Microsoft Forecast Is Called “Partly Cloudy” on Eve of Windows 7 Release

10/19/09Follow @gthuang

In case you missed it yesterday, the New York Times ran a sweeping review of Microsoft’s position in the tech world on the eve of its Windows 7 rollout this week. That’s the latest version of Microsoft’s iconic operating system for personal computers. But the article smartly goes beyond the company’s strategy for PCs, and examines its near-term prospects in areas like search, mobile, entertainment, and cloud computing.

It’s arguably the most challenging time in Microsoft’s 34-year history. The Times piece points out the company’s revenue declined for the first time ever in its 2009 fiscal year, and it faces increasing competition from the likes of Apple, Google, Amazon, and Salesforce.com. Nevertheless, top Microsoft execs like CEO Steve Ballmer and chief software architect Ray Ozzie continue to defend the company’s position in the market, reiterating its focus on phones, PCs, and TVs—the idea of “three screens and a cloud” that Ozzie talked about back in May. Microsoft also has earmarked nearly $10 billion for R&D spending over the next year, according to the piece.

The conclusion? The Times calls the overall forecast for Microsoft “partly cloudy.” It’s a bit of a letdown, but the story does cover a lot of ground in terms of different technology areas, and competitors coming from different angles.

The story also includes critical comments from a couple of former Microsoft veterans who have strong ties to the Seattle tech scene. Bruce Chizen, the former CEO of Adobe Systems—and now a venture partner with Seattle-based Voyager Capital—is quoted as saying about Microsoft, “They are not the company they once were in terms of market position…They no longer have a monopoly that is critical to the future of computing.”

And Bryan Trussel, the former head of Xbox Live Arcade and now CEO of Glympse, a Seattle-area mobile startup focused on location sharing, is quoted in the context of Microsoft’s recent efforts to work with developers, students, and cloud-computing startups— crucial audiences that company execs have worried about losing touch with. “They got scared,” Trussel says in the piece. “I think they get it now, but the question is how far behind they are.”

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com. Follow @gthuang

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