John Rhodes over at recently wrote an article on How Web 2.0 Killed Microsoft. The article points out a lot of the hurdles and challenges facing Microsoft as they try to keep up with the movement from desktop-based applications to online services. It’s a long article; here are some highlights:

The disruption afoot in the world of operating systems isn’t tied to the software resident on your own computer. Instead, the disruption is network enabled software, particularly software, data storage, and end user environments that reside squarely on the internet, but probably more specifically on the web. To be quite blunt about this, Google doesn’t give a damn if a web browser of any virtually flavor is running any particular operating system. The network is the computer, after all.

Web 2.0 developers are mostly yawning about Vista because they don’t need it. Like me, I’ll bet you haven’t seen much buzz on Vista coming from developers and designers. In the past, developers needed to care about the operating system, but no more. They obey few corporate masters because they feel liberated. They leash of Windows has been cast off.

As users adopt more and more Web 2.0 tools, they will get more comfortable with them. In turn, they will start to expect and even need these applications in their organizations. The enterprise will start to focus on web applications more and the operating system even less. To put this another way, Google and many other companies playing the Web 2.0 world, will slowly kill Microsoft. The mightly enterprise will move to align with user demands over time. It’ll be a glacial move, but it will happen as Web 2.0 continuosly demonstrates victory, and liberation.

I’m a big fan of John’s writing and agree that Microsoft won’t have it easy in the coming years. However, since I’ve just purchased some MSFT stock, I figured I had to defend the company a bit. Here is the comment I responded with on the WebWord blog:

Isn’t there a way out for Microsoft? They’ve come to the show late, but they ARE actively moving into the online services space with offerings like

These services may not be able to compete with Google, Yahoo!, and the like now, but there are lots and lots of computer users who haven’t adopted “Web 2.0″ as fast as we have. The first experience these users will have with the new wave of online services is through the desktop links Microsoft will put on the Vista desktop. I think the impact of this is hugely under-rated.

After Vista’s release, every new computer will run it. Every corporate computer will be upgraded to it (security updates and support). I can foresee a future where the operating system is not as important as it once was, but we’re not exactly there yet. Microsoft will still ship lots and lots of units this time around. Hopefully for Microsoft, they can leverage those shipped units to draw new users to their online services.

I’ll leave with one more thought: what about games? While productivity and research applications have moved to the web, games are still entrenched on local hardware. You might feel that gaming is moving to the living room, but that’s another predicted event that is yet to come. Microsoft may have some more life in their OS as a platform for gaming (DirectX 999 or wherever they’re at now).

So while I agree with your basic sentiment (that the OS isn’t as important as it used to be), I thought I could give a few reasons why Microsoft may still be a large part of our technological futures.

I think Microsoft’s future may not be as clear cut as John is describing. But how Microsoft and other big companies are going to compete in the new software landscape with thousands of great, cheap, high-quality startups constantly nipping at the heels of established players (the termite’s John refers to his piece) is all yet to be determined. I would suggest that even well-respected, future-thinking companies like Google will have at least some trouble maintaining their dominance. On the flip-side, Microsoft has a lot going for them which may (profitably) carry them through the next decade.