Microsoft’s business model may be in final jeopardy

Google buzz is becoming a constant roar. But the ongoing speculation about Google’s next moves – nation-wide free Wi-Fi, video search, Google buys AOL, Google browser, and so on – really reflects the surprising volatility of the IT market, regardless of what Google does.This volatility springs fundamentally from the long-run weakness of the Microsoft business model, in the context of emerging technology. The Web may not be an industrial-strength computing platform yet, but it will be, and the PC as a standalone device loaded with its own apps will wither.
Web services are the obvious catalyst for this shift, and the proliferation of low-compute-power nodes as the end-points in an Internet of things will accelerate their maturation. Today the best pointers to how this evolution will occur are in the world of “mash-ups” — applications built by cobbling together services available on the Web.
Google Maps is a fertile source, and so is Amazon. A good example is, which mashes together Google Maps and Craigslist, to provide a map-based housing search application. Such applications are sufficiently easy to create that they have attracted a large number of developers, in a virtuous spiral of development and release, demonstrating the power of openness once again.
The most interesting, and certainly the most amazing, developments are in high-end scientific computation. A recent mash-up displayed high-definition video images captured thousands of feet below the surface of the Pacific Ocean, and piped in real-time to huge screens in La Jolla, Calif. This demonstrated the immense power of the optical network, which provides high bandwidth, reliable connectivity, and is the second key enabling technology for realizing the dream of the network as the computer.
While CIOs have, in general, responded to the promise of Web services by investing in new application development on the .Net and J2EE platforms, there appears to be less realization that the structure of whole industries might shift. The business model of newspapers that rely on classified ads as a source of revenue, is collapsing, for example. On the other hand, as the mash-ups demonstrate, there are huge opportunities to be explored. The BBC, for example, through its Backstage project, is inviting developers to create new prototype services built around BBC content, presumably with the expectation that, by harnessing their ideas and energy, it can discover significant new revenue streams.
In spite of the success of .Net, Microsoft is most at risk as the network computer emerges, for the reason its products dominate the standalone computer market. But it may have plenty of time to respond appropriately. The recent much-hyped announcement of a new cooperative agreement between Sun and Google turned out to be a damp squib, indicating that there is a long way to go before Open Office and Google sink Word and Excel.
However, it’s time CIOs started to think seriously about two things: the likely shape of an industry where Microsoft is no longer the dominant player and the consequences for their businesses of rapid innovation in Web services.

Would you recommend this article?


Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.

Jim Love, Chief Content Officer, IT World Canada

Featured Download

Featured Story

How the CTO can Maintain Cloud Momentum Across the Enterprise

Embracing cloud is easy for some individuals. But embedding widespread cloud adoption at the enterprise level is...

Related Tech News

Get ITBusiness Delivered

Our experienced team of journalists brings you engaging content targeted to IT professionals and line-of-business executives delivered directly to your inbox.

Featured Tech Jobs