Microsoft’s most dangerous competitor is…

… itself! Here’s an insightful essay on Redmond’s growing problem. Extract:

It is, admittedly, a cliché, but Microsoft is clearly a victim of its own staggering success. What they’ve done best, historically, is kill and/or neuter their competitors. That’s why they’re gearing up for a fight against Google; Microsoft, as a company, defines itself by its rivalries. They relegated early PC peers like WordPerfect, Lotus, and Borland to relative obscurity; then, famously, they outright obliterated Netscape.

In the ’90s, to sell copies of Word, they needed to beat WordPerfect, and they did; to sell Excel, they needed to beat Lotus 1-2-3. Now, though, to sell new copies of Microsoft Office, they need to beat older copies of Microsoft Office. Hence the much-maligned ads in which Microsoft casts their own users as dinosaurs simply because they haven’t upgraded to the latest version of Office.

Most of the criticism of these ads revolves around the fact that it’s a bad idea to insult your own customers. But what I found interesting about them is the tacit acknowledgment that Microsoft’s strongest competitor in today’s office software market isn’t OpenOffice, or any other competing suite from another company, but rather the Microsoft of a decade ago.

The problem with Google, as an “enemy” for Microsoft, is that Google is even less of a direct rival to Microsoft than Apple is. Microsoft sells software. Google does not sell software. The only way for Microsoft to “beat” Google is for one of the two companies to enter the other one’s market. Google doesn’t seem the least bit interested in selling operating systems or office software — and even if they do eventually enter those markets, it would likely be with software they give away in order to generate advertising revenue. Microsoft’s previous corporate rivals were companies that helped Microsoft focus on its core competency: selling and developing PC software. Obsessing about Google draws them away from that focus…

Link via Nicholas Carr.