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Open...and Shut It stinks to be number two in a market. Or worse, number three. But that's the position that most consumer technology companies find themselves in today, at least compared to Facebook, Google, and Apple. Everyone else is an also ran, in large part because they're allowing themselves to be defined by someone else's race.

Yahoo!, oddly, may actually show the way to break the cycle of loser-dom.

ZDNet's Sam Diaz pegs this when he writes that Yahoo "Is no longer viewed as a search company, which means that it's no longer compared to Google." That shift in perception is critical to a company that otherwise looks like a relic in Silicon Valley.

Yahoo may well end up fading into oblivion, but its willingness to reinvent itself gives it a fighting chance. Would that its "also ran" peers would do the same.

Apple and Google have been taking no prisoners in their mobile land grab. Nokia's response to its shrinking market share and profits is apparently to launch a MeeGo tablet, which seems like a strategy born of wishful thinking. The not-Apple market has already crowned Android king of the iOS alternatives. Why fight it?

Instead, Nokia could embrace Android even while distinguishing its hardware. Kind of like Research in Motion (RIM).

RIM is apparently considering the Dalvik virtual machine, which would allow its Blackberry and PlayBook devices to run Android apps. With Android gaining in the enterprise, according to a report from Good Technology, this move would allow RIM to ride the Android wave while seeking to differentiate itself on hardware, email services, and more.

Probably much more, if RIM wants to win. The Android compatibility would be a stopgap to keep itself relevant, but RIM must refashion itself as something different and better than Apple or Google if it wants to win.

Because that's the key, right? Consumers and enterprises want to buy from a winner, which means that vendors who want customers need to position themselves as winners in something, anything.

All of which makes Microsoft's various strategies a little confusing.

Microsoft takes a beating in the press, despite continuing to deliver outsized earnings. But the reason is that Microsoft's gains are mostly in old markets (e.g., desktop), while its mobile and online businesses have not impressed.

Karl Smith, Assistant Professor at the University of North Carolina at Chapel Hill, puts it this way, arguing that Microsoft's continued losses in its Online Services division, specifically, are wasteful:

Microsoft is captured by its corporate bureaucracy, a group that is more interested in the continued existence of the company than in maximizing profits. The entire point of capitalism is creative destruction: Old firms die as new innovators come along. However, modern firms lock up much of their profits in a war chest designed to keep them from dying. This is pure economic loss. It's bad for shareholders....

Microsoft, then, needs to put up or shut up in its Online Services (and mobile) businesses, going all out to win. Some believe Microsoft is already positioned to do just that, while others believe the company needs to take bolder action - acquisitions or otherwise - to regain relevance. I fall into this latter camp.

Or maybe Microsoft needs to get out of these businesses altogether and distribute its legacy profits to shareholders, as Smith argues.

One thing it can't afford to do, but which it seems hell-bent on doing, is offering up a Milque-toast response to the iPad and generally moving in slow-motion. It is out in front of exactly none of Forrester's ten mobile trends for 2011.

That's not a winning strategy.

With mobile transforming enterprise computing, and the Web turning software upside down, every enterprise technology vendor - including Microsoft, RIM, Salesforce, Oracle, and more - needs to figure out how to be a winner, not an also ran.

Right now, the crowd is bleating its way into the tablet herd, or creating yet another app for the iPhone (or Android). That's not going to be enough. It's not a differentiating strategy.

Microsoft makes enterprise IT relatively painless. How can it translate this to an increasingly mobile, social enterprise? RIM makes mobile communications easy and secure through an integrated hardware/software experience. How can it extend this to a world that cares about more than email? Nokia built the world's first generation of mobile phones. How can it remain relevant in a world that needs more than Symbian, and more than just a candy bar phone?

I don't presume to know the answers. But I do know one thing: being an also ran in someone else's market - competing on their terms, not yours - is a recipe for failure. ®

Matt Asay is senior vice president of business development at Strobe, a startup that offers an open source framework for building mobile apps. He was formerly chief operating officer of Ubuntu commercial operation Canonical. With more than a decade spent in open source, Asay served as Alfreso's general manager for the Americas and vice president of business development, and he helped put Novell on its open-source track. Asay is an emeritus board member of the Open Source Initiative (OSI). His column, Open...and Shut, appears twice a week on The Register.

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