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  • The Microsoft On-The-Skids Report

    December 24th, 2008

    It appears that no company is immune from economic woes. Toyota, now the world’s largest automaker, was once thought to be bulletproof, yet the company is about about to suffer from the first financial loss in its history. Apple appears to be cutting back on production for this quarter, although it seems certain they’ll still report decent profits.

    That takes us to Microsoft.

    Stung by tepid sales of Windows Vista, with more and more companies sticking with XP and refusing to upgrade, there are published reports that the world’s largest software company may also be looking to shed bodies from among a roster of over 90,000 employees.

    Although nobody wants to see people lose their jobs, some folks who resent anything with the Microsoft label on it might just feel it serves them right. Besides, you can always hope that whatever personnel are cut from the ranks will have sizable golden parachutes, so they can sit back, play golf or do some traveling with their riches.

    Or maybe I’m just being too charitable.

    Ever since the Night Owl began a Microsoft death watch, I have been carefully watching for signs that they’re on a steady, inexorable decline, and I’ve not had long to wait. You all know, I’m sure, that Internet Explorer’s share of the browsing universe recently dipped below 70%, according to worldwide surveys.

    Microsoft watchers can’t escape the fact that such products as the Zune were huge failures in the marketplace. Maybe that’s why promotion has been lax; they knew going in that they had a dog on their hands, and they just wanted to put their best corporate face forward and hold back on huge cash outlays for R&D.

    Efforts to expand the reach of the Windows Mobile platform seem to be failing. These days, all the smart-phone related talk is about Apple and Research In Motion. If you have a Verizon Wireless account, you get a BlackBerry. If you have AT&T, your inevitable choice is the iPhone, yet even Apple admits RIM is a good company and a worthy competitor.

    On the operating system front, it appears Microsoft may be rushing to get Windows 7 out the door by mid-year, hoping against hope that the Vista debacle will soon be forgotten. Then again, doesn’t Vista’s successor seem to be nothing more than a fast shave and haircut designed to obscure the fact that there are not a whole lot of real differences between the two.

    True, Apple isn’t promising much surface change with Snow Leopard, but the guts of the system might make you feel that you have given your Mac a healthy dose of steroids. That is, if the promise of superior multiprocessor and graphic chip support shows a genuine advantage in the real world. Indeed, it would also be nice to see 10.6 arrive in the first quarter, if rumors of an accelerated release schedule prove to be true.

    Perhaps it’s also true that the nuttier-than-ever Microsoft CEO, Steve Ballmer, is praying that Steve Jobs is quickly disengaging himself from Apple. That might afford them a better opportunity to compete, although I would disagree.

    As you’ve read here and elsewhere, the Jobs culture is deeply ingrained within Apple, and were he to depart tomorrow, the company would likely go on to follow through and expand his vision. So you wouldn’t see a sudden drop-off in new iPhone, iPod and Mac releases. Everything would go on as before, only you wouldn’t have Steve Jobs to kick around anymore, and I doubt his successors would be as polarizing to the media.

    This is not to say that Microsoft can’t right the sinking ship. But, as with Apple, fixing the problems has to start from the top. If the executives can’t voice and implement sound policies to address the company’s inefficiencies and poor product design, even the most brilliant employees will be left frustrated, feeling ineffectual.

    When Steve Jobs returned to Apple, he quickly shed products that were not advancing the company’s growth, and built a leaner, meaner corporate machine that has grown to unexpected heights.

    In the same tradition, new leadership at Microsoft would have to break out virtual hacksaws to clean out the dead wood, and there must be plenty. Consider, for example, what Apple can do with a staff a third of that of Microsoft, including a retail chain with over 250 branches.

    Does this mean Microsoft can’t succeed beyond the cocoon of its software division? I don’t pretend to have all the answers to that question. But fixing the software issues would do wonders towards restoring faith in their products.

    And, of course, if Microsoft were to ultimately vanish from the scene, would anyone, other than their former employees, really miss them?



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