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Comment by AlexanderDhoore | Hacker News Reader

Microsoft Is Spread Too Thin.

That's it. That is the reason most of their products are half-assed. They have database systems. Server, desktop, and tablet/phone operating systems. Web, desktop, mobile development environments, all in multiple languages. They have their IaaS and PaaS offerings. They have end user services like Skydrive and Outlook. Then there is everything Office. And games, both PC and Xbox. Also, Bing. And Skype. Edit: And hardware: Xbox, peripherals and the surface.

...

This is probably an incredibly incomplete list. Try making this list for Apple, and you'll get my point.

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> This is probably an incredibly incomplete list.

You've actually hit Microsoft's five business units. In order of revenue:

Business Division (ie, Office): $24B

Windows & Windows Live: $18.8B

Server & Tools: $18.7B

Entertainment & Devices: $9.5B

Online Services: $3B.

With the exception of Online Services, each of these business units alone is doing enough revenue to qualify for inclusion on the Fortune 500 list.

Entertainment & Devices makes more revenue than Yahoo does in total. More than Hertz and Barnes & Noble.

I would love -- love! -- to be spread so thin.

The speed with which one technological company can fall is amazing as history has shown time and time again. According to joel spolsky Excel 4 made lotus 1-2-3 obsolete virtually overnight and that was the beginning of the end for them.

The fact that MS is strong now means nothing in the long and even midterm.

The total share of world computing that Microsoft controls now is lower than in the 90s. They have trouble getting good products out except in Server and Azure divisions. They are bleeding developer loyalty and they are turning into Apple style control freaks without having the charm of Apple.

> Excel 4 made lotus 1-2-3 obsolete virtually overnight

Isn't that the benefit of being "spread thin" though? Xboxone might die but at least they have the other stuff.

Actually, their substantial diversification beyond Windows means that it's very, very unlikely Microsoft is going to fall (easily or quickly). Microsoft could lose the entire consumer Windows business and be just fine (despite the hit their stock would take), particularly as they keep growing in other sectors while Windows becomes less important by the day (and is clearly done growing as a business). Consumer Windows is about 1/3 of Microsoft's profit these days.

Apple by comparison gets about 3/4 of its profit from the iPhone. Google is even worse, 95% of their profit comes directly from search.

The vast majority of Microsoft's profits come from Office. Windows makes a little bit, and everything else loses money.

This is fundamentally incorrect. Only Online Services Division (Bing) loses money. Everything else makes money, and Windows definitely makes more than "a little bit."

Operating Income by Division FY13 Q3: Windows: $3.46 B Server and Tools: $1.98 B Online Services: -$262 M (loss) Business: $4.1 B Entertainment and Devices: $342 M

It is interesting that people perceive so many businesses at Microsoft as "failing" even when they have healthy income and growth year after year.

Source: http://www.microsoft.com/investor/EarningsAndFinancials/Earn...

Even though Xbox (Entertainment) is now making a small profit, they've got a long, long way to go before it recoups the vast investment/losses of the early days:

http://www.neowin.net/news/report-microsofts-xbox-division-h...

> The speed with which one technological company can fall is amazing as history has shown time and time again.

I disagree. The speed with which companies relying on a single product can fall has been shown again and again. Companies which are diversified have lasted much longer.

Lotus is gone, Borland is gone, Apple almost died -- but Microsoft are still around.

Microsoft are no longer the absolute masters they used to be (and that IBM were before them). But they, and IBM, demonstrate there is "a lot of ruin in a great company" (to paraphrase Smith).

But Microsoft have single product. While they do sell it from 5 different department is combines to one interwoven whole.

That is great on the rise but can be terrible when every customer lost means losing network effects. The more google apps/ Libre gain traction the less valuable the windows desktop becomes. The less valuable the desktop - the server becomens less valuable and from there the DB.

Computer ecosystems are like the real stuff - they can implode with a few strokes of stupidity and bad luck but are hard to be wiped out. And microsoft have somewhat bad track record in the last few years on quality decisions. There is no future in which there does not exist sizable deployments of microsoft software.

But also metric of a company is their relevance. MS lost their ability to be trendsetters and are playing catching up.

Unless there is strong change of direction coming I think that MS will have their soviet union moment in the next few years - they will vomit a lot of territory and they will still be huge and powerful afterwards, but just not among the superpowers.

If Microsoft has a single product, so do Apple and Google.

Your summation of Microsoft's position is way off. Microsoft was never much of a trend setter. They tend more to come into an established business and try to dominate it and they do that well.

Microsoft has 12 billion dollar businesses. Apple has 6. Google has 1 or 2 I think (although I can't find a source for that).

Sources: http://www.businessinsider.com/microsofts-billion-dollar-bus...

http://www.mediabizbloggers.com/group-m/Is-Radio-Apples-Seve...

> I would love -- love! -- to be spread so thin.

I think the argument is that thinness is evaluated by a width/height ratio so while it sure is heighty, taken globally it lacks so much focus that the width dwarfs the height. Besides, given the sheer size of it, it's really hard to get a good perspective.

By comparison, Apple is incredibly focused and generates more revenue while still being way less 'everywhere'. Looking at it that way, it seems Microsoft is aiming for a long tail effect.

This list confirms what I've been thinking about MSFT for a long time - their primary product is the Office Suite and has been for quite some time. As long as there are billions of people in the world vendor locked to the Office Suite as there currently is, MSFT will be around and kicking for a long time no matter how hard they fail on other fronts. It's no matter how badly Windows declines, as long as it runs Office and a web browser, (some) people will buy it.

Agreed, seems like way too many fronts to fight on. Back in the day when they were the evil empire (TM), this probably made sense - they were able to steamroll into new markets, right over the competition. Now that they're playing catch up in many of those areas, probably not so much.

Also, there's more: They're quite a bit into hardware, making input devices and, lately, Surface. They're also a big name in the enterprise software world, offering their own CRM and, I'm sure, tons of other things. They really do everything.

When you are in so many markets, your efforts will sometimes be ahead and sometimes behind the competition. It's the sort of normal Poisson distribution you'd expect to find anyhow.

Microsoft's business model is basically "we are all things to all men". It's all about vertical integration.

They aren't attractive because their products are necessarily that compelling on their own, it's that if your entire computing is Microsoft (as it was for many people late 90s-early 2000s) a lot of problems go away.

The killer app for Windows server is that it is designed for managing Windows desktops for example. If you are running OS X desktops, why bother with it?

"If you are running OS X desktops, why bother with it?"

Because you want to run applications that only run on Windows Server?

But a large chunk of the really compelling Windows Server applications are about management of Windows desktop.

> If you are running OS X desktops, why bother with it?

If you are one of the small minority of people running OS X in a business environment then of course Microsoft's vertical integration is less useful. But well over 90% of business desktops/laptops are Windows based, so Microsoft has an attractive model for many businesses.

Yah, but that's kind of my point. They are spreading themselves thin because their business model is all based around vertical integration.

I'm not sure I understand your point. How does making the Xbox hurt Windows Server or Windows Phone?

It doesn't , if anything it's the opposite.

So in what sense do you think they are spreading themselves too thin?

I don't really, they need the verticals to maintain their current position.

They can't really "hunker down" on a few core products in the same way that Apple does.

Aha, looks like I misinterpreted your original comment. I knew one of us was being dense - turns out it was me.

The really compelling applications are at a business level - ERP, CRM, finance, engineering etc. - and might not come from Microsoft.

There is a huge world of specialised business applications out there that are ignored on HN (often for good reasons) that any large enterprise will have hundreds of - a lot of these run on Windows.

True, but third party vendors can shift platforms a lot more easily than an entire enterprise on Windows 7 desktops.

Yes, there are many business applications, that run o Windows.

However, there are two trends now:

1) Move the application to the web. Many of them are getting HTML frontends, and the backends are OS-independent.

2) Those, that are not getting ported, are being thrown into Citrix XenApp (or into other desktop virtualization environment). It is actually very interesting to see using your business app on device like Asus Transformer. And then you start question yourself - why do you need Windows on client and all the heavy infrastructure in the server room it needs?

"why do you need Windows on client"

I was only addressing why people want Window Server - clients are something else entirely. In my experience, in large enterprises almost all "business" applications (except for Office) are served over Citrix or RDP.

So Xbox is half-assed because you don't like their all digital model? Come now. You may not agree with the model, but nothing I've seen from this generation xbox can be honestly called half-assed.

Well, except the entire dashboard and game purchasing system on the actual console. It's incredibly terrible. The cycle of update and reboot (I've watched my Xbox360 reboot 3 times for updates after turning it on once) is silly. The dashboard is extremely slow. You select something like "download game", and you can count several seconds between the rendering of every element on the screen that pops up. It's terribly half-assed.

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