Making plans for Microsoft

How many pies can Microsoft get its mitts into? Quite a few, by the looks of things. The company has diversified into a bewildering number of areas, including its new operating system for Palm-sized personal digital assistants.

Pocket PC 2002, as it is known, is an impressive piece of software. When you look at the range of different things it can do, and compare it to Palm OS, it is pretty astonishing.

But this is only half the mobile story. Details have begun to emerge about Microsoft's operating system for mobile phones. Codenamed Stinger, it provides similar applications to Pocket PC 2002, but tailored to suit the various form factors.

Navigation on Stinger phones will use a five-way controller, so you'll be able to operate it one-handed. You'll also be able to synchronise Stinger phones with your Outlook address book, inbox and calendar.

Microsoft is diversifying into other areas too. The X-box games console, intended to compete directly with Sony's PlayStation2 and Nintendo's GameCube, is due out in the US very soon.

Opinion is divided on how good it will be when it finally does appear. Ultimately, it will stand or fall on the quality and quantity of games available at launch and beyond.

However, Microsoft is still looking after its main business: writing and selling operating systems for x86 PCs, such as the recently launched Windows XP.

This is also looking pretty impressive from a technical viewpoint. Hopefully, Microsoft will be able to attain its Holy Grail: writing an operating system that's feature rich, has wide industry support, but is also stable.

The main reason for all this activity is, of course, to grow the company and increase shareholders' dividends. But there are other reasons too.

Much has been written about the downturn in the PC market. Should this become permanent, Microsoft could be stuffed: most of its money comes from the licences it sells for the Windows operating systems that customers acquire when they buy a new PC. Diversifying into new markets will help to isolate it.

The largest project going on at Microsoft at the moment is .Net. This is based on an even more audacious strategy - to get us to pay for the software we use on a subscription basis, rather than by one-time purchase.

If it can persuade people that this is a good idea, Microsoft will have succeeded in isolating itself from a downturn in hardware vendors' fortunes forever. No longer will it have to persuade you to buy a new PC or mobile phone so it can get its cut - you'll be paying regardless.

It makes complete commercial sense and, if Microsoft keeps expanding in the same way it has been, I won't be surprised if, one day, it ends up owning my house.