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A decade to forget - how Microsoft lost its mojo

So not the 1990s

The smart choice: opportunity from uncertainty

The IE debacle

The internet and mobile were sins of omission. But with IE, management actively shot itself in the foot. In 2003, Microsoft announced that there would be no more standalone versions of IE and that you could only get IE with Windows. It was the height of arrogance from a 90-per-cent market-share winner.

That decision opened the door to Firefox, then known only to open sourcers and geeks. In the years since, it has been downloaded by millions, eroding IE's lead. It made surfing simpler, safer, and more standards compliant. Today, Firefox stands at 24 per cent market share, while IE has hit an all-time-low of 63.5 per cent. And now that people have been released from the "must-have" IE mindset of the 1990s and found there is another way, IE faces a fresh challenge in Chrome from internet search and ads Goliath Google.

Another disaster: The introduction of a new form of licensing for Windows called Software Assurance. It charged a subscription on the basis customers would get upgrades during the two- or three-year lifetime of their SA contract. But in the end, it pushed up customer's licensing costs and - in the case of Windows - new versions were not forthcoming, breeding anger and resentment among customers. Microsoft spent years spicing SA with extras to make the program palatable and provide some perceived form of value for money.

New world, new Microsoft

As Microsoft moves out of the Noughties and into the next decade, the confidence it displayed when it entered the Millennium is gone. The certainties of the old PC world have evaporated while the tactics of Microsoft used in that world - picking a leader and spending furiously to beat them - are challenged in a world where the competition is diverse, fragmented, free, and open.

Opportunities exist for Microsoft in the next decade and the company can succeed again. It might be late to cloud computing with Azure, but most everyone is still on the start line, so it still stands a chance.

If Microsoft can convince open-sourcers it's genuine - and if it no longer lobs grenades on intellectual property and patents that poison the atmosphere - then it could harness open-sourcers on Windows and Azure. The Xbox looks like continuing to challenge Sony, which has acted with a curious inertia to Microsoft throughout The Noughties. And when it comes to rich media, Microsoft's got a winner with Silverlight as an alternative to Adobe's Flash - at least as far as .NET developers are concerned.

In other areas - particularly mobile phones, browsers and search - the missteps of the past will need to be rectified before Microsoft can move on. As for Windows, Microsoft can bask in Windows 7 for now, but one day must find new ways to persuade users to move on to succeeding editions.

One thing is certain. Microsoft will see 2010 as a chance to re-set the clock - and put a painful ten years behind it. ®

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