“This isn’t to say competition from Apple is stunting Microsoft’s growth. That isn’t the case. Rather, the things Apple is doing right are the things Microsoft is not,” Dvorchak writes. “In other words: Apple’s successes have diminished Microsoft’s growth prospects.”
“The technology industry thrives on innovation. Microsoft is, and always has been, more of a ‘fast follower,’ than a product innovator,” Dvorchak writes. “In its cash-cow, historical product segments, notably the operating-system and Office software, there are few valuable new features that the company can offer to drive upgrades.”
Dvorchak writes, “In more recent growth categories, such as mobile, Microsoft generally isn’t a relevant player… Apple’s key competitive advantage — the reason it can create such great products — is the integration of hardware and software. Microsoft is somewhat stymied by the multitude of hardware platforms it must support, which inevitably creates a poor customer experience. I see a high probability of Microsoft buying a PC company — perhaps Dell — and a mobile-handheld company — maybe RIMM? — so that it can begin to offer a fully-integrated, more robust product to match Apple’s offerings.”
Dvorchak writes, “Absent such a strategic move, I believe Microsoft will continue to struggle to offer relevant products.”
Full article here.
They’ve always struggled to BE relevant!
No matter if or what they might buy, they are still going to inflict the Windows disease on it. It will NEVER go anywhere!!! Do you really think MS would accept RIMM’s new software?? I doubt they’d know how to deal with it!
Dvorchak, the anti-Dvorak.
Apple has made a believer out of Dvorak.
It only took 28 years.
Kudos, John.
that is crap windows mobile seven is going to bring us for the first time ever……facebook integr…..wait got that…Music play….wait got that……touchscre……wait got that….no no for the first time ever we will have a primarily blue home-screen…finally I can’t wait to see how long it will take apple to catch up with that.
Wow. Somebody can’t read.
If MSFT were to buy a PC box maker the smart play would be HP’s box division. HP has a much better rep than does Dell. They have a better international presence and build a better product (hard to do in a me too market).
This would kill (or at the very least cause a great deal of consolidation) several of the other box makers around the world.
This would actually benefit MSFT because they would no longer be forced to support a myriad of box makers.
Didn’t M$ already buy a Mobile handheld company when they bought Danger?
If we ever have a cyberwar, Microsoft will not have to struggle with being relevant. History will have noted that Microsoft’s crappy security crippled software was what allowed it to be so devastating.
“I see a high probability of Microsoft buying a PC company — perhaps Dell — and a mobile-handheld company — maybe RIMM? — so that it can begin to offer a fully-integrated, more robust product to match Apple’s offerings.”
Isn’t that the Zune strategy? (And we know how well that worked.) So why would other PC vendors continue to work with Microsoft if Microsoft is now their competitor?
Microsoft won’t buy Dell, it will fall back to its old habits of partnering with a company like Dell to produce some not-really-good-enough product.
The real problem with Microsoft is that the company is too tied to its lucrative corporate OS and server systems. Microsoft believes it must continue to support systems and software that are 15 years old, or at least have some degree of compatibility there, or its customers won’t upgrade (or will upgrade to someone else’s software, like Apple or Linux).
Microsoft also will never completely rehab Windows or Office to streamline or modernize either. Simply not in its DNA. Their OS and Office products are design by committee, except that the committee sub-groups don’t talk to one another and just make stuff they hope works with the other bits later on.
Microsoft is all about great promises with not product, only to gut the “fantastic” new features prior to release. With those types of corporate attitudes, Microsoft will hang on as a giant simply due to its installed base and the need for Office compatibility (yes, MDN, people do need Office still). It will gradually fade away rather than suddenly folding up and dying.
The interesting thing about Microsoft will happen when Ballmer steps down/is forced out. That will be Microsoft’s (likely last) opportunity to become relevant again, because it will still have hoards of cash and the ability to do something. If the wrong person is appointed CEO, the company may not ever become a force again.
Dvorchak misses it here…if they buy Dell, they still have to support all the other PC manufacturers. Unless they all go Android or Chrome in response.
@Gregg, there is no way HP would sell off their computer (and presumably printer) division. It’s too much of a cash cow and it feeds their services divisions. And buying HP as a whole is a terrible proposition as it spreads MSFT’s focus far too wide. It would require massive spin-offs. HP is, of course, a far, far, far, better company. I hold HP stock and MSFT (the latter for the dividend, primarily) but would never, ever, touch DELL.
Finally, Dvorchak suggests purchasing RIMM. That’s more realistic, but Blackberry has its own OS, and the pushback against the prospect of being forced into Windows would be horrible – I’d imagine an immediate 35% loss of customer base. Purchasing PALM is probably far smarter – you get a lot of IP cheap + Rubenstein et. al. and you can needle AAPL with both of those.
For the love of all that’s pure on the earth… it’s Gary *DVORCHAK*… NOT John Dvorak…
PLEASE… learn to read ppl… ffs
MaWo: ‘expect’. As in, ‘More of you… I do.’
You’re better than this ppl. You are.
Microsoft is a Software company, Apple is a hardware company that unlike other hardware companies, they happens to write there own software to sell there hardware. Sure, now this guy states that what Microsoft has done to get on top, it’s main and fundamental business strategy has been fundamentally flawed, and it took him more then 20 years to figure this out? It will take another 20 years for Balmer to figure this out.
@bizlaw
I actually am a bit more pessimistic about what happens at the CEO level:
Any CEO replacing Ballmer will likely be better for Microsoft (can’t get worse than him… When you’re at the bottom, there is only one way to go);
Any CEO following Steve Jobs’ footsteps would likely be worse for Apple (when you’re at the top, there is also only one way to go)…
In other words, if MS does not suffer a serious melt-down, their future odds of competing with Apple are probably, and very unfortunately better. It is not the scenario I’m wishing for, but it’s what I feel is more likely to happen.
@ Horseshack
We are agreement that HP is a far better choice (if it were possible) than Dell.
Dell profited in the early days by figuring out how to make computers less expensively. But that just created a cost cutting mentality throughout the industry, and eventually came back to bite Dell in the ASS. Mikey is a good production manager, but a horrible corporate CEO. Sounds kinda like Apple’s Spindler back in the early ’90s. The problem with Dell now, and Apple then, is/was their respective Boards.
Gee, Jobs fired all but one Director when he came back. Looks like he saw the problem and fixed it.
@ Too Hot!
Agreed with your take.
Now, if we can clone Dolly the Sheep and others the time is now to clone Steve Jobs.
All traces of Ballmer’s DNA should be torched.
@Too Hot!
I’m not so sure anymore. All Apple has to do is promote the new CEO from within and they will continue doing what they do. The top team have the ethos ingrained now. It’s all about the interface. That’s the one thing that really makes Apple products what they are.
Tim Cook as CEO would be able to keep the current main players in the team.
Ballmer meanwhile has a group of multi-millionaires who haven’t done anything special for a decade to hand over to. MSFT have to bring in new blood to turn the company away from the direction of malaise they are increasingly headed towards, and a period of blood letting amongst the upper management levels will stall them on all fronts for a short while. Therein lies opportunities for competitors. Not just Apple.
So much irony – how many years did we have to endure pundits telling Apple to emulate Microsoft in licensing their OS? (Ignoring the fact that such a software licensing model isn’t profitable without IBM gift-wrapping a monopoly advantage and handing it to you.)
Now, it seems a lot of folks are coming around to the notion that Microsoft needs to emulate Apple’s fully integrated model. I’m firmly convinced that, at some point, Microsoft will simply have to do so. (They’re already dipping their toes in the pool, so to speak, with their Zune and Kin products.)
@Mac-nugget
Semi-Right. While it is true that Apple began as a hardware company and even to this day makes the vast majority of its money through hardware, the day Apple bought NeXT, Apple became fundamentally a software company. All of Apple’s success in the last 13 years can be attributed to its core capabilities and collaboration through software. While Apple makes beautiful laptops, they would not be in the least bit special if they ran Windows. While the industrial design of the iPhone is incredible thanks to Johnny Ive, it would have failed just as bad as a WinMo device if it ran Windows Mobile. This is especially relevant with the iPad. ALL pre-iPad tablets failed because of the software. That is where Apple succeeds.
Microsoft has failed because their software is bad. There is no consistency across their platforms. The iPhone was seemingly MADE to work with OS X — not only is it, at its core, the same OS — it integrates so very well into the Mac ecosystem. Can that be said of ANY mobile device from Microsoft?
Finally, just as Microsoft looked like they were going to have a solid mobile strategy going forward with Windows Phone 7, they introduce the KIN. ANOTHER platform that doesn’t play nice with Microsoft’s many others. They clearly do not understand the ecosystem model.
There is no compelling reason for a Windows desktop owner to buy any other device from Microsoft. Whereas with Apple, owning a Mac makes you want to buy more into the Apple ecosystem because when EVERYTHING you own is Apple made, it really does just work.
So yes, Apple is a hardware company. But it is through software they have created their ecosystem, and through integration that they have created loyal customers. As proof of that, I bought my first Mac in 2006: a Macbook Pro. Since then, I have gotten an iPhone, iPad, Airport Express, and countless iPods – not to mention converted my entire family. Apple is answering the question Microsoft should have (especially since they’ve been the marketshare leader for so long) answered a long time ago: How to we make our customers stay?
That is why Apple is succeeding.
@Frank –
You got it almost right. Apple is succeeding because they understand the importance of the user. User interface design, with both software and hardware, is the most important thing. Anyone can add “features” to a device, but if it’s hard to use, no one will buy one.
If you can make a product that is powerful, flexible, and capable you will sell to a group of technically aware and advanced customers who appreciate what it can do.
If you can make a product that is simple to use, you will sell to the much larger audience who doesn’t want to have to read a manual or ask a friend just to figure out how to use it.
If you can make a device that is powerful, flexible, capable, and is simple to use, you will sell to everyone.
That was Apple’s vision from the time of the first Macintosh onward. (They did lose sight of that idea once or twice, but each time they did they always came back to it.)
In the short term, there were a few problems. The people who crave simplicity aren’t the biggest computer buying group out there – those technocrats I mentioned buy far more computers (for themselves and also make the decisions about what computers will be purchased for the companies they work for.) Also, that simplicity came with costs in both money spent on design and in computing resources like RAM and CPU cycles.
Now that RAM and CPU cycles are cheap and a phone (as opposed to a personal computer) is a computer that everyone will want and see value in, Steve’s original vision is paying off for everyone involved.
Powerful AND easy to use. Apple has it. Who else?
“This isn’t to say competition from Apple is stunting Microsoft’s growth. That isn’t the case”
“In other words: Apple’s successes have diminished Microsoft’s growth prospects.”
Sounds somewhat contradictory to me.
Now if MS decided to screw its box makers as some have mentioned here, by buying one of them and concentrate on that company to create an integrated product it is somewhat naive to think this would be advantageous to MS in the long term. While it would give them advantages to improve the product itself it would undoubtedly break and fragment the Windows market in such a way that it would simply force the hand of the Asian manufactures who are already rapidly taking over the world wide PC market to find an alternative OS, be it Google or home made Linux. May take some years and MS might get a short term boost but it would only make inevitable their ultimate decline into ultimate irrelevance while destroying at many of those supposed advantages that IT clones love and holds their monopoly in place even at home. Even Ballmer can’t be so stupid as to alienate both its IT acolytes and China in one mce surely?
Oh, puhleeze let them buy Dell AND RIM. That would make for the quickest death sentence of three clueless companies we could ever hope for!!
“Fast Follower” – no.
“Big Follower” is more accurate. As I’ve said before, Microsoft’s core competency for the last couple of decades has been in leveraging their dominance. This is what their leadership has become good at. Unfortunately, this has come at the expense of their ability to innovate, and to a more recent degree, their ability to write/ship stable software.
Microsoft flails now because their dominance is waning, and their core competency of leveraging it can no longer sustain it’s weight as an organization. Thus, unless there is a massive sea-change in the leadership, management, AND corporate culture at Microsoft, their continued decline is inevitable.
And Apple will be there to bury them….
Another tech writer that has no clue… M$ sucks because it sucks and stinks.
That’s the only reason.