Microsoft's 10 Unlucky Breaks
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News Commentary. It's Friday the 13th, the unluckiest day of the year. How unlucky has been Microsoft over the past 34 years? |
[Editor's Note: This is the first of two parts. We'll be back with "Microsoft's 10 Lucky Breaks" when Friday the 13th returns in March. Yes, your lucky day will come around that soon.]
Microsoft has had many lucky breaks over the years. The company's rise through the 1980s and 1990s is really a series of lucky breaks combined with business savvy and execution on the vision of one PC on every desk.
More recently, Microsoft hasn't been so lucky. Since the mid-1990s, the company has stumbled a few times and been unlucky even more often. Recent unluckiness is so great, I had a really hard time whittling down this list to just 10 items. I consulted the independent analysts at Directions on Microsoft for their advice; these guys have followed Microsoft since 1992, and some of the analysts are former employees.
The list is by no means comprehensive, and to some people may seem somewhat arbitrary. Well, yeah, there were just so many unlucky breaks to choose from. My list is unlucky breaks with monumental impact on the company—past, present and future. I encourage you to offer your own list of unlucky breaks in the comments or by e-mail.
Microsoft's unlucky breaks are in order of descending importance, with No. 1 being most significant and No. 10 the least.
10. Windows XP launch. The shocking Sept. 11, 2001, terrorist attacks against the United States affected Microsoft in a quite unexpected way. The company had already planned a late October launch of Windows XP in, of all places, New York. The timing and venue meant that Microsoft had to do a subdued launch event. How could Microsoft get all rah-rah about Windows XP with the American psyche still in state of shock?
Not only the launch event, Windows XP marketing was somewhat subdued, too. As the true inheritor of the Windows 95 legacy—a Microsoft operating system for businesses and consumers—Windows XP should have launched with blow-out marketing.
9. Stock doldrums. Microsoft's share price peaked at around $58 in December 1999, and it has not gone much of anywhere since. A year later, share price fell to around $21. There were a few rises—$36.50 (June 2001) and $36.81 (October 2007)—but generally shares have traded below $30. Microsoft shares closed at $19.26 yesterday.
Meanwhile, some competitors have profited nicely. Apple shares rose from about $7 in April 2003 to around $190 in Oct. 2007. Following some turbulence, Apple shares pushed back up to around $174 in August 2008, before beginning a steep decline tracking the global economic crisis. Shares closed at $99.27 yesterday. Google is another example. Shares rose from about $100 in August 2004 to a more than $740 peak in November 2007. The global economic crisis plowed Google shares, which fell to less than $250 a year later. Google closed at $363.05 yesterday.
Microsoft isn't alone in the stock price doldrums. Oracle, Novell, Sun and many other software companies have seen shares decline or seemingly go nowhere up during the 2000s. For Microsoft, the share price leads to negative perceptions about the company's value and future growth capabilities. I'm not an investor, and won't be as long as my profession is journalism. But if I invested, Microsoft wouldn't seem all that attractive, which really is strange. Microsoft sells products that most people use. A company with such reach and consistently increasing revenues and profits should be valuable to investors. There's a perception that Microsoft isn't a growth company, so the shares go nowhere. It's bad luck.
8. Passing on YouTube. In October 2006, Google announced the acquisition of YouTube for $1.6 billion. Six months earlier, Microsoft CEO Steve Ballmer passed on buying the video startup for about $500 million. He chose to build rather than buy. Microsoft built MSN Soapbox, which has gone nowhere. Meanwhile, YouTube has led to an explosion in online video content and consumption.
In December, U.S. Internet users viewed more than 14 billion videos, according to ComScore. Google's share of videos watched was 41 percent, compared with 1.7 percent for Microsoft. YouTube accounted for 99 percent of the videos watched at Google sites. About 150 million Americans watched videos online in December for an average of 96 per viewer. Google had more than 100 million unique viewers, with an average of 59 videos per viewers. By comparison, Microsoft had 29.5 million viewers, with an average of 8.4 per viewer.
Something else: If ComScore ranked YouTube as a search engine, the video sharing site would be No. 2, ahead of Yahoo. If ComScore tracked Google and YouTube as a single entity, the video sharing site would account for one-quarter of searches.
I debated about putting this one on the list. Was it an unlucky break or sheer stupidity that Microsoft let YouTube get away? Whichever, YouTube's popularity is explosive at the right time—when more people are watching videos online and not just from PCs. They're using mobile phones, too. Maybe it was bad luck. Steve had indigestion, and it led to a bad decision.
7. Linus Torvalds develops Linux. Linus didn't set out to popularize the free software moment, but that's the eventual outcome of his developing the Linux kernel in 1991. Linus would later publish Linux under a GNU Public License, whose origins date back to the mid-1980s and free-software activist Richard Stallman.
Microsoft co-founder Bill Gates took a stance against free software in his "An Open Letter to Hobbyists," published in the Feb. 3, 1976, Homebrew Computer Club Newsletter. The letter admonished other software developers for reusing code created by others and laid intellectual property concepts Microsoft would later adopt. Linus' work was bad luck for Bill.
Open-source software consistently causes sales problems for Microsoft. The problem is bigger than customers switching to Linux. Customers threatening to switch may get extra discounts, which is still lost revenue to Microsoft. Linux's success, while arguably limited compared with Windows, anchors the open-source movement and energizes the fervent anti-Microsoft community. Open-source gains in Europe foster anti-Microsoft sentiments there and almost certainly have contributed to ongoing antitrust problems on the Continent.
6. Apple's May and October surprises. The year 2001 should have been great for Microsoft, with the release of new Office and Windows versions. But the year was greater for Apple, which through three seemingly small events kicked off pebbles that later set off an avalanche.
In March, Apple released Mac OS X and again in September with the 10.1 upgrade. In May, the first two Apple retail stores opened in California and Virginia. In October, the first iPod shipped. From these three 2001 happenings, Apple's brand and market share revival started small before reaching a crescendo in 2007 and 2008.
Mac OS X proved to be a rock-solid competitor to Windows XP and, later, Vista. Apple offered XP-wary PC users something different and with lower malware risk. The retail stores exposed Apple products and brand to millions more people than had ever seen them in places like Circuit City or CompUSA. The stores also promoted a Mac lifestyle. Apple Store Genius Bars also offered an important point of customer technical support and satisfaction.
The iPod would derail Microsoft's Windows Media strategy. The company had banked on Windows Media DRM and media streaming capabilities built into Windows Server to woo content providers. But the iPod didn't support Windows Media, which would come to matter two-and-a-half years later when device sales greatly increased, along with those from the iTunes Store. It would be Apple, and not Microsoft, that would come to be the biggest distributor of DRM content.
Folklore has it that bad luck comes in threes.
5. Windows Vista. If there were a blueprint for product development disaster, Windows Vista would be it. The operating system seems to have been jinxed with bad luck from the very start:
- Microsoft made big feature promises, including the ill-fated WinFS, that couldn't be kept.
- The Vista project, then called Longhorn, ran aground in 2004. Developers started from scratch with Windows Server source code.
- Repeated delays led to disaster: Microsoft missed Christmas 2006. Vista shipped in late January 2007.
- Vista proved to be incompatible with enterprise software and demanded newer hardware to run. Oh, yeah, many drivers weren't supported either.
- Microsoft targeted Vista for high-powered systems, but many users bought less powerful notebooks as the market shifted from desktops. Vista demanded too much from many notebooks and netbooks.
- Reviewers panned the operating system, and businesses shunned it. Enterprise Vista adoption was a mere 10 percent at the end of 2008.
No Microsoft competitor could have launched an anti-marketing campaign as effective as Windows Vista. The operating system damaged Microsoft's brand and the company's credibility with customers, particularly businesses.
4. The Google economy. Google's success isn't its oft-hyped search algorithm, but how the company succeeded at the search advertising business pioneered by Overture. Finally, somebody figured out how to generate real revenue from the Web.
Google's platform is characteristically like Windows. There are APIs, developers and third parties profiting from the platform. It's bad luck that Google is so much more than a search engine.
Like Microsoft undercut competitors such as IBM in the 1980s and 1990s, so Google is doing to Microsoft. Microsoft could effectively bundle and integrate technologies into Windows because the company and its partners made money from the platform. Similarly, Google can give away technologies Microsoft must charge for. Advertising from Google's platform subsidizes the products and services. Google is a threat to Microsoft because it's a true platform competitor.
Google's platform is expanding, by way of the Android mobile OS and the Chrome browser. The time is quickly coming when Google will directly compete with Windows—it's already happening on mobile phones. Why not netbooks?
3. September 2008 economic crisis. During earnings announced in late October, Microsoft executives warned of a major dip in software sales, starting in mid-September. When Microsoft next announced earnings, the news was grimmer: Sales collapsed in December. The situation had become so unpredictable that Microsoft offered no revenue or operating income forecasts for the remainder of fiscal 2009, ending on June 30. Already, Windows revenues were down 8 percent year over year during Microsoft's fiscal second quarter; profits fell by 13 percent.
Global economic gloom is bad luck for pretty much everybody. But Microsoft has unique exposure. Annuity licensing contracts soften the blow because of billions of dollars of unearned revenue that Microsoft can amortize over time. That said, Microsoft is in a unique position of misery. Among various companies, cutbacks here, layoffs there, bankruptcies elsewhere will have limited impact on technology and other suppliers. Microsoft's products are used everywhere, so the potential sales harm is greater.
Whenever companies close, cut back or lay off, Microsoft loses something. In the past 13 months, the U.S. economy has shed 3.6 million jobs. With many of those jobs go people who had used Microsoft software. Because of Microsoft's cross-product integration strategy, each worker represents much either now or in future sales. One worker might represent licenses for Windows Vista Enterprise, Office Enterprise and Dynamics CRM, and client-access licenses for BizTalk Server, Communications Server Excel services, Exchange Server, SharePoint Server and Windows Server. Microsoft's good luck when businesses were buying is looking like really bad luck when they're not.
2. The United States vs. Microsoft. The May 1998 antitrust case left deep scars on Microsoft, and forever damaged the company's image. Microsoft carries the stigma of convicted monopolist. During the trial, government prosecutors played video depositions of a testy Bill Gates rocking back and forth. The depositions weren't taken to be shown in court, but the presiding judge allowed them there.
The judge broke his ruling into two parts, released in November 1999 and April 2000. He found that Microsoft had committed about 20 antitrust violations, and he ordered that the company be broken up into two separate entities. Microsoft would later avoid breakup, but a remedy trial kept the case alive and in the news until November 2002. Bad luck: U.S. government oversight of Microsoft was extended two years from November 2007.
The U.S. antitrust case led to more than 100 other lawsuits, most of which Microsoft settled. Dissatisfaction with the outcome here spurred on competitors and antitrust investigators in Europe. In March 2004, the European Union's Competition Commission found that Microsoft violated local antitrust laws. An appeals court would later agree. Since the ruling, the European Competition has fined Microsoft and launched two other antitrust investigations.
The damage to Microsoft is simply incalculable.
1. World Wide Web. It was bad luck that Microsoft executives were looking the wrong way when:
- Tim Berners-Lee created the first Web server in 1990.
- University of Illinois students developed the Mosaic browser in 1992.
- Netscape released the first commercial Web browser in 1994.
Tim developed the World Wide Web using open or accepted standards outside of Microsoft's control. The Web shifted informational, software developmental and computing relevance away from Windows computers to Web browsers and servers. Tim's work caught Microsoft unprepared.
IBM dominated information during the mainframe era. Microsoft claimed informational dominance during the PC era, particularly through proprietary, binary file formats. The Web is Microsoft's big problem, and it's growing larger as Google and other Web platform companies exercise more control over information. The promise to end users: informational access anytime, anywhere and on anything. No Windows required.
Bill Gates fairly accurately defined Microsoft's problem in the May 1995 "Internet Tidal Wave" letter. It's a blueprint for how Microsoft should have fought back against the informational liberation started by Tim Berners-Lee. The letter is also a blueprint for how companies like Google can more effectively compete with Microsoft.
Microsoft can't put the Internet genie back in its bottle. Too alluring is the promise of anytime, anywhere informational access on any device, with no Windows required. Microsoft continues to fight for control, trying to pull informational relevance back to the desktop through products like Office System and SharePoint Server. Microsoft can't succeed. The mobile phone and Web browser is the killer combination that will eventually undo Microsoft's desktop hegemony. What bad luck.
[Please send your tips or rumors to watchtips at live.com].
Comments (55)
Very few of those are anything much to do with luck. The ones that did affected everyone, including Microsoft's competitors. Some of the remaining ones didn't turn out badly anyway. They managed to dominate the web fairly quickly, for example, and Linux hasn't done them much harm in spite of much wishing that it would.
Posted by Daniel Phermous | February 13, 2009 2:25 AM
Agreed with Daniel. The antitrust lawsuit, the miscalculations about the web, problems with Vista, passing on YouTube - these were not unlucky events. These problems were the direct result of mistakes at Microsoft - poor choices in strategy, problems in execution, etc.
To be fair, many entrepreneurs would love to be as big of a failure as Microsoft! But when Microsoft has failed, it isn't just a victim of circumstances - it has made mistakes in strategy and execution.
Posted by Greg Glockner | February 13, 2009 2:34 AM
#9: Stock doldrums: Microsoft is showing its age. All companies face a long-term challenge of continued growth. The most successful companies I can think of over the years:
1. Coca Cola: not that much seems to have changed over the decades; they still make their fortune pushing a slight modification of the sugary stuff.
2. IBM: from typewriters to mainframes, supercomputers, personal computers, laptops, and now - well, I can't say I know what IBM does these days but the company still exists.
3. Pharmaceutical companies: Procter & Gamble, Merck, Rhone-Poulenc - the list goes on.
4. Ford Motor Company: sure they have some tough times now, but it is a company that has managed to exist for many decades.
The challenge to all lasting corporations is how to change tack and maintain their income. Forget growth - a company can only get so large and competitors also grow large. The stuff you were really expert at once is now common knowledge - the competitive edge really is incredibly tough to maintain.
Microsoft has the task of defending its near-monopoly - it's rather amusing that MS pretty much has no place to go now but down. Software has matured to a great degree. The great sellers in the MS repertoire are nothing terribly new. MS cannot innovate enough to maintain competition. MS will continue to be a profitable corporation for many years to come, but don't expect any earth-moving news which would boost its stock prices.
#8: You Tube: It has been clear for a number of years that social networking was a BIG thing. MS *never* innovated in this field. 'MS chat' - a poor copy of IRC. MS only ever copied ideas and never put in any significant improvement.
#7: Linux: Bill Gates saw an opportunity to profit from selling software as opposed to hacking at it for fun and giving it away and he has built up quite a company over the years. I remember the 1970's and early 1980's - people could tinker quite a bit with their computers at that time because computers were relatively simple devices back then. People enjoyed hacking. Proprietary software took much of that fun away and also caused enormous problems in industry and academia (company X goes bust and you have a $300k paperweight). Richard Stallman believed that proprietary software was evil because it robbed users of the right to fix things and get the job done (among other things). Fortunately the GNU Foundation had already developed quite a few free tools and Linus was able to provide the kernel to make a complete operating system. People could tinker again! Freedom had been restored and peace ensued throughout the cosmos ... As social animals and also thinking animals, people just continue to improve on free software. Large corporations see such a collaboration as saving them significant amounts of development money or significant amounts of software licensing money so it actually makes sense for them to support free software. As software improves, MS find less and less commercial justification for their fees or, indeed, for their very existence. Hence the anti-competitive behavior and renewed effort for lock-in. Free software, in the long term, is the greatest threat of all to MS.
Posted by Anonymouse | February 13, 2009 6:32 AM
9 of those were poor judgment, not bad luck. Thinking the internet was a passing fad and trying to lock in MSN was probably their biggest mistake.
Can't you remember all of the schemes to increase the share price? Billions of shares bought back, dividends paid. Nothing changed the bad luck because the market does not think that MS can operate in a market with competition.
At least 3 of your bad pieces of luck are competition. Are you saying a company should expect to operate in a market without competition and that any new competition is bad luck?
Microsoft had one piece of extremely good luck, they will never see that again.
Maybe you should look up the definition of bad luck. It does not involve making bad decisions of having competition in a marketplace.
USA vs. Microsoft was good luck (or bribery) they walked away from a conviction with virtually no punishment. If they didn't want the stigma of going to court then they shouldn't have broken the law in the first place.
Posted by billybob | February 13, 2009 7:39 AM
Characterizing 9/11 as an unlucky break for Microsoft?
Posted by Phil | February 13, 2009 8:17 AM
Microsoft, aca Bill Gates, are not so good in making software, but brilliant selling their products.
They destroyed many many competitors, and crated some niche or killing applications by themselves.
Remember Lotus, Word Perfect and a long long etc.. they collapsed not because of lack of quality, but wrong strategy.
MS established a standard, and PC industry and vendors had to adopt it.
Posted by tomas beh | February 13, 2009 9:17 AM
I would add the consitent security woes that plagues MS products. Sorry Mr. FreeLaptopWithNoRealWorlITExp the truth hurts.
.
There is a report on cnn.com that MS has just offered a $250,000 reward for information on who created the latest worm.
Posted by JM | February 13, 2009 9:29 AM
#8: If the reason for doing business is making money (that's rhetorical, of course it is), not buying YouTube for $1.6B was smart, according to none other than the current YouTube owners:
http://rochakchauhan.com/blog/2008/08/09/youtube-not-profitable-google/.
If Microsoft HAD pulled the trigger in a bidding war and won, everyone would now be ripping them for the poor business decision they made.
Said it before and I'm sure I'll say it again. Microsoft will still be around long after the current generation of anti-Microsoft bashers are forgotten.
Posted by jph | February 13, 2009 9:47 AM
Microsoft has more than its fair share of stupid acquisitions AQuantive, Fast, Bungee, XBox, the share of Facebook. None of them are great earners between them have blown > $15 billion which will never be paid back. You could say the reasoning for buying YouTube was the same reason for spending >$8 billion on the XBox, both are long term bets for the living room.
In the meantime Apple now has more money in the bank than MS and they are growing their revenues while MS is shrinking.
Nobody is saying that MS will disappear, they will just lose a lot of control they have in the market. The company will see massive downsizing in the next few years. Hopefully we will see a better Microsoft emerge, but I am not holding my breath.
Posted by billybob | February 13, 2009 10:06 AM
The unluckiest move of all was Gates selecting Ballmer as CEO. Everything has been downhill since, for both shareholders and customers.
Posted by Ed T | February 13, 2009 10:46 AM
While I think that Joe's list is good, the title of "Unlucky" is way out of line.
Unlucky? Becoming the richest businessman in the world is unlucky??????? YOU AND I SHOULD BE SO FREAKIN' UNLUCKY!!!! I'll take that bad luck any day, Joe, and I strongly suspect that you would also.
Having IBM hand you the market on a silver platter is PURE DUMB LUCK, and seeing the opportunity is PURE VISION, and jumping on the opportunity is PURE BUSINESS SENSE.
Winning the world's biggest lottery is LUCKY. Not winning it a second time is NOT unlucky.
An infinitely better title to this might be:
Microsoft's 10 Biggest Mistakes
As many of the other posters have said, it's not luck, it's missteps.
And 9/11 is unlucky for Microsoft????? What about the rest of the country??? What about the thousands who were killed, and the many more thousands of family and friends left behind? GET A SENSE OF PROPORTION, JOE!!!!!
Posted by Philosopher | February 13, 2009 11:56 AM
Here's #11 Joe:
Microsoft opens hundreds of retail stores in the middle of a worldwide depression. They lose lots of money and 18 months later all are closed.
#12: Ballmer, Bach, and Ozzie get the boot, and the MSFT share price doubles overnight.
Posted by Greg | February 13, 2009 12:41 PM
Failure of Microsoft to do anything meaningful about Windows Malware has to top this list. It is perhaps the biggest reason for users to switch to alternative OS.
New And Improved Storm Botnet Morphing Valentine's Malware
http://www.darkreading.com/security/attacks/showArticle.jhtml?articleID=213403915
"The botnet formerly known as Storm is ramping up its ability to evade detection by automatically generating thousands of different variants of its malware each day as it spreads and recruit more bots.
Waledac -- the new and improved Storm -- is using its favorite holiday, Valentine's Day, to spread the love with signature phony greeting cards and romance-themed email that Storm so infamously spread in the past. "Over the last 24 hours, we've seen over 1,000 new variants [of Waledac code]," says Pierre-Marc Bureau, a senior researcher with Eset, which expects Waledac to eventually pump out thousands of variants a day. "It was a bit lower than what we are expecting. It may not have reached many of our clients yet." That said, it's still a big jump from the around 10 new versions a day Eset had seen the botnet creating, he adds.
One of Waledac's latest attacks comes in the form of a puppy love e-card with a Valentine's-related link, as well as other warm and fuzzy-looking email. Subject lines include the usual "a Valentine card from a friend" and "you have received a Valentine E-card," but once you click the URL to retrieve the message, Waledac's malware is downloaded onto your machine. Another attack uses a phony pop-up that appears to be from Microsoft stating the machine is infected with spyware. That leads to a fake antispyware site that not only infects the machine, but also tries to sell the victim its scareware, according to Patrick Murray, director of product management for Marshal8e6."
Posted by Chips B Malroy | February 13, 2009 1:01 PM
Malware writers target Digg with fake celebrity stories
http://arstechnica.com/security/news/2009/02/malware-writers-target-digg-with-fake-celebrity-stories.ars
"Sean-Paul Correll of PandaLabs Security has documented several instances where users falsely submitted "stories" that led directly or indirectly to malware-infested websites; the exact attack vector varies depending on the preferences of the assailant or possibly the technical limitations of his infectious agent. In some cases, malware authors are simply commenting on legitimate stories, while in others, the submitted stories themselves lead directly to infected sites."
Posted by Chips B Malroy | February 13, 2009 1:05 PM
"There's a perception that Microsoft isn't a growth company, so the shares go nowhere. It's bad luck."
Good that you gave the caveat of not being an investor. Plenty of companies are value plays versus growth plays and still see healthy stock appreciation. Warren Buffet has made a few billion buying them. The cause of MS's poor stock performance lie deeper. Concerns about competition. Concerns about investments. Concerns about spending. Vista. Zune. Xbox. Online. etc.
Posted by Paul | February 13, 2009 1:05 PM
"Microsoft co-founder Bill Gates took a stance against free software in his "An Open Letter to Hobbyists," published in the Feb. 3, 1976, Homebrew Computer Club Newsletter. The letter admonished other software developers for reusing code created by others and laid intellectual property concepts Microsoft would later adopt.
Gates admonishing others re basically IP/code theft, is most ironic and a real laugher.
MS has unethically built and maintained it's vast empire thru "borrowing" (cough) IP from others.
"Do as I say, not as I do" comes to mind.
...
Posted by MacCanuck | February 13, 2009 1:21 PM
".....The mobile phone and Web browser is the killer combination that will eventually undo Microsoft's desktop hegemony. What bad luck...."
yeah sure...but wasn't that going to happened in the past by OS/2, something called the NetPC, Java, Linux, OpenOffice...just to name a few potential Microsoft-killer apps that never materialized?
Posted by evan | February 13, 2009 1:22 PM
I am a MSFT hated to some extent. But my baby has a computer, XP, she hammers on the keyboard, clicks on anything, has no fear so to speak. The goofy computer keeps on running.
I especially dislike Word. But who is going to push Word out of near 100% business use? In theory it would be easy if the new word processor could simply read Word and write back into Word. In theory.
Posted by Bhodie | February 13, 2009 1:25 PM
@Joe,
My apologies for sounding harsh. I still think that the title is incorrect, as it was conscious decisions and not luck that drove most of the missteps. But... the contents of your list are very well researched and right on target.
@evan:
Re: "yeah sure...but wasn't that going to happened in the past by OS/2, something called the NetPC, Java, Linux, OpenOffice...just to name a few potential Microsoft-killer apps that never materialized?"
OS/2 died from self-inflicted wounds. They can be summed up by two statements issued by IBM:
1. "... but the market has a mind of its own" (from 'Inside the AS/400'), a tribute to the post-Watson IBM theory that they could drive the market and didn't need or want to listen to it.
2. "It must work without a mainframe, but it must work better with a mainframe". This emanated directly from the mouth of a typical IBM salesman: Someone who could (and often did) stay up all night drinking and get up at 6:00AM the next day bright, cheery, with not a hair out of place, but without a functioning brain cell.
Sun didn't fumble Java as badly as IBM fumbled OS/2 (and WorkPlace OS, a costly abortion that never even saw the light of day), but they still ended up marginalizing their hardware business AND their operating system business. Not smart business, but a great language and platform.
Linux and OpenOffice? No, they haven't killed Microsoft. They HAVE killed at least one chair and perhaps a wall, though. :-)
And they do signal the beginning of the end. It's difficult to predict when MS will fall, but all business empires fall eventually, due to a combination of complacency from wild success, and inability to find a worth successor to the rare visionary who founded the company.
And Linux + FSF + the open source world are not only gaining speed in this current world economy, and not only do they represent the spirit of human software development that Gates' Letter to Hobbyists railed against, but it's also the original software model. Even IBM used to give away the software, making up for it by a torrent of revenue from lucrative hardware leases. IBM is one of the original open source companies? Betcha never realized it! But don't despair, it took me a while to see it, too.
Posted by Philosopher | February 13, 2009 2:43 PM
I like the comment reminding us of the age of enlightenment in which there was no tinge of opprobrium in the term hacker. Instead, it was simply a noun designating willingness to gain insight and learn to code in a condition of preternatural innocence. True enough, simply rebooting the machine would erase all the draft sorties, and clear the electronic breadboard, so to speak.
I read the Microsoft list of fretworthy passages as simply the tale of a company that stayed true to its origins as a tech outfit. The reflections on OS/2 are an appropriate comparison to the contemplation of Microsoft's soul for the personal computer spectrum of development, ok if you were accustomed to reading big iron code, so you could understand the manuals and error messages. The combinaton of MS-DOS and graymarket hardware, plus acceptance by both developer and workstation communities ended IBM's plan for desktop hegemony, but they still made a series of the best keyboards available. I would add to the Microsoft unlucky ventures list its discovery of ten innate typists who were born with the ability to type simultaneously with both hands without looking at the wierd geometry of the curled keyboard, with absolutely independent reflexes in right and left sides of the body. I think this condition may be common in progeny of parents who are coders, but that is only a populist generality which I would have to research.
A good article, and provocative.
For the sequel about Ten Lucky Opportunities in Microsoft Succeess, there could be a footnote to the final item, when published, one about Microsoft's early work with compilers, and even its cheerfully thorough presentation of its funny little dialect called Microsoft Basic around the epoch of the first Computer Faire.
Posted by JohnLopresti | February 13, 2009 3:17 PM
@Philosopher
Agreed completely.
A piece of friday 13th news for Microsoft:
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@Everyone:
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http://www.informationweek.com/news/windows/operatingsystems/showArticle.jhtml?articleID=214200260&subSection=Operating+Systems
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As some of our posters here say "Vista is loved" strange then why there are users that wish to downgrade. Maybe someone of pro-MS opinion can enlighten us as to why a user would want to remove Microsofts flagship product in order to put an earlier version of Windows onto their machine?
Posted by Goblin | February 13, 2009 5:34 PM
The article was interesting and instructive, congratulations Joe.
BUT, you committed a BIG error confusing bad luck with mistakes, this is important thing principally because of the perception we'll have about you and your general culture ( basic for you development as journalist)
Therefore I recommend you start reading history.
Then you could begin to discovery the difference between a fortuitous event (called Luck) and a concatenated event (occurs due to the pressure exerted by other events)i.e.: a glass full of water, placed under a leak will be leaking by a drop of water.
I'm sorry but I think it's convenient for you to know my honest opinion.
-------------
Entering in the theme: I do not believe in fortuitous event because I think that the 'luck' is simply a huge set of variables that we are not able to calculate yet (governed by what we call 'chaos theory')
Obviously this spoke for me has been reduced almost to the absurd.
Marco.
Posted by Marco | February 13, 2009 5:49 PM
Microsoft sued over Vista-to-XP downgrade policy
http://blogs.zdnet.com/microsoft/?p=2027
Microsoft is under legal siege again over Vista. This time, a consumer is suing the company for using its monopoly power to force her to pay to downgrade from Vista to XP on a new laptop.
-------
And this is NOT bad luck (and we will look trials about; 'Perilous Migrations: XP to Windows 7?')
Posted by Marco | February 13, 2009 6:02 PM
Perhaps not "luck" in the truest sense but MS is certainly in the unenviable position of having grown so enormously large so quickly. They're too big to be anything more than perhaps the best of the lumbering giants among corporations. A 90K+ employee company (not counting the other 40K” vendors and contractors) in a fast-moving business that requires rapid innovation is a non-starter. They should split into 3 or 4 companies and get back to the kind of culture and pace that served them best.
Posted by Scott | February 13, 2009 6:18 PM
Hi Goblin I didn't read your post and post similar link, excuse me.
Posted by Marco | February 13, 2009 7:35 PM
Re: World Wide Web.
The last section is nonsense. It was NOT bad luck that caught MSFT out.
The company simply has done and does nothing innovative. Everything is derivative, stolen, warmed over, junk: Vista(ster), Zune, Xbox, LiveSearch, PlaysForSure, WinMo, etc.
The ethos at the BloatFarm is purely mimicry; take from someone else, do minor rearranging, graft it on to one of the monopolies, choke the other guy to death with a monopoly anaconda.
When faced with true innovation like the Wii, iPod, iPhone, OSX, the Bloatfarm produces derivative, tiresome and inoperable junk that the marketplace inevitably rejects. (Has anyone ever actually seen a Zune, let alone seen someone "squirt" someone else? The Zune is emblematic of all that is wrong at the BloatFarm: second rate tiresome junk, almost universally rejected in the market place. Does anyone actually enjoy surfing the web on an execrable WinMo handset; why is there no WinMo "killer - it is because WinMo is already roadkill.)
There is a word for the management that delivers such products: failed.
It will take more time but the utterly failed nature of BloatFarm management becomes clearer each day. The only advantage MSFT has is fleeting: its tedious monopolies which depreciate minute to minute.
It the high end, Apple drains away customers because no one really wants to use the clumsy, klunky, time consuming and confusing Windows junk; no one wants constant BSODs and even more confusing "dialog windows" that issue in only one option: "Okay" and then shut down. Why uses a junk OS when you can have the solid reliability of OSX with out all the daily viruses, trojans, worms, etc.
At the low end, google drains Office users and dries up the Office monopoly revenue pool. Google recognized early on that Office is a monolithic dungpile that almost no one uses. The average user uses less than 10% of Word or XLS capability. Why spend $250 for bloat you do not use and a monopoly update each year when you can get "good enough" from google. The current economic downturn will likely see several large users move away from Office Bloat.
Good.
The demise of the BloatFarm is dearly to be wished. It has stifled innovation for too long; it has produced derivative, shoddy junk for too long.
It is time for the global marketplace to stab the bloated heaping dung monster in its revenue heart and kill it off, finally.
This cannot come too quickly.
Posted by Jeremy w | February 13, 2009 11:11 PM
Five years ago Microsoft had the best operating sysmte on the planet for mobile phones. Then they forgot to develope and more or less provided the same OS year after year, only updating the build #. During that time the main competitor Symbian evolved into a serious threat, but MS failed to act.
Then, all of a sudden, Apple saw what was happening and decided to have a go. They proved what a touch screen OS really should be like, no more poking at your phone with a stick. MS again didn't notice anything.
Along came iTunes on the mobile, App Store and lots of other goodies. But still MS insists on supplying the same old OS, even though all manufacturers using it now HAVE to create their own gui or no one will buy their stuff. Even the latest iteration of WM 6.5 is still more like their OS 5 years ago, than what the competion is providing today.
So it looks like MS soon is in for som more 'bad luck', as they are loosing the grip on the smartphone market very fast...
Posted by john | February 14, 2009 10:29 AM
Microsofts problems and issues are very similar to what happened to IBM.
IBM got too bloated trying to compete in too many areas an couldn't maintain focus on all of them.
IBM was derailed by the DOJ anti trust action for a long number of years (10 years I think)
IBM had a corporate culture that refused to accept changes - the Mainframe will live forever and the PC is a fad and will go nowhere
IBM could not develop decent products in house that people wanted to buy
The biggest issue facing Microsoft now is that in the consumer market they have ZERO credibility and a bad reputation thanks to VISTA and the Zune. Businesses are in a financial retreat and Apple is making money in the consumer market.
Microsoft will not go away but it will become irrelevent just like IBM has become.
Posted by DougE | February 14, 2009 11:12 AM
Apple opened it's first stores in 2008????
What about the company owned stores they had in the 1980's? Why don't you do your homework?
Obviously it was written by someone who wasn't even born yet when Apple had those stores in the 1980's. Or perhaps they were so gungho about MS they ignored everything else. Go look at the history of computers!
Posted by John Bowling | February 14, 2009 11:58 AM
I think this site has a vision and strategy problem. If it wasn't for MSFT, we wouldn't be having internet. Where does browsers run on? Mac 7-8% of credit market?
I thnink this site has the wordt writers I have ever seen
Posted by josh | February 14, 2009 2:52 PM
josh :wrote
"I think this site has a vision and strategy problem. If it wasn't for MSFT, we wouldn't be having internet."
---------------------------------------------------
I thought Al Gore invented the internet.
Posted by Ralph | February 14, 2009 4:14 PM
@josh:
Re: "If it wasn't for MSFT, we wouldn't be having internet."
The internet existed long before MSFT ever realized it had any value. Until NT and Win 3.X, MSFT didn't even bother to ship their tinker-toy operating systems with TCP/IP on it.
Re: "Where does browsers run on?"
The first GUI browser was Mosaic and it ran on Unix.
Re: "I thnink this site has the wordt writers I have ever seen"
Yes, and your stupid spelling and asinine grammar put you right up there with the worst writers on this site. You might even be in a tie for #1 Worst Writer on This Site. Congratulations!!!
Posted by Philosopher | February 14, 2009 7:12 PM
Hi Philosopher!
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You have to give Josh some credit, at least he didnt use obscenity or insults to put his point across, theres only a few Pro-MS posters here that can do that!
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Maybe he was going for comedy value? "I thnink this site has the wordt writers I have ever seen" LOL.
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@Everyone
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First the UK military became a victim of a Windows exploit. ( a few weeks ago)
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Next was France and their military systems were hit with a Windows exploit. I joked at the time and said at least it wasnt personal to the UK. I also joked that maybe Germany would be next, since it appears to be hitting the EU. Guess what? I was right, Germany are the new victims of a Windows exploit.
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http://boycottnovell.com/2009/02/14/german-military-windows-worm/
Posted by Goblin | February 14, 2009 7:25 PM
More disturbing allegations:
"Are Microsoft Partners Spreading Open-Source Fear?"
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http://www.crn.com/software/214200273
Posted by Goblin | February 14, 2009 9:15 PM
Hey Goblin, the shills are out in force on Tech Blorge. Especially that person who "claims" to use Linux.
" Linux zealots never quote verifiable facts to support their argument because they don’t exist. It’s always sweeping generalities and rhetoric.
7 is going to slam the door on Linux as desktop OS."
http://vista.blorge.com/2009/02/12/business-customers-told-skipping-vista-could-be-bad-idea/
Posted by Ralph | February 15, 2009 1:21 AM
Thanks Ralph, Ill go and take a look.
Posted by Goblin | February 15, 2009 4:41 AM
LOL
Tried to post a comment (and from an internet cafe)
and got the following message:
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"Sorry, but your comment has been flagged by the spam filter running on this blog: this might be an error, in which case all apologies. Your comment will be presented to the blog admin who will be able to restore it immediately.
You may want to contact the blog admin via e-mail to notify him."
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I had no links in the message. Im sure its all just a mistake and my comment will appear shortly!?!
Posted by Goblin | February 15, 2009 5:01 AM
Im sorry, my followup post is being held for moderation. Since Joe has never censored, I expect its my fault.
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Joe, I wont waste your time with an email, but could you consider approving it (if you read this message)
Posted by Goblin | February 15, 2009 10:07 AM
Hows this for an unlucky break, if the allegations are true, an update to the Xbox360 is causing the machine to fail. - It must be noted though at the moment this is unconfirmed.
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http://www.pcworld.com/article/159200/xbox_360_rrod.html?tk=rss_news
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Posted by Goblin | February 15, 2009 10:15 AM
Philosopher, open source in it's original conception simply does not exist. It's just big corporations giving out software, baptizng it as open source, in order to compete with Microsoft while trying to get their money by selling services, consultancy and support. Yes Microsoft's dominance will eventually fall, it's inevitable, but I am not sure I will be here to see it.
Posted by evan | February 15, 2009 5:06 PM
Quote Evan "Philosopher, open source in it's original conception simply does not exist. "
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So that is forgetting about MAME and the many emulation projects out there is it? Thats forgetting about the distros created by small groups of hobbyists? True your Open Office and other mainstream Opensource packages may have a financial element, but charging for support is a little different for the end user is it not? and in anycase I could set up a company for any piece of software, open source or not and offer support for it. People dont have to buy that support.
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Take Ubuntu, I wonder how many home users would pay for support when you can get just as much of it from many forums for free?
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Quote "....baptizng it as open source, in order to compete with Microsoft while trying to get their money by selling services, consultancy and support."
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And the problem with that is? If you dont want the services, dont pay for them. You can use the software free afterall, so if after doing that you decide you dont want to pay for any support, you dont have to.
Its a little different in the proprietary world isnt it, where you are paying for the product before you can even get to a point of deciding if you need any extra support for it.
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Quote "Yes Microsoft's dominance will eventually fall, it's inevitable, but I am not sure I will be here to see it."
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Whats your point? This is nothing to do with the rise or fall of a company, its to do with the right tools for you. Im sure everyone here would agree that if you have a piece of software you love using, its doesnt matter to you if 1 person or 1 million people use it.
Posted by Goblin | February 15, 2009 6:19 PM
Interesting article over on Boycott Novell:
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"Vista 7 — Just Like Vista — Starts Dropping Features Several Months Before Release"
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http://boycottnovell.com/2009/02/15/vista-7-dumps-ultimate-extras/
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Deja Vu?
Posted by Goblin | February 15, 2009 9:18 PM
@Goblin, regarding the ring of death. A few weeks ago I updated Gears of War 2 and the XBox crashed halfway through the update. After that it started giving the checkered display and ring of death.
Initially I thought it might be related to the update. I opened the XBox and dusted it with compressed air. It's been working fine since then. Probably some overheating since the airflow was obstructed by dust.
Posted by Gerardo Tasistro | February 15, 2009 9:36 PM
@Goblin, who says :
"Hows this for an unlucky break, if the allegations are true, an update to the Xbox360 is causing the machine to fail. - It must be noted though at the moment this is unconfirmed."
----------------------------------------------------
I good guess its almost confirmed judging from the many forum complaints out there.
Just to add something here, but not about the update:
Microsoft Sued Over Red Ring of Death
http://www.tomsguide.com/us/Microsoft-Xbox-360-Lawsuit,news-2779.html
"Apparently, a lawsuit against Microsoft exists in the Sacramento County Superior Court, alleging that an excessive number of Xbox 360 consoles have failed.
According to Dailygamesnews.com, the lawsuit also alleges that Microsoft purposely concealed the excessive failure rate in fear of losing its competitive edge over the imminent launch of both PlayStation 3 and Nintendo Wii consoles. If found guilty, Microsoft will have to publicly launch a refund program in California as well as disgorge all profits attributable to its sale of the Xbox 360.
As of now, the failure rate has dropped significantly thanks to a redesigning of the motherboard and the new falcon 65nm chip. Currently Xbox 360 models -from Arcade to Elite- should feature the redesigned hardware with a failure rate now below 15%. Still, console errors are not uncommon, as many consumers still endure video errors, hard drive failures, or other technical issues associated with one red light flashing."
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Should we be glad that Micro$oft has got the hardware failure rates down to 15%, while its competitors rates are less than the acceptable 2% rate? And now a more than possible MS software update is possibly bricking many XBox360 on top of that rate. Where are the consumer advocates reporting on this issue? Where are the governments of the world, not protecting its citizens from this Corporate Robber Baron?
Posted by chips b malroy | February 15, 2009 9:46 PM
@Goblin:
Thanks! Your rebuttal was much more eloquent than the one I was working on. I'll let yours carry the message and won't add to it.
And you just may have been right about Josh. He may indeed have merely written a brilliant lampoon... mea culpa!
Posted by Philosopher | February 15, 2009 11:01 PM
This is the most stupid article I have read all day. You get paid for this?
Posted by YOU ARE KIDDING RIGHT? | February 16, 2009 12:02 AM
Please donate your old boxes to a church-group or some needy student in these hard times! To comply with the law, and with Microsoft's leasing policy, you can now replace Microsoft OS with the free (download from the net) Ubuntu OS, which can be set to erase the hard drive of all traces of the “illegal to give away ” Microsoft system and your private information, before donation! Now, explain to your lucky recipient that all the manuals they will ever need are available for free on the internet! Just ask for them in Google! OpenOffice, which is installed already is plenty adequate for homework assignments and with a little exploring, everything else can work well too! Happy computing!
Posted by Uncle B | February 16, 2009 7:18 AM
:)
But Uncle B, you forgot to mention what our Microsoft pushers like to say...."its just so expensive to install Linux and retrain people, dont forget you need a compiler to play a music CD and its just so complicated to install new software, afterall theres no such thing as a package manager in Linux"
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Back to reality, and I dont just think its the needy student who would want Linux. I am in a position to upgrade my computer/software whenever I want, yet I choose Linux, not because its free and open, but because, IMO it is better than a Microsoft alternative. The free and open part is an added bonus! and Ive said before, if my distro was proprietary, Id happily pay for it.
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Hope you become a regular here Uncle B!
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One point Id make though, Im not a fan of Open Office simply because I dont require an all in one office suite. I champion AbiWord, since I only need a WP!
Posted by Goblin | February 16, 2009 8:02 AM
Our favorite software company is in trouble yet again.....
_____________________________
http://vista.blorge.com/2009/02/16/vista-to-xp-downgrade-fees-under-legal-threat/
"Vista to XP downgrade fees under legal threat With Microsoft heavily restricting the distribution of Windows XP, several manufacturers and retailers now charge a downgrade fee to replace Vista on new machines. If a new legal challenge is successful, Microsoft could wind up footing the bill for those downgrades."
Posted by Ralph | February 16, 2009 7:51 PM
I do not like MS. However, I must agree that their marketing strategy of forcing customers to buy new software because you no longer sell the old OS to retailers is a genius strategy for making money.
MS got the DOS from IBM and then put out false info about how non-MS DOS would damage your programs.
"How can you leave that food on your plate when all those people in xxxx are starving?", makes about as much sense as saying "How can you say 9/11 was unlucky for MS when all those people has worse misfortune?. MS needed publicity, but the country was reeling from a terrorist disaster.
FYI, My friend quit our company to open an Apple store in the early '80s.
I would like to see a story on the bad decisions made by Radio Shack when they had market share with their "Color Computer" in the late '70s or early '80s. They refused to sell third party software, failed to provide peripheral hardware, and in general, neglected a computer that had more developers and more publications than any other computer at the time. They already had consumer outlet stores in every city in the US. Yet they tried to be me-too and push for IBM compatibility with the RS-1000.
If the RS management had paid attention to developers, I think that there would be no MS and no Apple. Think about that for awhile.
My company also tried to build PC's for business customers, but like IBM, it is not profitable to sell a reliable product when the market is buying cheap parts from foreign sources.
Posted by lcsjk | February 17, 2009 3:07 PM
Lets add to the list...
- Microsoft opens retail stores during economic recession. Online retailers and others are able to offer more of a selection and for cheaper prices making these large behemoths nothing more than a a money hole for Microsoft. And during these hard financial times when people aren't buying as much software and are looking to save money by switching to open source, the stores were unable to make any money and ended up costing the company over $300 million in losses (mostly due to building costs) before folding.
Posted by Chuck | February 17, 2009 3:52 PM
Just use a Mac. Microshaft is finished.
5 years and their market share will be at around 50%, at which point many things will change very quickly.
Already they are down to around 85%. The big change is coming.....
Posted by dithers | February 17, 2009 6:54 PM
I don't know that you can actually call it bad luck.
Most of these problems have been brought about by MS and their own greed or just plain bad business decisions.
Some have talked about Vista and people wishing to downgrade. Not many are talking about Office 2007, but I have run into instances and seen places where they are downgrading Office 2007. So what went wrong? In their push to create vendor lock-in, they offered a product which out of the box was incompatible with previous versions of Office. Yes, you can make it compatible but it requires some knowledge and searching for information on how to do it. Customers were or are expecting that for $249 + they get a product that just works and doesn't require extra technical knowledge and extra work to make it work in the existing environment. Why pay $249 dollars for that, when you can get it for free (A product which requires extra technical knowledge and extra work to make it work in the existing environment)?
They made another bad decision with regards to OSS. They fought compatibility between MS, Linux, and FreeBSD. After a lot of hard work developers reverse engineered some of the protocols to make MS and Linux work together more easily, but there was still a ways to go. So they didn't leave much room for the OS's to co-exist, creating more of an either or situation. So at one time there was a decision that could be made that linux does better at this and MS does better at that. Well they couldn't allow that co-existence, so it drove developers of OS's and OSS's to build a better product. So that once where linux primarily had just a few specific server niche's they are starting to move into a the desktop and business software product lines.
So if MS had embraced open source software the products such as OpenOffice and replacements for Exchange Servers would not exist and they wouldn't have been as good as they are today.
Posted by cwashington | February 18, 2009 1:02 PM
Good list and comments. It seems to me that even more could be said about two areas: (1) Linux netbooks' uptake in the overseas market, and the possible emerging prominence of the open source desktop; (2) especially and especially, the mobile space which you touch on in your Android reference---all the signs are that the tablet PC will grow upward from the mobile space, not downward from the laptop space. Microsoft has no strong positioning there, unless they're able to do a proper job with Silverlight Mobile. I don't envision Windows Mobile 7 grabbing more market share.
If Apple is eating your upper-end laptop/desktop lunch, if netbooks in the overseas markets are eating your lower-end-sales lunch, if mobiles are threatening a fundamental displacement of this whole space (and I'm talking much more about some compelling new offerings from small IPhone competitors than about IPhone itself), the Microsoft meal could get small pretty quickly. We saw it happen with mainframes in the 80s (IBM), super-minis in the 90s (DEC), UNIX machines in the 2000s (Sun); the 2010s are going to see changes that could go even deeper. I wish Microsoft well(I like their tools and .Net 3.5/4.0 technology), and am hoping that they can get it together and stay in the center of things, for reasons other than the inertia of their huge current market share.
Posted by Mark Luppi | February 26, 2009 9:29 AM
M$ needs to think out of the box NOW, is that possible ? Maybe with the continuing loss of market share, layoffs, and product mistakes will force them to rethink their strategy.
M$ is a lumbering, bloated monster that is more worried about staying afloat than innovating good products, that in their panic, will cause them to mis-step continually until utter meltdown. Vista, Zune, WinMo, Office 2007, XBox, IE7, the list goes on..
Corporate cement, monopolistic attitudes, and continual bad habits of shoving bad products down the throats of vast community of tortured "microsoft slaves", has created a rising anti-M$haft sentiment among users to find a way out of their "pc hell". Apple hears them and innovated to welcome them aboard. Linux isn't a bad way for savvy users to run to either, thanks to distos like Ubuntu. Google apps will dig deeper and deeper.
M$ has done little to avert the onslaught of malware invasions into the Windows. The ever growing antivirus/antimalware/antispyware product market share is HUGE. This fact alone is driving customers away to Apple and Linux in droves.
Can M$ stop the blood letting ? What will happen to the PC ? Will someone overtake M$ as an O/S ? (who?)
And you know Apple will get to be a bloated monster too someday...what then ?
Posted by noel m | March 14, 2009 5:30 PM