Robert X. Cringely, writing for
PBS, looks at the future competitive arena for Microsoft. I'm
including three paragraphs below because they are the most salient:
So the New Microsoft has to go where the Old Microsoft
didn't. This means new markets, which eliminates at least for awhile
any antitrust concerns. It also means new enemies, which appeals to
Gates. It probably gets boring beating up the same kid every day after
school. The New Microsoft will operate in five areas - financial
services, video games, television, GPS, and wireless. .Net is the
beginning of Microsoft's thrust into financial services, using the old
technique of "embrace and extend" to hopefully grab a piece of every
transaction everywhere. This is Microsoft number one priority and Gates
is determined to see it through before the Windows and Office
franchises evaporate, as they ultimately will. With close to $40
billion in available cash, Microsoft will spend whatever it takes to
make this happen.
The other market segments - video games, TV, GPS, and
wireless - are close enough to what Gates perceives to be Microsoft's
core competencies. They are markets where Microsoft has not played or
has been a small player. They are markets that are big enough to be
interesting or growing fast enough to qualify as successors for Windows
and Office. And most importantly, they are segments where Bill feels
current leadership is weak and unfocussed.
So look over the next two to three years for Microsoft
to use the same "embrace and extend" strategy in each of these areas.
We'll see Xbox followed by more and different Xboxes at a rate of
evolution that will be staggering. Expect the same thing with Ultimate
TV. Look for a major thrust in Windows for mobile phones. And while I'm
not exactly sure how GPS will be rolled into this package, I know it
will be. In each case, Microsoft will be trying its darndest to build
itself into the future, trying to create new de facto standards, which
is to say new cash cows. And they will succeed. Current leaders in all
these segments should be wary. That or sell out now, because -their
future - no matter what happens with the DoJ, any private lawsuits, and
those nine errant states - their future is going to be ugly.
I've written before about the
direct broadcast satellite industry and the possibility of Apple
producing a Cube-like home server as the foundation block of the
Digital Hub. Dish Network has
used Microsoft to produce a set-top personal video recorder called the
DishPlayer. The DP has been a support nightmare for Dish, and there is
presently a lawsuit between Dish and Microsoft over continued software
updates and bug fixes. Does this sound familiar?
Take careful note of the middle paragraph. Dish is whining about DP
bug fixes and M$ wants to do more than build a set top box - they want
a steady revenue stream from every aspect of the TV experience.
DP was simply an alpha release, UltimateTV is a beta (which they'll
abandon just like DP), and then roll some more features into another
set top box, including high speed Internet access via MSN, and hype it
via a "partner" as the must-have home entertainment hub device.
Likely the "embrace," that is the "partner," will be a media
delivery specialist such as Dish or a cable provider. The "extend" will
be a feature or function proprietary to the box, such as leveraging
Windows Media Player in content storage or playback - or even .Net in
some form. The last part of the dance will be "extinguish," when a
sufficient user base becomes dependent on the technology and will
follow Microsoft regardless and the "partner" is abandoned.
Competing with M$ in this arena (or even allowing M$ to collaborate)
could be a kiss of death for anyone, most especially a post-merger
Dish. "Embrace & extend" - then pull the rug out. Java, W3
standards, C++, now personal video?
Please, Steve, pick up the phone, call Charlie Ergen at Dish
Network, and relaunch the Cube as the home server it's screaming to
be.
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