Can Microsoft Survive If Windows Doesn't Dominate? 497
Nerval's Lobster writes "In his latest Asymco blog post, analyst Horace Dediu suggested that Windows' share of the personal-computing market is declining at a faster rate than many believe, once Microsoft's cash cow is put in direct competition with Android, iOS, and other platforms built for tablets. In that context, Windows' share of the personal-computing market has dipped past 60 percent on its way to 50 percent. The big question is whether it'll keep plunging. 'If Windows tablets start growing as fast as the tablet market overall then Windows could stabilize in share,' Dediu wrote. 'But if Android and iOS tablets follow their phone brethren in growth then it will be far harder for Microsoft to maintain share.' Yet despite that gloomy scenario, Dediu doesn't necessarily see a market-share dip as a cause for concern on Microsoft's part: 'Even if Windows dips to only 20 [percent] of the world's computing market it will still be perfectly 'viable' for some time to come,' he wrote. But even if Windows can perpetuate, will its decline fatally undermine Microsoft as a company? All that Windows (and Office) money also allows Microsoft to launch projects that lose money for years before they gain traction. Without that monetary base, for example, it's possible that the Xbox (which bled money for the first few years of its existence) wouldn't have survived long enough to become a viable platform from a financial perspective—much less the center of Microsoft's future plans for living room domination."
Yes they can (Score:5, Insightful)
Re:Not to worry (Score:4, Insightful)
Server & Tools too... (Score:5, Insightful)
Not to mention the Server & Tools Division that sells Windows Server, IIS, SQL Server,Lync Exchange, Visual Studio etc. keeps getting record revenue every quarter.
From http://venturebeat.com/2013/05/20/with-19b-in-revenue-microsofts-server-and-tools-chief-says-hes-just-getting-started-interview/ [venturebeat.com]
Meet Satya Nadella, president of Microsoft’s server and tools division, a division that builds and runs the company’s computing platforms, developer tools, and cloud services. Nadella leads a team of over 10,000 employees, and his group alone makes $19 billion in annual revenue – which is more than the combined revenues of Facebook, Yahoo, LinkedIn, Zynga, Netflix, and a few others in the Valley.
That doesn't even include Office and Azure recently became a one billion dollar business by itself. Microsoft is pretty well diversified, unlike Apple with it's reliance on iPhone and iPad and Google with 95% of revenue from ads. As usual, Asymco comes with shortsighted analysis that mistakes the trees for the forest.
That's why the people with their own money on the line are buying up MSFT (stock went from $27 to $35 due to the last earnings report) instead of the air-headed armchair analysis that we see on here of 'lol my grandma ditched her PC and got an iPad so that means M$ is dying'.
Losing share may save Microsoft (Score:5, Insightful)
A real challenge to the Microsoft hegemony would squeeze out the idiocy and arrogance that currently dominates the company. Forced to pay attention to users and developers, Microsoft would never have created a disaster like windows 8, or the developer-hostile policy of allowing languages and platforms to "dead end."
Heck, someone at Microsoft might actually wake up and figure out that the policies and strategies that benefit Microsoft in the long run are those that benefit users and developers, not the marketing department, or upper management bonuses.
I joke. I joke. Of course this will never happen.
Re:Yes they can (Score:3, Insightful)
They'd do just fine. In fact, I think they'd do better.
Windows is a good product. I mean, the windows ecosystem as a whole. XP and 7 are great. The server OSs are fantastic. Office and exchange are de-facto business standards.
If they had a bit more competition they might actually start listening to their customers a bit more. That way ever-other windows release won't be an unsellable pile of garbage. Vista had a business adoption rate of less than 9%. Windows 8, which is completely inappropriate for a business environment, will probably be even less. (Seriously. Metro is a UI fuckup, a security hazard, a manageability nightmare, and a completely legacy incompatable software layer that you cant' remove. Blamer should be fired for letting that slip. There is NOTHING about the metro UI that fits in to a business environment.)
Re:Server & Tools too... (Score:4, Insightful)
Microsoft is literally doing better than ever financially. Ignorant tools are worried about market share percentages instead of market volume.
Re:Server & Tools too... (Score:5, Insightful)
I would imagine the reason for this is because of MS's enterprise penetration. I don't see Microsoft leaving the enterprise any time soon. But I can see its consumer market shrinking considerably.
Re:Server & Tools too... (Score:5, Insightful)
Sure, for a natural market, but lock-in is lock-out at low adoption rates:
- Office requires (works completely in) Windows, and hasn't been able to un-require it despite trying for years. Sure there's a Mac & Online mode, but they're behind.
- Lync, SQL, Exchange, IIS, Windows Server: Only Windows businesses care
- Visual Studio: (Mostly) only Windows businesses care.
Tie all those to a minor OS (instead of a dominant OS), and they won't be billion dollar businesses.
Re:If Windows doesn't survive... (Score:5, Insightful)
Their own pride, and probably corporate policy which says "all things must be Windows".
If Microsoft announced next week they were doing an Android or a Linux distro, their stock would probably tank because that would be interpreted as basically saying "we're losing the fight, so we're looking into other things".
I agree that Microsoft is far from dead, and are likely sitting on huge cash reserves. But I don't see Linux and Android as a way forward for them.
They'd do a better job of actually listening to what people want out of their products, instead of just releasing a much hated Win 8 only to have to reverse course with the changes in Win 8.1.
Me, I'll be curious to see how they fare with the next XBox -- because I suspect lots of people are reading these press releases and thinking "gee, that doesn't sound like what I want".
Re:Yes they can (Score:5, Insightful)
Re:Server & Tools too... (Score:5, Insightful)
It also makes no sense to slam Apple because they 'rely on iPhone and iPad' because the number of phones sold every year totally dwarfs the number of PCs sold every year. Furthermore, Q1 PC sales in 2013 were down 14% from Q1 2012. Smartphones and tablets, on the other hand, are in total growth mode.
MSFT has become a creaky, reactive company and always seems to be following the market rather than defining it. They might well dominate the PC industry for some time, but their bread-and-butter is in a rapidly declining market (desktop PC OSes and applications) and even there they are losing market share.
Re:Yes a smaller Microsoft can survive (Score:5, Insightful)
Let's rewind to a previous millennium long ago swept away in the sands of time. Let's go way back to . . . 1990.
Then the sudden realization hit. IBM's PCs were priced at monopoly prices and people were not buying them. The company was in crisis and had to reinvent itself. It got new management. Times got leaner. And they weren't committed to past management decisions.
By 2000 we had a much nicer IBM that was focused on its profitable mainframes and was friendly to both Linux and Java.
After Microsoft reinvents itself, it will have retreated to and focus on its profitable business. Microsoft has a very profitable and serviceable business with its Enterprise software Windows, Outlook, Exchange, Office, SQL Server, etc. Like IBM before it, Microsoft has already begun embracing open source (Apache, PHP, etc etc) that enabled its enterprise customers to do what they do.
Like IBM, Microsoft won't go away. Probably ever. But it will become a smaller and gentler Microsoft without the nastiness and bullying once it has been de-fanged of its monopoly power.
Re:Server & Tools too... (Score:3, Insightful)
The problem is that Apple makes more than that off just the iPhone.
And, given projected growth, iPad will be making more than that by itself too.
Yeah, MSFT is doing better, but much less better than everyone else. Hence the problem described in TFA.
Marketshare (Score:4, Insightful)
I have a PC running Windows. My household has a 100% Windows marketshare.
I buy a tablet and a phone. Suddenly my Windows only has 33% marketshare, while Android went from 0 to 67%!
But I still have a PC running Windows. So does a billion other people.
Gotta love 'em analysts.
Re:Server & Tools too... (Score:5, Insightful)
Re:Yes they can (Score:5, Insightful)
This has been predicted since the 90s and has failed to materialize. It has failed to materialize further in the current generation of gaming consoles, which aren't even ahead in terms of hardware to PCs anymore: the chips and processors powering the new generation are approximately mid-level graphics which can be obtained today. Not in the near future - but now.
While what we consider "the PC" may change, it seems pretty apparent that the future is more platform diversity using off-the-shelf components, not less. So long as people still game with a keyboard and mouse, on a machine they might also use for other things, "the PC" as a gaming platform will exist. And with the current trends, it seems likely that PC market-share is only going to increase.
The magic answer (Score:4, Insightful)
Re:Server & Tools too... (Score:5, Insightful)
So long as Microsoft is profitable, it will always be around regardless of other parties. Microsoft will make iPhone and iPad apps if that's what it takes.
They wouldn't be in the privileged position that they're in now though. It would be much harder for them to lock customers and developers into their products. They would probably survive, but they would shrink substantially. MS's strategy always revolved around controlling the platform, not just writing software.
Re:Server & Tools too... (Score:4, Insightful)
I doubt it. Maybe for the consumer space, but nobody in business land is heading towards OS X and only a few Really Big hitters are going Linux. Microsoft is going to be the core mid level business platform for a while yet.