5 ms·

If you are an OS company, then it makes a lot of sense to be in the hardware business.

by smackfu 11y ago

JustSomeNobody 11y ago
Sure, we can just forget the past 30 years where they've been very successful at partnering with OEMs instead of trying to be one.
- joshuapants 11y ago
  This assumes that everything that worked in the past will work in the present and future, which is not really a reasonable assumption.
  - JustSomeNobody 11y ago
    True, but you can't assume becoming an OEM will work either.
    - joshuapants 11y ago
      Absolutely. But they have to do something, since standing still will allow their competition to eat them alive, and I think that moving into hardware along with their various services is a good move to at least try. It's probably too early to call it either way; the Xbox division took something like 6-7 years to start posting profit. Surface was (still is?) in the negative, but it's been gaining traction lately and if it isn't already profitable it will be soon. Surface in particular is a good example of what they should do in hardware: make something that nobody else really does and do a damn good job of it. There are other Windows tablets, but nothing comes close to Surface in terms of build quality and form factor. They tried to differentiate the Xbox One with Kinect, which didn't work, but points to that being their strategy. With Windows Phone though, I'm not really seeing it. The main draw is the OS (which isn't much of a draw because of the low marketshare -> no apps feedback cycle).
- fredkbloggs 11y ago
  I would argue that this relationship hasn't worked well at all since the late 90s. The customer experience with OEM Windows PCs is horrible, thanks largely to all the crapware those "partners" install to make a couple extra bucks. And their margins are so shitty that those extra bucks are basically the only bucks, so they just keep piling on. Throw in the mobile revolution to give people plausible alternatives and Microsoft's way of doing business is toast. In mobile, there was only one vendor selling devices with Microsoft's OS on it; their market share was negligible and either the product line or the vendor itself was going to go under. No one else was (nor is) interested at all. That's why they have Surface, Windows Phone/Mobile (and did the Nokia deal), and Signature Edition now. They don't need to do any of that if the OEM partner model were working. It wasn't, and it isn't. Microsoft's decision to go vertical is very sensible. It isn't working because they're too late. One of the basic principles of running a megacorporation is that you shouldn't be in markets where you cannot be #1 or #2. Microsoft is a very distant #3 or #4 in mobile. Instead of trying to break in years after the top players were established, they should have admitted failure and gone off to find the next big thing where they could be #1 or #2. But that kind of courage is very rare in large corporations and certainly no one in the Microsoft leadership team has anything like it. So they'll thrash around for a while until either they hit on the next big thing themselves or, more likely, fail to do so and repeat this process a couple more times before finally going under.
  - JustSomeNobody 11y ago
    I'm not sure how you can say it didn't work well. Microsoft made a LOT of money because of it. And the things you cite, crapware, etc... that was not due to MS. Sure things didn't work out so well for end users, but again, Microsoft benefited greatly from this arrangement. I think Microsoft wants to go vertical because they see how well it worked for Apple. But Microsoft is no Apple. Apple started with hardware and have always focused on hardware. Their software and services exist to drive hardware sales. That's never been Microsoft's strategy. If they want to change, that's great. But my original comment stands. They have been very very successful partnering and not being an OEM.
    - fredkbloggs 11y ago
- JimmaDaRustla 11y ago
  When OEMs are no longer challenging the status quo, sometimes you need to join the battle.
- pjc50 11y ago
  They were hugely successful when the platform was open (PC clones) and the OS was the chokepoint. Now there is a very real risk that end users use closed hardware running Android or iOS, while servers run Linux serving web applications.

If you are an OS company, then it makes a lot of sense to be in the hardware business.

by smackfu 11y ago

If you are an OS company, then it makes a lot of sense to be in the hardware business.

Sure, we can just forget the past 30 years where they've been very successful at partnering with OEMs instead of trying to be one.

joshuapants 11y ago
This assumes that everything that worked in the past will work in the present and future, which is not really a reasonable assumption.
- JustSomeNobody 11y ago
  True, but you can't assume becoming an OEM will work either.
  - joshuapants 11y ago
    Absolutely. But they have to do something, since standing still will allow their competition to eat them alive, and I think that moving into hardware along with their various services is a good move to at least try. It's probably too early to call it either way; the Xbox division took something like 6-7 years to start posting profit. Surface was (still is?) in the negative, but it's been gaining traction lately and if it isn't already profitable it will be soon. Surface in particular is a good example of what they should do in hardware: make something that nobody else really does and do a damn good job of it. There are other Windows tablets, but nothing comes close to Surface in terms of build quality and form factor. They tried to differentiate the Xbox One with Kinect, which didn't work, but points to that being their strategy. With Windows Phone though, I'm not really seeing it. The main draw is the OS (which isn't much of a draw because of the low marketshare -> no apps feedback cycle).
fredkbloggs 11y ago
I would argue that this relationship hasn't worked well at all since the late 90s. The customer experience with OEM Windows PCs is horrible, thanks largely to all the crapware those "partners" install to make a couple extra bucks. And their margins are so shitty that those extra bucks are basically the only bucks, so they just keep piling on. Throw in the mobile revolution to give people plausible alternatives and Microsoft's way of doing business is toast. In mobile, there was only one vendor selling devices with Microsoft's OS on it; their market share was negligible and either the product line or the vendor itself was going to go under. No one else was (nor is) interested at all. That's why they have Surface, Windows Phone/Mobile (and did the Nokia deal), and Signature Edition now. They don't need to do any of that if the OEM partner model were working. It wasn't, and it isn't. Microsoft's decision to go vertical is very sensible. It isn't working because they're too late. One of the basic principles of running a megacorporation is that you shouldn't be in markets where you cannot be #1 or #2. Microsoft is a very distant #3 or #4 in mobile. Instead of trying to break in years after the top players were established, they should have admitted failure and gone off to find the next big thing where they could be #1 or #2. But that kind of courage is very rare in large corporations and certainly no one in the Microsoft leadership team has anything like it. So they'll thrash around for a while until either they hit on the next big thing themselves or, more likely, fail to do so and repeat this process a couple more times before finally going under.
- JustSomeNobody 11y ago
  I'm not sure how you can say it didn't work well. Microsoft made a LOT of money because of it. And the things you cite, crapware, etc... that was not due to MS. Sure things didn't work out so well for end users, but again, Microsoft benefited greatly from this arrangement. I think Microsoft wants to go vertical because they see how well it worked for Apple. But Microsoft is no Apple. Apple started with hardware and have always focused on hardware. Their software and services exist to drive hardware sales. That's never been Microsoft's strategy. If they want to change, that's great. But my original comment stands. They have been very very successful partnering and not being an OEM.
  - fredkbloggs 11y ago
JimmaDaRustla 11y ago
When OEMs are no longer challenging the status quo, sometimes you need to join the battle.
pjc50 11y ago
They were hugely successful when the platform was open (PC clones) and the OS was the chokepoint. Now there is a very real risk that end users use closed hardware running Android or iOS, while servers run Linux serving web applications.