IE loses market share: Does it really matter?

The latest market share figures for browsers are out, and IE is down again, to 67.6%, the smallest market share since Net Applications began tracking browser numbers in 2005. It certainly looks bad for Microsoft. But does it really matter? Should Microsoft care if it loses market share for a piece of software which it gives away for free?

The attention paid to browser market share figures at first blush seems a bit odd, given that they're all free. Mozilla, creator of Firefox, is a non-profit. Microsoft is certainly for-profit, but it gives IE away. Chrome, Opera, Safari, and others are free as well.

So why has Microsoft ever cared about market share for IE? Because enterprises have often written internal applications, and designed their intranets, around IE. If Microsoft can get them doing that, it's more likely that those enterprises will use for-pay Microsoft applications such as Office and Sharepoint. Sharepoint is designed explicitly to work with IE. It does support other browsers, although not as well as it does IE.

What does this mean? If more enterprises standardize on IE, Microsoft is more likely to sell more versions of Sharepoint, and most likely Office as well. However, there's no absolutely direct connection between Net Applications market share numbers and whether enterprises have standardized on IE. Net Applications measures the overall use of the Internet, and doesn't cover intranet use. More than anything, it measures consumer behavior, not business behavior. It's unlikely IE numbers are falling in enterprises to the same extent they are for overall use.

Still, the Net Application numbers do mean potential trouble for Microsoft down the road. Computerworld reports that "In the last 12 months, IE has slipped about 8 percentage points in market share, nearly as much as the 9.8% drop during the preceding 24 months." Firefox, Chrome, and Safari have all gained.

Ultimately, consumer behavior influences enterprise standards. So if the IE decline continues at the same rate as for the past year, you may begin to see some enterprises giving up IE as a standard. If that's the case, those enterprises will consider using other development tools than Sharepoint. And that, certainly, could mean trouble for Microsoft.

Update: There's one way Microsoft could stop IE's market slide: Release IE for Linux. For details, and to see why it could help Microsoft in other ways, check out my blog post "Why Microsoft should release Internet Explorer for Windows."

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