Motley Fool Writes Off Microsoft 404
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."
In other news (Score:5, Insightful)
Weak statement of faith (Score:2, Insightful)
Comment removed (Score:5, Insightful)
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.
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.
Last hurrah (Score:3, Insightful)
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.
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)
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.
Bad Analogy (Score:4, Insightful)
Meh (Score:4, Insightful)
Really it's about influence, and that's what Microsoft are losing, have been for several years.
Re:Vista is the Windows ME of our generation... (Score:2, Insightful)
I didn't know a generation had passed since I bought ME in college (for $5 through school).
KillaBeave == Old, Sad Panda
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.
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.
Re:In other news (Score:2, Insightful)
especially in order to get the same functionality as XP PRO, or Leopard (both of which sold for ~$130)you have to buy the $400 version.
So yea of course MSFT is seeing strong sales numbers. if I doubled the price of my product while having an illegal monopoly I woudl see strong sales figures as well..
Re:Vista is the Windows ME of our generation... (Score:2, Insightful)
I mean you can buy a frigging $400 pc laptop. It'll run your word processor, internet and whatever other work like things non graphics types run. Whereas the starting price of Apple laptops is $1200
AND you can say what you want about Linux, but for the average smuck walking around a best buy with a wad of cash it's not even on their radar.
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.
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.
Re:There's definitely wishful thinking in there (Score:3, Insightful)
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.
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.)
Re:He's right, you know. (Score:3, Insightful)
You're literally right that software doesn't rot, but you're functionally wrong, I think. Mitigating against switching to free replacements is the fact that a strategy of continual, incremental upgrades is generally the best way to handle the overall environment.
Re:In other news (Score:5, Insightful)
Risk and return (Score:3, Insightful)
If you buy shares you want as low risk as possible and decent returns (10-15% is average, somewhere between a low risk and high risk investment).
Microsoft is risky simply because there's so much uncertainty over Xbox 360 warranty claims, poor Vista sales and yet another EU court case.
Re:In other news (Score:2, Insightful)
What a justice eh? I hate to defend them because of those clueless fanboys but really, they didn't deserve that kind of stock market hit.
Re:In other news (Score:1, Insightful)
So, in summary, incorrect assessments == significantly greater than 0.
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.
Talk about a troll... (Score:3, Insightful)
Moderate the article -1 Troll please.
Re:In other news (Score:3, Insightful)
Whether or not Vista is a success is largely inconsequential to the bottom line of Microsoft. Sure they dumped some money into the programmer's coffers to write it, but that code can be used in later versions or cherrypicked for other projects so it is absolutely not a waste.
Microsoft's revenue stream from licensing continues unabated. For example, the company I work for runs mostly XP and has skipped Vista entirely. That doesn't really change the bulk licensing tribute we pay Microsoft each year. We pay per seat and the OS really doesn't matter. Especially if you compare the costs of licensing for SQL, 2003 Servers, Exchange, Office, etc. Whether or not we run Vista doesn't mean jack, the desktop machine is still running a seat of a Microsoft OS.
Microsoft's money maker isn't the guy standing in Best Buy wondering if he needs to upgrade his perfectly usable XP system to this new OS, it's the large companies that pay yearly tribute in bulk licensing costs to maintain their large install-base of Microsoft Products that range from the datacenter to the spreadsheet on the secretaries' desk.
Now that's funny, because... (Score:3, Insightful)
Vista is a big stumble for MS, no doubt about it. But to say this is the beginning of the end? That's a stretch.
Re:In other news (Score:3, Insightful)
Apple does not sell upgrades.
Apple only sell upgrades.
Take a blank disk, that copy of OS X (whichever version you want) and install. Period.
Utterly irrelevant.
You can bitch at them for not selling upgrades, but you don't get to call that thing they actually sell an 'upgrade package'.
You can only run MacOS on a Mac. You can't buy a Mac without buying a MacOS license as well. That is why every retail copy of OS X is priced as an upgrade.
The difference between Microsoft's and Apple's upgrades is how they are verified. Apple uses a hardware dongle, Microsoft needs you to demonstrate you already have a copy.
Re:Microsoft Lego's (Score:3, Insightful)
Unix-based systems (Linux, Unix, Mac OS X) are like Lego blocks and Lego Technics (I don't know if they're still around) but without the plans. You can do whatever you want with it, but somebody knowledgeable has to use it to actually build something that works. Any ol' kid can build SOMETHING with it.
Example: here at my job we have a mixed environment, 30 Mac's, 7 Linux and 3 Windows. Now out of the box, I can connect the Mac's and Linux machines to the directory and without issues they will start authenticating. For Windows, we are forced to use AD. So we set up Samba. Of course, the latest updates for Windows break some Samba functionality (nobody knew this off course) and all systems had to be rebound to the AD. Long story short, to evade this type of jokes (AD login would become randomly unresponsive on the Windows boxes but continue working on Mac/Linux) we installed pGina with the LDAP auth plugin, no more problems.
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?
Time to write off the Motley Fool.... (Score:2, Insightful)
Re:It's neither. (Score:3, Insightful)
That was the eye-popping part to me as well. I really had no idea their cash reserves were being so heavily depleted.
Which kind of goes against the bullish argument that they have no debt and large cash reserves, doesn't it? If they've burned through $40 billion of reserves in 3 years, if they do the same over the next 3 years they be around $20 billion in debt. At that level of finance, is there any real difference between burning through $40 billion of reserves vs. taking on $40 billion in debt?
It's not just the exchange rate (Score:2, Insightful)
In this case MS got a large boost by the weaker Dollar. But in no way does it account for a 79% increase in profits from the last quarter.
So let's look at what can account for MS getting huge profits:
1. They've gotten leaner. There were no layoffs and salaries are a large chunk of their expenses, so that's not it.
2. They've cut expenses by not printing DVDs and manuals and instead having people DL their software. That could be a part of it.
3. The number of computers sold has increased. Don't have the numbers but possible due to weak dollar making computers cheaper.
4. They've increased prices. Probably. We know their retail price for Vista is way larger than the retail price for XP but they sell only a small fraction through retail, and I doubt the OEMs would budge so easily without giving DOJ a call. Not likely.
5. They stopped hemoraging money on XBOX and Live. Possible.
All this of course doesn't mean that their long-term outlook is favorable. Cheap hardware makes the TCO of machines lower but also puts the pressure on OS prices. Everybody's down on them and is thus more aware of the alternatives like Macs and Linux.
It's doubtful they can ever again be a growth company. The number of PCs being sold each year is slowing down and that was their main driving force.
Although if they are going down because of some disruptive innovation like cellphones replacing computers it's going to take a long, long time. They've basically achieved a cockroach status just like IBM. You can be sure that Linux or Mac won't kill them.
Dejan
Re:In other news (Score:2, Insightful)
This implies that you are encountering or know of some issue that should be looked at to be addressed by a QFE or service pack. What are the steps to reproduce this issue, or (better) what is the fault bucket data [zachd.com]?
I deal with crashes all of the time... most of what I deal with is externally sourced. =\
Re:In other news (Score:3, Insightful)
A few years back, I worked for a mid-sized corporation (about 200 employees), and we bought computers when the old ones fell apart. I'm sure big corporations are similar except they might have a 3-year replacement cycle instead of "when the HD fails". Whenever a computer dies, its operating system license generally dies with it, and so whenever you buy a new computer you are giving MS revenue.
In light of this, does it really matter whether companies upgrade to Vista at all? If they simply replace their computers with XP computers, and keep on using them for the same period, won't MS get basically the same revenue no matter what?
Microsoft probably did shoot themselves in the foot since there is no cost-effective way to upgrade a machine built before (roughly) January 1, 2007 to Vista. So you will never sell any significant number of Vista upgrades, no matter what happens. Vista will eventually come in when support for XP is dropped by hardware manufactures, which clearly is not going to be any time soon.
Of course if the big corporations change their upgrade cycles from three years to four, then Microsoft really is in trouble
D