What Microsoft has in common with Detroit

ford-explorer.jpgIf software programs were cars, then Windows Vista would be the Ford Explorer and Windows Mobile would be the Ford Focus.

Why? Because these are both fine vehicles with plenty to recommend them. But tastes and customers’ needs change, and no company wants to be caught with the wrong vehicle line-up or get passed by a competitor with  better styling.

This thought is prompted by the focus on “cloud computing” at Microsoft’s developer conference in Los Angeles, which just got underway (see note below, and this report of the morning’s proceedings.) As users turn more to internet-based services and rely less on applications running on client machines, they are already starting to adopt new devices with new capabilities. Microsoft, though the king of client software, is not currently well positioned to meet this new need.

Two of the hottest new consumer trends bear this out. One is the arrival of the iPhone and, this month, Google’s first Android phone. These touch-screen handsets have turned the smartphone market upside down.

So where is Microsoft? It was only a couple of years ago, with the release of Windows Mobile 6, that it finally came up with a version of the operating system that really worked well on handsets (the general perception is that it takes Microsoft three attempts to get something right: in this case it took a few more.) But Windows Mobile has been overtaken, first by Apple and now Google. Microsoft had several years’ headstart, yet it has fallen behind in important ways and recent reports suggest that the next version of Windows Mobile won’t now see the light of day till late next year.

Vista is a different story. This is the gas guzzler that works fine when things like computing resources and power are in abundance, but doesn’t do so well in a world of scarcity. Vista doesn’t power most of the new “netbooks”, or mini-notebooks, that have become the hot new thing in the PC world: many of these are using XP, which Microsoft had hoped to consign to the dustbin by now.

All is not lost – far from it. Cloud computing is still in its infancy and Microsoft has time to adapt. On Tuesday, the company has promised to shift the focus of its developer conference to the “front end” – the technologies that users will need to access services in the cloud. Windows 7 is on the horizon and Microsoft will soon be able to close the sad chapter that was Vista. But the lesson from Detroit is clear: having a massive market share offers little protection if you stop building what customers want.

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Richard Waters, Chris Nuttall and April Dembosky in the FT's San Francisco bureau share their views - plus tech insights from Tim Bradshaw and Maija Palmer in London and Robin Kwong in Taipei.



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Contact the FT Tech Hub team: richard.waters@ft.com, chris.nuttall@ft.com, april.dembosky@ft.com, maija.palmer@ft.com, robin.kwong@ft.com and tim.bradshaw@ft.com.

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