Microsoft’s big corporate release of Windows Vista and Office this week surely must mean something, right?
“Um, actually no. They are completely immaterial to Microsoft’s earnings this quarter and next. And it’s not just me saying this; John Dvorak, and The Wall Street Journal are chiming in with similar takes (the latter being less extreme than the former),” Blackfriars’ marketing’s Carl Howe writes fro Seeking Alpha.
“The only way Vista would have affected Microsoft is if it hadn’t been released. After five years of Software Assurance contracts with no upgrades, companies might have started bolting at renewing their contracts. And that would have had a very negative impact on Microsoft’s future earnings,” Carl Howe writes.
Carl Howe writes, “The reality is Microsoft isn’t really a technology company. It’s a toll collector. It buys up toll-generating properties and then just collects the tolls on them, just as Spanish and Australian consortia are buying up the Chicago Skyway and the Indiana Toll Road. Don’t believe it? Take a look at this list of Microsoft innovations…”
MacDailyNews Note: Howe links to this list of Microsoft “Innovations” which include descriptions of the following products’ and technologies’ origins:
• C Compiler
• Common Internet File System
• DirectX
• DOS
• Flight Simulator
• Frontpage
• Intellimouse Explorer’s Optical Tracking Technology
• Internet Explorer
• Powerpoint
• RPC
• SQL Server
• Standard C++ Library
• TCP/IP Stack
• TrueType
• Visual Basic
• Windows
• Windows NT
Giving credit where credit is due: Microsoft developed Microsoft Bob all by themselves.
Howe continues, “…you’ll find that most of them actually were built at other companies, and then bought by Microsoft. That’s why Vista took five years — Microsoft actually had to build something instead of just maintaining it. It’s just not the company’s core competency.”
“Make no mistake: there are a lot of great technology people who work at Microsoft. But what innovations they might be able to achieve have been stifled by corporate organizational chaos and stifling development processes. When it takes 24 developers and their management to design a single button in your product, you know there is something wrong with a company. When you combine this with the fact that Microsoft has bought, not built, most of its successful technology, you don’t exactly have a formula for the next great technology breakthrough. Remember, only two of Microsoft’s product lines consistently make money. All other product lines actually dilute earnings instead of contributing to them,” Carl Howe writes.
Carl Howe writes, “So what’s wrong with being a toll collector? Not a thing. It’s just like being a utility — it provides a consistent earning stream that should generate significant dividends. The only problem: Microsoft isn’t valued like a utility; it’s valued as a technology company with a price earnings ratio of 23, whereas utility companies tend to be in the teens. And its dividend yield of 1.3% is a far cry from the 2% to 4% of utility firms. And utility companies don’t devote seven billion a year to research and development either, nor do they launch me-too music players like Zune. They do, however, have an obligation to do maintenance on their properties, and that’s exactly what Vista and Office are: maintenance.”
Howe writes, “If Microsoft ever wants to become anything other than a toll collector with a valuation to match, it really has only one option: change the leadership and break up the company into smaller pieces that an actually compete. But until that happens, we should stop pretending that Microsoft is driving the technology industry… Toll collection isn’t innovation, no matter how many billions get collected. And the sooner we stop praising the toll collectors as the apex of US business success, the better.”
Howe’s excellent full article is here.
[Thanks to MacDailyNews Reader “The Wzrd” for the heads up.]
Related articles:
Dave Winer: ‘Microsoft isn’t an innovator, and never was – they are always playing catch-up’ – December 01, 2006
Microsoft’s Windows Vista vulnerable to malware from 2004 – November 30, 2006
Microsoft Windows Vista developers used Apple Macs for inspiration – November 27, 2006
Microsoft’s Windows Vista is basically Microsoft’s version of Mac OS 9.3 – October 11, 2006
Microsoft Windows Vista: If you can’t innovate… try to impersonate Apple’s Mac OS X – August 10, 2006
Ballmer: I’m Microsoft’s ‘primary champion of innovation’ – July 27, 2006
Microsoft botches another copy job: Windows Vista Flip3D vs. Apple Mac OS X Exposé – June 26, 2006
Windows Vista rips-off Mac OS X at great hardware cost (and Apple gains in the end) – June 13, 2006
Computerworld: Microsoft Windows Vista a distant second-best to Apple Mac OS X – June 02, 2006
Thurrott: Microsoft going to get eaten alive over Windows Vista’s resemblance to Apple’s Mac OS X – March 09, 2006
NY Times’ Pogue on Gates’ CES demo: Most of Vista features unadulterated ripoffs from Apple Mac OS X – January 05, 2006
Analyst: Windows Vista may still impress many consumers because they have not seen Apple’s Mac OS X – January 05, 2006
Apple’s talent and innovation vs. Microsoft’s hype – October 25, 2005
Microsoft’s Windows Vista strives to deliver what Apple’s Mac OS X already offers – October 10, 2005
Thurrott: many of Windows Vista’s upcoming features appeared first in Apple’s Mac OS X – September 26, 2005
Microsoft’s Ballmer: It’s true, some of Windows Vista’s features are ‘kissing cousins’ to Mac OS X – September 18, 2005
PC World: Microsoft innovation – an oxymoron – September 14, 2005
As usual, Apple leads, Microsoft tries to follow – June 02, 2005
eWEEK Editor Coursey: Longhorn so far ‘looks shockingly like a Macintosh’ – April 25, 2005
Due in late 2006, many of Windows Longhorn’s features have been in Mac OS X since 2001 – April 25, 2005
Microsoft’s new mantra: ‘It Just Works’ ripped straight from Apple’s ‘Switch’ campaign – April 22, 2005
Apple CEO Steve Jobs on Microsoft’s Longhorn: ‘They are shamelessly copying us’ – April 21, 2005
Microsoft’s Windows Longhorn will bear more than just a passing resemblance to Apple’s Mac OS X – April 15, 2005
Steve Jobs: Microsoft copied original Apple Mac with Windows 95, now they’re copying us again – February 08, 2005
Where Apple leads, Wintel follows years later – January 31, 2005
Novell CEO: ‘Microsoft sucked $60 billion out of IT industry that could have used for innovation’ – September 13, 2004
Apple CEO Steve Jobs: Mac OS X Tiger ‘is going to drive the copycats crazy – June 28, 2004
PC Magazine: Microsoft ‘Longhorn’ preview shows ‘an Apple look’ – May 06, 2004
Charles Arthur: Microsoft’s definition of ‘innovation’ different from everyone else’s – April 27, 2004
Windows ‘Longhorn’ to add translucent windows that ripple and shrink by 2005 – May 19, 2003
BUUUUUUUUUUURRRRRRRRRRRRRRPPPPPPPPPPPP……….!!!!!!!!!!!!!!!
yawns…!!!!!!!
Microsoft is a utility company with a dancing monkey used car salesman as the CEO.
Vista seems to have some benefit after all…
The truth about Microsoft is leaking out… FINALLY!
Excellent article. The toll collector metaphor is perfect.
What I’d really like to see a list of companies and technologies who have been suppressed, harmed and/or crushed by Microsoft.
Great wrap up to the article.
I couldn’t agree more.
MS… Killing productivity, one product at a time.
MW.. among.. as in Anthrax’s Among the Living…Use a Mac..Get it done.
Hey, What’s the betting Equation won’t join us on this thread?
So much fr your wonderful innovative Microsoft Equation lol.
Ooh, my stomach hurts cos I can’t stop laughing…
where’s zune tang? I need some more laughs
First Indiana and then the rest of you lot. (Except perhaps the coldest places.)
More like a reverse Utility: sewage generation. Customers buy it to clean it up, sometimes with the aid of special contractors.
I checked out the Vista site yesterday and they were claiming that Vista was magically able to view the 3D books at the British Library website. Of course it only required the Shockwave browser plugin. Im loving the Informationweek article that just trashes Vista and talks up Leopard.
i’m a linux user and you mac fans have nothing fancy to prance around with. if you call leopard a “major OS upgrade”, then you are oblivious. time machine has been in Windows for some years now, starting with XP. its nothing new. sure windows didn’t have the UI that apple does in time machine, but if you ask me, the starts floating around is the hokiest thing i’ve ever seen. as for the other “new features”, i see no reason in paying apple’s fee to upgrade every time the version goes up by “x.0.1”. mac users think what you want, but i think MS has finally done something right. but i’m still sticking with the penguin.
Good luck with the penguin, Chris. More power to you if that works for you.
Of course, Time Machine is only one of the KNOWN features coming in Leopard. After it’s announced and we know the whole picture, then we can bash it or boast of it! Until then, it’s stupid to make a bunch of statements about its value or lack thereof!
Chris,
Here’s a little secret: Windows was invented just for you!
“And the sooner we stop praising the toll collectors as the apex of US business success, the better.”
It’s never ceased to amaze me that there have been so many people who know no better than think that MS is the epitomy of Wetern capitalism. I can’t think of a worse example.
And Microsofts spending needs much more scrutiny from its non-exec board Directors.
Linux users always seem to forget that most people don’t want to tinker with their computers– they want them to work well, even if the user isn’t advanced. And advanced users want a computer that can handle what they’re capable of. Macs do that.
And what do you know about Leopard since almost nothing has been said about it publicly. What you call hokey, I call fun. It’s unnecessary, but offers a bit a humor and personality to a pretty dry operation.
Let me guess: you live in symmetrical beige room with no furniture except your linux box and monitor. You eat only lentils of a certain color and use a version of Linux that is deliberately utilitarian. If someone laughs, you close your ears to avoid the excess exuberance. Ahhh, yes– for you, the stars are hokey. But that xbox you have tucked under your beige robes isn’t…
Hey, guys, lay off Chris. Using Window’s “Time Machine”, Chris had ported himself to the future and has just recently returned to let us know what the experts are saying about 10.5 in 2007.
Chris, too bad Microsoft can’t use the same technology to go back in time and reverse the multitude of mistakes, profusion of miscalculations, and superabundance of blunders that led to the collapse of Origami, demise of Longhorn, and, eventually, downfall of Zune. But, what the heck, you have an Xbox to play your childish games and amuse yourself vicariously as a fictional superhero in tights.
Yaaaaaawwwwwnnnn…huh?
Welcome to the social.
I actually do not believe you are a Linux user. You are just one more idiot MS sucker pretending to be objective. Stick with your Windows, lobster. The only penguin you will know is the one that will casually encounter at the zoo, next to your cage with a big sign on it: TROLL.
SHUT THE FSCK UP
What a strange world, Linux freaks defending Winblows, lol!
Mmm…lobster…
yawn? That’s it Zune Thang?
Some passion, duh.
I don’t get that TrueType is in the list. If you go to microsoft.com and type TrueType in the search box, the first hit says: “TrueType is a digital font technology designed by Apple Computer, and now used by both Apple and Microsoft in their operating systems…”
Chris, how little you understand.
Time Machine isn’t about the stars, it’s about the *ease of use*. You open a finder window, and zoom through time until you find a difference in the directory or file you’re looking at. You don’t need to know *when* you last had that file. You don’t need to sort out which of your backups to go digging through to restore it.
-jcr
yes, Apple invented TrueType. Actually, they were supposed to co-develop the TT technology with MS, but eventually MS dropped out. AFAIK, TT was mainly developed because of the annoying licensing fees of Adobe’s postscript technology.
To get back on topic, I think it’s very refreshing to see that journalists are starting to take a closer look at what Microsoft really is and stands for.
Lastly, I think it’s very childish how some of you guys jump on a Linux user just because he doesn’t think Leopard (given what we know about it) delivers enough to be called a major update. After all, he’s got a point: Leopard doesn’t look like a major update. Yes, there might be some great things introduced soon…but as of right now…umm…it’s more “neat” than “wow”. I still hope the Finder will get a major facelift (Pathfinder anyone?) just to mention one major drawback in the current workflow.
oh well.
Good article.
Chris is right about one thing, though… that Time Machine star field is mo-fugly!