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Comment by hvs | Hacker News Reader

I’ve often pondered on why capitalism doesn’t work the way it’s supposed to when it comes to reallocating resources. ... A no-longer useful business should release its capital back into the marketplace. But institutions formed during their useful phase never seem to go away voluntarily.

This is a shallow and misleading characterization of capitalism and Microsoft's current place in the economy. To pretend that Microsoft is no longer relevant just because their mobile phone and Windows 8 haven't been successful is just lazy journalism. Look at how much software still runs on Windows machines. Microsoft software runs the modern corporate desktop and that will not change for a long time.

Does Microsoft have challenges? Of course. But to pretend like they should be wiped away because of a few bad years is the argument child makes, not a journalist.

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I think the sentiment is that Microsoft now has an expiration date on it. You can't estimate it, but you could say that you are certain that they'll be closing their doors sooner or later. The OP is advocating that the company close their doors sooner, on their own terms, voluntarily. This would, according to the OP, good for the economy, though not good for Microsoft. I think we are seeing capitalism at work: Microsoft has run it's course, and is now just trudging along. It cannot pivot, and cannot turn back to a time when the software industry allowed it to flourish. In time, it will stumble, fall down and never get up. Then others will come along, take it apart, keep the useful parts going, and kill off the dead ends. This will happen slowly and organically. That's capitalism.

People could have said the same about Apple in the 1990s.

A company does not have to raise the white flag as long as it has some money in its bank account. Until it must declare bankruptcy, it always has some sort of chance to pivot and grow. It is after all just a group of people.

Michael Dell did say that about Apple circa 1999 I think.

Capitalism doesn't put an expiration date on companies though. Capitalism, in theory, is always there to provide new life for those who put the work in to make it happen.

Whether or not the current "renaissance" that's happening at Microsoft will be enough for that is hard to say... but to say that they are more-or-less finished and should just close up shop and disband is foolish.

> I think the sentiment is that Microsoft now has an expiration date on it. You can't estimate it, but you could say that you are certain that they'll be closing their doors sooner or later.

This much can be said of any company. It's called the Organisational Life Cycle:

http://en.wikipedia.org/wiki/Organizational_life_cycle

Microsoft is still providing tremendous value, so why should they close their doors sooner? The capital will get reallocated once it's no longer sufficiently productive at Microsoft, and there's no reason to do it any sooner than that.

Microsoft has a lot of room to fall before it's too late to recover. Organizations as entrenched and resource-rich as Microsoft can't be taken out by a decade-long stumble.

Also, it's conflating too much together. The problem is unlikely to be that Windows 8 will not be strictly successful. More likely is that it won't be as successful as it was expected to be. Which is a horse of a different color entirely.

Tens of millions of people are still going to buy and use Windows 8, and it will still generate billions of dollars of revenue for Microsoft. And hundreds of billions of dollars worth of 3rd party software will continue to be developed for and used on windows for the foreseeable future. But this current stage of the OS wars is very dependent on inflection points and momentum, so if Windows 8 is less successful than Windows 7 then that could mean that Microsoft will be faced with smaller and smaller successes until sometime way down the road they actually encounter an outright failure in the OS market.

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