...... . . Great, healthy companies not only dominate the market, but share of mind. Look at Apple these days. But when was the last time you thought about Microsoft, except in frustration or anger? The company just announced a powerful new search engine, designed to take on Google – but did anybody notice? Meanwhile, open systems world – created largely in response to Microsoft’s heavy-handed hegemony – is slowly carving away market share from Gates & Co.: Linux and Firefox hold the world’s imagination these days, not Windows and Explorer. The only thing Microsoft seems busy at these days is patching and plugging holes.
.....Speaking of Gates: if you remember, he was supposed to be going back into the lab to recreate the old MS alchemy. But lately it seems – statesmanship being the final refuge of the successful entrepreneur – that he’s been devoting more time to philanthropy than capitalism. And though Steve Ballmer is legendary for his sound and fury, these days his leadership seems to be signifying nothing.
.....There are other clues as well. Microsoft has always had trouble with stand-alone applications, but in its core business it has been as relentless as the Borg. Now the company seems to have trouble executing even the one task that should take precedence over everything else: getting “Longhorn,” its Windows replacement, to market. Longhorn is now two years late. That would be disastrous for a beloved product like the Macintosh, but for a product that is universally reviled as a necessary, but foul-tasting, medicine, this verges on criminal insanity. Or, more likely, organizational paralysis.
.....Does anyone out there love MSN? I doubt it; it seems to share AOL’s fate of being disliked but not hated enough to change your e-mail account. And do college kids still dream of going to work at MS? Five years ago it was a source of pride to go to work for the Evil Empire – now, who cares? It’s just Motorola with wetter winters.
.....None of this should come as a surprise to Gates. I remember in the mid-90s he shrugged off the claims that Microsoft was unstoppable by noting that the electronics industry was so cyclical that no company ever stayed on top for long. In that light, Microsoft had a longer run than most. It is still a well-run company, which argues that its fade will be long and slow, like DEC, rather than a sudden death like Wang. And it may yet come back – there may already be something revolutionary under way in a back lab in Everett or Mountain View – but, like Yahoo! And Apple before it, Microsoft may have to die in order to be reborn. . . .

“Creative destruction” or “reinvention” have become business buzzwords, but they are important tools of survival for large companies. General Electric has deftly managed its own reinvention process over the years; consequently, GE is the only surviving charter member of the Dow Jones Industrial Average.

Behemoths fighting to maintain the status quo are inevitably carved up; whether Microsoft is in this category remains to be seen. One important factor in its favor is $34 billion in cash and zero long-term debt.