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Why Microsoft Shouldn't Worry About Cannibalizing Their Userbases
New submitter coyote_oww writes "A ComputerWorld analysis article suggests that Microsoft should stop worrying about one product cutting into another product's sales, and concentrate on putting their best foot foward regardless of the impact on product lines. The big impact would be the price of Windows: '... Microsoft must, at least in the main, sell devices based on lower prices. And the only significant component of a Windows-powered device that can be cut further — hardware margins are at or very near the bone, and have been for years — is the Windows license.' It's still possible they could sell Windows versions at different rates for different devices, but that could get hard to justify to consumers over the long haul."
Release windows for free, and we will finally see how it competes.
You know what I want? A lower-cost Windows targeted at gamers. I don't need drivers for scanners, printers, fax and other unnecessary crap if all I do is play games on it.
A Windows with less processes running would also mean a faster computer able to dedicate more resources to the games instead of crap I don't need.
Get free satoshi (Bitcoin) and Dogecoins
The article is on ComputerWorld, which is owned by IDG. They are quoting a research analyst from IDC, which is also owned by IDG. What's the motivation for writing this article?
Some people die at 25 and aren't buried until 75. -Benjamin Franklin
Steve should consider throwing his best chair forward.
A feeling of having made the same mistake before: Deja Foobar
1. Windows bad.
2. Linux good.
from the article: "As part of the reorganization, Microsoft will consolidate all of its client OSes, including Windows 8, Windows RT, Windows Phone 8, Windows Embedded and Xbox, into a single engineering group [...] The Windows desktop client and mobile have a lot of common functionality, and a combined group could have a lot of synergy".
I fully agree, that's a good strategy (and it was about time)... oh, and one o the few times the word "synergy" makes sense!
Don't like to know they can't abuse their partners anymore.
Microsoft is heading down the Apple walled garden path and will cut the throats on any of it's former channel partners whenever the need arises, without compunction.
Anyone who gets in bed with Microsoft know what to expect, all you have to do is look at their history.
All is fair in love and business!
Instead of charging variable amounts for Windows 8, they could charge a fixed amount and then refund a small percentage to the user every time it unexpectedly switches interfaces on them. Windows RT would be flat-rate then, as would Windows 8 for people who live entirely in the Metro world. Me, on the other hand, I'd be a millionaire in a week.
The motto of the CEO at a company I worked for many years ago.
The real "Libtards" are the Libertarians!
For years games was a big argument to have windows installed on a machine. But the arrival of the 360 made it for me so easy to dump windows for linux on my desktop and buy a macbook pro for on the go.
Windows is a product. When you buy it pre-installed on a machine, prices are already cut to the bone with volume discounts to the manufacturer. Someone has to pay for the security updates, the patches, and so on when it's run by a monolithic corporation instead of an open source community.
I've no beef with the price I paid for my Win7 laptop -- and I know that maybe $50-100 of that purchase price was for the Windows license. Perfectly reasonable.
I use Ubuntu LTS on my "main" machine, but that's because I like Linux, not because Windows is "too expensive."
Furthermore, precisely what product line would be cannibalized by cutting Windows prices further? WinPhone (which no one wants and is a different code base)? WinRT (which no one wants because it's a piece of incompatible crap)? XBox (which doesn't even have an installable OS)?
This article is essentially flamebait to spark discussion, and nothing more. There is nothing pragmatic or realistic about it.
I do not fail; I succeed at finding out what does not work.
Cannibalize your own product line before the competition does is an obvious necessity, yet it is the hardest thing for managers to actually do.
If Slashdot were chemistry it would look like this:Cadaverine
the introduction of Windows Genuine Advantage.
Before WGA was introduced, most people thought windows came free when they purchased a new computer. The rather high price for the OS was completely obfuscated. The cost was hidden because there was no impediment to installing a copy onto any machine so they thought it was free. All you needed was a copy. Well, MS decided they wanted to get paid for all of those installs. So, they introduced WGA. So, what happened... Well, people still bought new machines... But, when they went to use the new OS version on their old machines it didn't work because it could only be validated on one machine... Now, people still wanted the new OS so they went to see how much it cost and they were horrified by how much a copy of windows cost.
This left people with four choices:
1. Don't upgrade... (Look at how long it has taken to get people to stop using Win XP.)
2. Pay the high price. (Probably not)
3. Bootleg a copy. (Bit-torrent has lots of copies)
4. Look someplace else. (Have you noticed how well Apple has been doing lately)
Notice, in all but one unlikely scenario, MS doesn't make anymore money than they did before the introduction of WGA. But what they have done is enlighten people to the true cost of MS windows. Additionally, when someone doesn't upgrade or goes with an alternative to Windows, then third party applications suffer because the installed base of the current windows is diminished...
MS quite simply destroyed their own monopoly by trying to get people to pay for something they would never pay for.
Every time MS releases a new OS I keep thinking they would figure this out and drop WGA but they keep on striving for a smaller and smaller market share.
Simply put, having a solid monopoly is MUCH more valuable than the few sales they have made as a result of WGA...
Oh and lets not forget, WGA just pisses people off so as a paying customer... You get punished... Great business model if you want to shrink your market share.
Isn't it time for ReactOS... I would love to have an open source OS that is compatible with MS Windows... Nothing would put an end to the MS nonsense faster!!!
"Cause all their userbases are belong to us" is the only appropriate comment here. Jesus.
The article talks as though Microsoft is a monolithic entity that will like a single intent. Like any large organization there it is a conglomeration of parts and they mostly act in their self interest than the interest of the whole organization. Most of the time there is a large overlap between the self interest and interest of the larger body. But Microsoft has some perverse incentives like giving part of the revenue stream from a product line as compensation to the top managers of that line. Sounds great in theory as a motivation factor but it can backfire too. These people in top management well versed in the palace intrigues have to let some other part cannibalize their revenue stream for the interest of the organization as a whole. The track record is they won't. Only when the "partner level" managers' bonuses (or is it bonii?) are tied to the over all performance of the company, not the individual parts under their control, they will let internal cannibalization. But letting their bonii depend on large parts of the company they have no control over is a tough sell too. It is a problem that developed over a long time. It won't be solved in short time.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
"concentrate on putting their best foot foward regardless of the impact on product lines"
They can't do that. They'd go out of business in a blink!
Do the right thing MS.. Move to *nix back end like the other 0.80% that use *nix
Fixed that for you.
Cannibalizing your own product lines is hard for managers to do, but is usually the right thing to do. If you worry about destroying sales of one product, you probably do not need to make it. Exceptions exist, such as building a high end product.
But cut your profit? Horrible idea. That only works if you plan on going out of business soon. If you cannot maintain margins then not enough innovation is happening.
What Windows really needs is new technology that people want, that makes current PC's seem old and dated, creating an update demand (at good margins). Perhaps new 4k monitors at reasonable prices?
Who cares about what Microsoft should or should not worry about?
http://stephan.sugarmotor.org
Are you sure? Last time I checked, I can only license it, not buy it like I buy products. Also, if it is a product, how come, from the best I can tell by reading the license, product liability doesn't cover it?
Seeing how the competition are free--ChromeOS, Android, and Ubuntu--and consumer-level users arent bound to Windows, Microsoft cant afford to charge for a consumer version of Windows. Not unless theyre giving up consumer space. Enterprise is a different story, where users are locked in for the foreseeable future.
I believe they meant that Windows would be "cannibalized" by MS making and selling devices.
"That shift is the corporate reorganization unveiled last week to support a radical strategy of retreating from decades of selling packaged software and advancing on sustainable services and potentially-lucrative devices".
..
Nice spin on what is essentially Microsoft cutting into their own reseller channel
AccountKiller
Don't interfere with your enemy while they are busy making a mistake. Got it? Whose side are you on, anyway.
When all you have is a hammer, every problem starts to look like a thumb.
Do the right thing MS.. Move to *nix back end like the other 0.80% that use *nix
Fixed that for you.
Wow MSFT astroturf on the loose. In denial much?
When all you have is a hammer, every problem starts to look like a thumb.
It has always made me angry that manufacturers have had to cut prices so much that for basic consumer machines 100% of their profits come from the trial/bloat ware that they stuff their machines with. Yet Microsoft still keeps charging a ~$100 tax on every machine. This is $100 on a machine selling for maybe $300-$400.
What I wish would happen is some daring company like Staples would start selling some machines with Linux on them and have their sales people show that you can browse, watch Youtube, and edit office documents just fine. They could give the customer the option of trying Linux out for a few weeks and if they don't like it then they can come back with $100 in their hand and Staples will install Windows.
I suspect a fair number of people would be 100% happy with Linux and at least people would understand that Microsoft was gouging them for 25%.
Are you trying to say that my numbers are off somehow? Hell, I'll be super generous today and let's just say 1.6%. Does that change things for you?
What about a version of Windows called "Windows: What We Didn't Change"? During the install or first boot, after a brief mention of how many tweaks & minor improvements were made, it would bring up a video showing all of the interface changes they rejected as being worse than useless. And make the video unskippable. People would be writing donation checks to thank Microsoft for their kindness. Programmers would name their first born "Windows: What We Didn't Change". And slashdotters? Slashdotters would be about the same.
I come here for the love
Linux is free. Mountain Lion is $20 Mac Server is $20. Windows 8? $200.! I could see maybe $50 with deals for bulk but 2 C Notes for something that is a fist fight and outside the last 20 year built comfort zone people are used to... Nah. Way too hard a sell. Would be nice to either have a fresh and solid OS for the enterprise environment standard or simply another option all together.
Actually I could see them doing this.
After the company is mostly in ruins following failed product after failed product and no longer being able to rely on install base anymore.
They could very easily do what apple did, buy a version of the bsd source like the mach bsd. Only tweak the internals a little and focus on a window manager and a select few programs.
The thing is, when it comes to inexpensive devices, say under the $300 mark, that $50-100 fee is a very significant expense, as opposed to "free" Android or in-house iOS.
Showing my age. The original IBM PC was at first too weak to compete with IBM's higher-end offerings. But the AT with 6mhz chip was getting close. People started overclocking their cpus. IBM responded by tweaking the BIOS to not boot if the cpu was faster than 6 mhz (assholes).
This affected a lot of people who ran into problems with the original 20 mb drive, and took their machine in to be serviced. IBM "upgraded" the BIOS when replacing the bad hard drives (assholes).
The modders responded with a "turbo-switch". It was a a manual toggle. The cpu ran at 6 mhz when booting, to pass the boot-time checking. Then you could flip it to 10 mhz or whatever. IBM eventually came out with faster ATs, but the clone makers had eaten up a lot of the PC market by then.
I'm not repeating myself
I'm an X window user; I'm an ex-Windows user
Windows.
What, Microsoft isn't making enough money? Come on.
Apple uses Unix backend, and they have about 7% of the desktop market. Include servers, tablets, phones and other devices that run an OS, and you'll see a much larger percentage.
For full disclosure, I have started using Linux in the windows 98 era for the sole reasons that downloads and music playing kept being interrupted by Windows crashing. I setup two PC's, one for browsing, music playing and downloading which was an "old" linux box (basically my retired windows gaming PC) and a windows PC purely for games and productivity. Over the years, I shifted more and more productivity to Linux and it became my work station with the Windows PC being used purely for gaming.
And then Windows got better and Linux got worse. Of late it is Linux who crashes or doesn't do stuff for no good reason with no text config files to edit or log files to debug. While Windows since 7 is if not perfect it is at least marginally stable and only pulls the phantom network card trick only twice a year.
For example, I recently installed xubuntu and configured my NAS as samba shares defined in /etc/fstab. Should work right? No. On boot I have to do sudo mount -a and then watch error messages scroll past that the shares are already mounted (but not visible and/or accessible in any way). When they are mounted, if I play a movie file and then wait 1 minute, xubuntu seems to "loose" the share and its filemanagement app takes 5 minutes of freezing to do anything.
Windows 7 isn't much better, instantly forgetting a mapped drive if it can't find it for a split second but that is an old bug. Simple samba mounts in /etc/fstab USED to work in Linux. Then they broke it. Regular Ubuntu is even worse because there .gfvs or whatever that horror is called tries to dynamically mount stuff you already defined in fstab and then get it wrong.
Attach a android phone and Ubuntu shows how out of touch it is by trying to mount a camera. Nobody has camera's anymore, everyone does have a smart phone. If you want to attract casual users maybe you shouldn't throw away standard desktop design and instead focus on allowing people to easily hookup their phone?
Active nvidia drivers, loose your icons... why!?! What does the video driver have to do with your desktop theme?
Suspend computer, resume, open video file. Crash of desktop, what is this, Windows 95?
I am addicted to sloppy mouse focus, something neither OSX nor Windows can handle, so I am stuck but I am startling to like the experience less and less.
Mostly because stuff that used to work, now doesn't. It seems the PC in general is going backwards. Come on Intel, get some multi-headed video support, with display ports already. This is fucking 2013 why am I dealing with issues that were solved half a decade ago?
And here is another rant, why does every desktop on Linux insist on including its own crappy media player that doesn't handle any files and crashes on 99% of files when there are two good reliable players available (vlc and mplayer).
The Linux culture of late seems to reason: App X is 80% complete, lets replace it with App Y which is 40% complete! Unity and Gnome 3 would have created far less outrage if they had been released when they had achieved full feature parity with Gnome 2. But they didn't. People had just gotten Gnome 2 setup to be workable and then it was replaced with a system that crashed, lacked basic features people had come to rely upon and only worked on a handful of machines.
That is like a 2 star Michelin restaurant just about to receive its 3rd star firing its kitchen staff and replacing them with monkeys and then wondering why their business went bankrupt. If these people ran a F1 race they would respond to a record setting test lap by rebuilding the car from scratch. With lego.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
You could make that argument I suppose. I wasn't thinking of Apple because it's not really in the same market as Microsoft. Apple sells hardware and they license their OS to run on it. Microsoft's market is stand-alone OS software sales, and Apple isn't part of that, nor is any phone or tablet. So I guess it depends on how you look at it.
I suppose Microsoft could (in some fantasy world), drop it's stand-alone OS completely, and resell linux on their surface hardware, but that's a silly idea.
Whoa... Tough Love, Linux zealot and troll, calling someone else out on astroturfing? Color me surprised! -_-
This is so obvious, and yet it is the downfall of so many successful companies. IBM lost control of the computer hardware business because it was worried about mid range cannibalizing mainframes, then PCs cannibalizing mid-range.
Hey CEOs: If you don't let your own new products cannibalize your current products, your competitors will do it for you. And then you'll be left with no sales for the old product and no new product to take its place.
We are the 198 proof..
* Laptop is a MacBook Pro
* Phone is Android
* Tablet is Android
At work:
* I work with very large e-commerce sites - everything is Linux
* No SharePoint
Outside of Outlook/Exchange at work, I just don't use anything Microsoft anymore.
I hate it when articles give Microsoft advice because they might just listen and I would prefer to see Microsoft go under.
For those interested in a more in-depth discussion of the dynamics of situations like this - fear of cannibalization - I would suggest reading "The Innovator's Dilemma." The book is the non-academic standard for how innovations threaten organizations.
which didn't have the Metro UI.
Just because IBM made the same mistake decades ago why think that Microsoft wouldn't fall into the same trap? IBM's mainframe division was so afraid of the first IBM PC that they saw to it that IBM's second PC was the laughable toy, the PC Jr. That left the field open for Compaq to design and release the first 386 boxes and IBM lost control of the market. Had IBM added PC local smarts to the 3750 line of remote terminals things might look very different today.
"It's still possible they could sell Windows versions at different rates for different devices, but that could get hard to justify to consumers over the long haul.""
They already do that, and have done it for years through OEM.
I've not exactly been caring about the details of the Windows environment for half a decade now, but isn't this what they started trying with about WinXP, expanded with Vista, and have been ramping since.
I'm pretty sure that we had several cases of the Boss picking up a laptop from PC-Wankstain ("PC-World", it says on the door) on a Saturday afternoon for a Sunday morning helicopter to the boat, and then discovering that it had the wrong version of the OS on it, which wouldn't so some networky things, or service management things. I may even have been the poor schmuck on the boat, trying to patch something workable together after burning out the existing machine. Nightmares ; now Someone Else's Problem.
Birds are not dinosaur descendants;birds are dinosaurs, for all useful meanings of "birds", "are" and "dinosaurs"