There is no shortage of Mac fans willing to predict the demise of Microsoft.
People wondered how I could think Microsoft possibly needed saving, with its size and money and power, but the firm has indeed been faltering. The latest financial results for most tech firms are now in, confirming Microsoft's position. So it's clearer what I was getting at a couple of months ago.
Microsoft's profits haven't actually crashed. They are just lower than hoped. Revenue is still rising - until you take the rate of inflation into account, anyway. Microsoft's stock has lost nearly half its value over the past year, but tech stocks are down everywhere, including Apple's.
In the current climate some would argue that 5000 job losses (about 5%) isn't too bad. I've never actually played with a Microsoft Zune - a little unit a bit like an Apple iPod. I heard that it had some sort of wierd copy protection, but otherwise wasn't a bad device. It seems that the Zune is dead or dying. That would surely be every Mac fan's dream.
On the other hand Microsoft deserves a lesson from the market and the reason is security.
Recently I noticed a tender from one of our beloved government departments, looking for a security system for its end-user computers. The requirements are numerous, over 100, including protection against viruses, stopping users doing things they shouldn't, firewalls, authentication and omnipresence. It seems to me that said department would be much better off just changing operating system, rather than trying to build a secure PC based on Windows. Thankfully for Microsoft, the government department doesn't see it that way.
The enormous cost of Windows' insecurity is borne by consumers everywhere. Just like government regulation in the building industry increases the cost of a cup coffee (through increased building costs and therefore rent), Windows increases the cost of business. It makes email harder by providing loads of easily-infected PCs for spamming networkings. It causes hotels to lock down their networks so much that you can't even use your own company's email server when travelling. It stops people from browsing and banking with confidence. It employs legions of otherwise useless 'IT staff' to reinstall, disinfect and nursemaid the country's computers.
Microsoft isn't really to blame for this debacle. It is the crooks' fault. But Microsoft's total inability to build a secure operating system (while claiming that it has) has made things much easier for the crooks.
On the other hand it is far to early to predict that Microsoft is dying. On the contrary, it has released a dodgy Windows upgrade (called Vista), but people are still looking forward to the next release. It owns the OS and office software markets (the two biggest in consumer and small business software) even though there are free and excellent alternatives. It has a presence and following (to some extent) in cellphone software despite Nokia's massive purchase and open sourcing of SymbianOS. People still buy PCs for games, and spend $1000 or more on the latest graphics card.
On the other hand (did I mention I am an octopus) I have noticed recently:
- I purchased an Asus EEE-Box over the holidays, for about $400. It is tiny and works well as a home computer. It is surely what computers should be with current technology, not these over-large and air-filled boxes. How Asus can justify paying $50 to Microsoft for the OS software is beyond me. The kids haven't even moved beyond the web browser built into the BIOS (splashtop) so we are not getting value for money from the license
- Talk of clock speeds has dried up and it is sometimes difficult even to find out the clock speed of a computer. This suggests that consumers don't care so much about upgrading to the latest spec. Computers have become more of a commodity tool than a technology-driven gadget. If so, it's about time.
- Operating Systems and office software now have all the features than most of us need, even the free editions like Ubuntu / OpenOffice. For most, there is little reason to upgrade to the latest version of anything
- Gadgets are increasingly independent of the 'PC'. You can now sync your phone over the air to a server, rather than having to connect it to your laptop. Your camera can print directly to a printer without needing a PC. Phones and other portable devices are getting better and better at operating on the Internet. The idea of the PC as the bringer-together of all these gadgets is looking a bit unlikely
- A slower trend, but local storage is on the way out. Much better to store your files 'forever' on someone else's Internet-connected disk
- Games machines now have Internet, web access, music library features as well as an excellent user/revenue base from which to push features like online shopping, movie rental, etc. It is early days, but it is by no means clear that the PC will win this battle
Microsoft's interests run in the opposite direction of these trends. So perhaps it is in trouble. At the very least, Microsoft should probably try to run with the flow rather than against it, to the extent possible. Then I might even buy some shares.