Friday, February 11, 2005

Is Microsoft dying?

Michael Malone has a provocative article, suggesting that Microsoft may be in the early stages of decline.
Great, healthy companies not only dominate the market, but share of mind. Look at Apple these days. But when was the last time you thought about Microsoft, except in frustration or anger? The company just announced a powerful new search engine, designed to take on Google -- but did anybody notice? Meanwhile, [the] open systems world -- created largely in response to Microsoft's heavy-handed hegemony -- is slowly carving away market share from Gates & Co.: Linux and Firefox hold the world's imagination these days, not Windows and Explorer. The only thing Microsoft seems busy at these days is patching and plugging holes.
It's not easy to dismiss Malone's analysis. He's been covering the high-tech industry for more than 20 years, most recently as editor-at-large of Forbes ASAP magazine and earlier at the San Joe Mercury-News. He has written for the Wall Street Journal, The Economist, Fortune, and the New York Times. He has hosted two national TV shows on PBS, and he's written a dozen books.

He continues,
There are other clues as well. Microsoft has always had trouble with stand-alone applications, but in its core business it has been as relentless as the Borg. Now the company seems to have trouble executing even the one task that should take precedence over everything else: getting "Longhorn," its Windows replacement, to market. Longhorn is now two years late. That would be disastrous for a beloved product like the Macintosh, but for a product that is universally reviled as a necessary, but foul-tasting, medicine, this verges on criminal insanity. Or, more likely, organizational paralysis.
It's probably a stretch to say that Microsoft is dying, or that it will cease to be a major force in information technology. Still, it's hard to disagree with Malone's observations:
Does anyone out there love MSN? I doubt it; it seems to share AOL's fate of being disliked but not hated enough to change your e-mail account. And do college kids still dream of going to work at MS? Five years ago it was a source of pride to go to work for the Evil Empire -- now, who cares? It's just Motorola with wetter winters.
Read Malone's whole article on ABC News.

Related posts
Microsoft eats more humble pie in enterprise software business
Microsoft: selling enterprise software is a "humbling experience"
Microsoft Longhorn cutbacks threaten Project Green


Darrel Miller said...

When you are looking at a company with as wide a product line as Microsoft has, it is easy to pick on various parts of the organization and predict doom and gloom. However to claim it is dying is ridiculous.
MSN Search is nothing to shout about, but when are 1.0 Microsoft products ever outstanding. Google is a tough act to follow and it will take time to be able to compete.
Look at XBox. It faced huge competition with the Playstation 2. It took a few years and a huge amount of cash, but if you go into a games store now you will see just as many if not more Xbox games than Playstation ones. Microsofts online gaming is killing Sony's efforts.
It really annoys me when the press berate Microsoft for their efforts on Longhorn. Microsoft have really opened up their development process in the past few years to help the user community provide more feedback on their direction. But they still are getting killed in the press. Headlines read "MS drops major portion of Longhorn" instead of reading "MS listen to community and agree to move major chunks of Longhorn into Windows XP, even though it will delay their revenue generating OS release."
Microsoft may look stagnant if you are an OS user. From a developer's perspective this is the most phenomenal period I have ever seen. The .Net framework is revolutionizing the development community with huge productivity gains and quality improvements. Future efforts like Indigo are going to have a similar impact on distributed computing.
Microsoft are focusing on their roots and that is a good thing for everyone. (Except maybe Oracle!)

Bob Halloran said...

The meat-n-potatoes of MS is still Windows+Office. That underwrites the efforts everywhere else.

The problems for MS are (a) replacement cycles are lengthening, so they don't get the turnover business they once did (b) Linux is encroaching in the server room where the big licensing $$ are (c) their other efforts are at best breaking even (X-box) or losing money badly (Business Software) and (d) Longhorn is still a glimmer in the distance.

The previous poster's comments about .Net are interesting if you're an all-MS shop, but the enterprise market is more interested in J2EE. The one about moving pieces of Longhorn to XP make no sense; other than security fixes, what planned features have been shifted? All I've seen are writeups of what is getting jettisoned from the original plans to get the thing out the door...

X-box has moved from a money-sink to Just Another Gaming Console, still well behind PS2 in market share; other than Halo, what games are exclusive to it? The gaming companies are porting to X-box, but that's just good business sense. The online service is there to prop up the declining MSN infrastructure.

Add to this the concerns about security and the perception of buggy product, and you see why the stock price has remained essentially flat the last two years in a generally upbeat market.

The Cynic said...

I don't care how long this guy has been in the business - to make a Star Trek reference speaks to his geekiness...

In reality, Microsoft is still the dominant operating system - whether we like it or not. Linux, Apple, FireFox (add your new product/technology de jour here) are surely carving out their niche of the pie with good products and better stability. However, they do not provide the complete picture (client software, server platforms, etc.) that Microsoft does, and until they do, will remain as smaller, yet necessary, players.

Giving kudos to the up and comer's is admirable. Denouncing the death of the monopoly is another. It is easy to forget that IBM was in far worse condition just a few years ago. They may not be in the same core business as before, but their current earnings are a timely example of what can happen when we ring the death knell too soon.

Microsoft is still filled with intelligent, proactive executives who are very aware of the expanding and changing market. I may be an avid Apple user at night, but I am still making a great living in the Microsoft world by day - and things ain't slowin' down none...

Anonymous said...

Open source is the present and the future. You can download for example java and develop with
any IDE (Eclipse, Netbeans,etc, free also). Why buy Visual and VB?. Why to have a package like Axapta running only
in MS environment?.

Anonymous said...

MS will be around for a while, however to say they are not is ridiculous. Microsoft is still one if not the one of the biggest third party software developers for Apple. But to also say that the work is not slowing down in the MS world is false in many markets around the America.

Take the inland Northwest for example mainly Spokane, Washington. In my business I do IT for Linux, MS, and most defiantly Apple. Apple is gaining in the server market here in short, but on the professional client side of things Apple has had the most dramatic increase in small, medium businesses and some gain on the big corporate businesses in this area.

Another false statement to say that Linux, and especially Apple Quoted above saying:

"They do not provide the complete picture (client software, server platforms, etc.) That Microsoft does"

Then you don't have access to the information you need to see what is going on at Apple, or even the Linux world. I to am an Avid Apple user at night and mostly throughout the day! ;)