Three Reasons Microsoft Should Be Thankful

This is the time of year to be thankful for the good things in your life: family, friends, health, a job, a smartphone, a virus-free computer.

What should the software soldiers in Redmond be thankful for? Well, Microsoft has certainly had a topsy-turvy year. But despite layoffs, dismal revenue reports and great difficulty getting anyone to take Windows Mobile seriously, the software giant has much to be thankful for as we head into Turkey Day.

[ For complete coverage on Microsoft’s new Windows 7 operating system — including hands-on reviews, video tutorials and advice on enterprise rollouts — see CIO.com’s Windows 7 Bible. ]

Here are a few reasons why Microsoft should stay resilient against its many rivals through the holidays and beyond.

Windows 7 Is Not Vista

It’s a safe bet that Windows 7 will not end up like its embattled predecessor, Vista. The new version of Windows, launched on Oct. 22 in a modest fashion compared to Vista’s garish debut three years ago, has received mostly positive reviews, its early sales exceed those of XP and Vista in a comparable time frame, and its market share for last weekend passed 5 percent, according to Web metrics company Net Applications.

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Windows 7 still faces roadblocks. Those clever Apple TV ads will continue to taint perceptions of the Windows brand, but Windows 7’s true enemy is the economy. The upcoming holiday season is ripe for new PC purchases, but the sour economy could prevent buyers from opening their wallets. Also, on the consumer side, if fairly new PCs running Vista ain’t broke why fix ’em? And then you have cash-strapped businesses content to run the competent Windows XP into the ground.

Nevertheless, Windows 7 has silenced the Vista stigma — an important accomplishment. Also, its frequently-aired TV ads are lively and engaging, and with Gartner forecasting that PC sales will actually make modest gains this year, Windows 7, now running on everything from netbooks to all-in-one touchscreen PCs, is in an ideal position for when consumers and businesses start spending again.

Office Still Owns the Enterprise

It’s hard to deny the lure of cheap, Web-based productivity suites such as Google Apps, OpenOffice and offerings from Zoho and IBM. But the fact remains that enterprises still choose Microsoft Office desktop tools more frequently than any other suite.

A recent survey of 2,000 IT decision-makers by research firm Forrester shows that 80 percent of companies surveyed support some version of Microsoft Office, and 78 percent have no plans for implementing an alternative to Microsoft Office.

The main reasons for Office satisfaction are that businesses are comfortable with it and Office is compatible with Microsoft’s ubiquitous Sharepoint enterprise collaboration software, as well as other business applications.

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On the other hand, Web-based e-mail and productivity tools, though much less expensive than Office, require that IT managers retrain workers who are old hat with Microsoft Office. Also, storing company data on someone else’s servers in a cloud environment remains a sticking point with many businesses.

But with cloud computing becoming more prevalent, enterprises won’t resist Web-based apps forever. Microsoft knows this, and will include Web versions of Office 2010 apps when the software launches in the first half of next year.

Bing Is Holding Its Own

When Bing, Microsoft’s “decision engine,” launched back in June, nobody knew what to expect. Could Bing actually compete with Google search?

Well, Bing has not revolutionized the search engine world, but it has been surprisingly successful. Putting photos of exotic locations on its main page brought visual flair to search, and its categorized search results, hover preview feature and enhanced video search provided streamlined results in a way that made Google look both disorganized and boring.

Bing vs. Google: The Feature War Begins

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Bing’s U.S. market share has increased to 9.9 percent, which is almost two percentage points higher than when it launched, according to October data from online market tracker comScore. Yet Bing has hardly taken any share from Google’s comfortable 65.4 percent. Bing’s share gains have come at the expense of Yahoo, not Google.

But Microsoft is committed to Bing growth, dedicating close to $100 million for marketing and advertising. Also, this month Microsoft unveiled new features in Bing.

The latest updates include Facebook previews, full-page weather reports, expanded hover preview showing a snapshot of the Web site you want to go to, and the integration of Wolfram Alpha, a computational technology that returns deeper search queries such as a person’s body mass index or how many grams of sugar are in a banana.

What’s next for Bing? You can expect Bing and Google to try to one-up each other with new search features in the coming months, and Bing will experience a market share jump as it gets rolled into Yahoo when the Microsoft-Yahoo search deal is finalized.

Shane O’Neill is a senior writer at CIO.com. Follow him on Twitter at twitter.com/smoneill. Follow everything from CIO.com on Twitter at twitter.com/CIOonline.