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Can Microsoft Survive If Windows Doesn't Dominate?
Nerval's Lobster writes "In his latest Asymco blog post, analyst Horace Dediu suggested that Windows' share of the personal-computing market is declining at a faster rate than many believe, once Microsoft's cash cow is put in direct competition with Android, iOS, and other platforms built for tablets. In that context, Windows' share of the personal-computing market has dipped past 60 percent on its way to 50 percent. The big question is whether it'll keep plunging. 'If Windows tablets start growing as fast as the tablet market overall then Windows could stabilize in share,' Dediu wrote. 'But if Android and iOS tablets follow their phone brethren in growth then it will be far harder for Microsoft to maintain share.' Yet despite that gloomy scenario, Dediu doesn't necessarily see a market-share dip as a cause for concern on Microsoft's part: 'Even if Windows dips to only 20 [percent] of the world's computing market it will still be perfectly 'viable' for some time to come,' he wrote. But even if Windows can perpetuate, will its decline fatally undermine Microsoft as a company? All that Windows (and Office) money also allows Microsoft to launch projects that lose money for years before they gain traction. Without that monetary base, for example, it's possible that the Xbox (which bled money for the first few years of its existence) wouldn't have survived long enough to become a viable platform from a financial perspective—much less the center of Microsoft's future plans for living room domination."
Microsoft owns both gaming and workplace PC's. Nothing is going to take that from them. Tablets aren't meant to replace PC's, they're just too different kind of devices. Microsoft has nothing to worry about.
Not to mention the Server & Tools Division that sells Windows Server, IIS, SQL Server,Lync Exchange, Visual Studio etc. keeps getting record revenue every quarter.
From http://venturebeat.com/2013/05/20/with-19b-in-revenue-microsofts-server-and-tools-chief-says-hes-just-getting-started-interview/
Meet Satya Nadella, president of Microsoft’s server and tools division, a division that builds and runs the company’s computing platforms, developer tools, and cloud services. Nadella leads a team of over 10,000 employees, and his group alone makes $19 billion in annual revenue – which is more than the combined revenues of Facebook, Yahoo, LinkedIn, Zynga, Netflix, and a few others in the Valley.
That doesn't even include Office and Azure recently became a one billion dollar business by itself. Microsoft is pretty well diversified, unlike Apple with it's reliance on iPhone and iPad and Google with 95% of revenue from ads. As usual, Asymco comes with shortsighted analysis that mistakes the trees for the forest.
That's why the people with their own money on the line are buying up MSFT (stock went from $27 to $35 due to the last earnings report) instead of the air-headed armchair analysis that we see on here of 'lol my grandma ditched her PC and got an iPad so that means M$ is dying'.
A real challenge to the Microsoft hegemony would squeeze out the idiocy and arrogance that currently dominates the company. Forced to pay attention to users and developers, Microsoft would never have created a disaster like windows 8, or the developer-hostile policy of allowing languages and platforms to "dead end."
Heck, someone at Microsoft might actually wake up and figure out that the policies and strategies that benefit Microsoft in the long run are those that benefit users and developers, not the marketing department, or upper management bonuses.
I joke. I joke. Of course this will never happen.
Please do not read this sig. Thank you.
In my opinion, the whole "PCs are dying, everyone will be on tablets and in the cloud by 2017" meme is a little overhyped. It's true that PCs are no longer the only computing devices available, and tablets are definitely getting good enough to replace PCs for most "read only" tasks. However, even with suitable Bluetooth keyboards and other accessories, creating documents and content on a tablet is still very difficult. I'm sure it will continue to be this way until some new UI paradigm pops up like 100% fluent voice recognition, wildly gesturing to type, etc. For writing software, messing with spreadsheets and even playing high end games, PCs still have a place. It's just not 99% of the market anymore. A good example of this is the Surface. It's amazing to have almost a full fledged PC in a tablet form factor and lets you build some really cool applications that the previous Tablet PC form factor didn't address well. But I wouldn't use it to write anything longer than an SMS, tweet or quick email...it's just not built for huge gorilla hands. :-) On the other hand, it's great for watching movies, surfing the web, and other Millenial-approved social media tasks.
Microsoft seems to have missed this fact with Windows 8, probably because they were panicked about Apple and Android dominating the tablet market. Or their marketing department came in and said "zomg Millenials and hipsters are chooing a tablet-first approach to computing, we must capture this market." And that makes sense -- people of a certain age have been raised with Facebook and smartphones, so they're used to it. However, they also have jobs, and probably use PCs and laptops at these jobs to create content. Windows 8.1 appears to be backtracking on their tablet bet a little bit, but not totally -- the Metro "app" ecosystem is here to stay. (As a side note, my primary complaint with Windows 8 was not the Start screen, though it's nice they're bringing the button back -- it was the awful 2-D Windows 2.0 user interface, and it looks like they're not bringing back Aero in Win8.1, so that sucks.)
Microsoft will continue to have decent market share in workplaces. Desktop PCs will most likely fade out as laptops get more powerful, but the idea that the tablet form factor works for every situation is crazy. Even when hardware begins shipping with touch screens by default, some people will prefer not to use them. Windows Server 2012 (and Windows 8 under the hood) are actually very good products. But they do need to listen to corporate customers. How hard would it have been to bring back the classic Start menu for companies who are deploying on desktops and laptops? Why wouldn't you allow your customers who were happy with Windows 7 to keep most of what they liked while having the option to use the new stuff? In my mind, not listening to corporations who buy millions of licenses will make them less relevant, not the rise of the tablet.
Their own pride, and probably corporate policy which says "all things must be Windows".
If Microsoft announced next week they were doing an Android or a Linux distro, their stock would probably tank because that would be interpreted as basically saying "we're losing the fight, so we're looking into other things".
I agree that Microsoft is far from dead, and are likely sitting on huge cash reserves. But I don't see Linux and Android as a way forward for them.
They'd do a better job of actually listening to what people want out of their products, instead of just releasing a much hated Win 8 only to have to reverse course with the changes in Win 8.1.
Me, I'll be curious to see how they fare with the next XBox -- because I suspect lots of people are reading these press releases and thinking "gee, that doesn't sound like what I want".
Lost at C:>. Found at C.
In the early '90s, everyone said that IBM couldn't survive. Look where they are now.
In the late 80's, everyone said that DEC would crush IBM. Look what happened to them.
So I guess it could go either way:
Megasoft Business Services . . . ?
. . . or iSoft . . . a division of Apple Galactic Life Systems . . . ?
Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
Microsoft owns both gaming and workplace PC's. Nothing is going to take that from them.
In the short run you are quite correct. In the long run though the picture is far less clear. Microsoft has viable competitors in gaming both in hardware and software which they have been unable to drive from the market. While not likely, it's hardly inconceivable they could lose their grip on the gaming market in time. The biggest source of Microsoft's dominance in the work place isn't Windows, it is Office. Specifically the Office file formats (.xls and .doc especially) are the main source of their dominance. That isn't going to change in the near future but history shows that office product dominance doesn't always last. Wordperfect, Lotus 1-2-3, etc used to rule the office and eventually they were pushed out of the way. There are some very real threats to the Office monopoly (Openoffice, Google docs, etc) out there. Whether any of them will eventually push Office out of the way I honestly cannot predict but it isn't impossible in the long run.
Tablets aren't meant to replace PC's, they're just too different kind of devices,
You forgot the key word "yet". No, tablets don't compete directly with PCs now but in time they unquestionably will. Remember that PCs didn't compete directly with mainframes back in the day either but eventually they did. There is no fundamental reason a tablet couldn't be put in a dock and used as an office computer and in time the probably will be. A tablet is just a general purpose computer which focuses on a touch interface rather than a keyboard/mouse interface. I think it is only a matter of time before someone figures out how to adapt them for office work.
I would love the ability to plug my phone into a dock at my office (possibly with some extra processing horsepower/storage and connection to the office phone system) and have it be my work PC as well. Think something along the lines of a Mac version of OSX when docked and IOS when undocked. Done well that would be hugely useful.
Android is most certainly Linux.
What it is not is GNU.
Stallman's rants about "GNU/Linux" were actually onto something.
A Pirate and a Puritan look the same on a balance sheet.
Let's rewind to a previous millennium long ago swept away in the sands of time. Let's go way back to . . . 1990.
Then the sudden realization hit. IBM's PCs were priced at monopoly prices and people were not buying them. The company was in crisis and had to reinvent itself. It got new management. Times got leaner. And they weren't committed to past management decisions.
By 2000 we had a much nicer IBM that was focused on its profitable mainframes and was friendly to both Linux and Java.
After Microsoft reinvents itself, it will have retreated to and focus on its profitable business. Microsoft has a very profitable and serviceable business with its Enterprise software Windows, Outlook, Exchange, Office, SQL Server, etc. Like IBM before it, Microsoft has already begun embracing open source (Apache, PHP, etc etc) that enabled its enterprise customers to do what they do.
Like IBM, Microsoft won't go away. Probably ever. But it will become a smaller and gentler Microsoft without the nastiness and bullying once it has been de-fanged of its monopoly power.
I'll see your senator, and I'll raise you two judges.
I've thought a lot about this exact point. I, too, would like to see Apple come out with less expensive and expandable systems. I think the main reason they maintain their tight lock is they don't want the plague of problems that Windows users experience due to IDIC: Infinite Diversity in Infinite Combinations. Anyone can make hardware that works, to varying degree, with MS OS, and MS will try to support it. And sometimes fail. And most frustratingly, fail intermittently. Apple maintains extremely tight control to try to minimize the IDIC problem and improve the user experience through higher reliability and fewer crashes.
There's no way Microsoft can fully test their products against the infinite combinations of hardware, old and new and forthcoming, that are possible in the world outside of their labs. Users are going to pay for this in the form of crashes and problems, it's unavoidable.
Apple, OS-X, iOS, etc., is not perfect. It has problems, but in my experience much fewer than Windows. I've used MS operating systems professionally since Dos 1.0 through Win 7 and currently use it, but I'm infinitely happier with my Mac equipment like the Air that I'm typing this on. OS-X has its limitations and problems, and though Win 7 is a very good product, I'm still a lot more frustrated with it than I think I should be. We pay a higher price for hardware, and it's fairly high-end hardware and lasts a long time. I would really like less expensive and expandable hardware, I'm just not sure that fits Apple's culture.
When you sympathize with stupidity, you start thinking like an idiot.
That's why the people with their own money on the line are buying up MSFT (stock went from $27 to $35 due to the last earnings report) instead of the air-headed armchair analysis that we see on here of 'lol my grandma ditched her PC and got an iPad so that means M$ is dying'.
The time constants of slashdotters discussing future of MSFT and the traders are vastly different. Slashdotter think 1 year is short term, 5 years is medium term and 10 years is long term. People buying MSFT @ 35 think 1 quarter as short term, 1 year as medium term and 3 years as long term. And the hedge fund honchos think 1 micro second as ultrashort term, 1 second as short term, and 1 minute as medium term and 1 hour as long term. And these hedge fund honchos will happily risk 1 trillion dollars for 1 micro second to pursue a possible profit of 25 dollars. And they will happily do it 1000 times a second. No wonder we are hosed.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
Think about it this way, Microsoft got started in the OS business by being an app provider whose apps a lot of people liked. They then leveraged that and the money to build an OS and then used the app business to build on their OS value. It was only later that the OS and the apps flipped in value, with the OS dominating everybody.
What the.... ?!@#$ parallel universe history are you talking about!??? Microsoft started as a language vendor (not typically considered an "app") selling BASIC, then got into the O/S business by buying QDOS and selling it at a ridiculous markup to IBM, who just wanted something quick for their (they though) ill-fated "personal computer".
They later used the profits from their DOS O/S to build "app"lications like Word to outcompete Word Perfect and Excel to outcompete Lotus 1-2-3. In the future, please take the time to have some clue what you are talking about before posting...
I have no problem with your religion until you decide it's reason to deprive others of the truth.