Microsoft has been the big dog on the block with the giant target on its back for some time. Being Microsoft, that is not likely to fundamentally change any time soon, but Microsoft's two primary rivals--Apple and Google--are so busy bitterly competing with each other that Microsoft has an opportunity to fly under the radar and play both ends against the middle.
Microsoft is expected to shake up its consumer devices organization and restructure the Entertainment and Devices Division following repeated failures in those areas. Windows Mobile, and the Zune portable media player have not exactly overwhelmed the competition.
The areas where Microsoft has "flopped", though--mobile phones, music players, or even games consoles and video games--are not the bread and butter that pay Microsoft's bills. There are some strategic objectives that Microsoft could achieve if it had as dominant a stake in consumer gadgets and entertainment devices as it does in desktop operating systems, and office productivity software, but pursuing those objectives seems like an ego trip--an exercise in attempting to prove that it can compete and dominate in any market.
When it comes to Microsoft's core strengths in operating systems and office productivity, neither Google nor Apple represent any substantial threat. Apple loyalists will argue that the Mac OS X operating system is both technically and aesthetically superior to Windows, but Windows still has 18 times the market share. Google is trying to position Google Docs as a competing alternative to Microsoft Office, but Microsoft Offices still dwarfs Google Docs in market share--in fact Google Docs is a drop in Microsoft's bucket so small Microsoft may not notice the ripples.
Microsoft has lost some ground in the Web browser arena, another area it previously monopolized. The fall of Internet Explorer could indicate that Microsoft is mortal and that it's possible to chip away at the armor and eventually knock it off its perch. However, on a version-specific basis, Internet Explorer 8 is still the number one browser, and taken as a whole Internet Explorer still has more than double the market share of second place Firefox.
Although Google and Apple have invested a lot of time, effort, and resources pitting themselves against Microsoft, and Microsoft has likewise recognized Google and Apple as primary competitors, neither is really any threat to Microsoft's core markets. Microsoft can take advantage of the bitter rivalry between Apple and Google to play the two against each other and come out ahead no matter which one "wins".
Microsoft wants to maintain Exchange Server as a leading messaging platform. Microsoft wants to expand its presence in unified communications with Office Communications Server. Microsoft wants the business and consumer worlds to rely on Microsoft Office productivity software. These form the foundation of Microsoft, and Microsoft can increase its influence by focusing on developing solutions that work on both Google and Apple platforms.
Office Mobile should not be limited to Windows Mobile or Windows Phone 7 handsets. Microsoft should be aggressively working to create versions of Office Mobile for both Android and iPhone, for the upcoming Google Chrome OS, as well as the iPad.
Microsoft's strategy should revolve around ensuring that all businesses and users rely on Microsoft for office productivity, messaging, and unified communications platforms regardless of which mobile operating system, or device is being used. By ignoring the "threat" of Apple or Google as competitors and flying under the radar, Microsoft can become an even more dominant force in the areas that matter most.