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Microsoft Fights the Flab as it Turns 30

Alain Williams writes "This review of Microsoft, as it enters middle age, looks at it's problems in maintaining growth." Discusses the recent Kai-Fu Lee/Google debacle, as well as things like Apple's iPod.

21 of 214 comments (clear)

  1. Saturated market? by Transcendent · · Score: 5, Insightful

    How can microsoft continue to grow with it's current market share? Granted it still has competition, but that's not going to change much.

    Tons of people use windows, the people that don't aren't going to switch any time soon. Most people (in the US at least) have computers (and probably running windows)... so the only place I can see microsoft going is into a new market section, or just down.

    With embedded media centers not taking off that fast, I'm assuming the latter will most likely happen.

    1. Re:Saturated market? by TooMuchEspressoGuy · · Score: 2, Insightful

      "How can microsoft continue to grow with it's current market share?" I don't know; maybe... actually concentrate on releasing quality, bug-free products that people want to buy?

      --
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    2. Re:Saturated market? by tsa · · Score: 2, Insightful

      No, why should they? They are now in the phase where they have to cater the replacement market. The people that buy their products are already used to their quality and don't expect more. Besides, most people don't even know that there are more software manufacturers than MS. How do you think they get away with the new look and feel of Vista that they so obviously (to us) ripped from OSX? Because 90% of their customers never see a Mac end will marvel at the new eye-candy and the 'new and innovative' features this new OS has to offer.

      --

      -- Cheers!

    3. Re:Saturated market? by kamapuaa · · Score: 3, Insightful
      How is this different than in 1992, when basically 100% of the OS market was MS, the vast majority of Word Processors and Database products were MS, and those products were MS's cash cows? They've still managed to grow since 1992, even if their expansions into new markets haven't been nearly as profitable as these core businesses.

      Who's to say they can't keep at it?

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  2. Surely if by ClosedSource · · Score: 1, Insightful

    Kai-Fu Lee and the iPod represent MS's biggest problems, they have nothing to worry about.

  3. What the fuck is this? by Anonymous Coward · · Score: 3, Insightful

    Microsoft getting fat isn't news, Microsoft being fined half its cash reserves, further restricted and split into 2 would be news, good news.

  4. Said that yesterday by RAMMS+EIN · · Score: 4, Insightful
    All that sounds like a comment I made yesterday (my definition of yesterday, which is as good as any other in a world with different timezones, is "before I slept"). The relevant text:


    I seriously think that Microsoft is currently at or over their peak. Their flagship called Windows has made it to the ocean called 'Internet', but is found not to be seaworthy. Malware is penetrating it at an alarming rate, and it's only a matter of time before it will sink. It remains to be seen if their next OS will be any better. At the same time, their Office software has about reached the point where no new features can be important enough to attract many new customers, and since they have pretty much the whole market, they can only go down from here.

    In both markets, they are receiving competition from opponents that they can't kill. Open source projects just won't die while there are still people using them. Right now, open source is still all potential and no real growth in the market that Microsoft is in. However, with cross-platform products like Firefox and OpenOffice.org slowly creeping in, it is only a matter of time until the benefits of jumping ship from Windows to Linux overcome the resistance, and then the self-sustaining system of platform lock-in will come crashing down.

    Whether or not Microsoft actually loses most of their market share, the truth is that they will be forced to innovate and forced to compete, both of which eat into their profits. The days of them being a virtual monopoly are numbered.
    --
    Please correct me if I got my facts wrong.
  5. It will still be around by Brundylop · · Score: 5, Insightful

    Even if Microsoft has slowed down, I'd be very suprised if they all of a sudden went belly-up.

    The increase of competition is a good thing, as companies have to make their products better than their competitors, and sometimes selling them at a cheaper price.

    I just wonder how many small companies with great ideas were too intimidated by Microsoft to put those ideas into action (a certain Simpsons episode comes to mind, no?)

  6. Symptom of FUCKED up investing climate by Monkelectric · · Score: 4, Insightful
    People are worried about the growth of MS, which, were it to never grow again is still a company which makes a BILLION a month? By and standard thats still a HELL of a company.

    Or are people worried because they bought a stock which was far overvalued due to fervor and hype which was known to everyone at the time to be unstable, unsustainable, and a bad risk?

    --

    Religion is a gateway psychosis. -- Dave Foley

    1. Re:Symptom of FUCKED up investing climate by msaavedra · · Score: 2, Insightful
      These are called dividends, and they're nice...but dividends are a longer term investment, so they're unattractive to a lot of people.

      The big problem with dividends is that you are taxed on them immediately. Essentially, with dividends the government skims a percentage off the top every year, whereas if the corporation keeps the money and reinvests it to encourage growth, you should end up seeing that money returned to you in the form of higher stock prices, while avoiding the tax hit until you actually sell your stock. Due to the magic of compounding returns, you make a whole lot more money if you defer the taxes until the end rather than pay them steadily every year. So dividends are bad not only for all those moronic get-rich-quick day traders, but also for canny long-term investors. Indeed, it's this sort of strategy that made Warren Buffett, the quintessential long-term investor, into a very wealthy man.

      The problems you describe are very real, though, and I think we'd be better off as a society if we got rid of taxation of dividends altogether. Of course, there are already some ways to reinvest dividends tax-free, which is good, but usually you are pretty limited in the amount of money you can put into such programs. Also, Pres. Bush managed to pass some big reductions in dividend tax rates, which IMHO is one of the few good things he's done. I suspect that Bush meant this as a favor to the "haves and have-mores" (his own phrase) that make up his base, but it really is good for society as a whole if we can discourage that growth-at-any-cost mentality in corporations by making dividends more attractive to investors.

      --
      "Any fool can make a rule, and any fool will mind it."
      --Henry David Thoreau
  7. ... but that thinking makes it so by the+bluebrain · · Score: 4, Insightful

    "Apple's iPod" is only a "debacle" for Microsoft beacuse they decided to make it one. If they concentrated on making good software that plays well with other children, rather than defining each actual innovation in the wider marketplace as a threat to their core competencies - or rather, redefining their core competencies to include any actual innovation as it turns up in the wider marketplace - they might be a "mature" company in two senses of the word.

    --
    yes, we have no bananas
  8. Re:F**K OFF by Ucklak · · Score: 5, Insightful

    When you hit 38 and realize that 18 year olds consider you old, you might retract that comment.

    What's even worse are the 14 year olds that consider you really old.

    But yeah, thirty is not middle aged.

    --
    if you steal from one source, that is plagiarism, if you steal from many, well, that's just research.
  9. Organizational/software bloat by RradRegor · · Score: 5, Insightful
    I've noticed in my time on this planet that aging organizations and software both show an unavoidable tendancy to bloat over time until they can no longer function and must be replaced.

    I'm not just harping on one company here, I'm thinking organizations in general. Just as individuals have a natural birth, aging, and death cycle, the same seems to hold true with other phenomena. Organizations become victims of their own success. They get larger and more unwieldy, and the presence of excess resources seems to create its own economy of waste. Internal empires form. Departments carve up the pie, and defend turf. As waste increases, the survival of the organization tends to trump whatever purpose it originally formed to serve. With hundreds or thousands of individuals depending on the status quo, or at least the continued existence of the organization, there is a convergence that takes place that makes one soul-less organization or government look much like the others after a while.

    Software bloat we all know about. Features get added by divergent interests who don't fully understand the limits of the paradigm, until the structure starts to sag and/or crumble under the weight. Loose ends and bugs multiply and begin to take on a life of their own, like cancer cells multiplying out of control.

    Sometimes organizations or programs can be "born again" and rise from their own ashes in a completely different form. But sooner or later, some kind of major destruction is inevitable, and maybe necessary.

  10. Re:F**K OFF by tsa · · Score: 2, Insightful

    Yeah that really sucks. But also the other way round: I find time and time again that I'm 37 but I don't feel that age. This is a problem sometimes when dealing with younger people.

    --

    -- Cheers!

  11. Re:F**K OFF by exp(pi*sqrt(163)) · · Score: 4, Insightful

    Does anyone care what a 14 year old thinks?

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    Doesn't it make you feel good to know that our freedoms are protected by politicans, lawyers and journalists.
  12. Re:Yes, but what about Google by yagu · · Score: 2, Insightful

    What about Google, though? It seems they are showing many of the traits that made Microsoft so strong. They're relatively new, innovative, providing useful products to the masses for cheap, and attracting talented people by good working conditions (including high salaries).

    The same can be said about many new companies. The fact any new company becomes strong and offers products shouldn't make them fodder for comparisons to Microsoft. The differences in starting circumstances are striking. Most notably, in my opinion, is Microsoft was aggressive and arrogant from the very beginning. This was probably easy for them from their leader, himself an arrogant spoiled millionaire brat who dropped out of college, drove Daddy's Porsche cross country gathering speeding tickets while thumbing his nose at anyone who got in his way or disagreed with him. (Was he a genius?, a great business man? Maybe, but let's not think the beginnings of Microsoft and Google are really similar at all.)

    As for vendor lockin with Google. I suppose it's a possibility, but their business model isn't based on selling products to consumers. It's based on advertisers and those advertiser's continued faith in Google's excellent consumer services. A 180 degree reversal of that bent by Google would greatly upset their user community and likely create a huge ding in their relationships with their true customers, the advertisers. Not likey, in my opinion.

    And finally, from your post: I remember the days when Bill Gates was every nerd's idol. I don't, and I was around and working in IT back then already. Bill Gates has long been reviled by many for his arrogance and disdain for the rest of the world. Yeah, there were nerds and geeks who adored him, but every as a quantifier is a stretch. The guy was an asshole from day one.

  13. To MSFT is like GM by HangingChad · · Score: 5, Insightful
    Back in the day GM ruled the automotive industry. In the 70's and 80's US car companies started turning out junk. After all, what was your alternative back then? You could rebel and buy a Ford or Chrysler, but they weren't any better than the GM's of the day.

    But that lack of quality plus the oil embargo encouraged consumers to try smaller, more fuel efficient foreign cars, specifically Japanese models.

    Consumers discovered that the reputation of Japanese cars being cheap and poorly made was not true. Not only did they get better gas mileage, but they were really reliable cars. My first import was a Toyota Tercel and the only things I put in that car over 100,000 miles were gas, oil, a set of tires and brake pads. Today you couldn't give me an American car, even though the imports are made here and most American cars are assembled elsewhere. Impressions last a long time.

    That's how I see MSFT. For years they were turning out crap and people are in the process of discovering that the alternatives are pretty good. I'm typing this on a Linux box. A few years ago I hadn't even heard of it. I'm never on the bleeding edge of technology and rarely even the leading edge. If I'm using Linux it's because it works. It works for me at home and, where appropriate, for my business customers.

    MSFT will still be around for a long time, but I believe the market will change to include more alternatives and those alternatives will have a following of their own. There are a lot of people walking around with a MSFT chip on their shoulder that they'll never forget.

    If it's one area MSFT has really fumbled it's inspiring customer loyalty. They're one of the few companies inspiring their customers to outright hostility. They've abused their market position by treating customers as a revenue stream. Most people will get tired of being porked after a while. We're there. MSFT traded short term quarterly gains for long term loyalty. That's what happens when bean counters run your company and Republicans run your country. And I believe people will remember a long time.

    --
    That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
  14. Re:Cut down the fat ( crappy management) by Overly+Critical+Guy · · Score: 5, Insightful

    If Google releases an online office suite, it's over for Microsoft. Imagine an office productivity suite that doesn't require installation, is always up-to-date, and is integrated with the 'net.

    --
    "Sufferin' succotash."
  15. Re:F**K OFF by nanowyatt · · Score: 2, Insightful

    On the up-side, eventually you'll grow up and stop measuring yourself against the standards of teenagers.

    --
    Intellectuals! Liberals! Peacemongers! IDIOTS!!!
  16. Re:F**K OFF - Care what a 14 year old thinks? by Maow · · Score: 2, Insightful
    Does anyone care what a 14 year old thinks?

    We all did once [for about 12 months]...

  17. Re:Time for the... by MPHellwig · · Score: 2, Insightful

    Microsoft is like oil (in more then one perspective). Sooner or later you have to shift to other resources. Just say that I believe it will be sooner then later. But if you still want to buy oil for your long term investment, be my guest.