The State of Microsoft: Are they losing focus?

February 16, 2010Sparxoo

Should Ballmer’s Vision Take a Back Seat to Reality?

Historically, Microsoft has been a leader in desktop software. The company revolutionized computing by transitioning the computer from the university research centers to our homes. Microsoft has since branched off into slew of other markets. Their efforts have been met with several failures (e.g. the Zune, Internet Explorer) and limited successes (e.g. Xbox 360, operating systems). With Google following a similar growth strategy, Microsoft is going to have a very formidable competitor in many of the same markets.

Microsoft’s CEO, Steve Ballmer discusses his growth strategy with one of Mac’s most famous pioneers, Guy Kawasaki (behind Steve Jobs and Steve Wozniak):

The point Steve makes about Microsoft innovating on many different fronts is interesting. While Microsoft is developing MP3 players, mobile and desktop OS, gaming systems, browsers and search engines, the question becomes, is the leadership losing focus? Are they concentrating on too many areas and diluting their efforts?

Microsoft is suffering on several fronts. The software giant lost 28% market share in mobile OS this past year (Apple has a 1.84 million user lead on Microsoft in mobile OS), Internet Explore’s grip in the browser market is slipping to Mozilla and Chrome (down from 75.47% in January to as low as 64.13%) and the Zune is continuing to choke. The software giant faces even more competition from Google (beyond browsers and search engines) with their new Chrome OS.

How can Microsoft use focus to win

While Ballmer says he wants to innovate on many different fronts, should they instead be re-tooling their strategy? One that brings more focus to their efforts?

In November 2009, Microsoft’s search engine, Bing, took an astounding 10.4% market share — weakening Yahoo! even further. Bing is not touching Google — instead the new search engine is taking big bites from Yahoo!. If Microsoft continues winning in its fight against Yahoo!, Bing could nab the remaining 17.5%. Maybe the software giant focuses on search. After Yahoo!, Bing could go head-to-head against Google in the battle for the multi-billion dollar search market.

Or the software giant should consider focusing-in on gaming. The Xbox 360 sales went from 28% to 37%, a massive 9% rise this past year. iStockAnalyst reports the Xbox has overtaken the famous Wii.

There is even speculation that Microsoft could strike a strategic partnership with Apple to beat-out Google. In any case, the software giant has obviously overextended itself. Steve Ballmer’s vision of conquering the world — fighting on all fronts — is no way to win a battle. Ballmer might want to re-tool Microsoft’s strategy to focus on specific areas where they can excel, not dilute their product offering by appealing to every tech trend or industry.

Magnifying Glass Image by Paul Barker from Stock.Xchng