Last week, BI editor Jay Jarow wrote about how Steve Ballmer’s nightmare is coming true: Many huge market trends continue to move against Microsoft, and the company’s responses to them have not yet done much to change its fortunes.
Jay’s article continues to be very widely read, and it has prompted a strong response.
Some folks, often in Silicon Valley, think Jay is dead right. Silicon Valley wrote Microsoft off long ago.
Others, who remember Microsoft’s “fast follows” and destruction of early market leaders in the 1990s, still think Microsoft doomsayers are missing the big picture: Microsoft will come from behind to crush “consumer” companies like Apple and Google, the same way it always has.
With every year that goes by, this latter view seems increasingly delusional. Microsoft has always been an intensely strong competitor, but the market tides have moved against it. In the case of the Internet, Microsoft has now been in “comeback” mode for 17 years–and it’s still miles behind the leaders. In the case of mobile, Microsoft is still running a distant fourth. Meanwhile, Apple’s iPhone business, which was only created 6 years ago, is now bigger than Microsoft’s entire company.
Yes, Microsoft is still strong in the enterprise. And, yes, Apple and Google have only dipped their toes in the enterprise market. But even in the enterprise, the world is changing. The “consumerization” of the enterprise is now allowing employees to drive the IT adoption process and decisions, not the IT department. And “Bring Your Own Device” (BYOD) policies are driving huge sales of iPhones and iPads for business use.
Microsoft’s best hope is likely to double-down on its strong enterprise position and try to own it. But even that will be challenging given the rise of cloud-based apps and mobile computing, which Microsoft does not control.
In the 1990s, Microsoft used to say that the PC was the centre of the world–that all peripheral devices would be driven by it. That was true once. But not anymore. Now, the cloud is the centre of the world. And the PC is just once of many devices that run on top of it.
Here’s one of the Microsoft-still-rules-the-world notes we’ve gotten.
You really need to understand how most businesses run systems, visit a data centre some time and have conversations with some IT Directors/CTOs at Fortune 1000 companies, as I have. In NYC I urge you to visit 111 8th Ave or 60 Hudson.
First off, 90% of the world still runs Windows. APPL does not have any products of relevence but the iPhone, 70% of their revenues come from this one product, so they are as much a smartphone maker as Starbucks is a coffee house. To make such silly statements about iPads displacing PCs is just very amateur on your part. Tablets are not productivity tools, regardless of who makes them, unless you typed your article on one as well. Tablet market is much too “green” to speculate or extrapolate on any futures right now.
I literally watched MS steam roll Novell, Sun Microsystems, NetScape, AOL, (Lycos, Alta Vista, HotBot, and others). Many brick and mortor businesses are tied into MS for LAN/WAN, ERP (Dynamics), Sharepoint, Outlook and now Mobile/Surface computing will be hitting. I also witnessed the dot com bubble rise and burst, AAPL has all the makings of this type bubble, actually many parallels with AOL.
Corporate IT Departments in this day and age are not about to add AAPL products that cost 3 times the price and only allow them to do what AAPL dictates. AAPL will always be a consumer product due to their use of the “command” button versus the “options” button, “It just works,” at the price of control.
The fact that AAPL has even made it this far is that they gave up on WordPerfect and other products that never gained universal appeal. AAPL is confused they want to be Proprietary/Lock-down, but their entire recent growth/appeal is based on “allowing” consumers to use MS Office, IOS (Unix-based)…
You need to realise overall as a tech writer that hardware in general is dying (content is future…Jeff Bezos gets it), and there isn’t anything luxurious about technology, look at the Vertu sometime. Most tech seasoned folks know hardware is only good for about 3 years, then time to upgrade. Much of iPhone’s success is also due to the carriers subsidizing the phones by $400 a pop, if consumers really paid $600 per phone as a few did at the initial release of iPhone, AAPL would not even be around for us to be discuss them.
I think more and more people are realising that AAPL keeps USB ports, HDMI ports, 4G and other simple features from them in their products to keep profit margins healthy…
Innovative hardly, Marketing genius absolutely!
Founder – Chief Recruiting Officer