Is Microsoft Poised For a Comeback?

Datamation columnist Mike Elgan says the launch of Windows 7, a $20 billion war chest and an improving reputation will catapult Microsoft back into a position of industry leadership.

The recession is bad. And it could get worse before it gets better. But the downturn will end. And when it does, the consumer electronics and IT industries will look very different from those that entered the recession in late 2007.

There will be winners and losers — many companies that have been with us for years or decades will be swallowed up, never to be heard from again. Others will shrink to insignificance.

I think one of the biggest winners coming out the recession will be none other than Microsoft.

For the past few years, Microsoft has been suffering something of a PR dark ages, with fumbles, blunders and legal hassles staining its already battered reputation of the 1990s.

Some of the biggest and worst blunders are very recent. Windows Vista, for example, was a train wreck compounded by Apple's "I'm a Mac, I'm a PC" ad campaign, Microsoft's Mohave Experiment debacle and the more recent Seinfeld ad campaign fiasco.

But if you look at the foundation that Microsoft is building upon, you can see that the company is poised for a spectacular comeback. And what is that foundation? It's Windows 7, the "secret sauce" that Microsoft will use to re-dominate the industry.

There's no question that Windows Vista was a clumsy pig. But testers seem to really love Windows 7. The OS will almost certainly be fast and appealing, stable and fun to use -- and ship this year.

Here's how Microsoft will leverage Windows 7 to dominate:

1) Netbooks.

The ASUS Eee PC launched a new industry, surprising everybody and throwing a monkey wrench in the expected trajectory of mobile computing. (It was supposed to be all about laptops and the Ultra-Mobile PC, remember?) The first wave of what are now called netbooks ran Linux. But in another surprise, it turns out that this hot category favored Windows XP. Don't look now, but (unlike Vista), Windows 7 is an awesome netbook OS, and will take over the market when it ships.

2) Touch.

The future is touch. But the transition from the old-and-busted WIMP (window, icon, menu, pointing device) UI invented by Xerox Park in the ‘70s to the mouseless touch UI of the future will be gradual — and largely a contest between Apple and Microsoft. Microsoft's vertical marketing device, called Surface, points the way to consumer and business touch PCs. But Windows 7 is also optimized for touch. I think Windows 7's touch features plus the tablet form-factor could be the driving force that mainstreams touch on devices larger than an iPhone.

3) Games.

If you think gaming is big now, just wait. The whole gaming category will grow massively year-over-year indefinitely. Gaming will happen primarily in four "places": 1) consoles, which Microsoft leads with Xbox; 2) cell phones, which Apple will probably control with the iPhone and App Store; 3) the Internet, which everyone will get a piece of, including Microsoft; and last but definitely not least; 4) the desktop, which will thrive on Windows 7. Others will control the free and cheap gaming universe, while Microsoft will control the big-money segments of gaming.

4) 64-bit computing.

Sure, 64-bit OSs have been around awhile, but applications have lagged, robbing users of the full experience. It's likely that Office 11 will ship in about a year, and in a 64-bit version. The performance boost of Windows 7, plus 64-bit office, plus another year of Moore's Law on the hardware side should make business computing pretty damned fast.

I think Windows 7 will be very, very lucrative for Microsoft. But there are other factors contributing to Microsoft's coming ascent.

Next Page: No longer an industry villain

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TAGS: Linux,Microsoft,iPhone,Vista,Windows 7

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