Microsoft after Windows

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What will become of Microsoft ( MSFT ), the world's most successful software company, if the demand for Windows fades away?

The Windows operating system always stood at the core of the Redmond, Washington company's brand image. Its textual and visual language - particularly its signs of failure, such as the Blue Screen of Death and Control-Alt-Delete - form an integral part of digital pop culture.

However, the digital medium itself is moving away from the desktop computer and even the laptop, the domain over which Windows holds undisputed supremacy. Increasingly, the focus of hardware and software companies is on a much more diffuse, distributed world of smartphones, tablets, consoles and internet-connected appliances, a world where Apple ( AAPL ), Google ( GOOG ) and Facebook have greater dominance.

One place where the firm created by Bill Gates performed well is the gaming sector, where its Xbox 360 platform continues to dominate the high-definition console market. The company's Entertainment and Devices division surged 60 percent in sales on an annual basis, the company reported Thursday, prompting CFO Peter Klein to state that "consumers are purchasing Office 2010, Xbox and Kinect at tremendous rates."

Equally, and perhaps more important, were software solutions for the corporate sector, including the aforementioned Office suite of products and the server division, which climbed from $15.4 billion in sales last year to $17.1 billion this year.

Microsoft will have to craft a new identity for itself if and when Windows loses its place as the linchpin of personal computing. It will need to continue to successfully appeal to consumers with a new generation of consoles and peripherals like the Kinect, while maintaining its strong legacy with the corporate environment as it transitions Office into a SaaS-type platform.

Unfortunately for the software giant, its latest venture into the mobile market, the Windows 7 platform, looks to be meeting the same fate as its Zune music player - technically competent and skillfully executed, but too little, too late.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: News Headlines , Technology

Referenced Stocks: AAPL , GOOG , MSFT

Daniel Pereira


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