re: Microsoft's Struggles Grow: 9 Key Points
1. Microsoft remains a very profitable company.
(Ballmer was a Pepsi exec during its decline.) Not as profitable as it should be. Pepsi was still profitable as it lost market share to Coke.
2. Windows has never been this vulnerable.
Per those fools at Gartner et al that can't explain why XP still has 40%? Yes Tablets have grown, but unit numbers of Basic Desktops/Laptops are up slightly as is 1% US economic growth. Total expenditure of Tablet+PC approximates PC only spending a few years back. Real Estate agents have a Tablet and Smartphone but use Laptop to show Multiple Listing Service to customers, & use a desktop in the Office. Brokers & Bank Execs still do paperwork on PC. Doctors carry around a Tablet but enter patient notes on a PC. Would you want your MD to make a surgical decision based on Xrays he viewed on a Tablet? Macs, Linux, et al are not a threat to Windows, Microsoft is.
3. The Surface RT is an epic flop.
MS Usability group usually has a strong influence on MS direction. Apparently ignored to "be like Apple" & misunderstanding Apple's key metrics. Surface is a Device; RT is a "Metro" presentation interface: IOS has Cocoa, & Android has Dalvik (java micro edition clone).
4. Enterprise business performed well -- but still below expectations
Ballmer's previous reorgs failed. The current reorg seems aimed at help Ballmer's clueless outside management hires control the company.
5. Office 365 is doing great, but the larger Office business is a mixed bag. Office365 eats into not only on premise Office sales but also "Office Servers" sales. Office365 popularity is due to its lower cost (& saves businesses money on infrastructure), & MS loses money on its almost break-even pricing. Office is no longer the cash cow that bouys up MS.
6. Microsoft is generating money from mobile phones -- but maybe not Windows phones. Yet Apple owns 35% of ARM holdings & makes money from licensing of CPU in MS phones. The key to Mobile success is wireless providers that promote & discount the phones; both Allen & Gates own big stakes in Telecom. Handset manufacturers use Android because: has small footprint, it is "free", and has drivers for Telecom RTOS requirements. Windows Phone is NOT free, larger hardware footprint, and handset/tablet makers need their own Hardware Abstraction Layer for Windows.
7. Microsoft's OEM relationships are a mess.
Perhaps the commoditization of hardware has something to do with it? Microsoft used to depend on partners evangelizing their products, now MS *THINKS* they understand their OEMs' customers better than they do.
8. Windows 8.1 needs to succeed.
Lack of acknowledgement of the empiric upgrade cycle (5-7 years). Previous Ballmer reorgs screwed the OS: previously OS (Server+Desktop) was 45% of cost & 25% income (vs Office 20% of costs & 50% of income).(MS no longer breaks out this cost information externally), NT6 codebase is longest running in MS history, Vista 6.0, Win7 6.1, Win8 6.2, & issues in the KB as "to be fixed in 6.0" are still broken in Win8. This OS code stagnation lowers internal OS costs, offers no value to users.
9. At least Microsoft has good company.
Most are Microsoft partners, but countries Worldwide are in financial turmoil. This epidemic of bad decisions seems to stem from stockholders (esp Fund managers) that vote with management e.g. Microsoft stock would surge if the board kicked Ballmer out.