The article “Microsoft Beyond Vista” by Robert A. Guth (WSJ,
Nov. 27, 2006: pp. B1 & B6) presents an insight into the changing landscape
of the PC industry and the future directions for Microsoft in it. In recent years, the spread of high-speed broadband Internet
access and a host of new technologies have made it easier than in the past for
people to use the Internet for tasks such as storing music to watching videos
and writing documents. Consumers are increasingly using sites such as Flickr,
for online photo site, and You-Tube, to store pictures and videos online.
Increasingly, applications such as email and word-processing are offered as
Internet services and the need for software running on a PC is reducing. The
releases of new versions of services are happening with much lesser fanfare.
create a delicate balance as it tries to retool its software for fast-changing
Internet while trying to preserve one of the richest cash cows in business
history. To put things in perspective, last year Microsoft Windows contributed
$13 billion towards revenues and $10 billion towards profits.
becoming critical. Some companies such as Oracle Corp. and Sun Microsystems
Inc., predicted that PCs would be replaced by simpler terminals that just ran
Web browsers. Yet, the reality is that the Internet has in fact propelled PC
sales, as consumers bought them in order to access the Web. This was again a
great situation for Microsoft to be in. However, how this situation will unfold
in the future is not clear. As an example, Google is gaining steady ground by
means of a combination of Web services and online advertising, instead of
relying on developing and selling software.
For Microsoft it is important to utilize its strength in
software and pursue initiatives that will be instrumental for future success. Under
the brand name Windows Live, for example, Microsoft plans to offer online
services that complement Windows. A separate set of services called Office Live
will be aimed at small businesses. Those services are still taking shape,
though Microsoft already has an online service called Windows Update that
allows users to automatically receive software fixes, security enhancements and
other features. In another shift the company is trying to make its software modular
by breaking in into individual components. The development of Vista was a stepping stone in this direction. To try to stay a step with Google, for
example, Microsoft could release search software for finding data on a PC over
the Web without having to wait until the next major release of Windows.