Microsoft's future No. 2: The 'slow decline' scenario

Unwilling to change but too big to be displaced, Microsoft enters a period of slow decline that hampers everyone.

In this environment of a few dominant players at each chokepoint, all fixed on their own machinations to make customers dependent on them. Microsoft was not alone in pursuing a path of "fully integrated stacks" that complicated hopes of heterogeneity; the two remaining major US carriers, along with Google, Hewlett-Packard, IBM, Oracle, and SAP, had similar strategies. Sometimes they acted as an informal cartel with each other and key players such as Adobe, Apple, Intel, and Sun Microsystems, but just as often, they came across as independently lumbering giants whose uncoordinated steps kept IT ever fearful of being stepped on accidentally.

Ironically, this very strategy perpetuated Microsoft's slow decline. Customers were loath to invest further, given the high prices that customer lock-in afforded providers such as Microsoft. That continued to drive a slowdown in Microsoft sales, as customers that could escape did and the rest stayed pat as long as possible.

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