Skip navigation

Microsoft is failing to bridge, let alone dominate, cloud computing paradigm shift

Sunday morning is one of life's simple pleasures. For me, it starts off with what is basically a triple espresso and the Sunday New York Times (via the Amazon Kindle, natch). Today's Times had what I think is a very insightful article by Randall Stross, describing Microsoft's inability to dominate the Internet "paradigm shift" that has braced the industry for the past decade and is leading us, inevitably, to a cloud computing future. Check it out:

Two successive Microsoft chief executives have long tried, and failed, to refute what we might call the Single-Era Conjecture, the invisible law that makes it impossible for a company in the computer business to enjoy pre-eminence that spans two technological eras. Good luck to Steven A. Ballmer, the company’s chief executive since 2000, as he tries to sustain in the Internet era what his company had attained in the personal computing era.

Empirical evidence, however, suggests that he won’t succeed. Not because of personal failings, but because Mother Nature simply won’t permit it.

There's so much good information here. This includes:

  • A comparison of Microsoft's attempts to buy Yahoo! with IBM's purchase of Lotus and decade ago, and why each is a stunning waste of time and money.
  • Multiple warnings from Microsoft executives that the then-coming Internet wave could topple the company's software business, all to no avail. There was Nathan Myhrvold's 1993 "Road Kill on the Information Highway" and Bill Gates' 1995 "Internet tidal wave," of course, but also a 2000 prediction by Gates that Microsoft would be the first company to successfully stay on top after a "major paradigm shift."
  • Microsoft's online services aren't just doing bad, they're doing worse than ever. The last time Microsoft made money online was fiscal 2005. But MSN was only profitable thanks to dial-up accounts. Once its subscribers went to broadband, the money dried up.
  • Meanwhile, Google--which makes about 90 percent of its revenues from online advertising--made $1.5 billion in 2005, $3 billion in 2006, and $4.2 billion in 2007. Microsoft's online business lost $74 million last year.
  • What about market share? "Google’s share of searches in the United States has increased to almost 67.9 percent in March 2008 from 58.3 percent in March 2006. During the same period, Microsoft’s share has dropped to 6.3 percent from 13.1 percent."

Interesting stuff.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.