor partnerships and revenue.
Apple’s Mac App Store
At the Apple Worldwide Developers Conference in June, Apple said that its Mac App Store is now the largest marketplace in the world for software purchasing. That’s an issue for Microsoft. Currently, the company’s Windows 7 platform doesn’t have an applications marketplace. Rumors suggest Windows 8 will feature such a store. But by then, will it be too late?
iOS
If Google’s operating system is an issue for Microsoft, Apple’s iOS platform certainly is too. However, iOS is a bigger issue for Microsoft in the tablet space. Not only is Apple’s iPad catching on with consumers, it is also catching on with enterprise users—a key market for Microsoft. If the iPad reigns supreme in the enterprise and Android wins out in the smartphone space, Microsoft won’t have anywhere to go in the mobile industry.
Vendor Issues
Microsoft is facing some serious issues with vendors right now. HP, the world’s largest PC maker, plans to bring its mobile webOS operating system to mobile devices and computers. Dell has doubled down on Android in the mobile market, while Acer has partnered with Google to sell Chrome OS-based Chromebooks. Microsoft’s key vendors are playing ball with the company’s competitors, and over the long-term, that could be a major issue for Microsoft.
Windows Phone 7 Reputation
As noted above, Windows Phone 7 hasn’t caught on with the marketplace yet. However, the reasons for that are numerous. For one, the platform lacked many key features at launch, including full multitasking and copy-and-paste. Plus, the hardware wasn’t all that compelling. And now that consumers have faced trouble with the updating process, some are looking to move away from Microsoft’s platform.
Google’s Chrome OS
Google’s Chrome OS is only available on lightweight computers right now, but the search company has designs of turning its operating system into a real competitor to Windows. Though that might take years, Microsoft has done little so far to insulate itself. Granted, Windows is a dominant player in the OS space, but nothing lasts forever.
Apple’s Halo Effect
In the desktop operating system market, Microsoft has little to worry about right now. Linux has a small fraction of the market, and Apple’s Mac OS X platform is a distant second. However, as the iPhone and iPad continue to gain popularity, Microsoft must beware of Apple’s Halo Effect—that over time, as people warm to their iPhones and iPads, they will be more likely to buy Macs. And as more people buy Macs, Windows’ market share will decline.
HP WebOS
Though Microsoft is an important partner to, it’s important to note that the PC vendor is just as important to Microsoft. Without its support, Windows wouldn’t be as popular as it is. That said, HP is planning to bring webOS to its line of PCs, indicating that the company might not be as keen on relying upon Windows as it has been in the past. If webOS catches on, Microsoft will need to keep a close eye on how HP handles Windows going forward.
Search Market Share
The future of the technology industry is on the Web. Microsoft knows that. And it also knows that if it doesn’t start improving its search market share, it could be in for trouble. Currently, Google easily dominates with Bing a distant second. Search is the gateway to cloud dominance, and if Microsoft wants to lead the cloud, it will need to start growing Bing faster than it has in the past.
Steve Ballmer
Though not everyone might agree, Microsoft CEO Steve Ballmer could very well be a threat to the software company’s business. While Ballmer has been delivering major revenue and profit figures to Wall Street, he has done little to grow Microsoft’s business. The company’s stock price is stagnant, and the competition is running circles Microsoft when it comes to innovation. Ballmer simply doesn’t seem equipped to compete in today’s rapidly evolving technology space.
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