Microsoft at the Tipover Point



The Inquirer has this article on “the IT industry is moving away from Microsoft” (by way of Slashdot).  While it contains a lot of typically vague and vehement Inquirer/Slashdot statements, it IS worth a read, especially by MSFT folks. I do believe the software game is going through an inflection point and I do believe the long-term implications for both Microsoft and the rest of the industry will be significant. But I also believe that Microsoft will come out of this a stronger, healthier company (queue the theme music from the Six Million Dollar Man). We’ve been through significant inflection points many times before and we’ve evolved to meet the new challenges. Do I think we need to do a better job of providing value to our customers? Yes. Do I think we could respond in a more mature manner to certain challenges? Yes. Am I totally happy with the way certain things are being done internally? No. But name another company of this size that IS perfect? A large organization is just that – an organization of people. And Microsoft is much like you’d expect a hugely successful, pretty intelligent, vastly wealthy, self-made 28-year old human to be in character. Have you ever met someone like that (any dot com founders in their brief moment in the sun)? They can be, quite innocently, rather obnoxious at times. Does that mean they cannot learn and mature into someone with more wisdom and better interpersonal skills? No. Will they need to go through some change pain to get there? Probably. But it ain’t over yet. Netscape was supposed to destroy Microsoft 8 or 9 years ago. We probably wouldn’t have the internet-centric, open standards supporting products we have today without Netscape. Java was supposed to make Microsoft redundant. We probably wouldn’t have C# without Java.


One of the things that especially bugs me about this ultra-negative, no redemption view of Microsoft that the Inquirer article perpetuates is that it isn’t balanced. There is no mention of the awe-inspiring work that the Gates’ Foundation is doing. As I posted recently,


·         he is pumping $800 million a year into his global health initiative — nearly matching the entire World Health Organization budget.


·         Gates’ immunization efforts have saved hundreds of thousands of lives.


As Scoble is fond of pointing out, Microsoft is really nothing more than 55,000 smart, passionate people trying to build, sell and deliver compelling and useful software solutions for businesses, government, schools and consumers, while at the same time, trying to maximize shareholder wealth. And sure, Microsoft employees are shareholders and option holders, but so are millions of other people around the world, directly and indirectly. We have a responsibility to them to continue to be successful. Not to mention that tens of thousands of partners and millions of customers who rely on our technology.


The other part of the article which strongly rubs me is the insinuation that all of our customers are annoyed with us and are desperate for an alternative. I can tell you quite honestly that this doesn’t gel with my direct experience working with CxOs in Australia. Sure, they are always making sure they are paying a fair price for their software, and they demand value and quality, but we deliver both of those things in spades WHEN DONE CORRECTLY. I know of heaps of organizations, both in Australia and globally, who have recently become a Microsoft shop OUT OF CHOICE. Some of them threw out Linux, AIX, Unix, Solaris, Oracle, etc. Not because these aren’t good technologies and valid solutions, but because we had something better for their particular needs. McNealy and Ellison (and the IT press) have predicted 5 of the last 0 “end of Microsoft”s. Does that mean we are infallible? No way. But does it mean we sometimes get it right? I think so.


As for discounts… it’s really REALLY hard to get discounts for customers. It’s the OTHER guys who discount, sometime almost to ZERO, in order to win the business. I see this time and time again. Let me ask this: if the technology solution is SO compelling for the customer, why do the vendors feel the need to discount below the MSFT price?


And as for “oh Microsoft used its profits from Windows/Office to prop up loss making divisions”… how much money do IBM make out of Linux licenses to feed back into R&D?


Come on Inquirer – if you are going to act as journalists, at least PRETEND to be balanced.


Comments (32)

  1. Anonymous says:

    I was wondering if ‘The Inquirer’ you mentioned in your post is in anyway related to ‘The National Inquirer’ (http://www.nationalenquirer.com/) ?

  2. Anonymous says:

    "I know of heaps of organizations…" — heh, if it wasn’t for the mis-spelling of "organisations" I’d take you for a fair-dinkum Aussie! 🙂

    I also love the fact that every man and his dog (and the dog’s fleas) likes to pull out the old "Windows makes money and XBox doesn’t" factoid.

    No smelly brown stuff, Batman!

    Obviously these people conveniently ignore the concept of "venture capital" and the financial success of every other business in the high-tech world (and possibly even other industries). How many start-ups make money their first year? Their fifth year? Ever?

    It’s a simple fact of business — it takes money to make money. And MSN, XBox, SmartPhone, and all the others are just "start-ups" inside Microsoft that are funded with "VC" from the other business units.

    (I also think it’s funny that it took XBox about a year to take a large chunk of the console market, whereas it’s taken a certain high-profile open source operating system the better part of ten years to get just a small fraction of the server market).

    But yeah, everyone should read this article; it’s funny :-).

  3. Anonymous says:

    hey if that’s how WORD wants to spell it, who am I to argue? 🙂

  4. Anonymous says:

    What does Gates’ charity work have to do with the article?

    Sorry, but none of the things you wrote prove Inquirer’s article wrong.

    Look at IIS’s market share. Apache serves almost 70% of internet pages.

    Count how many Worms/Viruses are written for your company’s OS. Things like that cost businesses money.

    Why didn’t you adress that?

    Just because you’ve managed to find some businesses who don’t know about technology much, and chose to go with Microsoft doesn’t really mean anything.

    Those business that chose to go with Microsoft will receive hefty bills. Now, you know as well I do that their productivity won’t be higher than that of their competitor who went with Linux for example. The only thing that will increase will be their costs.

    So, if they’re smart they will eventually migrate to other platforms (like Register.com did for example), or continue to pay Microsoft, and eventually get driven out of business by their more efficient competitors.

    So, nice try but you’re not very convincing.

    True, MS won’t go bankrupt anytime soon, but the shift is there.

    That’s the reason why your company is vigorously researching and testing things like

    TCPA, DRM, and custom chips that can be easily used to prevent users from installing anything but Microsoft approved software.

  5. Anonymous says:

    regarding X’s comments:

    What does Gates’ charity work have to do with the article?

    Nothing specific, but its not being mentioned is poor writing. If the Inquirer is looking to be a media outlet (of the fair and balanced type) then having a "reporter" write an article such is this is very damaging to its reputation. This article seems to be organized around the author’s desire to show the end of Microsoft. Everything in the article is gathered and organized to create that end. There is no objectivity no both sides of the argument.

    Sorry, but none of the things you wrote prove Inquirer’s article wrong.

    You are correct, but not for the reason you might think. The Inquirer’s story is presented as fact or fore gone conclusion, which it is not. What bothers me the most is this is present as "news" when it is really an opinion piece.

    Look at IIS’s market share. Apache serves almost 70% of internet pages.

    Does Apache require Linux? I don’t think so, I could be wrong. Also Apache is only one type of server, a good one at that, but does not represent all types and MS has good products in several areas.

    Count how many Worms/Viruses are written for your company’s OS. Things like that cost businesses money.

    Why didn’t you adress that?

    Again, I agree that there are many worms/viruses written for MS software. The can cost a company lots of money. It can also be a non-issue for many companies because they have proper security and desktop accounts for their users. Furthermore, if you have noticed many of the worms/viruses are written for bugs that have been previously fixed. Part of this issue is the user and part is MS. For MS they need to work very hard to eliminate bugs from their software and provide strong educational programs for users to protect their machines.

    Just because you’ve managed to find some **businesses who don’t know about technology **much, and chose to go with Microsoft doesn’t **really mean anything.

    Those business that chose to go with Microsoft will receive hefty bills. Now, you **know as well I do that their productivity **won’t be higher than that of their **competitor who went with Linux for example. **The only thing that will increase will be **their costs.

    So, if they’re smart they will eventually migrate to other platforms (like **Register.com did for example), or continue **to pay Microsoft, and eventually get driven **out of business by their more efficient **competitors.

    So, nice try but you’re not very convincing.

    Here I must disagree completely. First you are making an accusation/assumption that these businesses don’t know anything about technology. Which factually speaking you do not know. Secondly, you are saying that they will receive heft bills from MS. This implies that if a company uses anything else it will be cheaper, have you ever since the price Linux based Oracle? Definitely not cheap. Thirdly, price of software and emergency patch management is not the only cost of IT. In most cases it is a small portion of the daily grind of creating new users with the correct policies and programs. Lastly to say that price means greater efficiency is a philosphical "Staw Man." In so much that you make the connection that lower price means greater efficiency, which is not necessarily true.

    True, MS won’t go bankrupt anytime soon, but **the shift is there.

    That’s the reason why your company is vigorously researching and testing things **like

    TCPA, DRM, and custom chips that can be **easily used to prevent users from installing **anything but Microsoft approved software.

    Wow I really don’t know how to respond to this other than, dude the black helocopters are coming for you, better hide.

  6. Anonymous says:

    Actually, the subhead of the Inquirer piece reads, in bright red, 18-pixel or so letters, "Comment", which caused me to regard it as a clearly labeled editorial piece.

  7. Anonymous says:

    ouch snake — bitten —- yeah I missed that one.

  8. Anonymous says:

    First of all The Gates Foundation != Microsoft. Robert Scoble is fond of pointing out the fact that Bill Gates and Steve Balmer are not running around micromanaging everyone, that MS is made up of 55K+ individuals trying to do the best they can to make great software.

    How does Bill and Melinda Gates charitable work let MS off the hook for negative business practices in the past? Does everyone at MS work for the Gates Foundation?

    If only Gary Ridgeway would have known that charity works makes people forget about bad thing, he could have rung a bell for the Salvation Army and gotten off with a lighter sentence; Of course equating MS’s somewhat shady business practice with a serial killer IS a bit of a stretch, but you can see my point.

  9. Anonymous says:

    So Scott how do you feel about the Rockafellers (Standard Oil), Bell Labs great contributions to science (AT&T), IBM clones (IBM). All companies that were considered ‘evil’ in their time. The Rockafellers gave millions to charity, AT&T poured millions into research on non-telecommunication (ahh Unix), and IBM well does anything IT and holds thousands more patents than MS does. All have made significant ‘evil’ decisions in the past. Do we ignore what good the companies and those that run them did as well. All I am saying is do ignore the good or the bad. No The Gates Foundation absolutely doesn’t equal MS, however, it would not exist with out the wealth created by MS. No company or person is saintly not SUN, Oracle, Joe’s Bar & Grill, or even Open Source Software. There is always a bitter pill to swallow because there will always be conflict in motivation.

  10. Anonymous says:

    Giving to charity doesn’t excuse shady business practices no matter who is doing the giving.

    Now I’m just a simple guy and what I consider "shady" is probably just standard business practice in the real world. That’s why I’m not a businessman, and when I have had to play the role of businessman in the past (e.g. independant consulting), I’ve played by my own rules.

    Talk bad about SUN all you want, but don’t ever question the motives of Joe’s bar and grill/ 🙂

    http://www.infomaui.com/dining/2540.html

  11. Anonymous says:

    just wrote a lengthy response to these comments but when I posted it, I got an error message and lost it! ugh. I hate computers sometimes…

  12. Anonymous says:

    Was it the "The viewstate for this page is invalid" error?

    I get those sometimes on the .Text blogs.

  13. Anonymous says:

    YES! I’ve got it twice today alone. Figured out what causes it?

  14. Anonymous says:

    Ironically enough I just got it trying to post this comment. I think it is a concurrency issue. If someone else posts a comment, either on the same thread or a different thread, I think that asp.net freaks out and throws that error.

  15. Anonymous says:

    What does Gates’ charity work have to do with the article?

    > Nothing specific, but its not being mentioned is poor writing.

    I disagree. The article is about Microsoft, the company.

    Not about Bill Gates’ private life, or his charity work.

    Has it been some sort of personal attack on him, then I would agree, but it’s far from it.

    True, MS won’t go bankrupt anytime soon, but the shift is there.

    That’s the reason why your company is vigorously researching and testing things **like

    TCPA, DRM, and custom chips that can be **easily used to prevent users from installing **anything but Microsoft approved software.

    > Wow I really don’t know how

    > to respond to this other

    > than, dude the black helocopters are coming for you, better hide.

    Oh come on…look at Xbox.

    How did Microsoft react when people finally figured out how to install Linux on it?

    They weren’t very happy. You know it, I know it, everybody knows it.

    I read about Microsoft going over to IBM and designing a custom chip which most likely will be tested on Xbox. Thats what I’m talking about.

    And don’t get me wrong, when it comes to Xbox I don’t care, but it seems to me at least, that MS is trying to do something like this with PCs, which I don’t like (TCPA v2.0).

    > have you ever [seen] the price Linux based Oracle?

    Have you ever seen the price of Windows [something] Server?

    Linux itself doesn’t cost anything.

    Only thing that the money has to be spent on is setup/administration which is also needed in case of Windows servers.

    Cameron Reilly wrote:

    > YES! I’ve got it twice today alone. Figured out what causes it?

    Could it be MS software?

    Nah, I’m sure it’s not 🙂

    Need help switching to PHP? 🙂

  16. Anonymous says:

    …sure if you count the 12 year olds hosting the pictures of his last birthday party using mom’s computer 😉

  17. Anonymous says:

    I can tell you that at our company, we have migrated all future development off VB, .NET is .NOT, and we are writing our code using Java and Oracle platform. Serious investigations are being made to look at Linux. We are through being jerked around by M$.

  18. Anonymous says:

    Matthew,

    I’m sorry to hear that but I respect your decision. Was your decision made on any other factors in addition to "being jerked around"? And can you be more specific to what that actually means? Contact me privately if you don’t want to discuss it publicly. My email link is on the left side bar.

    cheers,

    Cameron

  19. Anonymous says:

    RE: Black helicopters, DRM, and XBOX:

    C’mon, everyone knows the XBox is nothing like a regular PC. Microsoft sold the hardware AT A LOSS with the express intent of getting money back from software sales. Of course we’re going to get upset when people get the subsidised hardware but don’t buy any games, although there’s nothing we can do about that and really it’s just a cost of doing business.

    What we can and do get legitimately upset about is people pirating software (and most of it isn’t even ours — that’s right, we care about our ISVs). We also care about people using "aimbots" and other things to cheat on XBox live, which degrades the quality of the service for everyone.

    (Aside: I read somewhere that originally Microsoft wanted to sell the consoles at a profit and make the games cheaper, but all the game companies said "Don’t do that" because no-one would buy a $500 or $800 or whatever console, even if the games were cheap)

    As to PCs, there’d be no point in making it so that Windows couldn’t run arbitrary 3rd party software. There is zero evidence to support this claim, and it doesn’t even make sense, except from a paranoid "the black helicopters are coming" irrational stance. Same goes for the PC itself running non-Microsoft operating systems. Do you think Intel or IBM or HP (who all make PCs and are all heavily invested in Linux) would make it so that they couldn’t sell Linux and related applications / services? Of course not.

    Might we see more "appliance-like" devices that can’t run arbitrary software (without hacking, of course)? Certainly. But they won’t be PCs, they’ll be appliances. Nobody complains that their toaster or television or car stereo doesn’t run Linux…

  20. Anonymous says:

    Cameron Reilly wrote:

    > I’m sorry to hear that but I respect your decision.

    > Was your decision made on any other factors in addition to "being jerked around"?

    > And can you be more specific to what that actually means?

    > Contact me privately if you don’t want to discuss it publicly.

    > My email link is on the left side bar.

    He should post his experiance here. Or write an article.

    Why hide it.

  21. Anonymous says:

    Peter,

    The toaster and television manufacturers don’t go apeshit and sue pet shops if we decide to gut our our toaster or television and turn it into an aquarium.

    I thought the different approaches that Sony and Microsoft took when they found out people wanted to run Linux on their gaming consoles to be very interesting and somewhat indicative of the companies strategy in the marketplace.

  22. Anonymous says:

    Well, there are a few key differences:

    1) Sony makes money on their hardware; Microsoft doesn’t

    2) Sony makes a pretty penny out of its Linux kit ($200 US); Microsoft can’t (all the hardware is already in the box)

    3) Sony doesn’t have a vested interest in any OS; do you REALLY think we would say "we’d love it if you installed our competitors product on the hardware we subsidised for you"?

    4) They’re trying to compete with us 😉

    Also I bet Sony isn’t happy about people pirating games on their hardware… they probably hate mod chips and people running warez on their boxes just as much as we do.

    Could it have been handled better? Sure. Just like the whole "GPL is a cancer / un-American / etc" comments that came out a while ago.

    We shouldn’t really care WHAT you do with your XBOX (turn it into a boat anchor for all I care 😉 ) but we certainly have no obligation to SUPPORT Linux on it, and we certainly DO have an obligation to fight piracy and cheating on-line.

    The thing that gets me is that people seem to think Microsoft owes it to them to let them install Linux on their XBox, because an XBox is built with PC components. Well, if they wanted a PC that runs arbitrary code out-of-the-box, they should have spent the extra cash and bought a real PC.

    XBox != PC

  23. Anonymous says:

    I don’t understand anyone who says "Microsoft should make it so I can do x with my XBox". It seems to me that if you mod it, MS has every right to kick you off Xbox Live and void any warrenty (the voiding of the warrenty is a time honored tradition). Sony and MS did both sue Lik Sang for selling mod chips.

    It’s not the consumers fault that MS is losing money on each XBox sold. That kind of argument doesn’t fly with consumers.(awwww, poor multi-billion dollar Microsoft is lost money on this XBox it took me 4 months of saving my allowance to buy). I don’t think people should be punished financially (or by invoking the DMCA) for installing non-MS approved software on their XBox, or PlayStation for that matter.

    Ironically enough, I haven’t seen any MS outrage at this?

    http://slashdot.org/articles/03/12/31/0057209.shtml?tid=109&tid=137&tid=185&tid=187&tid=190&tid=201

    If people aren’t allowed to put Linux on their XBox, why can they put WinCE?

  24. Anonymous says:

    Scott, I completely agree.

    It’s not the consumer’s problem if we lose money, and I personally couldn’t care less what people do with the hardware — as long as they don’t use it for illegal purposes (warez, pirated games and movies) or unethical purposes (cheating on games).

    Unfortunately, when someone buys a mod chip or uses a save-game BO in 007 to "hack" their box, we don’t know why they’re trying to do it. The assumption (rightly or wrongly) is that they’re probably doing it to break the law (pirate content) rather than just having some good clean fun (hack in the "true" sense).

  25. Anonymous says:

    "x" wrote:

    >He should post his experiance here. Or write >an article. Why hide it.

    Someone who calls him or herself "x" shouldn’t have to ask why someone else chooses to remain anonymous. 😉

  26. Anonymous says:

    Peter,

    Agreed. Having been driven off of CounterStrike on the PC platform because of cheating I’m in total agreement.

    I’m not talking about people cheating online, that’s an obvious misuse of the hardware and no one wants to see that. No one (well no one rational) seems to be arguing that MS doesn’t have the right to suspend/ban XBox live accounts if the hardware has been fiddled with.

    I’m more concerned with the fact that a lot of people don’t seem to think that you have a right to do whatever you want with a piece of hardware that you buy. Do I have the right to reverse engineer the XBox "OS" and distribute it for free? No. Do I have the right to decide how I want to use my XBox? Yes.

  27. Anonymous says:

    Agreed. What I’ve been getting at (I hope!) is that I think Microsoft should go after the illegal activities (piracy) but should not go after the other activities (installing Linux). We might complain loudly about how it hurts our business, but that’s life and as you say is not the customers’ fault at all.

    Unfortunately in an attempt to get the first set of users, we might also inadvertantly get the second set.

  28. Anonymous says:

    While I sometimes may be accused of an apologist for Microsoft, for my mind at least, I care as much about about the Linux’s, Suns, IBMs and numerous ERP vendors of this world as they do about me and the companies I have worked for.

    Despite spending several millions of dollars with these organisations (note the spelling) over my professional IT management career, my experience is that as soon as they perceive the project budgets are waning, they cease engagement and I only hear from them once a year when they want their maintenance bills paid. I have shared strategies with them and have received zero response. They add no value to my organisation.

    Microsoft on the other hand have been (in the past) keen to build a relationship irrespective of my current capital spend budget. It has been an enduring a sustaining relationship where they have endeavoured to add true value. Only Microsoft have endeavoured to truly understand my business and add ongoing value.

    On top of that, only Microsoft understand risk sharing, not that they really need to, because they actually stand behind their solutions (read solutions NOT products).

    I had a visit a few weeks ago from an ex MS business partner Account Manager who haf swapped to the open source BP market. While this person is someone I regard as a personal friend, and he wanted to get some business, he agreed the picture he was painting wasn’t pretty. Any real solution had bits and pieces from all over and would require a substantial head count increase in my IS organisation to support the end to end solution, even though the open source community would support the individual "bits".

    Yes I have used Apache as well as IIS. But if I want to use Linux, then I have to buy Oracle or DB2 … and why would I when my professional experience of both is that the vendors behind them don’t want a relationship, only a sale (notwithstanding the TCO). Actually Cam, when are Microsoft going to be a little less closed? 🙂

    I’ve heard all the virus and worm arguements before, but hasn’t anyone heard of security? Mates, it is a hostile world out there and it is best not to rely on luck to survive. I met with a few CIOs and a Microsoft tech the other day; the tech said that if the inherent security features of the MS operating systems and other applications had been switched on, no computer running MS would have been impacted by any virus in the past 2 years …. moving forward, MS would be switching these on by default, rather than off by default.

    MS is successful because it makes it’s customers successful.

  29. Anonymous says:

    agent smith – not sure what you mean… closed? MS? how? You’d like to run another DB behind BTS?