Their main problem is that their release cycles are too long across all of their product lines.
It takes a year for Microsoft to release a minor revision to Windows Mobile 6. In a year, Apple releases a major revision to iOS. Google releases multiple revisions to Android.
It also took them 2.5 years to release Windows 7 to essentially fix Vista which should have been way better considering XP came out 5 years before Vista. Meanwhile Apple and Google have been continuously innovating and iterating.
When they did try to rush to market with the Xbox 360, they ended up having to take a $1B charge to repair the shoddy hardware.
> Their main problem is that their release cycles are too long across all of their product lines.
You can't please everybody. You mush choose between offering a cutting edge product and a stable one. Windows thrives on stability-staleness. Make updates too frequent and users will learn not to depend on browser specificities, API quirks and specific technologies. If Microsoft teaches its clients to be vendor-independent, they'll be doomed.
"If Microsoft teaches its clients to be vendor-independent, they'll be doomed."
It's this sort of statement that is absurd. In some sense it is fundamentally true, but true of virtually all companies.
Apple doesn't want iPhone users to be vendor independent. Otherwise they'll use Android phones.
Google doesn't want users to be search engine independent. They make their money from people clicking ads on their search engine site.
Nike doesn't want you to be shoe-independent.
Starbucks doesn't want you drinking tap water rather than coffee.
Every company wants you using their product. And the more the better.
My issue with the statement is that there seems to be this odd implied notion that MS will go into a space where there is no upside for them, simply to create downside for another company. This is patently false. They go into markets where they think they can make profit, either directly or indirectly. This is not any different than what Google or Apple does. The only difference is that MS has done it longer (Apple has struggled with its core market that it never had the chance, but now they're flourishing, you're seeing Apple doing things just like MS did if not more egregiously). And there's nothing wrong with it. It's business.
Apple uses paid apps to make switching away from iPhone painful. Google doesn't have that leverage (@gmail addresses excepted, perhaps) and so does Nike - no leverage unless you purchased that iPod gizmo. It's also pretty painless to switch from Starbucks to any other coffee shop.
Very few companies enjoy the network effects Microsoft depends on. And yes, Microsoft will enter a market, even burn tons of money, so that no other company gains a foothold there that could be used to threaten its dominance in other markets. They did it with the Xbox - they burned tons of money and did not achieve anything close to dominance, but were extremely successful on preventing Nintendo and Sony from doing so.
When you have a network of monopolies (or mutually reinforcing market positions), it's very smart to disrupt every market you can't dominate because, if it doesn't strengthen your position, it will at least weaken your competitor's and prevent giving them a position they could leverage against one of Microsoft's captive markets.
So where is MS's Facebook? Where is MS's Google Voice? Where is MS's Yelp? Where is MS's Netflix? Where is MS's JumboTron API? Where is MS's line of televisions? Where is even an MS computer?
And noting the network effect doesn't mean that companies won't user other means to stop their competition. For example, try to get Lebron James to wear shoes you make. Not going to happen. I don't care how comfortable your shoes are. Also, try getting your shoes into FootLocker. Also, not so easy, and Nike won't lubricate the process for you either.
Try getting Starbucks to open up a kiosk in your building with a Seattle's Best right next to it. Starbucks has enough influence that they can use other means, besides network effect, to push out competition.
Network effects are a beautiful thing to leverage. Actually I think MS is in trouble, because it has very little of it. Compared to Facebook or Apple. Google is trying to strengthen their network effect.
But again, there's a fundamental difference between trying to create and leverage network effects. And what you're saying, which is to simply disrupt any other company.
http://www.thespoke.net/
"Microsoft's digital lifestyle club for students from around the world, with message boards, hubs, blogs and 10 MB of upload space for members"
The problem for them is that their network is losing relevance fast. The value of desktop software lock-in is in sight, server software is coming next.
The Spoke predates Facebook I believe. At least the site as we know it today. The Spoke existed far before people believed there was a ton of revenue to be made on those sorts of sites... otherwise sites like MiGente and BlackPlanet would have probably been more richly funded.
Apple is making focused, strategic expansions into one new market every 3-6 years. They were a computer company, but in 2001 they introduce iPod and expand into MP3 players. In 2007, having dominated MP3 players, they expand into phones. In 2010 they expand into tablets. Apple wins every major extension and ends up--to this date--with only 4 major product categories (Mac, iPod, iPhone, iPad). And each of them is massively profitable. They're like a sniper, picking off market opportunities once at a time. Headshot. Years pass. Headshot. Years pass.
Microsoft, on the other hand, is just unloading shotguns at the hip.
It takes a year for Microsoft to release a minor revision to Windows Mobile 6. In a year, Apple releases a major revision to iOS. Google releases multiple revisions to Android.
It also took them 2.5 years to release Windows 7 to essentially fix Vista which should have been way better considering XP came out 5 years before Vista. Meanwhile Apple and Google have been continuously innovating and iterating.
When they did try to rush to market with the Xbox 360, they ended up having to take a $1B charge to repair the shoddy hardware.