4 ms·

The question now is, can Microsoft compete in a world where they are no longer a monopoly? They make almost all of their still-quite-impressive profit from the

by kyllo 13y ago

The question now is, can Microsoft compete in a world where they are no longer a monopoly? They make almost all of their still-quite-impressive profit from the markets that they still completely dominate, like enterprise productivity software. They are probably losing money on products like Windows Phone and Surface. So what happens when Microsoft has credible competition in every market it sells to? That will soon be the case (if for no other reason than the fact that Google is actively trying to kill them), and I'm not sure even Microsoft is confident that Microsoft can compete and stay profitable in that environment. I see a lot of belt-tightening in their future. I don't really think a company can get--or stay--as big as Microsoft is, without the rent-seeking ability afforded by near-total monopoly of a major market.

bdcravens 13y ago
Of course. People will be buying Office licenses for a long time; there's too many companies with mission critical stuff that relies on Access or Excel macros. They'll continue to sell Server licenses for the many companies that have systems built atop SQL Server. When you're an entrenched solution as opposed to a potential rip-and-replace, you definitely have a competitive advantage.
Spooky23 13y ago
Good question. History (IBM) suggests that they can probably muddle through. You can ask the same question of Google. Enterprise with Google is a grown up hobby project that isn't a big earnings generator. Will google apps stay cheap if googles golden goose (advertising) declines?
- kyllo 13y ago
  Good question. History (IBM) suggests that they can probably muddle through. IBM just laid off over 3,000 people last month. To quote pg, "Consulting is where product companies go to die. IBM is the most famous example." http://paulgraham.com/startupfunding.html http://paulgraham.com/startupfunding.html Will google apps stay cheap if googles golden goose (advertising) declines? No. Nothing lasts forever. No matter how much we want to think that major corporations are permanent institutions, they have a lifecycle, and when they lose control of their market they may continue along for quite a while in a zombie-like state, but eventually they will wither away and die. Someone outside of Google will eventually figure out a better way to do online advertising, and Google will find itself in the position that Microsoft is in today. Microsoft is trying really hard to get a new lease on life through a product pivot, but I'm just not sure it's even possible at this point. Their products are generally more expensive and not convincingly better than the competition's.
  - ximeng 13y ago
    IBM has 400k plus people according to Wikipedia, so 3000 is really a drop in the bucket. Stock chart doesn't suggest imminent death either. http://finance.yahoo.com/echarts?s=IBM+Interactive#symbol=ibm;range=my;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined; http://finance.yahoo.com/echarts?s=IBM+Interactive#symbol=ib...
  - cglace 13y ago
    Steady growth over the past 10 years is dying? https://www.google.com/finance?cid=18241 https://www.google.com/finance?cid=18241
  - Sven7 13y ago
    Product companies require a higher level of talent than consulting companies do. The larger companies get, it just gets harder to maintain that level of quality, and the consequences show up in the output. A Google at 50K employees looks very similar to a MS or an IBM when they were at that staffing level. Look at Intel they have been stuck at 100k for decades. The only exception I can think of is Samsung but this is really over a much smaller time frame so doubt it will sustain.
deleted 13y ago
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by kyllo 13y ago

bdcravens 13y ago

Of course. People will be buying Office licenses for a long time; there's too many companies with mission critical stuff that relies on Access or Excel macros. They'll continue to sell Server licenses for the many companies that have systems built atop SQL Server. When you're an entrenched solution as opposed to a potential rip-and-replace, you definitely have a competitive advantage.

Spooky23 13y ago

Good question. History (IBM) suggests that they can probably muddle through. You can ask the same question of Google. Enterprise with Google is a grown up hobby project that isn't a big earnings generator. Will google apps stay cheap if googles golden goose (advertising) declines?

kyllo 13y ago
Good question. History (IBM) suggests that they can probably muddle through. IBM just laid off over 3,000 people last month. To quote pg, "Consulting is where product companies go to die. IBM is the most famous example." http://paulgraham.com/startupfunding.html http://paulgraham.com/startupfunding.html Will google apps stay cheap if googles golden goose (advertising) declines? No. Nothing lasts forever. No matter how much we want to think that major corporations are permanent institutions, they have a lifecycle, and when they lose control of their market they may continue along for quite a while in a zombie-like state, but eventually they will wither away and die. Someone outside of Google will eventually figure out a better way to do online advertising, and Google will find itself in the position that Microsoft is in today. Microsoft is trying really hard to get a new lease on life through a product pivot, but I'm just not sure it's even possible at this point. Their products are generally more expensive and not convincingly better than the competition's.
- ximeng 13y ago
  IBM has 400k plus people according to Wikipedia, so 3000 is really a drop in the bucket. Stock chart doesn't suggest imminent death either. http://finance.yahoo.com/echarts?s=IBM+Interactive#symbol=ibm;range=my;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined; http://finance.yahoo.com/echarts?s=IBM+Interactive#symbol=ib...
- cglace 13y ago
  Steady growth over the past 10 years is dying? https://www.google.com/finance?cid=18241 https://www.google.com/finance?cid=18241
- Sven7 13y ago
  Product companies require a higher level of talent than consulting companies do. The larger companies get, it just gets harder to maintain that level of quality, and the consequences show up in the output. A Google at 50K employees looks very similar to a MS or an IBM when they were at that staffing level. Look at Intel they have been stuck at 100k for decades. The only exception I can think of is Samsung but this is really over a much smaller time frame so doubt it will sustain.

deleted 13y ago

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