December 29, 2008

Bill Gates has retired, and Windows is at a crossroads. InfoWorld sketches out five paths the software giant may take.

It's been six months since Bill Gates retired from Microsoft, though he remains an adviser, and the Redmond giant is chugging away as if business were usual. Work continues on Windows 7, Internet Explorer 8, Windows Mobile 6.5, the Azure cloud development platform, and so on. The path looks to be unchanged.

But that stability may be misleading. In its 33 years, Microsoft has extended its quest to turn every PC into a mainframe and to make Windows the center of the information and technology worlds. It's come close, but there are strong signs that the Microsoft era, at least in the Gates mold, may be ending. That's because the PC-centered world that Microsoft so successfully dominated may be ending.

Microsoft seems to have lost a cohesive outline for its future, allowing the debacle that is Windows and the bizarre interface changes in Office and Internet Explorer to come to market. Yet this same company has produced a great server operating system (Windows Server 2008) and sharing server (SharePoint 2007), and shows promising work in its touch-interface technology (Microsoft Surface), in addition to well-regarded midmarket business apps (Microsoft Dynamics) with a world-class user interface. It's clear that there are actually multiple Microsofts with their own visions and execution strengths.

This lack of forward focus is critical because of Microsoft's business realities. While Microsoft has its fingers in many pies, only two slices really matter: Windows and Office. As the concept of cloud computing takes hold, these two businesses -- which pay the bills for the whole company -- may shrink dramatically. f Microsoft's core Windows/Office business slows down or even fails, the rest of the company -- excepting the server division -- may not survive. Microsoft needs a strong Windows and Office business to execute the Microsoft-everywhere strategy. Migrating or adapting these assets to an on-demand future is an option, though the financial hit for such a transition is huge, risky, and thus a hard sell to investors, at least today.

Five futures, from terrible to great

Given the state of Microsoft and the clear trends emerging, InfoWorld has envisioned five futures for Microsoft, from worst to best, from the vantage point of 2018. See which you agree with:

1. The "Borvell" scenario
2. The "slow decline" scenario
3. The "streaming" scenario
4. The "Oort services" scenario
5. The "Gates was right" scenario

Only time will tell which of these futures -- or some other future we haven't foreseen -- is what really happens.