Leader: Microsoft must tend to core markets

Microsoft has grown so big in certain markets that it almost seems laughable to even attempt to compete with it there.

Take desktop operating systems. Who wants to fight with the guy hogging 90-plus per cent of the market?

Or office suites. For years, Corel has been the only rival able to stay alive there.

At least until recently.

Two companies - Beijing-based Evermore Software and Beaverton, Oregon-based Gobe Software - have released office suites set to compete directly with Microsoft Office. Add to those Sun's StarOffice, Corel's WordPerfect and the open-source OpenOffice, which is especially popular with governments and universities, and you're looking at some healthy competition.

Microsoft also faces renewed pressure in the desktop OS space. Red Hat released a new version of its desktop Linux earlier this month. And many in emerging and international markets - areas with lots more room to grow than Europe or the US - have chosen to go with Linux.

Don't get us wrong - we're not saying open source or Linux is going to kill Windows. That's an old slogan that probably will never come to pass.

But new competitors that can offer lower prices or capitalise on the omnipresent anti-Microsoft sentiment in the air should not be dismissed.

What is becoming clear is that the company's toughest fights may not come from its attempts to expand into new areas. The software giant, if it wants to continue to own that moniker, needs to keep an eye on its core markets.