Is Microsoft at the precipice of stagnation? If history is anything to go by, IBM first ruled with it's line of IBM mainframe systems and then got bigger and cumbersome to a point where it became a formidable organization but slow to turn around and compete in a changing IT environment. It has been argued that due to IBM's retention of the mainframe systems niche market, IBM did not see the need to hunker down and focus on new and emerging technologies that were innovative and competitive. Ultimately IBM learnt its lessons, paid the price and eventually turned the corner.

Now here we are with Microsoft, a formidable IT powerhouse with it's line of Windows operating Systems and office application suite yet seems to be giving up on Innovation. Can Microsoft keep producing different versions of Windows operating systems, office application suite and Internet Browser for the next decade and retain it's competitive advantage? Can we learn anything from both IBM and Microsoft? Is there a correlation between the size of these IT organizations and how innovative and competitive they can get? Does their big size hinder how innovative they can get? compare with Google, yahoo and Apple. Or is Google the next one in this cycle of events?

A simple analogy, look at the pirate problem, small boat captures big ship. The big ships are formidable but cannot turn or maneuver quickly. The same thing with IT organizations, small companies are strategically able to harness their resources and quickly take advantage of opportunities.

Bigger IT Organizations do tend to have a broad line of project portfolios, but this can also turn out to be their achilles hills. having too many projects slows down decision making process and it is the equivalent of having too many balls in the air. On the other hand, smaller IT organizations have smaller size of IT project portfolios with more control and focused resource allocation. A simple gloss over this problem seems to indicate that smaller and leaner is better, it allows the organization to quickly react and pack a punch. Decisions are made faster especially in selecting viable projects and there is less bureaucracy.

I think Microsoft is waking up and learning it has been asleep at the wheel with its dependence on incremental revenues from its product upgrades. It seems to have recently adopted a new strategy trying get into web, cloud and virtual computing technologies. But should it be playing catchup? and can Microsoft acquire substantial market share in these areas that can reflect in its stock.

I think Google is the next big thing.....but they will have to compete with Microsoft's liquid capital. Microsoft on any good day can buy off most competitors.

the one thing that has stifled Microsoft's innovation is Suits..Anti-trust suits. Microsoft of the 90's and early 2000's was fierce and ambitious until courts started punishing it. now they are basically playing catchup. as far as company's are concerned Microsoft is in its middle age while Google is in its teens - google is growing!! Apple has been able to reinvent itself since Jobs jetted in. but if he goes....
http://itmanagement.eart...--Differing-Visions.htm

When they released Windows 95, almost everyone knew about it, then came Windows 98, XP, Vista (with less glamour for each release) and now Windows 7 - very few people even know there is something like windows 7...it shows you where its headed in terms of relevance.

As a developer, though, I must say that they have really grown in leaps and bounds in terms of developer tools. The innovation and work that is going behind the .NET platform is making it a leading tool of choice amongst many. I think they have a strategy here. If they monopolise the developer market, then it means they will still be selling Microsoft Windows Server licenses for years and years to come...