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Motley Fool Writes Off Microsoft 404

Posted by kdawson
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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Motley Fool Writes Off Microsoft

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  • hmmm. (Score:3, Interesting)

    by apodyopsis (1048476) on Friday January 25, 2008 @11:28AM (#22181736)
    and WOOOSH! let the flame fest begin...

    except that this is /. and I don't see many MS defenders around here much. Personally MS are not very relevant to me, I only use Linux at home, even my gf only uses Linux. And my firm seems in now pressing hurry to upgrade to Office07 or Vista.

    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.
  • Re:In other news (Score:2, Interesting)

    by AvitarX (172628) <me@@@brandywinehundred...org> on Friday January 25, 2008 @11:32AM (#22181784) Journal
    Isn't it not uncommon for businesses to skip entire versions of windows?

    With the next version coming quick (allegedly) I don't see any compelling reason to not go XP -> 7 without dealing with Vista at all. It was only recently that new software stopped working with Windows 98.
  • by je ne sais quoi (987177) on Friday January 25, 2008 @11:34AM (#22181816)
    I read the bull and bear arguments, whatever, they're both waving their arms. The most interesting part I saw was in the bear rebuttal:

    MS Cash and Short-Term Investments
    6/30/04 $60.6 billion
    6/30/05 $37.8 billion
    6/30/06 $31.1 billion
    6/30/07 $21.1 billion
    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:In other news (Score:3, Interesting)

    by maxume (22995) on Friday January 25, 2008 @11:38AM (#22181856)
    If Vista is indeed a failure, it is only a failure in context, most companies would be glad to have such a failure on their balance sheet.
  • by Simon Brooke (45012) <stillyet@googlemail.com> on Friday January 25, 2008 @11:42AM (#22181904) Homepage Journal

    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:

    Sure -- Microsoft's dependence on its Office and Windows products makes it vulnerable to a slowdown in business spending. Then again, GE's power turbine and aircraft engine businesses are vulnerable, too. When the economy turns south, virtually every company is affected in one way or another.

    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: NT 3.51 to XP (Score:2, Interesting)

    by colinnwn (677715) on Friday January 25, 2008 @12:01PM (#22182140)
    Good point, and you are right on businesses (even large ones) skipping entire versions of Windows. The transportation company I work for ($10 billion in revenue) went straight from NT 3.51 to XP about 2 years ago.
  • Re:ms needs to die (Score:2, Interesting)

    by n0dna (939092) on Friday January 25, 2008 @12:09PM (#22182252)
    Bully for you!

    Some of us however need to run more than StarOffice, Firefox, and the JDK.

    Snide Aside: Does Solaris still ignore all the networking setup questions it asks you during install?

    "Thank you for filling out the IP and Routing information as well as the Hostname. Please write these down so that you'll have them for reference when you build out the network confs by hand after the installer is finished."
  • It's neither. (Score:5, Interesting)

    by babbling (952366) on Friday January 25, 2008 @12:16PM (#22182352)
    I doubt Vista is a huge flop or a tremendous success.

    What's much more interesting is the cash reserves. Dropping by over $10 billion per year? Really?! Are those numbers accurate?
  • by MacarooMac (1222684) on Friday January 25, 2008 @12:33PM (#22182546)
    Good point. But IBM's operations were heavily dependent on the manufacturing sector, for their IBM boxes. Such production intensive business models are much harder adapt and react quickly to the surrounding environment and IBM resultingly had a shocking period.

    M$'s primary business, however, is software and services and the product ranges in this sector can be diversified, adapted and even completely changed much more quickly and easily. Over at M$ Strategic Command they realised many years back that the long-term market for their Windows and Office products would start coming under serious threat, especially from OSS products, and naturally they will retain their vice-like grip on these markets for as long as they can whilst all the while identifying new revenue streams. They're doing this last bit very well indeed, don't you think?

    I guess what I'm trying to say is that it was always inevitable that M$ would eventually start getting reeled in by the competition but it's a testament to their business model and strategy that it's taking everyone so damn long!
  • by moderatorrater (1095745) on Friday January 25, 2008 @12:39PM (#22182632)
    It was a debate. While slashdot wrote off the rebuttal, it's actually a well written and well thought out argument. Also, you'll notice that Microsoft is an inside value pick, meaning it's a safe bet stock because it's undervalued compared to it's debt, earnings and holding.

    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.
  • Gates' "Departute" (Score:2, Interesting)

    by bradgoodman (964302) on Friday January 25, 2008 @12:40PM (#22182648) Homepage

    From the first minute I heard the announcement - not so much about Gates stepping down as CEO - but walking away from his "day-to-day" to focus on his foundation

    Starting from nothing, tp (almost) completely dominating the world of computing - where's Microsoft to go from here?

    There's branching to other areas, like Mobile devices, Automobiles and Game Consoles - yea, but isn't everyone trying to do that.

    Aside from that, what about their "core" business(es) - the next version of the OS

    With all that, the world is going "web" - and people like Google are the places to be in that universe

    So where does Microsoft go from here? Well - there not going to go away - but in reality, they've plateaued - and that's not going to change.

    Gates' "departure" was in inticipation/reaction to that without a doubt. He's not bailing because their "failing" - it was a rush riding to the top - but now they're there, what? It's just more drudgery from here-on-out, it's not going to be anything meaningful or exciting.

    There's always the chance of a "Second Life" - like Apple got with the return of Jobs - but in reality, very very few people or companies - even extremely successful ones ever see that - and I think Gates knows it.

    In retrospect, I think Windows-95 was perhaps Microsoft's last giant leap (and/or NT from a different perspective) - and everything else has been pretty much momentum from that.

  • by QX-Mat (460729) on Friday January 25, 2008 @12:43PM (#22182710)
    Excuse me for being a bit sceptical, but the XBox 360 is doing fantastically well, they have a market and the right games for that market... New PCs are still being shipped with MS products and MS office is entrenched into modern information systems decision making.

    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.
  • by Anonymous Coward on Friday January 25, 2008 @02:16PM (#22184342)
    When you buy a brand new business PC from one of the big OEMs (Dell, HP, Lenovo, etc) with XP Pro on it these days, the OEM still had to buy a Vista license and shipped you the "downgrade rights" XP Pro installed without the right to ever take it back to Vista unless you buy the Vista license again. But MS still counts that first O/S sale as a Vista license sale.
  • Re:In other news (Score:3, Interesting)

    by necrogram (675897) on Friday January 25, 2008 @02:47PM (#22184812)
    [quote]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.[/quote]

    Thats wrong. Vista Business == XP Pro. Ultimate is Business + Media center + Bitlocker. Retail for Vista Business is 300. Retail for XP Pro is 300.

    are there some suck ass bugs in vista? You bet! I haven't seen many show stoppers. theres the change in group policy processing sucks monkey balls, but now i know what to look for, its easy to fix. the dhcp client continuing to request its old IP after its been nak'ed is another. Only one that sucks is all legacy control panel applets require elevation. The SMS applets were rewritten for low rights, but because they are "legacy".

    Is the product as a whole, a piece of steaming shit? nope. OS deployment and management tools are outstanding. a single, hardware agnostic image rocks! Right along side of that is the new ADMX templates. Once SP1 is rtm and it passes our certification process, we're going.

    your point of view on MS changes when you have a nice budget, and a few thousand machines to tend to.
  • Re:In other news (Score:3, Interesting)

    by Macthorpe (960048) on Tuesday January 29, 2008 @05:11PM (#22226738) Journal
    What about these 346 [google.com] other news outlets reporting the same thing? Including WSJ, BBC, eWeek, CNN, AP...

I find you lack of faith in the forth dithturbing. - Darse ("Darth") Vader

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