Slashdot points to an interview with Brad Silverberg, former chief of Microsoft Windows division, who left the company in 1999. He is now managing partner and one of the founders of Ignition Partners, a VC firm. Some excerpts from the interview:
I think Microsofts biggest competition for Windows is older versions of Windows. There arent that many new people buying computers that didnt have computers. Its a pretty saturated market worldwide at this point. The places where there is really the most growth are developing countries where they dont pay for software. Not much of an opportunity for Microsoft there. I think the biggest thing they have to do is to figure out how to get people to upgrade, and thats a challenge because people tend to upgrade now only when they buy a new machine.
[Microsoft is] struggling with not so much open source, per se, but rather they are no longer the low price solution. In the past Microsoft was the low cost solution and Microsoft was then competing and attacking expensive proprietary systems from below. Now for the first time the tables are turned and it’s Microsoft that’s being attacked from below by a lower price solution. Microsoft needs to figure out how it can demonstrate better TCO to justify its higher prices. Another aspect to that, which is an area I think Microsoft is also struggling with, which is when you are as successful and dominant as they are, how do you continue to foster that ecosystem? What really propelled Microsoft Windows success was an ecosystem that they created that allowed other people to benefit from your success. Actually your success was really a side effect or byproduct of their own success. If they saw a way that they could develop your platform, make money for themselves and build big businesses. Now that Microsoft has expanded into so many different areas there is reluctance from some developers to continue to invest in a Microsoft platform because they wonder how do they build a business? How does it become their business and not Microsofts business? So people are looking for alternative platforms that create new ecosystems that allow them to build. The challenge to Microsoft is to continue to keep that ecosystem going and to get developers and applications folks to see that there is benefit to themselves in adopting and continuing to develop for the Microsoft platform.
Separately, for those in India, Business India has a cover story on Microsoft India.