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MS Sales Growth Limited by Delays in Windows

Posted by timothy on from the perhaps-some-other-reasons-too dept.

Alien54 writes "As reported by Bloomberg, Microsoft Corp.'s sales growth will probably drop below 10 percent next fiscal year for the first time because delays in the next version of Windows have created the longest-ever lag between releases of the software. They go into some detail on how the lack of new products also hurts multiyear subscriptions, because clients that buy the contracts expecting to get product upgrades may not renew if new items won't be available for a while. Didn't someone say once that they have enough reserves to last 5 years without any sales at all?"

2 of 308 comments (clear)

  1. As an insider for Microsoft by Anonymous Coward · · Score: 5, Informative

    I am posting anonymously for obvious reasons.

    I can safely tell you to expect a "SE" version of Windows XP by December of this year. It will have some enhancements and adjustments, plus it will also have a new media center-like program included.

    Expect an announcement in the next two or three weeks.

  2. Many Small Things by Jameth · · Score: 5, Informative

    Microsoft is currently threatened by a barrage of minor issues which add up to something serious when combined.

    1) Lack of new products prevents sales and damages customer loyalty.

    2) Severe worms damage customer loyalty, increase costs in maintenance and customer service.

    3) Competing products getting stronger with OS-X on the desktop on Linux both embedded and in servers cut into what sales they would have.

    4) Strong competition generates press for opposing sides, making them appear less innovative than they want to.

    5) Constant lawsuits present a steady sapping on resources.

    6) Constant web-popups make IE seem sad in comparison to Firebird and Opera, as well as a lack of features being painful. This detracts from their general appearance and aids competitors.

    7) More people are satisfied with their current systems and are just refusing to upgrade.

    8) Piracy of windows is staying widespread despite product registration, and the lack of legitimate copies is adding to the virus issue.

    9) The next version of Java is looking stronger than .Net and reasonably fast, preventing their newest system from completely stealing Sun's thunder. Once again, damaging credibility.

    10) Although X-Box started gaining on the other consoles finally, all the competing systems are starting to push even more for handhelds, and likely integration between the two, resulting in an aspect where the X-Box will be lacking.

    11) The G5 chip is the first time that a Macintosh processor has been seen as competitive with the top Intel chips, further undermining their superiority.

    12) The iTunes music store is still unrivaled, re-solidifying Macintosh as the OS for multimedia, along with programs such as FinalCut and Garage Band and products such as the iPod.

    13) Governments are starting to strongly consider open standard, raising the lobbying costs for Microsoft and potentially requiring some new file formats to be supported by them.

    14) OpenOffice.org shows a technically capable alternative to MS-Office. Where MS-Office was once clearly on top it may have to start fighting for its place soon. Also, the latest version of MS-Office, MS-Office XP, doesn't run on as old of hardware as OpenOffice.org, so many people with old Windows systems have an alternative upgrade line, as opposed to being locked into upgrading computer, OS, and office suite all at once.

    15) Many large contracts for Linux have been seen recently, harming Microsoft's public image more.

    There is other stuff, but I can't think of it at the moment.

    I would say their strongest pieces at the moment for increasing sales are .Net, the X-Box, and WMA with DRM. MS-Office and Windows are still their biggest products, but they can't increase in sales very much.

    Their OS is just not going to be ready before 2006, so it cannot stimulate a recovery. What they need is something to make it worth the wait. .Net is that, as it has very much promise and says something about how much total change will come with their next OS release. Also, .Net can compete with Java somewhat, helping them in a buzzword cattle.

    MS-Office was traditionally their big seller to tie people into their systems, but it's basically finished up. They have very little room to improve. Most of the improvements that could be of value cost more to develop than they will bring in sales (better type-setting control and similar advanced features) or will have a huge risk of damaging their current monopoly (a new office suite can have a radically new UI and be easier to use without losing customers).

    X-Box, on the other hand, is totally up-and-coming and is technically superior to the competition. If they can get the X-Box2 out in a timely manner, they can get press about being innovative, they can get a rush of sales from nowhere, and they can stimulate their gaming division, giving them a third strong arm to thei