Can Microsoft Corporation (MSFT) Be the Leader Again?

What’s it going to take for Microsoft Corporation (NASDAQ:MSFT) to take its former position as the leader of technology breakthroughs? Several areas that the company is currently focused on could turn the company around and send it to the type of profits that Apple Inc. (NASDAQ:AAPL) is experiencing. But as Apple has shown, the key ingredient to market dominance is creating a device or software that can change a society.

Microsoft Corporation (NASDAQ:MSFT)

Microsoft’s future

After Windows 8 flopped, Microsoft Corporation (NASDAQ:MSFT) certainly has its work cut out for it. Users said the system was difficult to navigate, though the system was essentially the same as Windows 7 with a few new features. Nevertheless, Microsoft Corporation (NASDAQ:MSFT) recently announced its pledge to make the system easier to navigate by having the operating system open in a similar format to popular previous versions. But the failure of Windows 8 is a black mark against the company and shows it isn’t able to deliver revolutionary breakthroughs similar to what Apple Inc. (NASDAQ:AAPL) has done.

For Microsoft to really make moves comparable to Apple Inc. (NASDAQ:AAPL), it will have to work better with its customers. The Windows 8 operating system was dubbed user-unfriendly, and now Microsoft is putting restrictions on what gamers can do with the upcoming Xbox One, which on June 10 the firm said would be released in November. Microsoft Corporation (NASDAQ:MSFT) said gamers can only trade in games at “participating retailers.” Furthermore, users can only give a game away to a friend once, and that person must be their friend for at least 30 days prior to receiving the gift. Those actions don’t bode well for customer loyalty.

Apple’s future

Now appears to be a better time than any to take a bite out of Apple’s market share. Despite not releasing anything as revolutionary as previous editions of the iPhone have been, Apple has still maintained a loyal customer base. The iPhone 5 isn’t much different from the iPhone 4, but the company hasn’t experienced the type of criticism that Microsoft Corporation (NASDAQ:MSFT) has.

On June 10, Apple announced changes to its iOS software that powers the iPhone and iPad. The new software doesn’t represent major changes, just alterations to the iOS usability, including new features like a faux-wood bookshelf and simulated paper. The new software also includes changes to the text messages, email, and calendar. This shows that unlike Microsoft, Apple is obviously trying to be user friendly.

I wouldn’t expect another groundbreaking technology to come out of Apple in the years ahead due to the passing of the company’s original genius (Steve Jobs), so now would be the time for Microsoft Corporation (NASDAQ:MSFT) to show that it is the true genius in the industry. But it’s not a matter of Microsoft vs. Apple, as International Business Machines Corp. (NYSE:IBM), could lead the way once again after being mute for nearly two decades.

IBM’s future

While the company has been an afterthought in computer technology advancements since the 1990s, it now appears to be locked into the cloud computing market. After all, there are now more devices that connect to the Internet than there are people on earth. That makes storing and accessing the same information on multiple devices important to many people. International Business Machines Corp. (NYSE:IBM) looks to be at the forefront — along with, Inc. (NASDAQ:AMZN) and Microsoft — of the cloud computing industry. IBM’s executive director Vance McCarthy said the cloud computing industry is set to generate about $20 billion for IBM by 2015 due to the company’s focus on the “new wave” of smart clouds. While cloud computing is in its baby stages, it still has a long way to go and International Business Machines Corp. (NYSE:IBM) is in the thick of it. Microsoft Corporation (NASDAQ:MSFT) also has a stake in the cloud era, however. The company dedicated nearly all of its $9.6 billion annual budget for research and development on cloud computing. The payoff appears to be the Windows Azure software that is attempting to make storage easier.

IBM announced at the Edge conference on June 10 that it will dedicate $1 billion into flash-based storage. During the conference, the company introduced its IBM FlashSystem family of flash storage devices. The company said it aims to address the IT demand for performance improvements for managing unstructured data. IBM called the new service “smarter computer,” and looks serious in dominating the sector.

The crystal ball

While it no one is able to predict the future with a crystal ball, looking at the companies’ dedication to research and development could go a long way toward that end. Microsoft has taken some heat for its lack of progress, but that doesn’t mean the company isn’t trying. It is utilizing some of the best minds in technology to help bring it back to the forefront of the computer industry.

The article Can Microsoft Be the Leader Again? originally appeared on and is written by Phillip Woolgar.

Phillip Woolgar has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple, International Business Machines (NYSE:IBM)., and Microsoft. Phillip is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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