Microsoft past its prime, destined for decline?

“Two successive Microsoft chief executives have long tried, and failed, to refute what we might call the Single-Era Conjecture, the invisible law that makes it impossible for a company in the computer business to enjoy pre-eminence that spans two technological eras. Good luck to Steven A. Ballmer, the company’s chief executive since 2000, as he tries to sustain in the Internet era what his company had attained in the personal computing era,” Randall Stross reports for The New York Times.

“Empirical evidence, however, suggests that he won’t succeed. Not because of personal failings, but because Mother Nature simply won’t permit it,” Stross reports.

“Maybe this was why Mr. Ballmer flirted with Yahoo,” Stross reports. “That prize, however, seems a mirage. You can’t merge-and-acquire your way around the Single-Era Conjecture. Just ask I.B.M., which gobbled up Lotus Development Corporation to no avail.”

“It’s Google, of course, that has developed the musculature to step forward and lay claim to being Microsoft’s successor as industry leader in the Internet era,” Stross reports.

“It’s no secret that Microsoft’s online businesses have failed to gain leading market positions. But what is not widely appreciated, perhaps, is that the company’s online initiatives have lately been doing worse than ever,” Stross reports.

“In the 2006 fiscal year, Microsoft’s online services produced a $74 million loss after the previous year’s profit of $402 million. Since then, the numbers have become uglier, as Microsoft’s online segment has added employees and absorbed growing sales and marketing expenses. In the 2007 fiscal year, the online businesses lost $732 million. In the next nine months, through March 31 this year, they recorded a loss of $745 million, almost double the amount in the period a year earlier,” Stross reports.

“According to Hitwise, an Internet research firm, Google’s share of searches in the United States has increased to almost 67.9 percent in March 2008 from 58.3 percent in March 2006. During the same period, Microsoft’s share has dropped to 6.3 percent from 13.1 percent,” Stross reports.

More in the full article here.

Microsoft made its fortune on the back of general tech ignorance in the 1980’s and ’90’s. “Hey a PC is a PC, right? And besides, Joe from work told me to get one of them Dells.” That level of ignorance, Microsoft’s lifeblood, has begun drying up. Everyone who gets a Mac and tells their friends and family about it increases the evaporation rate exponentially.


Direct link via YouTube here.

81 Comments

  1. The never reached their prime, and they likely never will. They’ve been living off of the winning lottery ticket IBM handed them in 1981. It made them fat, dumb and happy. Now that the lottery winnings are nearly used up, they’re just fat and dumb.

  2. Innovation is not in their company culture. They’ve spent the last decade plus living off momentum and paranoia.

    That’s no way to create.

    Oh yeah, and the soulless bean counter is running the company.

  3. As important as MS’s decline is, there is more important things going on. Like for instance, my life. I have MacTheRipper, strips my drm fine, but I can’t get my stripped movies into itunes so I can watch them on my apple TV. Please help me.

    Thanks

  4. all you need to know about tech today is that “Apple” is a noun meaning ‘cool stuff’, “Google” is a verb meaning ‘search’, and “Zune” is a noun meaning ‘turd.’

    knowing that, how long will it take for “Microsoft” to mean ‘failed expectations’?

  5. Windows user prayer: “Dear Lord please help the title of this article to be true! Please Lord!”

    Mac user prayer: “Dear Lord please help the title of this article to be true! Please Lord!”

    Linux user prayer: “Dear Lord please help the title of this article to be true! Please Lord!”

    Unix user prayer: “Dear Lord please help the title of this article to be true! Please Lord!”

    Enterprise pc user prayer: “Dear Lord please help the title of this article to be true! Please Lord!”

    Home pc user prayer: “Dear Lord please help the title of this article to be true! Please Lord!”

    Entire planet is praying: “Dear Lord please help the title of this article to be true! Please Lord!”

    Amen.

  6. What rubbish. Mother Nature has nothing to do with Microsoft’s decline. MDN’s take is spot on. They got lucky in the first place, riding Dos, but they lacked and still lack inovative ideas and a committment to quality. You can’t fool all of the fools all of the time, and right now all those fools are growing some brains and M$ is failing.

  7. @Ampar:

    “(No, it’s not a rickroll.)”

    Nope. Here’s the Hungarian original:

    http://mf.index.hu/player_ng.swf?file=/tech/ballmer/ballmer_tojas-text

    Gizmodo says:

    “Microsoft has midterm contracts with the state in Hungary for “way cheaper than from the store” Campus-licences. This costs billions (in HUF, 160HUF=1USD) for the state and makes students stuck in the Microsoft-world, not knowing Linux etc.”

    Fuck people over enough over so many years and in the end they begin to get a bit fed up with it. Throwing eggs may not be the best way to make your point — though neither is throwing chairs — but it’s not surprising when you know the cause, is it?

    Years and years of shady deals, bribes, in and out court rooms …

  8. The Hungarian egging was odd. I would have expected the others in the audience to tackle the crazy nut.

    Speaking of Hungary, I sold a Mac SE back in 1991 at Georgetown Univ., by sticking up a flyer, and some Hungarian students came to buy it. After they told me their sad story, I just gave the Mac to them for free. I hope my generosity was one little step in the Apple revival!

  9. Here on the beautiful west coast, we have a long tradition of loud, clinically insane TV salesmen, often dressed as cowboys. From Cal Worthington cars to local heroes like Ted Sadler’s Mattress Ranch spots. Steve Ballmer was a fine specimen of this beast, though his High Society mocking always came off a bit gay.

    And if history is any guide at all, this can only mean that Microsoft will one day be run… by this guy.

  10. @ KenC

    “The Hungarian egging was odd. I would have expected the others in the audience to tackle the crazy nut.”

    What? You thought they’d all have brought eggs?

    ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

    Oh, wait a minute, by “the crazy nut” you didn’t mean Ballmer.

    Why would they? He was no threat to anyone — not even Ballmer with an aim like that. Everyone was just embarrassed, including the thrower, who didn’t know what to do after his “grand gesture”, and it all just fizzled out.

    As for Monkey Boy, he passed it off rather well.

    But that someone wanted to throw the eggs tells you something. No one ever wanted to throw an egg at Steve Jobs that I know of.

  11. Hilarious article. Damn near fell out of my chair laughing until Nancy looked over her side of the cubicle divider in disgust. Sorry, Nancy. I can’t stand the ‘soft rock and dusties’ on her radio station. How much Sting and Olivia Newton John can you hear in a day and not go nuts? Thankfully once in a while one of those REO ballads makes it through to restore my sanity. Timeless stuff.

    Anyway, Microsoft continues to skyrocket to new heights in market share and revolutionary innovations while you MAC dorks fiddle with your dopey I-Pods and so-called computers that can’t play games. I don’t think there will ever be a decline for the geniuses in Redmond. Hey MAC lemmings, wishing Microsoft will go away won’t make it so. Apple has to get off their duff and make something people actually want for a change. Dorks.

    Your potential. Our passion.™

  12. @almux

    I hate to be negative here, but no MS will not fail or crash to the point of irrelevance. They will suffer a bit, lose some customers. Thats about it. Remember they have a Monopoly in the business world and now 3rd world countries.

  13. Microsoft past its prime, destined for decline? – This is 2008, how slow people are to see what is in front of their faces.

    MS, Crooks and Liars, since day 1.

    Microsoft = world’s biggest (non-governmental) criminal organization ever (well maybe excepting the East India Company 200 years ago, and maybe not non-governmental).

    Not taken the red pill yet? – being a Mac user doesn’t absolve you.

  14. I think many people here are missing the larger point: This isn’t just a “Microsoft problem.” What happens in ten or so years when there is another paradigm shift in computing? Will the Apple of 2018 be like the Microsoft of today? Steve Jobs stepping down; a new CEO at Apple who, for whatever reason, can’t build on or even continue Apple’s past success; a new way of computing or using the computer; other smaller, more nimble companies moving in on Apple’s turf… I’d like to think that Apple is creative enough to either embrace and succeed with whatever new technology emerges, or will create the very technology of the future, but who knows?

  15. @John

    Alex Bogusky needs to take some advice from the late Hank Stramm regarding the creation of an advertising campaign for M$ to compete against Apple – “it’s like trying to dress up a pig – it ain’t gonna make much difference”

  16. @ Mark, “clogs to clogs in three generations” (Google) – W H Gates junior was the second.

    More importantly. What happens when nature’s resources are so constrained (insert alternative word here ………… ) that much fewer people can survive?

    It’s just an illusion (that was too).

    Thank Steve for iTunes, makes the illusion more palatable – for now.

    Will you sign up for the Steve Jobs podcast?

    In super-cryptic mode today ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

    Which color would you take?

  17. There will be no fast decline for Microsoft. There are too many businesses and consumers who don’t know any better, and so they’ll keep buying Windows until it’s no longer available.

    Microsoft will slowly shrivel up and exist as a smaller company. X-Box will be sold to someone, and the other businesses will be jettisoned except for Windows and Office products, since those are the only ones which make money.

    Too bad for Yahoo! that they’ll be forced by shareholders (Icahn) to merge with Microsoft. That will be the end of Yahoo!.

    MDN Magic Word: growth, as in none for MS (or Yahoo!)

  18. @ Yikes,

    He says wait a couple of weeks before you buy it:

    “I doubt you’ll need to wait a month but it probably would be prudent, given what happened with the first generation, to at least wait a week or two while following any breakage reports to ensure your experience will go seamlessly.”

    But within that fortnight, buy a competitor’s phone!

    “It is likely Apple will respond to known threats by competitors like Samsun, LG, Asus and RIM in any case and one of these phone designs may be a better choice for you.”

    Who takes advice from this guy? Let’s see a show of hands.

  19. New issue of Fast Company:
    http://www.fastcompany.com/magazine/126/believe-it-or-not-hes-a-pc.html

    “Alex Bogusky built the country’s slickest ad shop using Apple products. His next challenge: Persuade people like him to buy Microsoft’s stuff.”

    Read this article. It’ll make you laugh your ASS off. This egomaniac and his ad agency had a few winners with Miller Lite and Burger King, and now this guy is convinced, with his deluded thinking, that he can destroy Apple by changing Microsoft’s advertising.

    Puleese. No amount of cool advertising can prop up uncool, unstable, unusable products. It’s like crapping in a box and backing it up with 100 million bucks in advertising. Doesn’t work.

    NOTHING can make MS’ crap look cool anymore. Too little, too late. Their time as a dominant force is coming to an end.

  20. @Asmodeus:

    Yeah, their uber-hip Zune advertising was so effective they apparently forgot all about it. Making your geeks go to the gym, shave their heads, and pierce their ears, and concocting a cool persona for them, I’ll buy that.

    And ye Gods! Honk for Fonk? Is your insurance at Steak? We just don’t have advertising like that around these parts, LOL! Somebody should forward those to Redmond.

  21. M$ is like a twenty+ year old car … still runs, but boy, does it show its age!
    The M$ mechanics are trying to keep this old heap [OS] running but the technology is past its prime, the repairs [patches] don’t seem to help much get more out of the old bucket.
    Sure you can still drive the old heap, but it keeps on breaking down just to get to the corner store.

  22. I think MS got to where they are because of being in the right place at the right time. First, an operating system was needed for the PC. IBMs didn’t cut it. MS gave them DOS. It worked better than IBMs and other comers. Then the Mac came along. This was MS’s second big break. In the beginning, MS wrote apps that worked on the Mac and took advantage of the Mac’s OS and UI. This was good for Apple as well (Developers, Developers, Developers…. ” width=”19″ height=”19″ alt=”raspberry” style=”border:0;” /> ). But it also gave MS a good look at the OS and the UI. And it gave them something to COPY. They have been doing it ever since. The only reason that the copy outsold the original was because the hardware was an order of magnitude cheaper. But now that just ain’t so. And Mac OS became harder to copy. The business model that made MS great (i.e., copy Apple and sell for less) isn’t viable because they can’t sell for less and there copies are grossly inferior. Look at Zune. Zune might have been successful (I say might, mind you) if the cost was half the iPod. But at the same price – pulleaze!
    MS is clearly on it’s way out. But it’s so big, its just going to take a while to die.

  23. To HMCIV:

    Regarding your comment :Is it me or does Ballmer look like he’s squeezing out a really big brown Zune in that photo?”

    I would have to say no, there is a photo MDN has put up a photo of Ballmer that looks like he is squeezing out a really big brown Zune and another that looks like Zune Thang is pulling out a really big brown Zune out of Ballmer, but this one looks new and different.

    It looks like Ballmer is squeezing out a really big brown Zune….sideways.

  24. Man you guys get worse with every passing day. You really think Microsoft is going to crash. Give me a fucking break. der fueher really brain washes you guys! Microsoft with 95.61 of the market on OS is in the world. Who in the hell is ready or even wants that kind of responsibility. Or how about the Office suite dominanace or the Browser dominance.
    You forget they are inovating with new products every quarter. The cloud is a reality right now whith them. Surface computing is there already as well. Mobile technologies gets more market share every quarter. Oh and the gaming consoles, the media player.
    You guys are a bunch of brainwashed Apple wannabes shouting to the mountain, ME TOOOOOO.
    Go get a life.

  25. @ James
    “We just don’t have advertising like that around these parts, LOL! Somebody should forward those to Redmond.”

    Someone already sent them to North Bend, where Nintendo USA shamelessly ripped them off.

    Take That To The Bank!!!

  26. @LateRegistrant
    Oh arent you the cleaver one. Apple may have their own loyalty base, but in the real jungle of business and day to day computing Apple is a babe in the woods, without a clue.
    good luck on your continued indoctrination, der Fuerher is proud of you.

  27. “but in the real jungle of business and day to day computing Apple is a babe in the woods, without a clue.”

    Stunning prose, honey. You really know how to say a lot without actually saying anything. I’m in awe.

    Please, continue.

  28. Sorry to say this to M$ fans, but …
    a parallel can be made between M$ and the North American auto industry.
    Old style products that don’t work well end up being replaced by machines that work and are of quality from elsewhere.
    You know, people do get fed up with things that don’t work well even though they are sold, nay given, at garage sale prices.

  29. Ha, ha! Holy crap! How do you find these things? Maybe we should just send Redmond a box of those fake mustaches. Now that I might be tempted to buy!

    @Roberto:

    In the video, it actually looks like he managed to duck them all . . . I think that’s just his face. ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

  30. Yes Vern Fonk, he would do a great job running Microsoft. He would handle all those PUI’s, programming while under the influence – of ‘nothing’.

    We’ve always enjoyed his commercials in Vancouver, BC.

    Thanks ChrissyOne

  31. @ChrissyOne
    Not your honey , and I am appalled you would be so audacious as to verbalize that. Now back to the discussion at hand
    The Apple crew in here as stated before needs a reality check. Microsoft is so emaeshed in the fabric of the worlds business that switch to another platform would take better part of a decade and a vision that is not present by any other players out there.
    Think about it 95.61 % of the worlds computing power, being handled by one platform. Apple doesnt have the aspirations for this, neither does Linux. Microsoft wanted this and they got it. And quite contrary to all this prognostication, they will not go quietly. They will adapt to the enviroment like Dos, 95 then 98, NT, 2000, XP 64bit Winows Server, Vista…….. Microsoft will evolve and shrink in some areas and expand in others.
    Of course you der Fuerher cannot grasp this, he only like building beatiful things. Get his hands dirty on the mundane as everyday business, low cost intro computing, 1 Laptop per Child, Cloud, Expanded media content, surface computing and interaction, And please dont denegrate yourselves nad refer to the Iphone as surface computing. It would be a joke to think of that interface running anything but a second level smart phone, but I digress.
    As I have said before Apple is good. However they will always be a small base, highend nitch, with the current thinking going on. Microsoft fills the other 95.61 % void nicely.

  32. So are you saying that I shouldn’t tell anyone about our brief but torrid affair? You did things to me that I’ve never even read about, and now you try to deny me the memory of the most magnificent pleasure I’ve ever felt?!?! AND YOU NEVER COME TO SEE THE BABY, EITHER. Appalled?! You Bastard!!!
    Okay, just walk out of my life forever. But when you want someone to paint your toenails and put the Mag-Lite in your butt, DON’T CALL ME!!!

  33. And Ive been ban for less.
    People People People….. you are so easy to incite. Now where is your high standards? Lol der Fueher will be pleased with you.
    However I see no one disputing my claims as stated. Must be true then.
    Apple will fall again, Think Different People!

  34. Man all this hating going on. You know people we are of a kindred spirit. I dislike Apple, and you dislike everything that is not Apple. We should really be getting along famously.
    You wound me….

  35. Ah, Jack.

    We’ve got our own equally goofy: The Bulk; Wizard of Savings; et al..

    ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

    Only in Canada, you say. Nah, Gordy learned from ‘the best’. Victoria is in King: Komo: Kiro’s ‘cable encatchment’.

    We used to have the “You betcha” — Ford guy, too.

    But, Stereo Warehouse seems the kraziiest, ‘cuz that guy actually ‘looks’ nuts.

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