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Motley Fool Writes Off Microsoft
Journal written by twitter (104583) and posted by
kdawson
on Fri Jan 25, 2008 10:11 AM
from the limited-vistas dept.
from the limited-vistas dept.
The Vista disaster has caught Wall Street's attention before but I've never seen the popular press understand the issues like this argument in the Motley Fool. The opposing argument is a weak statement of faith, essentially "as it was in the beginning is now and forever shall be." "You don't need to watch the 'I'm a Mac, I'm a PC' commercials to see that Microsoft is taking a beating. You see it in the company's financials where its online unit, incredibly, is operating at a loss; overheating Xbox 360 consoles find the company taking a huge warranty hit for a system losing market share to the Wii; and the upgrade wave of its flagship operating system has been more of a ripple than a tsunami. That last point is important. This was supposed to be Microsoft's final feast, the major last hurrah for its Windows Vista operating entry and its Office 2007 suite of applications before the inevitable embrace of cheaper open source operating systems and Web-based apps... In fact, even Microsoft will tell you that its fortunes peaked several months ago."
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In other news (Score:5, Insightful)
Re:In other news (Score:5, Funny)
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Re:In other news (Score:4, Insightful)
It doesn't take a genius, it only takes an editor who will post a story from a Twitter.
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Re:In other news (Score:5, Insightful)
Now I know he's a Microsoft robot but on the otherside of this issue is Ed Bott [zdnet.com] who cites adoption rates. Of course there are other factors like Vista being forced down people's throats.
You have to admit, the stories we're hearing just don't add up. People can spin this like Vista's a flop or success. I'm guessing it's par for the course and Microsoft is doing fine. My company will be shoving Vista onto my workstation in a year and it's hear to stay.
Do I like Vista? Not at all. That still doesn't mean I should live under a rock in denial.
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Re: (Score:3, Interesting)
Re:In other news (Score:5, Insightful)
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Re:In other news (Score:4, Insightful)
Actually Vista is selling like hotcakes. Dell is buying lots of copies, Gateway is buying lots of copies, Sony is buying lots of copies, OEMs are buying lots of copies.
The only people who aren't buying Vista are businesses that aren't making computers, home computer owners, upgraders, and everybody else.
-mcgrew
(no journal for YOU! You;ll have to make do with reruns. Happy DT.)
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It's neither. (Score:5, Interesting)
What's much more interesting is the cash reserves. Dropping by over $10 billion per year? Really?! Are those numbers accurate?
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Re:It's neither. (Score:5, Informative)
They have been paying out a lot of dividends over the last few years, and have been putting money into new tech. Depleting their cash reserves is not a sign of weakness, it is a purposeful response to shareholder complaints. A few years back they faced a lot of criticism from shareholders because they had to large of a cash reserve. Why is this a problem? Cash reserves are not making the company (or shareholders) any money. If a company can't find anything to do with their cash reserves that they think will meet their required rate of return on investment (ie: invest in R&D, capital, or other ways to improve the future profitability of the company), they should return that money to shareholders via dividends.
Their current depletion of cash does not suggest that they will be in debt in a few years. Once they have lowered their cash reserves to a level deemed appropriate by their shareholders, they will change their strategy. So to answer your question, yes there is a huge difference in eliminating 40 billion in reserves and taking on 40 billion into debt.
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Re:In other news (Score:4, Informative)
What was it, really? Sure, it's shipped on (some) new machines, but is there much reason to upgrade for most, the same way XP was?
IMHO, no.
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Re:In other news (Score:5, Insightful)
My company was not in love with '98, so made the jump quickly to 2000, but then stuck 2000 on every machine that came in the door until they had trouble making new hardware work (laptops, for instance, just remained XP). Last time I checked, they were still blocking SP2 - though I've been working remotely for 2 years so that might not still be the case. The loaner PC that I use when I visit is still 2000. I suspect they will be similarly slow to adopt Vista, and may skip it altogether if MS releases another OS quickly enough.
Then again, my company still runs Exchange 5.5 and just tells everyone to clench during daylight savings
Personally, I won't upgrade my PC to Vista, but if I happen to buy one with it pre-installed I won't remove it, either. I've set up some Vista machines for people and played with it quite a bit now - it's really not so bad. It just has some new irritations, and some things are flat-out impossible to do (or at least not that I could figure out with the help of Google). But on the whole it is stable and not really much different day-to-day than XP.
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Re:In other news (Score:5, Informative)
My company went from 95/98 directly to XP. Even with Office we still have most of the installs at Office 97 or 2000 with only a few Office 2003 copies.
When we upgrade, I expect it will be directly to "Windows 7". And since I'm the IT Director, my expectations will probably prove accurate.
Being a small company, the cost of upgrading is prohibitive, so we squeeze the last bit of usage out of our expenditures.
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Re: (Score:3, Informative)
Also, Vista Ultimate is sold for some $200 (OEM) to $210 (Upgrade if you insist on retail packaging). Using the $400 retail price tag for comparison doesn't work out bec
Re:In other news (Score:5, Insightful)
Not true at all. My corporate licensing rates on a per-license basis show Vista Business coming in at exactly the same price point as WinXP. I don't know who you're getting your pricing from, but they're taking you for a huge ride if you're paying 400% more for Vista than you did for XP. Heck, even the retail pricing is similar.
On the other hand, if you've got some sort of ideological axe to grind against MS, you might've tried comparing something silly like XP Home with Vista Ultimate in order to get your ridiculous price differential. I'd like to believe you're not one of the slobbering, frothing, anti-MS zealots Slashdot is so rabidly famous for, so I'm going to assume you're just getting bum pricing from whatever vendor you're using. Given your comments, though, I'm thinking that's not the case with you, is it?
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Re:In other news (Score:5, Informative)
And after all if you had invest in Apple last year you would have had 117% returns. Apple is overvalued... plain and simple...
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Re:In other news (Score:5, Funny)
We are watching your every word. Be afraid, be very afraid.
-Your Friendly Neighborhood Spelling and Grammar Nazi
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And yet... (Score:5, Insightful)
Here's hoping HD DVD's troubles means that they'll remove all the "secure path" BS from Windows 7. They only did it to placate Hollywood, and it's a major reason why Vista had developmental problems. (Note, they'd have had to do it too if they were supporting Blu-ray instead - the point though is that I'd like to see Microsoft throw a tantrum and remove a "feature" they should never have added in the first place.)
Re:And yet... (Score:5, Insightful)
They survived Windows Me and they already announced (leaked) the next OS is on the way sooner than thought
They also have more money than God - So they will adopt, adapt and improve (and steal, and "innovate" etc etc)
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Re:And yet... (Score:5, Insightful)
They are still turning a (sizable) profit. They not only need to start taking a loss, but they need to either start taking a MAJOR loss each quarter (doesn't look likely), or, we gotta wait it out. As long as they're managed just well enough that their losses are minor, I doubt we'll see Microsoft go away in the foreseeable future.
Still, that doesn't mean that they need maintain their current control for that long. I'd love to see Microsoft in 15 years, putting out their OS that only has about 25-30% market share, and shipping Office for Linux (and naturally Mac, but they already do that so no big change there). Xbox would likely be scrapped by then (admittedly though, the 360 is the only current gen system I own, but I bought it pretty much exclusively for Mass Effect).
If Linux could just get that level of commercial support, I think it would be a major victory. I'll admit that, though not the only things, having WoW and MS Office available are major factors in my preference of MacOS over Linux right now. Linux is ideologically the better way to make software, and I hope to goodness that within the next few years it gets the functionality, polish, and commercial support to be functionally the better of the two as well. Microsoft has already proven that Windows is steering towards crippleware, and Apple is likely not far behind.
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Who thinks The Fool is a good source? (Score:5, Informative)
Microsoft Tops Street in 2Q; PC Sales Up
Friday January 25, 9:45 am ET
By Jessica Mintz, AP Technology Writer
Microsoft Beats Street in 2nd Quarter; Vista, Office, Xbox Games Helped
SEATTLE (AP) -- Microsoft Corp. forecast a rosy 2008 -- despite broader economic worries -- after it blew by Wall Street's expectations for a second consecutive quarter.
"We will be impacted just like everybody else," if the U.S. falls into a recession, Chief Financial Officer Chris Liddell said Thursday. "But overall, we feel very optimistic about our second half."
Company officials touted rising sales in each of Microsoft's business divisions, a slate of important upcoming business-software launches and the growing contribution from sales in non-U.S. markets.
Microsoft raised its outlook Thursday for the rest of its fiscal year, which ends in June, matching Wall Street's forecast and sending shares up in after-hours trading.
The software maker's quarterly earnings jumped 79 percent to $4.71 billion, or 50 cents per share, from $2.63 billion, or 26 cents per share in the second quarter a year earlier. Quarterly revenue climbed 31 percent to $16.37 billion from $12.5 billion.
Re:Who thinks The Fool is a good source? (Score:5, Interesting)
The arguments boil down to one guy saying that you're an idiot if you think that Microsoft is going away, the other one says that Microsoft is on the decline, and since it's not the big winner it's a loser. In my opinion, they're both right, although the one saying that Microsoft is a loser takes the longer look and, therefore, more risk of being wrong (what happens if the XBox becomes the PS2 of this generation of systems?). Slashdot got this one wrong, not The Fool.
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Re:Who thinks The Fool is a good source? (Score:4, Informative)
tells a different story.
The income is good, but they've just released a new product. That's to be expected.
Looking at the balance sheet though, their numbers are not so good. The actual value of the company is weakening while at the same time their liabilities are rising - at a time when their liabilities should be reducing due to the end of the development costs of Vista.
And then even worse their cash situation is looking very bleak - especially when you consider that the US is heading for a recession (to survive a recession you need cash and as much of it as you can get).
The have a new product out which should be selling for cash - their balance sheet should be rising as should their cashflow. It isn't.
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Uhh... (Score:5, Informative)
http://www.news.com/8301-13860_3-9857633-56.html?tag=newsmap [news.com]
Hasta la Vista (Score:3, Funny)
Re:Hasta la Vista (Score:4, Informative)
John Connor: No, no, no, no. You gotta listen to the way people talk. You don't say "affirmative," or some shit like that. You say "no problemo." And if someone comes on to you with an attitude you say "eat me." And if you want to shine them on it's "hasta la vista, baby."
The Terminator: Hasta la vista, baby.
John Connor: Yeah but later, dickwad. And if someone gets upset you say, "chill out"! Or you can do combinations.
The Terminator: Chill out, dickwad.
John Connor: Great! See, you're getting it!
The Terminator: No problemo.
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Need more coffee (Score:5, Funny)
Gonna be a long day...
Vista is the Windows ME of our generation... (Score:5, Funny)
Interesting (Score:3, Insightful)
However, I also see the general public becoming more and more sophisticated when it comes to things like Operating Systems and understanding that there are indeed options out there. And with knowledge of options will come people exercising those options.
In other words there's a up and down roller coaster ride ahead but this ride may be coming to a full and complete stop.
Re:Interesting (Score:4, Informative)
Windows XP Home Edition replaces Windows Me
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Re:Interesting (Score:5, Informative)
http://games.slashdot.org/article.pl?sid=07/10/26/2052251 [slashdot.org]
http://xbox360.ign.com/articles/847/847658p1.html [ign.com]
Yes, 2 quarters in a row now, it has turned a profit.
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Vista == PS/2 Micro Channel (Score:5, Insightful)
But people failed to beat a path to the PS/2; they waited, and used things like EISA [wikipedia.org] until PCI [wikipedia.org] came along and was roughly as good as Micro Channel. IBM finally learned that they didn't own the PC market anymore.
IBM's still around but isn't a colossus astride the computing industry. Microsoft has now discovered that the competition is "good enough" and the Microsoft name isn't enough to force people to follow along with whatever they say. Like IBM, MS isn't going away... but they'll be one option among many in a few years, not the single dominant giant.
Bad Analogy (Score:4, Insightful)
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Re:Vista == PS/2 Micro Channel (Score:5, Insightful)
As much as I'd like to believe this, I see no indication that it will actually happen.
In my mind, it is software, not hardware, that locks people into Windows. I am a VAR who mostly services businesses too small to have an IT staff, and it seems that every sector has an industry-specific software that only runs on Windows. Examples from my customers include:
-Collision Repair Estimating Software
-Accountant Software
-Manufacturer's Representative Software
-Dental Practice Software
-Church Administrative Software
It's kind of a chicken-or-the-egg dilema; developers would port to other platforms if those OSes's had more marketshare, and platforms would have more marketshare if applications were ported to to the OSes. I just can't see a short-term road out of that conundrum.
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Last hurrah (Score:3, Insightful)
What about the Bull Argument? (Score:5, Informative)
So much for Motley Fool writing off Microsoft. Typically - guess which article gets highlighted in
hmmm. (Score:3, Interesting)
except that this is
In a year it has been out I have used Vista only once, and it was a very annoying experience indeed - more to the point I do not know anybody who actually uses Vista. Maybe this is the beginning of MS's slide into irrelevance.
Of course, if Linux is the new boy around town we can expect virus writers to turn their attention to it big time and it to suffer the some of the same problems. I don't know what I prefer - insufferable bloat issues or raging dependency woes really.
There's definitely wishful thinking in there (Score:5, Insightful)
But it's in the first article, not the second.
ZOMG, people are specifying XP instead of Vista! Sure, but they're still buying Microsoft. Apple is topping out its niche appeal, and corporations are run by lawyers who hate and fear Google Docs with a cold reptilian passion.
Wise up, nerds. Major purchasing decisions are not taken by people live with their parents in Wyoming [penny-arcade.com]. They are taken by grown ups who have mortgages and orthodentist bills to pay, and those people recommend, and will continue to recommend, Microsoft because nobody ever got sacked for doing so.
The upcoming recession may see a few smaller outfits switch to freeware in the hope of chiselling a few dollars off the budget, but that's probably a sign that they're doomed, and so wouldn't have been buying M$ one way or the other.
Still, I'm swimming against the tide of opinion here, if not of history, so feel free to get excited about the prospect of the Evil Empire toppling any day now. Let's compare notes in 5 years and we can spot where you went wrong.
Re: (Score:3, Insightful)
That sounds oddly like the old adage "No One Ever Gets Fired For Buying IBM," a statement which is no-longer true. I don't know about your experience, but in my experience most "normal" people ask techs for what to do. Most techs that I've met these days recommend either Mac or Ubuntu (and have a sly comment about "
Most interesting part of article... (Score:5, Interesting)
Notice a trend? It would seem that MS' me-too policy (Xbox, Zune, live search, etc.) over the last couple of years has been pretty hard on their cash reserves. I think if they can turn a profit on these things it will have been worth it because $60 billion of cash reserves sounds like too much.... but if that trend continues, we'll see MS in debt by the time the coming recession is over.
Re:Most interesting part of article... (Score:5, Insightful)
Frankly, their cash reserves have dwindled because simply put, sitting on 60 billion worth of cash is just dumb.
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Re:Most interesting part of article... (Score:4, Informative)
If MS didn't have to pay dividends to get investors, they wouldn't. Because having 60B and not trying to get 70B is just dumb.
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Meh (Score:4, Insightful)
Really it's about influence, and that's what Microsoft are losing, have been for several years.
but wall st. disagrees (Score:3, Informative)
"Stocks rose sharply for a third straight session Friday as investors cheered upbeat profit reports from big names like Microsoft Corp. and were reassured by word of a possible buyout of a trouble bond insurer."
and
"Microsoft's bright forecast and earnings that outpaced expectations lent strength to a notion emerging in recent days that perhaps Wall Street had been too pessimistic in its reading of the economy."
So the Fool can say what it likes - it's always a good story to bash M$, but the people who know and who put their money on the line reckon they're wrong. Hell, I wish I had "only" $20Bn in the bank
Bill Gate's smartest move (Score:5, Funny)
He's right, you know. (Score:5, Interesting)
OK, I'm old enough to have been in this industry when IBM were as dominant as Microsoft are now. We didn't see them start to slide, either. We were only aware that IBM were falling when their decline was already well advanced and unstoppable. I think we're in that position with Microsoft now. Why?
We're heading for a recession. The rebuttal to the FA says:
That's true, of course. But GE's customers can't download an open source aircraft engine for free. Also, and significantly, aircraft engines wear out. If the airlines want to keep flying at all, they have to continue to buy spare parts, sub-assemblies, refurbished engines and, from time to time, new engines. No matter how tight the economy gets, unless all GE's customers go belly up, they will have to continue to buy parts - and GE can at least hope to get some of that business.
As the economy tightens up, one of the things that happens is people start looking at where they can save some money. Software does not wear out. Software carries on working just as well as it did when it was new, until the hardware platform which supports it wears out. And even then, it can usually be transferred to a new hardware platform. So as the economy tightens up, people simply stop buying new software. Where's the need to upgrade, when the software you have works acceptably well?
There are fewer reasons to buy software in a recession, anyway. The total number of seats is not increasing - most companies will be laying off staff. And hardware upgrades which had been planned will be put off, so there will be no need to buy software for new hardware...
And if people have to get new software for one reason or another, for every significant profitable product in Microsoft's inventory, there's a free alternative. Not 'cheap', free. Usually, of as high quality as the Microsoft product or higher. Increasingly, as easy to use as the Microsoft product. The tighter the economy gets, the harder it becomes to justify choosing 'expensive' over 'free'. Furthermore, unlike GE's competitors, Microsoft's free competitors are not subject to the normal rules of the financial market. they can't go bankrupt. The recession will not hurt them much - it is more likely to help them.
I won't hide the fact that I think it's bad for this industry to have one dominant player, be that IBM, Microsoft or Google. I didn't mourn IBM's fall and I shan't mourn Microsoft's. But I don't think you can any longer pretend it isn't happening.
Re: (Score:3, Insightful)
It does wear out, in several ways:
Re:He's right, you know. (Score:5, Insightful)
As long as you have the ability to maintain your software, it will
never wear out. You can always train someone else to be the
maintenance monkey. Admittedly, this only works for software where
you have the source.
This does NOT necessarily imply "Free Software".
Saavy companies get the source to important applications so they
can maintain those systems if necessary. Software like that can
(and has) last longer than most of us here have been alive.
Also, the world (or technology) isn't as dynamic as a lot of people would like to think.
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The Fool isnt always right (Score:4, Interesting)
You have to remember that MS can afford to fix faulty XBoxes, so it ultimately becomes a moot point.
All this on a very good quarter...
I think The Motley Fool just wants good slashdot traffic myself.
Re: (Score:3, Funny)
Re:dancing (Score:5, Funny)
Gearoid_Murphy: Here's one.
Motley Fool: Ninepence.
Microsoft: I'm not dead!
Motley Fool: What?
Gearoid_Murphy: Nothing. Here's your ninepence.
Microsoft: I'm not dead!
Motley Fool: 'Ere. He says he's not dead!
Gearoid_Murphy: Yes, he is.
Microsoft: I'm not!
Motley Fool: He isn't?
Gearoid_Murphy: Well, he will be soon. He's very ill.
Microsoft: I'm getting better!
Gearoid_Murphy: No, you're not. You'll be stone dead in a moment.
Motley Fool: Oh, I can't take him like that. It's against regulations.
Microsoft: I don't want to go on the cart!
Gearoid_Murphy: Oh, don't be such a baby.
Motley Fool: I can't take him.
Microsoft: I feel fine!
Gearoid_Murphy: Well, do us a favour.
Motley Fool: I can't.
Gearoid_Murphy: Well, can you hang around a couple of minutes? He won't be long.
Motley Fool: No, I've got to go to Sony's. They've lost nine today.
Gearoid_Murphy: Well, when's your next round?
Motley Fool: Tuesday.
Microsoft: I think I'll go for a walk.
Gearoid_Murphy: You're not fooling anyone, you know. Look. Isn't there something you can do?
Microsoft: [singing] I feel happy! I feel happy!
Apologies for spamming you with this Monty Pythin troll.
-mcgrew
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