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Microsoft reorg designed to defend turf against Apple, others; MSFT shares remain stuck in mid-$20s

Sunday, September 25, 2005 · 9:37 am · 45 Comments

“Microsoft announced a streamlined corporate structure designed to boost growth outside its Windows monopoly; reduce the time it takes to get new products to market; and defend its turf more effectively against assaults from Google, Yahoo, Apple Computer and purveyors of free Linux operating software. Seven divisions will be reduced to three, each with its own president and more autonomy. The news, however, did nothing to lift Microsoft shares, which remain stuck in the mid-$20s, where they have been for five years,” The Washington Post reports.

Full article here.

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Comment Feed

45 Comments

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macnut222

Sunday, September 25, 2005 - 10:44 am · Reply

I’ll shed a tear for them…

…a tear of joy.
AC

Sunday, September 25, 2005 - 11:04 am · Reply

mommy I found poopoo in the sand box. . . ..o wait, that’s Microsoft. .
Jack Arends

Sunday, September 25, 2005 - 11:08 am · Reply

I could care less about M$ share price. What I do care about is Apple capitalizing on the current situation where we have clear and present advantages by advertising more and making significant market share (re)gains.
R

Sunday, September 25, 2005 - 11:28 am · Reply

This company (unfortunately) is no where near dead, nor are they dying… at all. The restructuring will help them to a degree– ultimately, though, I hope it’s the technology that decides things.

I think one of the reasons M$ “won” the first round of OS wars is because of a generally ignorant public that were ready to “enhance” their ibms into unstable, glorified calculators. No one had expectations for what a computer should be because they really were very new and they were buying on the prospect of what COULD be. Now, more people know what to expect (though not anywhere near all)– and they are also unwilling to be saddled with pure crap.

Just because Apple is currently better, they don’t get to stay on top through divine appointment. Do I hope they win, yes! I can’t stand M$ business tactics, but it’s the technology that drives sales for most folks, not M$’s behind the scenes practices.

So there!
Quevar

Sunday, September 25, 2005 - 11:28 am · Reply

Why can’t Apple advertise, even a little bit, on TV? They could easily reach 2 million macs shipped a quarter. That would be a huge boost to their bottom line and their market share, which will make it more worthwhile for the developers to stay. The only reason I can think of, which is debatably a good option, is that they will start marketing the Intel Macs when they come out.

I think they should pick a region of the US, and market to it. Make sure the Apple stores are stocked in that region and start putting ads up for Macs. This will create a culture for the Mac and as more people in that area use them, they will be able to help each other out. Then keep doing that in various places.
John

Sunday, September 25, 2005 - 11:29 am · Reply

Stock didn’t go up because nobody believes what changes did occur has changed anything. Why? Because the main issues with Microsoft is there insecure operating system which being compromised every single day.
Until that stops nothing has changed.
Race placer

Sunday, September 25, 2005 - 11:51 am · Reply

Quevar,
You mean like those lame “Start” commercials Microsoft did? Or that weak set of commercials they’re running now?

WHAT could Apple show in 30 seconds that will get someone out to the stores and buy? In other words, HOW exactly will advertising something as complex as an operating system that runs on specialized hardware that can do what windows can’t… in 30 seconds?

I say just keep pushing the easy sell, the iPod. It’s already selling more Macs per quarter than any other advertising ever could.
jc_10128

Sunday, September 25, 2005 - 12:05 pm · Reply

Two points: First, why Apple doesn’t advertise? It’s only a matter of when they will advertise, not if they’ll advertise. Look at the iPod. When the iPod first came out, almost 5 years ago, there was almost no advertising; because Apple knew that us — their Apple OS core user base — didn’t need to see the iPod on TV to buy it; we saw the iPod on Apple.com and on MDN and other Apple news web sites and we bought iPods. Millions of them. I bought 2 1st generation, and several of each subsequent generation without having to watch a TV commercial for iPods. Only once they got the cross-platform Windows capabilities in iTunes; when Windows users became a real potential market for iPods did Apple start to advertise the iPods, and look what happened, sales exploded. The same thing will happen with OSX, once we have intel mac in the stores — Apple will advertise intel Macs and OSX and Apple Macintosh computer sales will go up, through the roof and towards the moon. Why? Because intel macs will be the new high end Windows hardware that every Windows user will dream of having, and it will also run OSX, intel macs will be the gateway to OSX for Windows users, who will buy them to run Windows, and will suddenly discover OSX and switch. Intel Macs will be better than Sony Viao’s, and better than anything Dell or HP or anyone ever made that could run Windows.
readerX

Sunday, September 25, 2005 - 12:14 pm · Reply

I still have an ongoing request for my favorite OS. I run 10.2.8 on my beige g3 266 powermac at home and 10.4.2 on a dual 1.8 at work.

the continuing work apple does on this OS is amazing but no matter what i’ve tried in the past my open windows still get occasional interference with the dock. this is really the only complaint i have. i like the dock, otherwise. maybe, the dock could expand with addiontal options like making it disappear altogether leaving just the command-tab function or maybe an option to create an off-limits area to any open windows.
Ralph

Sunday, September 25, 2005 - 12:18 pm · Reply

You don’t just advertise Apple’s OS, you advertise EVERYTHING Apple does in a more general “Apple Technology” ad. Keep assuring the general public that whatever they want to do, Apple can help them do it better. You just can’t advertise the iPod forever.
iDon't

Sunday, September 25, 2005 - 12:30 pm · Reply

“Intel Macs will be better than Sony Viao’s, and better than anything Dell or HP or anyone ever made that could run Windows.”

Stop dreaming. The quality of Macs is going downhill fast. Apple is spending its time and attention on iPods and not much on Macs. OSX is just OK and only a little better than XP.
iSteve

Sunday, September 25, 2005 - 12:41 pm · Reply

A common misconception is Macs are not compatible with Windows – in 30 seconds you could tell people you can open and run Word, Excel and Powerpoint.

I had a meeting last week with a friend that happens to be an IT guy. I was going over some excel files I was giving him on CD. When Excel for Mac opened on my PowerBook he was taken aback. Then he asked what he had to do to convert the files so he could read them on Windows. He didn’t believe me when I said they transfer without any issues.

The issue of having to learn something new is the other area where people think it is going to be a challenge to switch.
Rainy Day

Sunday, September 25, 2005 - 12:43 pm · Reply

If you want to know the current state of M$, read Isaac Asimov’s Foundation. M$ is in exactly the same state as the Galactic Empire at the start of Foundation. Appeared to be strong and healthy to most people, but was already on the inexorable and quite irreversible path of self destruction. It didn’t die immediately, but it died nonetheless.

We are witnessing a glorious day for humankind: The beginning of the end for a beast which costs businesses (and therefore consumers) untold trillions in lost productivity due OS instability, viruses, etc. The InterNet is slowed down unnecessarily by wasted bandwidth of all the virus infested Windoze zombies looking for new victims (as my server logs can attest).

M$ can re-org all they want. It just means they know they have a problem. But they are powerless to do anything about it. Part of what is sealing M$’s fate is their corporate karma. Nobody loves this company (except monkey boy balmer/fester).

I plan to dance on M$’s grave in about 15 years; sooner if we’re lucky.
meatofmoose

Sunday, September 25, 2005 - 12:43 pm · Reply

Stock stuck in the $20′s?

How ’bout thinking stuck in the ’80′s?
MCCFR

Sunday, September 25, 2005 - 12:52 pm · Reply

iDont:

I don’t know what parallel universe you’re living in, but I cannot imagine how you can even compare OS X (from Jaguar onwards) with XP.

As I stated in another thread earlier in the week, I’m currently running a Keynote presentation at a local theatre on a keyboardless/mouseless Mac mini into a 42″ NEC plasma.

As far as I know, you still can’t boot up XP without a keyboard being present. You can’t run Keynote on XP. And there’s nothing mainstream in the Intel universe that has the same form factor, especially with a DVI out.

So arguably more stable, indisputably more secure, more flexible, better specified and better packaged. And better software: no, you’re right – I should be using a Dell with a noisy fan or power supply with Powerpoint.

As for Apple’s iPod focus, you need to understand that the iPod platform in all its forms is the best advertisement for Apple and its approach at the moment. Additionally, with Apple likely to shift some $2.5 billion worth of iPods in the coming holiday quarter generating around $450 million of gross profit, why should they not give the product that has the ability to generate nearly 50% of sales and gross profit equal priority.
MCCFR

Sunday, September 25, 2005 - 1:19 pm · Reply

And on topic, the worries for MSFT shareholders should be as follows: -

a) Declining market capitalisation: on the 5th September ’04, MSFT was worth $292.75 billion; at the close of standard business on Friday that value had declined to $273.03 billion – a reduction of over 6.7%. Five years ago, MSFT was pitching over $30 (adjusted for splits et al) and they’ve lost nearly 16% of their value. This is going to hurt.

b) A deflating market cap brings a problem in the software industry, namely that share options – the weapon of choice in recruiting and keeping stellar talent – cease to have any attraction.

Combine that with engineers complaining about a lack of vision and direction and former employees like Bruce Chizen apparently being dragged into criticising the “spirit” of the company and MSFT is seemingly starting to publicly suffer from intertia whilst drifting rudderless.

c) A lack of focus: Apple’s real focus can be abstracted as follows – Mac OS X, computers, iPods, content [iTMS], professional applications (Final Cut et al). Every single bit of it profitable.

Try doing that with MSFT: computers, peripherals, phones, PDA, software development, business software, games, consoles, TV, and God only know what else. And most of these side issues simply don’t make any money.

So MSFT could make more money by trimming some unprofitable businesses, which might help the company show some direction and increase profits. And that might help the share price which should help the morale issue. But hubris won’t let them.

If I was a shareholder, I’d be worried.
iDon't

Sunday, September 25, 2005 - 1:21 pm · Reply

MCCFR: OK, OK, OK, I’ll be good! Please, don’t spank my bare bottom anymore. Please!!!
ChBlackthorne

Sunday, September 25, 2005 - 2:36 pm · Reply

I’m reminded of what Fidelity Magellan’s Founder, Peter Lynch, once wrote. One of the major errors a company can make is to over-diversify. Lynch called it “deWORSEfication”.

It will be interesting to see how Microsoft’s new graphic editing programs will work out. I wonder if Microsoft will try on Adobe the tactics they used on WordPerfect: give away or under price a product to drive the competitor out of business, and then, one they control the market, raise the prices with impunity.
Pete and RePete

Sunday, September 25, 2005 - 2:51 pm · Reply

Who needs a computer – soon you can do all your computing via your cell phone. (Just add monitor and keyboard.)

Maybe that´s what the Apple iPhone should be.

Read here:
http://philip.greenspun.com/business/mobile-phone-as-home-computer
MS Death Knell #1

Sunday, September 25, 2005 - 4:27 pm · Reply

Microsoft is now beleaguered.