Spin On Demand

How quickly things can change. It seems just a short while ago that Microsoft seemed utterly invincible, swatting away antitrust suits along with the competition as if they were mere flies.

Today, however, Microsoft seems more David than Goliath. With its rapidly decreasing influence on the desktop and the declining relevance of traditional software overall, Microsoft is desperate to reinvent itself in the face of Google’s dominance in search, Apple’s re-emergence with Mac OS and consumer gadgets, the ever increasing popularity (and market share) of Mozilla’s Firefox, and a growing consortium of firms that have embraced and continue to very successfully propagate the software-as-a-service model. Microsoft would seem to be fighting an uphill battle on all of these fronts. And I’m not even going to mention open source (that’s so yesterday).

So where and how can Microsoft leverage its $20 billion war chest to maintain relevance, if not wholly recapture its position as an undisputed technology leader?

I believe the answer lies in Microsoft’s past. Microsoft skyrocketed to success by creating a highly accessible platform that was easy to use by consumers, and easy to develop for by 3rd parties. Windows 3.1 represented a singularly, fantastic break-through achievement.

But what does that mean for today and tomorrow? Vista was 3 years late, and it shows. But does anyone care? The only other real competitor on the desktop is… Microsoft. So forget about the desktop. Especially relevant since no one is developing for the desktop anymore. At the risk of stating the obvious, Web-based applications are well on their way to displacing traditional software on the consumer desktop, and the enterprise won’t be far behind as wireless hi-speed internet access becomes more and more ubiquitous.

Let’s consider Microsoft’s historical strengths: the ability to provide a robust, development platform and programming tools, combined with monopolistic end user reach. In today’s context, user reach continues to be achieved via Internet Explorer’s continuing dominance in the browser space. The opportunity therefore lies in the provisioning of an application development framework, tools and infrastructure for delivering world class, internet applications. Throw in some increasingly popular buzzwords like Cloud Computing, On Demand and SaaS, and we begin to form a vision of the future where Microsoft powers the engine, indeed the operating system, of the on demand, cloud computing model. (I cite numerous benefits of the on demand model in a previous article.)

They’ll have some catching up to do — firms such as Amazon, with their S3 and other cloud computing services, have already launched and are being adopted by early innovators. But Microsoft, known for taking good ideas from others and turning them into great (and profitable) applications, wouldn’t have it any other way, would they? Cloud computing is in its infancy and has had its fair share of challenges, and thus provides a perfect opportunity for Microsoft to enter and provide a stable platform that enables the security, robustness and credibility necessary for the enterprise to jump on board.

Update (08/19): Inklings of a “Cloud OS” from Microsoft, codenamed Midori, are beginning to trickle out.