Microsoft: shaky future or rocking and rolling?

Okay, I couldn't resist plugging the analogy into the latest BriefingsDirect analyst panel discussion, but isn't this true when it comes to Microsoft: That Microsoft's target constituency from day one has always been the IT-technically challenged business users, a vast number of which are small business users?  Is Microsoft not the IT solution for the "Joe the Plumbers" of the world?

Can Microsoft turn Joe the Plumber on to SOA?

That, I feel, has always felt was the secret of Microsoft's success from 1980 on. And I continue to see evidence of that original intent in Microsoft's SOA pronouncements. It's unclear, though, how they will handle the growing storm clouds coming from, well, cloud computing.

Dana Gardner, Tony Baer, Mike Meehan, Brad Shimmin, Jim Kolebius, Dave Linthicum, and yours truly recently had an invigorating discussion on the future of Microsoft, weighing the impact of all the various pressures on the company's margins -- from cloud computing to open source to the economy in general. (Transcript available here.)

Will the software giant be even bigger in five years, or will it begin to shrink?  By a narrow four-to-three margin, most of our group said Microsoft will be larger in five years than it is now, mainly because we expect the IT industry as a whole to be larger by then. The other three analysts predict Microsoft's revenue base will erode.

Dana pointed out that Microsoft seemed to missing the boat when it came to many of the top trends shaping the IT space in 2009, as defined by Gartner: cloud computing, blade computing, Web oriented computing, mashups, specialized systems, social software, business intelligence, and green IT. The vendor is making progress in some other hot areas of IT, including virtualization and unified communications.

Dave Linthicum summed up Micrososft's shaky future this way, observing that "Microsoft isn’t going to go away, but I think they’re going to find that their market has changed around them. The desktop isn't as significant as it once was. People aren’t going to want to upgrade Office every year. They’re not going to want to upgrade their desktop operating systems every year. Apple Macs are making big inroads into their market space, and it’s going to be a very tough fight for them. I think they’re going to be a lot smaller company in five years than they are today."

Mike Meehan says the tough will be going at the enterprise level as well, stating that "Microsoft has been capped on the business side." Microsoft has lost ground in the service-oriented space as well, he feels. "My view is that .NET has lost to Java, just as an enterprise technology. It’s a niche. It’s an avenue where Microsoft is going to have a presence. People are going to use Visual Studio. They can build out Oslo and they can try to keep people in with as much service orientation as Microsoft can give you in their package, but they are not going to be on the same par as IBM, Oracle, or even SAP long term, in terms of being able to give you enterprise applications and application development tools."

Jim Kolebius begged to differ with such dour appraisals of Microsoft's prospects, noting that the vendor has made great strides into the enterprise with SharePoint and SQL Server. "SharePoint is everywhere," he said. "It’s the de-facto standard portal for a large swath of the corporate world."

My point of view is that Microsoft has been very adept at entering unserved and underserved markets -- including smaller companies and departments of larger ones with small budgets, as well as non-technical business users -- and continues to pursue that strategy. Survey after survey I have seen or been involved with -- to this day -- always put Microsoft tools, platforms, and applications on top.

Microsoft has a pretty good shot at solid growth in the coming years -- as long as they avoid doing any more Jerry Seinfeld commercials, that is....