Microsoft Is Dead

2 posts



I'm posting this in light of the fact that Microsoft has shed 10% of their share price (over $40 billion of their market cap) last week.

Some problems/failures they are facing:

  • Surface tablets aren't selling. They had to write down a $900 million loss because they slashed the prices to spur purchasing. The strategy failed. They don't realize that tablets are a consumer good, not a capital good for work. And even with that misunderstanding, the initial offering was much weaker than a similarly-priced laptop as the tablet lacked features and polish that come with any standard business-oriented computer/OS.
  • Windows 8. No one likes it. Microsoft invested heavily in trying to get people to move over to the "Metro" interface which is not superior in any way. It's more difficult to develop for, and anyone who wants to develop for Windows 8 has to take on extra costs to develop for it. It's been their worst release since Windows ME (if not worse)
  • The announcement of the Xbox One (the name of the newest xbox, not to be confused with the first xbox) was not well received. They've backpedaled on some of the features they were pushing, so that's more of an investment gone down the drain. Sony's new Playstation offering was also well received. Some surveys show that there's a 20:1 preference of what Sony is offering over what Microsoft is offering.
  • Azure. I use this each day at work. It is Microsoft's cloud solution offering. It is inferior in almost every way to all the other major cloud service providers. Microsoft has claimed to have earned over $1 billion in revenue from sales through Azure. What counts as sales is calculated as such: actual direct sales + the price of goods and services given away. I know that the company I work for spends about 10x as much or more on Azure's services than we need to, and it's not done due to lack of efficient use of resources, but because we are 1) getting this service from MS for free through their BizSpark program and 2) our contact told us that we'll get more free credits for this service if we inflate our usage. (which ultimately goes into their sales numbers)
  • Losing to open source software. Not much needs to be said here except that Linux is run on way more devices than Windows, it's free, and it will remain that way. Valve is pushing gaming on Linux. Open source software is actually better now than most paid software solutions.
  • Structure/politics: nothing innovative can happen at Microsoft. They don't hire risk-takers. Just mathematicians and people who pass HR interviews. (i.e. "yes sir" establishment-worshipping hacks) There is no purpose to the company. Just the bottom-line and the next earnings report. The direction of the company is driven by a bunch of 55 year old shareholders who don't understand the technology market. They see a success from Apple and try to replicate it (see iPad vs. Surface, Amazon Cloud vs Azure, video game consoles)
They're a zombie sitting on old money. They're somewhere between what IBM is and what Sun Microsystems was but with a little more involvement in software. Admins don't like Microsoft's active directory solution or email solution. (exchange) The only thing they have going for them now is the momentum of previous successes and Office 365. Look for a Google solution and/or open source solution to ruin Office 365 for them as well.