Leadership

Is Microsoft's Monopoly Over?

By Steve Tobak

Updated on: June 24, 2009 / 8:35 PM EDT / MoneyWatch

Let's face it: monopolies don't last forever and it's not always the government that puts an end to the ride; sometimes competitive forces do the job they're supposed to do. Well, I think we're at an inflection point with respect to Microsoft's effective monopoly on personal computing software.

Just to be clear, I'm not just talking about Windows market share of PCs, but Wintel (the Microsoft - Intel duopoly) PC market share of the ever-growing number of devices used to compute, communicate, game, learn, network, browse, anything that can access the Internet.

I know that seems convoluted, so here's another way of looking at it. If there was a metric for the amount of time people spend on all devices that can access the Web, I think you'd find that the percentage of time they spend using Microsoft software is already declining.

And while it's too early to call the demise of Wintel, there's a definite confluence of factors that, when taken together, point to the beginning of a slow decline of Microsoft's dominance in the digital world.

PC sales growth has been flattening out for years. Note that Apple's Mac and the Netbook category are bucking the trend (see next two bullets). Also, there are a growing number of devices - like game consoles, STBs, MP3 players - that people can use to do things that used to require a PC.
Apple's Mac continues to gain market share. People are getting fed up with the complexity of Wintel PCs and the ever-growing security issues. Mac market share has more than doubled in the past five years and there appears to be growing synergy between Apple's iPhone, iPod and Mac.
Netbooks are taking off. If the rumors are true about Windows 7 OEM pricing, Microsoft might be shooting itself in the foot in this growth category where device makers can scarcely afford the software giant's already exorbitant license fees.
Smartphones are taking off. More and more, people are using smartphones to email, interact via social networking programs, access media content, and for general Web browsing. Microsoft's share of Smartphone OSs is only about 12 percent, according to Gartner.
There are alternatives (sort of). While I wouldn't say Linux is gaining huge competitive traction, it - and open source in general - does represent a genuine demand for alternative operating systems and applications and a way out of the tyranny of monopoly.

And don't forget, there's a whole world of software players out there, including giants IBM and Oracle. There's Google search, Gmail, and Android; the Firefox web browser; cloud computing; and who knows what the Carol Bartz-led Yahoo might cook up.

When you look at the entire competitive landscape, the trend is definitely working against the sofware giant and picking up speed.

I should also add that, after 30 years in high-tech and growing up with PCs - I've owned and used dozens of them - I'm buying my first Apple Mac this week. I simply don't have the time or energy to deal with all the problems anymore. And I'm not alone.