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How Does Microsoft Avoid Being the Next IBM? (arstechnica.com)
An anonymous reader quotes a report from Ars Technica: For fans of the platform, the official confirmation that Windows on phones isn't under active development any longer -- security bugs will be fixed, but new features and new hardware aren't on the cards -- isn't a big surprise. This is merely a sad acknowledgement of what we already knew. Last week, Microsoft also announced that it was getting out of the music business, signaling another small retreat from the consumer space. It's tempting to shrug and dismiss each of these instances, pointing to Microsoft's continued enterprise strength as evidence that the company's position remains strong. And certainly, sticking to the enterprise space is a thing that Microsoft could do. Become the next IBM: a stable, dull, multibillion dollar business. But IBM probably doesn't want to be IBM right now -- it has had five straight years of falling revenue amid declining relevance of its legacy businesses -- and Microsoft probably shouldn't want to be the next IBM, either. Today, Microsoft is facing similar pressures -- Windows, though still critical, isn't as essential to people's lives as it was a decade ago -- and risks a similar fate. Dropping consumer ambitions and retreating to the enterprise is a mistake. Microsoft's failure in smartphones is bad for Windows, and it's bad for Microsoft's position in the enterprise as a whole.
Microsoft is already the new IBM (old and staid). Apple is the new Microsoft (embrace and extend with proprietary stuff to ensure lock-in). Google is the new Apple.
"National Security is the chief cause of national insecurity." - Celine's First Law
Since the early '90s, I've been predicting Microsoft's future: it will follow the same trajectory as IBM -- meaning Microsoft will never go away, but will become increasingly less important until it can reasonably be ignored if you wish.
My reasoning is that their corporate behavior pretty solidly mirrors that of IBM's through its various phases. There is nearly no chance that Microsoft (or any other company of its size) could pull off such a complete reinvention of themselves as to change that behavior.
I see no reason to modify my prediction yet.
(ducks)
Look, the problem is how the market exists, and how it will change, not in how it used to be.
IBM rolled into services, having initially come from services.
MSFT started with OS and apps, but is fighting three different wars:
1. Tiny tech. Stuff that is so small nobody will ever pay for an OS for it. It's in the background. Do you ever think "oh, my new fridge and toaster need a fancy Kenmore OS, not some Braun OS". Nope. Wearables don't care. Only Apple (which amounted to a large share of MSFT apps market share, originally) has managed to make people pay for that.
2. Ubiquitous Linux blade servers. Nobody cares what your database and AI runs on. Oh, at trade shows they pretend they do, but IRL they don't. Cheap fast quick reliable wins every day.
3. Cell/mobile vs Desktop/Server. MSFT has never grokked cell or mobile. Ever. Still don't. They keep trying to chrome it up, and they aren't Apple, so it never works.
Thing is, you think MSFT gets most of their money from stuff and services they sell. They don't. They get it from all the bits and pieces of companies they own.
(caveat: many of my friends got rich off of MSFT or Apple or IBM, and my first house was from selling MSFT stock I bought below book value on Black Friday stock crash)
-- Tigger warning: This post may contain tiggers! --
Looking at your responses what I take is that Microsoft isn't going to be the next IBM, they're just not going to see the kinds of growth that they enjoyed in the years when consumers were having to buy computers for the first time in order to get on the Internet.
Think about it, there was a period from the mid-nineties to the mid noughties where we went from little consumer Internet use to a large majority of households having consumer Internet access, even faster-than-modem access. Being the dominant PC operating system meant that Windows itself was overwhelmingly profitable and expanded Microsoft's profits more than ever before, and likely without costing the company all that much in development to do so.
Once the vast majority of households have PCs though, sales growth will tail-off. Sure there will still be lots of sales, but those sales will come in the form of replacing existing PCs with new ones preloaded with Windows, not whole new markets getting in on top of replacement PCs. Microsoft will be profitable, but not stupid-profitable like they were for about a decade.
Microsoft has since made a push to get PCs into all workplaces for as many workers as possible, whether those workers really need their own PCs or not. Where they got a bit blindsided is with tablets and smartphones, where proprietary applications like workorder and dispatch systems can run on operating systems other than Windows. I partially blame Microsoft's UI, anyone that worked with older Windows CE would agree that "WinCE" was an accurate way of describing the experience on a PDA, and they never really got it truly right, while both Google with Android and Apple with iOS learned from watching Palm and designed OSes with the best features from the PalmOS GUI but now with automatic cloud connectivity for the default applications. Microsoft never got over trying to shoehorn a desktop OS into a phone, and thought being Windows on the desktop to applications on Windows on the phone would be worth more than it proved to be, as developers seem happy to write Android and iOS versions of their packages.
Do not look into laser with remaining eye.
I used to work exclusively with WM on industrial (rugged) devices and it was huge in a lot of enterprise scale applications like mail service, warehousing, point of sale, etc. Everything was great until MS started flapping around trying to decide if they wanted to have Windows Embedded or Phone or Handheld or whatever the fuck. One thing enterprise customers DO NOT LIKE is uncertainty.
So they started switching to Android because at least they know what they are getting and that it will be supported in the future. Microsoft did NOT understand their market for Windows Mobile. Or maybe they did when they started and forgot, or new blood came in and bollocks-ed up the works.