Microsoft as a company has spread. Look at google, they have done the same thing. Their business is thriving. Microsoft is attempting to spread into other markets. Microsoft is a company based with many different product divisions each running independently of the other. While some might receive some financing from other departments, they are still separate entities within Microsoft. Microsoft as a company, an organization, an enterprise, has grown leaps and bounds. Have they thrown Windows to the side in recent times? Maybe. But I feel they have learned the hard way with Vista, which I still use and actually thoroughly enjoy, and I think they will be more cognizant of this in the future.
-Josh
What MS did very successfully was:
- to convert an IBM monopoly into a MS monopoly that facilitated world-wide competitive production of hardware and reduction of hardware costs
- to realise the importance for the mass market of the Xerox/Mac/GEM ideas and produced Windows rather than just OS/2, thus reinforcing their own monopoly
- to leverage their understanding of Windows and their monoply into the effective monopoly of the Office suite (and thence into the monopoly of the Exchange server)
As with all monopolies, they had massive surplus revenues. Dvorak just notes a number of ways in which this surplus was frittered away.
I don't think that there would be many business analysts who doubt that they are in long-term decline profitability-wise unless they come up with another big income source. I'm uncertain whether they realise it themselves, but it seems likely that they do. The big issue is that both the OS market and the Office Suite market have become commodities. Hardware prices are now at such a low level, that the extra cost of Windows is significant and therefore constrained. The threat of Linux is not that it threatens to take over the market in the near future, but that it limits the prices that MS can charge. MS will still charge the most it thinks it can get away with in its various markets (retail, corporate, OEM, developing world) but its freedom is limited; as the netbook market shows, MS can take the market over when it wants (atm at least) - but only by selling at a price point the market is prepared to bear and, in this case, by changing its XP roadmap. They don't just have competition from other enterprises impacting their monopolies, they also have their legacy versions. There's not a great deal of desire by users to move on from XP or 2003. And their track record in their major areas has not been that good recently: 2 of the last 4 Windows launches have been turkeys (Vista & Me) and a huge % of people don't like Office 2007.
In practice, Google have not been doing the same things at all with their cash. Pretty much all their new projects increase the number of times that people use the net with Google (or make Google use easier) or increase their advertising muscle and some seem to have a bit of a poke at MS's monopolies. Their spending seems focussed and they appear to discontinue a product line fairly quickly when they decide it isn't doing what they want. Microsoft got involved in a great many areas which were never going to offer significant profitability to a business of their size and which did not obviously make use of any of their particular talents. Apple have stuck to selling Cool and Desirable; Amazon have stuck to selling Internet distribution - but they are both able to substantially increase revenues by doing so. MS no longer has the luxury of sticking to its last
and having substantially increasing revenues. They're not going away any time soon, but they do look set for a long period of diminishing if they can't develop something else really big and monopolistic.
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