Microsoft has just announced a reduction in the price of Windows Vista ( Ultimate from $400 to $320 USD, upgrade of Home Premium from $160 to $130). In an article on Nicholas Carr's Rough Type blog, he points out that these price points are usually signs of a weakening of the market overall. If Carr is right, it makes you wonder where the next play is, especially where Microsoft is also signaling its intention to purchase Yahoo.
Microsoft has a great position, in some ways. They have a heavily installed user base. They've invested effort and intention with IT organizations. They provide end-to-end solutions from the operating system to the browser and everything in between.
To that end, with all those touch points, there's a play. Regarding the Internet opportunity, Microsoft started in that direction with their Live product. With some of Yahoo's DNA threaded into theirs, maybe they can pick up more market there than they are with shrinkwrapped software.
It's a challenge for Microsoft, and it should be on your radar, too.
Read Nicholas Carr's full article here.