Microsoft on course for self-destruction

Gigaworld report: Microsoft comes under fire from research group.

Microsoft is self-destructive, many of its executives are in a state of denial and the vendor is losing industry dominance to another breed of competitors, claimed analysts at Giga Information Group.

But customers can take advantage of this as the software giant begins looking for new friends, said Rob Enderle, vice president of Giga, speaking at the Gigaworld IT Forum last week.

He added is making the same mistakes as IBM when it controlled the industry and Big Blue's only survival tactic was to fire its chief executive and the entire board.

Microsoft's problems stem from senior executives making the wrong decisions because they are receiving incorrect information. This is because insiders are too afraid to give bad news to Bill Gates, chief executive of Microsoft, who is noted for his fiery temper.

'Microsoft is its own worst enemy,' said Enderle. 'Gates is isolated from the customer and locked-in development.'

He said the vendor is rapidly losing control of the industry to ISPs and applications service providers (ASPs), which host and manage software over the internet. ASPs are able to influence the software industry in a way no other key user or vendor has done before.

Microsoft is self-destructive because it inflicts more damage on itself than on its competitors, Enderle added. He cited the battle with Netscape as an example, saying the case is threatening to alter Microsoft for good.

Netscape is no longer a threat to Microsoft directly, he said, but its involvement with powerful ASPs and ISPs could present interesting challenges.

In addition, if the regulators hit Microsoft hard as a result of the trial, many Microsoft executives will leave, he added.

Enderle said he believed things were beginning to change at the software giant. He praised the efforts of Steve Ballmer, president of Microsoft, in trying to mend the pieces, but urged him to 'make more visible the removal of some highly influential people' who are merely being moved into different roles instead.

The current situation presents opportunities for chief information officers of user organisations to take advantage of Microsoft's troubles, Enderle added.

'Microsoft needs friends and if it approaches the right folks and is open, it will see they are more receptive than ever,' he said.