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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.""
This kind of "insight" can be applied to almost every company, and it's about as good as Colin Fry's cold reading ("wait, I think I smell something back there...").
It will however be interesting to see if Microsoft may one day break up voluntarily into different operating units, and thrive in different areas independantly.
Rock that crushes, Paper & Scissors that don't matter.
They've got enough cash in the bank to run the business for decades if they never made another cent ... They may not be the 800lb gorilla, but I don't know how you could possible predict a collapse.
2advanced.net - Business Quality Hosting
Apple and Sun will be gone by the end of the year. IBM will collapse under its own weight, Nintendo will be out of business any day now, BSD is dead....
Same crap, different company.
"I use a Mac because I'm just better than you are."
Apple is going to be dead by the end of the year.
What a revelation. Next up people that hate cities think small towns are wave of future.
They just gave away 60 billion to stock holders and still have 34.5 billion with zero debt.
Esp. when its flagship products are monopolies.
The Raven
...about the Roman Empire in the time of Julius Caesar. But it took several hundert years until it collapsed.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
I won't believe it until Netcraft confirms it.
Yeah, and in late 2004 the Register posted that Microsoft was about to file for bankruptcy.
(FYI, no B.S.: That article is printed, laminated, and behind a case in one of Microsoft's lobbies.)
The coolest voice ever.
Microsoft is dying, the same way that Apple and FreeBSd are Dying.
I'd surely be socked if they did die. But I'd bet money they won't. In fact, I have.
Pretty Pictures!
"The faint smell of root" :-D
Sig Nature
I'm sorry. That was me.
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.
Umm... no. Definitely not.
As I went from the latter to the former, I can tell you there's a lot of difference. Motorola is bogged down, lacking excitement in teams that should be excited. The place was being "SEI/CMM Level 5"'ed and "Six Sigma"'ed to death. The personality of the employees and teams was as interesting as the endless rows of slate gray cubicles. And it was horrid to take an internal class on Perl, and see experienced software developers that couldn't finish a simple basic program in 20 minutes that I had finished before the instructor was done explaining.
At Microsoft, I'm excited about my job and the product I'm working on in ways I never was before. I'm more impressed by both the knowledge and passion of the people here than I ever was at Motorola. It's nothing like anything I saw in my 6 1/2 years at Motorola.
I don't mean to sound like a MS cheerleader here, I just want to make it clear that this is definitely not a valid comparison to anyone who has spent any significant time inside the two companies.
Oh, and the winter here is a hell of a lot better, even if it wetter. And the summers... wow.
"You know your god is man-made when he hates all the same people you do."
The situation for Microsoft is somewhat worse than GM in our example. Consider Microsoft Word 6.0. Unlike an automobile that wears out, breaks down, and needs to be replaced, Word 6.0 has eternal life. It does not ever wear out. After you have used Word 6.0 for 15 years, Word 6.0 works just as well as it worked 15 years ago.
So, you have no need to replace Word 6.0 unless you want to upgrade. For most people, the upgrade is unnecessary because Word 6.0 already has all the features that you need.
Other software programs have the same "problem". Microsoft has so relentlessly added feature after feature to its products in order to capture most of the marketshare that most consumers now have no further need for additional features.
The only way for Microsoft to grow is to enter into other markets. Hence, you see Bill Gate's fist print in the gaming market as Microsoft pushes the XBox. Unfortunately for Microsoft, there is no guarantee of success in markets beyond the computer-software market.
As a side note, Microsoft will continue to invest heavily in R&D in order to enhance the likelihood of success in those other markets. I would not rule out the possibility of buying Bell Laboratories.
As soon as the market opens on Monday, I'll buy a few hundred shares, and watch the tumble.
Get out while you can.
DT
Is this thing on? Hello?
You're right - it's probably just formaldehyde.
--- Egads, I glow in the dark!
Yeah, wasn't Apple dead too? Like what, three times now?
Microsoft is where IBM was in the old days. The excitement that lures glamor-seeking job applicants can't last when you've already grown to fill your entire ecosystem. Ditto the press buzz.
In other words, where Malone sees senility, he may actually be looking at maturity.
Microsoft will just buy Glade, the company that makes plug-in air fresheners.
Your computer will emit a little wisp of air freshener the mext time you smell a hint of rot.
You will actually look forward to seeing Clippy...
Take the cheese to sickbay, the doctor should see it as soon as possible - B'Elanna Torres, "Learning Curve"
The earth would appear to be eroding away by massive solar winds. Scientists predict the earth to be completely disintegrated in 20 to 30 billion years.
Gimme that booze you little pumpkin pie hair cutted freak!
In 15 years, employers will no longer expect your resume to be in Microsoft Word format.
I think Microsoft will become like J.P. Morgan: still huge, still important, but not what it was.
Certainly this was written to get a bit of attention, but in a way he's just foreshadowing what happens to most businesses, especially those that grow as large as Microsoft has. A brief look through history will confirm this.
AT&T is a good example. Although they were "broken" by an anti-trust suit, they actually volunteered to spin off the Baby Bells as a concession. In their minds, networking and computers were the future. In a way, AT&T had it all going for them. They ditched the tedious Baby Bell system to jump headfirst into a sector that absolutely exploded. Tons of people thought AT&T was the unstoppable 800 lb. gorilla that once it entered the computing/networking segment, it would just dominate it. History, however, has proved us wrong and now AT&T is about to be consumed by one of its children in an odd sort of Darwinist/Oedipal freak of the market economy.
Now, I'm not saying MS will tank tomorrow or even five years from now. What I am saying is that there's always something that destabilizes the status quo. It could be something that they don't see coming; it could even be something they see coming but can't properly react to. In any case, the inevitable will happen and MS will fall. Some day.
Per Square Mile, a blog about density
If you sniff the air, you can just make out the first hints of sensationalistic journalism.
MS have lost some of their dominance, and will lose a little more. They wont collapse any time soon, not while they have real prospect of a decent P/E ratio and not unless something really amazing comes along to do REAL harm to Windows, Office et al. Famous last words and all that, but such amazing things are unpredictable almost by default.
MS seems to be having poor "leadership and vision" right now, these things come and go. The smell has probably been there since they moved out of Gates' garage, such things dont come and go so easily.
Of course, Microsoft is too big for that to happen. But "collapse" doesn't necessarily (or even usually) mean total disappearance. It more often means mass firings, loss of market share, plummeting stock price. As happened at SGI.
Speaking of SGI, I worked there during their waning days as a graphic workstation powerhouse. When people talked about where the company went wrong, a common theme was this: Wall Street fell in love with SGI and threw money at the company. All that cash helped them avoid measuring risks carefully or look for efficient ways to do things. By the time money ran short and it was obvious SGI had to reform, it was too late to claim a permanent place in key markets.
That's different from Microsoft, of course, since MS's pile of cash comes from their tithe on every PC sold. But the effect on corporate culture is the same. Cash can be toxic to a good organization.
Wishing doesn't make it so.
San Francisco Photographers
Microsoft is not rotting but it is maturing. It is not as nimble as it use to be. The market has matured along with Microsoft. Microsoft is starting to go through a mid-age crisis. They can not sell more OSs and Office suites than in the past, because everyone already has them and the old versions are good enough. Microsoft is changing into a mature old company that will have a steady income but there will be nothing to get excited about.
... here..
... He explained that Microsoft carried on its books no value at all for its software. Assets like Microsoft Windows or Microsoft Office, which might be given some book value and depreciated over time were carried on the books as valueless. This contrasted at the time with IBM, which valued its software assets at billions of dollars.
Basically discussing accounting shenanigans before the bubble burst, and I remember reading it at the time (though this comes from this weeks' article links)..
"The late Frank Gaudette was Microsoft's first-ever Chief Financial Officer. He was also Microsoft's first head of Human Resources, first head of Facilities, first at running just about every department that had to do with operations but not product development, sales, or marketing....
My question was based on the idea that nothing goes up forever and there must come a time when even Microsoft is no longer a good buy. How can we tell when that time has come?
"Watch for any changes in our accounting," said Gaudette. "If I need to I can start, depreciating the software and maintain earnings growth for years on flat revenue. Watch for the accounting changes, wait for the next uptick in the stock price, and then sell.""
Read the whole thing, very interesting stuff...
The smell of VICTORY.
word.
Is lack of competition. They almost always win, either in price, or in features, or in both. In all fairness, there's no office suite on the market that would be more polished than MS Office. There's nothing to replace Exchange. There's nothing to replace Windows even, because once you move an inch away from windows your hardware doesn't work anymore.
That creates problems for Microsoft itself. Everyone is too attached to "cash cows", they become "sacred", everyone is afraid of making big bets until it's too late. Microsoft is simply afraid to boldly innovate. They have people and money, they simply don't want to.
You've forgotten the reason why Microsoft existed in the first place: To *make* a lot of people a heckuva lot of money.
If Microsoft sees no future in its business, it will liquidate its assets and pay off its investors. Sure, it has billions, but if it can't find a way to turn those billions into trillions, then it will be sold and the capital invested somewhere else. This is the core of capitalism.
Companies are the sum of its investors, and nothing more. They can come and go pretty much as they wish. What do you think "corporation" means? It means something made out of many parts, those parts being actual people and their fortunes.
Companies don't collapse. They are abandoned. That is what is happening to Microsoft *right now*, and he sees it.
The radical sect of Islam would either see you dead or "reverted" to Islam.
It's hard to say how much monetary clout Microsoft has beyond its value on paper. Certainly, they have a lot of value in investor funds available to them, and because of accounting methods that allowed them to exclude stock option grants from their expense statements, they've been able to consistently beat earnings estimates.
But from some perspectives, that looks like a pyramid scheme. Microsoft's single most important product isn't Windows, but Microsoft itself. Or more specifically, Microsoft stock. As long as the stock continues to rise in price, it remains an attractive purchase for investors who (rightly) see that it will continue to increase in value.
But as soon as that stock stops rising, the investor funds will slow to a trickle, and Microsoft will be forced to survive solely on the profits from its software and the actual cash it has in the bank. Is that enough by itself?
LOL! This guy should smell RMS' sweaty armpits at his highness' next presentation and do a prognosis for OSS based on that!
As much as I, personally, do not like them or their products, I doubt that Microsoft is going away anytime soon or anytime at all. Too many people have invested too much money and time in the MSFT platform. Moreover, MSFT's biggest weakness (security) is not unique to them.
Regardless of the bad architecture decisions unique to Window's, all platforms are vulnerable. This existence of any security weakness in other platforms (even if quantitatively smaller) is used as rationale for staying with "the devil you know."
But the real core of the problem is deeper than any one exploit or architecture mistake. The core problem with security is that the "bad" guys are, in many ways, more motivated than the "good" guys. On the one hand you have the black-hat hacker/spammer/spyware creator/ crime syndicate that is sure that they can make a potload of money off any little crack in a computer's security. Thus, they are highly motivated to search for any flaw and exploit that flaw in however many millions of machines they can reach. On the other hand you have millions of users that don't think that they will have a security problem and thousands of programmers who think their code (or at least their job) is secure. Thus neither the programmers nor the users are as motivated to create security and the bad guys are motivated to defeat security. Thus, the global resources devoted to cracking computers exceeds the local resources to securing computers. Thus all computers have holes and MSFT is unlikely to die because Windows is somehow uniquely insecure.
At worst/best I see Windows slipping to 50%? marketshare before MSFT throws more programmer-hours at security than the entire OSS community could ever hope to muster. With enough of the proverbial monkeys at keyboards, MSFT will regain the security crown or at least through enough marketing dollars to claim it. Morevoer, as Windows loses marketshare, the black hats will attack other platforms. People will soon realize that the new non-Microsoft software is really not that much better than the old stuff and go back to MSFT. At best (for Microsoft's foes), the world will reach some equilibrium point of Windows, Linux, Macintosh, and other platforms.
Two wrongs don't make a right, but three lefts do.
Ronald Reagan was right, and elite wisdom was wrong. The Soviet Union was already decaying from within, and all it took was a few firm pushes (IRNMs in Europe, aid to the Mujahadeen, SDI) to help push it over the edge.
So it is with Microsoft. Besides Windows and Office, what products do they have that are profitable? Story after story comes out about how Microsoft is going to take over this or that sector of the industry (MSN, WinCE, WMP), but they never seem to turn a profit. Like the Soviet Union, they've overexpanded, they have a restive population tired of chaffing under their iron bootheel, and a few pushes (Linux, iTunes, etc.) may be enough to push them over the edge.
To put it another way: It's no accident that both the Soviet Union and Microsoft are called "the Evil Empire."p.
Lawrence Person (lawrencepersonh@gmailh.com (remove all "h"s to mail)
http://www.lawrenceperson.com/
I think that this guy is right, up to a point.
We see lots of things that tend to loosen up MS's chokehold on the industry.
Large government clients are pushing for open office document formats. People are using more and more software that runs on multpiple platforms (ie., Firefox). New platforms, like phones, set top boxes, media centers, PDAs, and the like aren't panning out.
And many customers really want out. People complain about MS a lot now.
To me, the most significant thing is that they don't seem to be making the right moves. They're not doing anything interesting, and they're not responding to their technical challenges in a vigorous and competent way.
Gates is clearly a genius with business, but I don't think he's up to running the tech side of the company. Since he became the "chief software architect" they've been floundering.
But on the other hand, think about how much money they have. That means that there's no chance of them collapsing or going away. The cash gives them enormous staying power.
I don't think that collapse is a likely scenario. It's more likely that they'll be more like an IT industry Sears.
Sears was mismanaged for decades. Long after the retail industry had passed them by, they were still doing things in the same old dumb ways they had always done it. But they were still there, because they had gotten to be so big and strong in the days when they were on top. They owned a ton of land underneath their stores, and it was worth a lot of money. They had staying power.
I feel really good about the future. I don't think anyone's going to have their boot on our necks the way MS has in the past. Apple is making some beautiful machines, and Linux is a couple of years away, at tops, from being really competitive on the desktop. Windows will probably get cleaned up, and it will probably end up being cheaper.
What? Microsoft is sitting on enormous cache reserves, still has a monopoly on the desktop OS market, and has many extremely successful products such as Office.
Not to mention that the xbox is doing pretty good; while they might not make money on the hardware itself, games like Halo 2 make them a heck of a lot of money.
Microsoft might be going through a rough spot, but since when does that mean a company is going to collapse?
Or maybe not even that something is wrong- just that something that used to be right isn't there anymore. I think I see what he means. The image used alongside the article is the Microsoft that dominated, that we feared and loathed: the Borg. I can't exactly put my finger on it now, but that's not how I see Microsoft right now. Sure, they're still enormously big, powerful, and evil, but somehow don't seem terrifyingly unstoppable, destined to destroy or eat up everything in their path. There was a time that the mere mention of Microsoft getting into a market was enough to send people scattering. Do they still have that effect? I think the guy is onto something.
After all, he's essentially correct in that the world's imagination is on Linux and Firefox rather than Windows and Explorer... at least in what I've seen in my limited scope.
But if I were to interpret what I smell, I'd say it was something along the lines of huge change rather than oncoming death. Microsoft [should] know they aren't moving the way they once did. Their code is too big to maintain backward and forward compatibility and things are breaking around the edges. I can't tell you how many places I've read that Microsoft needs to make a new product from scratch and throw out compatibility if it wants to recapture the hearts and minds of users and administrators. I think we're all very ready for something new which is why we're looking to Linux... well some of us are looking to Apple as well as the author points out.
Microsoft is a lot of things in my book but stupid isn't one of them. Their hearts are in the wrong place though. They need to shift focus away from themselves and back onto the consumer.
On October 5, 2000, Mr. Malone predicted the end of Apple and the PC.
a lone.html/
But with falling profits and plummeting stock, and having hastened the end of the desktop PC era, Steve Jobs has put Apple again in a precarious position.
http://www.forbes.com/columnists/2000/10/09/1005m
Microsoft may have a few years left too.
I come from a age where you had a choice of MS-DOS or ... Unix. AT&T SysV is where I learned myself -- the goal, of course, was always to get root. I got root.
:). There's a LOT of logic behind how Unix systems work -- and considering the concept/usage is much older than Microsoft I see it as being rather well thought out and mature. It becomes so obvious when dealing with trying to fix something on XP.
:)
If you look at all the major players in the market place today you'll note that they're _all_ getting behind one of the Un*x's or the other (I consider Linux, BSD, and OS X all to be "Unix" regardless of what SCO [or you] may think
Microsoft may be a 800 pound gorilla, but IBM is still a 8,000 pound monster that is going Linux [and still pissed off]. After recently comparing OS/2 to XP side by side I understand.
Of course there's a reason (in our organizations) that as of 2000 it was decided to REMOVE Windows from the mix and migrate all users to either Linux or OS X. I myself [IT admin] use OS X at home for a reason. Others will follow.
It's simple really -- in personal consulting I charge $35/hr for IT work if it's Linux/BSD/OS.X/QNX/Netware based. The rate changes to $70/hr for de-virus'ing your system [again]. Clients quickly learn what the Mac-mini is all about...
Yeah, Microsoft is dying -- and unfortunately (for the US) it'll be a slow death. IMHO the US had better wake up or we'll technologically have out shorts eaten by the rest of the world as they continue their migration away from Windows.
Microsoft makes almost all of their profits on sales of XP and Office. I would argue that both of these products are adequate, but neither compelling nor great. Both continue to be successful because people must endure great pain if they try to choose any other alternative.
/.er. And they know how to build hardware that they can sell *for profit*. The PS3 will own the next generation just like PS2 owns this one.
Lets list the other great applications or product categories MS has pioneered since the beginning of the internet era- the early 90's:
(sound of crickets chirping)
Where have they completely missed the boat?
1. The Web. If it weren't for Netscape we would all be using a closed, proprietary, for-pay MS network much closer to the old pre-internet AOL model than the public internet we have today. And since MS stole the browser market from them how much innovation has happened in the browser space? For all practical purposes - Nada! Hopefully the Firefox phenomenon will convince smart, hungry people that success can be had inovating in this space.
2. Search. Google is kicking their butt back and forth and truly innovating on a regular basis. I never realized how piss-poor the Windows search functionality was until I tried Google Desktop Search. It is a revelation to get results immediately that would take several minutes or hours of searching to find with the MS provided pap. And have you seen the other stuff coming from Google Labs like the new Maps? Great stuff.
3. Music. Tiny little Apple has single-handedly eaten Microsofts lunch on this one. Even though MS compatible players are (or at least were) far more widely available to consumers.
4. Gaming. The XBox seems like a contender, but only because it has been propped up by the profits from other divisions. MS blew it in the first generation - using PC components sealed their fate - the machine was too big for the Japanese market and too expensive to make a profit on. Xbox would have tanked long ago if the division was actually dependent on making money. Switching to G5 chips may help with those issues but will consumers buy a machine that isn't backward compatible? If the PSP is any indicator, Sony has not forgotten how to make hardware that inpires lust in the average
Please somebody provide a single example of something important that Microsoft has truly inovated with in the past decade!
A well run company that initially succeeds and then fails will carry on making record profits right up until it starts going downhill.
Is it me, or does this sound a lot like 'A car will continue to coast until it stops moving'...
Hope be with ye,
Cyan
"Now the company seems to have trouble executing even the one task that should take precedence over everything else: getting 'Longhorn,' its Windows replacement, to market. Longhorn is now two years late. That would be disastrous for a beloved product like the Macintosh, but for a product that is universally reviled as a necessary, but foul-tasting, medicine, this verges on criminal insanity. Or, more likely, organizational paralysis."
Or, more likely, Windows, with its backwards compatability, integrated applications, and security flaws, among other design problems, is so sprawlingly complex that it is reaching the level unmanageability. IANAME (MS Employee), nor have I been, but I know they hire the best. If even teams of such people struggle for so long to produce a major upgrade to Windows, then that seems to me to be a sign that they're now dealing with an unmanageable monstrosity, rather than a sign of organizational paralysis. Not that such a distinction matters much to the author's argument, though...
Flying is easy, just throw yourself at the ground and miss. -Douglas Adams
Actually, I've been smelling the stench of MicroSoft since 1997, but when GNU/linux didn't take over the world by 2001 I had to conclude that I had only been smelling the crap MicroSoft calls software. The borg was alive and well.
That said, the stench has definitely been turning toward rancid over the years. A data point I've noticed is that it is no longer "cool" to be a MicroSoft employee. We interviewed a potential new employee about six months ago and the general opinion was that he was a possible hire, but the fact that he was a MicroSoft employee definitely counted against him. He suffered half-serious ridicule behind his back.
We didn't hold it against him too much -- he would have been taking a pay cut and would have had to leave his newly purchased and remodeled mansion to come to work for us. In the end he stayed with MicroSoft rather than jump onboard a fun startup! 8-0 Nevertheless, I caught the faint hit of rot from his reception here.
It may be dying, but it will be a nice long death. There's plenty of time for it to thrash out its death throws.
Meanwhile... I distribute Knoppix CD's as a hobby.
Religion is poison to rationality, and we lose sight of that at our own peril. -- Lurker2288
Microsoft's total cash on hand is 34.5 billion. Their operating costs average around 6-8 billion a quarter. By my math, that means they could operate for anywhere to 1-1.5 years without taking in any revenue, unless they *seriously* scaled back their business ventures.
That is quite far from "decades"
To me the real question is why, even after so many years of being in a wide variety of markets, Microsoft's only reliably profitable divisions are still Office and Windows. The Mac division is really an extension of the Office division.
Your comments about the XBox, directory services, games, PDA, and so on are valid, but from a business point of view that really only matters if they are profitable. The Home & Entertainment division is now profitable but is expected to go red next quarter, and the Tools division is profitable. The real money earners for MS are still Office and Windows.
Add to this the fact that Microsoft maintained profitability by cutting their R&D *in half* and I can't help but wonder if Microsoft is mortaging its future in order to please the stock market today.
They do have a boatload of cash in reserve, and they won't be going away any time soon, but the famously long Microsoft quality cycle (v1 sucks, v2 sucks less, v3 is ok, v4 is good) just isn't going to cut it any more. Smaller, more nimble competitors abound, and they're getting smarter. They're attacking Microsoft at the edges and playing against Microsoft's weaknesses (user experience, security, price, reliability).
Microsoft may be going after the long-term bucks with the XBox, but they can't leverage their OS dominance in that battle, and Sony definitely isn't going to take it lying down. What happens when MS can no longer rob from the Windows and Office divisions in order to keep the Home division going?
Read the EFF's Fair Use FAQ
He's right about one thing, or should I say four. Microsoft hyped the "four pillars" of Longhorn over and over again. But the Longhorn about to be released won't have a single pillar. The irony of an OS without any support is quite telling. Microsoft simply can no longer deliver what it promises.
It's simply too distracted. It's worried about Sony winning the living room. So it releases the Xbox (and don't forget WebTV!). It's worried about Google winning the search war. So it spends a lot of resources on its own search engine. It worried way back about AOL so it created MSN. But the problem with all of these diversions is that none of them make any money.
Microsoft is running scared. It senses that it cannot continue getting people to upgrade their OS and Office year after year, so it's desperately trying to find something, ANYTHING to hold on to.
Microsoft reminds me of the extremely well armed troops in the first Predator movie, shooting in every directing and hitting nothing.
If someone says he and his monkey have nothing to hide, they almost certainly do.
for all the hot air about Linux in the last 5 years, it hasn't cost MS a cent in their monopoly desktop space
Yet.
But there has certainly been some missed opportunity.
And, they are taking their eye off the ball.
--Phillip
Can you say BIRTH TAX
A well run company that initially succeeds and then fails will carry on making record profits right up until it starts going downhill.
Perhaps it's more like Enron recording record profits until it collapsed. I'm not saying it's the same thing, but don't believe everything an accountant tells you. Keep your guard up. Record profits don't mean much if an IT company isn't spending much on research and development and is just coasting on licensing revenue.
Q: Is it true that capitalism is rotting away?
A: Yes. But what an aroma!!!
- Back off man. I am a scientist
I believe you mean, "GNU/Linux on every desktop!" don't you?
The living have better things to do than to continue hating the dead.
Now that firefox has some traction, it's on the radar of the asshats that target IE for their spyware and shit. If firefox is still spyware free in 12 months, it'll mean something. Otherwise, it'll probably have some massive pullback.
The iPod is not a competitor of Microsoft, but of the people that bought into wmv.
Did Microsoft even have a web search offering that was up against Google?
According to the date in the archives listing on the site...
Windows succeeded for a very simple reason. Cheap PC clones. You had "PC-compatible" computers (remember that phrase?) that were getting cheaper because they were clones, and they were appearing everywhere. Windows was a cheap and easy GUI to place on them. I still remember my first thoughts when running Windows 3.1--"Cool, this is like the Macintosh but for PCs."
Windows is only everywhere because PCs were everywhere, and therefore Microsoft made enough money to finally release a good version of Windows some ten years later. And they're still patching it.
But it's not Microsoft. It smells more like the rotting of a tired journalist raising controversy to drive readership. How pathetic. *LOOK AT ME!*
include 'std_copyright.inc'
doesn't give much away about the date of publication in this case.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.
Consider this. They have a monopoly (the Justice Department has said so) They have $55 BILLION dollars in CASH. To take an example, American Airlines lost about 300million this year. At this rate, Microsoft can keep on kicking for 183 years. And this is a bad scenario. If companies like Dell continue to patronize them, Microsoft will continue to post profits. As much as /. may want it, it probably won't happen. At least until we are dead.
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.
Microsoft has as far as I understand two cash cows: Microsoft Windows and Microsoft Office.
Now both of those are being challenged by open software.
Microsoft Windows is being challenged by both Linux and Mac. Windows is still king, but Mac is gaining popularity and Linux is becoming ever easier to use. I think Windows will lose substantial market share over the next 3 years or so.
Microsoft Office is also being challenged. Open Office has come along nicely. A main threat here is the fact that users don't use more than a few percent of all the functionality within Microsoft Office. They pay for stuff they don't use or need. Once Open Office comes with some really slick templates and default fonts, I bet it will gain popularity. I think Open Office will start stealing license money in the not too distant future. The 2.0 release is coming up, and then that will become really good after a few minor updates.
Once profits decline for Office and Windows, Microsoft will lose a lot of its current freedom to waste money. They will need to be more focused. Given the impression they have a nasty case of infighting already, this focusing will not happen. They will instead continue to decline.
Stop the brainwash
The author of the ABC article basically says that he can just "feel" that Microsoft is in bad shape- Having just finished the new book Blink, I notice there are close similarities between the book and the kind of subconscious feeling the author is describing about Microsoft (I must admit, I feel them, too...)
Microsoft is a public company. What you say is (generally) true for a private company. (Their exception is when someone gives them an offer to good to refuse, often about the time the owners want to retire)
For a public company things are different. Remember the corporate raiders of the 1980s? They basically examined companies looking for those who could be bought for less than their assets were worth. Then they bought the company (general only enough to gain control) placed their own people in as the board of directors, and sold everything the company had, distributing the cash to shareholders.
Seeing this opportunity if often hard. Many things are hidden. The $100,000 worth of property might be the price paid in 1935, and today worth millions!
You can bet that people who do this are looking closely at Microsoft. They have a lot of cash in the bank, too much to ignore. Windows and Office are worth a lot to someone (company), when you find the buyer. Not to mention the Microsoft campus buildings. (Unless they are renting) and various other things. Nintendo or Sony are likely to buy the xBox just to make sure there is no xBox2. All it takes is for the stock to slip below whatever that magical price is. It doesn't matter if Microsoft is profitable, just what their assets are worth when sold.
Note for those considering this: You borrow the money to buy the company. Part of your calculation includes interest on the money used to buy the company. You need to factor in that once you start buying stock the price will go up - it will go up more once people learn of your plans, and the SEC requires you to announce your plans before you gain control. You need to have potential buyers for things like Office in place already. (This could be a private company that you start for that purpose with more funds that you borrow) You need to have bankers and other investors behind you. (Nobody does this with their own money)
When you stand back and look at the entire history of MSFT on a single graph, one feature stands out.
Something happened in early 2000, before that peak, their price made a steady upward progression with barely a setback. During this time the volume of shares trading steadily increased.
After the peak, the price drooped, staggered around a bit and then levelled out at about half the peak price... never to recover its former glory. BUT the volume of trade has INCREASED, and 2004 saw some of the highest volume of MSFT trades in the history of the company. In other words, the whole share trading pattern has shifted into a different mode.
To me this says that during the steady climb before 2000, people who owned MSFT usually hung onto them. After 2000, people have been much more willing to sell. The shares are in the process of being "handed over" to a different class of investor.
the real test is if they are going to be forced to fight the browser wars again.
if firefox forces microsoft to move the IE team out of the dungeon, and into the spotlight again, its over.
in a war, if you fight multiple battles over the same territory, you will lose.
... hi bingo
Microsoft didn't learn the lesson of the late 80's/90's when IBM tried to push us to more proprietary/expensive systems. IBM stock tanked from a high of $84 to $48. My Boss at the time said 'screw em', so did many others, we shifted to Microsoft.
Fifteen years later, Microsoft makes the same mistake. More expensive, not compatible etc.
I've already done twelve new Linux installs this year, happy people too.
Enjoy,
It's just the normal noises in here.
Windows (and Microsoft) succeeded because it gave users what they wanted and needed. They needed a cheap and backward compatible GUI instead of Macintosh or OS/2, and they got Windows 3 (after a couple less successful iterations). The only ones that were not satisfied were Mac and OS/2 users. Users needed simple networking for sharing files and printers as opposed to NetWare or Lan Manager, and they got Windows for Workgroups. They wanted applications that looked consistent with the rest of the GUI, and they got Word, Excel and, later, the Office suite.
At that time, Apple was evil - they had cute computers, but they were overpriced and incompatible with everything else. IBM was evil too - pushing OS/2, incompatible with just about every application written up to that time and with the added FUD that it would run best on the overpriced PS/2 family.
People used to talk about the next version of whatever that came from Redmond - How Word would handle tables better or how Visual Basic (and being able to quickly develop simple business apps was a major factor in Windows' acceptance) would simplify accessing databases or what new widgets people would be able to use.
It is not so anymore. Nobody is really excited about Longtime^H^H^H^Hhorn (well... I am not), MSN Search or the next release of SQL Server. Can anyone tell me what changed between Word 2003 and Word XP? The XBox gaming console seems to attract more attention than the next release of Office.
IBM used to be boring. Now Microsoft is. They have grown predictable and slow.
They may not be dying, but they are sure losing steam.
http://www.dieblinkenlights.com
The collapse has been evident, and although it's surprising to see someone go out on a limb, I think those in the know have felt the tide turning for a while:
1) Stalled growth. The stock price has flattened. MS has thrown out dividends to keep investors interested, but the stock is played out.
2) Tapped markets. Financials show a disturbing trend: the only operations in the black are the Windows and Office units. Despite relentless spending in R&D, acquistions and experimental to expand their market (MSN, WebTV, etc.), nothing seems to pan out.
3) Apathetic customers. Inability to move entrenched (NT, 95, 98, ME) users, especially business users towards new products. The threats to drop legacy OS support have always ended in retreat -- and for a company as powerful as MS, those actions betray their ultimate dependence on Windows sales to stay alive.
3) Longhorn. For a company that makes so much of its money in OS sales, the inability to deliver a next-generation OS on time and as promised (Avalon, Indigo, WinFS moved out either to bolt on to XP or "for the future") is not an indication of engineering failure, but instead management failure. MS is too large to turn on a dime anymore.
4) Security. This is the death knell, and truly the slippery slope that Apple and the Linux community will use to the most advantage. If you can't get your customers to upgrade to a faser OS (see 3), then you're doomed to see them suffer the fate of today's spyware, malware, trojan and virus ridden reality.
5) Dubious "initiatives." IPTV? Tablet PCs? Wired watches? Again a management failure. Someone needs to keep their "visionaries" on an even keel.
And you can add to this list for a long time. Do one or two of these things signify the end of MS? No, but the trend is clear and the "end of MS" meme is gaining momentum. MS has finally become IBM of yesteryear. IMHO, their pathetic "grasp" at Google's share makes this clear.
When a company throws the term "innovation" around like rice at a wedding, you know that's the thing they're most nervous about.
But maybe he caught a whiff of the stagnant air. I seriously doubt Microsoft is about to collapse, but they've saturated their target markets. They have prevented any competition from getting a successful footing in the OEM market, they hold captive the majority of developers who write click-and-drool stuff for casual users, and they've sort of levelled off their sales in the low-end server market.
That's great, but in their current position, all Microsoft can do is sell upgrades to the stuff that people have already bought. That's probably just fine for keeping the cashflow coming in on a regular basis. It's kind of naive to expect Microsoft to continue expanding, and expect a big jackpot from rising stock value.
I'm not worried. When Microsoft's mistakes hit 'em in the pocketbook, they'll change in a hurry.
Fred
"A fool and his freedom are soon parted"
-RMS
As Dell continues to take over the entire market it will become the key to Microsoft's life or death.
:)
Picture this if you will. Dell ends up with 60-70% market share and it starts to stagnate. As a company it wants profits so it pesters Microsoft to lower prices so that it will get more profit. Microsoft of course says no so Dell brings out the trump, Linux. If Microsoft doesn't lower prices then Dell gains a free OS and Dell wins. If Microsoft says yes, Dell gains more money and Microsoft starts to decline but Windows moves ever closer to extinction.
You never know though, Microsoft may give away copies of Windows and start providing tech support if Dell wants them to, simply to maintain their monopoly. All the while Windows turns even more commodity as Linux gets better and the same with the Mac OS.
Michael Dell is a smart man and he will be conniving when the time comes.
My 2c if anyone wants it.
This article mentions the fact that Longhorn is slipping on its shipping schedule.
There are a number of reasons for this, perhaps most importantly is that Microsoft is trying to do a true X.0 full-rewrite release of the core operating system, with a bunch of "new" features. It is dubious that their "customers" (aka independent software developers and small businesses).
I will also say that for any major software project, when you do a genuine X.0 full code-base rewrite (cleaning out the cruft hopefully and redesigning the base archetechture) it is a major gamble. It is also a situation that tests the mettle of the management to see if the resources are properly applied and available, and if you got a small group of excellent developers or a large group of ordinary developers. This is often what makes or breaks any software company.
From my own perspective, even though I've been using Microsoft operating systems now for close to 20 years (gee.... has it been that long?) I will never personally own a copy of Longhorn willingly. I may even quit a job that forces me into using it, I feel so strongly about avoiding it. I was pushed into using XP, and I've since reverted back to Windows 2000 because I can't stand the direction XP has gone. Transitioning from Windows to Linux (or other Unix-based operating systems) is a huge jump, especially since skill sets are so much different, but it appears as though Longhorn is going to be just as big of a jump so I might as well simply ignore what Microsoft is going to do. My preference would be to go back to VMS, but that isn't an option as a major OS platform for new development.
The only projects I hear that might move onto Longhorn are from die-hard Microsoft computer development groups, and that is more because of "*Rah* *Rah* Microsoft can't do wrong" fans who have an MSDN Universal subscription and have been doing this for some time. Genuine new software development is not being planned in that direction. This situation is far worse than the relutance of moving on to Windows 95 or Windows NT (which had real slow acceptance when it first came out). Or even the fiasco that Microsoft had with Windows 3.0 that somehow they pulled out of when Windows 3.1 came out and fixed many of the 3.0 bugs.
My kids are still abuzz over the X-Box, and if Microsoft is going to have any legs, it probably will be in the electronic gaming industry... where it is largely a hegonomy anyway and difficult for small independent developers to get involved. Propritary operating systems are not a problem in that industry either, and even largely expected.
Microsoft makes money on Windows, Office, and Exchange. Most of the other stuff they do is a money loser: MSN, X-Box, Hot Mail, Windows CE, hardware. The other stuff may be strategic and it may help to prop up Windows, but still its mostly a money sink.
If Microsoft were to lose Windows and Office monopoly because of competition, Microsoft would not be a profitable company - not by any stretch. What could cause them to lose Windows and Office. Open source.
All that really has to happen is for Linux to get more usable. And a lot of that has to do with drivers. Once that happens, the big PC vendors will migrate the Linux faster than you can say "Linux Torvalds". The layoffs from Microsoft will be similar in relative magnitude to the layoffs at IBM in the late 80s. I say relative because MS has far fewer employees than IBM did.
Let me say that I would not want to own a house in or around Redmond when this happens. I also would not want to have a lot of MS stock when it happens either.
Within 5 years Linux will become the dominant desktop OS. MacOS X will have a marketshare perhaps double what it is today. Windows will have a smaller marketshare, but will still be around as Microsoft focuses on it as a "core business" for those who can't or won't migrate to Linux.
Avoid Missing Ball for High Score
Sure they've grown rapidly, but is that sustainable? Microsoft, it seems to me, has defined itself in terms of rapid growth and leveraging their monopoly power in the marketplace. But what happens when there's nowhere left to grow to? Pretty much everybody in the US who wants and can afford a computer already has one. And as for monopolies, here's a thought that must keep Gates up at night: what happens if they no longer rule the market with an iron fist and Microsoft must make people actually want to use their products?
A final point: often, the simple fact that you have to ask answers the question. I can't imagine anyone taking this article seriously half a dozen years ago. The fact that we're discussing it now really says something about a shift in computing.
But none of this happened. Netscape was wiped out, IE dominance is settled even despite IE again looking pathetic in comparison to Mozilla's newest breed. Office still rules and there is nothing to beat it. Open Office? Well, for simple documents and spreadsheets maybe yes. And yes, it has improved a lot over last few years. But still for serious word processing, I'm sorry, but no.
Also Linux is still a great server OS but still can't be considered seriously for the desktop for non-geeks. I've installed Ubuntu three days ago. I was really amazed how little has changed since three years ago when I, sadly, abandoned Linux as my desktop. Again, a few things that can't be done in any other way but by editing config files with, say, vi. I enjoy vi and I still remember what to edit, but does a simple user? And no access to most of applications without reading manuals and adding additional repositories of .deb packages (mostly for ideological reasons). It is not "install and work", it's still "install and then tweak the things around to get anywhere". This is the part of the mix that makes OS X a success - some OS X users I know were not even aware there was a command line on their system until I showed them. Now, that's how a modern GUI OS should be designed. If there is a Linux distro to match this please let me know, but I think I'll end up buying a PB when I'll save enough money to do it.
And in the meantime Microsoft has improved a lot. XP is stable, easy to use and I'm yet to have a virus infection or anything after three years of having it on my PC (which is connected to the net 24/7 on a public address, BTW). Also Office has improved a lot in terms of stability and reliability. I remember using Office 97 which without SR-1 crashed a lot and we had lots of problems with it. Office 2003 I use now is rock stable. This is not exciting, this is nothing new but maybe in these days of computing becoming commonplace (and programming & sysadmining becoming a blue-collar commodity job) what is needed is not excitement but solid, predictable functioning? Can you think of a killer feature now missing from, say, Word that would excite the masses?
So, maybe Microsoft is just maturing with the market. They were a geeky sweatshop when computing was the new, exciting field. They are a solid, respectable, middle-aged corporation now. So, I don't think we will see them sinking anytime soon.
When predicting a quick demise for Microsoft, people might be forgetting about the corporate environments that run Windows. There is a great deal of money in this market, and the revenue from these environments will not extinguish very quickly. Most companies in the world use the Microsoft operating systems and office productivity applications. There are very few that have gone MS-free, and those are easily overshadowed by the number of companies that run only Microsoft servers and clients. Many of the largest companies in the world also invest in developing solutions based on this platform, such as Sharepoint portals, Infopath forms, sales automation applications in Outlook and on and on. A lot of companies make at least a few investments in simple Access database applications or SQL servers. Even if most of these companies decide to ditch Microsoft, how long do you think it will take for these companies to migrate their workflow applications? How much money do you think it would cost to roll out a Linux OS to all their clients? How much would it cost in retraining to teach someone how to recreate their Sharepoint portal? How many companies are prepared to spend the huge sums of money and time it would cost? Even if investments are justified, somehow I sense that this would not happen quickly. Its much more likely that slow movement would happen, which may be the best news of all for Microsoft. Because in the next few years, Longhorn and its associated technologies may make the OS arguments moot by outpacing the Linux development effort and providing features that simply won't be offered in the Linux available when Longhorn ships. In my opinion, huge teams of very good and highly paid developers (MS) will come up with better feature lists than smaller teams of passionate expert developers that are writing code in their spare time for no money (OSS). True, the code may be better thought out and more elegant with OSS (heavy peer review), but for office process automation, features are what drives the business to buy the software solution, not elegant code. If the features of Longhorn are persuasive to the enterprise customers of Microsoft (again, far and away, most companies in the world use Windows), quite the opposite of what the author proposes will happen. Another round of enterprise purchases of Microsoft servers and record profits continue. If not, what the author proposes will not happen either, until most companies have completed a long and painful migration of business process and technology.
There are def some valid points in what is being said there. I see the biggest issue going against microsoft is interoperability. Exchange is a great product but to really use any of its features you have to use outlook. The License fees for any business are often referred to as extorsion by many small business owners. Open Source Alternatives are few and far between and there are good efforts in that direction BUT its difficult. I am about 95% confident that microsofts "rot" will not be really show its head in any big form for at least another 5-10 years maybe less if there are any bad business choices. However Microsoft is diversifying more and more so that software is not theier only business.
Got a question about UNIX ask it here : Unix/xBSD Forum
I'll apply the so what argument to the billions spent on research. What has Microsoft developed? Just because R&D is funded doesn't mean that anything useful comes out. I've heard of the products of Apple R&D (this comes as a product: itunes, ipod etc) but what about MS? R&D spent to develop a copy of someone else's already sucessful product? Another search engine? Another music site? Another game plateform? Articles come out about the new innovative chip set that Playstation will use. We crack open an XBOX and its based on off theshelf technology. That's not research and development that's reverse engineer and copy. So MS spends billions on R&D and gets what? Someone else's product done less well? It takes a long time to do fundamental, innovative research and development. MS has some flaws that prevent it from ever doing good R&D leading to useful products: the customer is always last and monopoly is always the goal. That's why when MS comes out with a product, it aint the best thing ever in the customer's eyes. they don't think it has to be, because they intend on gaining the monopoly and forcing you to buy their stuff.
Creative Spelling Copyright (2002). May use without Persimmons
Microsoft has enough cash to pay 50,000 employees $100,000/year for the next 10 years even if they don't bring in another dime in revenue.
Do the math...
Do you have ESP?
Sure, MS is still making a profit but they are slipping on the slope they had no problem climbing before. Microsoft has its grubby little hands in a lot of ventures. Many of those are wildly unsuccessful. MSN and Xbox have been great ways for Microsoft to lose money. Neither of those divisions has shown a profit. The deep pockets of the other divisions can fund them for some time but for how long?
Microsofts search engine in years past would have had the tech journalists creaming in their jeans but most see it for what it actually is, a rip off of Google with more ads. What has really changed over these last few years is that journalists are not giving Microsoft a "pass" on any product they release just because it comes from redmond. They are treating MS as just another software company and this is long overdue.
I do see harder days ahead for MS. They company will never disappear but they do major problems that are not being addressed.
I think this pretty much sums up Microsofts problems. A friend of mine was a die hard PC user. He was always giving me a bad time for using Macs. I use both platforms but because I had a Mac he was always harping on that. He would bring up the tired old facts, no software.....expensive...etc. I always told him that if he ever tried one for more than a week he would never touch a PC again. He would laugh and say "Yeah right". He surprised me two years ago by getting a Mac, for his kids. Problem was his kids never got it. After about a week he stopped using his PC.
He had all the software he used on the PC...better versions in fact and he did not spend time keeping Window running and healthy. Even he started laughing when he heard another Windows virus was tramping around causing damage. He just ordered his second Mac. A brand new 15 inch powerbook and he is a very happy camper. He will never go back.
Re: the edu/career svcs market, consider:
One of the tools I'm best known for is Folding Table Theory of Start-Ups. It says that when you walk into a new entrepreneurial company and you see a nice lobby and expensive office furniture, that company has its priorities screwed up -- either it is more interested in comfort than success or it is over-capitalized and lazy -- and it will never make it.
This "theory" has virtually no real predictive value. I've seen plenty of glitzy start-ups that succeeded. I've also seen plenty of dirt-poor, cheap-arse start-ups that failed. Classic example of glitzy start-up that prospered: Google. It *never* spared any expense in super-expensive office furniture or expensive employee toys and perks.
Da Blog
No, that is called 'begging the question'.
Great minds think alike; fools seldom differ.