What’s happening to Microsoft?

My first introduction to PC’s was in the early 80’s when I joined Victor Technologies in 1982, manufacturer of the Victor 9000. We supported two operating systems, CP/M 86 and MS-DOS.

The Microsoft Operating system became the preferred one. Microsoft, the company, had a youthful and invigorating aura; a company on the forefront of PC software development; one that was there to help you do things. They were cool; You just had to love the company and it’s products. But somewhere between then and now, something changed. There are a few signs of this:

1. Flat stock price
2. Product delays
3. Trust

In the last two years Microsoft’s share price has increased about 8%. In context, the NASDAQ has increased in value by about 15% over the same two year period. However, this less-than-market gain is in dramatic contrast to the trajectory of the stock price prior to 2000.

Vista, the next generation operating system has been delayed. This is not the first time.

Forrester Research conducted a survey, the 2005 Technology Brand Scorecard, covering 22 PC and consumer electronics companies. To set the context, the survey showed that all companies are trusted more than they are distrusted. In general, they found that consumer trust fell overall between 2003 and 2005. Of the group, only two companies saw their brand trust increase: Apple and TiVo. The company at the bottom of the list: Microsoft. It get worse. Forrester surveyed two other details: “Aspiring Users” which are those who are potential new customers and “At Risk users” which are customers that are at risk of leaving. Again the metric for aspiring users for Microsoft is the lowest of all companies in the survey, but there is a potential argument that given their market position that just reflects saturation. The at risk metric is more disturbing, as Forrester notes:

One measure of consumers’ dissatisfaction with Microsoft is seen in the 5.4 million households that give it a brand trust score of 1 [distrust a lot] or 2 [distrust a bit]. Compared with all Microsoft users, these at-risk users have higher income, are much more likely to be male, and are bigger online spenders. These households know they run Microsoft software but would be just as happy to leave it behind— if they could. Apple could double its PC share by winning Microsoft’s at-risk customers.

For some reason that scenario sounds strangly familiar. In any case, I feel like an old friend has lost his way and I’m powerless to do anything about it.