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Microsoft earnings: no escaping global recession

Warren Wilson | July 28, 2009
Dismal results, but they could have been worse

Next year, the vendor will launch a major upgrade of its productivity suite, Office 2010, with a slew of enhancements, including an overhaul of the navigational ribbon to make it simpler and more intuitive to use. The new year will also bring new versions of Windows Mobile, SharePoint Server and Exchange Server.

With this wave of product upgrades, Microsoft aims to regain its momentum after a period made difficult not just by the recession and the Vista problem but by its long struggle to counter Googles threat in Internet search and its failed bid to acquire Yahoo despite offering to pay $44.5 billion.

Its new search tool, Bing, has been well received. Although it remains to be seen how much market share Bing can take away from Google, at least Microsoft now has a credible entry in the field.

Microsoft still faces big challenges in entertainment, where its Zune music player and Xbox console continue to struggle against their main competitors, Apples iPod and the Nintendo Wii, respectively. And then there are netbooks, the lightweight, inexpensive laptop alternatives on which about 10 per cent of users have chosen to run Linux, not Windows.

Still, it appears that the most recent quarter will mark the low point for Microsoft, after which it will ride out the rest of the recession and then on the strength of the new Windows, Windows Server and Office releases begin to regain its stride.

Warren Wilson is Research Director at Ovum


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