Steve Ballmer’s annual letter to shareholders makes it very clear Microsoft is at a point of no return – and in the middle of a transition into a hardware company. “This is a significant shift, both in what we do and how we see ourselves – as a devices and services company. It impacts how we run the company, how we develop new experiences, and how we take products to market for both consumers and businesses.” Line. Sand.
Rubicon. Crossing.
The beginning of the end of Rome?
That’s been predicted almost as often as the year of the Linux desktop.
It will certainly be very interesting to see how things play out (as a curious observer, I doubt it will affect me personally as I run Linux at home and UNIX at work)
Edited 2012-10-10 13:05 UTC
Gosh I hope so, would be a dream come true.
But would it? Microsoft is no longer the security whipping boy it once was. It could still do a lot more to improve, but there’s not much that can prevent ignorant users, or badly written 3rd party software (although they are obviously heavily researching managed language OSes), and the work they do in taking down spambots is valuable work.
Meanwhile, Apple is showing negligence in security by spreading the myth of their immunity (helped by fanboys of course), ignoring some security bugs, and I don’t remember any news items involving them help taking down spambots.
Microsoft are still the anticompetitive douchecanoes that wrote the Halloween Papers. They still practice embrace, extend, extinguish, ESPECIALLY with respect to hardware standards like ASPM, making it a royal pain in the rear to get Linux working properly on devices that use it. Secure Boot is downright Orwellian on full-size computers and tablets. The restriction of Metro/Modern/Whatever they’re calling it this week apps to the Windows Store puts a serious damper on the third-party developers that have given Windows its primary advantage for over a decade, and is a kick in the teeth to Free Software on Windows.
While the first half of your point is correct, the second half isn’t a reason to hate Microsoft. Metro/Modern/Whatever is their choice, it’s definitely not a standard, and Windows Store is their store, and definitely not a standard either.
Unlike the very good first half, Metro/Modern/Whatever won’t adversely affect the rest of the market. If it is as horrible a mistake as people make it out to be, only Microsoft will lose. If people really hate Metro/Modern/Whatever when it’s released, there’s probably no way out for Microsoft except to ditch the idea completely and Free Software will just one of many beneficiaries.
I still see Microsoft infections every single day whether it is XP, Vista, or 7. (Admittedly, this is often down to the user being hit with a trojan, but nonetheless…) I’ve seen 1 Mac infection that took less than a minute to remove by simply running the latest software update that the user hadn’t run in months.
I think it’s great that they are going to concentrate again on their former core competence.
Because the computer mice which they made almost two decades ago were actually quite decent.
Hardware was never their core competence.
They did make nice mice though.
not only mice
in my opinion their first sidewinder-gamepad was by far the best gamepad at the time
Words like those rekindle the fire of old holy wars!
So… that first sidewinder-gamepad seems to follow the general layout of Saturn and later Genesis controllers. Hence it shares their flaw of six-button-overload of right thumb, can’t possibly be “by far the best gamepad at the time”
– that would be PS1 controller: nice grip and four thumb buttons, plus additional trigger buttons for four in total.
(no, but seriously, the overall form of Playstation controller hardly changed for almost two decades now – and successive revisions of Nintendo and MS gamepads got closer to it over time…)
I never really liked Microsoft mice much. Always much preferred Logitech.
Not bought a keyboard or mouse in nearly a decade though, so I wouldn’t even like to guess how Logitech hardware holds up these days.
Microsoft mice were made by logitech.
Ditto. As lucas_maximus pointed out, Microsoft’s mice were made Logitech… though I did always found that the Logitech-branded mice had a much sturdier, heavier feel to them.
Just picked up a m500 (mouse) a week or two back, which I do recommend (especially for those with large hands) – it feels pretty much identical to my trusty old MouseMan plus. Not a fan of their keyboards though – then or now – they’ve always been overpriced rubber-dome garbage (IME).
Had big OEMs like HP, Dell, Toshiba, IBM/Lenovo etc spend 0.01% of the money they paid MS over the years on Linux software and application development Linux would be a much better alternative now that they going to need it.
They had no strategic thinking and only thought about selling cheaper shit with more crapware and now Apple and MS are going to make them pay.
I don’t think Microsoft will produce computers themselves but I could see them come down hard on their OEM partners – “here is the standard, either meet it or lose your OEM discounts”. I could see Samsung, Lenovo and maybe Sony making it in the consumer space with Lenovo/HP in the enterprise but Dell is eventually going to die the death of a thousand crappy laptops with faulty batteries. I think going forward OEM contracts will not easily be handed out and the bar set will be a lot higher than in the past.
End of the day the biggest barrier has always been crappy OEM’s who compete on price rather than quality – and it is amazing when I hear people on this forum whine that their $400 laptop performs horribly when compared to ‘those over priced Mac’s’ that they whine about. There is a complete lack of connecting the dots by people here as to why their $400 laptop costs $400 or why crapware is installed in the first place or how pricing things cheap is no substitute for making a quality product. I’m using a Lenovo ThinkPad X1 Carbon and wouldn’t give it up for anything else on the market – it is a quality product with a price tag that was reasonable. Lenovo made a nice profit off my purchase (which I see nothing wrong with) and I’ve got a great laptop that works like a charm – we both win and come out better off.
Hi,
I don’t think Microsoft have a reason to be more involved in PC hardware. They already control the most relevant standards (e.g. ACPI) and also have a “Windows Logo Program” to entice hardware manufacturers to do what Microsoft wants.
The “fundamental shift” they’re talking about is smart phones, tablets, x-boxes, TV/media centers, etc; with hardware probably manufactured by other companies in partnership with Microsoft (and sold with Microsoft’s branding, software, vendor lock-in, etc).
The other part of it is likely to be making consumers pay for “cloud”, and tying all these devices into an app store model (where Microsoft get a percentage of all third-party software sales).
Basically, make sure Microsoft get a good percentage of the initial hardware sale, then make sure Microsoft get a good percentage of everything after that, then make sure the devices are useless if consumers realise their wallet is being sucked dry. 🙂
– Brendan
ACPI isn’t a comprehensive standard so I wish people would stop chanting these acronyms as if they were complete standards and only if the OEM’s actually stuck to them we would have nirvana. The reality is that these standards are deliberately designed in such a way that leaves holes open for vendor differentiation hence the reason why vendors provide ACPI drivers for their computers.
Or the a close relationship as with the case of Microsoft and Nokia but I could see a conflict brewing when it comes to services on top where Nokia will want their share of the pie and Microsoft equally preferring that their platform is being used to access Microsoft services rather than the handsets own.
The percentage they receive is small when compared to what it needs to pay for – even Apple which runs on the smell of an oily rag isn’t exactly rolling in the cash off the back of the 30% cut. The cut they receive pays for the reviewing process, the data-centres and maybe some of the operating system development costs but I don’t see it being a big money spinner.
As for the renting applications model – they’ve tried it multiple times and each time the consumer rejects it even if over a three year cycle the subscription works out cheaper. People like to be in control of their purchasing and they don’t want to feel as though they’re being forced into anything thus Microsoft has continued to sell Microsoft Office 2013 permanent licence. End of the day as I’ve said the best thing Microsoft can do when it comes to services is sell value added services on top of their traditional software licenses because long term I simply don’t see customers happy to pay a per monthly basis for their software in the same way that people are happy to pay for cloud storage or exchange service (which is what I’m paying for right now).
Or they could go the third option and start selling the tablets through carriers – I know in New Zealand Telecom seems to be quite happy to see tablets at subsidised prices on 12 and 24 month contracts and Vodafone did the same thing with netbooks with 3G devices.
Edited 2012-10-10 05:07 UTC
On your point about Nokia, that’s not a problem, M$’s got all the money in the world to make any merger or acquisition necessary with that company.
Man that ThinkPad X1 Carbon is amazing, I’m a proud owner of a T510 and I run Linux on it.
I think the X1 Carbon will be my next laptop.
I personally don’t find anything fantastic about it. Anything less than 17″ is too little, I want enough power from the thing to be able to game comfortably on it, and I don’t want to spend several grands on it. But alas, tastes are an individual thing, and I’ve always found practicality much more important to me than aesthetics.
Anyways, off-topic.
Depends on what you want – if I want power I have a desktop for that but if I want portability then I’ve always got my X1 Carbon. Both of them are running a clean ‘virgin’ install of Windows 7 resulting in a very fast and reliable experience.
Edited 2012-10-10 09:19 UTC
I had two 17 inches laptops, before giving up and returning back to 15.
Yes the bigger screen is nice for IDEs and graphics programming, but the 3.5 kg that they weight on average, is not well appreciated by my back.
Practicality of something too big to carry around in a shoulder bag most of the time, practicality of GAMING? (seriously? …plus, any laptop you can buy new now will play vast majority of games just fine; if at most, say, 1% of available titles determines you purchase, that doesn’t seem very practical)
Just saying, practicality is also not an absolute…
Edited 2012-10-17 00:05 UTC
actually it does seems a pretty cool laptop. it’s in the Air price range, so i would personally go the Air (if Apple doesn’t screw up the mac os) but it’s a pretty good option and seems a very decent workhorse.
i just wish that:
a) lenovo allowed Linux or BSD as default OS (with the consequent price drop) and
b) that they changed the website for customizing the laptop. 9 out of 10 items don’t have any options. the whole thing is confusing as hell.
Sure, MS won’t build low margin boxes. BUT they will build high margin premium devices.
Remember MS and Apple won’t sue each other anymore, their patents are all basically shared.
For example: MS can easily add a magsafe power connector to surface and ship pinch-to-zoom or that magic trivial scrolling Apple has patented. Other OEMs .. not so much (besides Sony)
There is a clause though with the patent sharing that doesn’t allow ‘blatant’ copying so it isn’t really an open and shut case.
BS, MS and Apple just need to make it look a little different and they are fine. See Surface Magsafe etc.
And even if they didn’t: MS and Apple will not sue each other anymore .. those times are over PERIOD. They profit more from having insurmountable barriers (like stupid trivial software patents etc) for upcoming competitors.
http://allthingsapple.me/apple-and-microsoft-have-a-patent-sharing-…
Again and again, yeah I know .. so what. Cloning is making it 100% the same. So they just need to change it a little and they are happy. If another company would use magnet on their powercords Apple would sue minutes later.
I think you’re exactly right. I think they’re looking at the iOS/OS X and Android models, and they want to go more in that direction. And they can’t do that if they’re allowing OEMs to ship butchered, mutilated versions of the OS, which produce a sup-par user experience, and a different sub-par user experience per unique OEM at that.
They’ve wanted to take more configuration control away from OEMs for a long time, and I wouldn’t be surprised if they start to become willing to take drastic steps to do it.
I don’t think I’ve ever heard anyone do that on this forum. You’re railing against a user who either doesn’t exist at all, or is non-representative.
I also find “wise consumers should always spend up for expensive OEM systems” to be completely rediculous.
on that note, a company like HP could always decide to do something revolutionary like reinvent the linux distro. make it compatible with android apps, make their own clones of metro apps (if that crap is good enough for microsoft, it can be done by HP), whatev.
Doubtful it would ever take place – not only because the cash required would be huge but also the legacy of HP not even being able to maintain their own ‘in house’ operating systems such as HP-UX and OpenVMS to a reasonable level of quality.
You mean like they did with WebOS?
HP aren’t interested in software, they’re more a hardware company. More so, a hardware company aimed largely at businesses (enterprise servers, business work stations, etc).
They might be more of a hardware company, but saying that HP is not interested in software is innaccurate at best: NNM, Operations Manager, Operations Orchestration, Sitescope, BSM, Network Automation, Server Automation, Service Manager, Load Runner, UCMDB, DDMi, Storage Automation, ArcSight, TippingPoint, Data Protector…
They’re all pretty much there to enable their hardware.
I will grant you that my statement was a little absolute though. It was more meant to read that their main focus is hardware
None of those I listed above.
They have loads of enterprise monitoring products and “business solutions” that have nothing to do at all with their hardware.
Even less so now that pretty much everything is deployed on virtual machines and you don’t even have to go buying blades for each software product.
The consumer market is different, but I think that on the business area they are making far more profit on licenses and services than on iron.
I’ll have to take your word for that then.
Our server room (well, it’s more of a mini data center these days) is all HP and Cisco gear but we run Nagios and of such open source tools for all the monitoring tools. From what (albeit limited) exposure I’ve had with other data centers, it looked like they used the same or similar packages.
I’ll have to give HP another look
Or they could buy a ready-made OS like WebOS and try to put it on printers, tablets, or whatever with it. In fact, they already did just that. It wasn’t successful, but any OEM is free to do things like that, and were already free to do it before Ballmer’s statements.
“Had big OEMs like HP, Dell, Toshiba, IBM/Lenovo etc spend 0.01% of the money they paid MS over the years on Linux software and application development Linux would be a much better alternative now that they going to need it.”
Tee hee… That’s what Nokia thought with MeeGo. “Let’s partner with other phone makers like Samsung to form the MeeGo aliance and make the OS together”. The wrinkle in that plan is that the other manufacturers (Samsung etc) realized Nokia needed MeeGo much more badly that they did (because Nokia wasn’t making any Android phones) so they simply laid on their backs and let Nokia do all the work.
So MS has problems with employees use of Caps Lock too?
HARDWARE!
HARDWARE!
HARDWARE!
HARDWARE!
HARDWARE!
HARDWARE!
HARDWARE!
HARDWARE!
HARDWARE!
HARDWARE!
HARDWARE!
HARDWARE!
HARDWARE!
HARDWARE!
HARDWARE!
HARDWARE!
HARDWARE!
No, they got scared of all the chair throwing and accidentally pressed the Caps Lock button…
“We want to be like Apple”
That’s a good thing.
But surely Apple’s kind of transitioning more into a software company. They mostly just sell commodity hardware at premium prices.
Apple have been a software company for half a decade, then killed most software they made and switched back to hardware. They look to currently have as many chip designer as SW engineer.
They had some nice professional software back when professionals were still the majority of mac owner. Now they shifted away from the market that kept them alive during the tough years. If the masses ever leave Apple behind, they are dead for good, they have no one else.
iPhone
iPad
iPod
Macbook
…etc…
That’s a lot of hardware for a software company.
I’m pretty sure I said “transitioning”…
None of the hardware you mentioned contained as much customized hardware as Apple of the past.
I have to disagree on that. Some features still come first to the Mac, but take less time to be copied by other manufacturer (not complaining about it, this is actually a good thing from my POV).
-“Ultrabook” form factor since 2008 (differ from previous ultra portable effort)
-Multitouch touchpad. OSX is still the king there, other OS integration is “there” but lacking in term of application adoption and use.
-Backlit keyboard, while I am not sure if it was unique, it was the first mainstream use of it I saw.
-Highres display. Older Macs used to trail behind, but the new Retina effort is quickly giving Apple the top position for _mainstream_ laptops.
-Sensors, they had most of them first, then everybody else followed.
-Remote control. Well, that was useless and there was an old hack dating to the 90’s to add it to any laptop by forking the internal RS232 connector, Apple supported it until the new Retina MBP.
-OpenCL. Apple was quite an early adopter of it as a core part of the OS
-Modern compositing. While Amiga has it, it was not until Apple implemented it that it became as essential as it is today in modern OS/DE (kudo to the KDE devs not to require it, but I am referring to OSX, Win and iOS).
-Metal chassis. Again, not new, but done in a new way.
That said, many OEM (as in non-Apple) innovate too, against usually Apple fanboy thinking, the dented fruit giant is not the greatest innovator of all time. But saying MBP are just usual laptop is still a bit wrong. They definitively have an unjustified premium on the price, but are the best laptop if you want the latest and hottest gadget.
/Flames on I guess, but it is not my intention. I just share my opinion as mostly a Linux user, but getting Apple laptop from time to time as they make, in my opinion, the best. I had some Apple, Toshiba, Acer, Asus, Compaq (pre-HP), Hp, IBM and Lenovo too. The old Compad Armada E500, both Mac, the IBM thinkpad and the first Asus EeePC survived. all other died before their time. I managed to _MELT_ the Acer to death when rendering a video, I hope they got better by now. The Toshiba “lived” 9 months out of the 3 years warranty period, it was in repair (shipped) the rest of the time. It just could not survive more than 3 month without an internal cable broke, chip unsoldered off the motherboard or the HDD needle got stuck (no, it was not stationary, since when laptop are supposed to be). Even the plastic case had a recall.
So, my tendency to pay the premium may come from those bad experiences, I may have a bias here.
Even so, the story of the MBP is more about design than it is about highly customized hardware. The internals of the MBP isn’t extremely unusual, but they changes that came about from external design considerations rather than technical specifications.
This is completely wrong. Apple designing cpu cores now and I don’t even speak of custom SOC design.
Just look at teardowns. Everything is custom except for common components like memory chips, connectors, etc.
Unibody cases Apple uses are very expensive to manufacture and not nearly a commodity.
Even glass panels in Apple Store required custom equipment to be made.
You know what, just read the rest of that discussion before you comment further.
Yeah, name one single component that they manufacture for ANY of these devices? Ever seen an APPLE factory? No? Ever hear of Foxconn? Apple manufactures NOTHING. They are a software company with hardware patents, NOT a hardware company.
I never said they are a hardware comp[any.
I guess you missed the announcement when they transitioned from PPC to Intel: “At the heart of the Mac is Mac OS X” – it is the operating system not the hardware that defines Mac. They haven’t transitioned because they’ve always been a software company with a hardware division little more than a giant dongle to enable you to get Mac OS to work. The biggest problem as I see it is the the RDF is no longer present and their consumerisation of computers is eventually going to isolate a large number of long time Mac users who depend upon them to make a dollar – such as the creative sector. I’ve made the transition from Mac OS X to Windows along with moving my Creative Suite from Mac OS X to Windows pretty much showed me that the only ‘constants’ used to justify the entrenchment of Apple in the creative sector have more in common with old wives tales than genuine strengths.
Edited 2012-10-10 04:17 UTC
That was part of the basis for my comment that they were transitioning to a software company. But I don’t say they are a fully software company because, as the others say, there’s still the iP* products that still keeps them with one foot in the hardware company category.
I don’t understand why I get replies that wants me to make a black or white statement that they’re either a hardware company or that they’re a software company. They’re a hardware company that is still slowly transitioning into a software company without drawing too much attention to that fact.
You stated that they’re transitioning where as I’m stating that they’re already have transitioned – the i-devices are also very much software selling hardware rather than hardware being used to sell software. What makes an iPhone different from the rest? the iOS and ecosystem that surrounds it. What makes a Mac different? the operating system and ecosystem that surrounds it. The hardware itself is a means to get the software.
Now if we’re going to play semantics as to whether something is all hardware or all software then that is a circle jerk that could go on for many hours with nothing gained at the end of it all.
I’m not the one playing semantics. I get replies from one side that they’re still a hardware company. I get you telling me they’re a software company.
You’re simply all wrong.
No, neither of us are wrong because these are opinions – now get down out of your ivory tower and accept that you’re in the same boat as the rest of us.
Edited 2012-10-10 09:40 UTC
Some opinions are more wrong than others. I argue that your view that Apple is a software company and the other view that Apple is still a hardware company are both wrong based on the facts.
It’s as though they are arguing that China is still a communist country because the ruling party has “Communist” in their name and their stated ideology, while you are arguing that China is a capitalist simply because they have a ruthless compete at all costs approach to world economics.
Both types of views simply are wrong based on the facts.
Like Communist China, Apple* is neither one thing or another, but is something transitioning into another.
Maybe you should stop hiding in my ivory tower’s “all opinions have equal validity” broom closet.
* That’s right, all you Apple fanboys out there.
Whatever your personal view points are, is some what irrelevant.
Jobs considered Apple a software company. He just saw elegant hardware as a way of enabling better software.
As I’d said in an earlier post (http://www.osnews.com/thread?538089), Jobs actually discusses this point in an interview and this is what he had to say: http://www.youtube.com/watch?feature=player_detailpage&v=xEVbxA1FNL…
Nothing to do with my personal views. Some people consider Apple to be a hardware company, whatever Jobs says. Their reasons seemed to be a good interpretation and so I adopted part of their viewpoints that Apple was really a hardware company.
What about the contribution of the other Steve? His contribution was hardware, and his side of things was more hardware than software. Did his achievements mean nothing?
It seems this Cult of Jobs is even rewriting Apple’s history to write out all other contributors to its proud legacy.
* Go on, you assholes who modded me down – mod this one down as well so you can keep your fantasy.
Considering how long ago he left, his testimony would be older than Jobs (or, at the very least, less relevant)
Normally I’d agree with you, but given this discussion is about what Apples primary focus is/was, then I’d say the (former) CEO’s view point is pretty critical to the discussion.
This isn’t crediting Jobs for anything other than actually turning up to meeting and running the business he’s supposed to be the chief executive off (or at the very least, being within ear shot of those that were running it lol)
So what? Apple could be a Musical Vibrating Electronic Dildo manufacturer for all I care, and they could have a band composing and recording new music to sell with next year’s model iDildo. So, Apple is not a 100% software and they are not 100% hardware either. I’m pretty sure Burger King’s got some janitor-type jobs, but that doesn’t change them from being a fast food restaurant with the primary goal being serving (relatively shitty) food.
Edited 2012-10-10 14:35 UTC
So you agree with the main premise.
Whoop-de-fucking-do about the rest of your nonsensically irrelevant unintelligble comment.
It’s about as relevant to this news item of Microsoft entering a transitioning stage from a software company to a hardware company, as your argument of kaiwai over whether Apple is a hardware or software company…
Did it sound stupid? If so, good–that was intentional. It was meant to sound as dumb as the argument you were going on and on about. If that was “unintelligible” to you, then you are sorely lacking a sense of humor.
Edited 2012-10-10 14:48 UTC
Why don’t you read the thread and the development of that argument, you retard?
Is resorting to calling people retarded and telling them to re-read the same tired old argument that’s been done to death the best you can do? Really?
I don’t have to re-explain myself to a retard.
Well I guess I was right, resorting to personal attacks is all you can do. It really shows your level of maturity. It’s actually pretty funny to be called a “retard,” not once but twice, by someone who seems to have some serious maturity issues himself.
And FYI–I already *did* read through a decent chunk of the topic. Well, until I realized it was a pointless waste of time… because it is the exact same god damn argument I’ve read many times in the past. No re-explaining necessary.
Either way, I’m done here. Just a suggestion, you might want to get your panties out of a bunch on your way out of this topic. The way you’re reacting leads me to be believe you got ’em all bunched up in that heated argument over what kind of company Apple is.
Edited 2012-10-10 15:30 UTC
You obviously didn’t, because you couldn’t even comprehend what I was actually suggesting you do. I wasn’t even suggesting you read the actual content of my argument. Just the development of the discussion and why it was relevant, even if it diverged from the initial topic.
Your reply however, IS irrelevant because it didn’t address the topic, it didn’t address my arguments, and stated the obvious that no one was discussing (other than you agreeing with me that Apple is not a hardware nor a software company but a transitioning one).
Apple have always been a software company. They just reach out to hardware because they believe that by controlling the hardware, you can write better software; and to a degree I actually agree with them on that.
I remember an interview with Steve Jobs which beautifully explains their view on the market: http://www.youtube.com/watch?feature…A1FNL4#t=1710s (link should play from the right point)
That whole interview is an interesting watch too -if you have a couple of hours spare- as it’s a rare interview where both Gates and Jobs are together and chatting to each other on camera. You just have to excuse the annoying interviewers.
True enough, but who wouldn’t want to be?
I’m not talking about the intellectual/tehnical/ethical stuff we usually discuss here – strictly financials. Apple makes more money than Microsoft – alot more. That is just ridiculous when you consider the vast difference in number of employees and product mix between the two companies. Its like seeing a local mom and pop brewery make more money than Budweiser…
If you look at a graph comparing MS and Apple financials over the last 5 years, in virtually any measurable metric (revenue, growth rate, market cap, profit margin) Apple’s line looks like a fricken rocket ship compared to MS – and ironically that is during a 5 year period where MS has done pretty well for the most part, historically speaking.
Lots of people hate on Apple, but you cannot deny that what they are doing is working from a financial perspective…
I don’t think Microsoft can NOT try to be more like Apple… Unless Apple implodes in the next few years (which I doubt), its just going to be more of the same. Microsoft’s board is inevitably going to demand that the company start emulating the success of their competitor – any CEO not willing to try would get their hat handed to them.
Sure, lots of people think this is a mistake. It may well be in the long run, but that fact is that Microsoft (as it is now) might be winning battles here and there, but they already lost the war and they know it. Their future is either to beat Apple at their own game or settle in for a permanent future as number 2.
Apple IS going to start doing something with that ridiculous 100+ billion dollar war chest at some point. Think about that.
MS can’t win if they don’t start trying to beat Apple at their strengths…
Indeed.
The iPhone has better (net) margins than Windows.
The world has truly turned upside down when a hardware device has better margins than a software package with a worldwide monopoly. That’s why Microsoft has to move into hardware. It can’t afford not to.
There are also some tangible financial benefits from bundling the software inside a device.
For example, China has a piracy rate of 77%. Every Surface tablet that it sells to Chinese consumers is equivalent to the profits that it normally would make from 4-5 Chinese Windows PCs.
In addition, Microsoft currently has over $50 billion of cash stuck overseas, because they do not want to pay the taxes to repatriate it. But it’s free to import Surface tablets! In essence, Uncle Sam is subsidizing all US sales of the Surface by 10-15%, under the condition that the Surface be manufactured outside the US. (Talk about perverse incentives.)
Edited 2012-10-10 19:29 UTC
It’s not so ridiculous that Apple makes more money despite having fewer employees when you stop to think about the average salary of Apple’s direct AND indirect employees. The majority of Apple’s employees (adding up both their direct and indirect workforce) work for just above slave wages. Only a very small percentage of Microsoft’s total (direct and indirect) workforce work for such wages.
Besides that, look at companies like Sony, Yamaha, and the like. Sony makes consumer electronics, computers, movies, music CDs, life insurance, banks, magazines, and on and on and on. Yamaha is so diverse that they make everything from motorcycles to saxaphones. Those two companies have more direct and indierect employees than Apple and Microsoft combined, by far, yet make less money than either.
I’m also reminded of the AOL/TimeWarner deal, which was actually AOL buying Time Warner, despite AOL being a simple online service and Time Warner being involved in magazines, TV networks, movies, video games, etc. Time Warner had way more assets and employees than AOL, yet AOL made more profit and had way higher marketcap value at the time.
Which is to say that generally the whole system is out of whack, kind of.
I realize that it is not a completely uncommon phenomena. What I mean is that it is ridiculous to Microsoft’s board – in the sense that a little over 15 years ago Apple was essentially roadkill that MS was throwing chump-change to in order to keep afloat. 7 years ago they start showing substantial signs of life and begin growing rapidly, and now they have essentially passed Microsoft up. The MS board is essentially asking themselves what the f*ck happened?
I just mean if you are Microsoft you have to be questioning your business strategy right about now… What they have been doing for the last 5 years may be considered by some to be “working”, but it isn’t, by any reasonable definition, working as well as what Apple is doing.
Microsoft could choose to stay the course, but if they do that they will not in any way affect Apple’s trajectory- they simply have not, up to this point made any real effort to play in Apple’s pool so to speak. They are both tech companies, but they hardly compete with each other because in most markets they are separated by a layer of ineffectual OEMs, and so far in the few examples where that hasn’t been the case (Zune) Microsoft lost badly.
I think the reality is that Microsoft has to become a vertically integrated device maker in order to control their own destiny. As it is now they are putting their future in the hands of their OEMs – and they all have butter fingers. No matter how crazy and self destructive some people think it sounds, there really isn’t another viable course for them.
When Apple introduced the original iPhone, Steve Jobs dropped a quote from Alan Kay during his presentation:
I don’t think many people took it seriously when he said it, but in hindsight that was a very prophetic statement. I think Microsoft has no choice but to take that advice.
Edited 2012-10-10 21:56 UTC
Dear Shareholders,
I really am the worst CEO in America. I have put a clueless Steve Jobs wanna-be in charge of Windows and he has created a POS called Windows 8 that will soon cost us billions of dollars.
Sell your stock as fast as you can.
– Steven Ballmer
Worst CEO in America according to Forbes
http://www.bgr.com/2012/05/14/microsoft-steve-ballmer-worst-ceo/
Edited 2012-10-10 03:40 UTC
Don’t confuse an opinion piece for an actual study using hard data.
I didn’t confuse anything and included the source.
The rest of Wall St will agree in a few months.
1) How about linking to the actual article rather than BGR:
http://www.forbes.com/sites/adamhartung/2012/05/12/oops-5-ceos-that…
2) You said “Worst CEO in America according to Forbes” as if it were some sort of definitive piece – speculation, circle jerk followed by more BS. Sorry, that isn’t a definitive critique of Ballmer but an over paid opinion writer completely lacking in delivering on real hard data to back up their statements.
Forbes is a magazine……not a research company….shocking news here so what the hell do you want me to add? A disclaimer pointing this out? Anyways in a few months the guy who wrote that will have a lot more credence than you and most tech writers. MSFT is at 29.29 and it won’t be long before shareholders wish they listened to him. Worst CEO in America*
* according to jerkface who is not actually a licensed financial analyst.
Their business model is reduced to milking the MS Office monopoly.
Whatever new they have come up with since Gates is gone has been mediocre or a disaster.
Oh no. More Microsoft sickness, but now in hardware.
I don’t know, I thought the XBox line was pretty good after they fixed the overheating red ring problem.
Actually Xbox is considered something that degraded gaming industry (especially adversely affecting gaming on PC). So it’s an example of sickness really
I would consider the opinion of gamers more important than the game industry – and so would the game industry
If nothing else, XBox gave us Halo, RoosterTeeth and Red vs Blue and thus it can only be a good thing for gaming and multimedia as a whole.
The opinion of gamers is that Xbox ruined the industry. Heard from gamers first hand
Edited 2012-10-10 15:55 UTC
Yeah, I wouldn’t know. I don’t play games at all these days. But I love RoosterTeeth’s work all the same, and they’ve got nothing but good things to say about their experiences. So as long as they’re happy to work with Microsoft and provide me with interesting things to watch, I don’t care.
How has the Xbox set the console industry back?
It’s my opinion that the Xbox moved the console industry forward with it’s Xbox Live service, introducing millions of people to online gaming, which was previously only available to PC gamers (and select few individual games, such as Phantasy Star Online)
Note, that I said nothing about the console industry above. I was talking about gaming industry. Consoles damaged PC gaming quite noticeably. No point to deny it.
Oh God not that BS. If the Xbox didn’t exist then PS3 sales would have doubled, there will be no golden age of pc gaming until the piracy problem is solved.
http://arstechnica.com/gaming/2008/11/acrying-shame-world-of-goo-pi…
The piracy issue is irrelevant to the sickening state of consoles today.
he’s toast
MS were always a hardware company. They produces keyboards, mices and other peropherals. Now they just want to copy Apple and produce their own PCs [yes, tablet IS a PC in my understanding, as it belongs to you and has processing power – it computes and it’s personal].
Now, I don’t find it shocking. I’m actually quite happy they’re doing that. I hope they wil eventually step out from this “OEM” crap we’re seeing today and investing their time and effort in their own crap. This way I won’t be forced to buy MS Windows with new hardware [as other vendors may just simply want to compete with MS using other OS, like GNU/Linux, which I’m hoping for]. Plus, all the crap MS wants to add [DRMs, TPMs and stuff] would not be forced on other hardware vendors.
No they weren’t.
MS started off by selling a BASIC environment. Then they developed Windows. The hardware came from elsewhere, and then the IBM PC line when they got going.
Their innovation was being a purely software company at a time when software was expected to be bundled for free with hardware.
The last I heard it was made by logitech. I am pretty sure they just outsource the actual production.
It not like it is their primary source of revenue.
Edited 2012-10-10 15:20 UTC
So Ballmer is shifting Microsoft from a business that is boring, but they make money in.
Basically because they have no ideas as to how to do their core competencies better.
No idea how to improve the desktop? just chuck decades worth of research and effort in the bin and start over.
No idea how to make the one OS many OEMs model work? just burn all your bridges and start over.
This is utter desperation. You think moving into a market with no proven want for Microsoft when you have thousands of employees and you haven’t addressed any of the core failings in recent years is madness.
The employees are ignored and treated like chattel. This absolutely is madness. Ballmer has gone mad in his obsession with Apple and is willing to burn any bridge in a desperate attempt to get even.
Madness?
THIS.. IS.. MICROSOFT!!!
Sorry, couldn’t resist.
So lets assume Microsoft wants to be like Apple and transition to a hardware/software company. Microsoft picks a particular vendor to work with in China, and locks out all the other PC manufacturing companies. Then we have two companies making all the toys, our options to have choice have now been narrowed to two.
Microsoft has basically saved the world. One will not need to worry anymore about hackers, malware, or cybercriminals because they can’t run Linux on a Microsoft device (same as Apple). Microsoft, like Apple is now in complete control about what happens on their devices. Microsoft will then be praised for what has occurred, and Ballmer will be elevated to a level of Godhood….for what he has accomplished. (Jobs will be his “Son”…..)
But Google will step up, and also develop their hardware based on Android, and offer the third option (its not really Linux you can control, because like the other companies, we need to be in control so you all don’t hurt yourselves). Then the technological “Holy Trinity”….will be complete….
all about “Building Better Worlds”…….
Why are people trying to decide if Apple is in the software or hardware industry? They are really in neither, at least not when it comes to mindset.
Apples focus is to create devices with a great end user experience. And they do whatever they have to do to get there.
MS would have done better to make this shift while protecting rather than risking their legacy control of the desktop/laptop markets.