Microsoft's Shifting Strategy in Response to Apple

[IJ Reilly]

Not so much of a different approach as it is a better relationship with the hardware that runs their software. Think of it as Microsoft trying to improve the consistency between their products.

Assuming they haven't been trying to do this for years, which of course they have. The comparison with Apple is the real tip-off that they want to duplicate what Apple is doing with user experience, while making the fewest possible changes to the way they're accustomed to operating. It's a mugwump strategy. Good luck, I say.

I don't think they're flailing at all. I can guarantee you Ballmer will have agreements with HP, Dell and the other big boys already as to what is an acceptable build for a Windows machine. They next key thing is to get them to remove the pre-installed crapware - this seems to be working with Sony.

We'll see. As I said before, I think most of this will take the form of jawboning plus amped up marketing, but little change in substance. IOW, the standard Microsoft approach.

 

[chris200x9]

People who believe that are setting themselves up for failure or mediocrity. Great businesses focus on making great products. People want great products. They don't care whether you make a profit or not.

I disagree a great product is the effect not the driving force, the driving force is to make a profit then with competition factored in to achieve your primary goal you need to make a great product. Any company that sells a product gets complacent and eventually turns out a crappy product unless they have competition. I say any company that sells a product because various free and open-source products do just strive to be the best that can be, but when you mix capitalism in with a company and you honestly think it's just being "the best you can be" sorry to say you are delusional.

 

[Syrus28]

Assuming they haven't been trying to do this for years, which of course they have. The comparison with Apple is the real tip-off that they want to duplicate what Apple is doing with user experience, while making the fewest possible changes to the way they're accustomed to operating. It's a mugwump strategy. Good luck, I say.

I'm curious as to what you'd do in Microsoft's position.

We'll see. As I said before, I think most of this will take the form of jawboning plus amped up marketing, but little change in substance. IOW, the standard Microsoft approach.

You never know. Whatever the case, it'll be interesting to see how things turn out.

 

[businezguy]

What this really comes down to is that Microsoft's success with the so-called "component model" was a fluke, an historical anomaly. It would be difficult to find another example of where it worked well for anyone else at any other time, including for Microsoft. They are just learning this it seems, having failed to implement it successfully in other markets. I think they're going to continue to struggle to get the same "seamless experience" out of the Windows PC market that Apple offers. They just don't have that sort of control over the OEMs -- in fact, they have less control today than they did just a few years ago. They're going to continue to jawbone the issue, but produce little. That's my prediction.

I absolutely agree with your point of view, and have been saying it for a long time, especially during Microsoft's days of success. What really brought about their success was lack of a strong competitor. Beginning in 1997 Apple began to make significant improvements and planned well for the future, and that has brought about this significant change.

Microsoft should have some pretty rough and challenging years ahead, and not just from Apple. The market is less favorable towards Microsoft's business model and expensive licensing costs. Quite frankly, for what is paid, Microsoft's support is very poor, and has gone down hill.

If the open source developers ever get their act together, Microsoft could really become diminished very quickly. Right now that doesn't seem very promising.

I doubt that Apple is going to challenge Microsoft enough to bring them down very quickly, but over the next 5 to 10 years, they should be greatly diminished in their power and influence.

 

[IJ Reilly]

I'm curious as to what you'd do in Microsoft's position.

Shut it all down and return the money to the stockholders?

Seriously, I think they need to reinvent their corporate culture from the top down, which has been built on a kind of arrogant inevitability that they will win every time, just because they're Microsoft, and on the assumption most people won't even stop to consider whether they've got a choice. They've spent so many years working so hard to eliminate consumer choice that they don't quite know how to address the challenge, now that they are faced with at least one competitor that won't back down or roll over. They need to refocus their efforts on building products that people actually desire, not that they feel a need to buy because they feel they don't have an alternative.

Even if Microsoft's management understood these problems, I don't think they could make the shift. They won't I believe until they're faced with a crisis like GM is faced with today. Almost by definition, the problems at companies which are saddled with sick corporate cultures are obvious to everyone on the outside and hardly anyone on the inside.

 

[Digital Skunk]

I don't think they're flailing at all. I can guarantee you Ballmer will have agreements with HP, Dell and the other big boys already as to what is an acceptable build for a Windows machine. They next key thing is to get them to remove the pre-installed crapware - this seems to be working with Sony.

Not to mention a jacked up price for PC hardware. People won't be paying for the $500 PC that hasn't even gone through QC anymore. PCs would start out at the typical Mac $800 price.

...most of this will take the form of jawboning plus amped up marketing, but little change in substance. IOW, the standard Microsoft approach.

Agreed.

Shut it all down and return the money to the stockholders?

Agreed, take a break more like it and rethink/rework the entire company from culture to infrastructure, etc.

Seriously, I think they need to reinvent their corporate culture from the top down, which has been built on a kind of arrogant inevitability that they will win every time, just because they're Microsoft, and on the assumption most people won't even stop to consider whether they've got a choice.

Double agreed. I would love to have the best of Windows PCs and Macs, but the limited use of Windows keeps me from owning those niche model PCs (19" laptops with SLI and 3 HDD for starters) and it won't change unless MS brings some real company improvements to the table that can produce a useable, expandable, integrated OS that is on par with the Apple stuff.

 

[IJ Reilly]

Just for clarification if it's necessary: For 20 years at least, Microsoft thrived on the conventional wisdom that they'd created the "standards," and that anybody else's product was by definition "non-standard" and buying one was a waste of time and money and foolish besides. This concept isn't entirely dead (see any given thread here about Office), but it has faded quite a bit over last few years as Apple has become resurgent, but also as it's become increasing clear to more and more people that Microsoft knows it doesn't have to work very hard to sell products to customers who don't even seem to want a choice.

I take the Ballmer memo as a realization that Microsoft now has to compete on merit, not inevitability. This is pretty much a new concept for them. I think it will take them some time to figure out the implications.

 

[thecartoonguy]

Shut it all down and return the money to the stockholders?

Seriously, I think they need to reinvent their corporate culture from the top down, which has been built on a kind of arrogant inevitability that they will win every time, just because they're Microsoft, and on the assumption most people won't even stop to consider whether they've got a choice. They've spent so many years working so hard to eliminate consumer choice that they don't quite know how to address the challenge, now that they are faced with at least one competitor that won't back down or roll over. They need to refocus their efforts on building products that people actually desire, not that they feel a need to buy because they feel they don't have an alternative.

Even if Microsoft's management understood these problems, I don't think they could make the shift. They won't I believe until they're faced with a crisis like GM is faced with today. Almost by definition, the problems at companies which are saddled with sick corporate cultures are obvious to everyone on the outside and hardly anyone on the inside.

I foresee the end of Microsoft in it's current form within 12 years.

 

[chewietobbacca]

All this talk of Microsoft's demise makes me go

First of all, for those who keep saying that MS was a fluke, a quirk, that they shouldn't exist if certain things didn't happen, etc.

Well the simple fact is that most companies that get that big don't happen that often. And they certainly are historical milestones. But people will probably talk about Microsoft's past twenty years in the same vein as US Steel, Standard Oil, etc. - all of which required a certain amount of luck along with shrewd business plans, tactics, and strong-arming. I can see in a hundred years how people may speak of Bill Gates in the same vein we speak of Carnegie, Rockefeller, etc.

Apple's biggest strength is in its software, often in spite of the hardware selection. People saying that Apple provides superior hardware on its Macs are kidding themselves - they're the same platforms now and they're all made by Intel. All the other companies use it as well. What separates them, however, is that Apple delivers a full standardized package with its biggest strength: the OS. However, that also limits sales in some ways because hardware needs sometimes trump software needs. As already pointed out in this thread, people might want a discrete GPU but don't want a larger screen. People saying that's not valid might as well say its not valid that you can't have different types of cars Fact is, people have different needs and want it, can't get it, but it doesn't make their argument any less legitimate. And I do foresee a time when Apple realizes that if it really wants to take big chunk out of the OS market share, it will have to expand its platform and eat the ills that come with it. Look at the iPhone and exclusive carriers - not only have many governments forced Apple to unlock their phones from carriers by law, but Apple has given the perception at least that they're no longer as demanding of exclusive carriers in the future. It has been very subtle but more than a few users on these forums have noticed it as well. The reason is that they've realized that artificial limitations get removed when pressure from the market says so.

And for those who say that Apple makes the best product regardless of competition and profit - don't kid yourselves. This is the high tech industry we're talking about. Making the best product is often required to survive but the fact is, making the best profits and returns for your shareholders matters the most. And look no further than the hardware industry to see examples of this. Intel was the clear leader in CPUs when they launched the disaster called Pentium 4 / Netburst. They were selling $1000 CPUs that offered little performance increase over $500 CPUs, etc. Then AMD came along with K8 and set Intel straight. Without AMD, we would probably never have seen Intel kickin butt these days with the Core architecture and soon Nehalem. At the same time though, AMD had grown complacent with K8 and when Intel came back with a vengeance, they had their pants down and are now nearing the point where running out of business is a distinct possibility.

Or another example: Nvidia vs. ATI most recently. Just look at Nvidia's shares this past month after nearly 2 years of complete domination. Or look back in the history of Apple and their dark dark days, or even earlier when they were relatively dominating the market and fell.

As far as why Microsoft *is* in markets beyond the OS and enterprise is simple - they want to not only diversify what they offer, but expand upon the capabilities of their OS.

Yes, the PS3 is outselling the XBOX 360 worldwide and the Wii is outselling all of them as well (though I don't consider the Wii a console of the same generation actually - when you think about it, it is a unique entertainment center with no equivalent so its really in its own market, most people who own a Wii and continue to use its software aren't in the same market as the PS3 or 360 really), but what we've seen this past generation of consoles is that developers of games are no longer willing to tie themselves to platforms dictated by a company. For example, they just announced that the next Final Fantasy is going to no longer be PS exclusive - it will be on 360 and PC as well as PS3. What developers have found is that because the 360 is based on the DirectX platform and so on, ports between 360 and PC and not to mention the coding for it can be reduced and eased, reducing development costs and increasing potential market.

All the talks of destroying the 360 division is ridiculous - yes, it took forever for them to make profits out of the division, but MS has the money to cover those losses pretty easily. And most of the failure wasn't in the OS at all - it was in hardware, which MS has not had a lot of experience in. Certainly lessons learned here will help them in their next generation, as the rest of the platforms hardware was pretty damn good, it was just suffering from overheating and other issues that small systems (relative to a tower PC) all suffer from.

However, seeing as how the 360 was an end-to-end platform, and one that ushered in the era of online consoles, the XBOX division is actually likely to be Microsoft's hardware basis for the future. As the capability of consoles increasingly mirror's PC's (GPU's for the PS3 are from nvidia, the 360 is by ATI, both have CPUs now, etc.), MS can see the 360 division as a future market to bring their OS and systems, in a more closed end-to-end solution certainly, but a future market nontheless.

The same goes for Windows Mobile, which has still been making money no less. But either way, the fact is that they are using it as an extension of their OS division into new markets. All this talk that they should cut out of a lot of places can apply to them trying to compete with Google by buying Yahoo and so on, and that is certainly valid. But telling them to cut the 360 and WindowsMobile is just wishful thinking. They're far more applicable to their roots, aka their operating system, than most people realize.

As far as MS ever goes for making their own hardware for PCs, it won't happen. They make their money by selling OS licenses to major OEMs and companies - forcing people to use their hardware or competing against people selling their OS's would only be counter productive. Apple is the exact opposite of course, selling OS only tied to their own hardware but they dont' compete against any other manufacturers on their OS. But MS is where MS is today because they didn't tie their OS to any hardware. That's why they grew so fast. For those that don't remember, the advent of PCs tied OS to hardware and you really had a choice only between IBM or Apple. Then MS came along and sold an OS that wasn't limited and they basically told hardware companies to worry about the hardware, they'd take care of the software part, and the rest is history.

All this talk of MS losing their power and so on might only be applicable in the consumer market - in the enterprise market, MS is firmly entrenched. They still continue to offer the best solution in the global business and economy, and the fact is, no other companies have bothered really to compete with them. Apple has certainly made hints at challenging them, but only indirectly, and their biggest foray was really in the iPhone. And even then, they still ended up using Exchange servers and so on, simply because companies won't just move away from something that has served them well. And MS Office still reigns king in the office software suite.

Yes, Vista had a rocky first year, but they *are* still selling Vista and a lot of people that once refused to upgrade have adopted it now. Personally, my enthusiast PC runs Vista Ultimate x64 and its far more rock solid and stable than any previous Windows OS i've used. The only driver issues I've had are from my Nvidia GPU. And that reminds me, all this FUD that Vista causes driver issues is a joke. Vista drivers are mostly written by the companies and if their drivers don't work, its cause the company failed to support their product (*cough* Creative *cough*). Even Macs have to have their drivers written and supported by their respective hardware companies. Funny fact though, something like 30-40% of driver issues with Vista were caused by Nvidia's drivers

As far as what MS is going to do, in the near and long term future, I can see them developing two OS's based on the same platform / framework. One is a continuation of what Windows has been - a very open platform that has a wide range of hardware and legacy support but all the ills that cane come with that as well. But that would likely be catered to power-users/enthusiasts and business/enterprise which already has a lot of requirements that can't possibly be contained to one hardware platform. But I can also an OS tailored to end-to-end, perhaps even specified for OEM needs. Vista was a bit of a beginning of this with a lot of features that controlled the OS that were never seen in XP or predecessors, such as UAC and security measures. I can see this expanding in the future much as they've done with the 360 platform and WinMo and eventually they will converge.

 

[Syrus28]

I foresee the end of Microsoft in it's current form within 12 years.

Microsoft pulls in about $60 billion a year (more than twice as much as Apple) with about $30 Billion in cash (more than twice as much as Apple) and is seeing double digit growths across the board. You can hate Microsoft all you want the the fact is that Microsoft is very effective at what it does.

Now here comes along Apple, who currently resides at, what? 4% market share, and takes advantage of Microsoft's less than stellar OS release (Vista) and your are calling the end of Microsoft?

 

[Syrus28]

Just for clarification if it's necessary: For 20 years at least, Microsoft thrived on the conventional wisdom that they'd created the "standards," and that anybody else's product was by definition "non-standard" and buying one was a waste of time and money and foolish besides. This concept isn't entirely dead (see any given thread here about Office), but it has faded quite a bit over last few years as Apple has become resurgent, but also as it's become increasing clear to more and more people that Microsoft knows it doesn't have to work very hard to sell products to customers who don't even seem to want a choice.

And for the last 20 years, their products have been the standards. Standards, by definition is "an object that is regarded as the usual or most common size or form of its kind." Only today, when they've faced some decent competition (Apple & Google) have they needed to work hard. Believe it or not, companies don't make good products for the good of the world. They make it for profit, and considering there was no competition to contest that profit, Microsoft slacked off. You can't blame that on Microsoft. What good company in their right mind would spend *extra* millions on developing a product that would bring them no more money than they were making before? Not Apple, not Google, no one would.

However, the next part is where our opinions differ. You seem to think Microsoft "lost" (or never had, considering on your view) the talent to make good products. I don't think they did. The Xbox and Zune prove that. These 2 products (especially the Xbox) have helped Microsoft completely changed its image to the younger populace in the last few years. Before, Microsoft was a company you couldn't really feel for. People only knew Microsoft = why my computer works. Now? Well now they have the largest online gaming community with Xbox Live and is pushing "the social" (abeit slowly ) with the Zune. Games like Halo have their own cult following (not unlike Apple), with Microsoft even negotiating movie deals based on the IPs. This, to me, is the kind of change Microsoft needs.

I take the Ballmer memo as a realization that Microsoft now has to compete on merit, not inevitability. This is pretty much a new concept for them. I think it will take them some time to figure out the implications.

If you say so... I think this change was a long time in the making. Again, the Xbox and Zune are at the forefront of this "change". With the acquisition of Danger, Windows Mobile may get there eventually. Really, the only part lacking is Windows.

 

[Syrus28]

Not to mention a jacked up price for PC hardware. People won't be paying for the $500 PC that hasn't even gone through QC anymore. PCs would start out at the typical Mac $800 price.

Since when is $800 the typical Mac Price?

Agreed, take a break more like it and rethink/rework the entire company from culture to infrastructure, etc.

Yeah, because Microsoft is in suuuuch bad shape, bringing in $60 billion a year... Such drastic changes are only for the failing...which Microsoft is not.

Double agreed. I would love to have the best of Windows PCs and Macs, but the limited use of Windows keeps me from owning those niche model PCs (19" laptops with SLI and 3 HDD for starters) and it won't change unless MS brings some real company improvements to the table that can produce a useable, expandable, integrated OS that is on par with the Apple stuff.

Here I agree. But Window's flaws are overstated. Microsoft does need to provide a more complete experience, which seems exactly what they plan on doing.

 

[IJ Reilly]

And for the last 20 years, their products have been the standards. Standards, by definition is "an object that is regarded as the usual or most common size or form of its kind." Only today, when they've faced some decent competition (Apple & Google) have they needed to work hard. Believe it or not, companies don't make good products for the good of the world. They make it for profit, and considering there was no competition to contest that profit, Microsoft slacked off. You can't blame that on Microsoft. What good company in their right mind would spend *extra* millions on developing a product that would bring them no more money than they were making before? Not Apple, not Google, no one would.

They're products, not "standards." If a commercial products becomes a "standard," then it's effectively no different than a public utility. For years now when faced with the "Microsoft is the standard" argument, I've been asking the rhetorical question, "then do you want Microsoft's products to be regulated like a public utility?" Of course not is the inevitable answer. So stop calling them "standards" then, because that implies that we don't need and maybe should not even want, a choice. They're commercial products.

However, the next part is where our opinions differ. You seem to think Microsoft "lost" (or never had, considering on your view) the talent to make good products. I don't think they did. The Xbox and Zune prove that. These 2 products (especially the Xbox) have helped Microsoft completely changed its image to the younger populace in the last few years. Before, Microsoft was a company you couldn't really feel for. People only knew Microsoft = why my computer works. Now? Well now they have the largest online gaming community with Xbox Live and is pushing "the social" (abeit slowly ) with the Zune. Games like Halo have their own cult following (not unlike Apple), with Microsoft even negotiating movie deals based on the IPs. This, to me, is the kind of change Microsoft needs.

The point I am making is that they never had to work every hard once the DOS/Windows effective monopoly was established, which it was almost from the start. In fact, Microsoft has worked harder at eliminating competitors by any means necessary, and protecting that market power, than they have at developing quality products. This is why they've spent so much time in court, and why they lose just about every time.

If you say so... I think this change was a long time in the making. Again, the Xbox and Zune are at the forefront of this "change". With the acquisition of Danger, Windows Mobile may get there eventually. Really, the only part lacking is Windows.

Maybe, but again, I take pains to point out, Microsoft apparently hasn't got the talent for making new products profitable. And having Windows be the laggard is a big issue since this is the cash cow that gives them the luxury to lose billions chasing new markets.

 

[Syrus28]

They're products, not "standards." If a commercial products becomes a "standard," then it's effectively no different than a public utility. For years now when faced with the "Microsoft is the standard" argument, I've been asking the rhetorical question, "then do you want Microsoft's products to be regulated like a public utility?" Of course not is the inevitable answer. So stop calling them "standards" then, because that implies that we don't need and maybe should not even want, a choice. They're commercial products.

I'm not sure I get what you mean.

The point I am making is that they never had to work every hard once the DOS/Windows effective monopoly was established, which it was almost from the start. In fact, Microsoft has worked harder at eliminating competitors by any means necessary, and protecting that market power, than they have at developing quality products. This is why they've spent so much time in court, and why they lose just about every time.

Don't think Microsoft aren't the only ones who don't like competition. Microsoft has been taken to court numerous times for bundling Internet Explorer, Windows Media Player, and even a desktop search client (all features present in Mac OS X). When your constantly being hounded, it's not exactly easy to develop products to compete with the smaller competitors (who aren't exactly on the anyone's radar). It may sound like I'm excusing Microsoft's actions, but I'm simply saying its not that easy when your in their position.

Maybe, but again, I take pains to point out, Microsoft apparently hasn't got the talent for making new products profitable. And having Windows be the laggard is a big issue since this is the cash cow that gives them the luxury to lose billions chasing new markets.

Actually, Windows is the easiest product to deal with being the "laggard". In terms of "no compromises, and complete experiences", its lacking but in terms of profitability, nothing else even compares. The real problem would occur when its the other way around. This gives Microsoft some much needed time to explore new markets. But criticizing it because it doesn't lead to direct profits? Look at Amazon. The founder went into this not expecting to turn profits for 4-5 years. Turns out they didn't turn a profit until 2002, and overall, the entire investment has still outweighed the profits. However, they are making profits, which is the important part. It would be a different story if the E&D division were still loosing millions each quarter, but they aren't. I'm sure Microsoft would have been glad to be turning a profit the moment they entered the market in the conditions they did, but that's not really realistic.

 

[sushi]

XP had only the "Professional" and "Amateur" versions.

Actually, there were the following US versions:
- Home Edition
- Professional Edition
- Media Center Edition
- Tablet PC Edition
- Professional x64 Edition

Plus these other non-US versions:
- Start Edition - available in developing countries
- Home Edition N - available in Europe
- Professional Edition N - available in Europe

And let's not discuss language specific versions.

Too many IMHO.

 

[KillerTree]

What Mac(s) do you have?

Just get a Mac Pro with a Quadro FX 5600 and that will last you a long time.

A Mac Pro. Lasting 50% longer and costing 500% more.

 

[clevin]

Actually, there were the following US versions:
- Home Edition
- Professional Edition
- Media Center Edition
- Tablet PC Edition
- Professional x64 Edition

Plus these other non-US versions:
- Start Edition - available in developing countries
- Home Edition N - available in Europe
- Professional Edition N - available in Europe

And let's not discuss language specific versions.

Too many IMHO.

i think its natural result of the markets, Windows has too many users that range in various aspects to various degrees.

Simple example:

pro-N in EU, because EU think bundling windows media player violate anti-trust law.
start-ed in developing country, lower price.
Tablet PC edition, because there is tablet pc
...

Apple isn't in the position to worry about those right now, because it doesn't need to.

 

[sushi]

i think its natural result of the markets, Windows has too many users that range in various aspects to various degrees.

Simple example:

pro-N in EU, because EU think bundling windows media player violate anti-trust law.
start-ed in developing country, lower price.
Tablet PC edition, because there is tablet pc
...

Apple isn't in the position to worry about those right now, because it doesn't need to.

Good points.

However, just looking at the US versions, plus language dependent ones, like Japanese, there are still too many.

One nice thing about Mac OS X, is that there is one version regardless of computer or location. That is very convenient for the user. So when Snow Leopard comes out, I can purchase the family pack and install it on 5 Macs that, hardware wise, are compatible with the OS. I can install as US, Japanese, Korean, etc. Very convenient.

Unlike XP where if I want to install 5 copies, in the scenario above, I must purchase 3 copies of the English version, one copy of the Japanese version and one copy of the Korean version. And if I change my mind at a later date, and want two computers running the Korean one, I would need to purchased another copy. What a pain. With the Mac OS, I just change the language.

 

[clevin]

Unlike XP where if I want to install 5 copies, in the scenario above, I must purchase 3 copies of the English version, one copy of the Japanese version and one copy of the Korean version. And if I change my mind at a later date, and want two computers running the Korean one, I would need to purchased another copy.

actually, you don't, you can purchase all 5 in English version, and download language pack for free later.

 

[IJ Reilly]

I'm not sure I get what you mean.

To understand my point it may help to cast your mind back ten or more years, when the conventional wisdom went that Windows was the only operating system anyone should ever want. Many in the media endorsed the idea that competition in this market was not necessary and might actually be a bad thing. My response to this extremely puzzling but pervasive reasoning is that a single vendor for a product that everybody needs to use is an example of the public utility model. Think electricity or gas. Public utilities are government regulated private companies, for the most part. So as a practical matter, you either believe that competition is not only good but necessary, or you believe in a regulated utility. There's really no in between.

Don't think Microsoft aren't the only ones who don't like competition. Microsoft has been taken to court numerous times for bundling Internet Explorer, Windows Media Player, and even a desktop search client (all features present in Mac OS X). When your constantly being hounded, it's not exactly easy to develop products to compete with the smaller competitors (who aren't exactly on the anyone's radar). It may sound like I'm excusing Microsoft's actions, but I'm simply saying its not that easy when your in their position.

To say that Microsoft doesn't like competition is to vastly understate the case. Microsoft has had the power to thwart competition almost from the very start (a power most corporations never get), and more to the point, they have used it. Ruthlessly. They didn't blunder into encounters with antitrust law, they rushed towards them with abandon. This is why you've seen them in court, and pursued by governments, so often. Microsoft likes to argue that they're pursued on these issues because they're big and successful. But this is only a disingenuous cover story for the real reason, which is that they've deliberately abused their market power again and again to restrain trade.

Actually, Windows is the easiest product to deal with being the "laggard". In terms of "no compromises, and complete experiences", its lacking but in terms of profitability, nothing else even compares. The real problem would occur when its the other way around. This gives Microsoft some much needed time to explore new markets. But criticizing it because it doesn't lead to direct profits? Look at Amazon. The founder went into this not expecting to turn profits for 4-5 years. Turns out they didn't turn a profit until 2002, and overall, the entire investment has still outweighed the profits. However, they are making profits, which is the important part. It would be a different story if the E&D division were still loosing millions each quarter, but they aren't. I'm sure Microsoft would have been glad to be turning a profit the moment they entered the market in the conditions they did, but that's not really realistic.

Again, I would point to Apple, and the completely different expectation that they will deliver immediate profits on new products, even if they're opening entirely new markets for the company. I'd also point to the fact that have done so. If the iPod and the iPhone had been unprofitable for the first five years, I don't think we'd be talking about how they were good investments for the company. We'd be talking about how Apple had failed miserably.

I probably pointed this out before (it's been a long thread) but ironically, Microsoft has become the company they always derided, IBM. It was said of IBM that they'd take a year just to design an empty box. And ironically it was that very characteristic of IBM's MO that turned out to be such a huge windfall for Microsoft. Face it: Microsoft is a plodder. They have the classic 500 pound gorilla mentality. They're not going out of business by any means, but they aren't going to change in a hurry either.

 

[sushi]

actually, you don't, you can purchase all 5 in English version, and download language pack for free later.

Actually, there is a difference in the US versions and the Japanese versions.

For some software applications to work correctly, it requires the Japanese version and not the US version with the language packs.

BTW, Microsoft markets Office in different versions to the Japanese as well.

 

[Syrus28]

To understand my point it may help to cast your mind back ten or more years, when the conventional wisdom went that Windows was the only operating system anyone should ever want. Many in the media endorsed the idea that competition in this market was not necessary and might actually be a bad thing. My response to this extremely puzzling but pervasive reasoning is that a single vendor for a product that everybody needs to use is an example of the public utility model. Think electricity or gas. Public utilities are government regulated private companies, for the most part. So as a practical matter, you either believe that competition is not only good but necessary, or you believe in a regulated utility. There's really no in between.

I don't think it would be wise to cast my mind back that far . Besides, that I think I get what you mean.

To say that Microsoft doesn't like competition is to vastly understate the case. Microsoft has had the power to thwart competition almost from the very start (a power most corporations never get), and more to the point, they have used it. Ruthlessly. They didn't blunder into encounters with antitrust law, they rushed towards them with abandon. This is why you've seen them in court, and pursued by governments, so often. Microsoft likes to argue that they're pursued on these issues because they're big and successful. But this is only a disingenuous cover story for the real reason, which is that they've deliberately abused their market power again and again to restrain trade.

How about something more recent? We all know Microsoft's history in anti-competitive behavior, but everything their doing now leads me to believe they have changed (either willingly or forcefully). You see them putting effort behind developing new products, entering new markets and providing more "complete experiences" and yet now complain they they don't return an immediate profit?

Again, I would point to Apple, and the completely different expectation that they will deliver immediate profits on new products, even if they're opening entirely new markets for the company. I'd also point to the fact that have done so. If the iPod and the iPhone had been unprofitable for the first five years, I don't think we'd be talking about how they were good investments for the company. We'd be talking about how Apple had failed miserably.

Different companies with different histories. Looking at Microsoft's and Apple's past, I'd be weary of Apple to start entering into unprofitable markets, as it was not too long ago when Apple was in a serious slump. Who's to say the current hot streak (iPod --> iPhone) Apple is on will hold up? Microsoft, on the other hand, has showed tremendous stability, and its past shows that long-term investments pay off.

I probably pointed this out before (it's been a long thread) but ironically, Microsoft has become the company they always derided, IBM. It was said of IBM that they'd take a year just to design an empty box. And ironically it was that very characteristic of IBM's MO that turned out to be such a huge windfall for Microsoft. Face it: Microsoft is a plodder. They have the classic 500 pound gorilla mentality. They're not going out of business by any means, but they aren't going to change in a hurry either.

I'd have to disagree. Ballmer has witnessed and acknowledged what went wrong with IBM, and I don't think he'll just sit there and watch it happen to Microsoft. This memo, along with Microsoft's foray into new markets shows that they know a change is needed.

 

[ashjamben]

microsoft will never get the same end-to-end experience as apple, purely because of the stated fact that they have no control over the hardware. they may want to incorporate certain features into the os, just little things, but with no control over the hardware it makes it a hard job.

i love the fact that any problem with hardware, os and software (music tech student using logic) i only have one place to go.

 

[IJ Reilly]

How about something more recent? We all know Microsoft's history in anti-competitive behavior, but everything their doing now leads me to believe they have changed (either willingly or forcefully). You see them putting effort behind developing new products, entering new markets and providing more "complete experiences" and yet now complain they they don't return an immediate profit?

I don't know that most people really do know Microsoft's history. For the record, they've been forced to change to the extent that nakedly illegal practices aren't going to work for them anymore. This does not mean they really know how else to approach the market. They spent a lot of effort figuring out how to snuff out competitors before they could compete.

Different companies with different histories. Looking at Microsoft's and Apple's past, I'd be weary of Apple to start entering into unprofitable markets, as it was not too long ago when Apple was in a serious slump. Who's to say the current hot streak (iPod --> iPhone) Apple is on will hold up? Microsoft, on the other hand, has showed tremendous stability, and its past shows that long-term investments pay off.

They have different histories, alright. Still Apple has huge resources at hand. They could easily throw a few billions at a new product that won't pay off for years, but they don't. Instead they develop products that pay off right away, and it's not like they are any less complex than the Xbox. The difference I think is more about corporate cultures and abilities than any other thing.

I'd have to disagree. Ballmer has witnessed and acknowledged what went wrong with IBM, and I don't think he'll just sit there and watch it happen to Microsoft. This memo, along with Microsoft's foray into new markets shows that they know a change is needed.

Knowing and doing are two different things. While it's critical to at least know that a change is needed, implementation is a very different animal. I just haven't ever seen anything in Ballmer's thinking that leads me to believe that he's the guy to do it. The memo was full of generic corporate-speak platitudes. Show me the plan. Show me how Microsoft is going to become a company that doesn't take five years to develop an operating system revision that still doesn't have many of the features they said it would. Show me the plan for how they can bring new products to market that make money right away. Yes, like Apple does. Then I'll believe that he both knows and can do.

 

[Syrus28]

I don't know that most people really do know Microsoft's history. For the record, they've been forced to change to the extent that nakedly illegal practices aren't going to work for them anymore. This does not mean they really know how else to approach the market. They spent a lot of effort figuring out how to snuff out competitors before they could compete.

Maybe, but their future looks to be promising compared to the last couple of years.

They have different histories, alright. Still Apple has huge resources at hand. They could easily throw a few billions at a new product that won't pay off for years, but they don't. Instead they develop products that pay off right away, and it's not like they are any less complex than the Xbox. The difference I think is more about corporate cultures and abilities than any other thing.

Apple is fully able to throw a few billions at a new product, but as you said, the market would freak, because of its history. And its not about complex products, but the market they are in. The Xbox is in a market where competitors undercut prices and forfeit profits in order to sell more. That's a unique ability of a company to be able to be able to sustain a product until the point that it becomes profitable, so what's wrong with using it? If anything, it allows some freedom of thought when development comes around. I'm sure Microsoft could have thrown out a basic console without a hard drive and without online capabilities and made a small profit but that's not they had in mind.

Knowing and doing are two different things. While it's critical to at least know that a change is needed, implementation is a very different animal. I just haven't ever seen anything in Ballmer's thinking that leads me to believe that he's the guy to do it. The memo was full of generic corporate-speak platitudes. Show me the plan. Show me how Microsoft is going to become a company that doesn't take five years to develop an operating system revision that still doesn't have many of the features they said it would. Show me the plan for how they can bring new products to market that make money right away. Yes, like Apple does. Then I'll believe that he both knows and can do.

Well, you have to start some where and I'd say Microsoft is right on the ball. They are planning on releasing Windows 7 by the end of 2009/early 2010, Internet Explorer 8 is in beta, Windows Mobile 7 looks promising, and is supposedly coming 2009/2010. The Xbox is getting a major rehaul of its interface soon, and there are plans for movies based on the Halo/Gears IP. Also, Microsoft keeps addressing "Zune" as a brand, so we may very well be seeing something soon.

None of the same mistakes they made years ago seem to be exposing themselves again. Microsoft has even stated it plans to resume its 3-year OS cycle.