Financials Indicate Microsoft Prepping for War 349
SpaceAdmiral writes "Microsoft has surprised analysts by forecasting significantly higher expenses in the next fiscal year, an indication that the company might be getting ready to do battle with its online rivals. According to analyst Eugene Munster of Piper Jaffray, 'It looks like Microsoft is going to war with Google.'" From the article: "According to Mark Stahlman of Caris & Company, the fact that Microsoft plans to spend significantly more in 2007 was an indication of renewed aggressiveness in its competitive strategy and an indication that the company was returning to the kind of actions it exhibited before the Justice Department's antitrust lawsuit in the mid- and late 1990's. 'It's pretty clear that Bill is running the company again,' Mr. Stahlman said, referring to Bill Gates, 'and they are going to remake the business. They are being much more combative and much more strategically managed.'"
Spot the dinosaur (Score:5, Informative)
Spot the dinosaur
Mar 30th 2006 | REDMOND
From The Economist print edition
Microsoft’s core business is under threat from online software
IMAGE [economist.com]
RECENT advertisements for Microsoft show office workers as dinosaurs, stuck in a bygone era. Aptly, it is an accusation that some are now making about the software company itself.
Microsoft earns more than half its $40 billion or so of annual revenue—and the vast majority of its profits—on just two products: the Windows operating-system and Office, a collection of personal-computer (PC) applications including word-processing and spreadsheet programs. Both, however, are coming under threat from new technologies.
The pressure Microsoft is facing in its core businesses is similar to one confronted by IBM—another firm that was once synonymous with computing. At the beginning of the 1990s IBM had to face up to the shift from a computing world dominated by mainframes to one dotted by personal computers. In this new world hardware became a low-margin commodity and Microsoft’s operating system took the privileged position. Today, Microsoft still dominates the PC market. But like IBM before it, today’s giant knows that its position is under threat.
The threat to Microsoft comes from online applications, which are changing how people use computers. Rather than relying on an operating system and its associated application software—bought in a box from Microsoft, and then loaded onto a PC—computer users are increasingly able to call up the software they need over the internet. Just as Amazon, Google, eBay and other firms provide services via the web, software companies are now selling software as a subscription service that can be accessed via a web-browser. Salesforce.com [salesforce.com], the best known example of this trend, offers salesforce management tools; other firms offer accounting and other back-office functions; there are even web-based word-processors and spreadsheets. This lowers the economic and technical barriers to entry for firms wanting to compete with Microsoft, as well as diluting the advantages the firm gets from controlling how the computer works.
These huge shifts in computing take a very long time, because there is so much inertia in the marketplace—the idea of online applications has taken years to get even this far. Microsoft is still in a position that most firms would kill for. Its two main products—Windows and Office—remain fabulously profitable quasi-monopolies. Even if online applications and open-source software make rapid progress, Microsoft would retain a powerful and profitable position for some time.
For all that, however, online applications clearly threaten the way Microsoft makes its money. Its licensing agreements are geared for a world where software is a physical product, purchased on discs, and paid for at once or in regular instalments. But its online competitors charge each user a subscription: some like Google are even supplying software as a free online service, financed by advertisements. Last month Google acquired the firm that created Writely, a popular online word-processing program that is an obvious potential competitor to Microsoft Word.
Online competitors have also mastered quick development and deployment times that Microsoft cannot match. Meanwhile open-source software—developed co-operatively and distributed free of charge—is also gaining ground. George Colony, the boss of Forrester, a technology-research firm, believes Microsoft faces the biggest challenge in the firm’s history: “Bill Gates knows how to compete with anyone who charges money for products,” he says, “but his head explodes whenever he has to go up against anyone who gives away product
Need login? bugmenot is your friend (Score:2, Informative)
Re:Spot the dinosaur (Score:5, Informative)
Intersting effect on the stock too... (Score:4, Informative)
[url]http://biz.yahoo.com/ap/060428/microsoft.htm
Almost makes MSFT look like a value stock... (That is, if you can evalutate MS on technical merits and not knee-jerk "Linux r00ls M$ SuX0rs!!!" criteria.)
However, I personally wonder if Mac OS X won't take a larger chunk out of MS in the coming future... What do you guys see in the crystal ball for Microsofts Future?
Re:Windows monopoly is secure (Score:2, Informative)
They are right.
Open Office's interface is horrible. Inconsistent. 2.0 is an improvement, but what wouldn't be an improvement? I remember when Sun first released Star Office for free. It was a decent alternative to MS Office at the time.
Back in what, 1998?
It wasn't even a fully featured replacement then. OOo has gotten better, but it still needs a ton of work.
This is not even mentioning that MS just revolutionized the entire idea of an office app UI with their ribbon concept. Yes I said revolutionized, I use Office 12, and it freaking rocks. Ok it is beta code and is slower than heck and a huge resource hog, but it still opens about as fast as OOo does. That is sad. Very sad.
Gnome is one of the more polished UIs for Linux as well. Fairly consistent, well, within any one given version, they seem to like doing UI changes every version number. Whatever. It still is professional looking and reasonably usable.
Linux rocks for development. Multiple desktops, tabbed console windows. Those two alone are killer features for a programmer. (I have multiple desktop support up and running on Windows, but I do missed tabbed console windows!)
It sucks for pretty much everything else
Re:Spot the dinosaur (Score:3, Informative)
Re:Windows monopoly is secure (Score:5, Informative)
So, I decided to try using it as a desktop product, now that I'm doing more "office" type tasks. Those elements I found very difficult, as described in my original post. Some stuff I figured out, after fooling around with config files. Other things I just couldn't fix. An example is the fact that when you're using OpenOffice Calc and try to save a file to an SMB share, it pops up windows about not being able to save a backup copy of the file. Yes, I checked all the permissions. Yes, I mounted the SMB share both by using Gnome's built-in smb:// interface and just sticking it in fstab. No, I don't have time to go through OOo's source code and fix the bug. I have a job.
Just installing the thing and getting a good set of apps on it took about 8 hours. I followed a guide posted online. It worked well, but that's 8 hours I'll never get back.
I think people are fooling themselves when they say people are just more familiar with Windows. As between Windows and OSX, I can accept that argument, since in my experience OSX works pretty well. Gnome and KDE are a different story. It's not just familiarity. It's the fact that they have serious bugs and problems that affect everyday users and make using them really hard.
Re:Microsoft is betting on online services (Score:3, Informative)
That's *precisely* the reason that investors are getting jumpy about MSFT. MSFT is still priced as a growth stock and Microsoft isn't growing. Microsoft keeps promising that its non-Windows non-Office investments are going to pay off, but for the most part they haven't. Many of Microsoft's investors would rather see the money that currently is being routed into black holes routed into their pockets instead.
Re:Microsoft is betting on online services (Score:3, Informative)
And none of their products break even. Office and Windows turn profits. The rest return very heavy losses. Open an annual report sometime.
And where do you think we get much of this information from? Industry analysts. They've always known exactly what's going on with Microsoft. They're questionable financial practices have never been a secret.
Re:Windows monopoly is secure (Score:3, Informative)
Let the clueless use Windows, I don't care. Just don't say that that is the entire measure of what constitutes "ready for the desktop".
Personally I don't feel at ease in Windows because there _isn't_ a simple text file I can edit by hand to make something do exactly what I want.
At the software company I work for, 80%+ of the people run Linux on their desktops, and it works fine. Just that the clueless need something limited, doesn't mean that the more complex stuff out there is bad. It just means it's not for the clueless.
And Their Stock Price Takes the Hit! (Score:4, Informative)
Shares in Microsoft Corp. (MSFT.O: Quote, Profile, Research) slid more than 11 percent on Friday, their biggest drop in more than five years, after the software giant said earnings would be hurt by increased investments aimed at fending off rivals such as Google Inc. ... The move shocked Wall Street, which had hoped to benefit from the company's biggest product releases in years, with its Vista operating system and Office 2007 scheduled for January. ... "This is still a company that is extremely profitable. What people are worried about is whether that ever flows through ... to the benefit of shareholders, or does the company spend that money," said Charles Di Bona, an analyst at Sanford C. Bernstein.
No doubt disspointing reviews of Vista and DRM'd content are part of the fizzle.
The long predicted downward spiral has begun. Employees are leaving for greener fields, product sucks and the competition is better. It will only get worse for them. They had their chance to fix things back when they promissed to take care of security four (five?) years ago. Instead of fixing, they wasted their time and energy with more anti competitive junk like Bitblocker, Paladium and lock box media. Their efforts to expand into the server market flopped and so will their efforts to expand into the kinds of services they derided back in 2000. Such a spiral could not have happened to a nicer company.
The Microsoft idiots thought they were going to come out swinging and are surprised that people are tired of being punched in the nose.
Re:Energy is being lost to the universe (Score:3, Informative)
I have a job, a car I work on in spare time, a girlfriend, and volunteer work I do. I still have time to use linux. Linux works for me. I do gaming on it, host my own webserver, office, chat, and everything else you do on your workstation probably.
I don't see the problem. People act like Linux is the most complicated OS ever. I guess they just don't know how to use the tools included in linux. It makes sense anyway, if you don't know how to use a tool, it's useless to you.
It's ignorance in use that only makes it the wrong choice for you. I learn more about linux/unix every day, and it feels better in the end. I use to be a Windows user, but it's not as satisfying as linux has become for me.
Just my thoughts
Re:Windows monopoly is secure (Score:3, Informative)
I have used a Linux desktop for the last 5 years, starting with a retail copy of Mandrake and knowing almost nothing about Linux/Unix. While there have been problems, it has not overall, been any more hassle than Windows. This is why people suspect you of trolling - your experience is so much worse than ours or that of anyone we know that it seems highly improbable.
and try to save a file to an SMB share
All the specific problems you have mentioned over the course of several posts have to do with SMB shares. OK, so at most all we know is that there are problems with SMB in FC 5. Going from that to "Linux sucks as a desktop" is a big leap.
Just installing the thing and getting a good set of apps on it took about 8 hours
I only took about three hours to install Mandrake with all the apps we needed on all four PCs in my small office a year and a half ago. Its not what I would do now - the way to use Linux in that environment is to have a single server and x terminals but I was still too much in the Windows mindset then.
Installing Ubuntu is faster. In fact if you have something else to do while waiting for the install, the actual amount of time you spend doing anything is very small.
Gnome and KDE are a different story... they have serious bugs and problems that affect everyday users and make using them really hard.
I found the Linux desktops I have used, the default KDE desktop on Mandrake and the Gnome Desktop in Ubuntu to be very productive - not just for me but for several people in a small business and several more home users. Your not liking Linux desktops is just a matter of taste or bad luck.