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11/4/2010
07:55 PM
Rob Preston
Rob Preston
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Down To Business: Give Microsoft Some Credit

It may not be on the cutting edge of most technology movements, but posting the highest quarterly revenue and profit in company history isn't tantamount to embarking on the Bataan Death March.

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Rarely has a company so astoundingly successful been subjected to so many predictions of its imminent demise. Sure, every huge, dominant technology company has its share of critics who don't like its products or business practices or perceived inability to innovate, but when it comes to Microsoft, even very strong financial results draw out the doomsayers.

In reporting last week that Microsoft's first-quarter net income shot up 51% compared with a year ago on 25% higher revenue, The Wall Street Journal chose to view the company's glass as less than half full. It set aside paragraphs two, three, and four of its analysis to key on Microsoft's weaknesses, mainly in the mobile phone, tablet computer, and Internet search sectors. Microsoft's phenomenal Windows and Office revenue engine continues to be pooh-poohed as only so much legacy bloatware, even if the latest product revs are blowing away customers and market estimates.

In declaring that "Microsoft is a dying consumer brand," CNNMoney.com piled on, adding media, gaming, and Web browsing to the list of product categories where the company is doomed to fail. My esteemed colleague Paul McDougall, in a column titled "Microsoft Looking Like An End-Stage Company," argued that "there's hardly a single tech industry trend line pointing in Redmond's favor right now," leading him to assert that "Microsoft as we know it may not be around in another decade—maybe not even in five years."

It's as if posting the highest quarterly revenue, operating income, and operating cash flow in its storied 31-year history—as it did on Oct. 28—is tantamount to embarking on the Bataan Death March. The serial negativity has so rankled Microsoft PR chief Frank Shaw that he created the Twitter hashtag #notdeadyet to encourage a more sober assessment of the company's prospects.

While I'm no Microsoft fanboy and don't fancy myself carrying water for Shaw, I have to agree with him. Haven't we all heard these predictions of Microsoft's demise before? It was too late to embrace the Internet (it wasn't), too hidebound to recognize that thin clients would swallow fat PCs (they never did), too technically immature to scale its SQL Server database for enterprise-class uses (it rallied), too full of itself to get a firm grip on securing its products (it made that job No. 1), and, most recently, too protective of its core businesses to embrace SaaS and cloud computing.

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