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Pity poor Microsoft's midlife crisis

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Microsoft

Even as the champagne flowed in Seattle, things didn't seem quite right. The share price is flat - and has been for quite a while. A company that was famously lean, mean and agile has become sluggish as it wades through the treacle that all large corporations accumulate. The next release of Windows - now called Vista - has been repeatedly delayed, and when it arrives it will be only a shadow of its predicted self.

It's getting harder and harder to persuade customers to upgrade from older versions of Office and Windows to updated releases. The threat of open-source software grows by the hour, and although it hasn't yet reached the average user's desktop, it has foiled Microsoft's attempts to capture the server market. And last week, former Silicon Valley titan Sun Microsystems joined with tech powerhouse Google to announce a free web-based competitor to Office.

Internet Explorer is losing market share to the open-source upstart Firefox. The European Commission refused to buckle under pressure and continues to insist that Microsoft unbundle its Media Player software from versions of Windows sold in Europe, and make details of the necessary programming interfaces available to competitors. It appointed a special commissioner last week to keep an eye on Microsoft's conduct.

Most worrying of all in an industry based on the creation of pure thought stuff, Microsoft is finding it harder to recruit world-class engineering and software talent. The best of this is now going to Google - which explains the bitterness of the recent court dispute in which Microsoft sued the search company for allegedly luring one of its senior executives.

Gen-Xer Microsoft has grown up and is beginning to experience the mixed blessings of corporate middle age. On the one hand there is the respectability and status of being the most famous company in the world after Disney, and the complacency that comes from having $US50 billion ($A66 billion) in the bank.

And, as if to confirm the suspicion of internal unease, we recently saw the announcement of massive corporate restructuring.

Then there's the furring of the corporate arteries, the slowing of reflexes and the dawning realisation that you are no longer the coolest kid on the block.

Full Story.

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