On October 27th, 2014, Techpinion’s very own, Brian S. Hall, wrote an article entitled “Microsoft Is Doomed. Doomed!”
Brian was, of course, being facetious. Far from predicting doom for Microsoft, he was mocking the Microsoft doomsayers. Let’s take a look at a few of his article’s choicer bits:
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.
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?
Microsoft is welcome to serve up a bowl of tasty claim chowder.
That sound you hear now? That’s Satya Nadella, laughing from his CEO chair in Redmond.
Hmm. With all due respect to Brian, Microsoft is not poised for growth, the critics aren’t wrong yet, there’s no claim chowder to be had here, and I very much doubt that Satya Nadella is laughing about the challenges facing Microsoft.
Truth springs from argument amongst friends. ~ David Hume
The difference between Brian’s view and mine reminds me of a joke:
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Holmes and Watson are on a camping trip. In the middle of the night Holmes wakes up and gives Dr. Watson a nudge. “Watson,” he says, “look up in the sky and tell me what you see.”
“I see millions of stars, Holmes,” says Watson.
“And what do you conclude from that, Watson?”
Watson thinks for a moment. “Well,” he says, “astronomically, it tells me that “there are millions of galaxies and potentially billions of planets. Astrologically, I observe that Saturn is in Leo. Horologically, I deduce that the time is approximately a quarter past three. Meteorologically, I suspect that we will have a beautiful day tomorrow. Theologically, I see that God is all-powerful, and we are small and insignificant. Uh, what does it tell you, Holmes?”
“Watson, you idiot! Someone has stolen our tent!”
Brian, like Watson, is very observant but he’s overlooking the problems that are closest at hand. Just because Microsoft made lots and lots of money last quarter does not mean that all is well. Profits are great, profits are swell, but they do not, the future foretell. For example, Nokia outsold the iPhone for four years after the iPhone’s launch…and we all know how that story ended.
The Microsoft that just brought in record quarterly income, is the same Microsoft that faces severe challenges going forward. First, Mobile is the fastest growing segment in tech and Microsoft has no prospects there. Second, Microsoft’s business model is dependent upon licensing its Windows Operating System to manufacturers and that business model has been disrupted and is no longer viable. Third, approximately seventy percent of Microsoft’s income is generated by its Windows Operating System and its Office productivity suite but all of that income is coming from PCs (notebook and desktop personal computers) and PC sales are flat or declining.
Let’s examine each those issues in one by one.
Mobile
In 2006, Microsoft Windows ran on about 95% of all personal computing devices in existence.
Today, that number is well south of twenty-five percent and Microsoft itself estimates that number to be around fourteen percent. ((MS COO Turner: We have 14% share of all devices (including our 90% PC share).”~ @maryjofoley) 7/14/14))
In 2010, Microsoft saw that it was nowhere in Mobile and they tried to turn things around with the introduction of Windows 8 and Windows RT. Microsoft was going to use its Windows Operating System as leverage to drive sales of Windows 8 tablets and it was going to use its Office productivity suite as leverage to drive sales of Windows RT.
Four years later, Windows tablet sales are nonexistent, Windows RT is gone, and both Windows and Office are being given away to mobile users for free.
We’re seeing the consumer valuation for those [Offce] start to approach zero,” said Wes Miller, an analyst at Directions on Microsoft, a research firm that tracks the company.
“Lots of consumers don’t need a PC,” said Rick Sherlund, an analyst at Nomura Securities. “They just need an Internet connection. They don’t need Office as much.”
In other words, free Windows and Office on Mobile devices are now being used by Microsoft to 1) mollify their existing user base; and 2) as a freemium product designed to entice mobile users to try, and then potentially buy, the full product. Mollifying Microsoft’s existing base is, in my opinion, a good move. Microsoft needs to milk Windows and Office for all they are worth, for as long as they’re worth something.
However, using freemium to attract new users has proven to be a losing proposition.
Microsoft launched Office for iPad in March and says it’s seen 40 million downloads of the three apps since then. But the full functionality of the apps has only been available to Office 365 subscribers, and it’s added less than three million Home and Personal subscribers since then, at roughly the same pace as it added subscribers earlier. People have been very interested in the apps, but most haven’t been willing to pay for the full functionality (or already had access to it through existing Home or Business subscriptions). ~ Jan Dawson
[pullquote]Neither Windows nor Office have any significant value on mobile devices[/pullquote]
This is the reality facing Microsoft today: Neither Windows nor Office have any significant value on mobile devices.
The problem with MS Office isn’t the price. Jordan Cooper (@blenderhd)
Exactly right.
User behavior isn’t the same on phones as it is on PCs. ~ Jared Newman
[pullquote]User behavior isn’t the same on Mobile as it is on PCs[/pullquote]
Let me repeat that, because this is the part the many people are still not getting. User behavior isn’t the same on phones (and tablets) as it is on PCs. In other words, operating systems like Windows and productivity suites like Office, have great value on PCs but have little or no value on phones and tablets. Accept that as a fact and your entire understanding of what is happening to Microsoft dramatically changes.
One’s destination is never a place, but a new way of seeing things. ~ Henry Miller
Microsoft is GIVING AWAY both Office and Windows for free…and the move is being met, not with applause but, with apathy:
Was poised to download MS Word, Excel for mobile. Then thought: what do I need them for again exactly? Charles Arthur (@charlesarthur) 11/7/14
Notice how long the web cared about free Microsoft Office for iOS. Times have indeed changed. Sammy the Walrus IV (@SammyWalrusIV) 11/7/14
Mobile is where it is at and Microsoft is nowhere in Mobile.
The high-growth parts of the tech industry, smartphones and tablets, are not built on Microsoft software. Microsoft applications have very little presence on those devices. Meanwhile, on the Internet it continues to be an also-ran to giants like Google and Facebook. ~ Ben Thompson, Stretechery
But perhaps you think that Microsoft is going to make their money in Mobile by selling hardware.
Please.
Estimated share of Q3 handset industry profits: Microsoft: -4%, Motorola: -2%, HTC, BB: 0%, LG: 2%, Samsung: 18%, Apple: 86%. ~ Kontra (@counternotions) 11/4/14
Microsoft’s hardware has done nothing but bleed red ink. For an excellent discussion of Microsoft’s hardware woes, check out the Mark Rogowsky’s article entitled: “Amazon, Microsoft And The Quixotic Quest To Sell Mobile Devices“.
CAPTION: Microsoft is never going to make any money off of any of these mobile devices.
If you think Microsoft’s short-term earnings makes their long-term problems in Mobile go away, then you’ve got another think coming.
Business Model
Business models are the best crystal ball technology ever invented. ~ @andreascon
Microsoft makes its money from Windows by licensing the operating system to manufacturers and consumers. Google killed that business model by giving their operating system away for free. Apple piled on by bundling their operating system for free with the purchase of their hardware.
Incumbents are rarely disrupted by new technologies they can’t catch up to, but instead by new business models they can’t match. ~ Aaron Levie (@levie)
Operating systems are losing all of their value. Their price is rapidly moving to zero. Yet Microsoft still makes approximately thirty percent of its income from this dying business model.
Moving from one technology to another is difficult. Moving from one business model to another is one of the hardest transitions there is. But that’s exactly what Microsoft now has to do.
If you think Microsoft’s short-term earnings makes their long-term problems in licensing Windows go away, then you’ve got another think coming.
PCs (Notebook and Desktop Computers)
This is what Windows sales looked like in 1995:
We’ve come a long way since then and yet, in some ways, it would be apt to say that Microsoft is still partying like it’s 1995.
- Approximately seventy percent of Microsoft’s income comes from Windows and Office.
- Almost all of that Windows and Office income is generated from sales to PC manufacturers and owners.
This presents Microsoft with two problems.
First, PC sales are flat or diminishing. Second, Microsoft’s portion of that diminishing market share is also rapidly diminishing.
PCs ARE FLAT OR DIMINISHING
The challenge staring Microsoft in the face is the 1.5 billion copies of Windows being used is not increasing and is, in fact, decreasing. … Desktops and notebooks are not growing in sales and not attracting first time buyers in any meaningful numbers. ~ Ben Bajarin
GOOGLE CHROMEBOOKS
Here are four recent headlines regarding Google Chromebooks.
Chromebook sales increase 67%, Acer holds the market lead
Chromebooks may grab 5% of PC market
Chromebook sales set to nearly triple by 2017, Gartner says
Microsoft’s next big headache: The Google Chromebook
Chromebooks are eating away at Microsoft’s PC sales from the low-end. And Macs are eating away at Microsoft’s PC sales from the high-end.
APPLE MACS
Apple’s Mac hits record market share in U.S., says latest IDC research. ~ Walt Mossberg (@waltmossberg) 11/6/14
Apple Grabs Record US PC Market Share On Strong Mac Sales in Q3 2014 ~ AppleTree
26.8% of the PCs sold in the U.S. between July 4th and September 1st were Macs. ~ Horace Dediu (@asymco) 9/24/14
Mac reached the highest PC market share since Windows 95 launched. ~ Horace Dediu (@asymco) 10/20/14
The Apple Mac, by itself, easily generates more revenue than does Microsoft’s Windows.
Mac ~$6bn/quarter, Windows ~$4bn. ~ Jan Dawson (@jandawson) 10/24/14
MICROSOFT IS LOSING EDUCATION
In the third quarter of 2014, Macs took in more than 25% of the back-to-school sales. And at Harvard University, an astonishing 71% of new students owned a Mac computer.
Further, the trend in education is towards tablets and away from laptops.
This is bad news for Microsoft since their presence in tablets is practically non-existent. Meanwhile, the iPad is capturing 90 percent tablet share in U.S education.
The back-to-school season voted and the Mac won… ~ Tim Cook
MICROSOFT IS LOSING THE ENTERPRISE
Good Technology released the latest iteration of its Mobility Index Report, in which it found iOS holds 69 per cent of the enterprise market — that’s nearly seventy times larger than the 1 percent share held by Microsoft. ~ Jonny Evans
Windows Phone activations remain consistent with the six previous quarters: flat at 1 percent. ~ Venturebeat
The iPad took 89 percent of activations during the third quarter, while Android tablets claimed the remaining 11 percent. Windows tablets are yet to make a dent. ~ Jonny Evans
(O)verall, the trends in the enterprise remain unchanged. Businesses prefer iOS, sometimes choose Android, and essentially ignore Windows Phone. ~ Venturebeat
Custom business apps showed a 107 percent quarter-over-quarter growth and 731 percent growth over the same time period last year. And Windows developers are getting virtually none of that business.
If you think Microsoft’s short-term earnings makes their long-term dependency on an ever shrinking PC base go away, then you’ve got another think coming.
Transition
(Wall Street) focuses on the waves and not of the currents. ~ Consuelo Mack
Microsoft’s most recent earnings statement was a wave and an impressive wave at that. But if we want to foresee Microsoft’s future, we need to focus on the currents, not the waves, and the tech currents are flowing against, not with, Microsoft.
Wisdom consists of the anticipation of consequences. ~ Norman Cousins
Windows will continue to make money for some time to come, but it is not a growth sector.
Windows has taken Microsoft as far as it could. ~ Ben Bajarin (@BenBajarin) 10/31/14
And Windows is not Microsoft’s future.
Microsoft has many very interesting things going for them and none of them have to do with Windows. ~ Ben Bajarin (@BenBajarin) 10/30/14
Office is transitioning from a monopoly software suite, running on a monopoly platform, to a cloud service, that is just one of many competing cloud services.
Seventy percent of Microsoft’s income is in flux and is either going to go away or is going to transition to something entirely new. And these sorts of things happen “gradually, then suddenly.” ((“How did you go bankrupt?” Two ways. Gradually, then suddenly.” ~ Ernest Hemingway, The Sun Also Rises))
So no, Microsoft is not “Doomed.” But neither is its future assured.
Realizing Windows is not a hegemony will unleash market forces nobody can predict. ~ Jean-Louis Gassée (@gassee)
Ridiculous to say Microsoft is doomed. But entirely sensible to wonder whether (and how much) it will shrink in the next few years. ~ Jan Dawson (@jandawson) 10/23/14
In fact, the one thing we know for certain is that the Microsoft of tomorrow is going to be radically different from the Microsoft of today. So, in a way, the monopoly Windows and Office supported Microsoft that we know is — sorta — doomed as it makes way to the unknown Microsoft of tomorrow.
The Promised Land always lies on the other side of a Wilderness. ~ Havelock Ellis
And if you think the magnificent earnings of a single quarter are going to change the fact that today’s Microsoft is a Microsoft in transition — not just from one or product to another, but from one business model to another — then you’ve got another think coming.
I expect Microsoft will be around for a long, long time, but diminished. Microsoft hasn’t been relevant for years. I don’t need anything they create, and worse yet I don’t *want* anything they create.
But that’s you as a consumer. Corporations probably can’t function without MS office, Microsoft excel alone is more advanced than its google or apple counterpart and is thought as course in college, I would know, I’m taking that course right now. So for this dude to say Enterprise doesn’t care about MS, or that office isn’t useful anymore? He’s talking out of his butt.
RE: MS Office
What does it have that is so mission critical that corp “probably” cannot function without it?
Well I am currently taking a BITM 315 class and I can tell you that most corps cannot function without Excel and Access, I mean when your products become a course in business school you know the business world relies on it HEAVILY. These software probably save corporation BILLIONS of seconds and we all know time is money in the corporate world. There are no superior alternatives to MS Office. Google docs and IWork apps are a joke.
“I can tell you that most corps cannot function without Excel and Access” – Guest
Undoubtably true but perhaps the wrong question. Office was the standard for both consumers and businesses. The proper question isn’t whether Office is indispensable to some — it is. The question is how many (or how few) people and businesses need Office going forward.
“Google docs and IWork apps are a joke.” – Guest
If so, Microsoft is the punch line. Google apps and iWork are a joke to you because they don’t do the job you need done. They’re more than enough to meeting the needs of the vast majority of computer users.
“The question is how many (or how few) people and businesses need Office going forward.”
And at what point those current Office users will decide that continuing to pay for the familiarity and safety of Office is too costly.
“And at what point those current Office users will decide that continuing to pay for the familiarity and safety of Office is too costly”
I think we’re at that point already.
“I think we’re at that point already”
For individuals yes, for companies maybe not quite yet.
Maybe. There are a lot of companies that. while standardizing certain specific documentations on Office, are still using Google Apps and iWorks at other levels, either for individual purposes or intra/inter department communications and collaborations.
I think this is what MS is addressing with Office 365, Office Apps, and One Drive. But both Google and Apple have had more time to be more culturally entrenched in this usage than MS even though MS’s solution is actually better from my experience. At this point is will MS be able to make it convenient enough to overcome corporate cultural behaviours.
Joe
Large businesses change slowly but all the markers are there to indicate that movement away from Windows and Office is starting to gain steam. Also, large corporations may decide to move away from Microsoft today and accomplish it over 3-5 years. It appears that this is a cost-based decision more than a decision based on the capabilities of the alternative products. Certainly those heavy users of Excel and Access will be allowed to continue to use those products but enterprise will move away from them for the majority of their users.
Depends on how you define “companies.” Big enterprises hate change and will move away slowly.
But big enterprises are a tiny fraction of overall jobs, employment and users in the business economy. Small and medium enterprises dominate… and those guys have been moving away from Office for years. Much to my chagrin as an Office “power user.”
“If so, Microsoft is the punch line. ”
Another good laugh, thanks. Comedy may be of your talents, realized or not.
“Comedy may be of your talents” – tz
I have always maintained that I am hilarious. My family and friends and most every person that I’ve ever encountered with beg to differ. Go figure.
There have been many times that I thought you were hilarious. Let’s hope we never meet 🙂
huh?
Me thinks thou art missing the authors’ message.
Hardcore Excel users will want Excel (usually because of habit); I don’t doubt that. I used to think I couldn’t live without Excel, PPT and Word. I was wrong. For non hardcore users like myself, there is Openoffice or LibreOffice.
the previous, 5 yrs old version of the doc you’re working on
the assurance that anyone will be able to open your doc
the ability to handle from letters to newsletters to tech manuals to sales handouts to financial reports
I’m not a fan of MS nor closed-source software let alone file formats, but every time I’ve tried to get rid of Word, I’ve gone back to it because I was missing features (stylesheets linked to outline, footnotes and indexes, layout options…) , confused by UIs (I still have to Google how to search & replace 2 paragraph markers in OOo every time), and ended up a bit lonely.
Yes, backwards compatibility is one of Microsoft’s great strengths and has much value. But it doesn’t provide growth.
It might not provide growth but it may prevent cannibalization by competitors for whatever market they do have
“it may prevent cannibalization by competitors for whatever market they do have. – Shameer Mulji
Agreed. Microsoft’s problem is that both Windows and Office are trapped on the PC. Microsoft is trying to free Windows from the PC by moving it to a subscription service in the Cloud. I’m following this move with great interest.
Microsoft’s other problem is that Mobile if growing so much faster than PCs. Even if Microsoft fends off erosion of its base (which is unlikely) they will be standing still as the rest of computing roars past them.
Microsoft has missed the chance to win the Mobile OS and the Mobile hardware wars. But they are hard at work trying to make their services relevant on every platform everywhere. They may or may not succeed, but without a doubt, it will be a bumpy ride.
“Microsoft is trying to free Windows from the PC by moving it to a subscription service in the Cloud.”
Really? That, I wasn’t aware of.
Microsoft Office 365 is a subscription service that works in the Cloud.
http://en.wikipedia.org/wiki/Office_365
Office isn’t Windows lol
“Office isn’t Windows lol” – TrickyDickie
You’re right, I goofed. (I worded my mixed up.) I fixed it and added an edit to clarify my error.
It’s not just backwards compatibility, it’s also ubiquity, familiarity and… full-featuredness (ouch, sorry). Each are individually strong, combined…
But I think MS are having trouble adapting:
1- they sell OS and software. Apple give it away with hardware, Google give it away w/ ads… There *is* value in for-pay software, but MS are not really making the case strongly: choice of OEM (if only they were not all rushing to the bottom), confidentiality (well, civil servants running amok w/ BUSINT and LOVINT and looking useful seems worse than advertisers these days), ideally better software (though that’s patchy, see Win8)
2- The consumer market is now bigger and stands on its own legs, probably even drives Entreprise in Mobile. MS have wasted years not trying to make consumers like their products, because there was no real alternative (it took Android to make Linux usable). MS have no consumer play aside “get the same as on your work PC”… from my HTC HD2, I can attest they meant that very literally, even on a 4.3” screen. There’s a lot of things Consumer needs (cross-platform, backups, local media servers…) . One-stop shop is an issue, but even before that, MS don’t really have product to sell there anyway. Took me hours of work and years of experience to set up my home server.. should be “insert disk here, plug power there” plus a double-handful of mom-grokkable config screens.
3- More generally, MS seem to be bonuses-driven, not customer-driven, and certainly not consumer-driven. Regardless of everything else, they must stop releasing quarter-baked crap à la Metro (which *is* good, just far from finished), and forcing stuff we don’t want down our throat (every other Windows release).
Yes, sometimes that happens.
However, as I’ve discovered on my own self journey of self discovery…I didn’t need MS anymore. I know I’m not alone. It is just a matter of time that others will discover that they really don’t have to pay for these.
“Corporations probably can’t function without MS office” – Guest
When Office was a monopoly, everybody had to use it. But now most people are NOT on Windows so cross-platfmor solutions are preferable. Microsoft knows this which is why they are trying to move Office to the Cloud where it will work on every platform.
The question is, how many people will be willing to pay for Office in the cloud? Some, for certain. Many? Enough to sustain Microsoft’s current income? Unlikely.
“But now most people are NOT on Windows so cross-platfmor solutions are preferable.”
Don’t forget that it used to be necessary to have office or at MS’s office viewer to open an office doc. Nobody else had reverse-engineered the file formats. Nowadays, just about every productivity suite, from Google to Openoffice to Iwork, knows how to open office documents (both the original and the new docx flavour), and can do so more or less flawlessly for all but the most complex of documents.
.
Considering how reliant enterprises & SMB’s are on Office, I can see MS maintaining a decent size business selling Office 365 licenses to these customers
“I can see MS maintaining a decent size business selling Office 365 licenses to these customers” – Shameer Mulji
Absolutely and I think that’s definitely going to happen. But that’s a smaller business than the one they have now. They have to make up the difference somewhere if they wish to stay as profitable as they are now.
And not anywhere close to the dominate, industry shaping position in computing they once enjoyed.
Joe
Actually I’m also a business owner, and I work with a lot of businesses that are either using less and less Microsoft products, or none at all. You’re correct that Microsoft has a kind of stronghold in some areas of the enterprise (which is partly why I say they’ll be around for a long time yet), but they are going to be diminished, there’s really no debate on that point.
What you say was totally true of yesterday and is mostly still true today. However, I am amazed, at how rapidly it is losing validity. Businesses change slowly but the markers are all there to indicate that the movement away from Microsoft is slowly underway. Microsoft can only stave this off by giving Windows and Office away to businesses and crate new, valuable products to generate revenue from enterprise in the future. I think they are doing that but I doubt they will offset anything near the 70% revenue loss from Windows and Office.
YAWN. you quoting tweets with barely any facts just makes your article pointless AF. Macs make more money than windows? Really? You think apple will be here any much longer? They may look good but trust people will move on if all they do is release new products every year with a new name.
“You think apple will be here any much longer? They may look good but trust people will move on if all they do is release new products every year with a new name.” ~ Enni
Are you in the running for Troll of the year or what? How am I supposed to take anything you say seriously when you start with an inane statement like that?
“Wise men speak because they have something to say; Fools because they have to say something.” ~ Plato
Calm down with the quotes man, how pretentious can someone be…
“how pretentious can someone be…” – Will
You have no idea. And if you don’t like the quotes then I’ve got another one for you:
“Why should I give my Readers bad lines of my own when good ones of other People’s are so plenty?” ~ Benjamin Franklin
Nice 🙂 Quoting wasn’t the embarrassment, replying with a quote is. Nice though
Thank you for your kind words and your display of humor. I find that replying with a good quote ends a lot of arguments. Take this one for instance:
“A good maxim allows you to have the last word without even starting a conversation.” ~ Nassim Nicholas Taleb
You are being a douche by responding in this manner without addressing the point. Expected better from you.
I always find it best not to directly engage with Trolls or with people who have the word “douche” in their names.
Pronounced “doushay”! 🙂
Aw! Did the nasty man say something negative about Apple!
?
“Consumers are going to wake up to it before long.” – TrickyDickie
Yeah, about that. If it’s all the same to you, I won’t hold my breath while we’re waiting for that to happen.
“Surely you can’t all be that dumb.” – TrickyDickie
Wrong again. I can be much dumber. If you think this article was dumb, then you have no idea of the depths to which I can delve.
Looking forward to some truly deep dumb.
So by your estimation the world is asleep and dumb so long as they continue to invest in Apple products. Interesting.
By default does a Windows-based device connote intelligence?
Not too long ago I rescinded a comment I made calling someone a “FanDroid”. After the fact I realized how immature and stupid the comment was so I returned to the forum and removed the comment. I realized I was letting my emotions speak rather than offer constructive criticism or insight into the topic at hand. Something tells me you should do the same.
I doubt you actually believe that people that buy Apple products aren’t using their brains or are somehow sleepwalking into Apple Stores buying up their products by the truckload.
Now, maybe you dislike Apple and that’s your preference. I won’t pretend to speak for Mr. Kirk but I believe that he doesn’t hate or despise Microsoft or Windows. He’s simply stating the ugly truth of their business model.
Preferring Apple doesn’t equate to competitive hate.
If Microsoft had your view of reality they would truly be doomed.
I personally don’t like the use of quotes, even if they provide clarity, or are more eloquent than what the author can provide. However, if the quotes can help deliver the message more effectively, then sure, go ahead and sprinkle quotes; but not to the point where all I am reading are quotes.
I would really love to read “your voice”, and less quotes.
Still in college learning? Here’s a tip. You learn more by listening more, reading more, and thinking more, rather than talking more.
The people here are way out of your league.
Really? On techpinions.com? 🙂
If you seriously think so, you’re not one of the “people” I was referring to.
Of course not, only people who agree with you are good empty to be in your little club
Anon Guest: Do you know what a trend is?
“… but as far as these companies don’t offer any superior alternatives to Microsoft software, consumers and enterprise will continue to run their business, do their homework’s and get real work on Microsoft software no matter the hardware they choose.”
Wow. Have you looked out from inside your cave in the last decade?
I am not so sure about Office being important for homework for primary and secondary schools. At least in our district, it’s Google products/services and iWorks/iLife being used together.
As for work, I haven’t used MS Office since 2002. And, there hasn’t been an issue with working with those that use MS Office.
Ugh. What was the point of this.
Winning…
Somehow that matters. When you root for a team, money is a way of keeping score. Market share is another. Either way, users are pawns, just for different reasons.
The piece just turned me off. In all reality, each player has different strengths and weaknesses. I chose Microsoft myself after being burned by one to many android phones. Not bitter about it, just time to changes sides.
“each player has different strengths and weaknesses” – Brandon Sobotta
That’s true but it’s about as meaningless a statement as there is. Each sports team has different strengths and weaknesses too but some win championships and some end up in the basement.
I would argue that Microsoft isn’t taking advantage of its strengths. In fact, I have argued that, here:
Microsoft Is The Very Antithesis Of Strategy
http://techpinions.com/microsoft-is-the-very-antithesis-of-strategy/32303
There’s no winning. It’s not Apple vs Microsoft vs Google. They can all win. Or lose.
“There’s no winning” – Will
I was wrong when I said, above, that Brandon’s statement was as meaningless as they come. Your statement has just just wrested that dubious honor from him.
Apple and Microsoft and Google can all win but that certainly doesn’t mean that they all shall. As Groucho Marx said, a child of five would understand this. Please consult with a child of five about the concept of winning and losing before you comment again.
They can certainly all win, I’m sorry, but I disagree. The 5yo was of no help.
“if you can’t explain it simply, you don’t understand it well enough “
“It’s not Apple vs Microsoft vs Google.” ??? Have you seen the commercial for the surface lately, because it’s a comparison to the Mac. The commercial for Bing puts it against Google. Apple has been suing Android OEMs for years. They are ALL competing. Furthermore, Microsoft has been changing their strategy, cutting development of Windows RT, making Windows free on smaller screens, putting office on IOS and soon Android and making it free too. They are giving up in some highly profitable markets and certainly not by choice, but because of competition. That’s not winning.
You missed my point. Simply put, I said the market can sustain more than one player.
By your logic, Pepsi didn’t win either, they’re so doomed!!
You’re right the smart phone market can support more than one player, but Microsoft is not one of them. That’s not a knock on their product, that’s the market reality. The Pepsi comparison does not work because Pepsi makes money and are in a stable market position. Windows phone looses money and the Windows PC business is constricting. Like I said, that’s not winning.
“What was the point of this.” – Brandon Sobotta
I can explain it to you but I can’t understand it for you.
ZING! LOL
Never square off with a former lawyer.
“Ugh. What was the point of this.” Really? I mean, REALLY? My friend, if you were unable to understand this master piece of journalism, then you need to start to use pears and apples as your new measure unit.
Once upon a time the railroad industry dominated the landscape. Steam engines and mega steam engines roared. Vanderbilts grew rich and famous. Today we still have railroads, mostly used for cargo and travelers. The rest use automobiles. Microsoft and Intel built the railroad and the steam engine hauled trains. They believed the future would never change. Smartphones became the autos – every individual can have one, drive wherever he wants to and whenever he needs to. Today steam locomotives are on display in museums. Very few companies can switch from making locomotives into car making at the flick of a finger.
What I always disliked about Microsoft was their sheer luck of being at the right place at the right time, spending all energy driving off other creative companies and monopolizing the market, innovating only as a last resort, just growing fat with money. It was just a corporation intended on making profit and had no real interest in taking software to the next level. Apple’s philosophy is in total contrast to this. They always wanted to create the next cool product that everyone would want. Finally that helped Apple switch its gears very quickly from making PCs into making music players to smartphone to tablets. Apple has had experience in both hardware and software. Microsoft was mostly a software corporation and has never dabbled with core hardware like Apple. They have grown so fat and obese that they are panting for breath trying to catch up with others.
Microsoft is definitely not doomed. But they will be the railroad industry of the tech world for a long time to come. Cargo still needs to be moved between towns. May be they may enter the truck industry of software where there is a little bit more flexibility of going through the streets and may be the pick up segment of the software industry as well. That is where Microsoft’s forte is – make locomotives, railcars, trucks, cranes and there is always the construction (enterprise) industry that does not like to change its way of functioning that easily. It is a reason why the British units still continue in this country while the rest of the world has switched to the metric and SI unit system. Why change something that works? So the enterprise industry will support Microsoft, unless some other company makes yet another paradigm shift there that can increase profitability of the industry. Microsoft definitely has become a sleeping giant.
I disagree, Enterprise will always be better consumers than individual consumers because of the point you just made, they don’t change very much. The attention of individual consumers are very fickle, hey remember when Nokia phones used to be the thing, and then Blackberries and now iPhones. Consumers will always move on to the next thing and it is almost impossible for any company to keep up. And at the rate apple is going now I do not see them churning out innovation the way the industry expected, iPad sales have stalled just like PC sales and their only saving boat is the iPhone and “growing” Mac (in a landscape where Microsoft will always dominate). Microsoft is “sleeping” because the same products(office and Windows) have continued to make them more and more money each year and will always be that way, the current changes are to protect those products and with a new CEO and recent products (xbox one, Surface, Microsoft Band, Windows 10, Cloud services) I see MS begin to innovate again. The future for Microsoft does look bright on my end. Apple, not so much.
Enterprise customers are not better consumers than individual consumers because, simply, there are not nearly as my enterprise customers. There are a potential 6 billion individual customers in the world (assuming about 1 billion children who do not make their own purchases). Also, there are individual consumers who do not make purchases rationally, which means they are worth a lot more than an enterprise.
And, I am sorry, but the products you list here: xBox One has a minority market share in a declining market for dedicated game consoles, Surface has loyal customers but is a premium product like Apple and does not have much potential growth, Microsoft Band lacks any fashion sense (and poorly reviewed) which means it will not be a hot product in the consumer space, Windows 10 is not out yet, and Cloud Services is where they are really excelling.
Microsoft will remain a big corporation, it is just that they will soon have very little relevance in the mind of a consumer.
“… I see MS begin to innovate again.”
That presumes that they once innovated. They never want to change too much. That’s the result of being big suppliers to the corporate world. Corporate IT departments hate change and innovation. They’re in the inertia game and Microsoft is right there with them. Slow and steady like the steam locomotives above.
If you don’t believe me, look at IE compared to Netscape. In two years, MS went from nothing to feature parity with Netscape. Once there. they simply stopped copying, er, ah, I mean ‘innovating’. The goal was to kill to kill Netscape. That’s not innovation. That’s copying and using your near monopoly position to unfairly compete. But hey, your comments indicate that you’re all good with that.
To be fair, a great deal of the newer Windows stuff, including the Metro/Modern UI and the pricing model for Windows Phones is pretty innovative. As is the development model for Windows, and the recently-announced app framework for universal apps. And HoloLens.
Innovative, yes. But successful with consumers? We’ll have to wait and see. If history is a guide, it’s clear that the most innovative tech companies are often those that fail earliest — otherwise Commodore and Atari would be tech juggernauts today.
Consumer market is much bigger than enterprise market my friend. Consumers are fickle like you said. And companies that can handle that always do better. Microsoft has no idea how to deal with it.They made the Surface Pro 3 and then went after Apple’s smallest laptop and preached “productivity”. And what they made resembles an iPad with a keyboard cover. They seem to be very confused about everything. They have no idea what consumers want and are seeing the market grow by leaps and bounds without their presence in it. Now they are trying to reinvent the wheel in the middle of this Nascar race and they are still figuring out what would work. In the meantime, its competitors have raced on ahead. Its supporters caved in and fell apart. Dell decided to go private. HP split into two. The others are just barely making any money selling laptops or even tablets.
iPad sales may stall, but it is not like PCs. iPad is in the consumer market mostly and is cutting into the enterprise market as well. And there is Google and its Android warriors. Microsoft can try to take on Apple, but then it has to deal with Samsung and Google. More players have entered the game and they are cutting inroads from behind Microsoft. ARM is taking up Intel’s pizza slices.
The products you listed – Xbox 1, Surface, MS Band, Windows 10, Cloud etc. Some are barely noticed by anyone. If another company makes a good Office software and offers it free with cloud subscription, then enterprise folks might be interested. If they can save money, why not?
Microsoft surely has been making money all these years, like you said. They could have made a lot more if they had used their brains instead of their muscles. Just because it rains in your field all the time, it does not make you a smart farmer. The one who produces with meagre resources due to his creative efforts is the one to admire.
Domed if not doomed.
“Never run with scissors?”
I can post quotes out of context as well.
“I quote others only in order the better to express myself.” ~ Michel de Montaigne
Me too. Apparently Richard does the opposite.
“This is the reality facing Microsoft today: Neither Windows nor Office have any significant value on mobile devices.”
True in phones, that’s not what phones are meant for. Not so on tablets. In Office Suites, Office has won, certainly unfairly, but it’s a common language that everyone speaks. Even if you use another Office Suite, it must support MS file formats, if you want to have ubiquitous ability to share. Standards matter.
“Operating systems are losing all of their value. Their price is rapidly moving to zero. Yet Microsoft still makes approximately thirty percent of its income from this dying business model.”
Losing all their value? You mean other than transforming a paperweight full of parts into an operational computer? They may not be sexy (to most), but they are essential. Further, of the three major PC OS’s, only one is contained to a single manufacturer. The other two offer far more latitude on which paperweights they transform into computers.
“The Apple Mac, by itself, easily generates more revenue than does Microsoft’s Windows.”
So what? That’s good for the financial stakeholders. Almost seven times more PC’s use Windows over Macs. Ditto. Neither aspect, in isolation, is proof of technical merit. What matters is what people can do with them. These are tools.
Where I do vehemently agree with the article, in different words, is that PC’s were oversold. A new, more appropriate, equilibrium will arise. Mobile’s primary benefit is just that, mobility. It’s about usage scenario. For most that’s an ample level of computing.
Intuitively, I forsee PC’s becoming more expensive, due to the new lower volumes of scale. It’s an old adage that will become more true again. “The computer you want always costs $5000”. At those prices, IMO, it better be versatile, fast, and as uncompromised as possible.
Meanwhile, I’m probably being unfair to market realities. I freshened up on Linux. Just in case… 🙂
“Losing all their value? You mean other than transforming a paperweight full of parts into an operational computer?”
I think John was speaking of monetary value (cost) rather than use value.
The cost of OS’s has gone to zero in the mobile market (MS now gives theirs away, Apple bundles theirs free with hardware, and Android is free except for patent royalty costs). And between Linux, Chrome OS, and OS X, Microsoft’s ability to charge $100+ per copy of Windows on PCs is under threat from multiple directions.
Not to mention that in several markets, including the most populous nation in he world, the cost of Windows has long been and continues to be $0 per copy because everyone uses pirated copies.
Yes, I certainly think that operating systems have tremendous value, but consumers are no longer willing to pay for that value because Android is giving away their operating system for free and Apple is bundling their operating system with their hardware.
When you buy a device with a pre-installed OS, that OS is as free as my steering wheel or spark plugs. They are both included with my device, and I can’t get the device for less money without them. If I want to replace them, I have to pay. So, they are not free.
Android makes it’s money from advertising revenue. The OS is the ‘viewer”.
iOS’s cost is fully covered under the cost of the device.
Windows is free to small devices. This is the old “buying market share”. If I want to install Windows on a PC (bootcamp?) I have to buy it.
My contention is that Google’s free Android operating system and, to a minor extent, Apple’s bundling of their operating system with their hardware has made it nigh impossible for Microsoft to charge for their operating system on Mobile devices. You know who agrees with me? Microsoft as demonstrated by their reduction of the cost of Windows and Office on mobile devices to zero.
If you don’t agree, argue with Microsoft, not me.
To be precise, a limited version of Office is free, the full version requires a subscription, even on Mobile. In essence, MS agree that MS Works should be free (and also should not be a separate, incompatible product), but not “real” Office. That’s probably smart: consumers won’t pay anyway (and never needed more than Works), prosumers and corp will pay, and segmenting your user base between 2 products was idiotic.
As for the OS being free… I think there’s a 3rd way, between “free” and “horribly expensive” or even “not available”. I’m happy to pay $30-$50 for Windows upgrades, but that price is only available towards the end of MS’s financial quarters, and for upgrades. Trying to install Linux is a lot more costly, as is switching to Mac (but for different reasons) Side Note: I’d also be happy to pay for Android updates, if that could keep them coming, or is it start them coming ?. There has to be value though. The issue right now is that Windows on Mobile has negative value in most cases (Live Tiles vs no apps + missing OS features), and Windows on Netbooks has to make up for MS & Intel’s mind-blowing mismanagement of the category (they dual-handedly opened to door to Chromebooks and spread the red carpet for them).
There’s a lot of chatter that Window 10 might free to Win8.1 & possibly Win7 users. If that’s the case, then the business model of selling Windows client licenses will be turned on its head.
Great for users! I’m all for it.
You see, since software is never really done, it was a ripoff to charge with each major release anyway.
I also think they nailed the subscription model. Runs locally, installs from the cloud. MS uses the cloud much more to my liking than either Google or Apple. That is, the cloud is a peripheral to the computer, not the computer to the cloud.
“I also think they nailed the subscription model”
I’m assuming you mean Office 365, to which I say I agree. And I think Apple’s done a decent job of making the cloud a peripheral to the computer as mentioned by Steve Jobs in 2011 where he said iCloud was now the hub of all devices.
Here’s where I disagree with you. On storage limited, and non-storage-upgradable devices, the device is beholden to the cloud. The device is the peripheral. This applies to iOS and any other device with non-upgradable and non-replaceable storage. When local storage is available, and the cloud is used to sync locally (as but one option) then the cloud is peripheral to the device.
Case in point…
A device is less useful if it can’t hold your entire music library when you don’t have internet access? In fact, then is when you’re even more likely to need it.
Conversely, does it really make sense to need to consume bandwidth (and money) to download (stream) media each and every time it’s consumed?
Not just Office 365, but Onedrive as well.
“since software is never really done, it was a ripoff to charge with each major release anyway” – klahanas
Wow. I couldn’t disagree more. I guess the Model-T wasn’t perfect so I should get a free car upgrade from Ford for the rest of my life too, right?
Conversely, we should have been paid to use Vista! 🙂
And who thinks you do not have a sense of humour, FalKirk? It might not be fall down laughing time, but I find myself smirking (girl equivalent, giggling) consistently.
Other writers at TMO and elsewhere, not so much.
Part of the pleasure is the setup, and then comes the knockout;
but that is a different kind of humour not everyone gets.
Namaste and care,
mhikl
All I want to say is this article is hugely biased. Microsoft is just a business and business do whatever they need to survive and prosper. Did Apple and Google do anything to crush their competitors? They do! They all do this competitive analysis and move all the time. You can dismiss Microsoft whatever you want. But opening your eyes and see the trend right now, Microsoft is being increasingly open, even more open than Google and Apple (well Apple is always not open). It’s a company in the change to a better future. As a developer, I fully admire what MS is doing.
It would help if your read what I said — not what you what you think I said — before you commented on my article. There is nothing critical of Microsoft in this article. I’m simply maintaining that they’re transitioning from one business model to another, that it’s going to be a tough slog, and that we can’t yet be certain what Microsoft will look like at the end of that transition.
If you would like to comment on something I said, I’m more than willing to listen. But I see little point in responding to criticisms of things that I did not say or contend.
“It would help if your read what I said — not what you what you think I said ”
I think that one goes into my quotation collection, because it applies to so many situations in human inter-relationships.
ZING!
I believe you’re replying to the wrong article.
Surprising that there is no mention about cloud or Microsoft’s enterprise strength.
Microsoft has many strengths. The point of this article was to counter-act the contention that Microsoft’s recent earnings meant that all was well. Nothing could be further from the truth.
One of Microsoft’s advantages is that they have the money necessary to make a difficult business transition. Companies like Palm, Blackberry (a.k.a., RIM) and Nokia ran out of money before they could turn the corner. Microsoft’s billions gives them some breathing room. However, Microsoft cannot dawdle. The income form Windows and Office will not last forever. It will diminish “Gradually, then suddenly”.
Further, there is a question as to what exactly Microsoft will become. They could become an indispensable services provider but a much smaller company. Will their shareholders view this as a victory?
You really think a behemoth like MS could become much smaller?
“You really think a behemoth like MS could become much smaller” – Shameer Mulji
Of course. Companies aren’t static. Any company can become smaller. Depends upon whether they are able to maintain their current levels of income.
Look at IBM. Look at Kodak.
Anyone who thinks the landscape can’t/won’t change (and dramatically so) didn’t live through the last time(s) it did. Reference IBM, Sony, Digital Equipment Company, AT&T (the first), 1980s US car manufacturers, trolleys, etc.
I think if Wall Street is satisfied with the direction that MS is going so far. Then they’re gonna be fine. I think MS and many people realize that being in ONE ecosystem is NOT the way to go. Which is why they are making their services everywhere
“I think Wall Street is satisfied with the direction that MS is going so far” – 12Danny123
Wall street can no more predict the future direction of a company than a weather vane can predict the future direction of the wind.
“Wall Street” does not predict; they trade on the expectation that the future expectation is priced to perfection and the profit from the trade is captured before the realization is unexpectedly realized.
Lol.. Guess Wall Street was very satisfied with GT Advanced’s direction before chapter 11 too..
Yes because minds looking through the prism of greed see reality so accurately, right?
“I think if Wall Street is satisfied with the direction that MS is going so far. Then they’re gonna be fine.”
You’ve never really tried to buy or sell stock have you?
Joe
Wow, this has been said and done again and again, yet MS is just fine.
“Losing education?” yeah, the iPad proved a horrible substitute and schools are wasting their money.
“Chromebook” are a joke, no one has *just* a Chromebook, it’s just a novelty.
And finally, “Losing the enterprise”… Won’t even dignify that with a comment.
Slow news day apparently.
“A theory is only valid if it can make predictions. So tell me, when exactly will we see a fall in revenue from Microsoft?” – Will
I HAVE made a prediction, Will. The incomes from both Windows and Office licenses will decline, first slowly, then quickly. Those business models are going away and Microsoft is transitioning to a company that is selling subscriptions to Cloud based services.
To be fair, it’s not much of a prediction because it’s already happening. It’s more an acknowledgement of the reality that already exists.
All companies will fall eventually, I don’t think that’s a good prediction. A time reference would be useful. 1y,2y,5y?
Office being free on tablets is not a sign of decline, it may simply be a way to get people on board. After all, nobody uses *just* a tablet. Numbers would be nice.
Judging from the comments. you seem to have raised the dander of the Softies. I haven’t noticed an article of yours that has raised so much attention from the Microsoft community. Truth hurts?
John, this is one helluva-long tirade just to diss a colleague in techpinions- poor Brian. Really, really not classy and savvy mate.
Whether Microsoft eventually keels in the end is a scenario that’ll will all eventually see. Either you be right, or Brian be the vindicated underdog.
Let it be known then, that the writing here of John, is an antithesis as to what Brian has discoursed upon. That he who be found erring on his premises and arguments solely deducted from objective and available data be found without a doubt, no ounce of credibility left.- Should MS be found in some serious trouble( Apple-like state when they were close to bankcruptcy before Steve Jobs return) year or years from now.
SUCH A SHAME SEEING TWO BLOGGERS GOING AT IT IN THE SAME site.
“Where there is much desire to learn, there of necessity will be much arguing, much writing, many opinions; for opinion in good men is but knowledge in the making.” ~ John Milton, Areopagitica
“The aim of an argument or discussion should not be victory, but progress.” ~ Joseph Joubert
“We find comfort among those who agree with us – growth among those who don’t.” ~ Frank Howard Clark
Okay. Agree to disagree. Quid pro quo. Be it socratic method if you must.
But by jove, when you plugged that Holmes bit in the article and you equated B.S. Hall with Watson… Ah, that has really put the last nail in the coffin there mate. Though it cracked me up real good, I certainly do feel that the joke wason Bryan.
And since you’re on the business of witty quotes, I like to toss out some below. Cheers!
“The most important tactic in an argument next to being right is to leave an escape hatch for your opponent so that he can gracefully swing over to your side without an embarrassing loss of face.”
― Stephen Jay Gould
“Those at too great a distance may, I am well are, mistake ignorance for perspective.”
― Carl Sagan, Dragons of Eden: Speculations on the Evolution of Human Intelligence
“One great thinker said one thing, another said another, and while the two thoughts are contradicting, the one that backs my argument at the moment is the superior statement.”
― Jarod Kintz
“Too many people get away with truly awful ‘reasoning’, not because what they are arguing happens to be true, but because they are in the majority.”
― Ellie Rose McKee
“I wish for you a more difficult life, somewhere in the complicated center, where the courage of your convictions blends with humility and respect for others.”
― Kenneth Patrick Ruscio
“SUCH A SHAME SEEING TWO BLOGGERS GOING AT IT IN THE SAME site.”
Shame? I think it is invigorating. I wish more sites had internally differing opinions on topics. I wouldn’t feel they were more shill or clickbait than rigorous thinkers and encouraging of discourse. Demonstrative of independent thinkers.
Joe
If ’twas done on a podcast then, it will certainly shall have piqued my interest. B.S. Hall on one side, John Kirk on the other. Readers get to vote. In fact since as you say it is invigorating, arguments and debates should be commonplace in techpinions via podcasts so that the maximums truths and highest ideals are achieved like John posits below.
What say you my friend? Agree? Disagree? Agree to disagree?
I’m not a big fan of verbal debates. I prefer written like this. This allows each side to lay out their position far more systematically and methodically with the wit that suits them best. They also get to focus on what is most important to them. I hate just about any of the talking head shows these days, CNBC, Sunday morning shows, etc. Most people are looking for zingers, lack of civility, and there isn’t ever enough time to respond with much thoroughness. At least not in any interesting manner.
And as readers we get to vote AND interact here in the comments. I love Techpinions writers with how much they do interact with their readers, even and especially those who disagree, as long as they disagree with content, not vacuous verisimilitudes or mere name calling.
Joe
I appreciate the effort you partook to respond to my comments. I agree on your remark that the writers do interact in the comments.
Stil, I do hope they also have that kind of podcast forum where we hear audio with them presenting their positions and counter positions, analysis and counter-analysis.
Techpinions already have podcast.
P.S. – Although I do think J Kirk would be a huge mismatch for B Hall considering he was a former lawyer(?). Idk if you’re still practicing John.
Maybe. I think they would end up making each other laugh so hard, I’m not sure anyone could take either of them seriously.
Joe
John, you may want to take note of the fact your continual anti Microsoft rhetoric is beginning to wear thin with your readers. Amusingly, someone as intelligent and articulate as you, doesn’t even realize you’re bashing Microsoft. I’d quote your statement below where you claimed you’re not, but that’d be a bit too easy.
It’s actually amusing when our rss alerts go off and someone here at the office says, “I wonder if it’s JKirk bashing Microsoft again?”
“your continual anti Microsoft rhetoric is beginning to wear thin with your readers” – Phil
I think the Techpinion readers are better able to decide what and who they do and do not want to read than you are.
And why don’t you try refuting my points before you start telling me I’m anti-Microsoft. I’ve laid out my case that Microsoft is going to go through a tough transition. If you think otherwise, provide facts and logic to support it, not spurious accusations of bias.
John,
“The lady doth protest too much, methinks” – William Shakespeare
If you’ve read what you wrote, and think it’s anything *other* than Anti Microsoft, I’m not sure how to help you further. By the way, ad hominem attacks should be reserved for 4Chan; not Tech Opinions.
I guess if nearly everyone here thinks the post is blatantly Anti Microsoft, but you don’t, then we’re all wrong. 🙂
Phil, you again fail to challenge even a single word that I wrote in my article. When you do that, we can talk. Until then, Its clear that you’ve got nothing meaningful to add to the discussion.
I don’t see it as anti-Microsoft, rather a good summary of the position Microsoft is in, which isn’t great. Anyone paying attention has seen this coming for years. Microsoft isn’t going anywhere, but they will become a smaller company, and they have already lost their dominant position in the market.
The question you should ponder is why a simple analysis of reality upsets you?
“The question you should ponder is why a simple analysis of reality upsets you?” – Space Gorilla
Man, I wish I had said that. Much better than my reply.
The answer of course is cognitive dissonance, humans become very uncomfortable when presented with information that doesn’t match up with what they already believe. We’re seeing a lot of that lately as Apple’s success becomes too obvious to dismiss, and also as Microsoft loses its dominant position in the industry. To a certain segment (small but vocal), both of these realities are difficult to accept.
John, the same comparison you made, about Nokia sales and iPhone sales, and how that changed. Do you think that can apply to Google vs Microsoft, Apple vs Microsoft?
The fact is that the Wall Street believes in Microsoft (Being now the 2nd most valuable company in the world), and you don’t. But, still they are all wrong, only you know the future.
“the same comparison you made, about Nokia sales and iPhone sales, and how that changed. Do you think that can apply to Google vs Microsoft, Apple vs Microsoft?” – SmokingMan
Sure. Income is a lagging indicator. That’s really not controversial and it applies to all companies.
“The fact is that the Wall Street believes in Microsoft (Being now the 2nd most valuable company in the world), and you don’t.” – SmokingMan
Are you saying that Wall Street is a good predictor of the future? I pity you.
Again, it’s very hard to respond to that which I have not contended. I’ve laid out an argument that Microsoft is going to go through a difficult transition because 1) they have no significant presence in Mobile; 2) Their licensing business model is being disrupted; and 3) Their two biggest money makers are trapped on PCs which are being eclipsed by mobile devices. Why don’t you start by refuting even a single word of what I’ve said. Then we can talk.
1- They don’t have significant presence in mobile, right now, like Apple, or Google a few years ago. 2- Times are changing, and also the way money is made. Business models needs to change, the fact that they are making more money each quarter, means that so far, the new model is going great. 3- They two biggest money makers are on the PC, just because there is where they need to be. You can use Office in a mobile device, sure, but there is not a single person that is going to be doing heavy work in a mobile device. The PC is not dead, and is not going to be soon, people is buying less, that’s right. but they still using the old ones, and there is pretty much Microsoft, just one single name, so far.
In the other hand, I not saying that Wall Street is best predictor, but one thing I’m completely sure, is that:
“I do trust more on Wall Street predictions, than yours” – SmokingMan
“1- They don’t have significant presence in mobile, right now, like Apple, or Google a few years ago.”
Apple and Google re-inventd the Mobile market. If you think that Microsoft has a chance to make a contribution at either the OS or the hardware level, then both I and the facts disagree with you.
“2- Times are changing, and also the way money is made. Business models needs to change, the fact that they are making more money each quarter, means that so far, the new model is going great.”
Microsoft is still making money from the old business model, not the new. If you think that will continue that’s fine, but I’ve laid out the case why the old business models cannot continue to grow. We’ll let time be the judge.
” 3- They two biggest money makers are on the PC, just because there is where they need to be.”
Disagree. It’s because that’s they only place they CAN be. A big difference.
“The PC is not dead, and is not going to be soon, people is buying less, that’s right. but they still using the old ones, and there is pretty much Microsoft, just one single name, so far.”
I pretty much said the same thing.
“I not saying that Wall Street is best predictor, but one thing I’m completely sure, is that: “I do trust more on Wall Street predictions, than yours” – SmokingMan”
No problem. I’m not asking you to trust me. I’ve laid out my case and I feel comfortable with what I’ve said. You’ve seen the same facts as I and reached a different conclusion. I believe that time will verify my position. We’ll see.
“Apple and Google re-inventd the Mobile market. If you think that Microsoft has a chance to make a contribution at either the OS or the hardware level, then both I and the facts disagree with you.”
Microsoft is by far, the best software development company. Microsoft have the most used OS in the world by far, and that’s not because the other ones are better choice, you can bet on that. Sure, Apple got the right OS, in the right time, with the right technology, but today, Windows 8.x idea, is more revolutionary than Android, iOS or Mac OS X. Stay around for a little bit, and you will see.
“Microsoft is still making money from the old business model, not the new”
So, Microsoft Cloud is their old business? The latest updates to Windows for free, is the old model? Office 365, Office online, is their old business? Do you really think that everything is going to be mobile? Surface Pro success, and Microsoft Band are old business? Now Apple has Continuity, and Samsung has Flow, but Microsoft, with the revolutionary idea behind Windows 8.x, don’t need to worry about it, it’s a OS feature. Using the cloud as back-end, all the Windows ecosystem apps can have “Flow” or “Continuity” implemented.
“Disagree. It’s because that’s they only place they CAN be. A big difference.”
Can?? Are you sure? I’m pretty sure it’s available in every single mobile device nowadays. “Need” is the right word, because there is where is mostly needed, and that’s the reason why Microsoft is giving those apps for free, nobody is going to do heavy use of Office on a mobile device, but that can be a big entry point to buy a 365 subscription.
And by the ways, just in case you don’t read the news, Microsoft is right now the 2nd most valuable company in the world, meanwhile Google is 4th, and all that is happening after about 10 years of people predicting Microsoft death.
“Microsoft have the most used OS in the world by far” – Smoking Man
You are way behind the times. Apple will or has just surpassed Microsoft in terms of OS. Android did it years ago (2012, I believe) and they’re smoking Microsoft.
“Microsoft Cloud is their old business? The latest updates to Windows for free, is the old model? Office 365, Office online, is their old business?” – Smoking Man
You’re making my point for me. Microsoft is only making a small portion of their income from those and other services. What Microsoft is trying to do is transfer their income from older products like Windows and Office on the desktop to the new services you’ve mentioned. They may well do it. But they could hit a few bumps along the way and it seems probably that the new business will not be as big as the old.
“I’m pretty sure it’s available in every single mobile device nowadays” – Smoking Man
The amount of money Microsoft is making from Mobile is negligible. If you count hardware sales (phones, tablets and even the Surface) its negative.
Fixed, was my bad, of course I was referring outside of mobile OS devices.
Microsoft have the most used OS in the world by far
Have you looked at the charts in the article?
My bad, I intended to say on the desktop, of course.
Makes me feel happy that I cancelled my subscription to techpinions when I see geniuses like this guy writing for techpinions. I am wondering what quote is he gonna use to try a smart-ass comeback 🙂
You’ll be happy to learn that I’ll be writing more Insider articles from this point forward. Since you’re no longer a subscriber (if indeed you every were) you won’t be burdened with having to read my articles in the future.
I was truly hoping for a good comeback quote. It would have been the best “smart-ass” moment. You missed the opportunity.
Seems many forget that Apple was just about dead, before Microsoft invested…i believe 300 million into the company.
This story means squat.
Do you just randomly pick phrases from a list and then insert them in an article’s comment section? Your comment has zero relationship to the article.
Do you just randomly act like an ass?
If you can’t see the relationship, then I can’t help you. I am also not going to argue with a brick wall.
I don’t think it is random. From what I’ve seen it takes a particular kind of pointless post to draw it out of him.
Joe
Your article is like a dentist who sees a huge cavity in the patient’s tooth. He pokes it with his pick and asks if it hurts. The patient screams in great pain. Only the dentist know how huge the cavity is. The Softies’ comments are like that patient.
Actually, it was $150 million, somewhere in the 1997 timeframe. More importantly, Microsoft agreed to provide IE for the early versions of OS X. And Office. That proved to be worth far more than $150 million, or even $300 million.
That would be part of the settlement they agreed to for stealing Apples QuickTime software. By that time Apple had already moved back into profit. Seems you forgot about things called ‘facts’.
…as I post this from my Lumia icon and soon to be purchasing MS Surface 2 and Pro 3.
??
You make some interesting points, yet Ed Bott calls your post “weaponised stupidity” I’m not sure who to believe
Well, Ed Bott is a very smart man and I like most of his posts. We don’t have to agree on all things.
My contention is that Microsoft has 70% of its income at risk and that leads to a dangerous transition. They might navigate that transition smoothly or they might stumble once or twice along the way. That doesn’t seem all that controversial to me.
“That doesn’t seem all that controversial to me.”
It’s not. I think what certain people can’t get their heads around is that 70% of the mothership is exposed.
I was being facetious? 🙂
Ha! I hope I represented your position fairly, Brian. As I’ve said many times, good disagreements lead to good writing.
I think your article was pushing against the Microsoft doomsayers. I thought you went a bit far, so I’m pushing back. Hopefully, the readers read your article and my article and gained something from both.
no worries. healthy debate good. 🙂
I though your article was more jocular; flippant, than facetious. The writing never seemed inappropriate.
Wisdom consists of the anticipation of consequences. ~ Norman Cousins
Microsoft’s current profitability is like being on the Titanic and seeing the iceberg afar off and focussing on how well the ship is progressing toward it. A true statement totally lacking in wisdom.
By 2020 the value of Windows and Office will be zero. Microsoft’s future depends on creating products and services that they do not have today. They have to create them and replace 70% of their income with them is less than 6 years. We will see if they can do it or not. They may have the talent to pull it off but their track record over the last 20 years in successfully utilizing that kind of talent offers little assurance that they will do it.
Very nicely summed up.
Thanks. I always look forward to reading your articles.
The reason why Microsoft is in trouble now is the inverse of the reason it wasn’t in trouble in the mid 1990s with the success of Netscape: leadership.
In the mid 1990s, Bill Gates learned about the internet. He saw the rise of Netscape. He immediately announced that the standalone desktop era was over, and that the era of the internet had begun. He sent out a very famous e-mail to all employees and immediately ordered the company to drop everything and pivot to embrace the Internet. We got Internet Explorer, network-centric operating systems starting with Windows 95, and an entire decade of huge profits and success at Microsoft.
Fast forward to 2007, and Steve Ballmer mocked the iPhone (and ignored the success of other mobile ecosystems like BlackBerry). When iPhones went on to outsell Windows Mobile 8:1 in a year, Ballmer still didn’t care. A small project called Windows Phone was launched and wouldn’t ship until late 2010, and only then on a few handsets sold exclusively on one US carrier. As mobile growth exploded and took over the world, Microsoft couldn’t be bothered to release devices that worked on all carriers (or work with OEMs to make those devices appear). It orphaned the original version of Windows Phone (version 7) and released a new version. It didn’t bother to develop a fully-featured version of Office for its new mobile-centric tablet and desktop OS, Windows 8.
It was clear that mobile was an afterthought, a small project, at Microsoft. It should have been the heart of the company. Steve Ballmer should have written another memo in 2007 announcing that mobile was the future and Microsoft would pivot, 1990s-style, to embrace it.
Instead he mocked the competition and took his good old time. Now it’s probably too late for Microsoft to be anything other than a software developer for iOS and Android, as well as a company that sells Windows to legacy customers.
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