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This week marks several important events:

• Google announced their broad Web-as-a-platform developer toolset.

• Microsoft showcased part of their Windows 7 user interface and set the date for their PDC which indicates their new OS, Windows 7, is approaching Beta.

• In addition, I and a number of the folks I work with are seeing what appears to be a rather massive move to the Mac platform, which hasn’t seen this kind of growth since the 80s.

• Finally, Linux is beginning to get some actual traction, showing up on a number of low cost “Netbook” offerings and MID (Mobile Internet Devices); it is starting to look like even this platform may have some legs.

I have not seen this level of competition before and Microsoft has never appeared more exposed. In my lifetime I have never seen a major vendor allow the kind of attack-marketing Apple is using without challenge. And, coupled with initial problems with Windows Vista, Microsoft suddenly looks like they are in a fight for the desktop the likes of which they – and we – have never seen.

Recalling IBM in the 80s

IBM had a similar fight on their hand in the 1980s against their mainframe platform, which was dominant prior to their collapse at the end of that decade. As the dominant vendor, they simply could not be overtaken if they maintained customer satisfaction and fueled the perception that they were the safest choice on the market.

For a lot of the IT market the phrase “no one ever got fired by buying IBM” was reality and they initially had a leasing model that made it virtually impossible to displace them.

However their market became saturated and they needed to show growth so they sold their leases to their customers, eliminating what was their strongest defense in exchange for getting a couple of really great revenue years. Then they decided to milk their customer base because they believed these customers couldn’t move. IT saw their payments to IBM increasingly as a tax.

A challenger to the mainframe showed up in the form of client/server computing, which promised to do what IBM did at a far lower cost and – in what was an amazing lack of strategy – IBM publicly agreed. This effectively validated this challenger at a time when they had lost their leasing protection and had really upset their customer base.

Microsoft entered the market initially as an IBM partner, realized by the end of the 80s that IBM fundamentally didn’t understand the market it was actually blessing, and they separated. IBM then tried to compete with Microsoft in this new market that Microsoft had been designed, partially with IBM’s help, to address. IBM, which was still vastly larger and more powerful, failed.

Currently they don’t even have an offering in the PC space they helped create and are looking up at HP (which effectively not only leads the market IBM once dominated but is redefining this market) to create a cloud-based world with most of the aspects that made IBM great. But, in this instance, it’s only working for HP.

Yes, the mighty can fall.

The 2000s and Microsoft

In the current decade the emerging technology is cloud computing and the company that was built on that model is Google. Google leveraged Microsoft partners and some competitors to get into the position they have today. But they aren’t yet in Microsoft’s core markets and will likely need an OEM partner or two to get there.

Microsoft has made some but not all of the mistakes IBM made. They have effectively raised prices for core offerings without ensuring that the perceived value has increased – making many customers feel, like they did with IBM, that they are overcharged. Firms like Gartner fuel this belief with services that sell the idea that Microsoft customers are overpaying for their offerings. Increasingly, IT buyers are viewing their payments to Microsoft as a tax.

This article first appeared Datamation.com. Click here for the full article.

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