Can software make workers better?

SEATTLE — Microsoft Corp. promises its software will make people better workers — more productive, more profitable, more able, as the company likes to say, to achieve their potential.

Yet some wonder why the software behemoth isn't taking more of its own medicine.

As Microsoft hits 30, critics reel off a list of complaints that sounds like, well, a Microsoft commercial: stifling bureaucracy, frustrating miscommunication, different units working on overlapping technology without adequate cooperation. In short, the very ills Microsoft promises to cure with its software.

Growing pains have delayed products, leaving the door open for Microsoft to be beaten to market by younger, more nimble competitors led by Google Inc. and Yahoo Inc. Meanwhile, Microsoft shares have been trading at about the same level for several years.

As it gears up to release a slew of new products, Microsoft is trying to untangle bureaucratic snags with a corporate shakeup meant to get the best ideas to market faster and increase the company's push toward over-the-Internet software and services.

Of course, no one would argue that the company co-founded by Bill Gates is in dire straits. Microsoft continues to earn billions from its flagship Windows and Office products, and the company is steadily making inroads in markets including mobile phones, video game consoles and server software.

But it isn't just Google and Yahoo that should worry Microsoft.

It's also up-and-comers big and small that offer products as Internet-based services. Salesforce.com, which manages customer relations, is a big one. Writely and gOffice, which provide Web-based word processing, and e-mail application Zimbra are among the small.

Web-based offerings give users easy online access to products and services, sometimes for free. The threat to Microsoft is that such products, by their very nature, could decrease the importance of Windows or Office.

Google and Sun Microsystems Inc. announced a partnership last week that, while still vague, could eventually yield tools that provide, cheaply or for free over the Internet, an alternative to pricey Microsoft software such as Word or Excel.

"What you've actually got going here between Google and Sun is their own personal version of the film 'Kill Bill,"' said David Garrity, director of research for Investec's U.S. operations.

Microsoft insists it is in a strong position to fight its competitors.