Microsoft: "We're a Devices and Services Company"

[dZeus]

Shareholder Letter explaining their new focus

Will they rebirth into the next Apple, or has Ballmer fully succumbed to his loony side and is this the beginning of the end for Microsoft? Your thoughts!

[Chucky Cheese]

Just a Humorous Thought

/humor on

"Just as Man was made in his creators image, so then is Microsoft re-making themselves in their creators(Apple) image!"

/humor off

[Elie]

Well remember, any end device (like the Zune and others) have met with failure. No one knows how their new tablets and Windows Phone 8 products will be received by the public.

So I think this is a wait and see.

[Jammrock]

The end of Microsoft, no.

[novel]

Microsoft still makes a boatload of cash and that won't change any time soon. MSFT basically owns the enterprise and government space for computer and non-mainframe operating systems. And, despite rumors to the contrary, there are still hundreds of millions of PCs and laptops sold every year with a Microsoft operating system on them.

Microsoft also has tens of millions of Xbox 360 systems sitting in tens of millions of living rooms around the world offering unique services to people. A market that Apple and no one else, except maybe Sony, has an in-road to at the moment. The services being offered there are beginning to really kick in, and will increase greatly with Windows 8's release and the Xbox Next console (rumored 2013, and no I don't know anything about it besides the same net rumors everyone else hears).

The problem is that investors, and the press, see Microsoft as stagnant because we don't have a large enough portion of the hip, popular markets known as smartphones and tablets. Because these markets are taking away from consumer PC sales, and a small portion of corporate sales, Microsoft's future returns have been rated low, despite continued profitability.

All that said, there are three or four main reasons why Microsoft has not broken into those markets with any success.

1. We haven't had a really good touch OS. Windows Phone 7[.5] is a great OS, but it doesn't have the ability to compete with iOS and Android on the feature level.

2. There is no good ultra-low voltage processor (read: ARM) support.

3. The tablets and smartphones that have been made for Windows [Phone] 7 have been lackluster and expensive.

4. Let's face it, Apple makes some great products and Jobs really knew how to make people want them. There is little you can do about that.

Windows 8 and Windows Phone 8 is designed to handle issues 1 and 2. The more I use Win8 on my desktop the more I like it. Admittedly it takes time to get used to it, but right now I'm typing this email on a 4 monitor setup with about 20 desktop windows open and the media players snapped to my far left screen.

I haven't had the chance to play with WP8 or Windows RT (the ARM version of Win8) yet, but that will happen soon enough. All full-time Microsoft employees get a WP8 and Surface RT for free this year. Me being a full-timer, I will get my hands on them ...November'ish or early December.

Anyway, that leaves item 3. Hardware. Apple's domain. My belief is that Microsoft hardware will fulfill two purposes. First, to bring in a new revenue stream; one that has made Apple king of the hill. This could chip away at Apple's lead, make profits, make investor's happy.

But, possibly more importantly, this sets the bar for our OEM partners. Instead of relying solely on other people's designs to generate OS sale revenue, Microsoft can set the standard, forcing other OEMs to improve their designs and make them more competitive with Apple and Android devices. Add a great touch-capable OS on top, and good apps/software, and you have a recipe for an excellent mobile product.

[/novel]

Ballmer's comment basically embodies this strategy of taking a bite out of Apple and Android, and impressing investors. Whether that statement was premature to make we shall see. Regardless, Windows won't die any time soon, and Microsoft isn't going away.

[ZokesPro]

Having tried Windows 8, I think Microsoft is following the current trends. If anything what they are doing now is giving Apple a run for their money and it's about time.

On the other hand, Apple products are boring, the OS hasn't really changed as far as the UI is concernend. And the current iMacs are higly disappointing with their mobile GPU solution and not to mention the Mac Pro's, they haven't touched that one in a while.

[dZeus]

Having tried Windows 8, I think Microsoft is following the current trends. If anything what they are doing now is giving Apple a run for their money and it's about time.

On the other hand, Apple products are boring, the OS hasn't really changed as far as the UI is concernend. And the current iMacs are higly disappointing with their mobile GPU solution and not to mention the Mac Pro's, they haven't touched that one in a while.

I'll take the opposite side to this. In a bit more than a year, Ballmer will be pressured by revolting shareholders to leave his position as CEO of Microsoft.

Causes
- less marketshare for Win8/WinRT in the tablet sub-notebook category than anticipated
- same issue for Windows Phone 8 in the phone market
- alienation of 'classic desktop' users by Windows 8 will cause many businesses to ignore Win8 till this is addressed
- failure of MS to copy Apple's business model (you cannot sell a complete hardware/software package without the polish and branding that Apple can provide)
- stagnation of Microsoft's market capitalization for the last decade

In the long run, the integrated platform that Microsoft offers (developing for phone, tablet and desktop) might be reasonably successful, but they need to offer superior solutions for tablet and phone to get the users in the first place.

[dZeus]

I'll take the opposite side to this. In a bit more than a year, Ballmer will be pressured by revolting shareholders to leave his position as CEO of Microsoft.

Causes
- less marketshare for Win8/WinRT in the tablet sub-notebook category than anticipated
- same issue for Windows Phone 8 in the phone market
- alienation of 'classic desktop' users by Windows 8 will cause many businesses to ignore Win8 till this is addressed
- failure of MS to copy Apple's business model (you cannot sell a complete hardware/software package without the polish and branding that Apple can provide)
- stagnation of Microsoft's market capitalization for the last decade

In the long run, the integrated platform that Microsoft offers (developing for phone, tablet and desktop) might be reasonably successful, but they need to offer superior solutions for tablet and phone to get the users in the first place.

Casualty #1: Steven Sinofsky

[Umfriend]

That must feel good *chuckle*

[dZeus]

That must feel good *chuckle*

Not at all. I have no beef with Microsoft. I do think that Ballmer lacks vision, and that it's a bad idea to try and copy Apple's strategy. In fact, it's unsure how much longer Apple itself can remain successful with their own strategy.

On another note, apparently Sinofsky wasn't much liked by his colleagues, and was one of the reasons that the internal divisions at MS don't operate very coherently. If they can focus on more inter-division cooperation, maybe they can repair the damage of the last years and catch up with the competition.

[Umfriend]

Must be me. I love being proven *right* (regardless of the victim and how I feel about him/her/it).

[dZeus]

Must be me. I love being proven *right* (regardless of the victim and how I feel about him/her/it).

considering I have quite a few rather negative predictions about where things are going in general, I'd very much rather be proven wrong. On top of that, most of these 'predictions' are not the result of original thought on my part either. However, not wanting to feel good and feeling good about something can be two different things completely... I guess that makes me a hypocrite in many cases?

[Jammrock]

I don't know that he was a casuality. People will always say he was, and maye he really is, but he's been at Microsoft for 23 years. He's basically done everything you can do at Microsoft and, according to his email, he just wants to move on.

Granted that may just be a cover-up, but no one I know of has ever heard or mentioned any disatisfaction internally.

And historically the Windows president has stepped down after their major release, since Bill Gates with Windows 2000. Or was it XP/2003. I can't remember. Anyway, it's been going on for a decade regardless of the sales outcome of the product.

[dZeus]

I'll take the opposite side to this. In a bit more than a year, Ballmer will be pressured by revolting shareholders to leave his position as CEO of Microsoft.

Causes
- less marketshare for Win8/WinRT in the tablet sub-notebook category than anticipated
- same issue for Windows Phone 8 in the phone market
- alienation of 'classic desktop' users by Windows 8 will cause many businesses to ignore Win8 till this is addressed
- failure of MS to copy Apple's business model (you cannot sell a complete hardware/software package without the polish and branding that Apple can provide)
- stagnation of Microsoft's market capitalization for the last decade

In the long run, the integrated platform that Microsoft offers (developing for phone, tablet and desktop) might be reasonably successful, but they need to offer superior solutions for tablet and phone to get the users in the first place.

And well within the schedule as Jammrock posted in the Lounge:

http://www.murc.ws/showthread.php?72656-Steve-Ballmer-retiring

I think Ballmer has often been described as a marketing genius who requires a visionary personality near him to steer the company in the right direction. Ever since Bill Gates left MS, this visionary personality at the top has been painfully absent at Microsoft.

[Umfriend]

How come you can predict this so accurately but not the coming hyperinflation and general demise as global reserve currency of the USD? :d

Must feel good though! ;-)

[dZeus]

How come you can predict this so accurately but not the coming hyperinflation and general demise as global reserve currency of the USD? :d

Must feel good though! ;-)

because I've got no clue what I'm talking about regarding economics, other than gut feeling. Still have some years to go before I'm proven wrong about USD losing reserve currency status.