Microsoft has over 80 products stretched over many markets from mobile device software, to RFID, to MSN services, to desktop applications to video games.
As companies get bigger they need to start looking at expanding their product base. Sure a lot of them won't click (with Microsoft it's a lot), but that's how they can get to the "next big thing". I don't see they having 80+ products stretched over many markets to be a problem at all. They are investing in many areas and they will hope that some of those will click for them. The reliance they have on Windows and Office is unbelieveable. It is an eventuality that these will subside. They NEED to look at other products.
But you can start to see signs from the Microsoft culture that the company is beginning to no longer be as cohesive as it once was. As Microsoft becomes a larger and more mature company, they will always continue to struggle to find the balance of performing with the strength of a large company while maintaining the efficiency of a small one.
I don't think this is anything unavoidable. It's sort of like a country. You have many subgroups and subcultures within. You relate yourself with both. Once a company gets to a certain size, you can't do things the same way as a startup. So rules change and so does the culture. We spoke a little about Google and how it operates. They are small right now, but aggressively hiring left and right. Eventually, the entire company will find itself in a situation similar to how many others before them have. They will need to change. How and what they do will have to be seen. But the certainty is that they won't be the same as they are right now and maintaining the "efficiency" they have right now won't be possible.
This can be seen from the recent resurgence of Netscape’s Firefox browser in the software market. In the Business of Software, it is mentioned that the Netscape Navigator code base grew from “100,000 lines in 1994 to 3 millions lines in 1994”. Netscape’s inability to add new features while maintaining stability in the product was one of the major reasons for their loss in the browser wars.
Yes, ONE of the reasons for Netscape's downfall was because version 4 was a real sucky application. It didn't even compare with IE 4, which was years ahead of it in every way. The most important being its implementation of the DOM. But I won't say that the size of the code was the reason for Netscape releasing such a bad app. I'm sure IE was also had similar number of lines of code. It's how the app is architected that matters. Look at Win 9x vs Win NT. Windows 2k/XP are much larger than Windows 9x, yet they are better OSs. So just trimming down the LOC (lines of code) isn't the answer.
Prahalad’s theory basically claim’s that 90% of the world technology and commercial products are targeting the richest 2 billion people in the world. This in turn has left the 4 billion people who earn less than $4 per day out of the world’s markets. But he thinks that is can all change, because now the “bottom of the pyramid” has reached such a critical mass that companies can still large profits despite smaller profit margins per sale.
I agree. The Asian market is HUGE. And these companies, Microsoft included, will need to do more to make their presence felt there. And not only target the upper/middle classes, but even the lower classes.
A few weeks ago, Microsoft announced they would be releasing stripped down Hindi version of Windows XP to the India market for $70 as a pilot program.
You're talking about Windows Starter Edition right? I actually think this was really stupid. From what I remember, this version only allows you to open up three applications or windows or something. You can't take a product that's sold for X in the US and sell it for around the same price in another country like India or China. Even $70 (Rs. 3000+) is too much. The only way they will come down to a reasonable price is when they start feeling the heat from Linux. China already has Red Flag Linux which is a home baked version. It looks like the Chinese govt. is heavily promoting it since they don't want to rely on a foreign American company. If India, with its IT superpower, status does the same, Microsoft will be forced to bring down the cost.
And regarding language, I think Linux comes in more languages than any other OS. There was a story long back where a small town in some scandinvian country threatened to move to Linux unless MS released a version of Office or Windows in their language.
In conclusion, I feel that in order for Microsoft to maintain their market dominance, they need to focus as a company. They not only need to question whether their new product lines are actually viable and worth pursuing but they also need to streamline their existing flagship products. And finally as software commoditizes, they need to find new ways for the entire software market to grow.
Yeah focus is needed, but at the same time I feel Microsoft needs to try out different markets. They need to see what works and diversify away from their reliance on Windows and Office. It might sound strange but the spread of broadband is a direct threat to Microsoft. As more people have access to high speed internet, they are more likely to store their data in a remote place and work with think clients. Essentially what runs on the client won't matter much anymore - which is exactly what MS is trying to prevent. They are in a catch 22. Classic example is IE. During it's hayday - v. 4, 5, 5.5 - it was absolutely brilliant. Blew everything else out of the picture. But they saw what they were doing... encouraging people to build web apps and not Windows apps. This was fine in a way, since IE only ran on Windows and no other browser supported the cool stuff in IE. But as Mozilla, Opera and other guys started having similar features which could support complicated Web apps, the OS didn't seem to matter much anymore. So they let IE rot. And this is it's present state. Let's see what new developer features IE 7 will have. I'm sure it will have all the general user friendly features like tabs and RSS support etc...
Boy that was a big tangent. Anyway, my point is that yes they need to put out better software with more innovative features, but they need to also expand into other markets or even create new categories of products.