Thursday, August 03, 2006


When Profits Crumble…

Microsoft profits fell to a paltry $2.8 billion this quarter, due largely to huge legal expenses.

Microsoft executives have known for some time that sales in the Operating System market will inevitiably fall off and that Microsoft’s period of explosive growth is at an end. Once that happens, if you want to continue to grow then you need to take market share away from others. Which means leveraging your dominant position into other areas, such as business document management, document workflow and CRM, to name a few.

Just under 3 years ago, I was working alongside a team producing document management software for fairly large companies. I tried to warn the manager of this team that there was a strong likelihood that Microsoft would be moving into the area of document management and workflow (i.e. in addition to the existing SharePoint software) and that they should draw up a 3 – 5 year business risk/strategy plan in order to decide what could be done to mitigate this risk, and indeed how long a market would exist if Microsoft entered the arena. Instead, he choose to put on the blinkers and completely ignore this advice…

Whilst I don’t have a crystal ball, it seemed inevitable that the outcome would be that in 1 – 2 years, Microsoft will have a product (something like ‘WorkPlace 2007’ or OfficeFlow or OfficeAdvance, you get the idea!) that it will compete with existing content management systems like Documentum, DocsOpen, HummingBird or OpenText. EMC, the owners of Documentum, already seem to be moving away from this area.


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