Probabilities

Probabilities are fun. If some outcome of the chaos around us depends on events A, B and C, the probability of the outcome is the product of the probablities of events A, B, and C happening.
P(X) = P(A) P(B) P(C)

In IT, “the market” is a huge thing with many players and many customers. The probability of any event in the market is between 0 and 1 with 1 being a certainty. Since nothing is a certainty, all these probabilities are less than 1. Some events are very probable with “M$ making $billions” being very near certainty. Other events like “M$ making Phoney “7” relevant” are much less probable.

Don Reisinger, over at Channel Insider, has identified a number of events upon which M$’s continued dominance of IT depends:

Count Event Pogson’s Estimate of Probability
1 Phoney “7” works 10%
2 Nokia stays relevant 25%
3 “8” matters 20%
4 Office suite in the cloud works 30%
5 Threat of Google suppressed 20%
6 Bing grows 50%
7 OEMs love M$ 40%
8 M$ controls tablets 10%
9 Ballmer survives 25%
10 IE remains relevant 30%
Likelihood of M$’s Continued Dominance of IT = half a chance-in-a-million

So, I state with confidence, M$ will no longer dominate IT within a few years the way things are going. We are seeing share of client OS drop rapidly, including smart thingies, and Phoney “7” and Nokia are on life-support. The last bastion of strength will be clients and servers in business which is seriously locked-in. Business is taking the cloud seriously and will move to thin clients, terminal servers and large numbers will realize they can save a $bundle using GNU/Linux or Android/Linux etc. on clients and that will eliminate the tie-in between client and server that M$ has built. The retail market is moving rapidly to accept Linux and ARM in all its forms. All of this hinges on whether or not M$ can rapidly catch up. It has shown with Vista and Phoney “7” that it cannot catch up and will soon be well back in the pack. M$ may remain huge for several years, but gone are the days when M$ could dictate to the market. Within a year or two the board of M$ will turn on Ballmer and tell the world some other hero will save M$, but it will be too late. The world can make its own software and will.

see Don Reisinger – Channel Insider – 10 Things Microsoft Must Prove In the Next Year

UPDATE There is breaking news on Ballmer. Defending his record, he let slip a month early some numbers from M$’s bottom line: $69 billion in revenue for the fiscal year. Their last 10-Q gave $52.5 billion for the previous 3 quarters so, presumably, M$ expects to take in $17 billion this quarter. Not bad, but that’s the same as last quarter so where’s the growth when the world of IT is on fire? Revenue was $60 billion back in 2008. Where’s the huge pop from “7” or Phoney “7” or Bing? It’s not there. How many quarters of low growth will it take to affect Ballmer’s tenure? How long before M$ gives up on money-losing ventures and sticks to the aged cash-cows?

About Robert Pogson

I am a retired teacher in Canada. I taught in the subject areas where I have worked for almost forty years: maths, physics, chemistry and computers. I love hunting, fishing, picking berries and mushrooms, too.
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8 Responses to Probabilities

  1. Dann says:

    “Defending his record, he let slip a month early some numbers from M$’s bottom line: $69 billion in revenue for the fiscal year.”

    Because Microsoft has had such an ethical accounting standard and great record with numbers…
    I wonder which divisions were merged with what, and how they juggled their failures around.

  2. oiaohm says:

    Market saturation point has been reached with PC’s.

    oldman I want you do something serous-ally. This is a critical metric.

    Take an XP machine and a Windows 7 machine. I am not going say use. Then to a fitness for task assessment.

    Every bar secuirty is basically equal. This is a problem. from 98 to XP. Businesses gained network resource sharing that worked very well and was stable. So helped company bottom lines. Secuirty is not always an issue. Secuirty normally only minor-ally effects profitability.

    Cloud base services is flawed from a profitability point of view. Cloud service goes down with your data and you are stuffed. MS Cloud base services is free to put data in but to get it out you have to pay. Other providers like amazon are nicer. If I cannot afford to pay my subscription to amazon any more they will ship my cloud data to me. Even google does that.

    Really MS unless they change they way they sell cloud services is only going to be used by people until they get bitten. Ie the next financial crisis.

    Since the introduction of Android the only way MS phone OS’s have been going is down in market share. Even with the billions spent on advertisement. Nokia is really MS last hope in the Mobile phone market. If Nokia cannot make sales with a MS based OS phone no one can. So I am watching Nokia with interest but the signs are not. WP7 may be MS last phone OS in the Mobile phone market.

    Really I am suspecting lot of companies I am dealing with to push out for Windows 8 with there XP machines. Mostly due to rising power bills. They are wanting to see Windows 8 on arm.

    Really windows 8 is going to tell us what way business is going. If Windows 8 is good business will buy if it bad they will be looking for other options.

    Due to not expanding features Linux is also closing up in a lot of areas.

  3. If M$ supplied only existing markets, it would be shrinking seriously:

  4. people are keeping PCs much longer because they are much faster than needed for most things,
  5. the number of people willing to plunk $700 for case, monitor, keyboard and mouse is shrinking, and
  6. people are spending $hundreds for a pocket PC or tablet and they know they don’t need M$ to do what they need to do.
  7. Really, last year I received two batches of 20 donated PCs for my school. These were machines discarded by large organizations. They were all 8 years old. I would have liked more powerful machines but they were faster than a new PC with either XP or “7” when we used GNU/Linux on them. This means the cost of producing quite adequate PCs (say with ARM, Atom etc.) keeps getting less and the cost of a PC running that other OS will be dominated by M$’s price or M$ will have to cut its price to about half sooner or later. The situation is unstable. Something has to give and whatever way it goes, M$ will lose power, in cash-flow, share, etc. This is the last year anyone will doubt that.

    see ASP (Average Selling Price of a licence for that other OS) It was $60 a while ago and is rapidly falling to $50 or less.