mjfern

In fact, this is a further indication of Microsoft's struggles in each key market that represents the future of computing: cloud computing, thin devices, and online media.

First consider cloud computing, with Windows Azure. I found it difficult to find any concrete data on how Azure is performing in the market, but I suspect it’s not performing well. Put simply, it’s hard to imagine that Microsoft is aggressively developing or marketing Azure, since cloud computing offerings directly threaten Microsoft’s revenues and profitability in the PC market, especially its Windows and Office products.

Next, consider Microsoft’s performance in thin devices, especially smartphones, video game consoles, and portable media players. With a current global market share of just 4.7% (Gartner, 2010), Microsoft is behind every other major mobile OS developer, including Symbian, Android, iOS, and Blackberry. In video game consoles, the Xbox 360 is trailing far behind the Nintendo Wii in market share, despite the fact that the Wii is using older generation technology (VGChartz, 2010). The Zune portable media player has a paltry 2% market share, compared to the iPod’s 70% (NPD, 2010). And Microsoft hasn’t revealed a clear strategy to compete in important and emerging thin device categories, such as tablets and connected televisions.

Moving on to online media, consider Microsoft’s performance in search or in online music or video. According to comScore (2010) Google has a 66.1% share of the search market, compared to 11.2% for Microsoft. And while Google generated $23.65 billion in revenues and $6.5 billion in income from search related advertising in 2009, Bing generated just $2.2 billion, with a $2.35 billion operating loss in its most recent fiscal year. Meanwhile, Microsoft is well behind Google and Apple in the online music and video markets (e.g., Microsoft’s Zune marketplace versus Apple’s iTunes or Google’s YouTube versus Bing video).

In closing, Microsoft’s financial performance since its initial public offering in 1986 has been nothing short of phenomenal. But if Microsoft wants to remain a leader in the future of computing, it must quickly and aggressively shift its focus and investments away from desktops and packaged applications to a combination of cloud computing, thin devices, and cloud computing. Given a bulk of Microsoft’s financial performance ($4.5 billion in quarterly profits!) and its core capabilities rest with Windows and Office, I am pessimistic that it has the interest or ability to make this fundamental transition.

I just posted this to my blog and submitted the post to HN. If you enjoyed the read, I'd appreciate an upvote (the article title is "Is Microsoft in trouble?"). Thanks!

For the last several decades, the Wintel standard has dominated personal computing (PC). If we look at current market share data, Microsoft’s and Intel’s position in the PC market appears unassailable. As of September 2010, the Windows OS controlled 91% of the PC market (Net Applications, 2010), while Intel microprocessors controlled just over 80% (IDC, 2010).

But what if personal computing is shifting away from desktops and packaged applications, the stronghold of Windows and Intel, to a combination of “thin devices,” cloud computing, and online media? Thin devices are smartphones, tablets, connected televisions, and a myriad of other devices that connect to the cloud to access various online media, from video to social networking.

In view of this transition, the future actually looks quite bleak for Microsoft and Intel, despite their strong position in the PC market. Microsoft has struggled mightily in the smartphone and online media markets, and is reluctant to aggressively enter the cloud in fear that it will cannibalize sales of Windows and Office. Meanwhile Intel has struggled to produce microprocessors that appeal to thin device OEMs, where energy efficiency is prioritized over sheer computing power.

If Microsoft and Intel, and the Wintel standard are fading, then which companies and which standards are rising? Apple has been pushing the frontier in computing with its collection of thin devices (iPod Touch, iPhone, iPad, the Apple TV) and its media platforms (iTunes and the App Store). Google has also invested substantially in these new computing markets with Android on thin devices (smartphones, tablets, smartbooks, set-top boxes, and connected televisions) and Google’s growing suite of cloud services (e.g., Gmail, Maps, YouTube, Android Market).

Looking at current trends, it appears that the diffusion of Android and ARM may be accelerating past competitors. Recent NPD and Nielsen data indicate that Android sales have now overtaken Apple’s iOS and Blackberry’s RIM in the smartphone market. And analyst Paul Morland of KBC Peel Hunt estimates ARM’s market share in microprocessors will increase from 29% to 40% from 2010-2014. Meanwhile Android and ARM are on the cusp of rising in emerging device markets, such as tablets and connected televisions.

If the last several decades of personal computing was dominated by the Wintel standard, with AMD and Apple as the scrappy competitors. It appears the future of computing may be dominated by Armdroid (or a slight variant based on the Google Chrome OS), with Apple and several others as strong niche players. Of course there will be other companies that will rise and sustain their position as dominant players in other segments of computing, from enterprise cloud services (e.g., Salesforce.com) to online video (e.g., Netflix), and online retail (e.g., Amazon).

I just posted this to my blog and submitted the post to HN. If you enjoyed the read, I'd appreciate an upvote (the article title is "Armdroid"). Thanks!

Windows 98 was the first with native USB support.

According to a June 1998 CNET article titled "Peripherals to surge with Win 98," Rob Bennett, group product manager of Windows 98 stated: "There will be a pretty impressive showing of peripherals this summer..There are 250 devices due to be launched around Windows 98 and 100 in development [to be] released in the next year..."

(http://news.cnet.com/Peripherals-to-surge-with-Win-98/2100-1...)

Looking through Google news archives for 1998, I see the following devices with USB support: Logitech scanners, Intel video cameras ("Create and Share"), Imation and Iomega high capacity drives, Kodak digital cameras, joysticks, modems, etc.

Hence, there was a collection of PC peripherals supporting USB around the time of the Windows 98 launch (in May/June) and the iMac launch later in the year (August).

Apple learned this lesson upon Steve Jobs return. The first iMac was much more compatible with PC peripherals. The compatibility was further enhanced when Apple shifted to Intel processors. This compatibility certainly helped Apple attract more customers and complements to its platform.

As a side note, Kaz Hirai, CEO of Sony Computer Entertainment, said this lack of developer support was intentional: "We don't provide the 'easy to program for' console that (developers) want, because 'easy to program for' means that anybody will be able to take advantage of pretty much what the hardware can do, so then the question is, what do you do for the rest of the nine-and-a-half years?" Needless to say, this seems absurd.

To attract developers and apps to WM7, Microsoft should be thinking about ways to make it as easy as possible for developers to port apps from existing platforms over to WM7 (particularly from iOS and Android). WM7 is already facing an uphill battle. There's no reason to create more friction in the system.

I think one of the key issues for Google, from a corporate strategy standpoint, is "freeing up people's time." Driving is one of last places where we spend significant time awake without being able to use the Internet and hence any of Google's services (except if you use a smartphone, which is now illegal in some states, and in any event isn't an ideal place to be clicking on ads). There is a safety issue here as well. Although using a smartphone while driving is illegal in some states, people are driving while using their smartphones with increasing frequency. We need our Internet "fix."

I am sure this driving technology also taps into several of Google's key capabilities: e.g., programming expertise, its voice recognition technologies, search, and its mapping software (Google Maps and Navigation).

I am sure this driving technology also taps into several of Google's key capabilities: e.g., programming expertise, its voice recognition technologies, search, its mapping software (Google Maps and Navigation), etc.

Strategy at the business/product level addresses the following four questions:

(1) Who is your target customer?

(2) What value (in the form of a product and/or service) are you delivering to this customer?

(3) What are your costs for delivering this value?

(4) Are you delivering more value at a given cost (value advantage), or delivering equivalent value but at a lower cost (cost advantage), relative to your competitors? In limited cases you can compete on both value and cost simultaneously (dual advantage).

The question is then what broad activities are you performing to deliver value to your customer (e.g., R&D, marketing), and what are the costs associated with performing these activities (e.g., time, equipment). Through activities, you want to maximize the wedge between value and cost for a particular segment of customers.

The "to do list" then flows from these activities.

A few examples of compelling BHAGs that guided and motivated people:

- John F. Kennedy's BHAG of landing a man on the moon by the end of the 1960s

- Microsoft's BHAG of placing a PC on every desk in every home

- Google's BHAG of organizing the world’s information and making it universally accessible and useful

"The way that we choose careers is strange. We often choose a career based on opportunism (e.g., expected salary) or fear (e.g., what family may think). The result is that we end up in a place that’s not fully satisfying. That we pick careers in a haphazard manner is stunning given the fact that we spend nearly 100,000 hours working over our lifetimes.

So if opportunism or fear are not the best ways to choose a career, then what’s a better approach? I believe three main factors should drive a choice of career. The first factor is goals. What are your short-, medium- and long-term goals in life? And it’s very important to think about goals beyond just your career. The second factor is pleasure. What activities do you derive real enjoyment from? The third and final factor is skill or expertise. Where do your innate and learned skills and talents lie?

Consider a Venn diagram comprised of these three factors — goals, pleasures, and skills — and a fulfilling career likely resides at the center.

Finding a career at the center of this Venn diagram is simple in theory, but difficult in practice. The first challenge is to overcome inertia, moving beyond opportunism or fear as your selection criteria. The second challenge is managing and balancing other commitments in your life, such as financial or family obligations. The third challenge is to know yourself deeply. It’s surprising how few people take the time to truly understand their goals, pleasures, and skills. The fourth challenge is to identify a career that aligns to these three factors. Many careers will satisfy one factor, some two, but few will satisfy all three. For some people there may be no established career path that aligns to all three factors, which means you have to create a “custom” career.

How does one learn about their goals, pleasures, and skills, and a matching career? Through a process of contemplation, trial and error, and growth. You must contemplate and be deliberate in your actions, but allow your perspective to evolve over time, as you attain more experience in work and life. You must try a lot of different things to learn about yourself and how you respond to different activities and settings. As you hone your understanding of yourself, you must undertake deliberate practice within a specific domain for an extended period to advance your expertise and skill. Imagine starting your working life at the top of a funnel, and as you contemplate, experiment, and grow, you move down the funnel, and towards a better understanding of yourself and an ideal career."

(http://www.fernstrategy.com/2010/09/18/choosing-your-career/)

In short, are there boundary conditions to the Khan Academy approach? And if so, what are they?

Strategy, technology disruption, cloud computing, small device computing, online media

Southwest competes on cost, and this cost position hinges in large part on the rapid turnaround of aircraft. Rapid turnaround lowers Southwest's equipment and labor costs; its aircraft, pilots, and flight attendants are "doing work" for longer periods of time each day (rather than sitting idle on the ground).

A variety of activities contribute to Southwest's ability to rapidly turnaround aircraft, but some of the key activities include:

- Southwest's culture, where everyone pitches in to turnaround aircraft

- Using a single type of aircraft (737s), enabling simplified service and maintenance

- The point to point route structure, avoiding the issue of synching the schedules of hub and spoke aircraft

- Operating at less congested airports to avoid traffic delays

From my vantage point, it seems the AirTran acquisition threatens each of these activities:

- Integrating AirTran's distinct culture with Southwest's

- Expanding beyond 737s to operate 717s

- Divergence from the point to point structure to a hub and spoke

- Entry into congested airports, such as Hartsfield-Jackson (ATL), which was ranked #20 in 2010 for on-time departure performance by the Bureau of Transportation Statistics

In short, this acquisition is problematic from a strategic standpoint and appears to threaten the basis of Southwest's cost advantage.

Evolution toward fit - http://www.management.wharton.upenn.edu/siggelkow/pdfs/Vangu...

Change in the presence of fit: The rise, the fall, and the renaissance of Liz Claiborne - http://knowledge.wharton.upenn.edu/papers/872.pdf

One of the most stark examples is Southwest Airlines. Scheduled passenger air transportation is a highly transparent industry due to the heavy regulation by the U.S. DOT and the FAA. Despite the fact that competitors know the precise activities that Southwest Airline's performs, they have been generally unable to imitate and compete. And there have been a number of attempts by both legacy and start-up carriers.

In 1965, Gordon Moore, the co-founder of Intel, proposed that the number of transistors on a chip (forming a microprocessor) would double approximately every two years (Moore’s Law). Transistor count is important because the number of transistors on a chip affects a microprocessor’s performance; i.e., the number of instructions performed within a given period of time. For the last 45 years, this doubling trend has continued unabated, and the latest generation of microprocessors from Intel contain about 2-billion transistors. Now combine this rate of technology development with the movement towards cloud computing. Cloud computing reduces the need for high performance (bulky and expensive) computers at every desk because complex processing tasks can now be handled remotely. In short, the rate of technology development combined with the advent of cloud computing has given way to microprocessors that now overshoot the needs of the vast majority of customers. Because many customers are content with older generation microprocessors, they are holding on to their computers for longer periods of time, or if purchasing new computers, are seeking out machines that contain lower performing and less expensive microprocessors. The result for Intel is lower revenues and profitability.

The next issue for Intel is that cloud computing is facilitating an entirely new crop of mobile computing devices, such as netbooks, tablets, and smartphones. The issue for Intel is that many of these mobile devices use the ARM architecture, a competing technology that is more energy efficient. And it’s very difficult for Intel to compete directly with ARM because of ARM’s unique strategy. Unlike Intel, ARM does not produce and sell microprocessors based on its technology; rather it licenses the technology to companies. If Intel were to follow a similar strategy, its revenues and profitability would drop significantly.

In sum, Intel is facing a big squeeze; as Intel’s revenues and profits are getting squeezed at the top because the average customer no longer needs or wants the latest generation Intel chip (due to Moore’s Law and cloud computing), it’s also getting squeezed at the bottom as OEMs of mobile devices are adopting the ARM architecture in droves. And, like many disruptive technologies, the ARM architecture is now moving up-market, beyond mobile devices. For instance, the company “Smooth-Stone” recently raised $48m in venture funding to produce high performance, lower powered chips based on ARM technology to be used in servers and data centers.