I think there will be little difference between the service model and the shrink-wrapped product model when it comes to costs and the profits generated for the software company. Some companies profit more than others right now too so it's sort of the same thing. You are saying that you won't pay $300/month but what if it's $300/year? I think it is more likely that each software company will price their product differently. A specialized, high-end, software (say something targetted towards businesses) will likely charge more per month than a mass-market consumer oriented, low-end, product. The latter may charge $100/year whereas the former may charge $100/month.
There is no reason to think that people are going to get ripped off or get charged even more than now. It may happen in some areas but I expect costs to be lower since distribution costs for the provider will be lower (CD pressing, boxes, shipping to retail outlets, profit for retailer, etc). In fact, don't forget that most retail products, software or not, are marked up 50%+ by the retailer.
People always diss Microsoft and its so-called monopoly but I think online provider model will result in even more monopolies--contrary to what many think. It will be far easier to lock in customer by bundling things and making it easy for newbies and non-tech-savvy-people to stick with a single provider than now. For instance, how many people end up using Google, as an example (not dissing the company or anything), to do their search, e-mail, maps, etc. In the future, Google may lock in users for their future services (say maps, or who knows what). Similarly, Yahoo doesn't get a lot of respect on Slashdot but they own most of the top internet sites ("suite") on the web. How many people who start out using Yahoo stick with it?
Your view, as well as the other poster's view below, is true. I'm not denying that very few would embrace such a change. However, that doesn't mean it won't happen.
The reason no one wants to let go of their data is because of a lack of trust. There is no trust out there now because (i) technology is still in its infancy, and (ii) no established service provider has emerged (i.e. brand recognition). The present situation is like Ebay 5 years ago. How many people would put up anytyhing worth over $10,000 on Ebay back then? Only a few brave souls;) But how about now? Many! The same thing will happen in other service areas. As companies become more established, they will gain market acceptance. Salesforce.com is what... 3(??) years old? But in 10 years, I'll bet a lot of people would be willing to use an online provider (whether salesforce.com or someone else) for their CRM...
Companies will lose some control... just like how many companies have lost control over their manufacturing by outsourcing most of it. But you are still better off. If costs can be significantly lowered, while losing some control, I think shareholders would vote in favour of it. As I mention in another response the data is not what is valuable; what's valuable is the idea/thought/process/etc behind it. Apple's iPod isn't #1 in its market segment because Apple zealously guards its blueprints (which I'm sure it does but it's irrelevant) but because it constantly innovates. Google isn't the #1 (depending on what you look at) online property because no one knows how to build a search engines (there are tons of search engines out there) or was the first one to try advertising. It's because it constantly keeps improving, staying ahead of the competitors. The same thing with other industries, say packaged goods or cars or whatever.
Maybe it's just my (misguided?;) ) personal opinion but a lot of the stuff that companies guard are a waste of time and money. If efficiency can be improved (eg. imagine a salesperson trying to access an on-site CRM vs one that one can access from anywhere on the road) or costs can be lowered (i.e. storing and guarding data is not the core competency of most companies and it will be much cheaper if it can be done remotely) then I think this methodology will spread like wildfire... We may not be there yet but it'll happen IMO...
"However, we see it as a false economy. There is no replacement for just doing the work."
I definitely don't think it's a false economy at all. In fact it's a growth industry that will end up becoming very large... I don't think this is necessarily avoiding work, but is instead something that improves efficiency... a disruptive technology if you will... someone still has to do the work...
Just because someone else will store your data does not mean that it will be available to your competitors or your public or whatever. As far as I'm concerned, security will not be the wall that prevents any of this (education and marketing will take care of that) but instead is the technology. Communication networks, computer networks, etc are still not fast enough to be able to do many of these things in an efficient manner.
Most you that are concerned have valid concerns but the way I look at it, that's an old way of looking at stuff. Through history, many have said they will never part with some particular sensitive information/procedure/knowledge/product when in fact they end up doing it over time, as technology lowers costs and makes the old way of doing this obsolete. What we are seeing is a new strategy at work. I mean, ignore the controversy over outsourcing on Slashdot, and look at how many companies are outsourcing non-core, although critical, aspects of their business. Thirty or fourty years ago, it would have been a ridiculous proposition for, say, a car company to outsource nearly all manufacturing (particularly all the main parts). How many hardware companies send their highly confidential blueprints for their products to some external manufacturer? Management in the 60's and 70's would probably have never done that. Even going back to the Ebay example, hardly anyone would have bothered to auction expensive items (Ebay does handle items worth hundreads of thousands of dollars, and even some million dollar items) online a few years ago.
I think the mistaken view has to do with the notion of data. What is important is not the data; what is important is the knowledge/process/information contained in it. As competition increases, knowledge spreads faster, communications become quicker, and product life cycles shrink, we will almost end up with a situation where the data that is generated this year will largely be obsolete next year. What past generations thought of as sacred and zealously guarded will end up obsolete long before anyone even realizes it. When that happens, holding data will become a "cost center" that is worth minimizing. Sensitive accounting information that no CFO will send externally will all of a sudden be sent outside the organization; important R&D will actually be held off-site; and so forth... perhaps that time is not now but it is a growth industry that is in its infancy.
There will certainly be resistanc but I think you will change your mind when:
(i) costs decline to make it attractive to you (if your $200,000 costs can be cut to $75,000, wouldn't you? (I'm just making up #s)) , or
(ii) it becomes so easy and ubiquitous that you would be worse off to do it the old way (an example would be webmail versus desktop client email from an ISP)
How many people nowadays use Gmail, Hotmail, or what-have-you for their personal and confidential e-mail? At one time, many would have said that they would not trust a "free email provider" for their email... In the corporate world, the best example is perhaps salesforce.com. So many companies are actually trusting their critical sales data to this online outfit. Given that many organizations treat their sales data as even more secretive and precious than R&D or employee personal data, you would think that no one would use salesforce.com. Yet it's happening and it will only grow... or how many people are willing to provide a whole hoard of personal information about them and their company when booking flights online or hotels...
In a crude sense, already your data is on someone else's servers. For instance, many organizations (not the large corporations but certainly many mid-sized and smaller companies) store their data on their ISP's or some 3rd party IT company's servers. Many don't even know that htey are doing this (cuz many in management don't really understand a lot of tech stuff and most of it is transparent anyway (only a techie can tell the difference between a file server in your building vs one 100km from you)). From a business point of view, a lot of the tech infrastructure in non-tech firms (i.e. I'm talking about a general business whose core competency is not tech) are costs that the business would love to get rid of.
A lot of people may hate Microsoft here but let's face it, MS' view of web services is taking off. It's just too bad for them that companies like Google are taking a big chunk of the market. Ebay is nothing compared to "web maps" (maps at Google or MSN or whatever) and their potential.
Agree... I think most of it is due to Steve Jobs and his vision. Steve Jobs is generally very closed and attempts to have strong control. This isn't necessarily bad per se but that's Apple's corporate culture. Steve Jobs has done a great jobs as an executive but his style is rough.. Do note that I have never worked at Apple so I am not sure how rigid they really are. All I know is that their executives are very rigid and secretive (they rarely talk about future visions or potential products unless they know they are going to do something for sure)...
Yeah but even a cynic must accept the fact that, with the way the legal system is, you are bound to win at least 1 out of 10 cases--regardless of who ridiculous the case is. The best example of this are law firms that sue companies after their stock price drops due to some issue (hello! when did shareholders become zombies suing for mistakes they themselves make?) I see that you are a lawyer and I'm not dissing your profession or you per se. I really respect defense lawyers such as yourself (really!) since you defend people against the strong arm of the government and against powerful corporations and their interests. Nevertheless, I think a huge chunk of the legal establishment, including many prestigious firms, live off ridiculous lawsuits. The fees charged are way too high. This doesn't mean that lawyers are ripping off people but it just means that the system is inefficient. It's going to get to the point where an average person won't be able to defend themselves against anything in the future. Even the government is going to go bankrupt due to the high legal costs (similar to the problem with doctors and the medical system)...
Is this another one of those money-making schemes for the lawyers? Surely the plaintiff must realize that he/she will end up with marginal gains after all is said and done. I could be wrong but didn't Kazaa go bankrupt or something. If so, would the new company (and shareholders) actually be liable for anything? Probably not but chances are we won't know until a few hundread thousand in legal fees are earned by the lawyers...
Sivaram Velauthapillai
The poster above alludes to it but just to reiterate, a hybrid player will cost the same as a normal DVD player (since it has to have the same licensing costs of the normal DVD, not to mention potentially extra hardware and support for the combination). So what's the incentive for a consumer to buy the hybrid (at the same or potentially higher cost) when DVD players are more readily available (with even steeper cost decline curves)? Furthermore, HD-DVD and Blu-Ray are just around the corner so there will be even less incentive to go with an intermediate (ie. temporary) solution until those take off...
China has to be given credit for how it is opening up its markets and (hopefully) liberalizing itself (on social/political issues). However, the country is still influenced too much by nationalists who want to have their own standard in everything. How many stories have we had on Slashdot on China's own specs on things ranging from mobile/wirless phones to CPUs (whatever happend to the Red Dragon or whatever it was called anyway), to you name it. It remains to be seen when this totalitarian mindset of having control over everything in the nation will come to an end...
Nah that won't work... companies have tried it many times (although can't think of any in the software field)... usually what happens is that consumers don't upgrade and everyone just sticks with the older product...
Anyway, the thing you guys don't realize is that you need the product to have tons of bells & whistles, and be broad, and be large, and well, be everything. Without all that, you are not going to have broad acceptance, and consumers won't buy your product. How did Windows--or for that matter, Office or Visual Studio--gain its market share? Certainly not by keeping it simple. They became popular because they offered MORE features--not less!
"Drop all the featureware that's in your OS and concentrate on simplifying, standardizing, and securing the 600 layers beneath what the users see."
A consumer will probably pay less than $20 for such a product and it won't generate sufficient revenues for a large-cap computer company. If someone wants to remain small and have a small market, that's fine. But large corporations need to grow and simplifying and streamlining ain't it. You have to capture more users by adding more features--even if they add bloatware...
The fact of the matter is people want a "toilet with a toaster, cordless drill, leaf blower, and pencil holder built in". It's not the Chewbacca Defense of featureware; instead, it is the Convergence of Technologies (trademark by me;) ). People want MORE not less!!!
The government will never be able to figure out what to support and how much to pay. Since software is a broad category, and since software changes so quickly, the govt will be caught off-guard. The project will start off with a small budget but will ballon to billions of dollars for stuff that the free market can provide. This will be different than CIA, DEA, or Department of Homeland Security or any other initiative that starts out small, costing a few million to a few hundread million, and then ballons into billions of dollars. The top 15 software companies, such as Microsoft, Apple, Oracle, and others, spend billions of dollars per year on R&D. The government will not be able to match even a small slice of that.
What does market cap have to do with cash? I'm not saying you are wrong but a high mkt cap company could have little cash, and low mkt cap company could have a lot of cash. During the dot-com boom, a lot of companies had fairly large market caps but you would be hard pressed to find much cash...
"Microsoft killed those other packages through bundling, tying, and proprietary formats."
Although that plays a role in some other Microsoft software (eg. Internet Explorer), most Microsoft products weren't like that. MS Office, when it was individual products, literally had 0% market share. Wordperfect probably 99% market share; Lotus 1-2-3 had 90%+; and so on. There was little reason for any company or individual to switch to MS Office if it indeed was mainly for bundling, tying and proprietory formats. The stuff you are saying, if they were true, would matter AFTER you have established your market share. That wasn't the case here. When you are the new entrant, consumers and business users will actually avoid products if they had they had the stuff you mentioned (eg. properitory formats will be avoided and instead the market standard (eg. Wordperfect 5.1 file) would be used; software that ties a user will be avoided for another that doesn't; etc)....
"Open source developers don't usually copy Windows features because they think they are good, they copy them in order to make it easer for Windows users to switch."
The Windows features are popular precisely because they are superior. Perhaps not entirely superior from a technological point of view, but from a usuability and cost point of view, the Windows features just kill everything else out there. MS Office features, for example, did not become popular just for the sake of popularity. Instead, they were superior and beat out Lotus 1-2-3, Wordperfect, etc. Younger people may not realize it but the standardization of the Office toolbar across all applications was a HUGE feature. It is one of the things that made corporations switch to MS Office--and remember that corporations don't like switching due to high switching costs.
hmm... even stuff like linux have high requirements if you use it as a desktop... you can't run KDE or Gnome with 128MB and expect decent performance...
It's more costly to design software--or any product for that matter--to run on older hardware. Even the consumer or corporate buyer will not care. Very few people are going to purchase brand new software costing $100+ to run on old quasi-obsolete computers with value of close to $0.
Your theory probably has a lot of truth to it. Being able to check the source code of some API or some component, instead of just relying on API specs or document, means that open-source software has one advantage. However, the advantage probably isn't as large as you are implying because most developers won't look through the source code. They may not have time for it or maybe they won't understand it or whatever...
Or could it be just that Microsoft produced better products?
Wordperfect and Lotus 1-2-3 had 90%+ market share and Borland probably had 60%+ market share in development tools. Users didn't switch to Microsoft products because Word and Excel were bundled together! Instead, they switched because the Microsoft products were indeed superior. The fact of the matter is that Word for Windows was far superior to Wordperfect for Windows, and Excel was just as good (and actually became superior) as Lotus 1-2-3.
Although linux has a good chance, it will likely lose as well. The reason is because the server market is influenced by the desktop. This may not be true in businesses that don't interact with desktops but those that do will likely prefer an OS that can integrate with the desktop. For example, Microsoft's Active Directory may not be the best thing around by a large corporation will likely go with Windows Server, instead of say Red Hat Linux, because the Active Directory integrates better with the client desktops.
With Microsoft pushing a web service platform in the future, I expect even more server losses for linux as companies develop products for Windows Server that will interact seamlessly with Windows desktops.
Until linux gains a foothold in the desktop area, their servers will simply be used for specialized needs (eg. webserver only) which will likely remain a small part of the market (similar to how mainframes and supercomputers are still used for specialized needs but the market is small).
I'm not disagreeing with your number. Salesforce DOES dominate. All I'm saying is that Microsoft hasn't really done a targetted push yet. The real battle is after Microsoft actually decides to start focusing on this area--all this time they really haven't cared much...
The fact that Microsoft may lose some market share in saturated sectors like operating system and the office suite doesn't really mean much. The gain of Firefox and Openoffice.org is not even 5%.
What will matter to Microsoft is NOT the saturated markets in Office and Windows, but new markets. The future of Microsoft will depend on what new markets they can develop. Whether it is IPTV, or video games, or whatever, that's where the real future is...
The middle-life that Microsoft is going through is natural for large corporations. Whether you look at Coca-cola, which used to totally dominate, or G.E., or Sony, or even IBM, they will hopefully capture new markets.
I highly doubt that... Google is primarily a web based business with literally no development tools or software. Microsoft, in contrast, is primarily a development company. Google is more like a quasi-media company than a tech company right now. They make nearly all their money on advertising--not on software or services--so they are not really directly competing.
Just to see what I mean, consider this. Microsoft is highly influenced by the sales of PCs, software, and computer services. If computer sales goes down, Microsoft is negatively impacted. In contrast, Google doesn't really depend all that much on computer sales, etc. Instead, Google is heavily impacted by the advertising market. If there is a downturn in the economy and advertising gets cut (eg. recession causing many small and medium businesses to close; large corporations cutting back advertising; etc) then Google will be negatively impacted.
I'm not saying that Google doesn't use software development, or have any R&D or stuff like that. All I'm saying is that Google and Microsoft are almost in two different industries. It's sort of like comparing Amazon to Microsoft. Even though Amazon spent a lot on R&D and hires a lot of programmers and so on, they are really a retailer.
" The business model for search still hasn't been proven. Neither Google or Yahoo has made a profit over their lifetime."
I think that's incorrect... Both Google and Yahoo make most of their money on search. In fact, nearly all of Google's money is via search. Google has been profitable over their lifetime for sure...
"
I'll give you an example where MIcrosoft has already lost to an online competitor--Salesforce.com has been eating Microsoft CRM for lunch. As their CEO put it, Microsoft still wishes the Internet had never been invented. Some vague new update to Microsoft CRM is scheduled for 2006, but I doubt it will happen."
I don't know about that...
Microsoft doesn't really have a strong CRM presence so I don't know if salesforce.com is doing much to them. If anything, I think salesforce.com is probably hurting the main CRM vendors, as well as database companies like Oracle, Siebel, etc.
But it looks like MS is going to push hard in the low to mid CRM market so we'll see what happens. As far as I'm concerned, MS isn't even a major vendor in the CRM market...
Slashdot Mirror
I think there will be little difference between the service model and the shrink-wrapped product model when it comes to costs and the profits generated for the software company. Some companies profit more than others right now too so it's sort of the same thing. You are saying that you won't pay $300/month but what if it's $300/year? I think it is more likely that each software company will price their product differently. A specialized, high-end, software (say something targetted towards businesses) will likely charge more per month than a mass-market consumer oriented, low-end, product. The latter may charge $100/year whereas the former may charge $100/month.
There is no reason to think that people are going to get ripped off or get charged even more than now. It may happen in some areas but I expect costs to be lower since distribution costs for the provider will be lower (CD pressing, boxes, shipping to retail outlets, profit for retailer, etc). In fact, don't forget that most retail products, software or not, are marked up 50%+ by the retailer.
People always diss Microsoft and its so-called monopoly but I think online provider model will result in even more monopolies--contrary to what many think. It will be far easier to lock in customer by bundling things and making it easy for newbies and non-tech-savvy-people to stick with a single provider than now. For instance, how many people end up using Google, as an example (not dissing the company or anything), to do their search, e-mail, maps, etc. In the future, Google may lock in users for their future services (say maps, or who knows what). Similarly, Yahoo doesn't get a lot of respect on Slashdot but they own most of the top internet sites ("suite") on the web. How many people who start out using Yahoo stick with it?
Your view, as well as the other poster's view below, is true. I'm not denying that very few would embrace such a change. However, that doesn't mean it won't happen.
;) But how about now? Many! The same thing will happen in other service areas. As companies become more established, they will gain market acceptance. Salesforce.com is what... 3(??) years old? But in 10 years, I'll bet a lot of people would be willing to use an online provider (whether salesforce.com or someone else) for their CRM...
;) ) personal opinion but a lot of the stuff that companies guard are a waste of time and money. If efficiency can be improved (eg. imagine a salesperson trying to access an on-site CRM vs one that one can access from anywhere on the road) or costs can be lowered (i.e. storing and guarding data is not the core competency of most companies and it will be much cheaper if it can be done remotely) then I think this methodology will spread like wildfire... We may not be there yet but it'll happen IMO...
The reason no one wants to let go of their data is because of a lack of trust. There is no trust out there now because (i) technology is still in its infancy, and (ii) no established service provider has emerged (i.e. brand recognition). The present situation is like Ebay 5 years ago. How many people would put up anytyhing worth over $10,000 on Ebay back then? Only a few brave souls
Companies will lose some control... just like how many companies have lost control over their manufacturing by outsourcing most of it. But you are still better off. If costs can be significantly lowered, while losing some control, I think shareholders would vote in favour of it. As I mention in another response the data is not what is valuable; what's valuable is the idea/thought/process/etc behind it. Apple's iPod isn't #1 in its market segment because Apple zealously guards its blueprints (which I'm sure it does but it's irrelevant) but because it constantly innovates. Google isn't the #1 (depending on what you look at) online property because no one knows how to build a search engines (there are tons of search engines out there) or was the first one to try advertising. It's because it constantly keeps improving, staying ahead of the competitors. The same thing with other industries, say packaged goods or cars or whatever.
Maybe it's just my (misguided?
"However, we see it as a false economy. There is no replacement for just doing the work."
I definitely don't think it's a false economy at all. In fact it's a growth industry that will end up becoming very large... I don't think this is necessarily avoiding work, but is instead something that improves efficiency... a disruptive technology if you will... someone still has to do the work...
Just because someone else will store your data does not mean that it will be available to your competitors or your public or whatever. As far as I'm concerned, security will not be the wall that prevents any of this (education and marketing will take care of that) but instead is the technology. Communication networks, computer networks, etc are still not fast enough to be able to do many of these things in an efficient manner.
Most you that are concerned have valid concerns but the way I look at it, that's an old way of looking at stuff. Through history, many have said they will never part with some particular sensitive information/procedure/knowledge/product when in fact they end up doing it over time, as technology lowers costs and makes the old way of doing this obsolete. What we are seeing is a new strategy at work. I mean, ignore the controversy over outsourcing on Slashdot, and look at how many companies are outsourcing non-core, although critical, aspects of their business. Thirty or fourty years ago, it would have been a ridiculous proposition for, say, a car company to outsource nearly all manufacturing (particularly all the main parts). How many hardware companies send their highly confidential blueprints for their products to some external manufacturer? Management in the 60's and 70's would probably have never done that. Even going back to the Ebay example, hardly anyone would have bothered to auction expensive items (Ebay does handle items worth hundreads of thousands of dollars, and even some million dollar items) online a few years ago.
I think the mistaken view has to do with the notion of data. What is important is not the data; what is important is the knowledge/process/information contained in it. As competition increases, knowledge spreads faster, communications become quicker, and product life cycles shrink, we will almost end up with a situation where the data that is generated this year will largely be obsolete next year. What past generations thought of as sacred and zealously guarded will end up obsolete long before anyone even realizes it. When that happens, holding data will become a "cost center" that is worth minimizing. Sensitive accounting information that no CFO will send externally will all of a sudden be sent outside the organization; important R&D will actually be held off-site; and so forth... perhaps that time is not now but it is a growth industry that is in its infancy.
There will certainly be resistanc but I think you will change your mind when:
(i) costs decline to make it attractive to you (if your $200,000 costs can be cut to $75,000, wouldn't you? (I'm just making up #s))
, or (ii) it becomes so easy and ubiquitous that you would be worse off to do it the old way (an example would be webmail versus desktop client email from an ISP)
How many people nowadays use Gmail, Hotmail, or what-have-you for their personal and confidential e-mail? At one time, many would have said that they would not trust a "free email provider" for their email... In the corporate world, the best example is perhaps salesforce.com. So many companies are actually trusting their critical sales data to this online outfit. Given that many organizations treat their sales data as even more secretive and precious than R&D or employee personal data, you would think that no one would use salesforce.com. Yet it's happening and it will only grow... or how many people are willing to provide a whole hoard of personal information about them and their company when booking flights online or hotels...
In a crude sense, already your data is on someone else's servers. For instance, many organizations (not the large corporations but certainly many mid-sized and smaller companies) store their data on their ISP's or some 3rd party IT company's servers. Many don't even know that htey are doing this (cuz many in management don't really understand a lot of tech stuff and most of it is transparent anyway (only a techie can tell the difference between a file server in your building vs one 100km from you)). From a business point of view, a lot of the tech infrastructure in non-tech firms (i.e. I'm talking about a general business whose core competency is not tech) are costs that the business would love to get rid of.
A lot of people may hate Microsoft here but let's face it, MS' view of web services is taking off. It's just too bad for them that companies like Google are taking a big chunk of the market. Ebay is nothing compared to "web maps" (maps at Google or MSN or whatever) and their potential.
Agree... I think most of it is due to Steve Jobs and his vision. Steve Jobs is generally very closed and attempts to have strong control. This isn't necessarily bad per se but that's Apple's corporate culture. Steve Jobs has done a great jobs as an executive but his style is rough.. Do note that I have never worked at Apple so I am not sure how rigid they really are. All I know is that their executives are very rigid and secretive (they rarely talk about future visions or potential products unless they know they are going to do something for sure)...
Yeah but even a cynic must accept the fact that, with the way the legal system is, you are bound to win at least 1 out of 10 cases--regardless of who ridiculous the case is. The best example of this are law firms that sue companies after their stock price drops due to some issue (hello! when did shareholders become zombies suing for mistakes they themselves make?) I see that you are a lawyer and I'm not dissing your profession or you per se. I really respect defense lawyers such as yourself (really!) since you defend people against the strong arm of the government and against powerful corporations and their interests. Nevertheless, I think a huge chunk of the legal establishment, including many prestigious firms, live off ridiculous lawsuits. The fees charged are way too high. This doesn't mean that lawyers are ripping off people but it just means that the system is inefficient. It's going to get to the point where an average person won't be able to defend themselves against anything in the future. Even the government is going to go bankrupt due to the high legal costs (similar to the problem with doctors and the medical system)...
Is this another one of those money-making schemes for the lawyers? Surely the plaintiff must realize that he/she will end up with marginal gains after all is said and done. I could be wrong but didn't Kazaa go bankrupt or something. If so, would the new company (and shareholders) actually be liable for anything? Probably not but chances are we won't know until a few hundread thousand in legal fees are earned by the lawyers... Sivaram Velauthapillai
The poster above alludes to it but just to reiterate, a hybrid player will cost the same as a normal DVD player (since it has to have the same licensing costs of the normal DVD, not to mention potentially extra hardware and support for the combination). So what's the incentive for a consumer to buy the hybrid (at the same or potentially higher cost) when DVD players are more readily available (with even steeper cost decline curves)? Furthermore, HD-DVD and Blu-Ray are just around the corner so there will be even less incentive to go with an intermediate (ie. temporary) solution until those take off... China has to be given credit for how it is opening up its markets and (hopefully) liberalizing itself (on social/political issues). However, the country is still influenced too much by nationalists who want to have their own standard in everything. How many stories have we had on Slashdot on China's own specs on things ranging from mobile/wirless phones to CPUs (whatever happend to the Red Dragon or whatever it was called anyway), to you name it. It remains to be seen when this totalitarian mindset of having control over everything in the nation will come to an end...
Nah that won't work... companies have tried it many times (although can't think of any in the software field)... usually what happens is that consumers don't upgrade and everyone just sticks with the older product...
With that line of thinking, there will be zero productivity improvements and zero advances.
Yo, good job getting first post...
;) ). People want MORE not less!!!
Anyway, the thing you guys don't realize is that you need the product to have tons of bells & whistles, and be broad, and be large, and well, be everything. Without all that, you are not going to have broad acceptance, and consumers won't buy your product. How did Windows--or for that matter, Office or Visual Studio--gain its market share? Certainly not by keeping it simple. They became popular because they offered MORE features--not less!
"Drop all the featureware that's in your OS and concentrate on simplifying, standardizing, and securing the 600 layers beneath what the users see."
A consumer will probably pay less than $20 for such a product and it won't generate sufficient revenues for a large-cap computer company. If someone wants to remain small and have a small market, that's fine. But large corporations need to grow and simplifying and streamlining ain't it. You have to capture more users by adding more features--even if they add bloatware...
The fact of the matter is people want a "toilet with a toaster, cordless drill, leaf blower, and pencil holder built in". It's not the Chewbacca Defense of featureware; instead, it is the Convergence of Technologies (trademark by me
The government will never be able to figure out what to support and how much to pay. Since software is a broad category, and since software changes so quickly, the govt will be caught off-guard. The project will start off with a small budget but will ballon to billions of dollars for stuff that the free market can provide. This will be different than CIA, DEA, or Department of Homeland Security or any other initiative that starts out small, costing a few million to a few hundread million, and then ballons into billions of dollars. The top 15 software companies, such as Microsoft, Apple, Oracle, and others, spend billions of dollars per year on R&D. The government will not be able to match even a small slice of that.
What does market cap have to do with cash? I'm not saying you are wrong but a high mkt cap company could have little cash, and low mkt cap company could have a lot of cash. During the dot-com boom, a lot of companies had fairly large market caps but you would be hard pressed to find much cash...
"Microsoft killed those other packages through bundling, tying, and proprietary formats." Although that plays a role in some other Microsoft software (eg. Internet Explorer), most Microsoft products weren't like that. MS Office, when it was individual products, literally had 0% market share. Wordperfect probably 99% market share; Lotus 1-2-3 had 90%+; and so on. There was little reason for any company or individual to switch to MS Office if it indeed was mainly for bundling, tying and proprietory formats. The stuff you are saying, if they were true, would matter AFTER you have established your market share. That wasn't the case here. When you are the new entrant, consumers and business users will actually avoid products if they had they had the stuff you mentioned (eg. properitory formats will be avoided and instead the market standard (eg. Wordperfect 5.1 file) would be used; software that ties a user will be avoided for another that doesn't; etc)....
"Open source developers don't usually copy Windows features because they think they are good, they copy them in order to make it easer for Windows users to switch."
The Windows features are popular precisely because they are superior. Perhaps not entirely superior from a technological point of view, but from a usuability and cost point of view, the Windows features just kill everything else out there. MS Office features, for example, did not become popular just for the sake of popularity. Instead, they were superior and beat out Lotus 1-2-3, Wordperfect, etc. Younger people may not realize it but the standardization of the Office toolbar across all applications was a HUGE feature. It is one of the things that made corporations switch to MS Office--and remember that corporations don't like switching due to high switching costs.
hmm... even stuff like linux have high requirements if you use it as a desktop... you can't run KDE or Gnome with 128MB and expect decent performance... It's more costly to design software--or any product for that matter--to run on older hardware. Even the consumer or corporate buyer will not care. Very few people are going to purchase brand new software costing $100+ to run on old quasi-obsolete computers with value of close to $0.
Your theory probably has a lot of truth to it. Being able to check the source code of some API or some component, instead of just relying on API specs or document, means that open-source software has one advantage. However, the advantage probably isn't as large as you are implying because most developers won't look through the source code. They may not have time for it or maybe they won't understand it or whatever...
Or could it be just that Microsoft produced better products?
Wordperfect and Lotus 1-2-3 had 90%+ market share and Borland probably had 60%+ market share in development tools. Users didn't switch to Microsoft products because Word and Excel were bundled together! Instead, they switched because the Microsoft products were indeed superior. The fact of the matter is that Word for Windows was far superior to Wordperfect for Windows, and Excel was just as good (and actually became superior) as Lotus 1-2-3.
Competition for the sake of competition is pointless.. There WAS competition in the marketplace and Palm lost it.
The weird thing is how Palm Source was just taken over at a big premium by another company. That looks like a horrible deal for the purchaser...
Although linux has a good chance, it will likely lose as well. The reason is because the server market is influenced by the desktop. This may not be true in businesses that don't interact with desktops but those that do will likely prefer an OS that can integrate with the desktop. For example, Microsoft's Active Directory may not be the best thing around by a large corporation will likely go with Windows Server, instead of say Red Hat Linux, because the Active Directory integrates better with the client desktops.
With Microsoft pushing a web service platform in the future, I expect even more server losses for linux as companies develop products for Windows Server that will interact seamlessly with Windows desktops.
Until linux gains a foothold in the desktop area, their servers will simply be used for specialized needs (eg. webserver only) which will likely remain a small part of the market (similar to how mainframes and supercomputers are still used for specialized needs but the market is small).
I'm not disagreeing with your number. Salesforce DOES dominate. All I'm saying is that Microsoft hasn't really done a targetted push yet. The real battle is after Microsoft actually decides to start focusing on this area--all this time they really haven't cared much...
The fact that Microsoft may lose some market share in saturated sectors like operating system and the office suite doesn't really mean much. The gain of Firefox and Openoffice.org is not even 5%.
What will matter to Microsoft is NOT the saturated markets in Office and Windows, but new markets. The future of Microsoft will depend on what new markets they can develop. Whether it is IPTV, or video games, or whatever, that's where the real future is...
The middle-life that Microsoft is going through is natural for large corporations. Whether you look at Coca-cola, which used to totally dominate, or G.E., or Sony, or even IBM, they will hopefully capture new markets.
I highly doubt that... Google is primarily a web based business with literally no development tools or software. Microsoft, in contrast, is primarily a development company. Google is more like a quasi-media company than a tech company right now. They make nearly all their money on advertising--not on software or services--so they are not really directly competing.
Just to see what I mean, consider this. Microsoft is highly influenced by the sales of PCs, software, and computer services. If computer sales goes down, Microsoft is negatively impacted. In contrast, Google doesn't really depend all that much on computer sales, etc. Instead, Google is heavily impacted by the advertising market. If there is a downturn in the economy and advertising gets cut (eg. recession causing many small and medium businesses to close; large corporations cutting back advertising; etc) then Google will be negatively impacted.
I'm not saying that Google doesn't use software development, or have any R&D or stuff like that. All I'm saying is that Google and Microsoft are almost in two different industries. It's sort of like comparing Amazon to Microsoft. Even though Amazon spent a lot on R&D and hires a lot of programmers and so on, they are really a retailer.
" The business model for search still hasn't been proven. Neither Google or Yahoo has made a profit over their lifetime."
I think that's incorrect... Both Google and Yahoo make most of their money on search. In fact, nearly all of Google's money is via search. Google has been profitable over their lifetime for sure...
" I'll give you an example where MIcrosoft has already lost to an online competitor--Salesforce.com has been eating Microsoft CRM for lunch. As their CEO put it, Microsoft still wishes the Internet had never been invented. Some vague new update to Microsoft CRM is scheduled for 2006, but I doubt it will happen."
I don't know about that...
Microsoft doesn't really have a strong CRM presence so I don't know if salesforce.com is doing much to them. If anything, I think salesforce.com is probably hurting the main CRM vendors, as well as database companies like Oracle, Siebel, etc.
But it looks like MS is going to push hard in the low to mid CRM market so we'll see what happens. As far as I'm concerned, MS isn't even a major vendor in the CRM market...