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Microsoft Sees IBM as Biggest Threat
Anonycat writes "Bill Gates gave an interview at the Consumer Electronics Show, claiming that IBM is the rival company Microsoft has their sights set on. From the article: 'People tend to get over focused on one of our competitors ... We've always seen that ... I'm never going to change the press' view
about what the cool company to write about is. That's Google number 1 and
Apple number 2 ... [IBM has] four times the employees that I have,
way more revenues than I have.'"
Is there any reason to think that there's a correlation between who he says is the biggest threat and who he thinks is the biggest threat? I can see a lot of reasons to lie about this.
After you sell the big iron to run those enterprise apps, all those consultants are used to do that seemless integration and support. And those are billable long after the box is paid for. I suspect a significant number of IBM employees and revenues come from that. Is MS planning on becoming a service organization or selling big iron?
And people wonder why we have a problem with happiness. This sort of envious greed is the main problem with Microsoft, and it looks like it goes all the way to the top.
Don't think of it as a flame---it's more like an argument that does 3d6 fire damage
"The biggest company in the computer industry by far is IBM. They have the four times the employees that I have, way more revenues than I have. IBM has always been our biggest competitor. The press just doesn't like to write about IBM."
I find it fascinating how he uses the term "I" when referring to the company he founded. I wonder how much of his motivation to succeed is pure ego driven. I always found it interesting how all these iconic leaders in silicon valley all know each other, and have all had personal interactions going back 20 years. The old question of whether or not bill and steve really dislike each other, and if that dislike stems from some initial interaction at a computer show in SF back in the 70's.
Strange indeed.
Microsoft never had to work hard for the money. Everyone jumped on the Windows/Office bandwagon. Not necessarily the best product, but everyone else was doing it, like a bunch of lemmings.
Look at Windows. How it is set up, how you install software, what safeguards there are. If you ever had worked on a mainframe computer and knew the kernel inside out, and knew good shop practices, you would be shocked and appalled that businesses have so readily adopted this ridiculous platfrom which is effectively a black box. All the security flaws and exploits are just a symptom of what an absurd aggregate the Kernel/OS/UserInterface/Environment has become. Perhaps Vista will be better, but I don't hold my breath.
The core problem at Microsoft is the market and the money all came easily. Where giants Unisys, IBM, DEC et al used to slug it out week to week for market share, support contracts, etc. some outfit just threw the stuff on store shelves and everyone bought it. Do you think they learned anything this way? There may be some very bright people up there in Redmond, but to constantly expect they can just waltz into new markets and own them or expect a T. Rex like IBM to just whither away is naive at best.
Is there such a thing as a Microsoft Fellow?
A feeling of having made the same mistake before: Deja Foobar
Speaking of Words, you notice the inverse relationship? Word, Excel, Windows... MS turns dictionary words into trademarks, while their competators do the opposite.
And of course Microsoft's enemies will be talked about - that's what Microsoft does, they fight. They move into an industry with established technology companies with the expressed purpose of taking it over by dumping wads of development cash into it and making their product tightly interoperable with the rest of the MS family. Microsoft moving into a new niche is a full-fledge onslaught to everyone else in that niche. No wonder they're famous for their enemies.
Why are MS's policies and strategies always based around "enemy lists" rather than actual products or services?
If you look at the totality of what Microsoft does, Gates is surely right. IBM is the 800lb gorilla of services (as distinct from software though IBM is huge in that too). Despite his claims about Microsoft just being a lil' old software house now and in future, my guess is that Gates sees services as the big one in the coming years. Yes, Google can hurt Microsoft a bit on the consumer desktop, and so can Apple and others, but the big money is in enterprise business.
If this is correct, then it follows that Microsoft may well have concluded that their cosy world of pay-for software has peaked and will now start to decline no matter what they do, so they are preparing to reposition themselves. Admittedly the great man's sour tone and strange diction don't help.
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Microsoft's security hype is not solving the problem with real corporate down time due to the latest virus/worm/trojan. I think nobody seriously beleives Microsoft can solve their security issues, but so far they've managed to convince customers that this is the way computers are, that there are no better options.
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Microsoft never had to work hard for the money. Everyone jumped on the Windows/Office bandwagon.
That's just simply not true. Microsoft has worked it ass off to convince the public it needs what its selling. That's been particularly difficult as Microsoft products have traditionally not been very innovative. So Microsoft has taken the tack of marketing the heck out of their product, and crushing the competition in the process.
Take the matter of the VisiOn GUI. Microsoft had nothing to compete. Zip, Zilch, Nada. So they see this VisiOn and realize that they'll soon be irrelevant. To counter this threat, Microsoft annouces that they will be releasing a product known as "Windows" Real Soon Now(TM). Everyone then puts off purchasing VisiOn while Microsoft goes and makes something up. Microsoft is late shipping (since they didn't actually have a product), and ends up bleeding Visi-Corp out of the market. Microsoft then delivers a steaming pile of software known as "Windows" which gains absolutely no foothold on the industry up until the point where it copies the Macintosh. Poorly.
Windows was then scheduled for demolition right up to the point where a couple of smart guys saved the company by getting Windows to run in 32 bit mode. Microsoft throws their marketing muscle behind this new version of "Windows", and the rest is history.
So in summary, Microsoft may be a lot of things. But lazy isn't one of them. Always give the devil his due, or you may get complacent.
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That triple threat consists of Google for Internet, Linux for servers and Apple for Desktops and Home Entertainment.
Look at how diversified IBM is... They survive disruptive technologies and paradigm switches. Switches like going from mainframe to client/server, windows to linux, even token ring to ethernet.
Also they bring in revenue from many many areas... when mainframes were threatened... they looked to PCs, as400, rs6000. How did they look to resurrect mainframes and as400? Introduce linux into their respective LPARs.
When customers talk about moving from one platform (windows) to the next (linux).. IBM says "no problem, use our hardware, and leverage our services." Getting rid of big iron unix boxes to go with hundreds of tiny 1U servers "how about using our blades..." Getting rid of your old SSA storage? "We'll help put in fibre channel switches..."
And don't forget about their microelectronics division... it's not just powerPC, but many companies send their designs to IBM for fabrication of custom ASICs.
IBM has always been a 'soup to nuts' company, MSFT on the other hand... is having trouble diversifying..
Their core business is windows and MSFT applications (office, SQL), but they are having trouble diversifying... They've gone to advertising (MSN), and home entertainment (Xbox), but they haven't had to survive losing one of their primary technologies (remember: IBM used to live off of mainframes). They do have services, and certifications, but I would guess those are pennies compared to OS and applications.
MSFT needs to diversify (yet we blame Google for not diversifying)...
Google and MS are software companies. All they need is a few programmers to write some software, and they can duplicate that software and minimal cost and sell it millions of times over.
IBM is a consulting, maintenance, and support business. If you're hired to consult for someone, you actually have to send people there. Problem is, people can only be at one place, or do one thing at a time. Unlike software, you can't copy or clone or consultants, or have them in two places at once. If you get a new support contract, you have to hire additional support staff. If you get a new maintenance contract, you have to hire additional maintainers.
IBM sells people's labor. If they sell additional product, they have to hire addtional people - the cost is almost directly proportional.
Google and MS sell software. If they sell more software, they just print up a few more copies, or purchase additional bandwidth for downloads. The additional costs are minimal.
Computers are useless. They can only give you answers.
-- Pablo Picasso
So Bill identifying IBM as his chief competitor is really a part of a smoke and mirrors game? Yeah, that's consistent with his past behavior.
So who IS Microsoft's most significant competitor? The Apache group? They've been encroaching on Microsoft turf for years, and just seem unstoppable. The Firefox people? They've only recently made any kind of dent in Microsoft's market share, but it has been a pretty big dent, and it is still getting bigger. How about OpenOffice.org? I've not seen any figures about market share, but with big corporations and governments going the OOo route I'm guessing that has to be making one of MS's chief officers want to throw a chair.
Funny thing, all these competitors that have measurably reduced Microsoft's turf are FOSS.
Could it be that FOSS is Microsoft's chief competitor?
Could there be some reason why Bill wouldn't want people to look at that?
Microsoft aims for world domination, therefore they are a fierce competitor to every other company. -Google is a competitor because they want to play the targeted ads game -IBM is a competitor because MS wants to get into more serious enterprise sofware -Sony is a competitor because they want to get into the games console game -Firefox (although not a company) pisses them off because they want to dominate the web browser market although there are only limited benefits in actually domination that market (if i was MS I would stop wasting money developing IE and ship Firefox with Windows) - Apple is a competitor because of iTunes because MS also wants to sell music. -Linux and Apache (although not a company) is a competitor for the medium size company market and seem to be able to scalate lo very large companies much better than windows (and this is going to go on for a long time, because Vista is not going to run a top of the line mainframe) MS wants to fight every battle and take no hostages, every battle has a biggest competitor.
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You don't know Bill.
Bill is like the world's most competitive businessman. He doesn't just sit on his laurels and secure his market, he attacks every other market in sight. Now Microsoft wants to be the technology behind everything, cars, cell phones, PDAs, workstations, television, music, movies, medical devices, etc. If there's software and a processor doing some work somewhere then it is in a market Microsoft wants to move into. Why? Because it's there and therefore can be taken.
Bill already has everything anyone could ever want. Ask yourself, what drives some like that onward? I have an Ex-Brother-in-law who started on a shoe-string. Today he's a millionaire, but somewhere along the way to financial success he already had home, financial security, family, etc., but couldn't take a rest and delegate, he kept on driving. It cost him his wife, my sister, because she was fed up with his relentless drive for success over time at home with the family. Obsessive/Compulsive something, but Bill strikes me as nearly the same thing. He doesn't need the money, now he just drives the thing along because he likes to and if he's going to keep driving the business then it needs new directions to go.
A feeling of having made the same mistake before: Deja Foobar
I think most of you are failing to recognize that Google is competing against only a tiny sliver of Microsoft.
I would say that Microsoft isn't effectively competing with Google at all. MSN search is pretty much a joke that, as you said Microsoft doesn't even take seriously. Conversly Microsoft is only competing against a tiny sliver of IBM. Microsoft's main market is in two areas, desktop OS and Office Suite. Apple and Linux are the only desktop OS's out there to compete against Microsoft and Open Office is the only serious threat to the Office Suite. Microsoft doesn't have a prayer of competing against IBM in the server or consulting market. Gates is, as ususal, blowing smoke. This is typical Microsoft nonsense. They are running around chasing their tail with no real focus or idea where they are going.
Looks to me like right now their main competitor should be Sony and the Playstation 3. Microsoft has sunk so much money into the Xbox they should be doing everything possible to make sure it's a success, rather than spouting off about how they are going to compete with IBM.
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Like I said, they [Microsoft] are their own greatest threat. All the things you mentioned are now serious threats to them because of the way they have done business.
I couldn't agree more.
In my considered opinion, based on watching them since the days of MSDOS, Microsoft's management has never made the transition from thinking like a small scale entrepreneur to the deliberations that drive big business. That is a transition they should have made at least a decade ago. For it has been that long at least since Microsoft joined the ranks of major multinational corporations. Yet they take pride in not having properly diversified their holdings; they celebrate their inability to move billions of dollars of reserves from low yield liquidities into long term investments; they make stupid public remarks about being able to afford to be in contempt of court. They have at least one key officer whose foul-mouthed violent behavior would not be tolerated in high level management in any other corporation of comparable size.
Their strategies wrt XBox and software licensing agreements are the moral equivalent of kneecapping the competitor. They are certainly big enough now that as a corporation they should have risen above these behaviors.
I think the only hope for Microsoft's long term survival is to change its upper level management team. But of course that won't happen.
Actually, they bought Powerpoint too - from a company called Forethought, back in 1987.
It always strikes me whenever I read any post on the internet that relates in any way to Bill Gates of Micrsosoft, that they are always depicted as the quintessence of evil on earth. It even amazes me when i read comments like "The only real problem with Microsoft is that they have a dumb CEO". I mean, come on. How many other companies have you heard of, that went from being run in a small garage by a bunch of college droputs to being the number one Software Company in the world, whose founders were both in top ten list of Individual wealth before they were 50 years old, and did this in less than 20 years of operation. Excuse me, but if that could be accomplished by dumb people, america would be busting with multibillionaires. My point is, you can say whatever you want about the quality of their software or their business practices. But you cant deny, that Microsoft almost singlehandedly propelled the informatics business to the point where it is today (that is, in almost every minute, everyday of your life), and they managed to do this while at the sametime implementing a ridiculously succesful business model that allowed them to force their way to the top on every market that they have ventured in. If you consider BG and MCSFT your mortal enemies, you should at least be well informed, and recognize that no one gets to where they are by chance. Keep one thing in mind, we are talking business here, and businesses are measured only by their financial success. IBM has proved that it has the muscle to be measured with MCSFT in this field, and its up to GOOGLE to prove that theyre more than an overvalued bunch of new ideas with no real world value once the dust settles.