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Microsoft haters: You gotta lop off a lot of legs to slay Ballmer's monster

Terrifying ten-legged beast of Redmond is not dead yet

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Milk the market dry

From one perspective, Google has already won: the endpoint is a commodity. Microsoft is aware of this and they have demonstrated no interest in trying to reverse this trend. The strategy instead seems to be pragmatic: suck every last possible dollar out of the market before they finally give up. Bad for end users – and certainly something that makes many of us quite angry – but comprehensibly opportunistic.

In addition to the end of Microsoft's endpoint glory days, the productivity suite monopoly is under siege from all sides. While it retains a powerful and loyal userbase, Microsoft's Office monopoly is no more eternal than that of Windows.

Defending a monopoly is unbelievably difficult and ruinously expensive. Microsoft cannot compete on price and the competition is getting "good enough" for many.

Microsoft has largely run out of things to add to their productivity apps except more layers of "integration" with their own applications and services. This is also known as "lock-in" and is increasingly viewed by a once-bitten public as a bug, not a feature.

Microsoft's management aren't blind; they see the writing on the walls and have already shifted gears from market-share defence to milking the Office market dry, backing off only when faced with overwhelming outcry from their existing userbase over licensing.

Good news, everyone!

When focussed only on Microsoft's failing monopolies, doom mongering is easy. What's easy to miss is that Ballmer and the rest of the Microsoft management crew have been preparing for this for some time. Instead of an empire built on one or two monopolies, Ballmer has been busy diversifying.

What occupies the time of Microsoft's management team isn't whether or not Windows 8 has a start button – I'm positive most of them don't actually care – it is building up as many billion-dollar businesses units as they can.

Satya Nadella

Server and Tools Satya Nadella: $19bn in revenue ... sweet

The crown jewel of today's Microsoft is its Server and Tools Business (STB). STB contains a number of excellent products and they regularly crank out industry-leading technologies. They are at the top of their game and every potential challenger (with the exception of Oracle and possibly VMware) is functionally irrelevant.

Even if every other aspect of Microsoft's business collapsed tomorrow Microsoft could still get by on nothing more than STB for at least another decade. This gives Microsoft massive cash flow and a totally dependent user base.

Azure cloud is a hosted platform for SaaS developers to stand up services. The Azure unit is looking to take gold from the lair of the Amazon dragon. They've got good technology and a tightly integrated development cycle with the STB group that will see the technology on offer get even better. Azure is nowhere near its peak yet; there is a huge market yet to conquer and it has the tools to do so.

While many focus on Office 365 as being a productivity suite replacement, that isn't where the true play lies. Office 365 plus Skype offers a unified communications platform aiming to commoditise and monetise telecommunications. The world's telcos are seemingly allergic to innovation and Microsoft sees an opportunity to do what the telcos should have done 10 years ago.

Xbox is a content delivery platform with games being just one type of content. Microsoft has invested in generating television-class material under its own banner and ties up with organisations like Netflix to ensure you can get even more. Microsoft is not only gunning for the cable networks here, but ultimately could well spawn its own content production network challenging the likes of Disney, Fox and Warner Brothers.

"Services" is where Microsoft has lumped Bing and all the other online ventures aimed at advertising things at you. It will be a long, miserable battle to unseat Google's monopoly in this area… but Google's grip on the advertising market is no more eternal than Windows' moment in the endpoint sun.

Whatever vitriol you or I may have to fling at Ballmer and crew for their maiming of our favourite products and milking the markets we depend on, they've done something strategically sound in moving Microsoft towards a more diverse economy. Soon they will be at a point that you can raze multiple pillars of Microsoft's business and the edifice of Microsoft will not fall. That's good business.

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