Microsoft is one of the featured companies in the Fortune 500 issue. The article considers many of the challenges facing the company in the next few years. The author sees the most recent reorganization as more significant than do some of us here who've seen Microsoft reorg with regularity.
Microsoft Gets Ready to Play a New Game
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Highlights:
...While Microsoft is growing like
a strapping adolescent (1998 sales rose $3
billion, nearly 30%), it is showing the
high-tech equivalent of premature gray:
slow response to changes in the market,
stubborn resistance to new ways of
thinking, deafness to customer needs. For
Ballmer and Gates, that added up to an
imperative for change....
...Ballmer is focusing on cracks in the
foundation--some obvious, some subtle. On
the obvious side is the threat of
punishment or dismemberment at the hands
of Uncle Sam (for more on the antitrust
suit, see Techno File). On the subtle side
are difficulties Microsoft has had trying to
reach beyond the desktop and keep pace
with the Internet age.
Early versions of [Windows 2000]
have already begun to sell strongly in the
so-called server market, for computers
that power intranets and handle other
business tasks, and in the corporate
desktop market. Those markets alone will
be worth billions in sales and profits. Where
NT is falling short of Microsoft's ambitions
is in so-called enterprise computing: the
high-end systems that corporations depend
on to manage vast databases and handle
vital tasks. Microsoft has made few inroads
against entrenched players like IBM, Sun
Microsystems, and Oracle, which are
improving their products fast.
...
Gates and Ballmer make no bones about
the need for Microsoft to grow up and
temper its PC zealotry. They've even
changed its official mission. For as long as
anyone at Microsoft can remember, the
company's grail has been: "A computer on
every desk and in every home." Now the
objective is much broader.
...
Making such changes throughout the
company will be tough. Even if Ballmer
succeeds, Microsoft is unlikely ever to
replicate the lock it has on the desktop. No
company is likely to. In the Internet world,
the rules of the game have changed to
favor a diversity of products, services, and
even standards.
...Maybe in driving
the stock to an all-time high, the market is
betting on the ability of Microsoft to adapt.
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