Slashdot Mirror
Microsoft: The Faint Smell of Rot
happycorp writes "A business reporter for ABC/Fortune
is asking whether Microsoft is poised to collapse, based on years of industry observation
(with successful calls in the past, he notes) rather than
purely technical considerations.
A short read, with this favorite quote:
"if you sniff the air, you can just make out the first hints of rot.""
...about the Roman Empire in the time of Julius Caesar. But it took several hundert years until it collapsed.
growth is way down in the OS and office departments
whilst software doesn't 'wear out' - the environment in which the software is designed to operate changes such that the effect is a degredation of the software in terms of its ability to interoperate with other software and also to remain maintainable...
... )
....
...
for example, you've just completed a c# project for a client with target machines based on WinXP, Office XP etc... your next project is to update some software which was originally written in Vb3 running on Win3.1 - currently running on NT, the new machines the company want to roll out run 2k - will it work? what about all the dependencies ? how far do you want to 'cripple' your dev box so it matches the release system?
(VMware is really incredibly awesome for this kind of situation
I'm personally in favour of software being maintained more like a car - yearly checkups / updates / replacement parts etc... I wonder if the net effect of regular maintenance on software would be cheaper than the develop / wait 5 years / then have to reconstruct the whole thing
my 2p which by current exchange rates is around 0.0000001cents
This kind of "insight" can be applied to almost every company, and it's about as good as Colin Fry's cold reading
Looking for previous Malone predictions I found this gem where he predicts the death of Apple. I quote from the full article:
"No, I think that if Jobs proved anything, it's that the core body of Macolytes is pretty inviolable. It would be very damn hard to lose them. The question is: Can he do much more than he's done right now? He's up against 300 companies. No matter how clever he is, the combined creativity and brainpower of 300 companies ultimately will defeat him. He didn't believe that the first time around. I think he knows that now. That's why I think he's positioned Apple for the big exit. I suspect he's shopping the place around. I hear rumors to that effect but I couldn't confirm them. If he was smart he'd do the same thing as NeXT. Remember, NeXT almost died, he managed to go sideways with it, establish it with a certain amount of prestige but not a lot of long-term potential, and sold it to Apple. He ended up being a hero, but he came within weeks of being a goat. If he can sell Apple and make a ton of money, then he becomes the savior."
Worldcom purchased MCI and then filed for bankruptcy protection in 2002 after "misaccounting" for about $3.5 billion. Compaq was purchased by HP and is one of the reasons everybody's glad to see Carly leaving this week - it was largely regarded as a stupid move. Sega is a major player in independent development because their tenure in the gaming industry, tragicly, reads like a country western song.
I think the poster's point was not death, but significantly diminished power, as the point of the FA was. I mean, even the Pets.com dog is still around -- except he was auctioned off for dot com chump change ($185k) to an insurance company.
I'm not sure what their operating costs are (I believe it's something just insanely low once you remove their research costs). Yeah, I'm fairly confident they can stick around once the pyramid scheme collapses.
By the by, I've been told the the pyramid collapsed a while back. Anytime a company re-prices options, it's a fairly sure sign, that a) they are using stocks as a primary form of compensation, and b) that the jig is up, and no one will ever get wildly rich of options again. They repriced a ton of options after the bubble burst and the stock price plummeted 50% from the all time high. I knew several people who were recruited to work there pre-bubble days. Both of them turned down the jobs, as they were about 2/3rds the going rate. However, you got enough options to turn you into a millionare in 10 years assuming they stock price continued it's incredible price rise. Relatively high risk, high reward.
I've lost the link, but there was a pretty good economic analysis a while back that showed, essentially that new investors in Microsoft were paying Microsofts wages and a lot of their taxes by buying up all the stock that got dumped into the market as converted options. The interesting part was that they ended up showing that Microsoft would lose a billion dollars a year if they paid the money out that employees got as options. The thing about that is, that I don't think Microsoft will make nearly as many of their employees millionaires as they used to. So I don't believe they'll lose all that money. I think they are right, that Microsoft played the market to the hilt. The market thought it was getting in on a good deal, when really Microsoft was using the markets capital to compensate employees.
They are still doing it to an extent by giving away actual stock. However, my guess is that is probably a great deal less lucrative then options were back in the day.
Kirby
No - they have a lot of assests. And "investments". In cash they are about equal with Apple. Have a look at their quarterly earnings.
Huh? How do you figure?
Apple Balance Sheet 25-Sep-04
$2,969,000,000 Cash
$2,495,000,000 Short Term Investments
=
$5.5 billion cash equivalents
Microsoft Balance Sheet 30-Jun-04
$15,982,000,000 Cash
$44,610,000,000 Short Term Investments
=
$60.5 billion cash equivalents
You are right. "corpus" is a body, which is where we get the words "corpse" from.
"Corporate" or "incorporate" means to form a body. Legally, a corporation has the rights of a human, but that is a modern invention. Historically, a corporation was a way that a new "body" could be formed of many different people. The articles of incorporation detail how the body is run, how decision are made, what the purpose of the body is, etc...
Every organization that comes together and has rules for how the organization is run is a corporation in that sense of the word. You'll note that sometimes "organization", "association", "body", "assembly" can be used to mean the same thing.
In the market, for-profit corporations are formed by investors who want to take their capital (time, talents, cash, resources) and turn it into something more. You've heard of "synergy" right? That's the idea that the combination of the parts is greater than the sum of the parts. As the corporation matures, they don't expect much in return. When the corporation is complete, they expect to get regular payments on their investments. Should the corporation fail its purpose, they expect to be able to salvage whatever capital they can from the effort.
Rich people don't do like Scrooge McDuck and swim in their piles of cash. Instead, they drain their coffers and invest it hoping to get even more cash. Or they give it away to their favorite charities. Rich people can't stand seeing money lying around doing nothing much like nerds can't stand seeing a computer turned off doing nothing.
The radical sect of Islam would either see you dead or "reverted" to Islam.
They've got enough cash in the bank to run the business for decades if they never made another cent
Not anymore. Back in November they paid an enormous dividend and got rid of about 32 BILLION in cash all at once.
"But it doesn't matter to SGI, which lags way behind IBM and Sun in HPC sales. It's not the market, it's the company."
No trust me its the market. It takes a ton of R&D money to stay on top of the HPC market, floating point and I/O in particular, and it gets worse with each new generation of chips.
Don't think its doing any wonders financially for SUN, they are in almost as bad a shape as SGI.
IBM is in it more for the PR and prestige. They are big enough they can afford the R&D costs especially with other big companies alongside like Sony, Toshiba and Apple. They are also a lot better at pushing the PowerPC technology in to both the low and high end. I'd sure like to know if IBM is making any serious money in their HPC efforts, I seriously doubt it once you factor out the R&D costs.
SGI simple lacked the resources to sustain MIPS development for HPC on its own, especially with MIPS going lowend and SGI trying to go high end and floating point with it. Now they are trying to keep both MIPS alive and make IA64 work and neither one of them do outside of the few niches where IA64 doesn't suck, or where they are building highly specialed systems for special government customers with deep pockets.
@de_machina
Microsoft stock stopped rising years ago. See here:
MSFT 5 years
MSFT max
-molo
Using your sig line to advertise for friends is lame.
According to the date in the archives listing on the site...
Apple obituaries are an art form.
Heck, according to The Mac Observer's Apple Death Knell Counter, even Steve Jobs himself weighed in with an Apple Obit at one point.
Frankly, it's not clear why you even mention this, but just in case it's important to your point, Nabisco has never been a tobacco company. In the big merger craze of the '80's, Nabisco bought (or merged with--it's a matter of perspective) R.J.Reynolds. They combined their finances, but never their operations, and many of the employees at Nabisco were heartsick about the deal at the time. Over time, RJR became the half of the company people focused on--maybe it was because of their immense profitability, maybe because they were always in the news, maybe just because they put the "RJR" before the the "Nabisco" in the corporate name. Finally, people started talking about how RJR's legal liablity was keeping shareholders from realizing the value of the company's hidden gem, Nabisco, so Nabisco spun off R.J.Reynolds and things were back like they were before--for about a year, then Kraft Foods, a subsidiary of Altria, aka. Philip Morris, bought Nabisco. So now, they're right back in bed with those cigarette guys, only this time they're not even nominally in charge.
But it's not like they were a tobacco company that decided one day to quit making cigarettes and start making Oreos and Ritz Crackers. The damn name says it all: NAtional BIScuit COmpany.
A tautology in the logic sense is effectively a statement whose truth table is entirely true.
E.G., "A or Not A"
A | A or Not A | value
T | T or F | T
F | F or T | T
Contrast that with a contradiction, for instance "B and Not B"
B | B and Not B | value
T | T and F | F
F | F and T | F
So, no, an argument that assumes the consequent and is therefore circular is not a tautology.
You are incorrect. For FY 2004, overall revenue was up %14, Windows revenue up 11%, and Office revenue was up 14%. Hard to call any company that has double digit growth "rotting".
Doesn't mean a corporation can't be "owned". While IANAL, the stock you own in a corporation isn't literally a portion of the company, but rather a portion of the company's earnings. I could be wrong there, but that's how I understand it.
And for the record, slavery is legal in the USA as a punishment for crime, though I don't know of any State or federal law that allows slavery as a punishment (community service and enforced labor as part of prison sentences aside).
Slackware, what else when it must be secure, stable, and easy?
Quite the contrary. A rocket has already run out of fuel well before it reaches maximum altitude. Don't confuse revenue with innovation.
The only means MSFT has to grow revenue is to squeeze more revenue out of you. Every person who jumps ship puts that much more pressure on...you.
MSFT has been run by the bean counters for the last decade. Zero innovation, constant cut backs, shifting production overseas, and ever newer ways to squeeze a few more pennies out of...
...you.
Go visit their offices in Redmond. There's no energy or excitement there, it's a crypt. Dead company walking the green mile!
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
Does anyone out there love MSN? I doubt it; it seems to share AOL's fate of being disliked but not hated enough to change your e-mail account. And do college kids still dream of going to work at MS? Five years ago it was a source of pride to go to work for the Evil Empire -- now, who cares? It's just Motorola with wetter winters.
In other words, he's talking about how college kids perceive Microsoft, not about the current reality of working there or about contrasting it with Motorola.
A corporation is a legal entity, not a (natural) person per se. A legal entity can enter into contracts in its own name, can be sued, can owe and be owed debts in its own name, etc. A natural person is a subset of legal entities. Corporations are another subset (as are partnerships, etc.). They don't have all the rights of a natural person, since they are the creations of the law. Shareholders actually own a portion of the corporation. However, corporations are set up such that ownership and control are separated (which justifies shareholders having limited liability, and was the whole reason for the creation of the corporate form in the first place, that along with pooling of capital), with the board being legally charged with managing the corporation, and the officers the board's (legal) agents.
Here in France we have a simple solution to this. When you are paid a dividend you get a tax credit with it that is the amount of taxes already paid on that dividend.
So a company that paid no taxes would be unable to give tax credits with its dividends, so the people receiving those dividends would pay more taxes.
Watch this Heartland Institute video
No, that is called 'begging the question'.
Great minds think alike; fools seldom differ.