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  • Microsoft Remains Divorced From Reality

    November 10th, 2008

    It’s not easy for a company that’s number one in its market to admit that its efforts to spread its dominance to other product segments have not succeeded.

    Whenever Microsoft is mentioned, the fact that they own over 90% of the personal computer desktops on the planet often accompanies the reference. That and consistent high profits surely auger well for their continued success, but it has been hard for them to come to terms with the fact that they don’t do so well when they stray beyond their core competency.

    Take digital media players, where Apple long ago rose to the number one spot and remains there. Microsoft first tried to parlay their PC operating system market share advantage and set up a standard for other digital players to follow. It went through an identity crises, but was last known as PlaysForSure. Except Microsoft realized they couldn’t succeed with this strategy, so they double-crossed their partners and created the Zune, which hasn’t done so well either.

    Their efforts to extend Windows to the handheld market have done all right, I suppose, but, after 15 months on the market, the iPhone is doing better. In fact Apple’s smartphone bettered the RIM BlackBerry in the last quarter too, so two companies were embarrassed as a result. Only Nokia does better in that segment than Apple, and they’ve been in the wireless handset business a whole lot longer.

    It’s not as if Microsoft truly realizes it is being battered and beaten by smaller companies. CEO Steve Ballmer will continue to rant and rave about how well they’re doing, and what little chance the competition has to beat them at their own game. Certainly Ballmer didn’t take the iPhone seriously.

    Of course a lot of Ballmer’s trademark bluster may be manufactured. As politicians do during a campaign, you tear down your opponents in highly inflammatory, exaggerated ways in order to gain the upper hand and emerge victorious. Sometimes it works and sometimes it doesn’t, but having the facts on your side would certainly add to the credibility of the message.

    That’s where Ballmer perennially comes up short.

    For example, the latest maneuver to escape the Windows Vista tragedy is warmed over version, called Windows 7. Now Vista had some major and sometimes confusing interface changes when compared to XP — and for that reason among others, many PC makers and their customers want to downgrade.

    So does Microsoft repair the damage by undoing some of the alterations? No, they’re making even more changes using the logic that user interface testing — make that focus groups — helped guide them to a solution. Thus they came up with a rejiggered taskbar that looks for all the world like Apple’s Dock.

    All this comes from the very same company that pleaded with the U.S. Department of Justice and European Union authorities for the right to continue to innovate. Microsoft’s concept of innovation has mostly been to take an idea, imitate it to some degree, add a few half-baked ideas that seem to emanate from a PowerPoint presentation filed to the gills with bullet points, and pronounce it something new and different.

    This is not to say that imitation is bad. Certainly many good ideas are influenced by what came before, and some manage to take that inspiration and meld it into something with its own unique character.

    Certainly there were attempts at graphical computer interfaces before and after the Mac appeared. Microsoft, with smoke and mirrors and clever marketing, blasted most of them out of existence, although the Mac carried on.

    Today, Microsoft’s executives must know that the old ways, the machinations practiced in previous decades, no longer work. Yet their public posture appears to be the same. They want you to believe that everything they do amounts to a momentous event in the tech industry, and that they have the skills and determination to make even a half-baked product number one in its class.

    Yes, every single syllable uttered by Ballmer is breathlessly quoted by some still-fawning members of the tech press. They somehow believe that all of Microsoft’s silly product ideas are destined for huge success, whether its the Zune or that absurd Multi-Touch coffee table, the Surface.

    Even if Windows 7, now in pre-beta form, actually contains all the refinements Microsoft promises, does that mean that it’ll fare any better than Vista? Well, assuming it has the same enormous system requirements, certainly today’s PCs, built to address Vista’s needs, will run about the same, or maybe better, if Windows 7 can be optimized or even trimmed down a hair.

    But does that mean that Apple’s huge gains in market share will suddenly vanish overnight? Microsoft has no right to remain number one, as much as they might prefer to think otherwise. Their browser share continues to erode, and there’s little reason to think that their operating system advantage won’t decrease too over the next few years.

    Will the Microsoft of 2013 or 2018 still be as dominant a force in the tech industry as they are now? I don’t think so, but maybe Ballmer and crew don’t realize that yet. Or maybe they do, which is why they want to spend their extra cash on a stock buyback so they can laugh all the way to the bank however it turns out in the end.



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    12 Responses to “Microsoft Remains Divorced From Reality”

    1. Sean says:

      Imagine spending $10,000 for a glorified wine list/Pac-Man arcade game. You have to know if the ‘Surface’ was an Apple product, it would be positioned to change the world, not the way people order beverages in hotels.

    2. Richard says:

      Ballmer is in the process of running Microsoft right into the ground. I agree that MS should stick to its core competencies. Going off in every direction at once is doing nothing but making the company look totally silly. I guess Ballmer is afraid of missing the “next big thing”. So trying everything that comes along (regardless of how weak the attempt is) is a attempt to calm his paranoia. The overall corporate plan seems to be, get out the “old 12 gauge shotgun” and shoot at anything that moves.

    3. hmurchison says:

      Microsoft will do just fine. Apple is happy with its growing position and the future of mobile applications where they will be a player. Though I do not see Apple entering into Microsoft strongholds (Server OS and business suites) either. One does have to commend MSFT for having the kahunas to storm “Apple’s iPod beach head”. Sadly Apple’s howitzers were a bit too accurate.

      Microsoft has searched for that next Billion dollar category but is just finding it very tough going. When they enter a new market they seem to have a hard time leveraging their OS to success.

      Apple certainly needs to take heed and avoid falling into the same pitfalls.

    4. Andrew says:

      Apple is in the server and office suite business, just not a major player yet. That is likely to change with Snow Leopard, where Apple should address most of the current Leopard Server’s shortcomings for enterprise use.

    5. hmurchison says:

      Andrew wrote:

      Apple is in the server and office suite business, just not a major player yet. That is likely to change with Snow Leopard, where Apple should address most of the current Leopard Server’s shortcomings for enterprise use.

      I don’t see Apple making any real concerted effort to get into the Enterprise. Jobs’ constantly says “we’re not an Enterprise company” and I believe him when he says this. iWork is a nice consumer suite but it’s not Office 2007 by any stretch in functionality. Hey I’d love to see them head this direction but it appears that they’re happy with their current place and trajectory.

    6. Confusing interface changes … people don’t like change. Remember the ruckus when Apple changed the Command-N function! 🙂

    7. Harvey says:

      Microsoft will recapitulate IBM’s history: a grand monopoly that falls to just another player in the enterprise market. Apple will not take its place, because Apple is not a software company that happens to make hardware, it is a hardware company that happens to make software. The purpose of OS X is to sell Macs. Apple’s competitors, the other hardware manufacturers will come up with other operating systems that are standards-compliant and can interact with Windows and OS X. This will make it hard for Microsoft, a software-only company, to compete.

      Apple doesn’t want to become a monopoly. They are content just to get rich. Steve Jobs said that for Apple to succeed, Microsoft doesn’t have to lose.

      In other words, the future is not Apple, but a whole orchard of little apples, each addressing a slightly different market.

    8. Jon T says:

      Surely the future of enterprise software post-Microsoft will be open source? Stuff that will work nicely with Macs or any other hardware you choose.

      I personally think Apple is very very astute in choosing NOT to become the next MS in the enterprise.

    9. hmurchison says:

      Jon T wrote:

      Surely the future of enterprise software post-Microsoft will be open source? Stuff that will work nicely with Macs or any other hardware you choose.

      I personally think Apple is very very astute in choosing NOT to become the next MS in the enterprise.

      Open Source has certainly made inroads but like JAVA it seems to have to support the lowest common denominator and that certainly impedes its evolution IMO.

      Microsoft is still generating nigh 5 billion in profits for a good quarter. I think many are writing the obituary a wee bit early.

    10. hmurchison wrote:

      Jon T wrote:

      Surely the future of enterprise software post-Microsoft will be open source? Stuff that will work nicely with Macs or any other hardware you choose.

      I personally think Apple is very very astute in choosing NOT to become the next MS in the enterprise.

      Open Source has certainly made inroads but like JAVA it seems to have to support the lowest common denominator and that certainly impedes its evolution IMO.

      Microsoft is still generating nigh 5 billion in profits for a good quarter. I think many are writing the obituary a wee bit early.

      It will take a long time for the chickens to come home to roost, but it will happen.

      Peace,
      Gene

    11. Tired of MS says:

      Don’t mean to split hairs — because I agree with most of your post — but…

      People who are really serious about software, should make their own hardware. — Alan Kay

      [http://folklore.org/StoryView.py?project=Macintosh&story=Creative_Think.txt]

      The fact that Apple ‘makes money’ selling hardware, by no means conceals the fact that they are actually ‘selling’ software.

      NeXTStep on Motorola; then OpenStep on Intel; which becomes Mac OS X on PPC; then Intel. The software is portable.

      To get the insanely great Mac OS X, we must purchase a ‘Mac’ computer.

      Thankfully, Mac hardware is good value.

    12. Andrew says:

      Most Mac hardware is an excellent value, though there are exceptions. The Mini is beautiful, and a new model may very well offer competitive value, but the current model, today, right now, is a horrible value. That said, value isn’t everything. If you have a specific need for a small computer, say to mount in a vehicle, need OS X and don’t want a laptop or have a specific price-limit that the Mini fits AND you don’t care about performance numbers, then it shifts from a question of value to buying the right tool for the job.

      The new high-end MacBook is a much worse value than the entry-level White MacBook in a pure price/feature value comparison. But, the new one is a whole lot nicer and if you play games, is actually (almost) acceptable. The Air is likewise a lousy value compared to the more powerful and cheaper MacBook, unless you want what it offers and are willing to pay for it.

      My business has an assortment of Macs and all of them are terrific values for their intended roles. Even the $3000 Mac Pro is a great value if you factor in anticipated longevity. My last desktop Mac Tower, a Sawtooth Power Mac G4, cost about the same as the Mac Pro when I bought it way back in 1999, and 9 years and $450 or so in upgrades later it remains in faithful service as a regular desktop computer. It is no longer cutting edge, but I still see no need to retire it from active service. The Mac Pro, totally overkill for its role as a web, print and file server, will, I predict, still be an excellent desktop computer a decade or so from now when I buy my next desktop Mac.

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