Bruce Everiss says he is "a veteran games industry marketer," probably for the same reason I say I call myself a "senior analyst." It's not because I have been doing IT market analysis for a long time--which I have-- but because I get two bucks off now at the movie theater and 10% off at Dunkin Donuts after 9am.
Bruce wrote an interesting blog post December 1 on how Microsoft (MSFT) is becoming a gaming company (and "a lot more"). His finding is that Microsoft is moving to provide more consumer services (including gaming) and less technology. I agree except that I believe Microsoft wants to own both the consumer and business IT-enabled services markets (not just consumer) and is uniquely positioned to do so.
The steps Bruce takes to get to his opinion however are based on some bad base data.
Microsoft in the browser market
Bruce imples that Microsoft owned the browser market all along. Actually in the beginning Netscape owned it, tried to monopolize it by giving away the browser to sell the requisite server that did all the work, and lost out to the Apache Software Foundation's HTTP web server, which was distributed with open source terms and conditions. Microsoft just came in and picked up the desktop piece despite what some bad European Union and U.S. Department of Justice politics-based legal findings say.
Microsoft in the operating system market
Similarly Microsoft has not "owned the operating system sector since MS/DOS" as Bruce says. It still does not. IBM (IBM) owned it until the 1990s; UNIX/Linux has owned it since. Microsoft's various operating system products have been pretty much stuck with about 40-45% server-software share this decade. I expect the latest IDC quarterly data any minute now but here is the data from the last quarter--and watch this space.
Microsoft on the desktop
I am guessing that Bruce is referring to desktop operating software only. But in the desktop (and emerging netbook) market, you cannot distinguish the device market from the operating software market. In desktops, it has been IBM/Lenovo, HP/Compaq, Dell, and so forth that have owned the market, not Microsoft--which simply got lucky when the CPM guy did not call IBM back in 1979 (or whatever the history of the IBM PC says).
Over the years, the PC manufacturers simply chose DOS/3.1/XP etc. because it was almost the only game in town when it came to running the applications consumers wanted (don't send me any pro-Apple blather; I just don't have time to go into all the Apple-Microsoft details in this blog post). Circularly the application writers were always going to "write to" the Microsoft operating software first (and maybe only) because that's the operating software the PC manufacturers chose.
Further into his opinion, Bruce buys into some Canonical PR about Ubuntu. But how many of the games he markets are being written for or ported over to Debian/Ubuntu? (Ubuntu is more Debian based than GNU/Linux based but I don't want to get into the fractured nature of the so-called open source software market.) Applications drive the desktop market, not Windows or Linux or Pick.
Microsoft in the Office market
That's why in comparing Google Apps to Office Bruce is simply buying into a Google PR line. Microsoft does appear to have some Office pricing problems on the business side (which I'm sure will be fixed) but for consumers at least, the price of the competing word, presentation and spreadsheet processing products is virtually the same (at least in the U.S.): $12 per year for Office 2007 vs. "free" for Google Apps. Consumers have figured out that the delta of $12 for Office is well worth it.
Microsoft in the cloud
Concluding for whatever reason that Microsoft is in big trouble in browsers (his data about Firefox is interesting and bears following but inconistent with everything I've seen), operating systems, desktops and Office applications, Bruce says Microsoft is "not seeing the (emergence of the) cloud coming."
That depends on your definition of cloud computing. I would argue that the cloud predates the founding of Microsoft.
But buying into the Google PR cloud definition of the day for the sake of discussion, all the evidence is that Microsoft is uncharacteristically ahead of that curve--in terms of cloud technology and implementation. What Microsoft has done in freezing the virtualization market over the last three years has brought Microsoft quickly to a par with everyone else [EMC (EMC)/VMware (VMW), IBM/Transitive/back-in-time, Red Hat (RHAT), etc.) relative to one of the most important enabling technologies in cloud computing. What Microsoft is doing in building out data centers to run its Live (and other brand) services for business and consumers probably outstrips any company other than IBM and Amazon (AMZN). And Amazon even playing around in this arena is a major strategic blunder but that's another issue.
So Microsoft is ready to respond as soon as users abandon their desktops for the cloud. But there's a little problem with that. There is little indication that that is happening very quickly in business (general trusting the cloud problems vis a vis Google email outages, demographic trust problems because PC generation is still in charge of IT and remembers the problems internal data centers caused, and so forth). And other than gaming (based on Bruce's findings-I do not follow it), there does not appear to be a big demand among consumers either.
But Microsoft will be ready when it happens.