5 ms·

So they've decide that the business model of the past two decades is doomed? Are investors onboard with that? Sounds like some serious downsizing is coming to c

So they've decide that the business model of the past two decades is doomed? Are investors onboard with that? Sounds like some serious downsizing is coming to come up in the next 5 years... We might be looking back at this CEO with incredulity in 10 years when MSFT is struggling to keep the lights on ("they did what?! They just gave away all their products for free??")

Delmania 11y ago
Have you paid attention to the change in behaviors that have come about due to mobile devices? Web services are huge in helping to store user data and keep it in sync across the diverse set of computer people use. Right now, I can't think of any vendor that forces a lock into their platform for development purposes. Even Apple made Swift free and cross platform. Lock in on Visual Studio and C# makes no sense. C# is a nice language, but there's a wide variety of alternatives that are just as good. Visual Studio is really nice, but people have been building stuff with Eclipse, Sublime, and Emacs for quite some time. They are making a long-term push to subscription oriented services.
criddell 11y ago
> So they've decide that the business model of the past two decades is doomed? Isn't it? How much growth do you see around the PC and Office business?
- alkonaut 11y ago
  Is growth really necessary? They have cornered the corporate desktop pretty well, businesses aren't going to stop buying new computers for all employees every 3 years with Windows and office and the associated backends with SharePoint/Exchange etc.
  - criddell 11y ago
    > Is growth really necessary? I actually agree with you. I think Microsoft's evolution is mostly done. The XBox is their consumer device and everything else is all about enterprise and small business users. Microsoft is a boring, mature, very profitable company. It isn't such a bad thing to be. Their hardware is in an interesting place though. They are really the only company making decent Windows hardware (and I say that as a longtime ThinkPad fan). I would be so happy if they took the Surface Book and simplified it into a traditional laptop with battery life as good as or better than similar Apple machines.
pjc50 11y ago
The alternative is to wait while change passes them buy and then issue a Nokia "burning platform" memo. (Nokia are now a wholly owned subsidiary of Microsoft. If Microsoft collapsed, who would buy them? Apple?)
- tuukkah 11y ago
  Microsoft bought Nokia's mobile phones but the rest of Nokia survives (marker cap $22 billion).
sdar 11y ago
> So they've decide that the business model of the past two decades is doomed? Windows is a commodity, a) it won't pay for its own engineering team and b) unlike other competitors, Microsoft hasn't been able to capture as much value from the current Windows ecosystem and marketplace. Developing for Windows is becoming a liability: a) your team can't develop only for Windows anyways; b) your team can be more efficient by using a wider set of tools and technologies than Microsoft's own developers, and c) if Windows is not profitable and your product depends on Windows, it better pay for part of Windows' cost. Internal OSS adoption, investing on cross-platform development and in Azure seem all strategic investments in managing the risks above while remaining a software (product) development company. Every other gain from the same strategies (the ones affecting their customer base) are cherries on the top of the cake. > Are investors onboard with that? Not sure they realize what's going on. If they did, I couldn't explain the current P/E ratio in days of declining revenue, a prospect of shrinking revenue streams (overall; medium-term at least) and large bets on lower margin businesses. > They just gave away all their products for free? They probably wish they had invested in Office for the Web, Android and iOS much earlier on and with much more intensity, and still have given it for free. They were lucky none of the competitors really stepped up to fill the void. In a cloud-first and mobile-first world, there are multiple revenue stream available once the data information workers process is more closely tied to a provider; specially with the synergies in their product line.
sdar 11y ago
> So they've decide that the business model of the past two decades is doomed? Windows is a commodity, a) it won't pay for its own engineering team and b) unlike other competitors, Microsoft hasn't been able to capture as much value from the current Windows ecosystem and marketplace. Developing for Windows is becoming a liability: a) your team can't develop only for Windows anyways; b) your team can be more efficient by using a wider set of tools and technologies than Microsoft's own developers, and c) if Windows is not profitable and your product depends on Windows, it better pay for part of Windows' cost. Internal OSS adoption, investing on cross-platform development and in Azure seem all strategic investments in managing the risks above while remaining a software (product) development company. Every other gain from the same strategies (the ones affecting their customer base) are cherries on the top of the cake. > Are investors onboard with that? Not sure they realize what's going on. If they did, I couldn't explain the current P/E ratio in days of declining revenue, a prospect of shrinking revenue streams (overall) and large bets on lower margin businesses. > They just gave away all their products for free? They probably wish they had invested in Office for the Web, Android and iOS much earlier on and with much more intensity, and still have given it for free. They were lucky none of the competitors really stepped up to fill the void. In a cloud-first and mobile-first world, there are multiple revenue stream available once the data information workers process is tied to a platform; specially with the synergies in their product line.
cm2187 11y ago
They used to live of windows licenses but their market share is shrinking if you take tablets and mobiles into account. The new strategy seems to be making money on cloud services, which are platform agnostic, and search engine, of which Windows is becoming just a natural extension, like Android and Chrome OS are an extension to google.com, a probe given for free that Google wants to see in each of their users pockets to keep an eye on where they are, who they talk to, what they do. Hence the extensive tracking of Windows 10, and Windows 10 upgrades being given for free. We may like it or not, or agree that it makes sense or not, but at least it looks like a rational strategy.
eip 11y ago
Sun 2.0?

Delmania 11y ago

Have you paid attention to the change in behaviors that have come about due to mobile devices? Web services are huge in helping to store user data and keep it in sync across the diverse set of computer people use. Right now, I can't think of any vendor that forces a lock into their platform for development purposes. Even Apple made Swift free and cross platform. Lock in on Visual Studio and C# makes no sense. C# is a nice language, but there's a wide variety of alternatives that are just as good. Visual Studio is really nice, but people have been building stuff with Eclipse, Sublime, and Emacs for quite some time. They are making a long-term push to subscription oriented services.

criddell 11y ago

> So they've decide that the business model of the past two decades is doomed? Isn't it? How much growth do you see around the PC and Office business?

alkonaut 11y ago
Is growth really necessary? They have cornered the corporate desktop pretty well, businesses aren't going to stop buying new computers for all employees every 3 years with Windows and office and the associated backends with SharePoint/Exchange etc.
- criddell 11y ago
  > Is growth really necessary? I actually agree with you. I think Microsoft's evolution is mostly done. The XBox is their consumer device and everything else is all about enterprise and small business users. Microsoft is a boring, mature, very profitable company. It isn't such a bad thing to be. Their hardware is in an interesting place though. They are really the only company making decent Windows hardware (and I say that as a longtime ThinkPad fan). I would be so happy if they took the Surface Book and simplified it into a traditional laptop with battery life as good as or better than similar Apple machines.

pjc50 11y ago

The alternative is to wait while change passes them buy and then issue a Nokia "burning platform" memo. (Nokia are now a wholly owned subsidiary of Microsoft. If Microsoft collapsed, who would buy them? Apple?)

tuukkah 11y ago
Microsoft bought Nokia's mobile phones but the rest of Nokia survives (marker cap $22 billion).

sdar 11y ago

> So they've decide that the business model of the past two decades is doomed? Windows is a commodity, a) it won't pay for its own engineering team and b) unlike other competitors, Microsoft hasn't been able to capture as much value from the current Windows ecosystem and marketplace. Developing for Windows is becoming a liability: a) your team can't develop only for Windows anyways; b) your team can be more efficient by using a wider set of tools and technologies than Microsoft's own developers, and c) if Windows is not profitable and your product depends on Windows, it better pay for part of Windows' cost. Internal OSS adoption, investing on cross-platform development and in Azure seem all strategic investments in managing the risks above while remaining a software (product) development company. Every other gain from the same strategies (the ones affecting their customer base) are cherries on the top of the cake. > Are investors onboard with that? Not sure they realize what's going on. If they did, I couldn't explain the current P/E ratio in days of declining revenue, a prospect of shrinking revenue streams (overall; medium-term at least) and large bets on lower margin businesses. > They just gave away all their products for free? They probably wish they had invested in Office for the Web, Android and iOS much earlier on and with much more intensity, and still have given it for free. They were lucky none of the competitors really stepped up to fill the void. In a cloud-first and mobile-first world, there are multiple revenue stream available once the data information workers process is more closely tied to a provider; specially with the synergies in their product line.

sdar 11y ago

> So they've decide that the business model of the past two decades is doomed? Windows is a commodity, a) it won't pay for its own engineering team and b) unlike other competitors, Microsoft hasn't been able to capture as much value from the current Windows ecosystem and marketplace. Developing for Windows is becoming a liability: a) your team can't develop only for Windows anyways; b) your team can be more efficient by using a wider set of tools and technologies than Microsoft's own developers, and c) if Windows is not profitable and your product depends on Windows, it better pay for part of Windows' cost. Internal OSS adoption, investing on cross-platform development and in Azure seem all strategic investments in managing the risks above while remaining a software (product) development company. Every other gain from the same strategies (the ones affecting their customer base) are cherries on the top of the cake. > Are investors onboard with that? Not sure they realize what's going on. If they did, I couldn't explain the current P/E ratio in days of declining revenue, a prospect of shrinking revenue streams (overall) and large bets on lower margin businesses. > They just gave away all their products for free? They probably wish they had invested in Office for the Web, Android and iOS much earlier on and with much more intensity, and still have given it for free. They were lucky none of the competitors really stepped up to fill the void. In a cloud-first and mobile-first world, there are multiple revenue stream available once the data information workers process is tied to a platform; specially with the synergies in their product line.

cm2187 11y ago

They used to live of windows licenses but their market share is shrinking if you take tablets and mobiles into account. The new strategy seems to be making money on cloud services, which are platform agnostic, and search engine, of which Windows is becoming just a natural extension, like Android and Chrome OS are an extension to google.com, a probe given for free that Google wants to see in each of their users pockets to keep an eye on where they are, who they talk to, what they do. Hence the extensive tracking of Windows 10, and Windows 10 upgrades being given for free. We may like it or not, or agree that it makes sense or not, but at least it looks like a rational strategy.

eip 11y ago

Sun 2.0?