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Microsoft’s Next Era

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56 pointsjamesjyu10 comments

As most people seem to right now, until the past few months I thought of Microsoft as sort of an aging giant. They had gotten lax during their monopoly, and instead of keeping up with the times they're struggling to keep up with more "hip" companies like Google and Apple. And in the public space, this is true -- the average consumer (or the small business/startup rather than the large corporation) these days is more likely to buy an Apple product or a Google product if they can. The average consumer has a better mental image of Apple or Google than Microsoft.

And then I started my job at a large hospital system assisting the guys who do financial analytics, and saw the other side of the industry. Microsoft is still the giant in corporate-level big data analytics and providing solutions for large server farms. Their B.I. stack (SQL Server, reporting software, Sharepoint, and other data analytics software I won't go into right now) is worlds ahead of its competition (and from what I understand can be used interchangably with the other software -- for example you can hook Tableau into SQL Server and use it as a front-end for an SSAS cube). I would have never thought about any of this if I hadn't been at this job, but Microsoft is still a giant in providing software and systems for hospitals, insurance companies, big banks and others in the financial sector -- big companies that need to procsess big data. In addition, as the article states, Microsoft is a leading competitor in providing cloud hosting solutions -- I went to a Microsoft thing to learn about and test Windows Azure, and it's incredibly powerful and so easy to use.

The article kind of hints at this stuff -- that, under Ballmer, Microsoft has actually been successful despite their stock falling and how the general public perceives them. They're not failing, it's just that the people who buy the stock are typically the average consumer who see Microsoft in the light I mentioned above. The stock market isn't always the best indication of a company's success, just an indication of what the people who buy stock think.

This doesn't mean I like Microsoft. I just wanted to point out something I don't think many people pay attention to -- they're still wildly successful, just in a different market segment, and people might not have noticed that if they weren't actually in that market segment. I still prefer not to use their products when I can help it, and I think they could do things much better, and maybe trying to actually compete with Apple and Google and earn the general public's respect back would be a good thing. Maybe their "next era" will do this. But then again, I'm the individual consumer, too.

At this point only 25% of Microsoft's revenue comes from Windows. And yet if you asked the average man on the street how big a part of Microsoft is Windows and they'd probably say between 80% to 600% (nobody said the average man on the street would be good at math...)

Just curious -- what's the usage profile for Office in the HN world? Where I work, we use Outlook (on macs), excel on occasion, powerpoint, and that's about it. Around 10 years ago or so, we'd draw up big honkin' requirements documents in Word and e-mail them around, but now we use Wikis & Stories (jira/VersionOne/etc...) for that, so use of Word has plummeted to about zero.

Excel is used a fair bit for columnar data and the like, and frankly, I think it's not a bad product at all, though for personal use, I'd probably go with a google docs spreadsheet. And for simple cases, the google docs presentation software is an adequate powerpoint replacement.

My general question/theory is that a lot of free/cheap/niche products have been nibbling at the edges of Office, and I'm wondering if/when a tipping point will occur, at which point it'll become totally irrelevant. On the other hand, perhaps if there's enough pushback against cloud services due to the NSA thing then standalone desktop apps will make a resurgence. "Office is Dead. Long live Office?"

We're a 50/50 UNIX and Windows financial outfit. We use windows 7 + office on all desktops. UNIXy stuff is all on the end of PuTTY.

From a general office work point of view, Excel is a piece of crap when it comes to anything past simple ledgers. Sure it starts out awesome but the moment it gets attached to an email, all hell breaks loose. SharePoint is the best fix for this but it's an ugly behemoth. Failing that, access + SQL Express is pretty good for most things but requires some knowledge past basic pointy clicky stuff.

However, I uaed excel (and an HP48 calculator) for years as an engineer. In fact I built a massive toolkit with it. Fine for that though but not for data sharing which is what it inevitably degrades to in the wrong hands.

Also our entire document authoring system is built on top off word and VSTO.

Office cost is a non issue. Its cheap enough not to be noticed if considered across 5 years.

Google docs doesn't cut it and we're not even likely to use it due to data sharing/privacy concerns and compliance issues. Plus google docs is hideously slow and the API is horrible.

Office is not dead by a long shot despite the whinging from hipster startups pushing social crap.

Oh we use JIRA too btw.

We use LibreOffice and Outlook 2010.

"Competitors were stamped out one by one (see Lotus, Word Perfect, Netscape, Real Networks) along Microsoft’s journey to capture eyeballs and entire software budgets."

Microsoft didn't stamp out WordPerfect. It was a brilliant company with amazing customer service which was acquired, gutted, and lives on as a rusting hulk. The same was the fate of Lotus - corporate customers could still purchase the 1990's Lotus Suite from IBM a couple of years ago.

I guess a case could be made about RealNetworks, but it would need to explain away the relevance of iTunes and Youtube to the space and explain how Windows Media player was the real force in the space.

Netscape is of course emotionally charged. My opinion is that its multi-billion dollar sale to AOL aligns its story more closely with that of WordPerfect and Lotus, than David and Goliath.

Microsoft's problem is that the marginal advantage of going with its dominant products (Windows and Office) is very low with cloud and mobile devices as opposed to PCs.

Microsoft's strategy of trying to leverage its desktop monopoly in applications to build a similar monopoly(or at least a very strong critical mass in mobile applications) has two critical drawbacks: 1. desktop and mobile applications aren't magically interchangeable, and where they are, desktop users don't like the new interface 2.mobile applications aren't just about functionality, they provide value based on the ecosystem they are connected to. This ecosystem is completely portable among application platforms 3. mobile applications aren't as complex as desktop applications

So I think that the Windows 8 strategy is actually counterproductive.

Nothing about Microsoft's troubles is a surprise. It could have moved aggressively to build new markets but instead it chose to view every opportunity as a way to extend its core products of Windows and Office. If no disruptive technologies came along this might have been a good strategy but we all know the changes in the technology space over the last 10+ years.

Microsoft's core competencies aren't built around blue ocean innovation at all. So changing the strategy will require significant risk. There isn't a magical solution here.

Microsoft's problem is that the marginal advantage of going with its dominant products (Windows and Office) is very low with cloud and mobile devices as opposed to PCs.

Perhaps, but I think this has as much to do with the fact that mobile just isn't a great platform for power user tools. Sure, we now have iPad spreadsheets, drawing apps, word processors, presentation tools etc, but they're very simplistic compared to what's available on the desktop. They're also generally just too cheap per unit to generate anything like the kind of revenue pro desktop apps can generate. But, as limited as these apps are, they do meet the needs of a lot of casual users.

This is a problem every desktop software vendor is dealing with right now.

I think that Microsoft has first grown to become a "monopoly". this has been done by killing (or buying or copying) concurrency and by providing software that were cheap or trivial to copy. In a second phase, they have been able to make a lot of profit by forcing people to buy their products. They are still in this phase and a lot of concurrency has appeared. If Microsoft does not want to die, I think they should stop these huge profits and kill again the concurrency by selling cheap software, easy to copy. The version of Office and windows that is sold to particular is a striped down version. The full experience of what could be Microsoft product is only available in enterprise versions. I think people are fed up of being considered as second class citizen or like sheep. If Microsoft gives the whole software (with all languages), for a small price, there would be less motivation to go to concurrency.

When companies get big they lose empathy for their users. If MS can somehow get back to caring about the feelings of people who use their products and not simply follow charts that show increase revenue paths ... well, I for one would be grateful. To start off this new era they should allow their GUI's to be more configurable instead of forcing broad changes. They're so good at supporting binary compatibility ... extend that to include the kinesthetic investments I've made in their older GUI interfaces while selling me on the value of the new platform.

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