Which company doesn´t compete in a way or another with Microsoft? I can only think of two: Coca-Cola and Ikea…

Seriously speaking, Microsoft´s huge free cash-flows finally find some battlegrounds to be invested. It looks today as if Microsoft could start competing against any software or Internet industry player whose market proves sufficiently juicy.

Take a look at Microsoft´s competitive landscape, & you´ll find how tough the software/Internet environment is since only top-notch companies operate in this industry:

- Operating Systems: Microsoft Windows vs. the open-source community´s Linux

- Consumer Electronics / Digital Industry: Microsoft Zune (an iPod-like, an AppleStore-like, an iTunes-like, MS Media Player vs. Quicktime – Microsoft is, like Apple did, keeping its environment closed, too bad for them) vs. Apple

- Video Game Stations: Microsoft´s XBox 360 vs. the Sony Playstation

- Internet Browsers: MSIE vs. Mozilla Firefox, Opera, Safari, Crazy Browser, etc.

- Search Engines, Instant Messengers, eMail services: MSN vs. Google

- Same as above, + Media Content: MSN vs. Yahoo!

- Encyclopedies: Encarta vs. Wikipedia, Britannica, Universaelis, etc.

- Enterprise Resources Planning (mostly business intelligence & customer relationship management): Microsoft Dynamics (ex-Business Solutions)´s Axapta, Navision & MapPoint vs. SAP, Oracle-Siebel, Business Objects, Salesforce.com, Amdocs, Cognos, Sage, etc.

- Contacts Management: Outlook vs. Mozilla Thunderbird, Eudora, Novell Groupwise, and even IBM´s Lotus Notes & Domino

- Office Solutions: MS Office vs. Open Office, Star Office, Corel WordPerfect Office, Google, etc.

- Personal Finance: MS Money vs. QuickBooks, etc.

- Internet Development Standards: the .Net galaxy (AJAX, XML, etc.) vs. LAMP (Linux-Apache-MySQL-Php)

And I´m forgetting so many (MS Meeting, MS Visio, MS Project, Windows Mobile, MS Exchange Server, Virtual PC, etc.)…I believe Microsoft´s ability to deal with so many impressive competitors deserves an in-depth reengineering of “commonly-agreed corporate strategy rules” like, for instance, “diversification is evil” & “the BCG matrix is wrong” which prove to be jeopardized by Microsoft´s software industry leadership. But that´s another story.

As I see it, Microsoft´s main strengths are:

- top-of-the-class Software Development Project Management Methods, undoubtedly;

- R&D horsepower (MS doesn´t find it too hard to attract talents from all over the world; R&D headcount: over 25K!)

- a certain know-how when it comes to reaching the mass-market; I would say this was Bill Gates´ genius, cf. the democratization of Windows 3.0 against MacOS, IBM OS/2 and Jean-Louis Gassée´s BeOS, although Microsoft undoubtedly had the worst product at the time i.e. less stable and user-friendly.

Before I finish, I bet Microsoft will soon make (say before 31 December 2007) a VoIP acquisition (Wengo?) to allow Outlook users to basically “Skype” their contacts who are online just by clicking on a button. Who bets?

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