Microsoft Is Doomed. Doomed!

I have to believe Microsoft’s latest earnings has finally obliterated all the silly “Microsoft is doomed!” discussion that’s been so bien pensant across the blogosphere these many years. This is a company that generated $23 billion in revenues and is clearly poised for growth. Most surprisingly, it’s poised for growth in the consumer and hardware markets, mobile and the cloud.

What’s that? Why, yes. I do hear Steve Ballmer laughing from the comfort of his LA Clippers courtside seat.

Billions Billions Billions Billions

Last week, Microsoft announced FYQ1 revenues of $23.2 billion. That’s up 25% year over year, despite the many proclamations of doom repeated over the years. Profits were a very healthy $4.5 billion, even after a $1.1 billion restructuring charge related to the Nokia acquisition.


  • Cloud services, which includes Office 365 and Azure, grew a whopping 128%, to $1.18 billion.
  • Office 365 grew to 7 million subscribers. Remember: unlike Apple’s iWork, people actually pay for Office.
  • Surface revenue was a surprising $908 million for the quarter — again, despite the persistent declarations it was a dead product.
  • Lumia sales were a robust 9.3 million devices.

According to CEO Satya Nadella:

“We are innovating faster, engaging more deeply across the industry, and putting our customers at the center of everything we do, all of which positions Microsoft for future growth.”

CEO speak. Yada yada. That said, to view Microsoft as a one trick pony, stuck in the past, as so many analysts still do, is to utterly misunderstand Microsoft and the industry. Simply check the numbers. Microsoft has one division with about $10 billion in quarterly revenue, and another five with quarterly revenues of about $2 billion or more. For comparison, Yahoo — all of it — just reported quarterly earnings of $1.15 billion.

microsoft revs

Claim Chowder

The facts are clear:

  • Microsoft is still printing money.
  • The death of the PC (and Windows) (and Office) (and Surface) (and Xbox) has been greatly exaggerated.
  • Yes, Microsoft can do hardware: Xbox, Lumia, Surface all had strong y-o-y growth. As Jan Dawson noted, “Lumia sales and Surface revenue were both the highest they’ve ever been.” Xbox was the highest outside of a holiday quarter.

Microsoft is welcome to serve up a bowl of tasty claim chowder. You know why.

Again and again, we were told Microsoft was dead or would be by now. You’ve heard this more times than you can count: The PC is dead — not merely dying. Bing? Dead. Skype? Irrelevant. Windows? Free or dead are its only options. Office? iWork and Google Apps will force it to be offered for free — and then kill it off.

Repeatedly, the analysts trotted out “jobs to be done” and “the innovators dilemma” and “the smartphone is the computer” to explain why Microsoft was so obviously doomed.

How could they all have been so utterly wrong?

No, it wasn’t a herd mentality that brought them all to the same, erroneous conclusion. It’s worse than that: They were not paying attention. What the analysts and blogosphere were doing — what led them to be so utterly wrong — is they were comparing single, often minor aspects of giant Microsoft against the primary driver of another tech giant’s entire operations.

Google search is far bigger than Bing, therefore Bing dead. Therefore Microsoft dead.

Windows Phone sells far less than iPhone, therefore Windows Phone dead. Therefore Microsoft dead.

It gets worse. By comparing one aspect of yesterday’s Microsoft to all of today’s Apple, for example, these seers of doom missed out on what Microsoft was actually doing in the cloud, and with social in the enterprise, with hardware, software, and on meeting the mission critical requirements of governments and Fortune 1000 companies.

Oh, and worst of all, Apple supporters in particular, so vigorous in their defense of Apple hardware prices and margins — because people will pay for quality — repeatedly failed to acknowledge these same “people” will pay for the quality and benefits they receive from Windows and Office and Azure, among other Microsoft products and platforms.

Long Slow Decline Except Not

You’ve seen the posts, many, many times: Microsoft must focus on the consumer. Microsoft must abandon hardware. Microsoft must give away Windows. Windows is doomed. Xbox is doomed. PCs are doomed. Over the past few years, Microsoft Is Doomed is the gift that kept on giving.

I will unfairly single out John Gruber because he is typically so understated and sparing with his criticism. That said, his “Microsoft’s Long Slow Decline” post from July 2009, which he proudly linked to less than three months ago, is one he no doubt would love to have back.

A few other favorites:

  • “These Two Photos Show What a Disaster Microsoft Is Today”
  • “The irrelevance of Microsoft”  (with charts)
  • “How Microsoft Lost Its Way, as Understood Through The Wire” (a personal favorite)
  • “The PC Industry Is Digging Its Own Grave”

When Vanity Fair opens its long post on Microsoft with “over the last decade, as the biggest force in tech history hurtled toward irrelevance (albeit lucratively),” you know the meme — despite being 100% false — is simply being parroted by writers who are willfully not paying attention. The utterly nonsensical pairing of “irrelevance” and “lucratively” stood in place of thoughtful analysis.

If billions of dollars are wrong, I don’t wanna be right. 

Pundits have for years now insisted Microsoft was dead or dying, brandishing the “dying” PC ecosystem as the doomed company’s massive blind spot. In fact, these analysts revealed a rather shocking blind spot in their own understanding of this highly iterative, multi-faceted industry.

Despite the many billions in profits repeatedly generated by Microsoft, drive by bloggers continued to insist:

  • Microsoft = packaged PC software
  • Packaged PC software is dying
  • Therefore, Microsoft is dying

Viewing 2014 Microsoft as being just like 2004 Microsoft is as wrong as viewing today’s Apple as no different then pre-iPhone Apple. Again, Microsoft has six lines of business all generating billions  — and all likely to continue growing, and continue delivering actual profits.

Stop the Microsoft is doomed nonsense. It was always wrong. It is wrong still.

That sound you hear now? That’s Satya Nadella, laughing from his CEO chair in Redmond.

Published by

Brian S Hall

Brian S Hall writes about mobile devices, crowdsourced entertainment, and the integration of cars and computers. His work has been published with Macworld, CNBC, Wall Street Journal, ReadWrite and numerous others. Multiple columns have been cited as "must reads" by AllThingsD and Re/Code and he has been blacklisted by some of the top editors in the industry. Brian has been a guest on several radio programs and podcasts.

117 thoughts on “Microsoft Is Doomed. Doomed!”

  1. With stock up so much this year alone, I’m not surprised it’s doing very well. They got a CEO that has a vision and has an innovate sense around him

    1. Yeah, Nadella looks like the right man, at the right time. But I’m pretty sure revenue quadrupled under Steve Ballmer and many of those billion dollar lines of business were built under Ballmer as well. The assertion that Ballmer failed is as absurd as the assertion that MS is dying. Ballmer understood product diversity and he understood how to leverage profitable lines of business to muscle into related segments quickly, even ones where you might lose money initially. Does Tim Cook understand this, because the fact that the lion’s share of the profits made by the world’s most valuable tech company comes from a single product would seem to indicate he does not. and unlike Ballmer’s MS, that single product reliance puts Cook in a box if ever that single product slips in just the United States, forget the rest of the world, if the iPhone loses footing in the U.S Cook’s whole company is screwed.

      1. i agree to some extent. but you seem to underestimate the IPad, and the mac business which bring a lot of revenue to the company.

        my biggest issue when it come to Apple is the cloud because the more category their add to the product line, the more complex it will be to make them all work beautifully together without a Strong Cloud back end

        1. Not at all, iPad shipments have decreased for two consecutive quarters, I imagine they will be cannibalized further by the iPhone 6 as well. Mac is doing as well as it ever has since before Win95. But look, in a world where all competing products are running an OS as unpopular as Win8 the Mac should be doing even better. Already Surface is catching on in the premium sector so time will tell if the Mac’s popularity is for real, or a cyclical thing.

          1. The MS surface is a dismal failure, the only reason it sells in the premium market is because that’s tge only market it sold in and yet it still loses money for MS.

            As for the Mac doing better, how much better should they do than having a record quarter? An even bigger record quarter, please say what level of Macs should be sold. Also why do you think selling a more profitable product is bad, that iPhone 6 v iPad ?

          2. After two years and 3 versions, Surface is close to another billion dollar line of business right now, so like the article says, that’s the kind of failure everybody wants to be. MacBook is what, $6 billion after almost a decade.

            A record when your market share is 7% is much easier than when it’s 45, 50 or more. I’m sure you recognize that when the subject is Windows Phone or some MS property, right? Like when MS says they’ve had record Lumia sales and WP is the fastest growing smartphone platform?

            If you think having almost half your profits coming from a single product, in the most saturated, slowest growth category in the sector, is a sound strategy then that’s great, but don’t pretend you make a convincing argument.

      2. So Apple is doomed because they are the most profitable phone maker, just as they are doomed by being the most profitable tablet maker, just as they are doomed by being the most profitable PC maker, same as they are doomed by being the largest music retailer, very much like being doomed by being the most profitable MP3 maker. Basically doomed by being successful.

          1. Why go back 30 years, MS is today, 10/27/2014 the tenth most profitable company of any kind in the world. Nice try though.

        1. I should add that I think Ballmer was a good CEO, he was methodically excellent in what he understood. He just couldn’t widen his vision to understand the possibilities that were available. MS understood SaaS when Amazon where selling books, they were talking about search before Googles IPO and they realised mobil was the future before Apples iPhone. They just consistantly fail to execute on what they see.

          MS has tremendous talent that can turn on a dime when properly directed, examples being IE which at one time was the best browser on pure merit and Windows 2000, which saved NT from irrelivence and released us from the BSOD that was 9x. Their problem seems to be too much managmeant which makes them almost always wait, see, copy what works and then assume they can win because the are MS and they can outspend their competitors. That has basically failed for the last 15 years. Sad really.

  2. Microsoft is not doomed. We all know that. It is just that it will not get to dominate the tech market the way it did in the1990s and the first decade of the 21st century. Their arrogance has cost them. We all remember how Microsoft executives laughed at the iPhone and iPad.They had no vision of what the market is and how it behaves. That arrogance was demolished. That is it. Microsoft, like GM still making cars, will get to make its Windows monopoly OS and Office products and that market is set, at least for now. It depends on what one calls as doom. Losing market dominance can be considered as a doom. Completely being wiped out of existence can also be called doom. It is all relative.

    Coming from the brink is not what many companies can do. Apple is one of the few companies that accomplished that feat. Not only that, it created new avenues and new markets. They outright made paradigm shifts. Google made the best search engine and the Android that gave world dominance to mobile devices. Microsoft is not in that league. It is getting down to where it belongs. It got to dominance by being at the right place at the right time, blocking out competition and getting away with mediocre product. Now it is simply gravitating to its level where it will belong if it still continues with its old mindset.

    1. Ummm, Microsoft is nowhere near, “the brink.”

      Tim Cook compared hybrid and convertible PCs to nailing a toaster to the side of a refrigerator, right before Apple started porting iOS smartphone functionality to the Mac, now there’s talk of a “iPad Pro” an attempt to make the iPad more PC like. Apple said that the iPhone was, “the perfect size” and that larger devices destroyed usability, then they released two gigantic flagship phones and now don’t even have one that meets their own definition of the perfect size.

      “Microsoft is not in that league,” At last check, MS and Google where neck and neck for the 2nd most valuable tech property in the world, so apparently people deciding where to risk their money are voting with their wallets that MS is in that league, and in fact has been in that league for more than two decades. Google’s ad revenue is in decline precisely because they’ve been out adventuring with barges and balloons and have apparently missed the turn that leads away from explicit search in places like Google and Yahoo to discreet search from within apps and services like Yelp and FB and Amazon, and increasingly those services and apps are powered by Bing, not Google, that’s why Bing’s ad revenue continues to grow disproportionate to it’s search market share, while Google’s continues to decline, despite it’s overwhelming dominance in search, right place at the right time indeed. Microsoft makes more off Android than Google, it’s owner, does.

      1. correction

        advertising is not declining when it come to Google, in fact it’s been growing in double digit, it’s the cost per click that is down which i associate to Mobile been a new and non defined territory for advertiser to spend money the same way they do desktop

        i am very confident that will change soon with they’re new form of Advertising based and Contextual, Location, personalize and predictive Ads,

        1. So the cost of click is going to go up bc the advertisers are going to collect more data from me?

          You think we should be happy about that?

          I don’t know about you but:

          I don’t welcome our new advertising data collecting overlords.
          It’s not a world that I want to live in…

      2. Microsoft is nowhere near the brink of course. But they are doing their best towards that. In the technology world things can change abruptly and old ways completely abandoned. Blackberry and Nokia can vouch for that. Both were dominant in the mobile world not long ago, until iPhone arrived. iPad has severely cut into laptop market. Microsoft has grown fat and obese with PC market completely cornered by it, IT having no other way but to submit to its “trials and mostly errors” in OS and office products. Now it is huffing and puffing, trying to play catch up with the new kids on the block that can run faster.
        All I can say about Microsoft is this – it is a very lucky company. It got to where it is without having to do anything in terms of innovation or creation. It just played catch up from behind most of the time. It destroyed Netscape, Lotus and many other software companies by arm-twisting the OEMs. Until someone woke up the Justice department, Microsoft continued its ways. It became a corporate giant instead of a software technology leader. They just slept off a little comfortably while Google, Facebook, Apple and others sneaked in and defined the mobile world. Now that is where everything is headed. Microsoft can keep its PC market. There is no healthy competition there. But mobile market can change things dramatically in the future. And one never knows, PCs might see even more diminished role in enterprise. Steve Ballmer laughed at all this and now he is sitting behind a basketball team and picking his teeth.

          1. Assuming Apple sits on its laurels. Their philosophy is not that of becoming a corporate giant. They want to create new things, new markets and new avenues. When they tried to change that philosophy after throwing Jobs out and tried to run the corporate way and fell on their backs. Apple and Google think unlike the standard tech companies that make incremental changes through trials and errors, market survey and have no idea about consumer side of the market. So the chances of Apple falling on its just because Microsoft and Nokia can is remote at this time. May be in a few decades they can get there. But Microsoft is in that situation and the only thing saving its grace is its cash reserves. And it would better change its ways or it will not wait for you to mention its own doom.

          2. It’s really how they react to disruption that counts, and the nimbler companies with less plaque in their bureaucratic arteries are more likely to weather any storms.

        1. “And one never knows, PCs might see even more diminished role in
          enterprise. Steve Ballmer laughed at all this and now he is sitting
          behind a basketball team and picking his teeth.” – Mauryan

          Ballmer bought the Clippers with the 2 billion dollars worth of loose change he found in his couch after years of increasing Microsoft’s revenues. And that was with MSFT getting its tail kicked in mobile.

          Stevie B. laughed himself all the way to the bank. We should all fail that badly.

          1. Ever heard of Kim Kardashian and the likes? They all became filthy rich not following the methods most people try to become rich. They found shortcuts. Microsoft and especially Ballmer is in that category. If you would like fall like on piles of cash, try being like Kim. At least she is attractive.

          2. I guess I should give you credit for finding a way to equate Microsoft to Kim Kardashian. That was courageous to say the least. I don’t agree with your point but we probably won’t agree regardless.

          3. Microsoft reminds me of countries like Egypt, Panama etc that park themselves at strategic locations where resources have to go through desperately. They can just live off of the money they can collect at the gates and let the ships go through. Microsoft found itself at the gate that opened the world to personal computers and capitalized on it. I’d give them credit for that. But after that they have only done things if needed – when some other company with innovative ideas showed up in the horizon. Microsoft basically blackmailed all the OEMs into submission and never let the fledglings grow their wings. Soon such fledgling companies died a death of starvation. Steve Ballmer built Microsoft along those lines. Though Bill Gates is the face of this company, Ballmer had a strong clout in the way the company ran. After Gates left, Ballmer basically ran the company full steam, ignoring all icebergs on the way. At some point the ship hit the iceberg. But this Titanic is very lucky. But the Titanic is unsinkable mindset is dangerous. There are many more icebergs on the way. Microsoft has to reconstruct itself as a true computer software company – run by creative geeks and not corporate wolves. Then may be there is a way out. However, I would not say that they are on the brink. They still have money and resources to change the way they run their company.

          4. I’m sorry if I don’t worship rich people like you do.

            There is nothing wrong with MS now, but Steve B. stalled the PC industry for years, he himself contributed almost nothing.

    2. i do not believe that we will eve see another company dominated en entire industry as Microsoft did with windows,

      However when it come to the enterprise sector they have all the tools necessary to dominate it

      1. As much as Office is smack dab over serving, well, just about every sector except Excel in finance and Word for long form documents, I think MS Office365/Cloud Drive/Exchange pretty much smokes Google’s equivalent. I think it is easier to manage, and easier to bounce between work and private use. And even my low-end use runs into obstacles in Google Apps.


        1. While i may love the way Google is approaching the enterprise sector, with a very Light very Thin cloud solution,
          Microsoft has been there for a very long time with a distinct approach and are well entrenched, and well establish among IT department with they thick, very powerful tool that will make it very hard for any new entrants so long as they can build on top of their success.

          it’s not just office, it’s the entire solution including their legacy relationship with many IT department

          1. This is why crime pays when it comes to illegal monopolies. Antitrust violations are one of the few crimes where even if you are convicted, you are not required to surrender anything approaching the benefits you gained from the criminal activity.

          2. Damm K, I’m agreeing with most everything you say on this OP, can you get back to trolling Apple. But yes you are correct with the MS relationship with IT heads, also most people forget the cost of training, I remember in the late 90s early new century when MS was panicking abut Linux and banging the TCO of moving to Linux. They were correct, if you could restart the world then Linux would be the way to go but with the world we have, sticking with windows and even office is cheeper.

            Simple fact is MS isn’t going away in any consiverable timeframe, there is just too much software and business processes that work on MS software. The price MS charges when taking in the TCO is incredibly small, we have something like 1.5 billion PC in use, MS makes what 75 billion, that’s $50 per PC a year. Ok that’s very simplistic but when you look on the macro level it explains why MS won and why Linux will never be on the desktop.

      1. GM has been around for decades before it came to the bailout level. I only quoted GM as an example which sat and watched the Japanese car makers bring in their smaller, fuel efficient cars and thought it would never catch up with Americans. Fuel crisis changed all that. Microsoft also benefited money-wise from the stock market boom in the late 90s. It does have a lot of cash on hand. Once upon a time DEC chairman laughed at the thought of personal computers. He believed a world where mainframes ruled at all times. Now DEC is history. IBM gave up its computer business and sold its fab to GF. A lot of example are there to watch.

  3. “Oh, and worst of all, Apple supporters in particular, so vigorous in their defense of Apple hardware prices and margins — because people will pay for quality — repeatedly failed to acknowledge these same “people” will pay for the quality and benefits they receive from Windows and Office and Azure, among other Microsoft products and platforms.”

    That was so good, I just had to hear it again! 😉

    1. Let’s not get overboard with the “quality and benefits” of Windows and Office. These products established their preeminence behind the protective walls of predatory monopoly, and they continue to benefit from it even though one might credibly argue that Microsoft is no longer predatory with respect to Windows and Office. Monopolies have long lasting benefits, especially with products that enjoy significant network effects or high entry costs. Hell, the Standard Oil monopoly was broken up a century ago and still Exxon remains a behemoth.

      Only a fool would forecast Microsoft’s death, but a reasonable forecast is that just like IBM, its days of completely dominating its industry are behind it. Windows PCs will never go away for the simple reason that the only viable alternative, OS X, is not aiming for the whole market, just the profitable (and sustainable) top end. Windows PCs will die only if the PC form factor falls completely out of favor or fashion and I don’t think that will ever happen in the foreseeable future.

      1. Italian citizens finally got the right to _request a refund_ for the Windows license that comes as part of a PC purchase if they don’t plan on using Windows.


        1. We’ve had that in France for several years, extremelly marginal impact. On the other hand, netbooks with Linux pre-installed vanished from resellers instantly when Windows netbooks became available.

          1. Well, sure. As long s MS still makes money on the PC regardless of Windows being installed or not, of course, why should they care?

            Mostly I think it is funny (stupid) that the customer has to request a refund, like a rebate, as opposed to just being able to buy it sans Windows to begin with.


          2. well, if you customize cars you might wish you could by them without an engine, but that’s almost impossible. But nobody cares if you buy Moe and swap the engine out, which few care to do, but it’s your option as an owner. There’s no reason the whole industry should be disrupted by a silly government mandate really designed to harm one firm. Especially since that firm traditionally sells class of a products its competition is giving away.

          3. I agree. But there is a bit of a legal paradox here.
            Why not the Mac being subject to the same law? I know that’s ridiculous, that’s why it’s a paradox.

          4. No paradox. Until the Surface, MS doesn’t make the hardware. Apple makes the Mac PC, which is a unified hardware/OS platform. Apple isn’t forcing some other hardware OEM to pay them money for their OS for each unit sold regardless of its end use.


          5. “Well, sure. As long s MS still makes money on the PC regardless of Windows being installed or not, of course, why should they care?”

            This is the one, most nefarious practice Microsoft employed that sewed up the Windows OS monopoly. It was one of the things that criminal prosecution was able to stop. But, that was like closing the barn doors after the horses have bolted.

            And as I said before, antitrust crime pays. Even though MS was convicted of antitrust crimes, they were never ordered to dismantle the monopoly they built through illegal means, or to pursue my earlier metaphor, to return all the escaped horses back into the barn. What’s the point of closing the doors on an empty barn?

        1. I don’t know what that statement means, catchy as it sounds.

          What i meant was you target a segment off the top that is large enough to be sustainable in terms of economies of scale in production, R&D, etc.

          1. the one commonality across all tech is that it spreads. those who target all, not just “the top” are likely to do the most good and ultimately make the most money.

          2. I’m not sure that’s completely true. Apple makes a lot of money just targeting the high end without hiding behind the protective wall of monopoly. It has always just gone for the high end and has been around longer than most of the tech companies that started in the late 70’s. I would consider that as a business that is sustainable.

          3. Yep, Apple is like Mercedes, a true, luxury brand that can weather things like economic downturns and increase cost of production because they’re have a lot more cushion in their margins than their competitors, selling a lot more units, do.

          4. I’ve continued to make this argument which is why I was glad when Apple never lowered their standards by making a really cheap iPhone (let’s face it, the iPhone 5c was the iPhone 5 with a bright, new outfit and was never meant to be “cheap”, rather just the $99 on-contract phone that the iPhone 5 was gonna be anyway).

            I don’t see reports about Maybach, Bugatti, Lamborghini or Aston Martin being challenged by all the Civics and Corolla’s on the road. Instead they invest even more money in making wildly more expensive cars. But my guess is one Maybach is likely equal to a couple dozen Civics.

            Clearly Apple doesn’t have to be Microsoft to be successful. Remember that time when the iPhone did more business in a single quarter than EVERYTHING Microsoft made?

            That doesn’t mean Microsoft won’t be sustainable or continue printing money from Windows or Office but it does mean that they’ll likely be playing from behind for the foreseeable future.

            They don’t have a competent, distinctive wearable, no competitive platform to Apple Pay, no ecosystem that compels developers and a desktop OS so schizophrenic it has to rely on the past to be relevant.

            What I think is surprising however, and what pundits and people alike are noticing, is the depths that Microsoft has sunk and how their rival, whom they once financed to stay above water, is crushing them in almost every way possible.

            No, Microsoft isn’t “doomed” but they’re a shadow of the company they once were. It’s hard to look at Microsoft and see them as an innovative company with ideas and platforms that challenge the status quo.

          5. I agree with your general point that Apple was right not to make the 5c the econo model that some bloggers demanded. I wouldn’t use Maybach as an example of success or longevity in a high end company, though. And Apple is not nearly as exclusive and high end as the marques you mentioned.

          6. Interesting, can you give 3 examples of non commodity tech products that have ever done what you claimed? Oh and also non free/subcerdiced.

  4. You’re forget one the Biggest Microsoft Doomsayer John Kirk

    the things is majority of analyst these day are cheerleader, who pay attention only to what is happening to their own favorite company, which make you wonder why they only react to news instead of providing deep analysis

    I Love what i see from Microsoft and their new approach to the market

    1. Not quite right. Mr. Kirk goes after Samsung. Criticisms of Microsoft’s hardware aspirations are not invalidated by this quarter’s financials.

      Anyone who said that Microsoft was dying is wrong. Anyone who said that the Microsoft “BRAND” is dying, is absolutely right. In fact, it’s dead already.

      At one time, every good secretary wanted an IBM Selectric typewriter. The world changed, and IBM did, too.

      Microsoft has had to completely shift its business model to platform agnostic services to generate these revenue levels. And good for them. But the Microsoft that was the default choice of consumers and small business is dead.

      1. “Anyone who said that the Microsoft “BRAND” is dying, is absolutely right. In fact, it’s dead already.” – Informed(?)

        It’s a pretty great looking corpse then. Fairly certain MSFT makes more revenue than all of the big social network companies COMBINED. Also makes a crapload more money than Google.

        Doesn’t look like a company with zero brand cachet.

        1. “Fairly certain MSFT makes more revenue than all of the…” Pretty certain that’s irrelevent.

          James, if the “brand cachet” of Microsot is so high, then why aren’t devices with MS’s brand on them chosen by more consumers? Why did MS entirely remove their branding from their XBox packaging? How many real people in the real world do you know who only consider buying MS products even when alternatives are available?

          And are they still using their Zunes?

          The value and cachet of a brand are measured in loyalty and future purchase aspiration. These numbers are out there for Microsoft, and they’re not pretty. So “dead” may be slightly hyperbolic, but if I were in a position where my brand cachet had fallen to MS’s level, I hope I wouldn’t take solice in comparing myself to Facebook.

          1. “”Fairly certain MSFT makes more revenue than all of the…” Pretty certain that’s irrelevent.” – Informed(?)

            Really? Because Microsoft isn’t in the business of, you know, being a business?

            “James, if the “brand cachet” of Microsot is so high, then why aren’t
            devices with MS’s brand on them chosen by more consumers? Why did MS
            entirely remove their branding from their XBox packaging? How many real
            people in the real world do you know who only consider buying MS
            products even when alternatives are available?” – Informed(?)

            There are indeed alternatives for every major Microsoft product:

            XBox – PlayStation

            Azure – AWS

            Windows – OS X, Linux

            Windows Phone – iOS, Android


            And yet Microsoft continues to make piles of money.

            “The value and cachet of a brand are measured in loyalty and future
            purchase aspiration. These numbers are out there for Microsoft, and
            they’re not pretty.” – Informed(?)

            You realize that Microsoft just released an earnings report that completely refutes this, right? How much of Microsoft’s business do you think is repeat? Hint: it’s a lot.

            “So “dead” may be slightly hyperbolic, but if I were in a position where
            my brand cachet had fallen to MS’s level, I hope I wouldn’t take solice
            in comparing myself to Facebook.” – Informed(?)

            You can probably make a ton of great arguments for why Microsoft will not achieve the level of dominance it once had. But it being a “dead” brand is not one. This is a company that is GROWING revenues yearly. It needs at least some brand cachet to do that.

          2. “…Microsoft just released an earnings report that completely refutes this, right?..”

            Please note that I made a distinction between MS the business and MS the BRAND. Failure to observe this distinction leads to all kinds statements about revenues and business performance which are not relevant to the discussion of BRAND. And no, a business does not require any Brand Cachet to be viable or profitable (Comcast, Haliburton, General Dynamics, etc). However, they will fail in a competitive consumer space without it, and Microsoft has already failed there. And before you pounce, note the qualifier: “competitive consumer space…”

          3. “And no, a business does not require any Brand Cachet to be viable or profitable (Comcast, Haliburton, General Dynamics, etc).” – Informed(?)

            You don’t seem to understand how Microsoft differs from the entities you’ve mentioned, who have monopoly or near-monopoly status or crony access. Microsoft actually has competition, a significant amount from companies with near-equal or even more power. For instance, Microsoft competes with Google and Amazon in cloud services. It competes with Apple, the most powerful tech company on earth in operating systems. It competes with Apple, Google and a slew of OEMs in mobile. It has no business that it can leverage for bargaining position. It can pretty much be replaced at any level on the chain.

            “However, they will fail in a competitive consumer space without it, and
            Microsoft has already failed there. And before you pounce, note the
            qualifier: “competitive consumer space…”” – Informed(?)

            I’m “pouncing” because no aspect of your argument is supported by fact. Here are arguments you could make that would be supported by fact:

            Microsoft is no longer dominant in the overall computing landscape;

            Microsoft is a non-factor in mobile;

            Microsoft likely will not ever again be a dominant force in consumer computing.

            However, Microsoft has a “dead” brand? That’s a wide brush with which to paint and discounts Microsoft’s brand in the enterprise. And stating that Microsoft will fail in the consumer space without a strong brand discounts the fact that well over 200 million devices with a Microsoft OS on them sell per year. There are over 1.5 billion devices with Microsoft operating systems on them in use. This isn’t niche.

            You’re conflating what MAY happen with what IS happening. Microsoft is printing money no matter how you cut it, in both consumer and enterprise. As much as Apple? No. But WAY more than Google or any of its other competitors. This is a company with both a strong business AND a strong brand.

        2. The companies that provide me with water and electricity make money. Dosn’t mean their brands have any value, everyone in my village would love to have another choice.

          Using MS because the alternative is more inconvinient dosn’t make MS good or liked.

          1. Please explain then the success of Office on the iPad… obviously the brand alone holds a great deal of value.

          2. Better yet, please explain the success of the iPad without Office, which was the case until this year…. “Nay,” I say. “Nay!”

          3. If I was a Pastafarian, I might note the correlation of Office being available for iPad and the slowdown of iPad sales. Coincidence? Hmm.

            Oh wait. I AM a pastafarian.

        1. In the enterprise sector, buying decisions are not based on brand, they’re based on negotiated terms and the ability of the business/service to provide and deliver what is being purchased. If brand serves any purpose in enterprise, it is to gain entry to the bidding process. Microsoft’s branded software is no longer an automatic winner, even in enterprise. After tolerating many years of egregiously rising license fees and unwanted software bundles being crammed down their throats, numerous former Microsoft customers have initiated policies of pursuing open-source first. Don’t take my word for it.

          1. I’m not convinced. My brother used to work in a very large French corp, his conclusion was: “what’s good about MS is that when they’re in a segment, I don’t have to think and choose products, I just get the MS stuff”.

          2. LOL, remember that and “at IBM you have a job for life”, left after 2 years. Stupidly I wasn’t paying attention because if I did, I’d have stayed for another year and been one on the 10,000s who got canned on very good terms.

    2. “You’re forget one the Biggest Microsoft Doomsayer John Kirk” – Kenny

      You’re partially right, Kenny. Microsoft has fallen a long way in the personal computing sector since 1996 and I think that fall will continue. Further, I think that their purchase of Nokia and their continued sale of the Surface are strategic mistakes. I do think Microsoft has a great potential future in Cloud services but their hardware and personal computer ambitions are acting like an anchor.

      In other words, Microsoft is not doomed and they are not going away. But they are becoming irrelevant in the area of personal computing and that’s the area where I focus most of my attention.

      Don’t agree? Fine with me. We’ll let time sort out who is right and who is wrong.

      1. Apple has shown us that with Vision, execution and Good timing any company can turn itself around

        i do not believe that the Surface are a strategic mistakes, in fact i think it make sense for them to try to compete with Apple by going after the business world first with a complete package instead of trying to compete with Google Free service.

        while many of you love to focus on product innovation, i do believe that the most important innovation for any company is it’s Internal culture, which i think is exactly what Microsoft is doing right now.

      2. John, glad you were able to chime in and defend your excellent and entertaining articles. In my first post to this thread I wrote: “Criticisms of Microsoft’s hardware aspirations are not invalidated by this quarter’s financials.”

        That’s pretty much the crux of it. I have no desire to see Microsoft fail. It pleases me that they are reinventing. That kind of energy may lead to possible long-lasting contributions and innovations. But the “Apple Envy” that led to most of Microsoft’s stretegic blunders has to end.

  5. Pure stinkbait for Apple haters. The Apple flavored writers whom I read don’t think about Microsoft much anymore. Or if they do, it’s a bit kindly. Like one talks about an alcoholic uncle.

    Unarguably Microsoft whiffed completely on mobile. It’s lost a whole decade and the deal of the decade. Hell, it might have been the deal of the century. And a decade of lost leadership looks a lot like defeat. It’s not doomed. But Microsoft was totally eclipsed.

    Can Microsoft leapfrog to the next big thing? Sure. But leapfrog to what? Nobody … Microsoft, Google, Apple … has a glimmer of what’s next.

    1. I think people generally know the big future growth areas: AI, Virtual reality, internet of things, robotics, Maybe augmented reality. Plenty of atoms to exchange for electrons and money to exchange hands.

      1. That’s a list, not a leap. The digital and miniature revolutions took thirty years to reach this point of convergence.

      2. AI, VR & robotics have been the future for 40 years. Very much like fusion, just round the corner, we will have it within 10 years and the future will be rainbows and unicorns. IoT is like twaddle, just less sencical.

  6. I find it curious that your focus is so heavily on revenues but ignore the bottom line. Net Income isn’t doing nearly so well because a lot of their new revenues are much lower margin then the revenues they are replacing. Microsoft’s pricing power has massively declined and new lines of revenue are lower margin than previous lines. For example, lots of growth in low-margin cloud revenue, but high margin Windows revenue is on decline. Bing revenue is increasing but is likewise low margin. Microsoft is more and more finding itself head-to-head with Google and Amazon selling cloud services at or sometimes below cost.

    Microsoft’s ability to charge near monopoly prices on Windows and MS Office is on decline and this is only getting worse.

    Dead? No, but it’s not an 800 pound gorilla anymore, it’s not even one of the biggest influencers in tech at this point. It’s joining the large pool of former behemoths of the industry which still manage to churn out billions in revenue. IBM isn’t dead either, nor is HP, Xerox, or Dell.

    1. Are there any 800 pound gorillas in tech?
      Apple’s market share around the world is meager. Google is facing multiple threats in digital advertising. Amazon is constantly under attack. Facebook may be the only example of a company that looks like it can grow and dominate its market for many years to come, and that’s certainly no guarantee.

      1. i’m not sold on Facebook future yet due to the fact that they don’t control any platform and still relying on user opening and stay on their App to make money at a time when we are moving in a Notification centrist platform where we will be able to do almost everything in an App without the need to open it

        in my opinion YouTube is more valuable than Facebook and even twitter combine

        1. YouTube probably funnels more users to ads, sure. But as a destination, it’s going to be a while before anybody best FB, doesn’t FB enjoy the greatest length of stay of any property in tech? Facebook’s weak spot is that it’s wholly reliant on the vagaries of human interest, but FB is pretty sticky, once you’re in it’s much harder to get out than any other service I can think of. FB knows it too, that’s why you’re account is always waiting just like you left it whenever you deactivate the thing.

          1. i am not expecting anyone to best Facebook on social media rather a decrease on time spending on it due to the new form of interaction base on intelligent notification and Card base interactive technology that will make it possible to do almost everything you want on Facebook without the need to open the App hence less Ads.

      2. @Brian – Google, FaceBook, and Apple don’t have as much influence over the industry individually as Microsoft had at it’s heyday, but they have vastly more influence than Microsoft does at this point.

        The bigger problem is Microsoft’s loss of pricing power. Windows and MS Office, used to be huge cash cows and both are losing value every year. Windows has essentially collapsed and while Office is much healthier, per-seat revenues are down there too.

        1. No, Office is not losing value, the model has simply switched from boxed copies that must be replaced en masse every few years to an always up to date, subscription model that can be ported to every major platform and produces a steady cash flow. The potential market for Office has gone from about 1/2 billion PCs to 1.5 billion PCs, tablets and smartphones. Windows has collapse, the hyperbole. Windows is used by about 1.2 billion people, Win8 alone, MS least popular offering in half a decade, has about 250 million users. People buying companion devices and disruptions in the consumer PC refresh cycle does not a collapse make, decline sure, collapse, hardly.

          1. Year over year same to same. Simply put, revenue didn’t go up as fast as subscriber count.
            “One interesting thing to note is that Office 365 Home and Personal subscribers grew strongly, from just 2 million a year ago and 5.6 million last quarter to 7.1 million this quarter. However, revenue… seems to have stayed at around $125m for the quarter from last quarter to this, despite the growth in subscribers. ”

            When Windows 7 was released, Microsoft’s revenue and earnings spiked to their highest level ever. After Windows 8 was launched both revenue and earnings declined significantly. Revenue has recovered, but earnings have never reached the level they reached in 2011.

      3. If you ask developers you will see where the mindshare and thus the market is going. No developer I know is excited about Microsoft anymore. None.

        Everyone is using Javascript as a primary tool and Java or Python or something that isn’t .Net.

        All the excitement is in open source and none of the top open source projects have anything to do with .Net.

        If you are going to scale in the cloud then you need to architect for server density!!! And Windows has ZERO story in this space. The Windows team hasn’t been able to match CGroups in Linux. There is MS Research project but its gone nowhere.

        So if your business is going to scale in the cloud you have to running CGroups or using a service like AWS Lambda (or something like it). That is the future and its here now. Microsoft has nothing in this space. Nothing.

        So its really strange that someone is acting, more like bluffing, that Microsoft has any cards to play in the technology game. They don’t.

        Google contributed CGroups to Linux. And if you didn’t know that then you really shouldn’t call yourself a tech writer.

        The real tech companies today are: Amazon, Google, Facebook, Apple, Oracle, Ubuntu, Redhat, and Apache.

        Microsoft is a joke.

  7. Google:

    Market Cap: 367 Billion USD (According to Yahoo Finance)
    Revenue:16.52 Billion USD Q3 2014 – Quarter ending on 30th September 2014( )

    Google Main Product(s): Through which they earn a majority of their revenues:
    1. Search (Adversting)

    Google OtherProduct(s): On which they either give it off for free or lose money on it:
    1. Google Chrome/ Google Chrome OS
    2. Android
    3. Google X (Google Fiber/ Google Glass etc.)
    4. Google Productivity (Sheets/ Presentation/ Spreadsheet)
    5. Google Drive

    Market Cap: 380 Billion USD (According to Yahoo Finance)
    Revenue: 23.2 Billion USD Q1 2015- Quarter ending on 30th September 2014 (

    Microsoft Main Product(s): Through which they earn a majority of their revenues[For Comparsion, lets only concentrate on Consumer Products/Service]:
    1. Windows

    2. Office (Students/Personal)

    Microsoft OtherProduct(s): On which they either give it off for free or lose money on it:
    1. Bing
    2. Internet Explorer
    3. OneNote
    4. OneDrive
    5. Surface (Even though it has shown expotential growth ; it is not a major revenue driver)
    6. XBox

    My arguement goes out to those people that say that Google is way better than Microsoft and that Microsoft is no longer revelant in the consumer industry.

    Both these companies have only 1 or 2 Products/Services which are major Revenue drivers and have other products/services on which they lose money.

    1. Yes, but Windows is not important anymore. Nor are any of their server offerings. The OS isn’t important anymore. The browser is king not the OS.
      And Office is very quickly becoming irrelevant. The licensing issues with Office just make it too difficult and risky to use.

      Google on the other hand depends on search. And search is a key technology that everyone needs. They are at risk of a black swan event but so is everyone.

  8. That sound you hear now? That’s the sound of the 18000 people FIRED from the company while Microsoft posted these record revenues and profits. Its always such a class act…

  9. I’m not one to say microsft is doomed, but I don’t see much to be overjoyed about when it’s earning less than 3 years ago and has most of it’s new product lines losing money.

  10. This article misses the point. Microsoft isn’t doomed, its irrelevant.

    IBM still makes money selling mainframes. But are mainframes “relevant”? If you want to run a large grocery stores IT shop then “yes” they are. But if you are starting a business today then “no”. Same goes for Microsoft. Microsoft is as relevant as an AS-400 is.

    I don’t see any reason to invest my time in reading about anything Microsoft is doing these days. Everything that Redmond does these days is irrelevant.

  11. I find it interesting that you didn’t bother to look around and ask yourself “who is using Azure for business critical systems?”

    If you had then you would quickly realize that nobody of any size is. By contrast with AWS you can point to Netflix, MOZ, and many other large and very profitable companies using AWS. Or could ask a real engineer who has deployed to both clouds and they would tell you that Azure is a total joke.

    So then how is MSFT posting these numbers? Well, talk to anyone with a enterprise license agreement with Microsoft. Microsoft is embedding Azure as part of the agreement if you want it or not! So this way Microsoft is able to say “hey everybody, look at our Azure revenue!”. And Microsoft is right to assume that lots of lazy tech journalist will see the numbers and print them without ANY critical thinking applied.

  12. Gotta agree with the others. Net income is the signifier hear. After revenue, what is net income? This could mean anything; they are selling off patents, business sectors, land… revenue can be anything. Net profit though is still not good due to their tremendous expenses and inability to bring money in from overseas for fear of being taxed.

    When you look at where that money comes from in the paperwork for revenue, that tells a different story entirely hence the constant restructuring every year.

  13. Microsoft is a big lie, everything about this company smells funny
    thank you for this article because we all know how inflated and fake this microsoft capital is !!!!!
    sooner or later things will come to light

    closing phones business,
    closing games studios,
    not releasing sales figure for various hardware,
    unable to compete with even the smallest / crappiest business out there
    no clear vision of the future
    ignoring every feedback received from users
    not following any trends in the market
    forcing windows / office licence unto customers and business

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