Microsoft has hit bottom, set for rebound: analyst

Stephen Withers
Monday, 27 July 2009 08:49

Opinion and Analysis

2010 will see other significant releases, including Windows Mobile, SharePoint Server, Exchange Server, and Office 2010.

Wilson notes that Office 2010 will bring "a slew of enhancements, including an overhaul of the navigational 'ribbon' to make it simpler and more intuitive to use." Anecdotally, the Office 2007 ribbon seems to have been one of the bigger reasons for users staying with Office 2003, so an improvement in that area would seem essential for increased popularity.

He doesn't think everything is rosy for Microsoft, pointing to the way Zune and Xbox are also-rans, and the relative success of Linux on netbooks (10 percent, according to Wilson).

While I generally agree with his perspective, I think he is being a bit optimistic in saying that "the most recent quarter will mark the low point for Microsoft, after which it will ride out the rest of the recession".

I can see no real reason to expect the current quarter to be better than the last. I think Wilson's reference to "several months of bumping along the bottom" is more accurate, at least until the new products start to flow.

Continued cost cutting may help profitability, but revenue growth - especially for the business division - is what's really needed. With new versions of multiple products looming, surely buyers will remain on the sidelines as much as possible to avoid the extra costs associated with upgrading operating systems and applications soon after initial deployment.

No doubt Microsoft will be hoping I'm wrong and Warren Wilson is right. And that its proposed settlement with the European Commission will ward off the threat of another billion dollars or so in fines.