There's Microsoft, probably the biggest software company in the world. And there are others. In the past years Microsoft has been trying to expand it's business to pretty much all the markets, faintly connected with it's core business - developing software. Marketing experts could say this is not a good strategy, because it is better for companies to retain their focus and stay specialized in things they do best. But if Samsung can build bridges in South Korea and at the same time make smart phones, why shouldn't Microsoft make iPods?
There are a few interesting new markets Microsoft entered into. But are they profitable enough to let the Windows family suffer because of this expansion? Here are the most significant:
- Gaming consoles market: the Xbox 360 is supposed to be one of the best gaming consoles according to independent tests, because of it's high performance and good online support. They even offer some exclusive Grand theft auto content, which was probably the most anticipated game of this year.
- Portable media devices: we are supposed to see the new Zune HD in autumn, designed to kill the iPod dominance of portable mp3 and video devices. But is it cool enough to be able to take this burden upon itself?
- Search: a few years ago Microsoft introduced Live search, which was the successor of MSN search. A few months ago Bing was launched, and it is actually successfully taking search engine usage and share from Google and Yahoo, at least for now. But is it just curiosity, or is it actually good enough to replace The mighty one?
In the mean time, Windows Vista was quite a debacle and left most of the users longing and keeping Windows XP. We will see how Windows 7 does, but they surely lost a good position against Mac and Linux in the past years. I still think that Microsoft's business suite is the best there is (Office, asp.net, SQL server), but negative attitude can easily travel from operating systems towards enterprise environment and fun gadgets. People want the iPod and the iPhone because it is easy and fun to use, will they think the same about Zune after using Windows Vista?
It is always fun and interesting to check what the stock market says. The following diagram compares Microsoft (MSFT) to it's competitors from different markets mentioned above, Apple (AAPL), Google (GOOG) and Nintendo (NTDOY), from the beginning of 2005 until now.
It doesn't look that good, does it (even though the dates and players in the diagram were carefully chosen to support the hypothesis)?