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Sooner or later dominant companies don't dominate

What will stop Microsoft from being dominant?

Mike
Sunday, April 27, 2003

When Bill Gates retires or dies, the company will begin to fall apart. It's really all about Bill.

choppy
Sunday, April 27, 2003

- A company which will be better at Marketing than Microsoft ?

Or more simply a few Al-Qaeda terrorist who crashes a few planes on Microsoft Campuses ;-)

- Do you know if they backup their source code on a remote server in Africa or something :-)

Codex
Sunday, April 27, 2003

Actually, I disagree that it's all about Bill. I actually think it's all about Ballmer.

Brad Wilson (dotnetguy.techieswithcats.com)
Sunday, April 27, 2003

As I've said before - I think Ballmer is the reason they're starting to slide. Despite his monkeyboy act, he doesn't "get" the whole developers thing. I also think he doesn't understand "penetration, then profit"

Philo

Philo
Sunday, April 27, 2003

I can't think of a company or time that's been better to developers than today's Microsoft. Why do you feel they're doing disservice to developers?

Brad Wilson (dotnetguy.techieswithcats.com)
Sunday, April 27, 2003

It's actually gotten better of late, but about two years ago MS was heading down a nasty road:
1) Threats of audits on MSDN software
2) MS Passport, as initially priced, was something like $15k just for a developer to enter the market
3) Drop in academic product availability
4) Product activation on MSDN operating systems

It just seemed to me for a while there that MS was turning its back on developers. Seems to have improved since the release of .Net.

Philo

Philo
Sunday, April 27, 2003

Actually, Ballmer said it's all about the "Developers.....Developers.....DEVELOPERS....."


http://www.zdnet.com/anchordesk/stories/story/0,10738,2807333,00.html

http://www.detonate.net/media/dancemonkeyboy.mpg

Bella
Sunday, April 27, 2003

I don't presently develop for Windows (I have done so in the past), but I personally think MS has already made their mistake - it's just a question of whether it will catch up to them before they do something else for other reasons.

The mistake? Trying to force everyone to a rental software model.

Why is it a mistake? Because previously, if you were an IT type, you might budget 'X' for computers, then be able to decided later whether you wanted to pay more money for the latest software rev or not. If it had features that helped your buisness, you budget and buy. If not (or if you are low on money) you don't buy. Now, with a rental model you don't have the choice - you pay yearly, whether you upgrade or not. And when your vendor screws up (recent Office 2K issue), you run into trouble. Or if you are struggling and pay your bills late - all your software dies.

I have the feeling that when the realities of a licensed software model really hit home, large companies are going to switch to solutions that DON'T come with this kind of risk attached.

But that's just an opinon.

Michael Kohne
Sunday, April 27, 2003

I'm a me-too'er re software licenses.  But, I think microsoft is smart enough to make the correct decision (whether I'm right or wrong).  I trust Ballmer to make the right decisions.


Sunday, April 27, 2003

Tides change, IMO, due to some truly disruptive technology coincident with a power vacuum.  In 1980, it was mainfraines quickly giving way to mini's, which gave way to the '386 in 1992 and the introduction of Win95 - the first offering from MSFT that was viable.  While Apple was always providing superior solutions - in every area - during this period, it was the power vacuum that was filled by MSFT.

Similarly, in 1974, with an oil crisis and gasoline quadrupling by 1979, Honda and Toyota filled the vacuum with reliable economical cars which nearly put Detroit under.

So, I think it takes not only a disruptive technology, but inability of the status quo to react with sufficient speed in order to bring down the Goliath.  Right now, MSFT suffers from an attack of the Lilliputians (sp?) .  But they react much faster and more effectively than will be required for their fall.  Certainly the day of stock prices doubling every 2 years are likely over.  And they need to be oh so wary of profits coming from 2 rather narrow sectors that well could run out of steam.  But...  At present rates, a sea change is not immenent.

On another almost orthogonal note, technical analysts are increasing bullish in general.  I'm saying the next down stop for MSFT is 23, maybe 23.5.  And it might not even make it that low prior to a break out above 26.  Might be a really good short term ride as everyone starts piling on.  Watch for it.

Nat Ersoz
Sunday, April 27, 2003

>>The mistake? Trying to force everyone to a rental software model.

Hum, I not sure if that is a mistake. It might be even a larger mistake to NOT change.

The whole computing industry from IBM, Oracle,  SUN, Sperry-Univac, Honeywell , and the rest for the last 40 years of this industry have been based on a some kind of pay per use, or what is called maintenance contracts.

So, for some company to wake up, and go, oh, gee Microsoft now want to run it’s business like the rest of the industry has for the last 40 years, it seems very doubtful that those companies are all of sudden caught off guard here.

Fact is, MS sold the software, and not some renewal type of model. MS’s challenge is to change that to a model that all their competitors have. They are the only company out in the cold in this regards now. Virtually every other company in the industry runs on a different model the does MS.

I think it is going to be a very tough challenge for them to change their business model to what the everyone else in the industry has. They may not be able to make this change.

Further, IBM was the Microsoft in the 1970’s, and was in court for anti-trust stuff constantly. There was at LEST as much hatred for big blue then, as we see for MS to Today.

However, despite the concept of Mainframe passing, IBM is still a very good and successful company.  So is Microsoft. I bet that IBM has probably lost little market share in the server market that they owned over the 30 years.

So, we might be asking the wrong question here. For example, is it reasonable to ask what Pepsi can do to take over Cokes market? In fact, it is UN-reasonable to assume that either one will grab too much of their competitors marker place. There is not much Pepsi can do, and the same applies to Coke.

Fact is, that both .net and Sun’s Java are going to own a part of the market.

While the collapse the mainframe market did deal IBM a blow, they remain a one of the larger companies in the US.

MS will also remain one of those viable and succesful American companies also.

Albert D. Kallal
Edmonton, Alberta Canada
Kallal@msn.com

Albert D. Kallal
Monday, April 28, 2003

I'd just like to point out that the *decline* of each of those companies was based in part on their rental arrangement - companies don't like having to pay annual tribute, and setting up a subscription or leasing service invites fixed-price competition.

In fact, the reason the case management system I'm on is being built is to dump an annual fee mainframe.

If Microsoft had a way to kill all the existing retail Windows versions and shifted to a pure subscription model then I'd buy Redhat stock so fast it'd make your head spin.

Philo

Philo
Monday, April 28, 2003

Decent competition with real product offerings.
Even with al the political anti-MS backing (watch Europe closely on this over the next 3 years), in the end you still have to offer the public something that does not suck.

Just me (Sir to you)
Monday, April 28, 2003

Albert, I partially agree with you.  The other large vendors you mentioned sell primarily enterprise software that runs on servers.  You really can't include office in that model.

Home users want to own their computer and everything it does.

Mike
Monday, April 28, 2003

And so what's your theory on why Intuit is quietly shifting all of their software to a re-occurring revenue model?

The thing is, selling a package may be more attractive to consumers, but it is currently perceived as a lot more work by software producers.

This is especially true for companies like Microsoft and arguably Intuit (with the exception of the tax software since it has a natural upgrade cycle) who need to have increasingly high upgrade numbers to maintain their growth (let along increase it), but are hampered by the fact that their software is pretty good the way it is.

As a result, both are attempting (in my opinion) to use their monopoly power to shift business models.  Changing business models is very difficult, but, provided the shift is gradual enough - I'm not so sure they won't succeed. 

Right now, for instance, if you want to run payroll via Intuit's QuickBooks (Canadian version) - you have to buy their subscription option (a nasty 300% price increase for many when their previous payroll only subscription ran out last year). 

"Consumers" may prefer to buy their software, but if the alternative is not to have it at all (as there is not a lot of competition), the experimentation by Intuit seems to imply they bite the bullet and subscribe.

Got to love monopolies...

Phibian
Monday, April 28, 2003

Two of the economics courses I've taken (and my antitrust course) pointed out that IBM pioneered the discovery that leasing is the method which maximizes profit margins - you make people pay for the same thing over and over.

The problem is that companies often seem to lose track of the idea that to capitalize on maximized profit margins, you have to have customers.

IBM leased mainframes, the PC stole their business. Xerox leased copiers, Canon & Co stole their business. Intuit's move towards leasing tax software is the best thing that's happened to Kiplinger's TaxCut in a long, long time.

Intuit's move was especially stupid because there's a law that says you have to be able to produce your returns seven years from now. People who have used tax software and been audited just dusted off the old application disks, installed, opened the file, and printed it off. Those people are the ones moving away from "rental only" Intuit.

And apparently no company is incapable of making a poor decision; especially when that decision is motivated by greed.

Philo

Philo
Monday, April 28, 2003

I wouldn't normally do this but...

"And apparently no company is incapable of making a poor decision..."

I'm not sure, entirely, what you aren't trying to get at, in a round-a-bout manner, or not!


Monday, April 28, 2003

"Intuit's move was especially stupid because there's a law that says you have to be able to produce your returns seven years from now."

My comment was about the accounting software produced by Intuit, not their tax software.  As I mentioned, tax software has a natural upgrade path, since you cannot just keep using last year's tax preparation software.  Also, it's very handy to just import last year's tax info - so there is a minor barrier to switching.

Furthermore, Intuit doesn't just rent tax software - you can buy it as well (although they have been pulling some nasty/dumb tricks with copy protection - a move with its own implications and not relevant to this particular discussion). 

The point I was trying to make about Intuit is that on the accounting side, they have a fairly large chunk of the market and very tight control over the software installed on your system because of the auto-downloads.  If you want a cheap/basic/user friendly accounting system to do your personal accounting, or to handle your small business, there are only a couple of options.  Here in Ontario, Canada, for small businesses there are three main ones: Simply Accounting, MYOB, and Quickbooks. Since Intuit owns two out of the three, if you don't like Simply Accounting - then you are pretty much stuck with Intuit and whatever they happen to pull, or have to pay more serious money.

Furthermore, migrating from one accounting system to another is a lot of work, in my experience.

So, if (like a goodly number of our clients), you were using Quickbooks Payroll (a Cdn$60/year subscription), and you came to the end of your subscription, and Intuit said "Sorry, we don't offer that anymore because your version of QuickBooks is too old - now you have to buy our subscription version instead" - you are likely going to pay for the subscription rather than going to all the work of first finding and then switching to something else.  In fact, although a number of people whined about the huge price increase (and got it reduced for the first year) - I don't know of anyone who switched, because they don't feel that there are any good alternatives.

As such, unlike tax software from Intuit - which you can in fact buy (even in the US) for around US$40 - if you are a company that does Payroll and used to use QuickBooks, you either have to switch or fork out for the subscription. And most people are forking out.

Personally, I think that Intuit is doing a brilliant job (although I hate what they are doing).  When it became obvious that they were moving to a subscription model in 1998, I thought they'd never pull it off.  However, the way that they've approached it made me reconsider.

Phibian
Monday, April 28, 2003

Whoops - sorry; didn't think about accounting.

"Intuit's pursuit of subscription software is the best thing that's happened to Peachtree in a long time"

There are a LOT of people moving to Peachtree, too. Mind you, it's not *just* the subscription - apparently the product has gone downhill as well.

Philo

Philo
Monday, April 28, 2003

Intuit's problem is they think they are the only grocery store that sell milk. 

Mike
Monday, April 28, 2003

Subscription only works when you have your customers locked in, or if you're providing an actual service other than the mere use of the software, such as antivirus updates.

But once you do implement the subscription model (without providing a real service such as that mentioned above), customers eventually find a way to escape it.

T. Norman
Monday, April 28, 2003

I think Nat is spot on with the power vacuem.

We almost saw Microsoft lose it back in the 90s, when they failed to see the Internet coming.

Of course, when the people in Redmond saw there mistake, their response was truely impressive.

It is remarkable that a company so big can change direction so quickly.  You can only admire what they managed to pull off.

When the next wave comes, they may not be so nimble.  If they are, then they really do deserve there dominant position.

Ged Byrne
Tuesday, April 29, 2003

Nat,
Just curious, how much money have you lost in trading stocks since 2000?  I hope your MSFT trade serves you well.

Bella
Tuesday, April 29, 2003

> We almost saw Microsoft lose it back in the 90s, when they failed to see the Internet coming.

Oh please.  Microsoft almost didn't lose squat.  What mindless hype.  Thankfully all those retarded "tech week" rags are mostly gone now.  Bubble bursting was the best thing to happen to IT since 1996.

Bella
Tuesday, April 29, 2003

Linux owns you all.  If you want a bug free OS get linux.  FOOLS!!!! FOOLS!!!

IceDevil
Monday, February 02, 2004

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