Dinosaur?

Working on a couple of engagements in London this week gave me the opportunity to catch up on some of the magazine subscriptions that have been piling up unread. The business section of the April 1st edition of The Economist was leading with an article on Microsoft called ‘Spot the dinosaur’, which caught my attention because of the Microsoft dinosaur ads that were liberally dotted around the Tube (I’d explain what they were about but despite having seen them for several months now I still have simply no idea). Anyway the article, which was illustrated with a cartoon of two dinosaurs, one captioned ‘Office’ the other ‘Windows’, posited the idea that Microsoft was heading for extinction on the basis of the rise of online software.

The two examples of potential challengers offered in the article, were Writely, an on-line word processor, recently acquired by Google, and Salesforce.com, the market-leading software as a service (SAAS) CRM package. I couldn’t help feeling this was another manifestation of the ‘armies of consultants’ argument I've talked about before whereby SAAS, offering instant access to the functionality of our wildest dreams for just pence per day, would sweep away all before it, including such behemoths as Microsoft.

It’s not that I don’t think SAAS has an important role to play in the CRM space – it already does, and will continue to do so. But I detect in the media the same hype over SAAS that we saw in the early days of the internet - retail as we know it is dead, the dotcoms will take over the world. It didn’t quite play out that way of course, with a few notable exceptions, the existing retailers offering both clicks and mortar have prospered.

With regard to Microsoft’s fortunes, while Salesforce.com may well be a more than capable competitor of Microsoft’s in the CRM space, it’s not exactly a battleground that will make or break Microsoft’s fortunes. I’m equally hard-pressed to see how on-line word-processors will seal the fate of Office, and quite what the threat is to the Windows operating system the article didn’t explain. To illustrate the dire predicament Microsoft was in, there were a couple of graphs plotting number of employees and revenues - both robustly trending upwards without a hint of a downward deflection. I may be being obtuse, but I can’t see either online software or even dodgy advertising for that matter killing Microsoft quite yet.