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Motley Fool Writes Off Microsoft
The Vista disaster has caught Wall Street's attention before but I've never seen the popular press understand the issues like this argument in the Motley Fool. The opposing argument is a weak statement of faith, essentially "as it was in the beginning is now and forever shall be." "You don't need to watch the 'I'm a Mac, I'm a PC' commercials to see that Microsoft is taking a beating. You see it in the company's financials where its online unit, incredibly, is operating at a loss; overheating Xbox 360 consoles find the company taking a huge warranty hit for a system losing market share to the Wii; and the upgrade wave of its flagship operating system has been more of a ripple than a tsunami. That last point is important. This was supposed to be Microsoft's final feast, the major last hurrah for its Windows Vista operating entry and its Office 2007 suite of applications before the inevitable embrace of cheaper open source operating systems and Web-based apps... In fact, even Microsoft will tell you that its fortunes peaked several months ago."
MSFT shares are up 3% today after another strong rise yesterday, after announcing their financial results and outlook.
"Weak statement of faith", twitter? That's rich coming from someone whose faith in his own assertions is so weak that he chose to disable comments in his journal rather than make a real effort at refuting critics who post in it.
Here's hoping HD DVD's troubles means that they'll remove all the "secure path" BS from Windows 7. They only did it to placate Hollywood, and it's a major reason why Vista had developmental problems. (Note, they'd have had to do it too if they were supporting Blu-ray instead - the point though is that I'd like to see Microsoft throw a tantrum and remove a "feature" they should never have added in the first place.)
You are not alone. This is not normal. None of this is normal.
AP
Microsoft Tops Street in 2Q; PC Sales Up
Friday January 25, 9:45 am ET
By Jessica Mintz, AP Technology Writer
Microsoft Beats Street in 2nd Quarter; Vista, Office, Xbox Games Helped
SEATTLE (AP) -- Microsoft Corp. forecast a rosy 2008 -- despite broader economic worries -- after it blew by Wall Street's expectations for a second consecutive quarter.
"We will be impacted just like everybody else," if the U.S. falls into a recession, Chief Financial Officer Chris Liddell said Thursday. "But overall, we feel very optimistic about our second half."
Company officials touted rising sales in each of Microsoft's business divisions, a slate of important upcoming business-software launches and the growing contribution from sales in non-U.S. markets.
Microsoft raised its outlook Thursday for the rest of its fiscal year, which ends in June, matching Wall Street's forecast and sending shares up in after-hours trading.
The software maker's quarterly earnings jumped 79 percent to $4.71 billion, or 50 cents per share, from $2.63 billion, or 26 cents per share in the second quarter a year earlier. Quarterly revenue climbed 31 percent to $16.37 billion from $12.5 billion.
What part of Microsoft's record earnings yesterday did Slashdot seem to overlook? I think the joke is on us.
http://www.news.com/8301-13860_3-9857633-56.html?tag=newsmap
Hasta la Vista, Baby .....
Browsers shouldn't have a back button!! It's all about going forward...
'Mötley Crüe Writes Off Microsoft'
Gonna be a long day...
What is it now, steaming or frosty?
Seven Days with Ubuntu Unity
This is especially clear now that Windows 7 is on the horizon. And if MS can survive ME, it can survive anything.
While I can see this as a mark of the beginning of the end for Microsoft I really wouldn't write them off just yet. They still have a metric butt-ton of market share, and are still overall profitable. Should they manage to stop the hemorrhaging of cash with the XBox (Which I can easily foresee) and come up with a good reply to Vista (Like they did with Windows ME/Then Windows 2000), then I can see them rebounding quick.
However, I also see the general public becoming more and more sophisticated when it comes to things like Operating Systems and understanding that there are indeed options out there. And with knowledge of options will come people exercising those options.
In other words there's a up and down roller coaster ride ahead but this ride may be coming to a full and complete stop.
But people failed to beat a path to the PS/2; they waited, and used things like EISA until PCI came along and was roughly as good as Micro Channel. IBM finally learned that they didn't own the PC market anymore.
IBM's still around but isn't a colossus astride the computing industry. Microsoft has now discovered that the competition is "good enough" and the Microsoft name isn't enough to force people to follow along with whatever they say. Like IBM, MS isn't going away... but they'll be one option among many in a few years, not the single dominant giant.
PHEM - party like it's 1997-2003!
I thought Vista was an interim OS between XP and Windows 7?
If you haven't made a developer cry, you've wasted a day.
There is a corresponding Bull Argument that argues the Counterpoint - each with its own rebuttal of the other argument.
/.!
So much for Motley Fool writing off Microsoft. Typically - guess which article gets highlighted in
and WOOOSH! let the flame fest begin...
/. and I don't see many MS defenders around here much. Personally MS are not very relevant to me, I only use Linux at home, even my gf only uses Linux. And my firm seems in now pressing hurry to upgrade to Office07 or Vista.
except that this is
In a year it has been out I have used Vista only once, and it was a very annoying experience indeed - more to the point I do not know anybody who actually uses Vista. Maybe this is the beginning of MS's slide into irrelevance.
Of course, if Linux is the new boy around town we can expect virus writers to turn their attention to it big time and it to suffer the some of the same problems. I don't know what I prefer - insufferable bloat issues or raging dependency woes really.
But it's in the first article, not the second.
ZOMG, people are specifying XP instead of Vista! Sure, but they're still buying Microsoft. Apple is topping out its niche appeal, and corporations are run by lawyers who hate and fear Google Docs with a cold reptilian passion.
Wise up, nerds. Major purchasing decisions are not taken by people live with their parents in Wyoming. They are taken by grown ups who have mortgages and orthodentist bills to pay, and those people recommend, and will continue to recommend, Microsoft because nobody ever got sacked for doing so.
The upcoming recession may see a few smaller outfits switch to freeware in the hope of chiselling a few dollars off the budget, but that's probably a sign that they're doomed, and so wouldn't have been buying M$ one way or the other.
Still, I'm swimming against the tide of opinion here, if not of history, so feel free to get excited about the prospect of the Evil Empire toppling any day now. Let's compare notes in 5 years and we can spot where you went wrong.
If you were blocking sigs, you wouldn't have to read this.
Motley Fool is authoritative? I have seen better reasoning from crackheads.
Vista is not Micro Channel. Vista is Windows ME.
Notice a trend? It would seem that MS' me-too policy (Xbox, Zune, live search, etc.) over the last couple of years has been pretty hard on their cash reserves. I think if they can turn a profit on these things it will have been worth it because $60 billion of cash reserves sounds like too much.... but if that trend continues, we'll see MS in debt by the time the coming recession is over.
Gentlemen! You can't fight in here, this is the war room!
It's not about the money. Want to make more? Just run the printing presses faster. Money hasn't been reliable enough to be used as a measure of performance for nearly a decade now.
Really it's about influence, and that's what Microsoft are losing, have been for several years.
Deleted
"Stocks rose sharply for a third straight session Friday as investors cheered upbeat profit reports from big names like Microsoft Corp. and were reassured by word of a possible buyout of a trouble bond insurer."
and
"Microsoft's bright forecast and earnings that outpaced expectations lent strength to a notion emerging in recent days that perhaps Wall Street had been too pessimistic in its reading of the economy."
So the Fool can say what it likes - it's always a good story to bash M$, but the people who know and who put their money on the line reckon they're wrong. Hell, I wish I had "only" $20Bn in the bank
politicians are like babies' nappies: they should both be changed regularly and for the same reasons
Maybe Bill Gate's smartest move was knowing when to leave.
OK, I'm old enough to have been in this industry when IBM were as dominant as Microsoft are now. We didn't see them start to slide, either. We were only aware that IBM were falling when their decline was already well advanced and unstoppable. I think we're in that position with Microsoft now. Why?
We're heading for a recession. The rebuttal to the FA says:
That's true, of course. But GE's customers can't download an open source aircraft engine for free. Also, and significantly, aircraft engines wear out. If the airlines want to keep flying at all, they have to continue to buy spare parts, sub-assemblies, refurbished engines and, from time to time, new engines. No matter how tight the economy gets, unless all GE's customers go belly up, they will have to continue to buy parts - and GE can at least hope to get some of that business.
As the economy tightens up, one of the things that happens is people start looking at where they can save some money. Software does not wear out. Software carries on working just as well as it did when it was new, until the hardware platform which supports it wears out. And even then, it can usually be transferred to a new hardware platform. So as the economy tightens up, people simply stop buying new software. Where's the need to upgrade, when the software you have works acceptably well?
There are fewer reasons to buy software in a recession, anyway. The total number of seats is not increasing - most companies will be laying off staff. And hardware upgrades which had been planned will be put off, so there will be no need to buy software for new hardware...
And if people have to get new software for one reason or another, for every significant profitable product in Microsoft's inventory, there's a free alternative. Not 'cheap', free. Usually, of as high quality as the Microsoft product or higher. Increasingly, as easy to use as the Microsoft product. The tighter the economy gets, the harder it becomes to justify choosing 'expensive' over 'free'. Furthermore, unlike GE's competitors, Microsoft's free competitors are not subject to the normal rules of the financial market. they can't go bankrupt. The recession will not hurt them much - it is more likely to help them.
I won't hide the fact that I think it's bad for this industry to have one dominant player, be that IBM, Microsoft or Google. I didn't mourn IBM's fall and I shan't mourn Microsoft's. But I don't think you can any longer pretend it isn't happening.
I'm old enough to remember when discussions on Slashdot were well informed.
Good point, and you are right on businesses (even large ones) skipping entire versions of Windows. The transportation company I work for ($10 billion in revenue) went straight from NT 3.51 to XP about 2 years ago.
Motley Fool: Bring out your dead!
Gearoid_Murphy: Here's one.
Motley Fool: Ninepence.
Microsoft: I'm not dead!
Motley Fool: What?
Gearoid_Murphy: Nothing. Here's your ninepence.
Microsoft: I'm not dead!
Motley Fool: 'Ere. He says he's not dead!
Gearoid_Murphy: Yes, he is.
Microsoft: I'm not!
Motley Fool: He isn't?
Gearoid_Murphy: Well, he will be soon. He's very ill.
Microsoft: I'm getting better!
Gearoid_Murphy: No, you're not. You'll be stone dead in a moment.
Motley Fool: Oh, I can't take him like that. It's against regulations.
Microsoft: I don't want to go on the cart!
Gearoid_Murphy: Oh, don't be such a baby.
Motley Fool: I can't take him.
Microsoft: I feel fine!
Gearoid_Murphy: Well, do us a favour.
Motley Fool: I can't.
Gearoid_Murphy: Well, can you hang around a couple of minutes? He won't be long.
Motley Fool: No, I've got to go to Sony's. They've lost nine today.
Gearoid_Murphy: Well, when's your next round?
Motley Fool: Tuesday.
Microsoft: I think I'll go for a walk.
Gearoid_Murphy: You're not fooling anyone, you know. Look. Isn't there something you can do?
Microsoft: [singing] I feel happy! I feel happy!
Apologies for spamming you with this Monty Pythin troll.
-mcgrew
mcgrew's razor: Never attribute to stupidity that which can be explained by greedy self-interest
So the reason why corporate uptake for M$ Vista has been relatively slow is because.. ...most corporations just lurrrve M$ XP!
...untill they release W7, which those corporations who skipped Vista will almost certainly adopt much earlier.
Guess M$ will have to dip into that $20 billion cash flow reserve of theirs and 'ride this one out'
Oh! I completely forgot: Apple Smuck and Linux OSS** are coming with a vengence.. to a t.v. advert near you.
**Please note that I dual-boot Vista and Kubuntu, though none of the *real users* in my company (you know - the guys who do 'business' and pay for all this stuff) are likely to change OS in the near future since they all seem pretty content achieving what they need to achieve using MS Office, Project, Adobe, SQL Server, Outlook and heaps of intranet apps that run on IE7 (some kool kids are even using Firefox now!) etc. etc. - all running on XP or Vista.
"He Who Dares Wins"
Bully for you!
Some of us however need to run more than StarOffice, Firefox, and the JDK.
Snide Aside: Does Solaris still ignore all the networking setup questions it asks you during install?
"Thank you for filling out the IP and Routing information as well as the Hostname. Please write these down so that you'll have them for reference when you build out the network confs by hand after the installer is finished."
I doubt Vista is a huge flop or a tremendous success.
What's much more interesting is the cash reserves. Dropping by over $10 billion per year? Really?! Are those numbers accurate?
What the Fool is pointing out that Microsoft is a risky investment where the returns are poor.
If you buy shares you want as low risk as possible and decent returns (10-15% is average, somewhere between a low risk and high risk investment).
Microsoft is risky simply because there's so much uncertainty over Xbox 360 warranty claims, poor Vista sales and yet another EU court case.
Good point. But IBM's operations were heavily dependent on the manufacturing sector, for their IBM boxes. Such production intensive business models are much harder adapt and react quickly to the surrounding environment and IBM resultingly had a shocking period.
M$'s primary business, however, is software and services and the product ranges in this sector can be diversified, adapted and even completely changed much more quickly and easily. Over at M$ Strategic Command they realised many years back that the long-term market for their Windows and Office products would start coming under serious threat, especially from OSS products, and naturally they will retain their vice-like grip on these markets for as long as they can whilst all the while identifying new revenue streams. They're doing this last bit very well indeed, don't you think?
I guess what I'm trying to say is that it was always inevitable that M$ would eventually start getting reeled in by the competition but it's a testament to their business model and strategy that it's taking everyone so damn long!
"He Who Dares Wins"
From the first minute I heard the announcement - not so much about Gates stepping down as CEO - but walking away from his "day-to-day" to focus on his foundation
Starting from nothing, tp (almost) completely dominating the world of computing - where's Microsoft to go from here?
There's branching to other areas, like Mobile devices, Automobiles and Game Consoles - yea, but isn't everyone trying to do that.
Aside from that, what about their "core" business(es) - the next version of the OS
With all that, the world is going "web" - and people like Google are the places to be in that universe
So where does Microsoft go from here? Well - there not going to go away - but in reality, they've plateaued - and that's not going to change.
Gates' "departure" was in inticipation/reaction to that without a doubt. He's not bailing because their "failing" - it was a rush riding to the top - but now they're there, what? It's just more drudgery from here-on-out, it's not going to be anything meaningful or exciting.
There's always the chance of a "Second Life" - like Apple got with the return of Jobs - but in reality, very very few people or companies - even extremely successful ones ever see that - and I think Gates knows it.
In retrospect, I think Windows-95 was perhaps Microsoft's last giant leap (and/or NT from a different perspective) - and everything else has been pretty much momentum from that.
Excuse me for being a bit sceptical, but the XBox 360 is doing fantastically well, they have a market and the right games for that market... New PCs are still being shipped with MS products and MS office is entrenched into modern information systems decision making.
You have to remember that MS can afford to fix faulty XBoxes, so it ultimately becomes a moot point.
All this on a very good quarter...
I think The Motley Fool just wants good slashdot traffic myself.
> Major purchasing decisions are not taken by people live with their parents in Wyoming [penny-arcade.com]. They are taken by grown ups who have mortgages and orthodentist bills to pay, and those people recommend, and will continue to recommend, Microsoft because nobody ever got sacked for doing so.
I take it you have never heard of: IBM, SAP, Oracle, or Sun Microsystems. You may be surprised to learn that, to many people who are serious experts in enterprise level system, it's microsoft that's the joke.
Yes, msft rules the weenie desktop market, but microsoft does not rule anywhere else.
IMO: those who think that IT systems start and end with desktop PCs have no business posting about "major corporate purchases." Frankly, you don't know what you're posting about.
The article cites future revenue growth of 10%-15% a year as evidence of MSFTs decline. Huh? Most companies would kill for that sort of growth.
Moderate the article -1 Troll please.
Now that's funny, because I recall reading just a few days ago that Microsoft is stating the highest ever profits (or is it revenues?) for its last quarter. And the MS games division announced it's profitable now as well after running for a loss for years.
Vista is a big stumble for MS, no doubt about it. But to say this is the beginning of the end? That's a stretch.
In the end they will lay their freedom at our feet and say to us, Make us your slaves, but feed us. - Fyodor Dostoyevsky
I would say that about Unix-based systems and software. Don't even dare to say that about Microsoft, Microsoft is more like the fake lego blocks that have been around. They look like they fit the standards but when you actually go to connect them, they don't align properly. Sure if you go and buy all kinds of fake lego blocks then they might work FOR YOU but as soon as you go play with another kid it doesn't fit right.
Unix-based systems (Linux, Unix, Mac OS X) are like Lego blocks and Lego Technics (I don't know if they're still around) but without the plans. You can do whatever you want with it, but somebody knowledgeable has to use it to actually build something that works. Any ol' kid can build SOMETHING with it.
Example: here at my job we have a mixed environment, 30 Mac's, 7 Linux and 3 Windows. Now out of the box, I can connect the Mac's and Linux machines to the directory and without issues they will start authenticating. For Windows, we are forced to use AD. So we set up Samba. Of course, the latest updates for Windows break some Samba functionality (nobody knew this off course) and all systems had to be rebound to the AD. Long story short, to evade this type of jokes (AD login would become randomly unresponsive on the Windows boxes but continue working on Mac/Linux) we installed pGina with the LDAP auth plugin, no more problems.
Custom electronics and digital signage for your business: www.evcircuits.com
I have never been a big Microsoft supporter, but their numbers don't lie. From CBCNews dated today : 1). Microsoft said it was helped by rising sales of Windows-based personal computers. The company said it has sold 100 million copies of its new Vista operating system since it was launched a year ago. 2). The company also reported better-than-expected sales of Xbox 360 game consoles and improved software sales to business. 3). After markets closed Thursday, the software giant said its profits rose 79 per cent to $4.71 billion US, or 50 cents a share, from $2.63 billion, or 26 cents a share in the same period last year. That beat the consensus estimate from analysts polled by Thomson Financial by four cents a share. Revenue at the company rose 31 per cent to $16.37 billion from $12.5 billion in the year-ago quarter. Analysts had expected $15.95 billion US in sales.
My first instinct when an international company traded in Dollars announces record profits is to see how the exchange rates changed between the two quarters.
In this case MS got a large boost by the weaker Dollar. But in no way does it account for a 79% increase in profits from the last quarter.
So let's look at what can account for MS getting huge profits:
1. They've gotten leaner. There were no layoffs and salaries are a large chunk of their expenses, so that's not it.
2. They've cut expenses by not printing DVDs and manuals and instead having people DL their software. That could be a part of it.
3. The number of computers sold has increased. Don't have the numbers but possible due to weak dollar making computers cheaper.
4. They've increased prices. Probably. We know their retail price for Vista is way larger than the retail price for XP but they sell only a small fraction through retail, and I doubt the OEMs would budge so easily without giving DOJ a call. Not likely.
5. They stopped hemoraging money on XBOX and Live. Possible.
All this of course doesn't mean that their long-term outlook is favorable. Cheap hardware makes the TCO of machines lower but also puts the pressure on OS prices. Everybody's down on them and is thus more aware of the alternatives like Macs and Linux.
It's doubtful they can ever again be a growth company. The number of PCs being sold each year is slowing down and that was their main driving force.
Although if they are going down because of some disruptive innovation like cellphones replacing computers it's going to take a long, long time. They've basically achieved a cockroach status just like IBM. You can be sure that Linux or Mac won't kill them.
Dejan