Has Microsoft lost its edge?

Aug 20, 2010, 1:05 PM | Updated: Mar 28, 2011, 3:46 pm

U.S. News & World Report includes Microsoft on its list of “10 Great Companies That Lost Their Edge.”

The magazine’s analysis:

microsoft-logoIt helped give the PC mass-market appeal, and still dominates much of the software industry. But Microsoft has also fumbled or passed up many great ideas that others capitalized on, like Web TV, E-books, smartphones, and the tablet PC.

“Why didn’t they commercialize any of this?” asks Vijay Govindarajan, a professor at Dartmouth’s Tuck School of Business and co-author of The Other Side of Innovation asks. “The problem is execution.” Sticking to one business line can be risky, especially in an industry as fast-changing as technology. And sure enough, the market is shifting away from the PCs that Microsoft’s software is designed for.

It’s easy to pick on Microsoft. They can’t make up their minds about a tablet PC, the Kin phone was a failure, and some of their products just aren’t as cool as their competitors, for example the Zune vs. the iPod.

Bill Gates continues to sell his stock in the company. Between the beginning of May and today, Gates has sold more than 20 million shares. He still owns an enormous 620 million shares though, so stock analyst Roger Nachman’s suggestion that maybe other stock holders should sell too is a bit off.

The question really should be, can Microsoft get its edge back? There are groups within Microsoft that are strong – Office, Windows Phone 7, and Bing. From what I’ve seen of the Kinect for Xbox, that will be a gaming industry “game changer” in November.

Other great companies that lost it, according to U.S. News & World Report:

  • Blockbuster
  • Dell
  • Eastman Kodak
  • Motorola
  • Sears
  • Sony
  • Sun Microsystems
  • Toys R Us
  • Yahoo

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Has Microsoft lost its edge?