Tomahawk, WI 01/08/2014 (BasicsMedia) – Microsoft Corporation (NASDAQ:MSFT) is a case of missing out on trends and losing out on opportunities.  Not that it is not doing good, but it could have done better. Such things are always said in hind-sight. The once dominant player in the IT sector has had to relinquish its crown to new comers.

Microsoft’s failure to read the tea-leaves:

If asked to identify the most important trend missed by Microsoft, I would say, it was the smartphone one. The second one being the move to cloud computing. Both these trends have dethroned several companies, some of them associated with MSFT very closely. Take the case of Intel Corporation  (NASDAQ:INTC).  There was a time when one could not think of IT without thinking about either Microsoft or Intel. They had a good collaboration going, one would design software which required faster processing speeds and the other would have a faster processor ready. Both dominated their respective segments. The second example is Nokia Corporation (ADR) (NYSE:NOK). It too failed to see the shift in consumer preference towards smartphones. Three dominant players dethroned by just one changing trend.

The other trend that is hurting the most is the loss of its dominance in the operating systems segments. With smartphones and tablets replacing PCs for computing needs, Microsoft has also relinquished its crown in operating systems to Android and iOS.

The future for Microsoft:

There are still many positives going for Microsoft. The first is that it still dominates in the ‘Office’ segment. Google has been trying to wean away users through its offerings, but has got little success. The trend towards cloud computing may be worrisome as Office is yet to move from typical desktop like applications to one operating smoothly on cloud computing.

The other thing going in Microsoft’s way is the sales of its gaming consoles. Pundits had predicted that gaming consoles will also die the way PCs died. After all, smartphone users spend a considerable time playing games on their smartphone. Microsoft appears to have done its home work well. The newer version of its gaming console has already crossed the 3 million mark in as many months.

It may have been late in embracing the trends. But it is making up for the lost ground. MSFT recently completed the acquisition of the handset division of Nokia. And its Windows operating system for mobiles is the fastest growing operating system. Though currently it does not enjoy the market share enjoyed by Android or even iOS, the growth is very encouraging.

There is still time left for Microsoft to regain its lost glory.

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