So, back to Mikes post and the contention that Microsoft should fear bandwidth. In fact, the availability of plentiful bandwidth is a great opportunity for Microsoft should it be willing to think (a little) out of the box. We will consider the implications for Microsoft in two markets the first 700 million users of computers that exist today, and the next billion users that are likely to adopt computing in the next 5-7 years.
Microsoft has little to worry about the existing users. They value complete control of their data and applications, and they are willing and able to pay for it. As bandwidth becomes better, Microsoft can, in theory, sell them remote management services on the desktop. There would be competition but then Microsoft already controls the desktop and so is better positioned than others. The biggest threat that Microsoft faces here is from Apple and Google both for different reasons.
Apple offers Unix-in-a-box. It has layered on top a friendlier and likeable interface (something the Unix/Linux community should have done a long time ago). For consumers, Apple also offers freedom from viruses and spyware at least for now. And now with the Mac Mini it also a much more affordable price. The iPod halo effect may help Apple get Windows switchers. I dont think a mass exodus is likely any time soon, but if the users frustrations with their Windows desktop continue, Apple is likely to be the biggest beneficiary. Microsoft has little to worry about in the enterprise market. More than Windows, the lock-in comes from Office and the applications ecosystem and that isnt likely to change anytime soon.
Google has taken a different approach though it has one thing in common with Apple a friendly interface that people like. Googles approach is to offer an increasing array of services for users on a centralised platform. While search is the most visible part of the Google eStore, there is much more to it. Google is slowly aggregating the components to offer all the utilities that people need for managing their digital life from a server platform mail, personal publishing, group communications, desktop search which integrates seamlessly with Internet search, image library, and more. Microsoft can match many of these offerings without too much difficulty on its MSN service and it does have an advantage via its Hotmail and Messenger services. So, this game is one which is still in its early days. Microsoft is as well positioned as Google to benefit from bandwidth.
In emerging markets, the battle for the next billion users is just about beginning. Here, Microsoft has no real advantage unless it is willing to think differently in making Windows as the base for a utility built around centralised computing platform. The technology exists. It is a matter of vision and will. It is the classic Innovators Dilemma that Clay Christensen has documented so well. The winners in emerging markets will be those companies which focus on small pieces loosely joined. What is needed is an aggregation of technologies and services that exist and delivering a whole solution to users for a small monthly fee. A dollar a month a user for Windows may seem like small change, but taken over a billion users, it has the potential to be as big as Microsofts other businesses in a few years time.
TECH TALK Microsoft, Bandwidth and Centralised Computing+T