Microsoft is Dead

A few days ago I suddenly realized Microsoft was dead. I was talking to a young startup founder about how Google was different from Yahoo. I said that Yahoo had been warped from the start by their fear of Microsoft. That was why they’d positioned themselves as a “media company” instead of a technology company. Then I looked at his face and realized he didn’t understand. It was as if I’d told him how much girls liked Barry Manilow in the mid 80s. Barry who?

Microsoft? He didn’t say anything, but I could tell he didn’t quite believe anyone would be frightened of them.

Microsoft cast a shadow over the software world for almost 20 years starting in the late 80s. I can remember when it was IBM before them. I mostly ignored this shadow. I never used Microsoft software, so it only affected me indirectly—for example, in the spam I got from botnets. And because I wasn’t paying attention, I didn’t notice when the shadow disappeared.

But it’s gone now. I can sense that. No one is even afraid of Microsoft anymore. They still make a lot of money—so does IBM, for that matter. But they’re not dangerous.

Microsoft’s biggest weakness is that they still don’t realize how much they suck. They still think they can write software in house. Maybe they can, by the standards of the desktop world. But that world ended a few years ago.

I already know what the reaction to this essay will be. Half the readers will say that Microsoft is still an enormously profitable company, and that I should be more careful about drawing conclusions based on what a few people think in our insular little “Web 2.0” bubble. The other half, the younger half, will complain that this is old news.



  1. SN says:

    I’m sure Microsoft defenders will point out the Xbox and the 360 as evidence that the company can grow into new markets.

    But neither the Xbox nor the 360 is profitable! It’s pretty easy to enter a market and obtain marketshare when you are willing to blow billions and sell your product for a loss.*

    The Zune was a failure. Web-TV was a failure. The Tablet PC was a failure. Microsoft’s attempt to get into the home networking market failed. Microsoft’s attempts at search have failed. Microsoft’s attempt at being an ISP failed. Microsoft’s attempt to tie merchants together with its .Net service failed. Microsoft’s browser is failing against an open source browser. Microsoft’s Frontpage failed against open source blogging tools such as WordPress.

    Basically, Microsoft is a failure in EVERYTHING it tries other than its core monopolies: Windows and Office. Microsoft makes 80% margins on those two products and those fund and have been funding failures since the 90s.

    I think people have finally realized that Microsoft is not invincible. That, when you looks at the company as a whole, it’s a failure.

    * And too all those people who claim that everyone in the console business sells consoles for a loss, Nintendo has always made a profit off of its hardware and has never sold a console for a loss.

    And when you compare Sony’s PS2 to Microsoft’s Xbox, even if Sony was selling the PS2 at a loss, it still made a profit overall. While the Xbox lost 4 billion dollars, even when you include the money made from games, peripherals, and the Live! service.

    To call a loss of 4 billion dollars a “success” is idiotic. But luckily for MS the 360 is only losing half as much money. Maybe in a few decades, after paying off the losses of the previously consoles, MS’s console division might actually start making a profit. Only at that time will it be a success.

  2. qsabe says:

    Nice thought, but won’t happen. Windows is mature. We hate it but we can’t buy the software we want to use for any other platform, so we use it. We always will. After a few years when the bugs are out of Vista, we will buy it because we will need it to run the software we want to use. Maybe for the author, the computer is an email apparatus and replaced his telephone, but for many of us it is a necessity to do what we do, and the last thing we want to trust is some ISP’s decisions about how we will accomplish anything today.

  3. Janky says:

    Microsoft may be dying or incapable of adaptation, but like the Oliphaunts in Lord of the Rings, it can still whup most anybody. If you’ve got a product or service, it still has the marketers and developers to release a free version, not as good perhaps and not with the idea to support it well, but just enough to screw up your market. It’s ongoing, just take a look at what it’s doing in virtualization software – it’s just serious enough to give vmware indigestion.

  4. noname says:

    Microsoft is dead when my computer at work no longer uses their OS.

    I don’t see it happening in the next 5 to 15 yrs. MS has allot of 3rd party software infrastructure people know works; that make it a compelling offer/solution.

    I for one am not a fan of MS, but I know more about what I can do with MS then what I can do using the other stuff. I got things to get done, so why futz with an unknown and jump through a series of unnecessary Rube Goldberg hoops and questions then still have to use MS to get work done.

    MS knows the too common dumbed down assumption, people only use their computers for the mundane, send email, surf the net, run word…. is not true. If it were true, there already plenty of free alternatives out there.

    Free and Harder losses to Easier and Costly, especially when your company picks up the tab. IMHO

  5. MyDogBen says:

    Meh. I’ll say it again. History is littered with the remains of indispensable giant companies – Western Union, US Steel, most of the railroads, many automakers, etc, etc. MS mindshare is a mile wide and two millimeters deep. No one will weep for them.

  6. Ram Prasad says:

    MS will not die. One fine day they will realize that others OSes are eating hard into their pie and will release XP/Vista for free (or for $45) and make profits off Office/Server/DB and other products running off that OS. Combine marketshare and nearly free OS.

  7. bs says:

    Name a real alternative for large corporate customers… Then we can talk about the death of Microsoft.

    Microsoft has a very nice framework for managing thousands of desktops with minimal effort using GPO’s, Active Directory, RIS (remote installation) and WSUS (windows update services). These tools let corp users automatically provision users, software, manage desktop permissions and manage updates with minimal intervention. All can be done with no 3rd party software.

    Sure there are some rudimentary tools in linux, but nothing that can compete when scaled to 1000’s of desktops.

    I would like to see an alternative, and it is a nice fantasy to think something is there almost ready to take the corp. desktop. Sorry, but this isn’t happening within the next 10 years. A product would have to arrive on the scene and outpace the albeit slow progress of windows. But let’s face it, Linux progress on the desktop is painfully slow as well. Heck, Linux is just now getting close to par with W95. We are happy when our favorite Linux distro works on our 2 year old laptop.

    So while I do think that Vista is a DRM ridden POS with a pretty face, and that Vista just may be the next Windows ME, don’t write off MS just yet.

  8. doug says:

    huh. So MS has an 80% margin on Windows and Office, its core business.

    So saying that MS is dead is like saying an electric company with an 80% margin on electricity is dead because it cannot succeed in the fast-food business. Whether the Zune or the 360 or Web TV fail is largely irrelevant, so long as MS can keep raking it in the bucks on Windows and Office, neither of which show any signs of going away in the business market (MS’s core customers).

    And frankly, people have been peddling this thin client, app-on-server crap for more than a decade. It was always just around the corner. It did not happen over ethernet to the in-house server, so now it is supposed to happen over the intertubes? Maybe someday when connectivity is truly ubiquitous, but that’s a ways off.

  9. Peter Rodwell says:

    It’s easy to write off M$. We all did it a few years ago and then – surpise! – it managed a 180º about-turn and not only acknowledged that the Internet exists but dominated it easily.

    I’d say: look for a DRM-free release of Vista, probably followed by a Linux version of Office in a couple of years and maybe even a Windows shell for Linux that runs Windows software.

  10. Milo says:

    At the end of day M$ has the corporate buyers in its pocket. I use Ubuntu at home and love it but work and school are on M$. I think this may continue and we may see a change between home and work users for a while. For me it started with Firefox and then Open Office and then I moved to Ubuntu. I think I represent a lot of people. How long will it take? I have no idea. I think the point is if Linux came up with a truly killer app then M$ couldn’t beat them down like it did with its past competitors or if they did they would go down because of it; M$ doesn’t have the power they did.

  11. doug says:

    #10. Total agreement, Milo. Microsoft does not have hte power it once did, but that’s far from being “dead.”

    All of us with use all this cool stuff – Firefox, Linux, OSX, and all those fun Web 2.0 things at home, then we will go to work at a corporate or government office and there will be Windows and Office and Internet Explorer.

    But that’s where the money is, and that shows no signs of changing.

  12. Gregory says:

    Microsoft has lost focus, that’s all.

    They have shown that when they have focus it’s really really dangerous. However that isn’t the case with any of their recent offerings. Balmer is one major problem there… MS is a chicken without a head right now.

  13. Jeff says:

    There is some truth to this article. Microsoft is dying (but there is no successor either). It is doubtful that either Mac or Linux will fill the void. It is also not clear if Microsoft is going to go under. They are, however, suffering.

    Neither Vista, nor Office 2007 has been a cash king. To be honest, they are not even success (based on past expectations). I think they need new management (beginning with the CEO).

  14. GregA says:

    Or it could simply be that the personal computer industry is now mature, and there are no more technologicla leaps to be had in the desktop (or laptop) computer.

    Wow, but the hyprbole does sound so much better.

    #10,

    Corporate buyer here. I am in microsofts pockets because they helped make me wealthy. I did my taxes this morning (so im grumpy) and my guess is i paid more in taxes than every microsoft basher here made gross last year. When you can tell me how doing something insane like switching (either to linux or osx) can make me piles of cash I will listen, but so far all I have seen is a bunch of complaining about microsoft.

  15. SN says:

    9. “It’s easy to write off M$. We all did it a few years ago and then – surpise! – it managed a 180º about-turn and not only acknowledged that the Internet exists but dominated it easily.”

    Microsoft dominates the internet?! Exactly how does it “dominate”? Sure Internet Explorer is used more, but its numbers are dwindling. And more importantly, it makes MS no profit!

    Apache is more widely used than any MS internet server product.

    WordPress dominates the blog-spear while MS offer no solution that I know of. (And I personally think that all the web novices use of WordPress that killed off FrontPage.)

    The most successful internet music site is not Microsoft’s. The most succesful movie internet site is not Microsoft’s. They certainly don’t dominate in my media arena.

    Microsoft has failed in every attempt at search engines.

    Microsoft has turned Hotmail into a joke. While both Google and Yahoo’s similar services are actually in high demand.

    So, please tell me how Microsoft “dominates” the internet. Thanks!

  16. SN says:

    8. “Whether the Zune or the 360 or Web TV fail is largely irrelevant, so long as MS can keep raking it in the bucks on Windows and Office”

    So the fact that Microsoft fails in every single thing it attempts other than its two monopolies is irrelevant?! That’s so fucking asinine I can’t even think of a response. It’d be like responding to a baby’s babbling.

  17. Milo says:

    GregA is absolutely right however back when I sold computers M$ had products that were clearly better as well as making the buyers money. Now all they have is buyer baksheesh. It’s like big auto saying buy American… because… it’s American!

    M$ made its money on the home user and used that to buy its way into the corporate (enterprise) world. They are starting to lose the home user. Can they do without the home user? Can they get them back even if they care, which right now they don’t?

  18. maria says:

    Until all the other Os can run all the apps that windows does it will rule. As Greg A said the others are for hobbyist. And before you say mac and graphics I have made a living doing that for fifteen years with widows. Bought a mac two months ago it is still gathering dust. I do not have time to learn another OS. And yes I discovered you do need to learn to use a mac.

  19. Drachenlord says:

    “That’s so fucking asinine I can’t even think of a response.”

    Then please don’t, as someone who posts on this blog you should be above swearing at the other users just because they post opinions that are contradictory to yours.

    I think someone needs to get off their high horse… must be pretty lonely up there..

  20. Angel H. Wong says:

    In the 90s everyone said that Apple was dying, and then came Steve Jobs and saved the company.

    Chances are that M$ will go through a similar phase.

  21. Misanthropic Scott says:

    Perhaps they should just rebrand themselves. In light of smaller and smaller computers, featherweight laptops, handhelds, etc., I’d recommend that they rebrand themselves as PicoFlaccid.

  22. Peter Jakobs says:

    #7: to say it with Queen: “oh how wrong can you be”
    So you say the best tools to manage a network of 1000s of (Windows) desktops is Microsoft? That’s exactly the thinking that much of Microsoft’s success is based upon: look no further!
    If that was the truth, then companies like Altiris or Novell had no case. The reality is that Altiris bases it’s whole business on managing Microsoft networks better than Microsoft does and Novell makes quite a bit of money on managing Microsoft based clients as well. So why would you be using Microsoft’s own products? Because you didn’t bother to look any further and you can quite safely hope that your boss doesn’t know any better either.
    Now, I do quite a few Windows to Linux desktop conversion projects, and a few of the questions coming up there always show the same problem: look no further!
    Common questions?
    Q: where are my drive letters?
    A: drive letters are a DOS concept. Even Microsoft was trying to get rid of them with NT and beyond. Try to accept a slightly more modern paradigm.
    Q: can I create dynamic local users on Linux?
    A: you would have no reason in the world to do so. DLUs are an auxiliary concept needed in Windows to emulate the native behaviour of Linux/Unix user management
    Q: how can I keep the user from installing software while still giving him or her the full functionality of the installed software?
    A: what is the problem here? Desktop lockdown is mainly a Microsoft issue as well.

    What I’m trying to say is this: Microsoft may not yet be dead, but it’s true, they’re not paddling much faster than a dead duck. In part, the workarounds that they had to come up with and that made Windows so weird to begin with have now become “features” that people want to see implemented in alternative systems. Microsoft’s current success strategy is based on inertia, which is why they have such a hard time innovating.

    They will be around for quite a bit longer, sure, but what the posting said is this: no one is afraid of them anymore. Sure, they’re still a 500 pound gorilla, but it’s not an angry gorilla anymore, it’s a well fed, fat and lazy gorilla. All it does is try to defend what it has. The future will tell how successful it was with that.

    pj

  23. ECA says:

    I love it, when…
    someone that chimes in, has Little or no knowledge Of the Past, or Current developements…In Hardware or Software…
    MS isnt INTO networks…To a point they HATE them, and have lettle protection. If you look at Windows, MOST of the networking is done but OTHERS software…The CHEAP STUFF…

    I love you folks that have only USED 1-2 environments, and NEVER looked any further or had experience with BETTER. Many of you dont remember and have Never used to OLD Mainframes, and tried to tinker with them.

    THINK…
    A person in Europe HACKS into the CIA? and is arrested…
    I wonder what they were USEING at the CIA.
    did they use a recoursive Password system, a Muti-password system, a LONG password… Before you enter, you MUST recive a COOKIE, and if you strike out….the system TELLS US, WHO and where you are…
    Was someone MONITORING the system?? 3 strikes you are OUT and we are TRACKING you….
    Even TV has shown better protection scemes(sp) then what this person PROBABLY had to get threw…

    Anything can be HACKED, and ANYTHINg can be protected….IF YOU THINK…

  24. Adi says:

    Lol. Its so entertaining to see Dvorak bait both the Windows crowd and Apple crowd with his columns.

    But whats even more entertaining is all the apple fanboys aka iFags and linuxheads aka bolsheviks bash, bash and bash Microsoft. The world innovates on the shoulders of Microsoft buddy, the 95percenters out there aren’t stuck doing nothing. But I’m gonna save my breath because Cult of Mac is pointless to argue with. Just go back 10 years ago and watch the Jobs keynote and MacWorld, for Apple to succeed doesn’t mean MS has to lose. But iFags can’t get over that.

  25. doug says:

    #16. “So the fact that Microsoft fails in every single thing it attempts other than its two monopolies is irrelevant?! That’s so fucking asinine I can’t even think of a response. It’d be like responding to a baby’s babbling.”

    Nonsense. The purpose of a corporation is to make money, not to make cool things. Microsoft makes LOTS of money at its core business, which is selling Windows to OEMs and Office to OEMs and businesses. Not cool, but very profitable.

    Cool things like the Zune and the XBox (or uncool things like Bob or WebTV) are more or less just little side projects to test the waters in new markets. Whether they succeed or fail does not have any impact upon whether MS succeeds or fails. If the XBox had tanked when it was released, MS would have called it a learning experience and moved on.

    You don’t respond because there is no response. MS is an exceedingly profitable company. It is not dying and will not die anytime in the future.

    Having a monopoly means it has a huge amount of inertia on its side. Institutions like government and business are not just going to jump ship when some snazzy webapp comes along – the transition costs are high and there is no compelling reason whatsoever to do so. Not yet, and not for the forseeable future.

    #19. gracias.

  26. bs says:

    #22 Altiris and Novell maybe, but NO OS there, and no one to take their place. And that was my point. Products that bold onto Microsoft NEED Microsoft to stay alive, Altiris would be dead without MS and Novell actually would be too (unless you count the billions they have made with Li… oh wait nevermind). If you want to talk about a dead company, look up Novell.. Hope you sold that stock long ago.

    I have used Altiris, and currently hold certifications in MS, Novell, and Citrix, and make a very good living doing this every day.

    Also, you dont have to use drive letters in MS if you dont want to, UNC’s, mount points and redirections work just fine. Drive letters are mainly still used for the end user’s convenience, not out a lack of ability to present the data otherwise.

    Regarding user provisioning, I was referring to Enterprise Active Directory users (or LDAP for the Linux fanboys). And yes there is a need for this.

    Regarding Linux software installs, it isn’t a problem for you because the user’s cant figure out how to install the user if they tried.

  27. bs says:

    Sic…That was they couldn’t figure out how to install the software if they tried.

  28. KVolk says:

    I think the on going “debate” about the relevance of Microsaft is much ado about nothing. They will be dead when they aren’t making money not before then. I don’t see that happening any time soon since they won’t go from billions in revenue to zero very quickly. To me this debate is like those endless conversations about what is the greatest/worst sports team etc. Makes for a good conversation over a beer but has about the same relevance to everyday life.

  29. ECA says:

    24,

    the problems come in many folds…
    There have been some WONDERFUL OS’s out there, that Fell beside the wayside. BECAUSE someone didnt see What it was.
    Ms has Steam rolled over Everyone and everything with CHEAP crap; Buying out the competition, and Overwhelming the world any time someone has a DECENT product.

    Looking at the world picture…
    Europe, India, Taiwan, Pakistan, and many other countries are dropping MS..
    If you are using your system to type letter, and do spread sheets, you can Use a C64.
    Linux could and IS making a stand, and Many venders are upping the antie by making drivers that WORK also for Linux.
    Unix isnt standing around either.

    The ONLY reason to Jump ON the MS bandwagon, is for GAMING and ALL the pretty Pictures…
    If MS would DUMP all these protections, and OPEN the OS up to the gaming world, or MAKE an OS just for a gaming environment(IT WONT HAPPEN)(Look at the 360, after all that was done with the Xbox)…
    MS could make ALOT of money.

  30. Martez says:

    Old news!


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