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Message
Microsoft's worst nightmare coming true
Posted on 12/3/12 at 5:42 pm
Posted on 12/3/12 at 5:42 pm
quote:
Almost one year ago today, we laid out the nightmare scenario for Microsoft (MSFT) that could lead to its business collapsing. After laying it all out, we concluded, "Fortunately for Microsoft, none of this is going to happen."
We were wrong.
A lot changed in the last year. Microsoft's nightmare scenario is actually starting to take hold. We're revisiting our slideshow from last year to see how things have played out.
Each number that follows has one piece of the nightmare scenario for Microsoft and an explanation of where Microsoft stands in comparison to that hypothetical situation.
1. The iPad eats the consumer PC market.
2. Employees gradually switch away from using Windows PCs for work.
3. Windows 8 fails to stop the iPad.
4. Loyal developers start to leave the Microsoft platform.
5. 5. Windows Phone gets no traction despite the Nokia deal and RIM's collapse.
6. Office loses relevance.
7. Microsoft's other business applications start to erode.
8. The platform business collapses.
9. The Xbox was never going to make up the slack, and Microsoft can no longer afford to keep investing in it.
10. Microsoft suffers a huge quarterly loss. Ballmer retires to play golf.
In the long term ...
Is this just a bad dream?
Last year, we concluded by saying, "Fortunately for Microsoft, none of this is going to happen. Windows 8 will reassert the dominance of the Windows PC. Office and other business products will remain corporate necessities, and developers will never be able to ignore Microsoft. Windows Phone will become a viable third mobile platform, the Xbox will continue to dominate the living room, and new products will surprise the pundits who thought Microsoft couldn't innovate. Even Bing will finally make a profit someday."
This year, it's a lot harder to say much of that. Windows 8 doesn't seem to be reasserting the dominance of the PC. Windows Phone is not a viable third platform. Bing is still burning money. The Microsoft nightmare scenario is actually becoming a reality.
LINK
This post was edited on 12/3/12 at 6:40 pm
11
Posted on 12/3/12 at 6:05 pm to rickgrimes
I just bought a brand new windows 8 PC. I also don't see many companies leaving Microsoft behind due to the strength of their server software.
Posted on 12/3/12 at 6:10 pm to rickgrimes
I love how those requirements are written to be correct no matter what, and yet only 2 or 3 of them are actually relevant.
Posted on 12/3/12 at 6:11 pm to schexyoung
Hopefully you sold your microsoft stock a year ago
Posted on 12/3/12 at 6:42 pm to schexyoung
quote:
I just bought a brand new windows 8 PC.
1. The iPad eats the consumer PC market.
This is happening right now. In the third quarter of 2012, PC sales were down 8 percent on a year-over-year basis worldwide. In the U.S., sales were down 14 percent. A big chunk of the decline can be attributed to the rise of the iPad. Apple sold 14 million iPads last quarter, which is more than the top PC maker, Lenovo, which shipped 13.7 million PCs. Throw in Apple's 4.9 million Macs, and it's the top computer maker by a mile.
quote:
I also don't see many companies leaving Microsoft behind due to the strength of their server software.
6. Office loses relevance.
Microsoft's Office has been a juggernaut. In fiscal 2012, the Microsoft business division did ~$24 billion in sales.
Last year, we cautioned, "Office runs only on Microsoft platforms and the Mac. As employees start to do more and more work from non-Windows smartphones and iPads, companies may start to question why they're still buying Office for every employee and upgrading it every two or three releases."
The death of Office, has not happened, though. Despite Google's attempt to create Docs, companies aren't giving up on Excel.
7. Microsoft's other business applications start to erode.
If Windows continues to fade, and if Office starts to fade, then corporations have less reason to adopt Microsoft technologies on the back end like Exchange Server for email, SharePoint Server for collaboration, Lync for videoconferencing and real-time communication, and Dynamics for CRM and accounting.
Exchange, SharePoint, and Dynamics all bring in more than $1 billion per year, and Lync is Microsoft's fastest growing business application. Plus, they pull through a lot of other Microsoft products. ...
8. The platform business collapses.
For the last decade, Microsoft's fastest growing business segment has been Server & Tools, which did $7.4 billion in sales last year.
A lot of these sales come because Microsoft business apps — Exchange, SharePoint, and Dynamics — require these products. But as companies stop buying these apps, they will have less reason to buy the Microsoft platform products that run them, and the System Center ($1 billion+) products used to manage them.
Posted on 12/3/12 at 6:52 pm to rickgrimes
quote:
Exchange, SharePoint, and Dynamics all bring in more than $1 billion per year, and Lync is Microsoft's fastest growing business application. Plus, they pull through a lot of other Microsoft products. ...
Exchange and sharepoint have a lot of sticky in them. And exchange is still the best email/cal server.
I do think MSFT is kinda fricked. But I also think appl is fricked.
Posted on 12/3/12 at 8:51 pm to schexyoung
quote:
I just bought a brand new windows 8 PC. I also don't see many companies leaving Microsoft behind due to the strength of their server software.
It's happening big time. I see more and more field sales reps using iPads instead of a laptop at all.
Posted on 12/3/12 at 8:51 pm to buddhavista
quote:
Exchange and sharepoint have a lot of sticky in them. And exchange is still the best email/cal server.
Companies running on Exchange are living in the past. Google Apps is much better.
Posted on 12/3/12 at 9:06 pm to rickgrimes
so you're saying i should sell my microsoft stock? I have about 200 shares, I have not been able to pay much attention to the market this year.
Posted on 12/3/12 at 10:11 pm to lighter345
MSFT will remain a value stock. They have such a hold on the corporate world that even if the typical Joe were a bit disgruntled with Windows 8 it would be offset by the fact that a vast majority of companies use Microsoft. I wouldn't really invest in them now because I don't see too much growth from here on out.
Posted on 12/3/12 at 10:55 pm to nolanola
quote:
Companies running on Exchange are living in the past.
True.
quote:
Google Apps is much better.
Better than Exchange. Not better than Outlook.com.
MSFT has actually built a very good overall offering. Skydrive and outlook.com are outstanding and better than what Google has.
MSFT's biggest problem is penetrating the phone/tablet market. They are trying hard to get there but it remains to be seen how it'll work out.
Posted on 12/4/12 at 12:06 am to rickgrimes
No mention on Bing?
They were losing $1 billion per quarter on Bing in '11. I think a few of us here could push a better product out if we had a $1 billion let alone $4 billion and all the rest that they wasted on Bing.
They were losing $1 billion per quarter on Bing in '11. I think a few of us here could push a better product out if we had a $1 billion let alone $4 billion and all the rest that they wasted on Bing.
Posted on 12/4/12 at 5:35 am to rickgrimes
do you really use Yahool for market and financial information?
Kinda like using MSNBC for fair and balanced reporting
Kinda like using MSNBC for fair and balanced reporting
Posted on 12/4/12 at 8:31 am to schexyoung
quote:
I also don't see many companies leaving Microsoft behind due to the strength of their server software.
Same here. Microsoft is the go-to for business. That hasn't changed and I don't see that changing in the near future.
This post was edited on 12/4/12 at 8:34 am
Posted on 12/4/12 at 8:31 am to rickgrimes
MSFT is in position to take over the tech world right now. Windows 8 is a great OS that will gain momentum as the PCs are rolled out and the corporate world adapts to it. This isnt going to be a 2 month surge.
What the frick? This is garbage.
Huh?
Way better than RIM and in position to take over the corporate phone accounts from them. No other company will be able to offer the integration that MSFT will have there. Let alone the fact that Apple and Google seem more interested with personal phone use with their devices.
quote:
4. Loyal developers start to leave the Microsoft platform.
What the frick? This is garbage.
quote:
Windows Phone is not a viable third platform
Huh?
Way better than RIM and in position to take over the corporate phone accounts from them. No other company will be able to offer the integration that MSFT will have there. Let alone the fact that Apple and Google seem more interested with personal phone use with their devices.
Posted on 12/4/12 at 11:21 am to nolanola
quote:
Companies running on Exchange are living in the past. Google Apps is much better.
depends on the size of the company, and what they want to accomplish.
Outlook is still sticky though, so is sharepoint. I used to work on a sharepoint competitor product, and our product was cheaper, and more functional plus lower skills barrier. All the MSFT shops were like - well, how does your product work wiht sharepoint? They couldn't get rid of it.
Posted on 12/4/12 at 11:31 am to rickgrimes
I think money board traffic would increase if we all go ahead and admit we have factions like the rant. Positigers vs negatigers, Team Lee vs Team Swag. We have MSFT vs AAPL
Posted on 12/4/12 at 11:22 pm to Catman88
quote:
Huh?
Way better than RIM and in position to take over the corporate phone accounts from them. No other company will be able to offer the integration that MSFT will have there. Let alone the fact that Apple and Google seem more interested with personal phone use with their devices.
I don't know of one company rolling out corporate Windows phones or tablets. Everyone I know is getting an iPhone or Android smartphone.
Posted on 12/5/12 at 7:47 am to nolanola
The 8 phone is just now being rolled out Im not sure what you expect. Corporations WILL move to 8 as the service expires and they will want integration where they can use their corp security on their phones something the iPhone is pathetic at. The iPhone is a great toy but cant even set an out of office and is pretty bad at mail folder management and notification. The RIM phones were much better for companies but they are sinking. MSFT has the ability to do something there with windows 8 that no other company can touch.
Posted on 12/5/12 at 7:56 am to Catman88
My company requires you to buy your own phone if you want an iPhone or Android. (If you can handle a Blackberry, it's free.) We use the Good app for email and calendar and it sucks BALLS. I've never used a Blackberry, but it has to be better for corporate stuff. Just give me a secure version of Hotmail. Shouldn't be hard.
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