Where Microsoft's Profits Come From

derrida writes "Microsoft is the largest, most profitable software company in the world. In case you had any doubts about where Microsoft's profit comes from, there's nothing better than a graph to make all those numbers clear. As you may have guessed, the desktop division is quite profitable, while the online division is a money pit."

Comments

Re:Preparing for the Future or Buying Their Own Hy

[devent]

And yet, a decade without innovation seems to have cost Microsoft nothing in terms of their core markets, and their experimental markets seem to be flat. Almost as if they are trying to push the market in a direction the market knows better than to follow.

What a surprise. If you want to sell an Office or Operation System the first thing your customers will ask you, how good does it support Microsoft Office file format or how good will my Windows only applications running.

It's good to have an almost monopoly, you just need to polish your old applications, make the binary formats slightly incompatible, so if some important person buys the new one, everyone else must upgrade, too.

I mean, what choice do customers have? It's either Windows 7 Starter or Windows 7 Home Basic or an Mac in the Apple Store.

Every school in the western world is teaching only Windows and Office. Microsoft is not a company, it's an institution. Every Computer vendor in this world have to support Windows and all the big ones are promoting Windows with everything they have. Just try to get a new Computer, everyone will have a "Xxx recommends Windows 7" and if Microsoft will have a new Windows 8, every big vendor will put a "Xxx recommends Windows 8", regardless of any quality.

For MS and the vendors it's a win/win situation. Microsoft have ads and it sells Windows, as well as other products that are build on top of Windows. The vendors get the Windows copy for free (or almost for free).

Just try and implement and sell a new system or office suite. The entry line to this market is like enter in the tourist space market or to colonize a new planet. But a system or an office suite are very simple applications. You need some know-how, but it's not rocket science.