Posted on 07/23/2009 8:12:48 PM PDT by Steelfish
Microsoft Can’t Evade Downturn’s Tight Grip
By ASHLEE VANCE July 23, 2009
Microsoft, the once-swaggering giant of the personal computer industry, has been humbled, both by the recession and by problems of its own making.
On Thursday, the world’s largest software company reported its worst fiscal year since it initially sold stock to the public in 1986. Year-over-year revenue and full-year sales of Microsoft’s flagship Windows software dropped for the first time.
“Clearly, Microsoft is not immune to the economic downturn,” said Brendan Barnicle, a software analyst with Pacific Crest Securities.
Many prominent companies tied to the PC industry have watched about one-fourth of their revenue vanish as business customers in particular have scaled back new PC purchases. Microsoft makes more money from versions of Windows tied to business computers than it does on cheaper machines aimed at consumers. If businesses start buying again, Microsoft should benefit from higher overall sales and rising profits.
But the economy’s pinch is not solely to blame for Microsoft’s problems. The company’s Windows Vista software, hailed in 2007 as the most significant product in the company’s history, has failed to attract businesses in any meaningful way because of problems with compatibility and speed.
According to a study by Forrester Research, 86 percent of corporate PCs continue to rely on the eight-year-old Windows XP.
Microsoft’s Windows profits have also fallen because of rising interest in the cheap, compact laptops known as netbooks, which rely on the lower-priced Windows XP instead of Vista.
Earlier this month, Google revealed plans to sell a direct competitor to Windows for the netbook market, and major PC makers have backed Google in what is most likely a bid to put even more pricing pressure on Microsoft.
(Excerpt) Read more at nytimes.com ...
"The big question haunting Microsoft is when sales of its old-line products like Windows and Office will come back and fuel the company’s aggressive strikes into areas like search, mobile device software and online business applications."
"In its fourth quarter, Microsoft’s net income fell to $3.05 billion, or 34 cents a share, for the period ended June 30. The figures represent a 29 percent drop in net income from the $4.30 billion, or 46 cents a share, that Microsoft reported in the period a year ago"
They should cut prices across the board by 20%, for starters. Office 2007 is a rip-off @ over $300 bucks. Discount Window XP discs too.
>> “The big question haunting Microsoft is when sales of its old-line products like Windows and Office will come back...”
What if they don’t? Ever?
Things are different now than they were back in their heydey. Wonder if they have a contingency plan for that possibility.
This is not Obama’s fault.
It’s the computer users out there are just too stupid to realize how wonderful Windows Vista and Office 2007 are.
You know the ones that after spending $100s to $1000s of dollars on a new computer are so retarded that they actually don’t want to spend $100s to $1000s more or spend hours to days of their free time installing/upgrading new software and hardware.
SO it’s no surprise Microsoft is down, people just don’t realize Bill Gates knows what’s best for them
< / Microsoft vendors who always show up in these threads mode>
The market have matured to the point where nearly everyone's needs are met by the existing products,with reduced incentives for customers to buy new.When a new device is introduced,proves useful,and no one has it,then the market is wide open for huge production and profits;once the intial demand is satisfied only the replacement and upgrade sales remain.
You left out the stupid business people who don’t want to spend millions of $ retraining their staff because the new programs work differently,use different hotkeys,etc.
If their staff had brains, the retraining issue would be a non-issue. A spreadsheet is a spreadsheet. Ditto a document. I’ve used Mac, Windows and Linux versions of all the major office applications, and it just isn’t that hard to get them - and the stuff from Google and others ain’t hard either.
>You left out the stupid business people who don’t want to >spend millions of $ retraining their staff because the new >programs work differently,use different hotkeys,etc.
Also, You left out the stupid business people who operate on the principal ‘if it ain’t broke don’t fix it’
Windows Vista!!!
Slowly I turned........
Well,some people make VERY good livings holding training seminars for users of a particular software.Microsoft itself has a bunch of certification programs .Perhaps you are an enthusiast or even just “smarter” than the average worker and executive.I know of large,successful corporations that seriously consider training costs with any software purchased.
Vista is a horrible beast. It’s not the difference that bothers me, it’s the high overhead required to run it. Vista is a hog due to DRM requiring it to encrypt inter-sub-assembly communication inside the box. BS!
Just bought a new XP Pro box. Dual-core 2.5ghz processor, 800mhz bus speed, 4gb RAM, 500gb HD, $499 compusa.com. It’s VERY fast. Before XP Pro disappears I figured why not. It’s a wonderful computer.
I will NEVER use vista. Screw DRM!
The reality is that 80% of the people use 20% of the functions of a software application. Maybe I missed something but I thought training seminars on office applications went away about 10 years ago? Most people could use the tune up of a very thorough introduction to what an office application can do and how get the most out of it. It’s just that most managers don’t get it. Simple stuff like learning how to architect a multisheet spreadsheet, or share one with co-workers to build a model. None of this takes a Ph.D.
Well, it could be that Vista sales to corporations have died, as we all wait for Windows 7?
And there is no compelling reason to upgrade to Office 2007, at least none that justifies letting staff people go elsewhere.
And, I can’t wait until people figure out that Google has a great email product for corporations that is a bunch cheaper than Exchange!
Perhaps software developers should worry less about loading up every application with features most users don't need or want.
Who really needs or wants a 200mb program loaded just to write simple letters and emails?Most business letters real content haven’t changed from the days of a word processor that took one floppy-except a lot of pictures can be include.
I’m putting off buying new s/w AND/or a new computer because I do NOT want to deal with VISTA either. Think maybe I’ll look into what you got! I didn’t know you could buy anything WITHOUT Vista on it!!!
Microsoft spends too much of their research and development? money writing software to catch the sharders and crackers out there who are definitely smarter than their outsourced one little, two little, etc. Let’s get a few more op systems too, directed at multilayered targeted buyers, three little, four little, etc. All of this has driven their interface driver suppliers up a trea trying to keep of with the exponential growth of bad software.
I've been Windows free for two years now. Google is making it's own Linux distribution with Chrome as it's browser. I'm looking forward to the debugged version.
Why even get Office in the first place these days? Open Office is just about as nice...and free.
Adios, MSOffice.
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