How You Can Avoid Paying for Microsoft’s Problems

Windows is losing market share – Microsoft needs to start looking at ways to reorganize and reposition itself after being faced with the realization that their existing vision “Windows on Every Device” is no longer viable.

Microsoft chooses Server and Services as their future – The mid to large business market serviced by Microsoft’s enterprise Server and Services Business Units are having stellar years and are expected to only do better as businesses exit the cloud of recession that has plagued them.

The new Microsoft paradigm is bad for small business – Microsoft will eliminate Small Business Server and guide everyone in this small to mid market into the recently released Office365 cloud platform. They will generate more revenue from their existing products by enforcing their product licensing agreements and ultimately raise prices.

Business owners should look at Windows alternatives – You may be pleasantly surprised by the software options available for you to run your business in the cloud.

Erosion of the Windows Desktop

Windows ErosionThe Windows operating system is losing favor worldwide. The loss is attributable to the gains achieved by the nascent mobile operating system market. As a result Microsoft plans to reorganize itself with a preference for business applications and services over the consumer market in order to cut their losses.

Operating System Marketshare through 2012

On the surface, Microsoft’s decision sounds like it would be good for all businesses, but because the small and medium business market relies on a lot of consumer products, this is not necessarily a good thing.

Adding insult to injury, Microsoft is discontinuing the Small Business Server Suite of products which has been pillar of the technology in place at many businesses.

If you run a small to medium sized business and you prefer maintaining your own servers, Microsoft is making this option less feasible in your very near future.

The elimination of the cost-effective, bundled products found in Small Business Server coupled with the fact that Microsoft has reverted to the DOS-like user interface called PowerShell over a graphical user interface for making even rudimentary server changes, make keeping Windows in your environment a losing proposition.

Why is this a good change for Microsoft?

This may be to the detriment of Microsoft’s “Windows Everywhere” vision. But if you were Microsoft and Windows penetration was eroding by the minute, you would do exactly what Microsoft is doing:

  1. Audit all Microsoft Business Customers (99% of businesses) and capture as much revenue as possible from improperly licensed users quickly, before they jump ship.
  2. Focus on the ‘money-making’ clients: mid to large companies that will continue to pay for server infrastructure and deliver on the scalability and security that they have been clamoring for (complete with a significant price bump)
  3. Funnel the ‘C’ users (Consumers and Small Businesses) into a cloud offering that guarantees a pay per user model and stop losing money with this subset of users that have traditionally been a large source of piracy

As evidenced by shareholder financial reporting at, Server and Business software and tools (these include Microsoft Office), represent a more lucrative revenue segment for Microsoft.

Microsoft Revenue through 2012

A blessing or a curse?

Good or Bad?Those businesses that choose to remain under the traditional model can expect a new terms of service agreement that will subject them to periodic licensing audits. Also on the horizon, you can expect an increase in server licensing costs for on-premises versions of server software. Businesses that do not have internal IT staff will be required to lean more heavily on an IT vendor for changes to the network environment as well as for periodic Microsoft software license audits.

This transition is part of the Microsoft plan to refocus their server
brand around the more lucrative mid to large business market. It will also help Microsoft reduce a source of software piracy: IT vendors that ‘give away’ installations of unlicensed software and the business owners that turn a blind eye to installing ill-gotten software. By pushing the small business market into their new cloud platform, Office365, Microsoft can rest assured that they will receive annual licensing payments and renewals for the use of their software.

Unfortunately for Microsoft, their race to the cloud to make up for lost revenue will be an uphill battle. Competition is fierce on all fronts in the small and medium business market for cloud based email, office, and other business productivity tools. Office365 is a relatively new offering that launched in the summer of 2011.

Google Apps for Business which launched in 2006, is the leading success story in the business cloud arena. Today, it is in use by over 5 million businesses, 66 of the largest 100 U.S. universities and government agencies in 45 of the 50 U.S. states., which launched in 2005, is a file/folder sync and sharing service that has quickly moved to providing technology for the enterprise. 92% of the FORTUNE 500 have already discovered Box as a leader in cloud software for online collaboration.

With proven alternatives to Microsoft staples like Exchange, SharePoint, File and Print services, Microsoft Office and even the good ol’ Windows Operating System, many businesses will go elsewhere for more cost-effective, more stable, more tailored and more feature-rich solutions. But by focusing on their ‘bread and butter’ and stopping the license revenue bleeding, Microsoft should be able withstand this collapse.

What should you do?

Which Way?A golden opportunity exists today for business owners to re-think IT and exploit the available solutions to support a more flexible, nearly zero-infrastructure model.

Business owners should look at their systems strategically. They should look out into the internet and app stores to find the right tools to do business (instead of just good ol’ Windows tools). Take the time to listen to employees’ requests for everywhere and every-device access and reap the rewards of improved and increased productivity.

Thankfully, the marketplace has already started filling this demand for mobile and cloud services and businesses are pushing proprietary software vendors into mobile and web enabled, Windows-free applications.

Today, there are many options and unfortunately for Microsoft, they will no longer represent the ‘only’ choice for small business solutions.

Get started

Plan and ImplementMicrosoft’s loss is your gain. Start looking at cloud alternatives for your software and servers today. Watch these players’ momentum as well as others in your business marketplace and make the switch to the right solution for you and your business before your next server purchase/ upgrade or Microsoft software audit notification.

All of the following vendors have successful web services accessible from anywhere, with an extensive install base, mobile and HTML5 support, and continue to erode Microsoft’s small business market by the minute.

  • Google Apps for Business (email and productivity)
  • (file serving and sharing)
  • and (accounting)
  • (CRM)


03 - 2013 Technology Trend