“My recent comments have probably echoed that of many other commentators, that if Microsoft is on a death spiral, it would be a slow decline, one that would require years to totally reverse their standing as one huge money-making machine,” Gene Steinberg writes for TechNightOwl. “But now it appears as if Microsoft is doing their level best to speed up the process.”
“Take the curious decision to waste over $8.5 billion in spare cash to buy up Skype, a company that has yet to demonstrate the ability to actually deliver even decent revenues despite having a huge user base,” Steinberg writes. “The other issue is how Microsoft is going to solve their real problems, with a declining PC market and, except for game consoles, no proven track record to establish products and services that will ultimately become larger profit centers than Windows software and services.”
Steinberg writes, “That’s the magic bullet that Apple discovered years ago, when the arrival of the iPod presaged a new direction for our favorite fruit company. These days, Apple makes most of their revenue from the sale of mobile gadgets, not Macs, although Mac sales continue to grow ahead of most of the rest of the PC industry… This is not to say that Microsoft is finished. IBM managed a rebirth as a services-oriented company. I suppose Microsoft, if the situation proves desperate enough, will find ways to survive. But that will likely require dumping Steve Ballmer and the rest of the company’s failed leaders, and going on a hiring spree to attract executive talent to guide the company into the future. The question is whether that’ll happen before it’s too late.”
Read more in the full article here.
Windows PCs ARE game consoles. That’s about the only thing they’re really good at doing and have a clear advantage in terms of software selection.
Does he mean the XBox money burner?
Xbox, yes he does.
“with a declining PC market and, except for game consoles,”
Wait a year.
Xbox consoles will not be looking so promising. 😉
Whether Xbox goes up or down, its still a miniscule share of MS’s business.. Seriously, Video Games??
If that $8.5 BILLION was just spare cash then why did Microsoft take out a $16 BILLION loan just six months ago?
It only makes sense if you consider Microsoft is already flat broke and an Enron-style accounting cover up is in progress.
Really? A $16 Billion LOAN? To Microsoft?!
Wow, I’m buying my party hat now!
Like many US companies, much of money is outside the US. If they bring it into the US, they will get taxes considerably on it, so they leave it outside. This loan is likely backed by their non-US assets, so it will let them use it in the US without paying the taxes. Apple is in a similar circumstance, but they are not wasting their money on overpriced companies, so they don’t need the loan.
This is yet another reason for the FairTax. Can you imagine what would happen if companies could bring their profits back to the US without being taxed on it? The FairTax accomplishes this as well as leveling the playing field between imports and goods made in this country.
[citation needed]
I think they did it because it was so cheap to borrow. Like free money they can have now and pay back at very low interest.
But Microsoft is not going to have its Windows and Office cash cows forever. And nothing else they have now, or will have, seems capable of replacing the Windows and Office revenue.
Surely hope your pension fund hasn’t heavily invested in MicroCents
Steinberg’s got a point – if Microsoft could focus on gaming the way that Apple has focused on personal entertainment (Microsoft has the XBox, Apple has iPod, iPhone, iPad, AppleTV), then maybe they could pull it off. I mean, let’s face it, computer gaming is pretty much exclusively the domain of Windows computers (I, myself, am pretty much exclusively a console gamer – I game on my Wii, my PS2, and my Nintendo DS. And yes, I do have my eye on an XBox 360 so I can play Final Fantasy XIII).
No, walk in ANY business, your bank your accountant, dentist, University staff, HOSPITALS (of all things—trusting your vitals to a PC), the majority are stuck in Microsloth land. Most are wedded to apps that were written only for PC, or they THINK their is no alternative app on a Mac that will run what they need.
Micosloth itself purposely sabotaged Excel for Mac (2008) NOT to be able to run Macros. Now we get things that you either must have a token PC to run or you use Parallels, etc. but still must purchase Microsloth software for.
Mac has gained a lot of ground but unless these business people come over from the Dark Side, Microsloth will continue to limp along dragging it’s stinking crap behind it.
Maybe not Macs, but iPads. And the more the iPad gains in popularity, the Mac will follow.
I don’t know about Excel for Mac, but what about Numbers? Can that run Macros? (Does anyone know about this?)
Now if Numbers runs Macros, then any business owner who wants to migrate to Mac will also migrate to iWork (if they haven’t already done so with the iPad), so if Microsoft wants their Mac office suite to stay relevant, they’ll probably fix that oversight. 😉
I use iWork for most of my practical work documents. The interface is very Mac-like and you can open MS Office files. I bit the bullet & dumped MS Office for iWork & it works surprisingly well for me. No problems at all.
my only problem is Numbers is too slow for me. Long time to open and sorry I am just used to Excel.
Yes, I used numbers exclusively for about 6 months. Then got fed up with trying to print some particular cells. Couldn’t figure it out in Numbers. That is the only program from Microsoft that I use. All the rest Apple or others.
iWork is great, and there are other alternatives to MS Office. If you’re just a home or student user, there may be no need for MS Office. Likewise if you’re a small business where your files are isolated, there’s no need for MS Office.
However, if you’re a large business or do business where you exchange documents with other businesses, you’re going to want to use MS Office.
The good news is that today MS Office works just fine on the Mac. I use it all the time and swap files with Windows users without any problems whatsoever.
You can play FF13 just as well on a PS3 and avoid MS altogether…
“It only makes sense if you consider Microsoft is already flat broke and an Enron-style accounting cover up is in progress.”
That’s not necessarily the case. Companies often have cash and loans at the same time. It has to do with several things, one of them being that if you get a big loan TODAY, in addition to your cash, you won’t have to fight for that big loan TOMORROW, when you might actually need it.
With this bone-headed Skype acquisition coming so close to Google’s announcement of their Chromebooks – explicitly aimed right at Microsoft’s business turf – everyone has to be wondering what, exactly, Microsoft thinks they’re doing.
How can Microsoft justify wasting money on money-losing companies, which have very little to do with their core money-making businesses, while those core money-makers are under more vicious assault now than ever?
Is Ballmer trying to *force* Microsoft to fire him? Does he have a killer severance package lined up for if he’s pushed out the door? His focus is definitely not where it should be.
…errrrr, I mean, may Ballmer remain CEO of Microsoft for as long as it takes!
You’re familiar with the concept of Stalingrad I presume. In the early stages of Barbarossa the Wehrmacht gained hundreds of kilometers a day capturing tens of thousands of Russian prisoners in encirclements. It was a strategic & tactical walkover.
Then instead of gunning for Moscow, to sever the jugular, Hitler took a detour to Stalingrad against the advice of OKH in the form of Keitel & Guderian the architect of Panzer Blitzkrieg. The German Army was not suited for brutal hand-to-hand combat within the confines of the city. The Russian commander, Georgy Zhukov, implemented a strategy of embracing the opponent in close quarters combat negating superior German artillery and Luftwaffe Stuka dive bombers.
Ballmer is losing sight of his objective and is playing to the strength of his opponents rather than to Mucrosoft’s strengths. In time to come there will be a Stalingrad. Perhaps Mr Jobs will be his Marshal Zhukov. You need to adopt unconventional warfare tactics to beat Microsoft.
Not Captain Steve Ballmer! He is piloting the SS Microsoft Titanic so well. No one else has the ability to hit those icebergs in the dark like him.
He can’t survive on his dancing. (We all saw that disaster. Ok, I would watch Monkey boy one more time.)
Not many dollar bills will be stuffed into THOSE dancing undies!
Prediction: The tipping point on the see-saw for MS will be when a number of significant applications with multi-tens of millions of users each suddenly announce to support Linux-Unix.
I know from the inside, they are already watching intently and have already laid out the road map, in case they need to add additional platforms.
It is only when, with rising use of Linux-Unix, we are see corporations revert to the open source stable kernel OSs which allow stability & its productivity that companies absolutely need.
If Mac OSX continues its double digit growth, it will be within 5-10 years, as there is too much opportunity on the Mac.
You’re delirious, my iPhone has a larger marketshare than Linux.
and
’nuff said.
Shouldn’t be a mental home be more suitable than a CEO pos…. …..errr….scrub that…. May he be the CEO as long as it takes… Long live the greatest CEO evar : Steve Ballmer. No really Microscrap, don’t even consider to fire him. He leads the way for MS. (into chapter 11 and the abyss)
Phew, that was close….
This manic white trash used car salesman is CEO of Microsoft. I still have to slap myself to believe it.
Call me crazy, but I think the Skype acquisition makes sense. I’ve never ever once heard a person say, “Let’s iChat”. It’s, “Let’s Skype”, “I could Skype you”, “I ran my business from Europe for six months with Skype”. It’s everywhere and extremely well known, and also perceived as platform independent. So now they’ll integrate it into this and that and the other thing and lead a charge of people deeper into their ecosystem. Makes sense to me.
And then you woke up! Microsoft is not going anywhere soon. A Goliath of a company like Microsoft will fight all its might to make sure it doesn’t lose more market share than it already has. They have been used to having a monopoly in the industry for so long that any threat to the share in the market will mean retaliation. It just shows some have more money than brains. Can’t they be innovative too despite all the money they have? Why are people keep comparing Apple to Microsoft? Microsoft products are designed to be very customizable. Apple products are designed to be “for the rest of us”.
Microsoft needs to break themselves up in order for it to survive. Gaming, enterprise software, whatever. Refocus on these individual areas and with new leadership, the company in this manner could do better.
Once upon a time, I had a Mac and a Dell and used both. It was time to buy the full version of Adobe’s CS3, which costs a lot of money, so I had to decide whether to make the Mac or the Dell my main computer. I needed to keep my data and software safe, and I needed as close to 100% up-time as possible.
Apple quickly fixed all my hardware problems locally. They would even replace the computer and restart the warranty. Dell outsourced my hardware fixes to someone 12 time zones away. They refused to do hardware fixes.
Apple also supported OS X. Microsoft outsourced Windows support to Dell, who refused to do it.
Windows needed to be reinstalled so many times, that all future reinstallations would require a phone call to Microsoft and would cause product validation problems with the application software. OS X didn’t need reinstallation, and if it did, there were no validation problems.
I decided that the Windows and Dell combination was too rickety for such a large software investment. My decision was not FOR the Mac, but AGAINST Windows. (I tried Linux before the Mac, but it didn’t meet my needs.) Windows is like a lawn chair that folds up while you are sitting in it. It’s like a Murphy bed that slaps up against the wall while you are sleeping in it. This is an operating system best suited for Bugs Bunny or Daffy Duck cartoons. I can’t understand why a business would put valuable data and software on a slapstick collapsible platform.
When people found out that I use a Mac, they accused me of being a fanboy, which at the time I was not. Since I was accused of it, I figured I might as well be one.
There is a post-Ballmer strategy that Microsoft can use to recover.
Make all the divisions subsidiaries. Give each subsidiary a separate brand name, reserving “Microsoft” for the umbrella company.
The subsidiaries that write application software or some server software (such as SharePoint) write it for every platform with a significant marketshare.
Then one of two approaches for Windows:
1. Phase out Windows, but continue support for enterprise clients.
OR
2. Go back to vertical integration. Before Microsoft started doing otherwise, the OS always came from the hardware vendor. Vertical integration was the norm, from mainframes right down to the TRS-80.
Do this by splitting the Windows group into several parallel subsidiaries. Each subsidiary purchases a hardware company and produces vertically integrated workstations or servers. Since each subsidiary is making a version of Windows for its own hardware, they can get rid of much of the one-size-fits-all flakiness. With a standard API, such as we find in UNIX or Linux, they are all compatible with the same application software.
The pension fund that will be sending me cheques in a short few years made about $1 billion dollars on their Skype investment.
Buying Skype was one of Ballmer’s greatest moments, in my opinion.