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The Return Of Microsoft: Part Two
Microsoft is not, as the new administration has made abuntantly clear, about to be broken up. It has cashed in on its enormously profitable near-monopolies for desktop and server software. Analysts believe it will soon return to 20 percent revenue growth, up from 14 percent today, which already is nearly double last year's.
The company is also launching a mind-boggling series of sweeping and expensive new initiatives:
- .Net services, software that permits unrelated Web sites to talk with one another and with PC programs, without the user having to open new programs or visit new sities. This is the company's wedge into Web services.
- XBox. As we know, this is the company's huge leap into the $20 billion game console business, scheduled for launch on November 9. XBox is supposed to be three times more powerful than Sony's or Nintendo's boxes, and Microsoft says it plans to spend $500 million on advertising in the first 18 months alone.
- Small Business Software. For the first time, Microsoft will jump into the $19 billion small-business software arena, says Business Week, having bought accounting software specialist Great Plains Software for $1.l billion in April. The company says it then plans to offer customer-relationship, human-resources, and supply-chain software.
- Stinger, Microsoft's latest effort at software for cellphones, begins trials in Europe later this year.
- Ultimate TV. Described by industry analysts as a "set-top box on steroids." For less than $400, this box will allow people to surf the Web and interact with TV shows, and record progams on hard drives for storage and later viewing.
On top of that, Windows XP, the biggest update in more than five years, is scheduled for late October. The company is also breaking out of the low end of the server market with Windows 2000, which began shipping last year. Services running Win2000 claimed 41 per cent of the market, says Business Week, up from 38 per cent in l999.
There's much more. MSN is now one of the most heavily-trafficked sites on the Web, the msn.com portal ranking second in this country behind Yahoo. Hotmail is the world's most used free e-mail service, and MSN Internet Access second only to AOL as the most popular consumer route to the Web. This from a company much criticized for failing to perceive the Web's importance a few years ago.
The rise of MSN demonstrates just how difficult it is to compete with this company. Were it owned by anyone else, the long-struggling MSN would have gone belly-up long ago. But Microsoft can subsidize its products through good and bad times, creating an environment in which it's difficult, if not impossible, for competitors to survive. Microsoft now operates under its own notions of Darwinian business evolution. That is, the rich prey on potential competitors and hang on until they win.
Microsoft is also getting serious about the handheld devices market; its Pocket PC has begun eating into Palm's market share. According to Net market researcher IDC, Pocket PC should hold 19 percent of the market by year's end, up from 10 percent two years ago.
The market for Windows servers grew 32 percent this year, while sales of servers running Unix grew only 14 percent.
Furthermore, Microsoft will spend $4.2 billion on research and development this year, while unleashing the above cavalcade of significant new products and initiatives, starting this week with the launch of Office XP.
Waiting in the wings are Microsoft's "pipeline initiatives," under development or planned for later launch: the first table PC; natural-language processing (talking to computers the same way you talk to people); face mapping (using digital camers to scan a PC user's head into a 3D image so that software can add a full range of emotions for gamers); information agents (software agents that sift and sort through information for businesses and consumers).
It seems almost silly to argue that this is too much power for a single company to wield over something as central to the country's business, entertainment and cultural life as the Net and the Web. But Microsoft's power is barely mentioned in politics or the popular press, and seems of little concern outside of the open source and the boardrooms of some competitors. No company has ever dominated so enormous a part of the country's economy as Microsoft is about to do. The company is moving far beyond the ability of competitors to challenge it, and thus offer consumers any real choices. In fact, the company has grown much more monopolistic than when the government sued it.
Since almost everyone who goes online intersects with a Microsoft product, there are substantial privacy concerns. It follows that MS knows more about the Web habits of Americans than any other company. And should the company ever decide to impose political or cultural values on its users and properties, it could have an enormous impact on speech and the transmission of political ideas.
The return of Microsoft, and its ferocious onslaught on well-funded new initiatives and projects is re-writing both government and civic history. We now have the Unaccountable Company, bigger than the government of the nation in which it resides, beyond the reach of legislators, regulators, citizens, critics, victims, or more individualistic and entrepeneurial competitors. People who need the Net and the Web in their personal loves or workplaces will do business with Microsoft, or they won't do business.
That returns Gates to his pre-lawsuit position as the pre-eminent figure of the Internet, invincible as Frankenstein's monster, the creature that really can't be vanquished or driven off.
Note: Here's Part One of this piece, if you missed it.
...is that you completely buy into the Microsoft marketing hype without any critical thought. Don't you remember, with the advent of NT years ago, Microsoft was supposed to own everything by now?
"Microsoft is not, as the new administration has made abundantly clear, about to be broken up."
Really? I follow this case closely, and I've never seen the administration say that. It's not only a political dead-end, but they don't have control. It's in the courts. And the states AGs will pursue no matter what the feds decide.
Even if they aren't broken up, they still face a strong possibility of other remedies. It will be very difficult for them to be exonarated.
"Anaylists believe it will soon return to 20 percent revenue growth..."
Again, not what I read, and I read a lot. Most stories I see project single digit growth, at best. Some of their divisions have had declining revenue.
"The company is also launching a mind-boggling series of sweeping and expensive new initiatives:"
Keywords here: mind-boggling, as in "consumers are generally unfamiliar with any of them" and "expensive", as in "how do we (MS) maintain expected profit growths when we're spending billions on new products, our money-makers are slowing, and the PC industry is now predicted to show its first annual sales decline?"
".Net... the company's wedge into Web services."
.Net isn't even released yet, and it's already facing competition from the other big players (IBM, Sun, Oracle). Also, it's not entirely clear the MS will be able to lock people into their own web services due to the fairly open nature of that market.
"XBox... huge leap... three times more powerful... Microsoft says it plans to spend $500 million on advertising."
First off, that's wrong. MS is spending $500 million on _marketing_, of which the bulk of that will be spent on non-advertising sources like wooing developers. Do you think Sony and Nintendo spend nothing? It's only an interesting amount b/c it's coming from Microsoft.
Also, it's the games that count. XBox will face fierce competition, and speaking as a hardcore gamer, I see no buzz about XBox around at all, other than that cooked up by ZDNet.
"Small Business Software..."
Microsoft just made a whole score of new enemies who are going to be more than happy to put up a fight.
"Stinger... for cellphones..."
Who cares? Who wants to write apps for specifically for Stinger phones when Java is already becoming the lingua franca? Many, many millions of phones are shipping with Java, and according to Nokia's president, they alone will ship 100 million of those in only a year or two.
"UltimateTV"
Only works with satellites, thus limiting its adoption, and a massive money drain on the company, just like WebTV...
Most of the rest of your points are just as ridiculous, but I've got more important things to do -- hey, I'm off to develop software that competes with MS! -- to waste any more time responding. I'm sure the other Slashdotters will pick up the slack.
So John, quit pushing this defeatist idea of Microsoft inevitability.
Speaking of "FUD and misconceptions"....
Every Compaq or Dell server that I've seen come out of a box comes BLANK. In fact, the drives are often packaged seperately. If you don't install the OS, you can certainly pay an 'integrator' to do it for you, someone who is also happy to install NetWare or Linux.
Now, I have no doubt that there's low-end server bundles with NTS pre-installed. However, at $500 for the base licence, that's not an insigificant sum to pay if you don't want it. It has to be easy enough to order a version without NT installed.
Bundling has been Microsoft's practice in consumer space. But the server market has always been too diversified for this to fly (has MS ever had more than 50% marketshare?). There is no "Microsoft tax" for servers.
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Business. Numbers. Money. People. Computer World.
Oh, I agree. They aren't guaranteed a win here, if we fight hard enough.
For instance: ".NET". If I understand correctly, this is a software subscription service.
Problem:
What we really need here is:
Give a company the option of using that stuff for free, or
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I, for one, welcome our new Antichrist overlord.
No company has ever dominated so enormous a part of the country's economy as Microsoft is about to do.
Damn ever hear of Morgan, Carnegie, and Rockefeller -- They (and their monopolistic practices as "robber barrons") drove the creation of the anti-trust laws in the first place because they became so dominant the public at large actually was forced to do something about it (instead of the usual sheep role). Hell even after some of the controls went into place Morgan still had enough cash to bail out the New York Stock exchange (can Bill G do that?).
I'm not advocating we should retun to the times of the "Robber barrons" just that this is not the first time corporations and individuals have had such concentrated power, and in fact I believe they had more power in the "Robber barron" period.
What this should do is allow us to learn from our history and try to prevent the kind of concentrated wealth that occurred in this period and hurt a enough people to create a general public outcry. Unfortunately we seem to be quite good at repeating the mistakes of history.
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Jon, I don't know where you get YOUR definition of Darwinisms from, but where I come from, the Darwinian model boils down to "the strongest [or most adaptive] shall survive".
And as much as I hate to say it, have you looked at MSN lately? The portal, I mean, not the lame dial-up ISP. It's really not all that bad.
I fully realise I shall be thrown into the dungeon for this, but... <gasp> some of Microsoft's things aren't too bad!
We won't, of course, mention the travesty of a platform that is .NET... not without laughing... but their Windows 9x GUI is a shining example of something that can be quickly grasped by Joe AOL, and their Visual Studio products have made programming accessible to those who shouldn't ever have considered a career in devel...er, wait, never mind, I'm having Freudian slips here. Never mind.
Zaphod B
Zaphod B
When duplication is outlawed, only outlaws will have
What's so unamerican about a company having the freedom to make and sell products as they see fit? If anything, all the rules and restrictions placed on Microsoft (and our efforts to put more restrictions on them, and in fact to break up the entire company) could hardly be called "American."
The company is also launching a mind-boggling series of sweeping and expensive new initiatives:
Why is that bad? Katz, you're knee-jerking again. They coming up with new projects and products. That's *wonderful*, not terrible. It adds to the "marketplace of ideas." If we don't like them, we don't have to buy them.
But Microsoft can subsidize its products through good and bad times, creating an environment in which it's difficult, if not impossible, for competitors to survive. Microsoft now operates under its own notions of Darwinian business evolution. That is, the rich prey on potential competitors and hang on until they win.
If Linux (or anything else) is going to make it in the marketplace, the people behind it will have to stop whining about not having the market equivalent of affirmative action, and instead will have to develop business models based on something other than "If we make it, they will come."
Since almost everyone who goes online intersects with a Microsoft product, there are substantial privacy concerns. It follows that MS knows more about the Web habits of Americans than any other company.
Uhhh....what about the fact that almost everyone who goes online also intersects with Cisco routers? You're not using any logic, Katz.
That returns Gates to his pre-lawsuit position as the pre-eminent figure of the Internet, invincible as Frankenstein's monster, the creature that really can't be vanquished or driven off.
If it was Linus Torvalds, Slashdot would praise it as the second coming.
This Microsoft garbage is getting really old. Aren't there any important tech topics left in the world?
Got Rhinos?
Here are my ideas on possible reasons, feel free to reply with more.
This is not a time to rest on your laurels.
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Microsoft can do wrong. Linux can do wrong. Microsoft get things right. Linux gets things right. But its not a black and white, MS bad, Linux good world. There are arguements for and against both. An article such as this simply panders to the slashdot majority, it shows little research, and less thought. A shame considering the potential of such a piece.
http://twitter.com/onion2k
Bill opened with some self deprecating humor, to loosen up the audience and put them at ease. Then he went on to spell out all the great things the future beheld and how Microsoft would create this technology. Not pausing to mention that there were hundreds of products at the show, which used established technologies (e.g. MP3) and those product lines, if the companies didn't get under the Microsoft Tent, would die. By the end of the evening I was pretty sure he had threatened, indirectly, but most definitely about half the companies at the CES. Not a minor thing to do, when you consider the initiative it would take to do it.
Well, much of that hoopla is coming out, and nobody can't say they didn't have fair warning. Where you want to go tomorrow is increasingly limited to diversity of ideas, which is being whittled down all the time.
-- .sig are belong to us!
All your
A feeling of having made the same mistake before: Deja Foobar
Crikey. Here I am with those golden moderator points and I choose to write on this forum instead. I was shocked and dismayed to read "part 2". Crikey. Part 1 was only worth reading coz of the flames that followed it. Is it just my imagination or is it that every day a MS bashing piece of news comes out, and if it doesn't, then JC'll just write on e anyway? This really is getting tedious. When I first discovered /. I actually thought it was a refreshing, up-to-date finger on the pulse site that informed me of stuff that I actually found interesting - just the like the title says - news for nerds. Now, instead of hoping /. puts up more stories during my working day, I'm finding I visit theregister.co.uk more often coz it's often more relevant, more interesting and more amusing. The only thing it doesn't have is the comments from joe public (which makes /. sooo much more compulsive). But today - jeez - it's as if today is a no-news day in the world of /. , but theregister still seems to make something out of it..
Please please please start publishing stories that aren't just anti - MS. I hate them as much as the next MS hating man (or woman), but I'm bored of x stories a day just bashing MS. Please
IF ONLY I COULD HAVE USED THOSE POINTS ON THIS ARTICLE!!
Two wrongs may not make a right, but three