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Plenty Of Exaggeration Over Microsoft's Rumored Demise

from the the-slow-business-of-going dept

Wed, Apr 11th 2007 2:21pm — Joseph Weisenthal

Lately, there's been a lot of discussion in various quarters about the future of Microsoft, with many proclaiming, once again, that the company is poorly positioned and ill-prepared to deal with the changing technology landscape. However, as Jason Wood astutely points out, this discussion has become rather repetitive and tiresome. Everyone and their grandmother knows that Windows is not the big deal it used to be, as internet-based software has reduced the significance of the client-side operating system. The fact that Microsoft faces significant challenges from Google, as well as a number of smaller firms, has also been quite obvious for some time. As Wood points out, the discussion ignores the major counterpoint to the doom and gloom arguments, which is the continuing financial success of the company. Despite its enormous size, the company manages to grow more profitable each year, and although it's highly dependent on revenue from Windows and Office, the company is proving adept at diversifying its revenue streams (e.g. servers, enterprise software, video games, mobile), which is something that Google has yet to pull off. The key point is not that all of the concern about Microsoft is wrong -- there's certainly plenty of validity to it, and the company does have its work cut out for it -- but that there's a need for the discussion to move forward, instead of rehashing the same points over and over again.

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30 Comments

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James, 11 Apr 2007 @ 2:40pm

The haters
They are always bitching about Microsoft and preaching its doom, yet it continues to live another day. Wahhhhhh !! Get over it, if you don't like them fine, but they aren't going anywhere.
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ConceptJunkie (profile), 11 Apr 2007 @ 3:26pm

Microsoft could coast for a decade...
...without doing anything. Even if they were dead today, they'd be around until the middle teens based solely on the money they have. However, they are not dead, and they are still wielding plenty of monopoly power, gearing up for a huge patent war to try to take down Linux and somewhere in there they might actually deliver some software.
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Black Ize (profile), 11 Apr 2007 @ 3:30pm

I agree they are not going anywhere
But they are starting down the path that may make them less relevent. There are several companies that have done this and still are around and still profitable. Examples IBM, Xerox, {fill in your own here}. They have made and continue to make missteps but they have always found away around them. I am not a MS fan. I really wish that Windows would go bye-bye and be replaced by something better, Windows did. But I don't think that will make them disappear.
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- Sergio, 12 Apr 2007 @ 5:16pm
  
  Re: I agree they are not going anywhere
  But I think that none of IT companies achieved such a level of influence over all society.
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Healthy Sceptic (profile), 11 Apr 2007 @ 3:39pm

MS is to big to go away
It would be really hard for any company to unseat them monopoly. But it can be done.
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Sanguine Dream, 11 Apr 2007 @ 3:40pm

It's all about bragging rights...
Every "tech analyst" in creation wants to be the one that "predicted MS's fall from grace." So every few years like clockwork a few of them will make the same predictions. After this wave fades expect it to come back around 2010-2011.
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Josh, 11 Apr 2007 @ 3:52pm

Microsoft
I just happen to be sitting at a Technology Security Conference in Denver right now and I’m looking around a packed room of Security Professionals and as far as I can tell all but one person in this room us using some variant of Microsoft with a good majority using Vista. I'm sure that there are some with some *nix variant or Mac, but I don't see them from where I’m sitting (near the back).

Long story short... Microsoft is still in the game and will be for a long time to come. They are not as stupid as everyone wants to make them sound. They still employ some of the best minds in the world and will adapt and learn.

I will make my own prediction that going forward over the next 5 years MS will improve their market base and release some pretty cool software.
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- Scott, 11 Apr 2007 @ 3:58pm
  
  Re: Microsoft
  Hey, ME TOO!! Where are you? I am running SLED 10, are you sholder surfing?!?!? :o)
  
  But REALLY! I am seeing the same thing, and I am the one NOT running Windows.
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  - |333173|3|_||3, 11 Apr 2007 @ 4:33pm
    
    Re: Re: Microsoft
    Don't you people on junkets have anything better to do than read techdirt?
    
    M$ will survie for years, whatever happens. DirectX is the most important software product which will encorage people to use Windows, beacuse so many games only use DirectX, and because gamers do not want to have to run WINE, because of the performance hit. since they are using Windows, more young people are only familiar with Windows adn so cannot easily use other OSes.
    Tehother probelm is that since a lot of comapnies use M$ products, schools tech studnts how to use them, and so it is easiest for companies to assume staff know how to use M$ products, leading to a vicious cycle..
    
    OTT, but I find it amusing that a lot of ads for Macs emphasise the fact taht they run M$ Office. This did give me some (more) stuff to annoy the Mac advertisers at O-week at Uni over.
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Peter Bromberg, 11 Apr 2007 @ 4:12pm

Re: Microsoft Demise
I've been making money as a software developer using Microsoft technologies since around 1985.

There are a lot of very smart people who work there (I know many of them personally) and I can assure you that the Mother Ship will remain quite nimble in adapting to the changing technosphere.

You can bash MS all you want, that isn't likely to change reality.
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Anonymous Coward, 11 Apr 2007 @ 4:41pm

Microsoft will be around until a new hardware device replaces the PC.
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- Me @ work Shhhh., 12 Apr 2007 @ 9:07am
  
  Re:
  And M$ will prpbably be the one manufacturing it LOL.
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Corm, 11 Apr 2007 @ 5:21pm

Why does everyone think that web-based apps will be the downfall of Microsoft? Products like Google Docs or webmail aren't going to replace client apps. Gmail routinely loses data, gets hacked, etc... not unlike the average client machine. Using a hosted solution for creating sensitive documents is not a great idea either, as it is a lousy security practice. However, it's reasonable to assume that people will continue to use web-based technologies to perform tasks that are web-based by nature (like posting to WordPress, etc). So, I submit that the desktop is by no means irrelevant, though if I was Microsoft I would be terrified that more people will adopt Thunderbird, Firefox, or anything that ends in 'buntu. There's a lot of client softwares out there that make their MS counterparts look like straight-up garbage.
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|333173|3|_||3, 11 Apr 2007 @ 6:11pm

Google officially does not compete with M$
A group of R&D staff from Google Maps viisted my Uni recently, and tehy announced, in an answer t a question from the floor that they did not try to compete with M$, but ratehr to simply do what hthey do best, better. Google will not be harmed for a long time because its revenue stream is advertising, not thier features, and google ads are so common on webistes that many people would, as thier first choice of advertinsing company, use google.
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RandomThoughts, 11 Apr 2007 @ 6:36pm

With over $40 billion in cash, I doubt Microsoft will be going anywhere anytime soon.

I just wish their stock would go up, getting tired of seeing my portfolio blow.
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Lawrence D'Oliveiro, 12 Apr 2007 @ 2:03am

Microsoft will survive, but...
It's worthwhile looking at the lessons of history. Nobody thought IBM could ever be knocked off its perch as king of the computing world, but it was. That's because it was king of mainframes, and nobody thought those toylike little PCs would ever come to dominate the computing world--the idea was just laughable. Yet it happened.
In the same way, I think Microsoft is king as long as closed-source software remains dominant. As it gradually gives way to open-source, so Microsoft's dominance will wane. Many may find the idea just as laughable as that of PCs taking over from mainframes. Yet I think there are signs of it happening already.
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rahrens (profile), 12 Apr 2007 @ 5:55am

cash
As of just recently, Microsoft was noted as having bled cash badly in the last year, and their cash reserves are down to less than 29 billion bucks. Still a lot of money, but they dumped something like a third of their cash reserves in just a year.

I'm not saying, nor did the analyst directly, that such an occurrence means that they're failing. It does mean that those of you that are saying that they can exist on those cash reserves for years or decades better think again. Microsoft is BIG, and a big company can bleed cash very quickly once things do start going south.

The point of this article isn't that the recent discussions are necessarily wrong saying that Microsoft is in trouble, but that instead of just repeating that mantra, we should move the discussion on to the next level.

What is that next level?

Perhaps what will Microsoft do to counter the forces that are causing it to lose market share? WILL it do anything to counter that? CAN it?

Instead of actually trying to compete in the same old way, will new management (after Gates) try reorganizing itself? Perhaps will MS try to dump unprofitable parts of itself? Diversification is the best defense against losing out in a primary market. If its not really that primary to your revenue stream any more, then you don't lose so big.

I think that's the thrust of this article. Plenty of analysts, and others, have noted the market forces that are grinding away at Microsoft, and even a monopoly can't fight forever. Markets change, and if the monopolist doesn't change, it WILL lose.

So now, start the discussion.

HOW will Microsoft change. Or will it?
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Starhelm, 12 Apr 2007 @ 7:36am

WINE can kill Microsoft...IF...
As noted earlier, there exists today a very strong re-enforcing cycle to maintain MS dominance in the market. Too many games and buniness apps run only on Windows for a real shift to take place, higher ed focuses on MS development products and technologies, and businesses hire MS-tech-savy graduates.

IF a WINE-like alternative were to really function, the capacity to truly port Windows apps and hardware to Linux or whatever OS, then there can be a rapid shift from the MS-only cycle. Otherwise it would have to be a gradual multi-decade change for things to shift away from this dominance.
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Business, 12 Apr 2007 @ 8:50am

Get Real Folks
Look, Microsoft will be around in our lifetime. On home user aspect, there are still many MS users. However, the real place they make the most $, is in the business market. Get real folks, do you think that in medium and big business, that they use Apple servers,products? No, not as much as MS servers, OS, etc. Look around, there are a ton of exchange, server 2003, etc. out there! Using Apple products in the business field is like using a friekin toy, a skecth-a -etch if you will!!!
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Pro, 12 Apr 2007 @ 10:15am

MS
People can spout off whatever rhetoric they want about how MS sucks and Linux is great. I personally don't understand where they are coming from.

Microsoft creates extremely full featured software that functions well. When it is found not to function, they turn around and fix it quickly. I've yet to see any other company release software that even comes close to the quality of a Microsoft product.

What do linux touters actually DO with your computers after you boot up? Ping each other?
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- Reed, 12 Apr 2007 @ 11:31am
  
  Re: MS
  "What do linux touters actually DO with your computers after you boot up? Ping each other?"
  
  Guess you would have to try it to find out huh?
  
  Everyone should stop thinking about Linux versus MS and start thinking of open source versus closed source. This is where the revolution is taking place. Linux happens to be a open source platform that is truly open. While that might not mean much now, in ten years when 90% of all software projects are open sourced it will mean a whole lot.
  
  Why continue to support MS when they no longer have the best solution for the market? Industry and development will get it first (they already have) and the consumers will follow.
  
  So people may still use Windows, but the reality that most of their apps will be open source at some point proves that even Windows cannot escape the open source momentum.
  
  All you source will belong to us! :)
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  - Pro, 12 Apr 2007 @ 12:06pm
    
    Re: Re: MS
    Open source is fundamentally flawed and a product of open source will NEVER compete with it's private enterprise counterpart.
    
    Doesn't anyone understand free enterprise, the concept of survival of the fittest or natural selection anymore?
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    - Reed, 12 Apr 2007 @ 12:24pm
      
      Re: Re: Re: MS
      "Open source is fundamentally flawed and a product of open source will NEVER compete with it's private enterprise counterpart."
      
      Firefox accounts for over 20% of the browsing market and is the preferred choice for computer literate users. Of course this is just one example of hundreds of widely used open source applications.
      
      Your statement is pretty dumb when you consider most of the Web is running open source applications (ever hear of Apache? lol)
      
      "Doesn't anyone understand free enterprise, the concept of survival of the fittest or natural selection anymore?"
      
      Yes thats why open source is the best possible solution to the software industry. Let's use your natural selection analogy to explain. Open source allows us to keep the best, fastest, and most secure code around so it can keep being improved upon by everyone who wants to.
      
      Closed source development is like life in a cave. Sure it can adapt in some pretty cool ways but it can only survive in a cave.
      
      Software needs to be more flexible and adaptable than development in a cave can provide. This is why over 60% (perhaps more now) of all software development labs have already implemented open source strategies.
      
      Let those "hybrid" people keep thinking they can build proprietary off of open source because in the end once they sign up with open source they are owned....mohahahahaa :)
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      - Pro, 12 Apr 2007 @ 1:40pm
        
        Re: Re: Re: Re: MS
        Firefox? Plenty of people will use an inferior product simply because it's not Microsoft.
        
        Apache? It's probably the best you can get for free. A web server is also a fundamentally simple piece of software that has been around for decades. I could explain it to you if you weren't an idiot.
        
        Closed source works because people have a vested interest in making it work. Open source works for certain things, but like I said - it will never deliver a superior product.
        
        Read the last paragraph you wrote. If you had any doubts that you weren't a free enterprising capitalist, that should settle it.
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        reed, 12 Apr 2007 @ 1:57pm
        
        Re: Re: Re: Re: Re: MS
        "Firefox? Plenty of people will use an inferior product simply because it's not Microsoft."
        
        you are freaking hilarious! :)
        
        "Apache? It's probably the best you can get for free. A web server is also a fundamentally simple piece of software that has been around for decades. I could explain it to you if you weren't an idiot."
        
        I guess that makes everyone on the internet including the people who host this blog an idiot. I bet you make a lot of friends that way jack*ss.
        
        "Closed source works because people have a vested interest in making it work. Open source works for certain things, but like I said - it will never deliver a superior product."
        
        Thats why MS is trying so desperately to embrace open source.. lol
        
        "Read the last paragraph you wrote. If you had any doubts that you weren't a free enterprising capitalist, that should settle it."
        
        I have no doubt your ability to reason is limited by how far your head is where the sun doesn't shine.
        
        Great comments, but I hear something knocking. Oh wait, it's reality!
        
        Apache? It's probably the best you can get for free.
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        Pro, 12 Apr 2007 @ 2:27pm
        
        Re: Re: Re: Re: Re: Re: MS
        Well, I don't have any Communist friends - because these people demonstrate a lack of understanding of the big picture. Usually other character flaws arise from this lack of understanding.
        
        Don't worry though - you might smarten up with age.
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        reed, 12 Apr 2007 @ 2:53pm
        
        Re: Re: Re: Re: Re: Re: Re: MS
        "Well, I don't have any Communist friends "
        
        I know, I know. You only kick it with the fascists and the neo-cons...>:)
        
        "because these people demonstrate a lack of understanding of the big picture"
        
        And your rhetoric clearly demonstrates how your grasp on the big picture is superior than those damned reds.
        
        "Don't worry though - you might smarten up with age."
        
        Current societal trends tend to point to the fact that age devalues your worth and intelligence due to the ever increasing speed of innovation and technology.
        
        BTW I already smartened up, thats why I don't buy into pointless socialistic or capitalistic propaganda. A black and white mentality is a poor way to view the world.
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me, 12 Apr 2007 @ 3:26pm

diversify
"the company is proving adept at diversifying its revenue streams (e.g. servers, enterprise software, video games, mobile)"

The gaming division at MS is unprofitable, and has been for years. Enterprise software is unprofitable. Don't know about mobile or servers, but diversifying isn't a catch-all solution unless you can make it work financially.
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Sergio, 12 Apr 2007 @ 5:13pm

Great article
That is one of the best website that I've known over last times. So it triggered to write something about this topic (the end of Microsoft), but is in spanish (my first language). You can read on Open Kairos
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frank burns, 16 Apr 2007 @ 4:50am

Microsoft vs Google
The Internet is a medium for all users be it business or pleasure. Taking a company to court and suing them for infringement of whatsoever nature is not acceptable in these days. Sharing resources and almagamating is the key. Let's just focus on what is more important to the user. After all, we're only here once so why not make the best of what we can do for the wider community.
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