Attention Marketers: Access 30 Million IT Decision Makers with ECT News Network's INSTA-LEADS Click to Learn More!
Welcome Guest | Sign In
TechNewsWorld.com

Microsoft's Bad Quarter and 'Lost Decade'

Microsoft's Bad Quarter and 'Lost Decade'

"A near monopoly is like a dictator," said Roberto Lim, a lawyer and blogger on Mobile Raptor. "Even a benign dictator runs the risk of failing to respond to the needs of the people, and how many people would called Microsoft benign? "What Microsoft forgot is that sooner or later, the masses do rebel."

The times, they are a-changin', as the old song goes, and nowhere is that more evident today than in perceptions of our old friend Microsoft.

In fact, after years of being viewed by many as an unconquerable leader in the world of desktop software, Microsoft's armor is apparently beginning to chip.

Exhibit A: "Microsoft's Lost Decade," a recent article in Vanity Fair that paints a damaging picture of how the software behemoth has declined in recent years.

An Implicit Admission

Exhibit B: Microsoft CEO Steve Ballmer's response, the very making of which made it plain just how much that Vanity Fair article had hurt.

Exhibit C: Last week's news that Microsoft was posting its first quarterly loss in its 26 years as a public company.

What do you get when you add exhibits A plus B plus C? The answer, most Linux bloggers seem to agree, is a company on the rocks.

'Not the Only Show in Town'

"There was a time when M$ shipped 95 percent of the licenses for OSes on PCs," blogger Robert Pogson pointed out, for example. "Now they are down to 75 percent. That's a decline even if the revenue still increases."

Not only that, but "since the office suite and the servers are handicapped by being tied to the OS, they are about to decline as well," Pogson predicted. "Claiming that businesses must use M$'s office suite, server OS and desktop OS to be in business is getting really tired as many governments and businesses of all sizes use GNU/Linux."

Meanwhile, "anyone who's serious about IT these days knows M$ is not the only show in town," he added. "Eventually M$ will have to compete on price/performance and the revenue will plunge. The Wintel treadmill is breaking down when OEMs ship millions of GNU/Linux machines and more Android/Linux ARMed machines than Wintel does."

'Death Is Imminent'

In fact, "the monopoly on retail shelf-space is gone if one considers ARMed devices as PCs, and the monopoly on retail shelf-space for x86/amd64 machines is gone in much of Earth; it's only in USA/North America where it is still difficult to find GNU/Linux PCs on retail shelves," Pogson pointed out.

In short, "the monopoly may not be dead yet, but the death is imminent," he concluded. "Try as they might, M$ cannot sustain monopoly because it's not the right way to do IT."

Microsoft's prime was actually over "the minute Bill Gates stepped down as CEO," suggested Google+ blogger Linux Rants. "Since then, Microsoft has coasted on its previous success."

That success, in fact, "was so all-encompassing, no one really noticed that Microsoft was coasting until later," Linux Rants added.

Now, "Microsoft is trying to rekindle some of their former glory with Windows 8 and tablets, but I don't see them succeeding," he concluded. "Microsoft will continue to decline in relevance until it's eventually replaced. That could very well be another 'lost decade' away, but it's coming."

'Inexplicable Decisions'

If Microsoft is in decline, "it is because of their inexplicable decisions such as angering their core user base with the new interface or throwing away boatloads of money on their entertainment division," Hyperlogos blogger Martin Espinoza opined.

Of course, "you can't project the future from a single quarter," he pointed out.

Still, "with that said, it couldn't happen to a more deserving company," Espinoza added. "Oh, wait, I forgot about those fruit guys, who are now carrying their torch admirably well."

'Where Apple Will Be in 10 Years'

Indeed, "in the 1970s, IBM ruled the IT world, used its power to crush competition, got sued for anti-trust, and nearly disappeared in the 1980s/1990s," Google+ blogger Kevin O'Brien pointed out. "Microsoft became the dominant company, used its power to crush competition, got sued for anti-trust, and has been floundering ever since."

Now Apple "is the dominant company, is doing its best to crush competition, and will probably attract increased scrutiny on anti-trust grounds soon," he predicted.

So, "I think Microsoft is headed for where IBM was before Lou Gerstner turned them around, and is forecasting where Apple will be in another 10 years," O'Brien said.

'No One Is Afraid of Them Anymore'

It's possible Bill Gates "jumped ship because he knew this was going to happen and didn't know how to stop it," mused consultant and Slashdot blogger Gerhard Mack.

To wit: "The world Bill Gates sought so hard to destroy when he put Netscape out of business is here, with many OS-independent apps all web-based," Mack pointed out.

The company's big money-makers are still Windows and Office, "but even those have lost share over the past decade," he added. "On top of it all, no one is afraid of them anymore."

There was once a time when Microsoft's entry into a new market "caused the existing players to panic," Mack concluded. "Not anymore."

'Ballmer Is a Bad CEO'

It all comes down to the fact that "Steve Ballmer is a bad CEO -- period, the end," Slashdot blogger hairyfeet opined. "He has NO clue what his customers want, he has NO clue about market trends. Frankly if Ballmer hasn't flushed at LEAST 40 billion dollars down the toilet, I'll be amazed."

To survive, Microsoft "needs to accept some basic truths," hairyfeet added.

"1. X86 will never go away, but it IS a mature market; 2. Computers passed 'good enough' and went straight to 'insanely overpowered,' and the work the average user has will be no faster on a first gen Phenom than it will a top o' the line i series, so there is no point for the average user to replace until the unit dies," he explained. "3. Since most users aren't using even half the power available, the units last longer than ever; and 4. There is NO POINT in having Windows on ARM if it can't run X86 software."

If the company accepts those truths, "spins off the mobile division and does NOT call it windows, but say Metro, and sets them up in an office far away from Redmond so they won't be pressured by the PHBs to tie everything into the sacred cows of Windows and Office, then and ONLY then do they have a shot," hairyfeet concluded.

'Nowhere to Go But Down'

"A near monopoly is like a dictator," offered Roberto Lim, a lawyer and blogger on Mobile Raptor. "Even a benign dictator runs the risk of failing to respond to the needs of the people, and how many people would called Microsoft benign?

"What Microsoft forgot is that sooner or later, the masses do rebel," Lim suggested.

Ultimately, "Microsoft is Windows and Microsoft is Office," he concluded.

"Microsoft has been on top for years because we needed it," he added. "Now, it has to try to hold its still-enormous-stranglehold in a market learning that it does not need it anymore. A monopoly is always more profitable than a buyers market, so really, there is nowhere for Microsoft to go but down."

'Dark Clouds on the Horizon'

It's clear "there are dark clouds on the horizon for Microsoft," began Chris Travers, a Slashdot blogger who works on the LedgerSMB project.

The question, however, "is whether Microsoft has reached dark days yet," he said. "It's hard to say based on one quarterly report.

"On one hand, revenue is actually up, so a quarterly loss means they are spending more rather than earning less," Travers pointed out. "The same thing holds true over the year, where net income is down compared to last year even though revenue is up."

In general, "I don't think you can conclude that this represents the entry into Microsoft's troubles," he opined. "They are spending a lot more and earning more. This suggests increasing re-investment of their income into their business."

'The First Crack to Appear'

A closer look, however, reveals some interesting things, Travers said.

"First, Windows and Windows Live revenue is slightly down even before the revenue deferral," he pointed out. "This is true both for the year and for the quarter.

"Although one can perhaps blame it on economic doldrums in part," Travers suggested, "it is the first crack to appear in the apparent inevitability of the Windows monopoly since the introduction of Linux-based netbooks."


Katherine Noyes has been writing from behind Linux Girl's cape since late 2007, but she knows how to be a reporter in real life, too. She's particularly interested in space, science, open source software and geeky things in general. You can also find her on Twitter and Google+.


Facebook Twitter LinkedIn Google+ RSS