Every once in awhile you read an article that really stands out at you and so it was when I read The Motley Fool recommendation about Microsoft. Some unkind words are flung at the Redmond giant, some of which have been known for some time. But what is surprising is how TMF accesses Vista & Office and how these products may eventually  may be the achilles heel that brings down the mighty software company. How true is this read? You decide and leave your comments.

Over at the MTF it states:

You don’t need to watch the “I’m a Mac, I’m a PC” commercials to see that Microsoft is taking a beating. You see it in the company’s financials where its online unit, incredibly, is operating at a loss; overheating Xbox 360 consoles find the company taking a huge warranty hit for a system losing market share to the Wii; and the upgrade wave of its flagship operating system has been more of a ripple than a tsunami.

That last point is important. This was supposed to be Microsoft’s final feast, the major last hurrah for its Windows Vista operating entry and its Office 2007 suite of applications before the inevitable embrace of cheaper open source operating systems and Web-based apps.

Delays didn’t heighten anticipation. They only let the apathy simmer in a crock pot of interminable indifference. Despite the hubbub over Vista’s features, revenue inched just 15% higher in fiscal 2007. The company is guiding investors to expect a 15% to 17% advance this fiscal year. Then that’s all she wrote — make that all she coded — for Microsoft. Analysts expect the top line to inch just 10% higher next year.

In fact, even Microsoft will tell you that its fortunes peaked several months ago. After a blowout fiscal first quarter (that ends in September for Mr. Softy), the company’s guidance implies a 12% to 14% top-line gain through the final nine months of the current fiscal year.

Forget the fact that it’s Apple’s (Nasdaq: AAPL) Leopard that is winning the critical praise. Forget the fact that companies like Google and Adobe (Nasdaq: ADBE) are jumping into the cloud computing realm where productivity software applications are served on the cheap in cyberspace.

All you really need to ask yourself is why you’re invested in Microsoft in the first place. Is it because the company’s dominance happens to be in the high-margin software space? That palatial estate is toast, my friend. Is it because Microsoft is such a brute that it can make up the distance in emerging growth areas the way it always has with its Web browsers and productivity suites — by simply bundling them in new PCs? Man, that kind of thinking is as outdated as Y2K.

Comments welcome.

Complete article is here.

[tags]microsoft, motley, fool, analysis, bear,  [/tags]