Apple vs. Microsoft: Sticking to one's knitting
From the first Microsoft Laptop Hunter ad: "I'm just not cool enough to be a Mac person."
John Dvorak is a crafty tech writer who has made a career of stirring up the Apple (AAPL) fan base and basking in the ensuing controversy. Two of his most famous examples: his 1984 critique of the "newfangled" mouse ("There is no evidence that people want to use these things") and his 2007 call for Apple to pull the plug on the iPhone "before it's too late."
On Friday he stepped up on his surly Second Opinion soapbox to go after Steve Ballmer's Microsoft (MSFT), and for once I thought he made a lot of sense.
The theme of "Is the party over for Microsoft?," as it often is with Dvorak (no relation to the Czech composer or the Seattle keyboard designer), is that companies should stick to their core competencies. Thus his warning to Apple to stay out of the mobile handset business — "a buzz saw waiting to chop up newbies."
"There is no likelihood that Apple can be successful in a business this competitive," he wrote shortly before the iPhone hit the market. "Even in the business where it is a clear pioneer, the personal computer, it had to compete with Microsoft and can only sustain a 5% market share."
But as Techcrunch's MG Siegler points out, Apple's 91% revenue share from computers that cost over $1,000 suggests that Cupertino is actually sticking very close to its knitting — which is to dominate the market for high-margin computing devices. Or, as COO Tim Cook would put it, not to build the most computers but to build the best.
The news hook for Dvorak's opinon piece this week was Microsoft's most recent earnings report, which showed revenues down 17% year-over-year in the same quarter that Apple's climbed nearly 12%.
"Everyone knew the day would come when the fortunes of Microsoft Corp. would reverse," Dvorak writes. "The company might now be in actual decline."
The reason, he says, is that Microsoft too often forgets that it is a software company built on the success of operating systems and applications suites. He makes the case that Redmond has been too easily distracted over the years by the success of others in essentially unrelated fields.
Then, in the meat of his argument, he ticks off 10 of these "bright and shiny objects." I quote:
- Years ago in the pre-Internet era, AOL was the talk of the town, so Microsoft had to copy it with MSN. No money was made; no strategic advantage was gained.
- Netscape was the rage for a while, so Microsoft threw together a browser and got in that business. The browser was given away for free. No money was made; the strategy got the company in trouble with government trustbusters.
- During the early days of the Internet, new online publications appeared. Microsoft decided to become a publisher too, rolling out a slew of online properties including a computer magazine and a women's magazine. They were all folded.
- Computer books became popular; Microsoft began Microsoft Press. After an early splash and success, the company soon lost interest and the division now languishes.
- Teddy Ruxpin became a hot toy. Microsoft rolled out a couple of robotic plush toys, including the creepy Barney the Dinosaur who sang "I love you and you love me." The company soon lost interest and dropped the whole thing.
- AOL-TV appeared, along with other device-centric TV-delivery mechanisms in the 1990s. Microsoft created a Microsoft-TV division as well as a device. It soon lost interest.
- Adobe Photoshop became a huge success, so Microsoft hired Alvy Ray Smith to develop photo-editing software. Smith quit when the company lost interest in the idea.
- Yahoo and Google showed that a search engine could be a money maker, so Microsoft copied that idea; it now has Bing.
- Cloud applications are currently trendy, along with notions about software as a service. Microsoft decides to go into that business.
- The Apple rolled out a MP3 player, the iPod. Microsoft came up with its own MP3 player, the Zune. The company also says it wants to stream music.
"This is a company that began making development tools for programmers," he concludes. "Does anyone see a pattern here?"
And gentlemen, what do you think Google is trying to achieve with the Chrome OS
ex ped: Google's knitting is as tangled up as any company I know.
Mark Says: "Microsoft won because they didn’t close their architecture"
It ain't over yet Mark … The party is just getting started and Microsoft is not looking good, to the point they are starting to mimic Apple's strategy
Yet Apple intentionally closed their architecture after watching 3rd party manufacturers take advantage of their card slots (particularly in the Apple II). Of course, IBM attempted the same with MicroChannel on the PS/2 machines which also flopped.
The answer is the other way around: Microsoft won because they didn't close their architecture.
Microsoft didn't win their OS monopoly just because they offered an open architecture. There are countless open architectures on the market (including Windows Mobile) and nobody gives a damn. Microsoft won because they enabled the cloning of the IBM PC, which had become the market leading product in the early 80s before any clone was available. Without IBM there would have been no Microsoft as we know it today.
Even if Apple had licensed their platform to other manufactorers they still would have lacked the lure of the IBM brand with corporate customers. Apple never had a chance to reach the market dominance that Microsoft reached through the IBM PC.
ex ped: Thanks, Tom. That's the way I remember it too.
Bryan – I agree. But they drew first blood.. there's such hatred against Microsoft that often becomes hostile. Facts are facts. Microsoft will, in all likelyhood remain the leading OS provider for quite some time.
As for the column, Microsoft is not making blenders. Every manufacturing company listed on the Dow Jones Industrial Average (along with Disney) could be considered guilty of no sticking to their knitting. The entertainment industry, in particular, is worse than Microsoft – but a column like this wouldn't work with them – you don't see Sleeping Beauty and Spiderman touting who's better in commercial after commercial.
I don't blame these companies for trying; more jobs are more jobs. And speaking of Jobs, since Jobs is a leading stockholder of Disney, maybe we'll just see such a commercial.
What the hell is wrong with you people? I read the article and scroll down into another meaningless Apple vs. Microsoft war. Who cares?!? It's a personal choice. You like the style and feel of a Mac, you get a Mac. You're a self proclaimed guru and you like to customize everything, you get a PC. No amount of opinions on money, value, usability, or design matter to anyone whose feet are planted firmly in one or the other camp. This article is about how Apple sticks to a few core areas and how Microsoft sticks it's business everywhere it can. No arguing that, and there's not necessarily anything wrong with that, unless you start losing profits…
@Steve: You seem to be misinformed on two points. First, Mac Pros have Core i7 CPUs, and were in fact the first computers to be sold with them. Second, the report you linked to explicitly states that it is the number of disclosed vulnerabilities, not the number that are unpatched. Also, no current OS has native support for Bluray, they all require an additional program. You can play decrypted Bluray discs in Mac, Linux, or Windows freely with VLC.
@StopLying (who obviously is too chicken to even give a hint of his real name)
Macs are easy to upgrade? Maybe if you buy the most expensive models, and even then your options are limited. But try upgrading an iMac or a Mini to use a second internal hard drive, RAID for data redundancy or faster disk access, a faster videocard, 12GB of DDR3 memory, a faster CPU, and Blu-Ray. That's right; you simply CAN'T. You can't get native support for Blu-Ray even on a Mac Pro tower.
Meanwhile, I can build a PC that can do all of that, and more, for less money than a Mac Pro. And with a Core i7, which will kick the pants of a Mac Pro's Core2 any day.
And as for security, hackers nowadays know that people are wising up to viruses, so they are attacking OS vulnerabilities. Please check IBM's X-Force report on the subject — one OS had the most and worst *UNPATCHED* vulnerabilities. Hint: it comes from a fruity company in Cupertino.
StopLying – Are you saying that Apple abandoned their earlier OSs to build a machine that doesn't run an OS created by Apple itself? Is that the 'open source' you're referring to? BSD?
Quoting things from the 90's and earlier, when Apple had a sporting chance to make it big in the PC world, is relevant. Apple opted to keep their architecture closed – that's quite clear. Jobs came back amid rapidly delcining sales and brought with him pieces of his NeXT OS – which was originally in a major part, BSD Unix. But it was too little, too late and they missed the boat and have been trying to catch up since. As much as you wish they were, Macs are still not 'mainstream.'
As for the USB/Firewire debate, you should qualify what you mean by 'far better.' Does price, number of devices or (what the U means in USB) universal factor into your definition? Probably not. How about availability? I have 8 servers, 4 desktops and 5 laptops – without counting, I suspect there are at least 50 USB ports in total – Yet only one machine has a FireWire port (what was HP thinking?). I think it's 'far better' I don't use FireWire, no? Point made.
You remind me of a movie I saw once, where a little boy was being about his puppy getting run over by a truck.. all he could do was keep saying "Stop lying to me!"
taken from: http://antivirus.about.com/od/macintoshresource/tp/macvirusfaqs.htm
————-
Are there any real Mac viruses out there?
Some try to answer this question literally, based on the strict definition of 'virus' – i.e. malicious software that infects other files. But the term 'virus' is used much more loosely these days and in that context refers to malicious software in general (or what the industry terms 'malware'). The answer also depends on the version of the Mac operating system (OS) in question. While Windows tends to be essentially the same "under the hood", the various flavors of the Macintosh OS vary widely. Thus the answer to the question is Yes, there are real Mac viruses out there. But whether you are vulnerable or not depends on the OS. As for malware in general, it's an even stronger Yes.
—————
ex ped: As you have discovered, Atlanta, it takes more than 30 seconds on Google to get to the bottom of the Mac OS X virus issue.
30 sec on Google and here is Mac Virus.
http://antivirus.about.com/od/macintoshresource/a/macosxflaws.htm
No nerves hit, other than people outright lying.
Nowhere did I mention that Apple made USB or was even a part of the creation.
I hate history revisionists, which you have proven yourself to be. Once Jobs came back in 1997, the whole plan was to go open-source with many things. They immediately adopted USB and put it on all their computers when PC-makers were still pushing legacy ports. PC-makers are STILL pushing legacy ports.
Macs are incredibly easy to upgrade – especially the towers. As usual, Windows users quote things from early to mid 90s as fact for 2009. This is why your statements are all unreliable.
Firewire may not be as mainstream as USB, but it's a far better technology. Only an idiot would deny it. Ask any musician which protocol is better for their needs. It's a no-brainer.
Seems to me the security-by-obscurity excuse is wearing thin. People went out of their way to install Linux on an iPod and even went as far as to create a virus for that OS. I'd think that would be far more obscure, but someone managed it and bragged. To date, with millions of Macs sold every quarter- NOT ONE VIRUS.
Keep up the lie. You have to justify in your own mind why you buy Windows.
PED.. I didn't say that Apple makes bad computers.. My original point (which has since been lost) is this piece give the impression that Microsoft is guilty of something that most companies (including Apple) do all the time.
Apple failed to become the rival to Microsoft that everyone thought they would. They've never been able to break through. The only reason they're doing well is due to their IPod and IPhone – which defy common logic. I guess usefulness takes a back seat to status symbols (aka, "I Am Rich" app).
You have to admit, with AT&T just rolling out 3G now when Sprint will be rolling out 4G (and making 4G devices – Palm Pre) this year and Verizon rolling out 4G next year, they're a bit behind the times.
The phone itself is decent but I've can do more with my Windows Mobile device on Sprint than any IPhone.
But I thought Apple was a computer company.. ?
Hey Ah, NY.. Did I hit a nerve? Did I insult your precious Mac? Microsoft builds in a very large number of drivers into their OS. It can run on an AMD or Intel CPUs, 32 or 64 bit. It natively supports ISA VLB, PCI, PCIx, AGP, CardBus, ExpressCard, SCSI, EIDE and SATA as well as standard serial, parallel interfaces just to name a few. Hmm..You have to think about who’s the idiot here.
Face it. Apple will never be a mainstream computer company. Look at all of the homes and businesses that run Windows – from hand-held devices, set-top boxes, laptops, desktops to small, medium and large Enterprise based corporate servers. So we’re going to measure success with how many viruses there are? Being mainstream and diverse means you’re a target. Who would waste their time writing a virus for any machine that holds less than 10% of the market share? How about only 1.2% of the server market?
USB was not made mainstream by Apple. USB was created Intel, Microsoft, and IBM and Compaq. Funny, Apple’s name isn’t in there. If anything, Apple resisted (as they had always done) integrating anything other than their own technology. They were so bent on keeping anyone from making anything for the Mac that they constructed the original Mac in away that you had to use a special tool to crack it open.. and if you did, it voided the warranty. But where is FireWire compared to USB today? Thank goodness that they’re putting FireWire back on their computers!
I don’t hate Apple. Keep buying those overpriced, under powered devices (IPhone on AT&T? Ha!). In fact, I hope their stock keeps going up – I can make good money.
It's ok to not like Apple, but there are some strange falsehoods listed here.
Firewire is back on ALL Macs, so stating that you have to buy "pro" is a LIE. Try staying up-to-date; this is the computer industry after all.
Macs have been using real video cards going back as far as 1997 – possibly longer.
USB was made MAINSTREAM by the iMac, not by any PC manufacturer.
The point of using Bootcamp is the fact that some apps are still Windows-only, but those are becoming more and more rare. Also, some of us, for business reasons, need to stay abreast of the latest Windows versions.
It is definitely a feat that MS makes their OS work on all pieces of hardware, but it doesn't make it automatically better. Just ask the majority of the computing community (not the people here who may know how to troubleshoot). They're too busy being told by MS to call Dell/HP/Gateway/Acer/etc., while all those companies tell people to call MS. Must be fun.
Be happy using your OS of choice, but the 1990s comments about Apple show that some MS fanbois wish it was still the 1990s. Sorry guys. Software is plentiful. Right-click existed since at least OS 8 (maybe even 7.x). Firewire is available on ALL Macs. There are STILL NO VIRUSES (Trojans are not viruses and aren't written in any magic way to replicate).
And, as someone who does tech support regularly, I don't want to have to babysit my computer. Despite all the anecdotal evidence on the web about people who never use anti-virus software on Windows, that doesn't really work in the Windows world.
Is this boardboard take over by idiotic MSFT fans?
Don't you idiots realize that windows is not only the worst product ever made in this country? It is actually the essence of human stupidity.
ex ped: Throwing the word "idiot" around isn't terribly smart either.
Mark – NY, you are an idiot.
Windows work with thousand of devices because the device makers write drivers.
@Myself — I was in such a rush to work on something, I forgot to check my own grammar. Bleah.
@Mark from NY — Exactly! The day Apple can get OS X run on such a vast combination of hardware, and do it better than Windows, it is the day I will admit they are better. Otherwise, it is Microsoft for me.
I don’t think Apple could ever pull off what Microsoft achieved. I would love to see them try to build an operating system that would work with thousands of motherboards, chipsets, video cards, sound cards, memory, hard drives, pointing devices, and peripherals and have it work at all.
Instead, they limited their playing field and produced a homogenous machine (hardware and software) with severe limitations and brand it as if it’s the best thing since sliced bread. Since they’ve failed with computers, why not a portable music player and cell phone? Talk about sticking to one’s knitting..
ex ped: Good point about what Microsoft achieved. But I'm not sure how you can say that Apple has "failed" with computers.
@Billy from Redmond
I do know Apple history. And Rosetta is nothing but a bondoggle. Yeah, it allows you to use software from PowerPC Macs, but *ONLY* from OSX. How about using System 7/8/9 software on your new Intel Mac, without any kind of *EMULATOR* that slows things down? 
And there is Bootcamp. If Steve Jobs thinks that Apple is sooooo superior, then why he has to give his users the ability to install and use Windows software? Maybe it is the bunches of good software that only exists on Windows and that Apple will never match? Nah, he says Windows is bad! (That was sarcasm, in case Apple-addled brains don't get it.)
Intel, USB, SATA, nVidia, ATI — shall I go on with all the hardware that finds its way first before it makes it to a Mac? And by the time it does, the PC has something newer. The only thing Apple has made was Firewire, and how good can it be that Apple won't even include it in their laptops, unless you spring for the more costly Pro? By contrast, my HP laptop does have Firewire. Ironic.
And there is not to mention the hardware I can use that Mac users will never have a prayer of using. My PC's Creative X-Fi gives me sound that runs circles around your crappy, CPU-hogging integrated sound.
So I stand by what I said. You want the Mac of tomorrow? Buy a PC.
Ha Ha … Just like knucklehead Greg Winn, (who was once the Operations chief of the Australian telco Telstra) said -
… "There's an old saying – stick to your knitting – and Apple is not a mobile phone manufacturer, that's not their knitting," …
What a dork, just like John D*or*k.
I know a lot of Microsoft fans will disagree with me on this, but I'll tell you why I think Microsoft is having problems. It's one big thing. They have hardly ever successfully developed anything in-house. They have gone out and bought small companies in developing markets and and emerging technologies, put a facelift on them (usually to the detriment to the product) and released them. When they have tried to develop something in-house, they haven't been able to do it. I think it's the mind-set at Microsoft, they don't have the patience to really get through the process to perfect a product. They want it now, not a year from now. Look at the netbook market. I think we all know Apple is developing something, but it's not out yet. Why? Because it isn't ready, not up to Apple standards. Apple will wait until it is. Microsoft would never wait. However, these days companies are less likely to sell-out to Microsoft (it's easier to believe Microsoft can't crush you when you have the US Justice Dept to run to – they have also seen how Microsoft has far from improved products once purchasing the rights). So, now, Microsoft is forced to developed most big ideas in-house, from scratch. Something with which they have rarely been successful.
Microsoft will always have many more machines running their OS. I think Apple likes it that way. I doubt if Apple ever wants to do what it would take to get even 50-60% of the desktop market overall. What it takes (ie building low-cost, under-performing machines) is against their philosophy. I agree with Dvorak. Microsoft has lost sight of it's core mission, that is to make a decent OS that can run on many different hardware platforms and systematically look for businesses that they can buy that can enhance that ability. Let the Dells and Sonys of the world compete with Apple using Microsoft OS products (and that includes OS products for phones, mp3 players, etc).
@mastrG who says "Microsoft will always be bif and Apple will always be small"
As much as it will annoy the old-guard faithful, AAPL is valued (market capitalisation) at around $150bn and MSFT at $201bn. MSFT is still bigger, but this is not anymore David v Goliath, more like Predator v Giant Sloth.
Dvorak totally misses the point about why Microsoft has pursued many of these 'shiny objects'. Either that, or he just enjoys provocative commentary as a way of drawing interest to his writing.
Microsoft has spent much of it's history trying to preserve and extend it's monopoly. From that logic flows the decision to:
• create MSN (to try and control the internet – read the history if you are not familiar)
• destroy or co-opt Netscape (they made IE after Netscape refused to capitulate)
• compete with Google, shift major corporate resources to pursue ad revenue (example; Ballmer's famous comments about it not being about "developers developers developers" anymore, but it's now about "advertising advertsing advertising!")
• undermine open source/linux, and Java (Dvorak does not mention this aspect, but Microsoft did spend lots of effort in this area, which produced no revenue to speak of)
• get a foothold in cloud computing and software-as-a-service, lest the ground shift away from packaged software (like MS Office), and disk-based OS (windows)
I can't really relate the Zune to the monopolist impulse, but I guess they saw how much money and mindshare that Apple gained from the effort and couldn't resist. They may have been a bit alarmed at the leverage that Apple has gained over the digital content providers as well.
The problem is way deeper. Microsoft has become a tech unfriendly bureaucracy that few, if any of the small number of truly talented developers want to work for.
Their initial 'open system' approach which dominated the business for fifteen years is now defunct. Too complicated to make an opsys that allows everyone's devices to connect. The walled garden will rule the future.
They will never again make a competitive operating system which requires a level of tech talent (5 top people are far more capable of doing this than the ten thousand mediocrities which msft employs) They will eventually die. Or use all their cash to gradually morph into a different kind of business.
MSFT is the major player and they will NOT going anywhere since they are connected to everything. on the other hand APPLE ONLY survive because of the release of Iphone and Ipod other wise I'm pretty sure they are out of business already as MAC is only 3% in the market share.
What Mr. Dvorak forgets is that innovation can occur in areas outside ones core competency. What about the buggy whip makers that hewed to their core product?
Look at the pattern of MSFT misfires, and one realizes that Apple is a hardware company that knows how to write software, and that MSFT is a software company that finally learned to control the hardware it uses.
The XBOX is MSFTs only hardware success. (OK, they make a decent mouse, but that's hardly rocket science). True, it's not the PS3, but its a respectable competitor.
The problem with MSFT is that they don't innovate, they copy. Sometimes, they can succeed anyway, because of their size. But look at the pattern:
1. MS BASIC was a yet another BASIC processor, just for a new platform.
2. DOS was purchased from another company.
3. Windows was a clone of the Xerox PARC and Apple work
4. The Zune was a copy of the iPod
I'll give them points for Excel and Word being the first graphical apps, but that just supports my thesis that MSFT is at its heart, a software company.
The impact of MSFT's entry into various fields has been bad and good: they have usually crushed smaller players, but where they are up against established competitors (Sony's PS3, Apple's iPod) they have pumped up the degree of innovation (by others). The game console arena was already really competitive, but not as much in the MP3 player niche.
Anyway, I say let both of these companies try as many things as they want. Any entrepreneur worth his/her salt knows that for every success there will be dozens of failures. Right now, they both have enough cash on hand to indulge themselves, and who knows what they might come up with.
The problem with MSFT is not that they are on to many markets. The problem is that they are in to many markets in a short period of time, many of which they do not dominate. On the other hand, Apple is expanding, at a slower pace. Apple first established great computers, once they were satisfied with their computer sales, the introduced the iPod and iTunes, once they were satisfies with that, they created the iPhone. The fact that Apple takes its time is what allows for their success. Once Apple establishes dominance in a market it takes little effort to maintain it which allows them to concentrate on new products, while mainting dominance in markets they already own. With MSFT, since they have not established dominance in the mobile phone, gaming, search, MP3, Music, and several other markets, they are trying to establish dominance in all of these markets without sacrificing any of the other markets they are in. Simply put, they are not focused onany particular market because the have to much on the table. In contrast, overthe past 2-3 years Apples big project was the iPhone and only the iPhone, as for the MP3, the made a few changes, and with their MacBook line, again
a change in design, some hardware modifications, but nothing outrageous, and yet they are still domnating the MP3 market, their computer shares continue to grow at a large rate, and the iPhone is a huge success. Simply put, Apple is clearly focused and one can easily see that they have clear and precise roadmap for their products, unlike with their Redmond counterparts who are struggling in several markets and appear to have no focus, and no real roadmap outlining their future.
I agree microsoft has gotten to far from the idea but so has apple both for there drm encryption on the stuff they sell and for not supporting more complex systems linux and bsd
for example make up a ever growing market now more then ever.Who ever heard of microsoft or apple servers not me linux and unix yes.Linux even has a new smartphone out or comming out .Both apple and microsoft need to help in making sure linux code is written so it knows what is connected and so on.
Microsoft has gotten to far from the idea i agree. Will they ever fail completely? I doubt it… but who would ever think best buy would live and circut city would fail? When not to long ago best buy seemed on the brink. Anyways what will eventually happen is they will have to refocus… they are like America… they had their time, they should focus on innovation and their core foundation… Apple on the other hand is like China… almost beat down (like in WW2 japan was whooping China), Now suddenly Apple has all of the potential and they may eventually be the leader. But all my ideas are just speclation, and no one knows what will happen… maybe microsofts exploration into other fields will eventually help their company…but i think the writer of this article is right… microsoft clean up your overall act, before you lose more customers.
Disagree with me? Think i have no idea what i'm talking about? I love getting into discussions so email me
Hey Don Kingman, you're analysis is spot on! I worked at a university where they lived, ate and breathed at the Microsoft altar. Funny, there continue to be problems with the platform, but do they look to linux as a more stable platform – nope.
Interestingly, the University is going to go with a form of Google Mail next year. So there is progress moving away from the MS Borge on one front. It is amusing to see that folks are waking up to the fact the the emperor has no clothes.
Mr. Philip Elmer-DeWitt wants to drive down MSFT stock price, so he can buy low and sell high at a later date, when once again, he is proven spectacularly wrong.
If Microsoft is smart they will set up their "Guru Bar" to only allow questions on products actually bought at the Microsoft Store.
No *way* do they want everyone and their brother bringing in every existing Windows PC that is acting funny. They can't afford that kind of floor space or parking arrangements.
Good article, good posts. Bad companies go, good companies grow. Bye Microsoft, you did it to yourselves.
@ Robert Leitao
Very good commentary. You raise a lot of good points.
You say: “Margins come from innovation not duplication.”
This is true, but margins also come from Monopoly – and this has been Microsoft’s m.o. In the old days, when there was lots of competition in the DOS world, they produced innovative improvements in software. Excel and Word were really best of breed – at least arguably so. But once the business world coalesced around these two as THE standard, and DOS assumed dominance as the OS, then MS ruled as a Monopoly, crushing competition in any area it wanted. This is how it maintained its margins.
You say: “Competence rather than efforts at dominance is what may bring success and the margins the company seeks.”
As I noted above, competence is not their m.o. So they will have to totally change the way they view the world.
@Steve from Denver.
You might want to crawl out of your parents basement once in a while and check what's going on out in the real world before commenting.
I'll give you a few hints: Rosetta, MacPro, Bootcamp, PowerPC vs. Intel and USB. Learn a little about those, and brush up on your Apple history.
I find Mr. Dvorak's writing to be at least as much entertainment as it is a source of informed opinion. I don't mean that in a derisive way. In addition to the columns referenced above, his column lampooning the first Apple iBook is a classic.
For those who read his columns regularly' his invective is targeted at Microsoft and the Windows platform far more frequently than it is at Apple.
His views on Microsoft sticking to its core competencies are valid ones. The challenge faced by Microsoft in the aftermath of the company's success in monetizing operating systems is that the company has essentially sucked the available margin from the Windows PC market leading to a commoditization of the hardware. This makes it challenging at best for the PC makers to innovate and works against the development of higher-margin product because the focus is on price and not unique or enhanced functionality. There's little margin remaining for Microsoft to consume.
How many consumers do you know that shop for a new PC based on the reputation of the manufacturer or the brand name of the product? Most Windows PCs are purchased with price as the primary motivator in the purchase decision.
The answer may be innovation rather than duplication. The company is surprisingly reactive rather than proactive in establishing a presence in new and emerging markets. The Zune is a bust. The Xbox doesn't offer the visual experience available from the PS3 and now there's talk of opening retail stores in an effort to counter Apple’s success. Rather than shun Linux perhaps the company should embrace that platform as a means to extend the company's leadership in productivity solutions independent of its Windows monopoly. Margins come from innovation not duplication.
In the mobile handset market manufacturers are moving as far away from Windows Mobile as possible. The lesson to be learned here may be that efforts to extend dominance into new markets will not be successful without innovation. Competence rather than efforts at dominance is what may bring success and the margins the company seeks.
The migration from Windows XP to Windows 7 will be problematic and troublesome for millions of PC users. Why? While many will opt to purchase a new PC with Windows 7 installed rather than contend with the hassles involved in upgrading an installed PC, it also opens a door for Apple to cherry-pick customers and extend that company's leadership in the high-margin PC market.
Microsoft has a successful and lucrative business in operating systems and productivity solutions. Focusing on reducing product complexity (how many versions of Vista or Windows 7 really need to be made available) and a willingness to innovate rather than duplicate might bring the company the new success it seeks.
@Dave Jax: "Also work out the x64 processor issues where we can install a x32 version of a program on a x64 box."
Dude, what world are you living in? There have never been any problems installing old software on a Vista x64 system. I have programs from Windows 95 running without problems on my Vista x64 PC. Try that with Mac software from that time.
Also, I like to configure things. That is why I rather have Windows than OS X. I like being able to place programs wherever I want, have the system do whatever I want, and have the freedom to use all the hardware I want, rather than what Apple wants me to have.
So I'll enjoy my brand new Core i7 and Phenom II x4 while you guys are still stuck with Core2's.
Thanks for summarizing Dvorak's article. i usually avoid reading his articles but I gotta ask "does Fortune really pay you for producing an article that is 99% of which is someone else's work?
I don't think you would even get a grade in any academic class if you turned this in. The instructor would return it and give Dvorak a grade instead. Why not use his work as a base for something more instead of just copying it.
ex ped: 99%?
I disagree with Mike Smith's contention that Microsoft doesn't "understand what the customer wants." They know exactly what the customer wants. The problem is that they see the customer not as the end user but as the IT departments of businesses. They use their wealth and monopoly power to bribe and train these people. As a result, the IT departments want MS and MS wants IT, forming a circle that doesn't–or can't–see what users want and need. Complexity and failure is on the part of software/hardware combos is GREAT for IT: it keeps them employed and prevents people without "certificates" from doing what they do. So they end up making each other happy while they cost companies millions and the economy billions in wasted time.
Until there is a split in the IT-MS complex, they will keep up their symbiotic feeding on each other until they both die. And they don't even realize what's going on.
Microsoft has had overwhelming success in Windows/Office. The list of their ventures can be viewed as failed attempts to copy the competition's ideas or it can be viewed as investments in new areas of semi-related technologies.
Would it be fair to say that that Google has lost its way because it wants to find an additional revenue stream other than paid search results? They are REALLY good at search, but keep producing software for a lot of other tasks and it is called innovation.
I was looking for someone to comment on the success of eBay/PayPal. In a CNN inverview recently, "PayPal will be bigger than eBay" it is revealed that eBay believes they are more than an auction company – they are an eCommerce company – and they have the sales numbers to prove it.
@Jeff from Houston, you do realize that the Xbox Games and Devices Division lost money the last two quarters, right? There's little hope that they'll ever recover their sunk costs in that division. I think their accumulated losses are close to $10B, in that division alone.
What Dvorhack didn't realize is that Apple did stick to its knitting. The iPhone is a pocketable computer, that just happens to have a phone feature.
Poor Josh, lost and lonely and looking for love….
@Jeff: "Also, in the entertainment world, the Zune, Xbox, and your PC all communicate with each other wirelessly so it makes for quite an experience when they’re all synched and working together."
That's the kind of thing that gets MS into trouble: some bullet points from a PowerPoint slide get mistaken for actual shipping product, and we are expected to not be able to tell the difference.
@Sean: "They have established beach heads in many directions and can attack whenever a challenger emerges from any direction."
Really? So is something like the Zune a "beachhead" or an "attack"? I'm sure your battle plan metaphor is exactly how they talk about strategy in Microsoft's boardrooms, but it's pretty evidently gibberish that translates into "we have a vague sense that we should be king of everything but our overwhelming hubris keeps us from figuring out that we actually don't execute very well outside of our core competencies."
Take a look at Microsoft's stock prices over time. Note that Steve Ballmer took over around 2000. http://finance.yahoo.com/q/bc?s=MSFT&t=my&l=on&z=m&q=l&c=
Everyone should watch Larry Ellison's YouTube video on Microsoft http://tinyurl.com/mhueb7
Larry has Microsoft in razor sharp perfect focus
Now Gizmodo reports that Microsoft's retail stores will be opening close to Apple's stores. They're going to have an "Answer Bar." Brilliant! Wonder where they got that idea. http://www.tinyurl.com/l7kcmj
Microsoft has no vision for the future so they can't tell what is important and strategic and what is not. Everything looks like a threat and so they case and defend. In all that, they've probably missed the real threat to their PC franchise: mobile computing including the smartphones. And now Windows Mobile has fallen seriously behind.
Also one should look at MSFT revenue and profit growth over the years–it is phenomenal and much has been in new areas such as Server&Tools. The only glaring weakness has been online and they were trying to address that by buying Yahoo which everyone thought was crazy but now it is clear that the biggest challenger to their Windows and Office cash cow is Google. If Google wasn't around and challenging their key businesses they would probably have shut down online business. But being as paranoid as they are they are trying to attack Google head on before Google's OS or Google Docs takes a foothold.
I disagree with the notion that MSFT should always stay away from unrelated fields. This makes sense in most businesses but not in technology. No one can predict the future of technology so Bill Gates strategy has always been to be paranoid and invest along various avenues and then pursue whichever ones pan out. They have established beach heads in many directions and can attack whenever a challenger emerges from any direction. If something doesn't pan out (like AOL TV they back off and continue to milk Windows/Office). That is rational as opposed to feeling one has a clear vision on future and pursuing one path since technology is so difficult to predict. BTW, that's why MSFT is so hated in tech world.
He forgot this one Phil. I've heard the stores are not about making money they're about, "branding"? That should make shareholders happy. Doesn't Best Buy already do this?
http://www.ifoapplestore.com/db/2009/07/24/leak-look-into-future-microsoft-stores/
Microsoft doesn't understand the difference between a "feature" and a "requirement".
Vista has the "feature" that your old hardware doesn't work. Any older applications don't work. Vista should have had expanded compatibility not less. It basically said "We write this now you conform to our standards".
What people want is for it to "just work". They don't want to have to buy office 2003 because their 5 year old copy of office 97 isn't compatible.
If windows 7 does everything XP does. ie run anything made in 10-15 years. Also work out the x64 processor issues where we can install a x32 version of a program on a x64 box. All that to where I don't have to configure crap. No special procedures just hit "install". And it needs to work with all the special patches that software devs have made to get their old app running on vista.
It's a long list but MS has dug themselves a big hole. If it doesn't do that then it will come up short.
Some legitimate points, however MSFT continues to make money so they're doing something right. I consider the Xbox as a success story and when you figure in that video game revenue now surpasses Hollybox box office intake, thats some pretty hefty numbers for MSFT.
But a strong point in MSFT's game plan is the interconnectivity of all their devices and software products. Anyone who works in a large business and has a full set of MSFT products knows how well all these devices "talk" to each other. Also, in the entertainment world, the Zune, Xbox, and your PC all communicate with each other wirelessly so it makes for quite an experience when they're all synched and working together.
While I agree MSFT has played follow-the-leader in many cases, connecting all these devices together is what they do well, and the product as a whole is worth more than the sum of its parts.
How are monopolies lost?
Excerpts from a BusinessWeek interview with Apple CEO Steve Jobs, October 12, 2004:
Steve Jobs: "Apple had a monopoly on the graphical user interface for almost 10 years. That's a long time. And how are monopolies lost? Think about it. Some very good product people invent some very good products, and the company achieves a monopoly.
But after that, the product people aren't the ones that drive the company forward anymore. It's the marketing guys or the ones who expand the business into Latin America or whatever. Because what's the point of focusing on making the product even better when the only company you can take business from is yourself?
So a different group of people start to move up. And who usually ends up running the show? The sales guy… Then one day, the monopoly expires for whatever reason. But by then the best product people have left, or they're no longer listened to.
And so the company goes through this tumultuous time, and it either survives or it doesn't."
BusinessWeek: Is this common in the industry?
Steve Jobs: Look at Microsoft — who's running Microsoft?
BusinessWeek: Steve Ballmer.
Steve Jobs: Right, the sales guy. Case closed.
ex ped: Thanks for digging that out. Right on the money.
There is nothing wrong on chasing other areas of growth. However, the real pattern is that Microsoft is a poor follower and not an innovator.
I think Microsoft is in real danger of destroying its brand and becoming the next General Motors
1. They don't understand what the customer wants.
2. They still don't get the importance of smartphones like the iPhone.
3. They are stuck in a bygone era of PC central and not distributed computing such as the Internet.
4. They are living on past laurels.
Windows 7 may succeed at resolving the problems with Vista, but I have a feeling it will fail at creating the buzz and passion of a must have product.
So I don’t see a rush of users getting in line to buy it. Even worst for Microsoft, people may just look it and say, “Yeah, good work MS but I now have a cooler alternative.”
The other problem I see is that people used to excuse Microsoft bad OS releases and just wait for the next release hoping the bugs would be resolved. But through this terrible debugging process people would stick with Microsoft because there were no other good alternatives. That’s not the case today. There a lot of alternatives and people don’t have to wait for Microsoft to fix its problems. They can buy other products.
So if Windows 7 fails at creating a real excitement and sales disappoint then put a fork in MS. It is done!
In a prefect world, where companies really appreciate the time and awareness of their target audience, there would be no need for this "war" which doesn't seem to be ending any time soon. The problem is that companies such as Apple and Microsoft are competing for different market shares but, in the end, it is a competition! People need to be able to figure out which they desire more if not through trial and error, then through advertising and reviews. Here is where the tricky part comes in! Over a week ago, I wrote an article attacking Microsoft's "Browse Never" Campaign… Adding: was the puke really necessary? http://bit.ly/9aWtK
I mean yes, again, in a world where companies think in the right direction, it wouldn't be such a big deal! Look at the Coca Cola and Pepsi wars which have been going on for what seems to be an eternity! It is a matter of personal preference in taste (and since I don't drink either, I don't know which one is better and I only judge through their ads!)
I'm a Mac user and I promote for it fiercely but never blindly! This is how it should be: persuasion through features, prices and numbers rather than endless futile ads and discussions!