From the ever-thoughtful Paul Graham: “Microsoft is Dead”:
He cites four main reasons why Microsoft lost their cultural dominance in the tech sector:
3. Broadband Internet.
30 years ago, Microsoft asked themselves a very clever question: How do we make a profitable company, based on the assumption that all hardware will one day be free? I suppose they need to ask themselves another question now: How do we make a profitable company, if people no longer need or want the desktop?
Microsoft’s issue is not a lack of financial, technical and intellectual capital. They have all that stuff in spades. Microsoft’s issue is cultural.
[Bonus Link:] Maybe Paul spoke too soon. Heh.
[UPDATE:] Dave Winer offers some wise and informed perspective.
[UPDATE:] Rick Segal gives Paul a good run for his money:
4. While Paul’s literal view about Microsoft buying up the Web 2.0 world is funny/wrong, Microsoft actually agrees with Paul’s assessment about getting Web 2.0 companies outside of the Redmond fold. For the last couple of years, Microsoft has been spending tens of millions of dollars spinning out technology, companies, and employees in a realization that they won’t live inside the Redmond machine so spin em out. Some make TechCrunch, some don’t. The point is, unlike other monster companies that now lay actually dead, Microsoft does get the point about making some types of innovation happen inside the machine while lots of it needs to happen elsewhere. Message received, Paul.
6. Don is right that if making good money now and for some time to come is a definition of ‘dead’, bring it on. But as I said at the beginning, I believe Paul was using hot words to make broader points.
[UPDATE:] Microsoft’s Dan Dodge:
Since when does growing $4 Billion a year = Dead?
For the record, Microsoft is growing revenues at over $4 Billion a year and is on track for $50 Billion this year. Since when does growing $4 Billion a year equal DEAD? If that is dead I know a lot of companies that would like to be so dead.
I’m ready to go outside and do a happy dance in the cold rain from reading Graham’s article. I switched to Apple gear a few years ago and I still have to use Windows at work. I can’t begin to tell you how much I loathe and despise Microsoft. It’s a constant battle every day at the office when something on the Windows desktop doesn’t work as I either need or expect. The greed and arrogance of Microsoft is so clearly on display in their products and O/S platform that it’s a personal affront to my sensibilities as a human every time I encounter anything from that despicable company. I make it a point to bad-mouth Microsoft in every conversation I have with anyone when the subject of any technology comes up and I provide factual examples of every bad experience I’ve ever had with their horrible s/w. On my Apple gear I’ve eliminated every trace of anything even remotely associated with Microsoft. I won’t use their search, I won’t watch their television, if any product I consider is exclusive to the WinTel platform, I won’t even consider buying it. You’re absolutely correct that their problem is cultural. Their arrogance has come close to ruining computing. Thank GOD for Google, Ajax, Broadband, and most especially Apple! Suck as much money from them as possible and enjoy the show as we all watch them die writhing in agony.
Yes, but what do you REALLY think, Joachim? 🙂
Very hapy to read this post, Hugh.
Something else MS is probably asking – how do we make a profitable company, if distribution costs are approaching zero, and you cant control it.
Robert Scoble commented the other day that you shouldnt bet against a company that had billions in the bank. Not sure he has this right, as you wonder whether this is the currency that begets the success MS wants. Aristrocrats rarely made it through the industrial revolution with as much power and success as the industrialists. Etc.
Cultural problem, as you say.
In the middle ages mindset, when the world was widely considered flat, Microsoft could have started a major religion, Microsoftanity – it rhymes so perfectly with insanity
I agree that it is cultural, but that culture has to seep into the technical, financial, and intellectual capital. So until they attain the culture they need, all of this “capital” is utterly useless. Do I think they should buy every Web 2.0 startup under the sun? Hell no. If some of these companies can’t make money with a couple of million dollars, who knows what they’ll do when part of a multi billion dollar company. I’ll leave the rest of my comments for my own blog post.
This reminds me of an entry on 37signals I read a few days ago which covers the difference between ‘cortex’ purchasing decisions and ‘reptillian’ ones. People aren’t always rational when they buy products, especially when the difference between products is primarily one of image rather than one that is quantifiable.
Why do people buy the PT Cruiser? It’s basically a Dodge Neon with a different shell over the frame. It has a generally poor record compared with, say, a Honda Civic. It’s because it’s a question of image, not rationality.
People buy Apple, follow Google, and are becoming less enamored with the beige box under their desk simply because what they have doesn’t appeal at all to their reptillian sensibilities. Companies like Apple and Google have successfully positioned themselves to appear to care more about their customers, and by extension, the self image of those customers. Microsoft hasn’t really appealed to any of those things. The Zune gets pretty close, as well as the 360. Windows, Office, and Microsoft as a whole seems incapable of getting anywhere close to that ideal, though.
I thought Google was the new Microsoft, Microsoft the new IBM, and IBM is the new GM 🙂
So who is the new Google? 😉
Oh….and the New Question for Microsoft is:
“How do we make a profitable company, based on the assumption that all *software* will one day be free?
Definitely not a Microsoft fan then Joachim eh? 🙂 Kind of weird that you cite Microsoft as greedy and arrogant though given the cost of Apple gear by comparison to PC’s and the recent Mac vs. PC ads
Love to know where you see the arrogance in the products too. Lets hear some of those factual experiences here too…lets get it all out in the open. Oh and steer clear of AJAX as Microsoft is a BIG supporter of that.
It’s not about facts, Steve, it’s about emotion. As my classmate told me recently: “osX loves me.” It’s the power of great design.
Wasn’t Hugh’s one-word manifesto: “Love.” 🙂
Hugh, I can’t wait to see what you do with this “global megabrand”……
I like both Apple and Microsoft. I have Apple at work and a PC at home. I don’t give a rat’s ass which does what, who’s evil and arrogant, who’s not..blah, blah, blah.
Perhaps I don’t give a rat’s ass because I have an actual life (a husband, a challenging job, a family, places to go, bills to pay, friends to see). Or perhaps it’s because I realize that even if I hated one or both of them, it wouldn’t change a damn thing… oh, and no one would give a rat’s ass if I hated one or both of them anyway. Besides, neither one would be any good w/o the other.
But I really love the comments from cry-baby “former readers” or “soon-to-be former readers”, hysterical. I will always be a reader Hugh. Even if I don’t agree with you, reading an opposing point of view is good for people, whether they realize or not.
For a company with zillions in the bank, Microsoft seems curiously unable to do anything new and exciting. “Copy what Apple does” used to be the joke, but now seems to be the only policy used by the management.
Does Vista have any wow-factor? If I wanted fancy graphical shells, Apple has stuff that is already proven in the market place. But far too often we see pretty graphics as a replacement for good user interface design. Does DRM do anything for _me_? No it doesn’t.
MS has been coasting for at least 10 years.
It’s hard for me to take Dave Winer’s post seriously when he attacks a position Paul didn’t take. Hugh, were you being sarcastic when you described Dave’s response as “some wise and informed perspective”?
I’ve used windows, linux and Mac OSX (which I use at the moment). I don’t hate Microsoft. I’m not a fan, but I do like it when they kick ass. Kicking ass is about features and the human voice. I see Microsoft changing. They have great people working for them like Ray Ozzie for starters.
I really think they need a new CEO. When I think of Steve Balmer I think ‘redneck’, ‘loud mouthed’, ‘arrogant’ and a nut shouting ‘developers, developers…’. It is image, because Microsoft is changing under Steve Balmer.
The features: Live maps are beautiful, but it has no open API. The satellite images ouside America suck (it needs both yesterday). Microsoft Video called soapbox, great quality. I just cannot log on using Firefox on my Mac. I want to use your stuff. You are locking me out or not providing features. Key is – make it easy to use your stuff and for non microsoft users to user Microsoft produced content. Do not stand in our way, help us to get from A to B.
I have written to Microsoft. No reply. Microsoft needs another open blogger with a human voice like Scoble. Scoble has not been replaced. Microsoft very much needs that human voice.
As a 30 year software developer veteran I can say with great comfort, “Microsoft has been very, very good to me.” I like the money and the weekly phone calls and Emails from recruiters that have seen my Monster resume. My M.B.A. is paying off. My ego and my bank account are bulging. I am having lots of fun. Life is good …
geoff, Vista has a few more things than just fancy graphics. I mean come on, we didn’t spend 5 years just doing graphics 😉
Don – I’m listening. I may not be the next Scoble but that’s solid, actionable feedback on Live maps and Soapbox. i can’t say I can get it fixed but I can try by taking your comments and sending them to people who I know listen. thanks
Whilst suggesting that Microsoft is dead, or even at least dying is clearly bull. I’m more surprised about how emotional people feel about this really “non story”.
There are indeed some elements that make sense. I’ve respected Microsoft for years. Hell, its because of Windows I’m in the IT industry. Microsoft DOES listen to its customers, however it takes too long for things to change. Why did we have to wait so long for IE7? Clearly, many wrote off the browser, but now look at it today. Its rapidly eating FireFox’s market share, because its a great product
The company is still doing great innovative stuff. (xbox 360) Granted, it doesn’t get it right all the time, but it learning from its mistakes. Look how it worked hard to turn the tide on its security problems.
What we need, is Microsoft “Web Celebs” Evalangists on steroids. Promoting web technologies for everyone and not just for big business
The M$ security team have Steve Riley and he does a smashing job at promoting security issues for the industry. But where’s someone similar for the Web?
Microsoft certainly isn’t dead, though with the new season approaching, I’d like to see existing bloggers evolving to the next level. Quick someone give them a Hi-Def camera quick!
Intel Vs AMD ?
ATI Vs nVidia ?
Google Vs Microsoft?
Funny how no one talks about gTalk? You see Google gets things wrong sometimes too..
We don’t care. Its all about the compelling end user experience. Give me Speed, Service and Simplicity.
MSFT is not a huge supporter of AJAX, the concept, they are a huge supporter of a MSFT-branded AJAX-like development platform. I work for a software vendor that provides development tools for Visual Studio developers. We’ve been offering an AJAX product for years before it was even called AJAX. Now we’re running into irate Visual Studio developers who are assuming that we are providing toolkits that are optimized for this bullcrap MSFT-AJAX format since MSFT has been promoting the heck out of it. MSFT seems desperate to taint and destroy everything that is open and honest – people are finally starting to see this and that is potentially the death of MSFT.
What a lot of fuss. To me, as a person who thought AJAX was a kitchen cleaning product, it seems pretty clear. Microsoft isn’t dead – but the business model that made Microsoft is.
Paul Graham makes two points which, when the dust has settled, deserve attention. First, the days of a Windows type desktop-based approach to things are limited as on-line storage and interaction become faster and cheaper. Second, the reaction of the young start-up guy should serve as a warning to Microsoft that, as a brand, it is losing its mojo. Important, but not terminal, issues.
Don’t forget the followup: http://www.paulgraham.com/cliffsnotes.html
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