Firefox vs. Windows

Posted on August 2, 2008

Microsoft has shrugged off the presence of alternative browsers over the years, including Firefox. While all the rest have made minimal impact in the way users browse the Internet (lots of people have tried lots of different browsers but inevitably seem to return to IE for one reason or another), Firefox has been the one that took legs and ran. Partly because of addons, tabbing, standards compliance, configurability, and other reasons, FF has taken hold with a moderate share of users, around 15%.

Microsoft doesn’t see that as particularly significant as it still holds a commanding lead with IE.

But they do fear Firefox for another reason. Not as a browser, but as an operating system.

The folks in Redmond have just released their annual 10-K report to the SEC. If you are not familiar with the 10-K, it is the one document where companies bare their soul and reveal their deepest fears. It’s the document that would keep you from investing in any company, if that’s all you got to see, because it would scare you to death. It’s all about who the competition is and about how the company’s products and/or services might become obsolete, replaced by competitors’ offerings.

Well, this one is the first time a browser has ever been mentioned as a possible threat to Windows. Sing along if you catch the tune, here are the lyrics.

“The Windows operating system faces competition from alternative platforms and new devices that may reduce consumer demand for traditional personal computers….competitors such as Mozilla offer software that competes with the Internet Explorer Web browsing capabilities of Windows products. User and usage volumes on mobile devices are increasing around the world relative to the PC.”(emphasis mine –bp)

Notice the part about traditional personal computers? That is plainly their acknowledgement that the days of the local operating system are numbered. Keep in mind that in client-side computing, Microsoft still gets 80% of its revenues from selling copies of Windows.

Obviously, Microsoft is very aware of the challenges before it to hold on to its dominance in the services era.Watch their diversified new efforts and you’ll see where they believe they must be situated. They’re spending billions on huge data centers, making inroads into search and advertising, increasing consumer services, etc.

They are fortunate to have the megastore of cash to fund themselves into new directions so they will probably survive.