Linked by Thom Holwerda on Mon 8th Apr 2013 18:16 UTC
Microsoft "After years of domination, Microsoft is finally facing serious threats at the cores of its business, Office and Windows. Consumers and businesses alike are largely purchasing devices based on their capabilities and form factors rather than the software contained within. Windows is slowly becoming commoditized and Microsoft's traditional allies are looking at Android and Chrome OS as viable alternatives, a trend that threatens the Windows monopoly. Microsoft faces a tricky balancing act as it faces a future that's very different from its existing business." Good article by Tom Warren.
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A fork in the road?
by Tony Swash on Mon 8th Apr 2013 19:28 UTC
Tony Swash
Member since:
2009-08-22

The article was very interesting but I could not see clearly how Microsoft hopes to grow in the new tech environments. Microsoft's problem is this: it is selling almost no software in the mobile device markets and at the same time those mobile markets are driving down the price of software. If Microsoft lowers prices in it's old market to remain competitive and to encourage the sale of devices using it's software it will shrink the scale and profitability of that legacy business. That would be a viable strategy if Microsoft was making up the squeeze on software prices by increasing scale by selling into the new device markets, but it is precisely that which it has failed to do. If Microsoft never manages to become a player of significance in the device markets and is left with it's legacy businesses it will see those legacy businesses shrink over time because it will be impossible to sell OS and software licences at the sorts of prices and mark ups it has got used to. It is a very, very tricky strategic situation for Microsoft.

The obvious option is to abandon the ambition of being an OS player in the new markets, drop the notion of using productivity apps like Office as an OS leverage, and become instead a supplier of iOS and Android software. A very difficult thing for Microsoft to swallow and they probably could not do it with Ballmer in charge. I am sure releasing a well designed touch version of Office for iOS (instead of retaining Office as a Windows RT and Windows Phone exclusive) will be the first indicator that they have reluctantly started down that path.

Reply Score: 3

RE: A fork in the road?
by jimmmy on Mon 8th Apr 2013 21:54 in reply to "A fork in the road?"
jimmmy Member since:
2012-01-02

In short, Microsoft needs to become a software company rather than stay a Windows company.

Reply Parent Score: 7

RE[2]: A fork in the road?
by leech on Mon 8th Apr 2013 22:29 in reply to "RE: A fork in the road?"
leech Member since:
2006-01-10

In short, Microsoft needs to become a software company rather than stay a Windows company.


s/become/go back to being/

Fixed that for you...

They used to be a software company, way back when. Remember Flight Simulator?

This is what happens when someone puts all their eggs in one basket. If it weren't for the Xbox, they'd have a really bleak future. But then again their next system sounds even worse, Windows 8 is horrible, and the list of crappy products goes on.

Microsoft is it's own worse enemy.

Reply Parent Score: 7

RE: A fork in the road?
by kwan_e on Mon 8th Apr 2013 23:15 in reply to "A fork in the road?"
kwan_e Member since:
2007-02-18

It's strange how Apple apologists attempt to ridicule those who talks about Apple's imminent but not-happening downfall, but forget to realize that they've been predicting Microsoft's downfall for ever too.

People have also predicted IBM's downfall too.

Reply Parent Score: 3

RE[2]: A fork in the road?
by JAlexoid on Tue 9th Apr 2013 12:49 in reply to "RE: A fork in the road?"
JAlexoid Member since:
2009-05-19

IBM was almost bankrupt in the early 90-ies.

Reply Parent Score: 3

RE: A fork in the road?
by Nelson on Tue 9th Apr 2013 03:06 in reply to "A fork in the road?"
Nelson Member since:
2005-11-29

The article was very interesting but I could not see clearly how Microsoft hopes to grow in the new tech environments. Microsoft's problem is this: it is selling almost no software in the mobile device markets and at the same time those mobile markets are driving down the price of software.


It depends how you define mobile, do you include ultra portable laptops? Do you include just cell phones and traditional tablets, what about tablets that are full blown PCs?

The market is being redefined as we speak, and on some terms that may be favorable to Microsoft.


If Microsoft lowers prices in it's old market to remain competitive and to encourage the sale of devices using it's software it will shrink the scale and profitability of that legacy business. That would be a viable strategy if Microsoft was making up the squeeze on software prices by increasing scale by selling into the new device markets, but it is precisely that which it has failed to do.


I think they just need to manage a transition carefully. Hybrid device are going to be the next big thing. If Microsoft can perfect the form factor by iterating on the Surface, then they've already beaten a lot of the major players to the punch. Its a healthy start.

As people start to want to use their devices to work and play, its down to a set of value propositions. Do people still value their Windows software for productivity?

Will people choose Office on Windows over an Office clone on iOS or Android?

Even beyond Windows, or other mobile OSes optimized for serious work? Can you multitask more effectively on iOS or Android vs Windows 8?


If Microsoft never manages to become a player of significance in the device markets and is left with it's legacy businesses it will see those legacy businesses shrink over time because it will be impossible to sell OS and software licences at the sorts of prices and mark ups it has got used to. It is a very, very tricky strategic situation for Microsoft.


I'm not convinced that Microsoft's dominance is at all threatened, or the PC market is shrinking as much as its evolving. Plus, the lul in PC sales will eventually create a boom which will benefit Windows 8. Its not like people are exactly running to ChromeOS. Acer sold something like 400,000 chromebooks in like 8 months. (While hilariously making fun of the Surface which sold that much off of a $1300 model in a month)


The obvious option is to abandon the ambition of being an OS player in the new markets, drop the notion of using productivity apps like Office as an OS leverage, and become instead a supplier of iOS and Android software. A very difficult thing for Microsoft to swallow and they probably could not do it with Ballmer in charge.


No. No. God no. They'd be throwing away the keys to the kingdom. Microsoft has the most competent cloud computing platform built on Windows, Office still sets the bar for productivity suites, and the installed base of Windows is stupidly big.

Windows users still vastly outnumber iOS, Android, OSX, and Linux combined. If Microsoft can herd even a fraction of those users to Windows 8, they exposure would be incredible.

There's evidence they're doing just that, albeit slowly. If they can get a ton of eyeballs on the Windows Store, the value proposition to developers will be too strong and their platform will skyrocket, having a halo effect on their services.


I am sure releasing a well designed touch version of Office for iOS (instead of retaining Office as a Windows RT and Windows Phone exclusive) will be the first indicator that they have reluctantly started down that path.


They can do this without giving up on mobile. The two aren't mutually exclusive. They already offer Outlook, SkyDrive, and a bunch of Xbox Live games on iOS.

Windows Azure supports PaaS using Windows technologies or you can run your flavor of Linux using IaaS. They recently launched an off premise implementation of Active Directory with federation with on premise instances.

The Xbox 360, and the next, which is going to run the Windows Runtime and a variant of Windows, is another area they've been successful in -- and an area which was the subject of ridicule not unlike that seen with Windows Phone.

I think no one needs this to happen more than Microsoft. Its going to take a herculean effort, but I'm confident they'll get through it in more or less a favorable position to them.

Reply Parent Score: 5

RE[2]: A fork in the road?
by Kivada on Tue 9th Apr 2013 09:23 in reply to "RE: A fork in the road?"
Kivada Member since:
2010-07-07

Maybe so, but still, Microsoft's failure, just as with any other monopoly, is good for the industry as a whole.

We can only hope that Microsoft, Google's and Apple's big market share holders take a big hit and allow for more players to take to the field.

Reply Parent Score: 1

RE[2]: A fork in the road?
by tylerdurden on Wed 10th Apr 2013 19:10 in reply to "RE: A fork in the road?"
tylerdurden Member since:
2009-03-17


No. No. God no. They'd be throwing away the keys to the kingdom. Microsoft has the most competent cloud computing platform built on Windows, Office still sets the bar for productivity suites, and the installed base of Windows is stupidly big.

Windows users still vastly outnumber iOS, Android, OSX, and Linux combined. If Microsoft can herd even a fraction of those users to Windows 8, they exposure would be incredible.


Unfortunately for Microsoft, the mobile market has already surpassed the PC Market. Smart phones have outsold PC for a couple of years, and tablets will be there in a couple of years.

Those two markets are comoditiced now and have brutal growth rates, the problem for Microsoft is that they do not have a controlling presence in either. And this is a new situation for them.

Although Microsoft may have the keys to a very large kingdom, that kingdom is stagnant. So who knows...things are going to get interesting.

Reply Parent Score: 3