Comments on: The Future is Online – Is the cost going to drive Microsoft out of business? http://stateless.geek.nz/2006/06/06/the-future-is-online-is-the-cost-going-to-drive-microsoft-out-of-business/ Mon, 06 Feb 2012 01:02:40 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Richard Parry http://stateless.geek.nz/2006/06/06/the-future-is-online-is-the-cost-going-to-drive-microsoft-out-of-business/comment-page-1/#comment-359 Richard Parry Wed, 07 Jun 2006 06:35:52 +0000 http://stateless.geek.nz/2006/06/06/the-future-is-online-is-the-cost-going-to-drive-microsoft-out-of-business/#comment-359 Diversification and commoditisation are cornerstones of Microsoft's business. If you take the stats of installed servers in isolation you might consider it's a lot, but they're using them to enter a lot of business states: 1. Mobile computing. 2. Search engines. 3. Gaming (Xbox Live). They don't want to compete with, say, Google - they want to compete with the world. I doubt that their investment in hardware will undermine their business especially with maturing technologies like VMWare or Virtual Server (which they own). They've stated recently that Windows and Live Anywhere are two key strategies for owning your soul, so watch out for that. I would be expecting a new tablet/portable device to support mobile entertainment in conjunction with Vista, all tied nicely in with Xbox Live and your new X360. Consumers drive the economy, and if you can sell enough Xboxes to enough people it's a bit of a no brainer. Their market economy for Live is driven by subscription, and because it's a captive market that offers solution no one else does, they're going to rake the profits of that for a while. Sony might catch up with the PS/3, but they might not - and at that point, MS will have seen ROI on their server investments (for say gaming). I think it's romantically attractive to think Microsoft are going to go out of business but not really feasible. As a player in a major corporate here, I can see Microsoft doing more innovative things to capture our dollar than IBM and HP ever are, no matter how remade they might be :) Diversification and commoditisation are cornerstones of Microsoft’s business. If you take the stats of installed servers in isolation you might consider it’s a lot, but they’re using them to enter a lot of business states:

1. Mobile computing.
2. Search engines.
3. Gaming (Xbox Live).

They don’t want to compete with, say, Google – they want to compete with the world. I doubt that their investment in hardware will undermine their business especially with maturing technologies like VMWare or Virtual Server (which they own).

They’ve stated recently that Windows and Live Anywhere are two key strategies for owning your soul, so watch out for that. I would be expecting a new tablet/portable device to support mobile entertainment in conjunction with Vista, all tied nicely in with Xbox Live and your new X360. Consumers drive the economy, and if you can sell enough Xboxes to enough people it’s a bit of a no brainer.

Their market economy for Live is driven by subscription, and because it’s a captive market that offers solution no one else does, they’re going to rake the profits of that for a while. Sony might catch up with the PS/3, but they might not – and at that point, MS will have seen ROI on their server investments (for say gaming).

I think it’s romantically attractive to think Microsoft are going to go out of business but not really feasible. As a player in a major corporate here, I can see Microsoft doing more innovative things to capture our dollar than IBM and HP ever are, no matter how remade they might be :)

]]> By: Robin Harris http://stateless.geek.nz/2006/06/06/the-future-is-online-is-the-cost-going-to-drive-microsoft-out-of-business/comment-page-1/#comment-358 Robin Harris Tue, 06 Jun 2006 12:04:05 +0000 http://stateless.geek.nz/2006/06/06/the-future-is-online-is-the-cost-going-to-drive-microsoft-out-of-business/#comment-358 Microsoft may be a brutal monopolist with some of the highest profit margins outside of organized crime, but they have not, IMHO, shown the ability to re-invent themselves that IBM and HP have. They are still very much a creature of Bill's personal vision, which has always been about the small-scale use of computers. While they can obviously buy anything they want, including visionairies, if they pick the wrong vision they still get stuck. Letting go of the Windows/Office franchise at the right time will be their challenge. It takes a long time for highly profitable multi-billion dollar businesses to fail. Look instead for increasing irrelevance, even with increasing profitability, as the marker for their eventual decline. Microsoft may be a brutal monopolist with some of the highest profit margins outside of organized crime, but they have not, IMHO, shown the ability to re-invent themselves that IBM and HP have. They are still very much a creature of Bill’s personal vision, which has always been about the small-scale use of computers. While they can obviously buy anything they want, including visionairies, if they pick the wrong vision they still get stuck.

Letting go of the Windows/Office franchise at the right time will be their challenge. It takes a long time for highly profitable multi-billion dollar businesses to fail. Look instead for increasing irrelevance, even with increasing profitability, as the marker for their eventual decline.

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