Future's cloudy for Microsoft

21-10-2009

by Ralph Averbuch

Microsoft's latest OS may be the last that matters to PC users moving to online apps.

With much fanfare the media pretty much toed the line on the new Windows 7 launch. There's no denying that all the reports around the new Microsoft OS are generally positive. "It's the operating system that Vista ought to have been," seems to be the underlying view of many industry pundits. Yet this release comes at a pivotal time for Microsoft. Despite some 93% of PCs using Windows, profits year on year are down. For the first time 2009 saw the company make staff redundant and the power of the desktop PC finally seems to be shifting inexorably towards, at least partially, a cloud-based future -- where many of the features we now enjoy from PC based software made by Microsoft will be available from any PC, using any operating system, anywhere where there's an internet connection. The challenge for Microsoft won't be in producing startlingly new feature sets and ergonomic improvements in future releases of its operating system, so much as finding effective ways of retaining customer loyalty. That's no easy task as people realise that, despite the innumerable features offered by Microsoft software, the essence of office applications lies in a few features well executed. This is something the web is more than able to deliver and a growing list of government bodies, institutions and commercial interests have already dumped the MS OS/office apps model to move online with Google Apps. Microsoft is facing some very hard choices. As with so many other areas of technology, the development of high-speed, always-on connections makes Microsoft's existing business model very susceptible to attack from competitors able to piggyback on its OS, dropping all the necessary functionality into the PC via a web browser. And if anyone were to doubt this reality, the fact that Microsoft is itself planning to launch online cloud-based versions of its well-known office apps is a sure sign that it recognises the very real threat it faces. Microsoft has little option but to cannibalise its own customer base before others do. That's why this latest operating system may be the last that people really bother about. After all, if everything you do -- email, calendar, docs, spreadsheets -- lives in the cloud, why would you care about the OS you use?

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