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Why Eric Schmidt Is Wrong About Microsoft Not Mattering Anymore
First time accepted submitter Gumbercules!! writes "Eric Schmidt said he believes there is a 'Gang of Four' technology platform leaders — Google, Apple, Amazon and Facebook — Microsoft isn't one of them. I wrote about why I believe he's wrong and what it might say about Google's weaknesses. From the article: 'It's no secret that Microsoft have utterly failed to make significant roads into the mobile market place. Windows Phone 7 has approximately no marketshare (ok they have live 5% or so) and this has actually gone down over the last year. It's also no secret that Microsoft have failed to gain any semblance of "cool" and that they're also managing to drag Nokia down with them. It's not even a secret that nearly everyone who looks at the new Windows 8 interface-formally-known-as-Metro doesn't like it. However this isn't the whole story.'"
All four of the companies mentioned are walled-in gardens.
Ballmer and out-of-control, boy-billionaire eccentricities including management implementations, R&D based on petty jealousies and magical thinking are to blame for MS' slow, steady decline. Stick a fork in MS, it's done insofar as stock value as far as staking its entire hopes for the future on legacy Windows and Office market bases.
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Why would I buy a laptop or a PC for my staff ever again I could buy them a single tablet – or even pocket sized phone – that just connects to a dock or cable and viola - it’s now a fully fledged PC, running all my corporate software, legacy or otherwise on a full sized monitor with keyboard and mouse.
This paragraph proves that this guy has no idea what he's talking about.
A tablet has a completely different user interface with swipe gestures and a crappy keyboard.
Why would I want to run legacy windows applications on it that already had in many cases godawful overcomplicated user interfaces with tiny menus and microscopic meaningless icons.
Legacy photoshop on a windows tablet?
Or standard Excel or Word with a monstrosity of control toolbars/ribbons with gazillions of tiny controls?
Not going to happen.
Where are we going and why are we in a handbasket?
Microsoft is making money. Lots of it. Facebook has a really good idea on how to make money.
Make your predictions about MS failing...there's evidence to suggest they are going the way of the dinosaur. Facebook's Golden Goose on the other hand has yet to lay eggs.
Apple, Microsoft, Cisco, HP, if you look at it from a business point of view. Apple is a bit cornered here with only the iphone / ipad products, but people seem to like them. MS is obvious: software, Cisco runs most of the networks, and HP is popular w desktops & printers. On second thought, maybe we should swap out apple for IBM here too. Business sales are far more established, less trendy, and without looking up statistics on it, are a lot more $ than consumer sales.
Yet another "Please come read my blog post where I totally miss the point of what someone said, but read it anyway so I can get some ad revenue" story on Slashdot.
I read the article. It boils down to "Microsoft may make a comeback so they matter". Given the lack of anything other than speculation in the article - the author could've just as easily replaced "Microsoft" with "RIM". I mean, really - we should expect Windows tablets to make a strong showing simply because they can run Windows applications? Then why didn't all the old Windows tablets end up ruling the roost?
Microsoft isn't a game-changer anymore. Sure, it's possible they'll rebound - after all, Apple was in the same boat in the 1990s. But they haven't demonstrated any reason we should give them the benefit of the doubt.
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An article about how wrong he is.. but no link to his actual comments? Really?
http://allthingsd.com/20121010/live-from-new-york-walt-mossberg-kara-swisher-interview-eric-schmidt/
Schmidt: Something unusual has happened. All four companies are networks/platforms generating enormous scale effects. We’ve never had that before: Facebook, Amazon, Apple and Google. All different, all competitors, all making enormous investments.
Swisher: You left out Microsoft:
Schmidt: Deliberate. ...
Mossberg: Why did you keep Microsoft out of the Gang of Four?
Schmidt: They’re a well-run company, but they haven’t been able to bring state-of-the-art products into the fields we’re talking about yet.
8:23 pm: Schmidt: The Android-Apple platform fight is the defining contest. Here’s why: Apple has thousands of developers building for it. Google’s platform, Android, is even larger. Four times more Android phones than Apple phones. 500 million phones already in use. Doing 1.3 million activations a day. We’ll be at 1 billion mobile devices in a year.
Schmidt: We’ve not seen network platform fights at this scale. The beneficiary is you all, the customer, globally. “This is wonderful.”
8:25 pm: Compare this to the PC industry. Phone user population is six billion, one billion smartphone users. Much bigger than the PC industry — maybe a billion, 1.5 billion installed.
Every month, quarter, year, the growth rate of mobile adoption exceeds everyone’s expectations. The phones become so useful that “it’s good enough for normal people” in lieu of a PC, for day-to-day events. Years ago, “people like myself, we missed that.”
1) It's Eric Schmidt. of course he's biased.
and
2) he didn't seem to be specifically talking about mobile. Facebook, Google+, etc.
So it's laughable that 100m apple phones, or 500m android phones is a significant platform.. but the OS used on 95% of a billion PCs somehow is not.
Microsoft is relevant today the same way that railroads are relevant. It will continue to be part of the infrastructure for a long, long time, but only as a necessary evil and a relic of the past.
Eric Schmidt has spend a lot of time competing against Microsoft. I think he's mostly right. Microsoft has only been able to prosper through monopoly tactics and those won't work anymore. They come out with a lousy version 1.0 to keep competitors away, refine it some through versions 2 and 3, then version 4 becomes useful. They can't even think about that strategy now because someone else came out with version s 1, 2, and 3.
Microsoft is still dominant in the word processing and spreadsheet markets. Unfortunately, they'll probably lose that franchise, given the rise of PDF for interchange, and their unwillingness to port their products to either Android or iOS. Someone with deep pockets, probably Google, will come along and take those markets from them.
There's also a lot of back office software that uses their servers, databases, and development tools.But those markets will never grow as quickly as the consumer end.
They won't be going away any time soon, but if they're ever going to get back in to growing markets, they need to change radically. In the end, no company that size will turn on a dime, and its not clear whether there's still time for them to get back in the game.
Play it cool, play it cool, 50-50 fire and ice.
Having a good selling tablet makes you an leader in computing?
No. Amazon is there because of AWS, not because of the Kindle Fire.
This is basically a list of companies that Eric Schmidt sees as direct competitors to Google. Each one established and now dominates a field that Google desperately wants to get into: the cloud (AWS vs GCE), mobile (iOS vs Android) and social media (Google+ vs Facebook).
The reason Microsoft is not mentioned is because it does not pose a serious threat to Google in any of these markets.
In exactly what ways is Facebook a technology platform leader that can be placed adjacent to Apple, Google, or Amazon. I'll buy Amazon. They have Kindle, but even without Kindle there's Amazon's web and cloud services, plus their supply chain management with all the technology that supports it, but Facebook? Facebook is still nothing more than a virtual platform that depends completely on existing platforms. Apple, Google, and Amazon can coexist independently in their own spaces. Facebook is a download, whether it's via browser to your personal computer or to your mobile device, it's still a download. Facebook does have its tech too. Something has made Zynga games successful and a seamless experience on Facebook, but Facebook has nothing that its competitors or its contemporaries lack except clicks. MySpace's luck with clicks and Facebook's constant stock devaluation illustrates just how easy it can be for Facebook to slip away. Microsoft has numerous platforms that interact with each other and is showing signs of realizing that today's market wants enterprise connectivity with consumer style, something Google and Apple have known. I would say that this "gang of four technology platform leaders" would best be described as a "gang of four attention leaders".
Which could happen soon, Microsoft won't have a business model at all. Currently Microsoft is being floated by patent extortion. If that ends, they are in big trouble.
If Microsoft do this right, it’s going to be game changing – and right now, Google doesn’t have an answer for it, that I can see.
Microsoft doesn't have to do anything right. In fact they don't have to do anything at all, just wait, until technology miniaturizes enough that you can run desktop business apps in a tablet or phone hardware format. The portable device space has been all about device and feature consolidation, and I don't expect that trend to suddenly reverse because Google excluded Microsoft from some list they made up.
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Their past strategy insures that business will continue to use a Microsoft OS as long as they need access to their legacy documents exactly as they were created. With their purposely none standard formats Microsoft has effectively locked in anyone that doesn't want to spend massive amounts of time and money to insure that all documents converted to a different format are actually as they were created. They don't have to be Good, and they don't care if they are liked are not, because they have your balls in a vise!
This is basically a list of companies that Eric Schmidt sees as direct competitors to Google. Each one established and now dominates a field that Google desperately wants to get into: the cloud (AWS vs GCE), mobile (iOS vs Android) and social media (Google+ vs Facebook).
+1 /. summary that.
They should change the
What horse shit. They may not matter in search or mobile due to their current market share, but I'd speculate Research in Motion is a great example of how one day you are on top, the next you are bottom of the heap. MSFT has been churning out desktop and server operating systems, enterprise applications and CRM/ERP solutions for as long as I can remember. With further penetration into the virtualization market I'd say MSFT has a bright future and an obviously consistent and impressive track record. Remember, MSFT was piling up hundreds long before google, facebook and amazon even existed.
Why would I buy a laptop or a PC for my staff ever again I could buy them a single tablet – or even pocket sized phone – that just connects to a dock or cable and viola - it’s now a fully fledged PC
What I don't get is the requirement for a viola to go with the cable...?
Microsoft's biggest revenue sources are still alive and well
MS SQL and Office
In my opinion, in the computing word,
The powerhouses are
Google, Apple, Adobe, Oracle, Microsoft
To be honest
Facebook is losing users everyday and while they have a lot of dominance they can't be a force in the world of computing. What they do or don't won't matter much to other parts of the IT world
Amazon's biggest competitor is eBay
Microsoft have failed to gain any semblance of “cool”
I don't think that Microsoft ever had cool. Microsoft rose to prominence not by being cool but by ensuring that their OS and utility applications became the default Business and Home standards.
New, layman computer buyers have had little choice but to send some money to M$ with every new machine they bought for most of the past 20 years. These people weren't buying "Cool" gadgets though. On the whole they were buying computers. Computers for their homes, school, work, internet connections - computers that happened to come with Microsoft products running on them.
Their vast OEM agreements with all major computer manufacturers and Getting Word and Excel to be ubiquitous with Word processor and Spreadsheet is what gave M$ their market share - Nothing to do with how cool they are.
. .
At home I have a couple macs. They do the job I need a computer to do. But to service the whole families needs, to provide a media center, and to provide something for on the go usage I need another work station plus a tablet. Eventually my other computers will get old and I'll need to replace them.
Now if I could just use a tablet hooked to a big screen I'd need ferwer devices and I'd be happier. The tablets would let me use apps that are touch freindly with ease and the attached screen for typing and mousing apps. It would allow on the go use. Media use (where you want to move it to the chair or the amplifer or tv). perfect.
so far all the tablets seem to only mirror their small screens if they have video out at all. Or they lack a desktop mode for mouse and KB usage.
Windows 8 is going to have both.
I had been wondering why win8 had both metro and desktop modes but suddenly I get it. this use case is a killer app.
it fits my profile exactly. it fits my moms profile. it fits my kids needs.
What sucks is that I don't like windows or the apps made for windows. I'd prefer to use the ones I have on my macs.
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Microsoft is making money
Horse and buggy makers were still making money (and lots of it!) when the first Model T rolled off the assembly line. Doesn't mean a big change wasn't coming.
The bulk of Microsoft's revenue comes from Windows and Office on the desktop. PC sales have slowed and begun shrinking - people just don't need to upgrade as often and the market is saturated.
The iPad alone is a significant slice of the PC market (25% in the US) but more importantly it continues on a tremendous hockey stick growth curve. That's a market that Microsoft cant sell Windows to and refuses to sell Office to. It doesn't take a genius to see the wall of pain coming Microsoft's way and Windows 8 is a desperate attempt to push what worked in the past into a new area. Windows has been so successful in the PC arena that Microsoft cant imagine life without it or any strategy to monetize iPad users that doesn't involve billions in risk on producing their own hardware (like, say, Office for iPad.... A no-risk proposal that might cost a few million in developer salaries).
That's always how entrenched players get beaten. It simply doesn't matter how dominant Microsoft is on the desktop because all the growth is happening in tablets and mobile... And being good early does you nothing there, you have to be good at the right time - the time when the market starts to look like a hockey stick so network and ecosystem effects can become self-reinforcing. Microsoft has already missed that point. That's why people think they are irrelevant.
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At least Google lets you get your data out.
I use a last gen Apple TV when I need to put video on the big screen, and to send audio from any of my macs or portable devices to my home theater. No need for a dedicated tablet when a $100 device does the task very well. For better network performance and sanity, instead of using Apple TV's built in wireless I use it hooked to a Gigabit Ethernet switch that provides connectivity to all the networked devices in the entertainment rack.
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"Coolness" is an added value which the market appreciates, but what matters the most to the market is the practicality of the product - and in Microsoft's case, I'm sorry to say there is a lack of practical value for most of its products today.
Uh...what? Granted, this is from 2010, but it hasn't changed much:
"Worldwide, 500 million customers use Office. Office's marketshare has held steady at 94 percent for years according to market research firm Gartner. The next closest competitor, Adobe has a mere 4 percent of the market. "
http://www.dailytech.com/Office+2010+to+Launch+Today+Microsoft+Owns+94+Percent+of+the+Market/article18360.htm
So those 94 percent of people find no practical use in Microsoft products?
Facebook had a really good idea on how to make money. It involved an IPO that made Facebook employees rich and screwed everyone else.
>> Microsoft sells stuff that is useful.
So do Apple and Google. The difference is that Apple and Google stuff is also cool, works better, looks better, has less virusses/security holes, isn't as dumbed-down, doesn't try and lock its users into wierd use cases, doesn't crash/hang as much, and doesn't feel like a warmed-over version of yesterdays dinner.
Classic problem with a lot of tech blogging.... people often look at the particular niche they are interested in and expand that to 'technology'
Things have changed, and anybody watching market share isn't going to notice. LibreOffice is invisible to the market because nobody pays for it. Or for any of the 20 other forks of Open Office, including Open Office itself, now managed by Apache (and out from under the entirely disinterested rubric of Oracle). It now takes work to discover how many copies have been downloaded, since there isn't just one Open Office, but the numbers are big, and getting bigger on a regular basis.
And oddly enough, it was Microsoft that opened the door for Open Office to start making serious inroads on their market share. When they invented the ribbon, and made their UI ridiculously harder to use, with LOTS of extra clicking and gratuitous rearranging of options, suddenly it was easier to migrate to Open Office than it was to migrate to a newer MS Office. Open Office still has the familiar menu-driven interface, and lots of stuff is still where people have learned to expect it. Unlike MS Office, which is now foreign to a hundred million users who started with Word 6.
I suspect that 94% is now substantially wrong.
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I hate printers.
The threat to office is from cloud services. For children doing homework, google drive is great, and be sure they already discovered that. Once using these tools, no way they will ask their parents to pay for MS office.
Uh...what? Granted, this is from 2010, but it hasn't changed much:
"Worldwide, 500 million customers use Office. Office's marketshare has held steady at 94 percent for years according to market research firm Gartner. The next closest competitor, Adobe has a mere 4 percent of the market. " http://www.dailytech.com/Office+2010+to+Launch+Today+Microsoft+Owns+94+Percent+of+the+Market/article18360.htm
So those 94 percent of people find no practical use in Microsoft products?
I am one of those guys using Office, and I'm old enough to remember using Lotus 1-2-3. Then, office was a real gamechanger. Now it's a commodity, most of the people using it would just as well use open office. They're not changing it because a) retraining b) admin tools.
As much as the cloud paradigma can be attractive to Microsoft, in their shoes I'd be wary: anybody can enter that market provided that it has given you a login and password ( Facebook document repository?), and they are not asking people for a yearly fee. I'd probably put up ads saying "Microsoft: your documents are REALLY yours", promise to give out free document viewers for eternity with a facility to copy them to newer versions, and to never mess with the program menus and shortcuts, and stick to the personal PC model like it was a mix between a young Gloria Swanson and Adriana Lima.
"Microsoft: we can do without a modem.... can you?" looks like a catchy phrase to me.
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Some people don't do anything "serious" with office software, especially on their own computers rather than work ones. Occasionally I want to write a letter, more often I email. I have some spreadsheets dealing with my personal finances. Nothing I do makes me need MS Office. Probably most businesses require more, but maybe not most people.
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First of all, those are flawed numbers. For one, lots of things have changed since 2010. It's difficult to gauge the exact adoption rate of Open/Libre Office. Open Office does report over 98 million downloads as of 2007, 100 million downloads in the first year of OpenOffice.org 3.x, and over 5 million for Apache Open Office. Libre Office reports 7.5 million as of late 2011. A market survey conducted in 2010 estimated Open Office as high as 9% of the office automation market in the US and UK by the end of 2010, and around 20% in Germany, Poland, and other parts of Eastern Europe.
And that was then. Today, Microsoft is on just under 70% of personal computers, once you factor in mobile devices. That is down from something very close to 95% at their peak. This WikiMedia tally is based on page visits, but it pretty much tracks the expected installed base of Windows 7 (40.3%), Vista (6.6%), XP (21.3%), and other Windows versions (1.4%). They also have MacOS at 8.5%, iOS at 9.9%, Android at 5.1%, and Linux at 1.6%... obviously, this is not going to include servers or offline PCs. But it's clear: Microsoft is well past peak.
I don't know that Schmidt is correct about Microsoft remaining relevant -- they still have a huge pile of cash, and as demonstrated in the gaming market, they have shown some tenacity in claiming a market, willing to lose billions in the process. So I wouldn't count them out in mobile just yet. As well, they do seem to be ready and willing to completely shake up the PC industry... I mean, Ballmer was saying just last week that he sees Microsoft as a devices and services company, despite the fact that right now, they make very little money on either compared to their software business. But they are trying to reinvent themselves, and it's pretty clear they still haven't gotten over wanting to be Apple. That seems to be driving their choices more than even back in the early days of Windows.
Sure, they can't be Apple. But they might managed to be something similar. The fun there would be, where do all these HW companies go, if Microsoft starts undercutting them on hardware?
-Dave Haynie