The Two Sides of Microsoft

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I am not a fan of Apple, so many people assume that I am a Microsoft fan. Actually, I’m not really a fan type. Call me paranoid, but I’m convinced all these companies just want my money and don’t really have my best interest as a priority. With Microsoft, the firm just annoys me less than Apple.

I recently posted Microsoft and Me where I expressed my frustrations with all of these platforms. My conclusion was that my life just might be easier if I go pure Microsoft. I’ve enjoyed my relationship with Google, but it’s beginning to be a bit creepy. I spent a full month using IE10 exclusively. It actually worked well on every site – except Google’s; esp Google Docs.

I’ve also set up Office 2013 and SkyDrive. It’s been nice writing in Word instead of Google Docs, but it can’t hold a candle against G’Docs when it comes to multi-user collaboration. I haven’t decided yet if I will dump Google. This post isn’t about that. This post is about Microsoft’s bipolar relevance.

Outside the Enterprise, Microsoft is dead. In March of 2011, Om Malik declared Microsoft Dead because it no longer is involved in generating the next round of real energy in the tech/internet world. Companies can become undead – IBM did – and more recently it seems Yahoo has or will.

Microsoft just isn’t relevant in anything cool. It can’t get traction with mobile phones, the tablets are a billion dollar joke, and even the second attempt of Windows 8 (8.1) was wanting. I took the Bing it on challenge and Google won 10 times. The new Xbox is even more creepy than Google, and evidently others agree. Microsoft requires an always-on Internet connection, the camera is always on, and they are killing game ownership. Sony isn’t.

Check out this comparison of reactions at the recent E3 conference:

 

Then I saw these charts that Benedict Evans posted. This first one shows falling prices and increased unit sales of PCs over the past decade. Nothing really wrong here, classic supply and demand except for the past few years. This is where the term “post PC era” comes from:

MSirRelevance1

And then there’s the exploding sales of mobile devices:

Msirrelevance2

 

Resulting with a drop in share of connected devices from 90% to about 25%.

MSirRelevance3

 

These tell the story of a company that has lots its way.

So while Microsoft can’t seem to get no love with the consumer, the enterprise can’t get enough of Redmond. Microsoft can’t stock enough Office, SharePoint, Exchange and Lync on the virtual shelves. Lync is growing far quicker than anything in the UC industry. Exchange and Office are enterprise standard issue, and Lync and SharePoint are growing. Office 365 is now has a $1.5 billion run rate. Server and enterprise tools grew 9%, and Office applications rose 14% (Q4 13).

But enterprise wasn’t enough. Microsoft wrote off $900 million on Surface RTs and its stock price took a huge hit.

Personally, I prefer a desktop more than a mobile device, but most of my desktop time is in a browser thus agnostic. I prefer Google Docs for short writing like blog posts and Word for longer form writing. I don’t want a Mac, but I can’t say I want Windows 8 either. Lync will slow down soon – particularly since it only makes sense if you have Exchange, Office, and Active Directory. and based on the growth rates of Amazon (and the cloud), non Windows desktops (Mac, ChromeOS and others), and mobile devices Lync has to slow.

Previously, I’ve defended Ballmer, with the logic that if Bill likes him, he’s ok by me. But I’ve reconsidered. Ballmer’s departure is inevitable. Microsoft needs to take drastic action while it still can. It has lots of cash and enterprise market share. The firm may be dead, but it isn’t unhealthy. Here’s my hopes and predictions for the new CEO.

A new Microsoft CEO should make peace with Google. MS will exit Bing and Google will exit Apps. They will resolve their differences about IE/Chrome and Chrome OS/Windows by agreeing that MS gets the enterprise and Google gets consumers. The new CEO will put an end to Surface and Windows Phone (and Nokia). Microsoft and Google will agree that Microsoft is exempt from Play store fees in exchange for dropping royalty payments from Android device makers. This will result with Microsoft openly endorsing Android as its preferred platform for Enterprise apps – a major blow to Apple. Microsoft and Google will align in several ways that hamper both Apple and Amazon.

Xbox will get spun out into a separate company. Azure? Hard to say.

 

Dave Michels