Nearly a year ago, I wrote, Microsoft is not smart, its just that, its competitors are stupid. Well, in years that have passed, that theory has been proved right. Look at Palm, a company which had the monopoly of the hand held business, and well, now the software is owned by a Japanese firm. Perhaps, that is one of the main reasons why one has to be cautious in betting against the Barons of Redmond. Fred Wilson, in an excellent essay calls Microsoft a cat with nine lives! Brad Feld is predicting 2006 the year of Microsoft.
Paul Kedorsky, the ultimate contrarian looks at the Business Week and Forbes cover stories, and concludes that Microsoft is a buy.
In other words, Microsoft is the buzz of the moment, thanks in large part to Robert Scoble who has turned the beast from Redmond into cuddly and cute. I am not buying the Napoleon Dynamite act.
Blogs and the world at large has gotten into a habit of focusing on the near term, the here and now. Everyone misses the big picture. Vista and Office 12, the so called new engines of growth (admittedly with newer technologies) are looking to tap into the same wallets they have tapped before. For Microsoft PC has been the money machine, and that will always be the case. I had once said, Microsoft’s biggest problem was how to get bigger. That question hasn’t been answered. James Stoup, has an excellent piece on Microsoft’s future prospects. While it has been written by a Mac person, it does you a scorecard of why not all is well in the Gatesville.
Look at their non PC-efforts. It might as well be a scene from the popular video game of yesteryears, Street Fighter. They are fighting all the people, all the time. Open source is chipping away. They might think telecom is going to be easy, but only time will tell. Mobile phones are proving to be tough nut to crack. They have a spectacular product in LCS, but Cisco is not going to go away. They are in a street brawl with everyone from Sony, Nokia, Apple, and every tiny start-up that is coming up with new ideas. That is an energy sapping, tiresome battle on many fronts, especially at a time when the company is slowly becoming a collection of fiefdoms. Think of Microsoft as the European Union of technology!
Lee, who opened Microsoft’s research lab in China in 1998 and moved to headquarters in Redmond, Wash., two years later, fretted over what he saw as repeated missteps. In court he detailed how the more than 20 product-development centers in China tripped over one another, duplicating efforts and even fighting over the same job candidate. Lee called the company “incompetent.”
Despite all these problems, I am loathe to bet against Microsoft. They just have too much money. Like the Yankees, you can never count them out. Here is a good example that the wolf still lurks under sheep’s clothing. The AOL-MSN deal, harks back to the blatantly predatory days where company arm-twisted computer makers to bundle a sub-par browser. Take away 12% of Google’s Ad-revenues, and you have wounded the upstart. Clearly a business win, because on technology they can’t! I think Microsoft can use its “mountains of cash” to pose problems for any rival, without any chance of admonishment from the regulators.
But there is the bigger, more everlasting problem. Fred Wilson puts it best when he writes…
Its because software is becoming “organic”. I believe Google started this movement. They released a free web service that people responded to in an emotional way. That created a phenomenon that drew developers and users to the Google franchise. Google opened up their APIs so people could build businesses on top of them. Now they have a whole ecosystem. This has happened with other software platforms too - Craigslist, Flickr, Skype, etc.
20 comments so far
3:26 PM PT
Om,
I agree - in the long term, Microsoft seems to be positioned all wrong, since the PC-centric model will lose its relevance over time. But I agree that Microsoft is a buy right now; Redmond’s reign won’t be over for a long time.
4:57 PM PT
well. i was originally miffed at windows as a development platform, considering it dead-end and unexciting. But i’ve recently seen some of the videos and demos of some apps built in Windows Vista, and was simply blown away by how cool that shit was.
XAML, its surrounding application development and animation frameworks are going to hurt the living crap out of browser/thin-client/ajax advocates (that would be me).
Sure you can build rich user experiences in thin-client-land, but not to the extent of what Microsoft appears to be building … in thick-client-land. It’s crazy. I’m talking about the stuff you see in movies. Maybe one step behind Tom Cruise’s virtual interface wall in Minority Report.
When Vista rolls out, it’ll be a matter of a couple of a few lines of declarative markup to build a 3-D animated user experience, with things flying around, and bunnies hopping around. Developers just won’t resist the appeal of developing in an environment where Microsoft has done 99.9% of the work for them, so they can bill their clients big bucks for having built them a “rich user experience”.
They’ll look at ajax, ruby on rails, web standards, cross-platform interoperability, and many of the concepts many of us hold dear to our hearts, and laugh really hard.
Our 2-D ajax-enabled web will very-much look all girlie-man next to microsoft’s virtual reality.
We need to take a serious look at what open standards are available to us, extend them to match what Vista will offer, and build cross-platform implementations of those standards, PRONTO. Something i would love to see Mozilla/XUL tackle, with support from Apple/WebKit.
5:37 PM PT
>Microsoft is not smart, it’s just that, its competitors are stupid.
Isn’t it that not being stupid implies being smart? So why this complaining all about? You seem to be totally jealous of the fact that Microsoft has being on the constant rise in the software world for the past 20 years — a time period in which most of the “then” software giants fell apart.
And then there is this complaining that they use their money power and position to subdue their competitors. I have been following your blog for a long time — I didn’t come across a single rant that criticizes any of Microsoft’s competitors to such an extent. Trying focusing a bit on people like Larry Ellison who cite Chengez Khan as their role model. In a capitalist world like ours, not many companies would come out to be clean enough — though some of such business tactics might be wrong (in the moral court) but somehow we need to adjust to it.
As Bill Gates said in an interview - ” Even if they [Microsoft's competitors] do “me, too” type stuff, people think, “wow.” ” — http://seattlepi.nwsource.com/business/240541_gates14ww.html
But then it’s also true that such type of negative criticism doesn’t make a lot of sense to Microsoft. There is hardly any advice there for them in this rant of yours.
I would seriously recommend a book by Jim Collins - Good to Great - Why some companies make the leap….and others don’t - http://www.amazon.com/exec/obidos/tg/detail/-/0066620996/002-2371207-0735242?v=glance
5:47 PM PT
Seems like lots of us are recognizing that Redmond is reawakening, after having to play defense for the first time (outside of the courtroom.)
A little competition and humility towards for them is great for the consumer, and it looks the two most competititive fellas in the business world, Steve and Bill, have had enough time letting the other team run up the score.
5:51 PM PT
i agree stu. a little humility would be good. but then there is the other aspect of winning - MSAOL. Anyway i think they will be playing defense for sometime, because i think the business is changing around them, and as a company their future depends on their ability to adapt.
8:09 PM PT
Om, you could see the big picture at Accelerating Change 2005.
http://www.accelerating.org/ac2005/
http://www.futuresalon.org/ac2005/
11:04 PM PT
“When Vista rolls out, it’ll be a matter of a couple of a few lines of declarative markup to build a 3-D animated user experience, with things flying around, and bunnies hopping around.”
Funnily enough, you can do just this today with Internet Explorer, if you don’t forget (or simply figure out) that IE4 ships with the DirectX animation vector markup. Scenarios like videos mapped into textures, or flying pigs is just a few lines away.
Nobody uses those, I wonder why…. Could it be that it irritates?
9:13 AM PT
Steph — I thought the same thing when I read the “bunnies hopping around” line. But I don’t think that the reason web developers haven’t taken advantage of the DirectX capabilities in IE isn’t because they couldn’t think of anything useful/non-annoying to do with it, it’s because there aren’t any tools to allow you to do it effectively (and because it’s not cross-platform, something I think Microsoft under estimates the importance of). Sparkle will change all that with regard to XAML. The hopping bunnies are a bad example. Check out the North Face demo from the PDC or the Media Mania demo over on channel9 (http://channel9.msdn.com/) to see some examples of what you can really do with XAML/WPF.
Yes, we will see some ill thought up UI designs that have no right to exist, just like there are some website UIs that are downright horrid, but in the end the overall movement will be positive.
The positive thing XAML/Sparkle does is that it lets a designer take care of the UI and a dev take care of the code, and those to sides of the application are able to mesh fluidly. What we currently have is a designer drawing a UI, and a dev trying to code that UI from the drawings, and the result is much less engaging than it could be.
9:17 AM PT
I’m hanging on to my January MSFT Puts.
Microsoft is getting destroyed on the server, Java in the enterprise, LAMP elsewhere. Microsoft is getting destroyed in music and video. Excel is the only impressive app in Office. MacOS and Linux are making inroads on desktop. Xbox is interesting but in a competiive space. PocketPC and Media Center are lame attempts to throw Windows at things that require dedication. Before switching to Vista, users will take a close look if it’s all really worth it.
12:34 PM PT
Steph, Paul, my “bunnies hopping around” line was ill-inspired, I truly meant to convey i found what i saw actually, very cool. I Saw the PDC North Face Video, and it blew me away they were able to throw that together in 6 weeks, while the developer was originally purely a web applications developer with zero windows development background.
And Paul’s point about Sparkle (i had forgotten the name of it) is so true. From what i’ve read/seen/heard, microsoft has created something that could be compared to Macromedia Director, except that it apparently doesn’t suck, is all object-oriented, and keeps UI development an artistic process. Likely a far cry from hand-coding DirectX in IE.
2:06 PM PT
You say Microsoft is not smart and then you write this sentence: “Well, in years that have passed, that theory has been proved right.” You don’t even get your grammar right fella.
2:07 PM PT
2006 the year of Microsoft? You must be joking.
You’re betting that long overdue beast of theirs, Longhorn, is going to be that good, assuming it shows up. As usual, when it comes to any Microsoft product, I’m not expecting much. At best, Microsoft will copy Apple’s Tiger, and true to form, it will be just that, a copy, or rather a bad copy. Meanwhile, Apple is planning in 2006 to release the next version of their operating system, Leopard, guaranteeing they remain at least two steps ahead of them, not just for 2006, but for the foreseeable future too. Plus, Apple are switching their operating system to Intel chips.
If 2006 is going to belong to anyone, it’s got to be Apple. Microsoft’s dominance is on the decline, not just because of Apple’s innovation and the Linux and open source alternatives, but in my opinion also because of blogging.
Yep, blogging. It is not working so well for Microsoft as you’re suggesting. There are plenty of cracks showing, former employees criticising them, customers complaining. Microsoft are trying to do with blogging what the old Soviet Union tried to do with Perestroika - let in a little freedom. Never works for long. People get a taste for freedom and want more, lots more. Unfortunately, the blogiverse is not something you can control, especially not through front men like Scoble who is not as respected as you’re making out. You can’t buy everyone to mouth your line. Either your products are good quality or they’re not and if they’re not, as Microsoft’s are not, lifting the lid even a little to let people voice their opinions about them is going to blow up in your face.
10:11 PM PT
Google lives on Adsense - tell me their other products - for how long?
Apple lives on iPod - for how long?
The market thrives on shareholder return not on geekdom and opensource-dom.
MS has products and services that make billions more than each of their competitors and each one of you that type here probably use some of MS’s products..
Think with your head, not with your heart - true geek speak ;)
11:36 AM PT
I don’t use any Microsoft products, neither Office nor Windows nor Explorer, and I get by very nicely. That something has made billions doesn’t mean it’s the best or that it will always have a strangehold on the market.
I think with my head and use products that are far better than Microsoft’s. The days when we had no alternative are long gone.
1:21 PM PT
good for you, but corporations are here to make money ;)
who said that MS makes the best products and who said that they will have stranglehold ? Look at my post..I didn’t LOL
Usually,
1. A good product makes money (good, not the best)
2. A good product might not be free :)
3. A free product will not make a company sustainable (not the product, the company!!)
MS makes products and those products work for the masses.
Super users might be comfortable using Linux (as I am), but Linux doesn’t do what Windows/Office does for a small business/for people who just want to use a simple interface to get things done (like my grandma) and people who don’t give a damn about installing new drivers everytime I have new hardware.
3:02 PM PT
The outlook for Microsoft will fracture as Web 2.0 and Open Source eventually render Microsoft an O/S only company with all other applications inferior to Open Source. Microsoft however will continue to make money on inferior products based on the always dumb core audience. I always see fools in Santa Monica on Segways. Microsoft will always own the Segway crowd and the early adopter gadget crowd. The veneer of marketing gets a certain segement of the population no matter what. Microsoft will eventually become a hybrid marketing company in my view. Marketing to mask the veneer of inferior products.
11:23 PM PT
“I Saw the PDC North Face Video, and it blew me away they were able to throw that together in 6 weeks”
Chris, I have seen some of the demo on C9. While DirectX animation provides no built-in debugging support, I could map a video on a 3D moving texture in just half an hour. And that’s without knowing anything about DirectX animation, just wading through the samples and doc.
“And Paul’s point about Sparkle (i had forgotten the name of it) is so true.”
I disagree again. I think there is potential in Sparkle and other designer, no discussion on that. But the whole thing about a new designer is the new file format it creates and how much interoperable it is with existing file formats and existing platforms.
Sorry to disappoint you again, but Director’s ability to run on both Mac and PC without changing anything was a clear mega-winner at that time, kinda the right tool at the right place.
In the IDE business, tools like Delphi are just as good : you can produce native or .NET code by just checking a flag.
Just think about the implications of write once, run on multiple places. And then think again about the fact that, Xaml runs only on Windows XP and above (because it needs so much of the underlying infrastructure, and it ships only on Windows XP and above). Microsoft made a big mistake by creating yet another incompatible run-time WPF/E.
That speaks volume what their real intent is : seed the market, scare the competition, try keep everybody ignorant about the many interoperable file formats available elsewhere (OpenGL is one of them).
Now, evolving a technology is good. I can’t say Microsoft shouldn’t sell Sparkle and other designers.
11:46 PM PT
Apple’s making money. Record profits. The problem with MS products is that they *don’t* work for the masses. They’re buggy crap.
Linux may not do what MS Office/Windows does for a small business (i.e. frustrate the hell out of them), but Apple will. Can’t get a more simple, elegant interface and an underlying operating system that’s rock solid reliable than Tiger. Why anyone continues to use Microsoft products is beyond me since better alternatives exist. Maybe it’s convention - they always have so they always will.
1:36 PM PT
[...] Anyway the latest reorganization may not be perfect, but it shows that Microsoft’s big dawg - Bill G - knows that something is not right. Step in the right direction? But as I said earlier, the challenges remain. More @ The Wall Street Journal, subscription required. In Random Access Posted Tuesday, September 20, 2005 at 1:35 PM PT [...]
6:03 PM PT
Pregnant Patent Pause Passed
I just got notification that the first of a whole suite of patents that my team filed when I was working at Sprint on the Mobile Portal and Wireless Application Manager platform was approved last week - US Patent 6987987. The listed inventors are me,…
Leave a Comment