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Paul Graham Claims "Microsoft is Dead"
netbuzz writes "He doesn't mean dead as in six feet under, but rather that the software giant no longer instills the kind of fear — particularly among entrepreneurs — that it did back in the day when it was making road kill out of companies like Netscape. Microsoft obits have been around for almost as long as the company, but Graham's stature, style and devoted following are likely to make this one a classic."
While many large companies don't fear Microsoft as they used to, there are still multiple small ones who still have a fear of being swallowed whole or being beaten out of business. Microsoft, if nothing else, still has the power it needs in order to take another (smaller) companies ideas and launch them themselves, creating a hit and effectively driving their competition out of business.
Microsoft may yet win. They seem to be working for once in a coordinated way to dominate (truly, and not by default) the home market:
-Windows Vista with pretty good media center capabilities
-Windows Home Server
-XBOX 360
-Zune
-Windows Media player
-MSN Live
-Various subscription services like XBOX-Live, Zune marketplace
It's quite a line-up and it's becoming more and more integrated.
On the corporative side, while many people prefer usign Unix for certain applications, I dont see Microsoft losing it's overwhelming dominance anytime soon. And with SQL Server 2005, they might increase it in the long run.
To me this story is not different from a iPod killer story. Maybe with the exception that the iPod is one product and it could actually happen one day.
Linux violates 235 Microsoft patents.
I think that tells you a lot about Paul Graham's everyday environment. He's working with startups, he's trying to put together teams of the bright and innovative, and what he's finding is that most of these people are not using Microsoft software.
I suppose you have to allow for a bit of statistical bias there. Since Mr, Graham is (presumably) involved in selecting these people, it's entirely possible that a subconscious selection criteria might be "doesn't do windows" or something similar.
Even so, I think he's got a point. How much of that market share is down to corporations who bulk-order generic beige boxes based on buying guidelines that are fifteen to twenty years old? How much is down to private homes where someone wanted to "get a computer" without realising there was a choice, or where the major criteria was that it should be "the same as the one at work".
It wouldn't surprise me at all to find that the Microsoft market share among the up-and-coming wave of computer innovators is actually very slim. And if that is in fact the case, Microsoft should indeed be worried.
Don't let THEM immanentize the Eschaton!
Come on, 4% market share and you are surprised when a computer does not run OSX?
The last number I saw was that Macs now counted for 6% of new PC sales. 6% is huge from a historical perspective, especially given the bulk of new PC purchases are businesses that usually lag the trend.
And I think his point was just that among innovators and edge pushers, Windows is rare -- would anyone really argue with that? While I don't think OS X owns that arena (Linux obviously being another major choice), I don't think you're going to find many installs of Vista.
While I disagree with some of Paul's points, ultimately I think he is absolutely right -- Microsoft's initiatives over the past couple of years have almost entirely been duds. No one really cares what Microsoft is doing, except when they know that it's going to be forced on them (Vista), which is remarkably different than how it has historically been. What do you know -- I just wrote about this.
The world is getting to be a much better place when Microsoft is freed to compete on actual merit, and not just one division hobbling another based upon the belief that they were their only real competition.
IBM has quite a bit of money too, yet they've been dead on the desktop for over a decade.
The only mistake I think he made was that more "average people" are voting with their dollars than in the late 80s and early 90s. They have to be coaxed out of their "comfort zone", which can happen, but would be difficult.
I think phase one is that MS loses the technical people, which has pretty much happened (all young technical people I know have either switched or feel "guilty" about not switching, it's the old farts that are hanging on).
It's just that bringing that message to the people is going to be slow... But I believe that it will get there. Especially since I don't believe MS can deliver anymore, unless they do something drastic.
As a side note, I would sum up this essay as, MS used to care only about competition. Now they think they've won forever, so they've stopped competing, just when they needed to (like ignoring IE for 5 years).
They can always wake up, decide to toss out the old OS code, or run it in virtual mode, then build a brand new OS from scratch. Maybe this time, they can let Cutler run wild without without the need for backward-compatibility and make something worth looking at? As Vista is quickly becoming this decade's Windows M.E, Microsoft is going to have to consider taking the big leap.
In the mean time, they can still just sue the crap out of any entreprenuer, right or wrong, because there are few with that kind of cash and time on their hands. Most if not all would just settle, giving Microsoft access to their inventions anyway.
--- and the chances are good some garbled version of it will make it to Slashdot.
But you have to be realistic: at any given time there are only a half dozen or so versions of the Mac on the market, compared to the dozens - perhaps hundreds of variants - on the generic Wintel PC. The office workhorse. The PC on the shop floor. The PC at Point-of-Sale. The PC in the military. The PC in the game room...
You can multiply these examples almost endlessly. Market share is what drove Apple to the x86 platform. To NVIDIA and ATI. To Boot Camp. When you need to demonstrate hardware and software compatibility with Windows to remain competitive there is no longer any question about who is in the driver's seat.
They remind me of Sony now, one foot tripping the other up (look at Zune and DRM, Vista and DRM).
You see, eventually these folks, flush with their startup money have to evolve into businesses with CUSTOMERS. This is the moment when all their foresight, vision and knowledge gets kicked in the ass by the reality of their target audience, who whether they like it or not, are generally using Windows in one form or another. I see this all the time. Awesome ideas, cool marketing strategies, beaten senseless by a a few basic questions: "This is cool, but will it work with Exchange? No? Damn, we cant switch. Sorry." "You mean we cant SSO with this?" Or "Okay, but can I control this through GPOs or can we LDAP it with Active Directory? No? Damn. Sorry, we cant switch."
No, Microsoft is not doing anything intreguing, but I think that for the moment(though not too much longer) they have enough entrenchment to fight off all but the most innovative of ideas. Microsoft can still zap Apple any time they want by stopping MS Office development on the MAC. This will change too, but if your business docs are in nothing but Word and Excel, you are not going anywhere soon.
One of the reasons for the dotcom bust was that too many startups never got around to the thought of what their customers WANTED, thinking that they could just convince them that their idea was so cool, so sweet, that they would just jump on it, without business considerations being a factor.
Its just like parental pride in a newborn baby. No matter what it looks like, they think the child is beautiful, when in reality, it could be a hideous creature and they would never know it.
If you are an Entreprenuer who believes that they have a target market large enough to pay back their VC without some form of Windows compatibility, they are headed for a fall, just like all the others before them. You dont find a Google every day of the week.
I found a source. Too bad for the GP it completely debunks his "theory".
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In short, Microsoft beat out Johnson & Johnson this year to take the top spot in the annual "reputation poll". From the article:
Microsoft toppled Johnson & Johnson and its baby-products business from its seven-year position as the company with the best corporate reputation, according to an annual poll by Harris Interactive and The Wall Street Journal.
Gates' reputation as a corporate leader contributed to an improvement in the company's emotional appeal, the Journal reported. While some respondents faulted Microsoft for bullying its competitors and unfairly monopolizing the software business, the Journal said, that criticism is less "biting and pervasive" than it used to be.
Harris surveyed 7,886 Americans online or by telephone last summer and asked them to name two companies they think have the best reputations, and two that have the worst, the paper said.
It collected the 60 companies mentioned most, and had them rated online by 22,480 Americans, giving them a score and ranking. They were rated on 20 attributes in six categories, including financial performance, social responsibility, emotional appeal and workplace environment, the paper said.
I kind of agree though. The market share is strange or regionally skewed. I work for startups in SF (as a contractor among other business) there's no fewer than 15 startups on one of my client's floors alone so a quick walkabout is revealing. I've seen macs on developer desks (not just designers) more and more. Linux is still on many admin and coder desks, and (at least) one startup has nothing but macs. Most of the new geeks meeting in the various local cafes and coffee-holes are also hauling around Apple logos.
Perhaps this isn't the case in flyover country, but something is up in Apple's favor around here. And btw - before I became an Apple fanboi again, I wrote a website / protoblog test-case based on "John Dvorak's school of getting hitcounts" called "the apple doomsday clock". Aside from using every OS under the sun (even IRIX) professionally, I'd always considered myself a platform agnostic. I went back to Apple once the varient of my fave OS came out - NeXTstep. I keep thinking I might put Vista on dual-boot or parallels at some point, but I just can't find the need (I keep my gaming on consoles largely, as well as my collection of fridge-sized of 80s gamecabs and that's the only reason I can see Windows being relevant at this point. I'm also addicted to RTCW - which you can run on a C64 for all intensive purposes.).
Computing Intensive stuff like video editing, games, etc, are going to remain on your computer.
But word processing? I doubted it myself, but I really like Google Docs and Spreadsheets - it allows me to work on certain things on any computers without dragging files around - and I can collaborated on a word document or spreadsheet with a ton of people without a ton of file swapping happening - I just have to invite who I want to look or give them read/write access - and I can see their revisions easily.
That is the unhyped, 0 buzzword reason I like it.
If you say "using a Web interface" instead of "putting applications on the Web" then there is a great advantage, at least for corporate applications. And it was in great part Microsoft who made it that way.
A typical example is a project I did a couple of years ago. There was an application in Access, about 2000 lines of code, that was a nightmare to maintain. Every time one of the 100+ users changed some configuration in his computer, the support people had to figure why that application had stopped working. I was given that application with detailed instructions: "fix this shit".
So I rewrote it, to a PHP application in a Linux server running Apache and a Postgres database. People now use it in several different browsers, with no problem at all. You can even tweak PHP to send Excel spreadsheets, by making Internet Exploder believe an HTML table is a spreadsheet and run Excel to open it.
You are right that CPU-heavy applications like video editing will remain at the desktop computer, but I see a definitive trend for most enterprise applications to migrate to Web-centric applications.
FTFA, and yes an instant classic:
All the computer people use Macs or Linux now. Windows is for grandmas, like Macs used to be in the 90s. So not only does the desktop no longer matter, no one who cares about computers uses Microsoft's anyway.
Slap, how truth stings. It's been over for a while, but people don't realize it because M$ spends about a billion dollars a month telling the world they are number one. Even grandmas are seeing through it.
DMCA, Hollings, Palladium. What might have sounded like paranoia is now common sense.
That little microcosm pretty much defines the limits of the industries that evolved around the commercial computer-on-a-chip.
Thirty years experience in programming for the micro computer.
Thirty years experience in buying, stealing, licensing or otherwise acquiring other companies' programs and adding hack after hack to it to "increase" features and "fix" bugs.
That is probably how it should read. MS didnt write anything they currently sell. They acquired it and revised it and added stuff to it. There is a very very long list of all of MS' acquisitions someplace online listing them all - including every part of Office, the entire graphics engine (including DirectX), IE, the Windows GUI, The WinXP theme changes, DOS, Win16, IIS, Exchange, and on and on. Acquired and added to by MS.
Yeah, maybe that qualifies as programming... but to me, the programmer is the person who wrote the apps to begin with... the work MS did is called modifying - which is done by programmers as well... but the way you have it worded makes it sound like MS actually programmed the stuff they sell.
StarTrekPhase2 - The Five Year Mission Continues!
.NET isn't that popular outside of the business server space. .NET was originally supposed to replace Win32 and be the new paradigm for Windows development. Now that we have Vista, all I have to say to that is "Chyea!"
"Sufferin' succotash."
The exact number is subject to dispute, but here's a pointer to the future: A lot of the people I know are thinking about or have their mind set on buying a Mac as their next computer. Nobody I know is excited about buying Vista.
Also, that 4% number you are quoting is PPC Macs only - that company lists Intel Macs as a different category, and lists them at 2%, with a a monthly growth of about 0.2% steady for the past year. Oh yeah, and there's a poll on their website about what's the best browser. Safari is 2nd (after Firefox) with 16%. Given that Safari is only available on the Mac...
Well, don't trust any statistics you haven't faked yourself, as the saying goes.
Assorted stuff I do sometimes: Lemuria.org
Microsoft is killing Microsoft. They decided that they owned the developers and then they tried to milk them. It was only a matter of time that those who brought home the bread and butter would begin to let go and go somewhere else. It worked that way for Apple before them.
I bought an Apple II and upgraded the 48k memory to 64k way back in the stone age of computers. Then I decided to do some serious business programming and found that Apple owned programmers. They said if you want the chore done, hire Claris Works. Well I wasn't rich enough for them so I found a machine (Microsoft) OS that I could get data on. That by the way was a difference produced by an Industrial Spy at IBM. When the PC came out the earliest design was stolen by a Japanese spy who had clones on the market ahead of the release. This caused the data to be available that made programmers love getting into MS machines and their OS. It closed the door on the "Apple Model." Now MS wants to own the programmers who make their product live.
Only a few years ago, I noted that I could pay a horrid price for Visual Studio because I was an American but had I lived in China or India, MS had versions for sale at less than 1/10th the US price. Often they distributed in their development centers for free. This made me pay for my competition. That is a business model doomed to die. If I pay the price I pay for the end of my business. Figure this one out.
Never Politically Correct ~ I prefer the facts If you don't like what I say, get a life, or comment yourself.
Uh huh...
That is how an entrepreneur thinks.
What is most important to Microsoft when making acquisition decisions? People are the most important factor in any acquisition. Microsoft looks for talented engineering teams with vision and passion and experienced management teams. Second is technology and IP that can add value to an existing Microsoft product. Third is the opportunity to acquire stand alone products for existing customers. Examples include Visio, Hotmail, and Vermeer. Another, more rare, decision point is the opportunity to enter whole new markets. Great Plains and PlaceWare are excellent examples.
How does Microsoft decide to acquire rather than build internally? This is the toughest question in any acquisition discussion. Microsoft has thousands of very talented software engineers that can build just about anything. How can you justify paying hundreds of millions or even billions for something a team of 30 engineers could build in a year or two. That translates to about $12M of development cost versus a huge acquisition cost. Technology is not the issue here. It is all about marketing channels, sales expertise, and market leadership in segments where Microsoft is not strong.
It comes down to this; if the company in question has a product that is squarely in the domain of an existing Microsoft product than the valuation is a small premium over the internal development cost. If the company has market leadership in a new product space or market segment than the valuation goes up significantly.
Entrepreneurs should remember this. The "barriers to entry" are most often market position, not technical brilliance. I have heard start-ups say "we have a two year lead on our closest competitor". In fact, I have said it myself at previous start-ups. I was wrong. Most technologies can be replicated by a talented engineering group within a year or less. Many times a similar technology can be licensed immediately and a new product shipped within months.
Many start-ups have failed by focusing too much on their technology and not enough on the value they bring to customers and the channels they use to service the customer. Many times the early innovator fizzles, and a "fast follower" comes in and makes all the money. "Microsoft will acquire my company"
The decline began when the US government won the monopoly trial. Regardless of how they screwed up the sentencing, it was at that point that everyone could sue them for screwing up the market, and VCs could actually invest in a competitor with some hope of actually recovering their investment.
Aah, change is good. -- Rafiki
Yeah, but it ain't easy. -- Simba