Old Dog Microsoft Needs to Reinvent Itself
Chris is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Microsoft (NASDAQ: MSFT) has had better days. When they were the only one on the block everybody looked forward to their new Windows releases. Why spend $100's updating to Windows 8 when most programs are browser based anymore? Major corporations won't be updating do to the fact that the majority of their software systems only work on the old Window's platforms. There is even Fortune 500 companies who haven't even updated past Internet Explorer 6 because of the programs they use would cost millions to update to a newer Windows version. Computer sales have already been on a major decline. The investment to buy Microsoft's software is not worth it anymore. Desktops are going the way of the dinosaurs and laptops are even on their way out the door.
Microsoft used to rule the roost because all the software made only ran on the Windows platform. People didn't have a choice on operating systems. Now with the death of the desktop and laptops Microsoft can't hold people hostage anymore. Internet Explorer use is on a huge decline, with other browsers like Google's Chrome and Apple's Safari on the increase. Most useful programs have gone to be web based meaning you only need a browser to update a word document or spreadsheet.
Microsoft is way too late to the game for tablets and phones and really could end up losing big because its application development is so far behind the two other big players. Just by taking a look at the number of games they have for their phone's operating system on their website is pathetic, it's only 3 pages compared to 100's for the Android. They don't have the applications exclusively like they used to on their old operating systems. The only way for them to break into the market with these services is to make new waves and stir the market up. They always want to play nice with the cell companies but why not go out on the limb and provide free Internet service to their customers? It could be free service by having a huge Wi-Fi network or buying cellular service wholesale and giving away a gig of data a month and then sell more data inexpensively. They really need to come out swinging with something unique to break into this market.
Xbox is their only hope they currently have. The ability to watch shows, play games and socialize makes this a current winner. Now the problem is the future is not looking too great as there is a ton of competition. With smart TV's coming out that have gaming capabilities, this will create huge competition for the casual gamer. Microsoft also needs to be upgrading quickly to get rid of the disc. Discs are outdated and really are a hassle for customers. Storing games on the hard drive or in the cloud is much easier than trying to find that disc your kid didn't put back.
I have no investment in Microsoft and have no plans on investing in this old dog anytime soon. No matter how good Windows 8 is, upgrading and buying a new Windows system is throwing money away. Google (NASDAQ: GOOG) now has Chromebooks for sale in the laptop market and offers a great alternative to Windows. Microsoft is an old dog with fleas and teaming up with a failed phone company, Nokia (NYSE: NOK), was not their best move. They should have offered a free operating system like Google. Then still charge for the other services they offer. People still know the name but pretty soon Microsoft will only be talked about on the History Channel if they don't watch out. To get people interested in their products they are going to have to do something drastic to make them attractive again; the question is do they have the guts to do it. Look other places if you want to make money with your investment dollars. Google is going places; Microsoft is to old school.
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