Siracusa on Microsoft
arstechnica.com
arstechnica.com
1. Is MS now "risking it all" with Windows 8? Windows 8 is certainly ballsy, but no, MS is not risking it all. The worst case scenario for Win8 is another epic marketing fail like Vista and slow adoption, followed by immediate uptake of Win9. Unlike companies such as RIM that have been largely banished from their core markets by Apple, MS's core market hasn't gone anywhere and isn't going anywhere. MS has expanded their hardware division somewhat (e.g. the Xbox), but to nowhere near the same extent as Apple. MS has not been pushed to the brink such that they need to risk it all to survive. MS hasn't shrunk in fact. The company just looks small now that Apple has shot past them to become so big. Win8 is not a desperate bid for survival, but rather, a new foray into areas MS hasn't been successful in to date.
2. Is Apple now in MS's shoes from half a decade or so ago? iPod - 2001, iPhone - 2007, Ipad - 2010. While Apple hasn't exactly disrupted any industries lately, it's not as if they've had a long dry spell. Still, there are some worrying signs. The iPod was immensely profitable for Apple because it took so long for halfway decent competitors to arise. The iPhone was under siege by Android in a much shorter period of time and the iPad in a shorter time-frame still. The iPad mini actually arrived after it's competition, with inferior specs and a higher price to boot. The only thing it has going for it is branding. Was this a fluke or is Apple losing ground? What is beyond question is that Apple is now a giant with everything to lose rather than the nearly bankrupt company of the late 90's that had just two choices: innovate or die. Apple is sitting on such a giant pile of cash that, instead of trying to innovate, they could easily decide to just keep making their stuff smaller (or bigger) and sue the pants off of anyone who makes anything similar. They could do this, but it's very premature to say that they have. Apple is leaking more product info these days, but it's not like a retina 13" macbook pro was such a surprise that it had to be kept secret. Apple may still have disruptive stuff under wraps somewhere in the dark recesses of Cupertino.
Funny, I didn't even realize this while I was reading the article. My only thought that aligned with this was "it's an odd mistake for him to refer to WinRT as WinFX."
And the entire iOS ecosystem. It is essentially just a small iPad 2. The iPad 2 now seems to have nothing going for it, except for people with eyesight problems.
As for "people with eyesight problems" -- that's the majority of human beings!
Microsoft has continued to be profitable and technologically relevant because it scratches it's own itches (and eats its own dogfood).
Microsoft depends on Visual Studio in it's workflow. It depends on Office, SQL Server, and [perhaps still] Project, in the same way. They gave a Surface and a Windows Phone to every employee because the design goal of those products is productivity for people who do the sort of things Microsoft's employees do.
Microsoft is a B2B company. It's business model allowed Michael Dell to become a billionaire. Even IBM, for all their B2B savvy, doesn't allow that sort of thing to happen.
Apple has adopted many aspects of the model of secrecy which led to the collapse of Boston as the center of the computing industry twenty odd years ago. It has rebuilt itself as an inward focused (and perhaps ironically, given the article, paranoid) company. Even the architecture of it's new headquarters reflects this.
What the Jobs-less Apple is missing is not competent designers, but a person who has insight into the inefficiencies within an entire industry. The initial success of the iPhone may have been largely a function of it's design. But it's explosive growth was driven by Jobs' ability to change the structure of cellphone data plans. Without cheap data rates and ubiquitous fast networks, smartphones are just another gizmo. His success with Pixar was likewise the ability exploit an inefficiency (finding a suitable computer alternative to hand drawn animation).
Just how often is a company supposed to disrupt an industry? Most companies don't even do it once.
And it is. It's not an Apple bubble that John Siracusa is living in (if that is still his opinion). It's a consumer/fashion/leasure products bubble. Microsoft is an enterprise software company, and the enterprise is all about managing slow transitions and dealing with a heterogenous hodgepodge of technologies permanently.
A company like Microsoft that can build on a broad base of ubiquitous products that their custumers just cannot throw out over night has a very good chance of surviving by evolution not revolution.
What could be Microsoft's undoing is if they start to look too much like a desperate also ran in the consumer space instead of telling its enterprise customers how they can transition to the cloud, use virtualization, do big data analysis, manage compliance with regulations, allow secure access through mobile devices, etc.
I think what makes Microsoft try so desperately to be a consumer play is that they remember the past when they undermined IBM's power through a partly consumer driven grassroots strategy. They don't want that to happen to themselves and that's what their paranoia makes them focus on.
But there's an important difference. Apple doesn't want to be in the enterprise space. They are completely uncompromising about that and for good reason. Apple's strength is to control the entire experience and that's just not possible in the enterprise.
Microsoft should certainly help businesses to manage Apple gear, but most of all they should take on Oracle and SAP much more aggressively. Both are vulnerable to a competitor that understands the enterprise, makes software that people don't hate and doesn't overcharge as egregiously as these two do.
"RIM (of BlackBerry fame) is an enterprise smartphone company, and the enterprise is all about managing slow transitions ... blah blah..."
RIM is dying. Fast.
You picked a single function device that isn't intertwined with much else. Not a good counter example. Just a special case.
Also, their continued focus on Windows and Office continues to suck the life out of many smaller products. There is no escaping the gravitational pull of Windows or Office.
Microsoft's problem is that while Windows and Office give MS the freedom to explore new markets those same two things let them treat these new markets as nothing more than multi-billion dollar whims that ultimately leave customers gun shy. I'm probably one of the last ten or so people that still has a Zune subscription (because the price and software are really compelling) but I also know that if they shut the entire thing down tomorrow and told all their Zune customers to go pound sand it wouldn't make a single penny's worth of difference on the Earnings Per Share report at the next quarterly earnings conference call.
But while you say that Windows Phone was a wake up call it doesn't seem like it from the outside. When Apple announces things they give dates and prices, Microsoft announces things like the Lumia line, which look great, but they lose when they fail to deliver specifics instead just relying on everybody knowing that anything the demo will be available in the next 6-18 months.
MS may have finally turned a corner by not releasing a half baked tablet OS in an effort to fight for the number 2 spot in the tablet wars, they waited until their "perspective" on tablet usage was ready. But still, they failed to outline specific dates and prices until relatively recently. People will "flock" to commitments to specifics, not so much so to "oh, shit if we don't find a MS response to threat X it's going to be bad".
You're right about the personal devices, and it's a big deal. Microsoft's strong point has been a full stack, but the issue is that the ecosystem is evolving faster than Microsoft is. I don't think it's as much of a safe bet anymore- Microsoft's inability to execute is causing a lot of concern for partners.
Before WP7, they had not really tried very hard in the smartphone market (no innovation, windows mobile was just a poor mans symbian) so it was a no-brainer that they had not done well.
I would argue that far from being limited to the past decade, Microsoft's entire history is composed of reactions.
DOS -> CP/M
Windows -> Original Mac OS
Excel -> Lotus 1-2-3, Visicalc
Word -> WordPerfect, WordStar
Access -> dBase
Zune -> iPod
Surface -> iPad
Novell used to rule that area until Windows NT 4 Server was released. A bit later after that, Active Directory basically killed Novell (not completely, but almost).
A paranoid attitude would have been if they took their 75% profit margins on the OS and ensured that it could run on absolutely every device under the sun and invested in every far-fetched concept out there. Rather, Microsoft focuses on killing any internal competing products (such as Courier).
Bear in mind it was only canned in 2010, shortly before Windows Phone 7 based on a completely re-written OS layer came out. Bringing out a tablet based on Windows CE at that point would have been madness.
Prescient timing in the article: "If it's not Google that finally subverts the power structure of the industry, then it'll be someone else...eventually."
Just at that time of publication (Nov 2005), Apple worked intensively on the first iOS device (iPhone, first shown 14 months later).
John was right - but even he didn't dare to dream that his favorite company (Apple) is the one that eventually subverted the power structure.
Windows, Server, Office, Gaming, and Online as individual companies would all have been powerful, fierce competitors in the aughts. A few of them would already be dead, but others could be incredibly strong.
Instead they are a huge conglomeration that lacks vision and direction.
Have you read this?
http://www.microsoft.com/investor/reports/ar12/shareholder-l...
This is the vision. Device and services.
The one thing I wouldn't accuse MS of right now is playing a conservative game. If anything I think shoving the "Metro" UI on desktop users is a step too soon, too far.
What I'm not clear on is whether this is an intentional effort to circumvent the Innovator's Dilema or just chasing Apple. If it's the former, there should come other, interesting steps. If it's the latter, it will just be sad to watch.
I wish that instead of shoving MetroUI in the user's face by not allowing you to launch directly into desktop shell, they would have done something like Apple's Camera lockscreen slider - it teases you and is there at the bottom, but if you want you can ignore it completely.
Sure, why wouldn't they want everyone to just ignore that? No big deal.
Selling heavily discounted surface tablets today would alienate and possibly kill their OEMs and set forward price expectations that would preclude future profitability.
Microsoft needs to establish a position for themselves that is profitable, otherwise they're burning their bridges behind them AND in front of them. It's hard to see whether Surface is going to succeed -- the reviews thus far are at best equivocal.
With a competitor like Apple, there's no way you can win this game without the vertical integration advantage they have.
Microsoft's biggest problem when entering the tablet market is the sad state of their ecosystem. And to try to fix that, they decided to sacrifice the desktop user experience.
I think that's a pretty bold move. It's also a really really stupid move.
Why stupid? I think this demarcates where Android went wrong. Google allowed the tablet OS to ship and run all it's phone apps really badly. That set a terrible precedent and left people wallowing around in a sea of unoptimized apps (the oft repeated claim that Android has no tablet optimized apps is as much that people can't find them as that they don't exist). I think they would have been much better off drawing a line in the sand and promoting explicitly tablet optimized apps and relegating unoptimized ones to a clear secondary status.
By contrast, MS is saying, if you want prime real estate for your app in Win8 then it's going to be Metro and hence tablet optimized by default. As a result I am sure that every major software provider is going to ship metro versions of their apps, if only to get themselves onto that metro UI that every user is forced to see by default and into the store in a priority position.
They're throwing away the market domination they already have (to some extent at least), which of course is the backbone of their business, to try to get the money to pay the entrance fee in a market dominated by others, as a late comer with slim chances.
They want enterprise to migrate to Windows 8 and develop Metro apps instead of adopting iPads.
Consumer adoption is just to prop up enterprise adoption. I would bet that Microsoft makes 2/3 or more of its money from enterprise. Microsoft is money/domination driven rather than focused on delivering value and improving things.
Here's what "risking it all" would look like: Finally declare Windows is EOL. Put it in maintenance mode, no further updates. First step after that would be to work on an entirely new OS specifically for tablets and phones, without a hint of the old Windows UI anywhere. Then think about what they're going to do next for corporate clients, home PCs, and so on.
Yes, it would be massively painful in the short term. But Apple got through a similar transition just fine, when they ditched Mac OS 9. And if Microsoft does not do this, it's just a matter of time until some other company does it for them.
How can there be entire + 5%? Sometimes people try to be too clever.