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Microsoft at the Tipover Point
David Gerard writes "In the wake of Microsoft's first flat quarter, The Inquirer brings us The IT Industry Is Shifting Away From Microsoft - Linux is being taken seriously, Microsoft is not trusted and our favorite monopoly is finding it harder and harder to compete with 'free.'"
The editorial points mostly at Microsoft's failed offerings like MSN and Xbox, saying that the 80% profit numbers for Windows and Office can only sustain the failed products as long as Windows and Office remain profitable
Humorously that article on the Inquirer (which is notorious for such factless drivel) repeats an oft stated claiming that only two Microsoft products make money (which is something that is classic in the community -- repetition eventually is presumed to be proof). In reality two Microsoft divisions make money by the truckload, and these divisions comprise all of the business software such as SQL Server, Exchange, etc. Ah well, I still would be saddened if I didn't see that myth repeated verbatim a million more times.
Mike Magee must be desperate for page hits: the author of the piece can't even count.
/. extra ad hits.
Microsoft only started breaking out the seven subunits about a year ago. During each of the quarters since then, three units -- not two -- have made money: client, Office, and server and tools. More than that, MSN (you know, the horrible money loser?) made money last quarter, and shows no signs of slowing revenue growth. That's four of seven making money, not two.
The author of the Inquirer piece would like to lump the two OS divisions together, but that makes no sense: F/OSS systems don't compete against the client yet, only against the server and tools segment. Revenue in that segment is growing faster than the segment. That's not being beaten by Linux; it competing solidly, despite a price disadvantage.
Worse, for the author's thesis, the handhelds division is hardly "losing money fast" -- instead, it's losing money at a constant rate, with its revenues more than doubling each year. If current patterns continue, that division will be profitable in the current quarter or the next quarter. That's not clearly going to happen, but it certainly doesn't seem unlikely.
That leaves two divisions not making money: Home and Small business solutions. Those are both new businesses for Microsoft, and they're both businesses where Microsoft expects to lose money for about a decade, just as it did with servers, with MSN, and with handhelds.
But, hey, the story predicts the death of the internet...I mean, the death of Microsoft. SO we've got to front page it to give Magee and
In one sense, the Enquirer article seems correct. In another sense, by not naming the really serious problems with Microsoft products, the article almost praises Microsoft.
For example, "Microsoft Windows 2000 and Windows XP have crippled file systems." The file system cannot copy some of the files that are necessary to the operating system. Microsoft provides no way of making functional backups of its newer operating systems! (Yes I know about Sysprep and NTBackup and third-party methods. Microsoft technical support agrees with my statement.)
Microsoft uses proprietary file formats. You can't reliably work with your intellectual property created with Microsoft products unless you pay Microsoft money!
Microsoft can change the license terms to which you are bound after you have made your purchase and agreed to the terms!
Who was using the more than 60 serious security vulnerabilities found in the last two years in Microsoft products before they were fixed?!!! Foreign governments? Your competitors? Hackers?
Microsoft doesn't have to or care to get into the text-terminal emulation business, they have NetMeeting and XP's RemoteDesktop.
Windows Media is used by a fair number of people, but yeah, a lot of normal people still use Winamp. Though microsoft always needs a couple tries before are able to dominate a market.
Microsoft doesn't have an answer to Photoshop, but that could easily change at any point.
And the mathematical stuff isn't used by a ton of people, so you could similarly ask why Microsoft doesn't have great MIDI sequencing or circuit layout tools, but microsoft is more interested in software that further their goal of world domination. Or they don't want to get into niche tools, or, I dunno. :)
> Its likely that a group of hackers would crack it, and allow Linux to open the "secure" content, but that would be illegal, which kinda kills the idea of Linux as an OS for the masses...
In the near future we will have two kinds of platforms. One platform will be a fully integrated appliance that runs Windows in DRM-nightmare mode with BIOS lockin. These will be for those who just want a computer to type letters and check e-mail. They will use it like they use their microwave. Microsoft will take care of all updates and security configuration, and they will track your usage and use it for marketing purposes.
The other camp will be composed of business users, hackers, and those curious enough to want to do more with their computer than what the manufacturer tells them to. These people know the importance of firewalls and updated antivirus. The computers they use will not draconian DRM and BIOS locking (at least not in a way that isn't able to be disabled). They will likely be using an OS other than Windows, since Windows will require trusted hardware (except possibly some small business who use their work machines to do little more than they would do at home). This camp will likely run a Unix variant and Mac OS X (assuming Apple doesn't do something really stupid).
You and I will run *nix/OS X at home, and our parents will send us e-mail on their Windows media centers (or better yet, Windows Embedded) that are plugged into their HDTV.
Microsoft's business model has built up around the ever increasing share price, to buy other companies and to woo developers. The share price has increased steadily because the revenue has gone up steadily. The long article describes this in a lot more words.
Revenue can't increase any more. The US market is saturated. Foreign markets can't afford list price or anything close, so Microsoft has condoned piracy up until recently, rightly figuring a stolen copy buys mindshare that a legitimate copy of somebody else's software doesn't. But with all their carping on piracy, and especially with Hollywood screaming about piracy, foreigners have been cracking down on piracy and turning to alternatives like Linux.
That's the cause of the flattening.
Infuriate left and right
I wrote that piece because I wanted to. I have a bunch more to write, and some that I have already written. One got slashdotted yesterday in fact. I am under no pressure, deadlines, or quotas, and as far as I know, the Inq doesn't do that. I just happened to have free time, and no news to report, so I did a lot of the stories that I have not had time to do recently.
-Charlie
"Back" to hard-line communism? The last time people in China felt that they could speak their mind in public, they were assaulted by tanks.
... often.
Horseshit. Every time I have been to China (last time 2000), everybody complains about the government, in public, all the time. The government doesn't care.
China still jails their citizens for the slightest criticism of government policy
Horseshit. Only the really vocal critics are jailed, and generally only if they are published.
The ones treated the worst right now are the Falun Gong people. But interestingly enough, they are not jailed. They are taken to mental hospitals, drugged and 'reverse brainwashed'. Despicable behaviour, but probably no worse than was done in Western societies until about 20-30 years ago.
regularly suppresses religious freedom by putting leaders of congregations in jail.
Yes. They still do that. Wish they did it elsewhere occaisonally too.
Their one-child policy (whatever the perceived need) takes away the fundamental human right of reproduction
All rights are granted by humans. There are no fundamental rights.
requires (REQUIRES!!) abortions in many, many situations.
Actually, it was more like economic pressure than force. Have more than one child and you lose your food coupons (which means you starve). These days prosperity is taking care of the one child policy all by itself in the big cities. In the country, peasants are still having more than one child
pay only the slightest lip service to international law and systematically, institutionally, defy legitimate and reasonable copyright and patent laws
Well, the Chinese invented gunpowder, paper and modern agriculture, so start paying the fuck up already.
Oh did you mean the European version of intellectual property rights where your rights are protected but fuck everyone else?
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