What M$ Said And What They Didn’t Say

Well, M$’s annual report makes interesting reading…

What M$ said What M$ didn’t say.
“The Windows & Windows Live Division revenue declined 13% for the fourth quarter and 3% for the full year.” Not good for a monopoly like us.
“Windows 7 adoption continued with more than 50% of worldwide enterprise desktops now running Windows 7.” Many of our business users are still running XP.
“Adjusting for the impact of the Windows Upgrade Offer, Windows Division non-GAAP revenue declined 1% for the fourth quarter and 1% for the full year.” We are having a fire-sale on future releases in order to stay relevant.
“Office is now installed on more than 1 billion PCs around the world.” That leaves 500 million x86 PCs, GNU/Linux PCs and more ARMed machines not running our office suite.
“Our enterprise business is firing on all cylinders” but we are going nowhere on small cheap computers the consumers are buying.

So, it’s just barely full disclosure. I would say their latest fiscal year pretty well defines M$ having peaked. All their business except search and gaming is tied to that other OS which is stalled. It has nowhere to go but down because consumers don’t see a use for it. They just want small cheap computers with which to play. It has nowhere to go but down with businesses and governments because none of them are migrating to that other OS. They are migrating away from it. Many new businesses just skip the lock-in altogether and use FLOSS or MacOS. They call it “greenfield”. I call it putting M$ out to pasture.

The only bright spot for M$ in the report is that inertia still keeps some products rolling uphill. If businesses keep expanding but M$’s OS does not keep up, sooner or later there will be less demand for M$’s office suite and server. Shortly, that other OS seen as just the cost of doing business will be seen for what it is, a tax on business.
see M$’s Annual Report

- Robert Pogson

14 Responses to “What M$ Said And What They Didn’t Say”


  1. 1 Chris Weig Jul 22nd, 2012 at 4:44 am

    You’ve clearly missed you’re calling as a business analyst.

  2. 2 Clarence Moon Jul 22nd, 2012 at 6:20 am

    They call it “greenfield”. I call it putting M$ out to pasture.

    I am encouraged to see that you have come to understand the term “greenfield”, Mr. Pogson. Still you misapply the metaphor. If a company has never used Microsoft products, it cannot be seen to have switched to Linux, hence the “putting out to pasture” is more emotional than accurate.

    The only bright spot…

    Well, that spot was pretty bright, though! Other than the penalty for a bad decision outside of their natural line of business made years ago, their financials are solid. You still haven’t read of Product Life Cycles, I sense.

  3. 3 Ted Jul 22nd, 2012 at 6:48 am

    “Many of our business users are still running XP.”

    And not that statistically ‘Other’ OS. Maybe it just works, and businesses don’t see a need for upgrading to 7 yet. They certainly aren’t seeing a need to switch away either, are they?

    “That leaves 500 million x86 PCs, GNU/Linux PCs and more ARMed machines not running our office suite.”

    Maybe not all the users of these other x86 PCs need Office? And over two thirds of the market has Office installed? If that statistically ‘Other’ OS gets close to half of anything, it’s trumpeted as taking over the world.

    “because consumers don’t see a use for it. They just want small cheap computers with which to play.”

    Not all of them. Which is a fact you are amazingly blind to. Not all usages are the same as yours. Not all needs are the same as yours.

    “It has nowhere to go but down with businesses and governments because none of them are migrating to that other OS.”

    They don’t need to _migrate_ to Windows; they already use it.

    “They are migrating away from it.”

    Citations apart from the usual suspects?

  4. 4 Tar Jul 22nd, 2012 at 7:40 am

    Microsoft is secure in the enterprise for many years, because they LISTEN to what corps want and make it for them.

    Liber Office has a tin ear to big corps concerns as they are just weekend coders, not taking orders from the man.

    Important that Windows is still profitable!

  5. 5 oiaohm Jul 22nd, 2012 at 7:58 am

    Tar LibreOffice stats don’t agree with the weekend coder idea.

    http://arstechnica.com/business/2012/02/libreoffice-stats-400-total-contributors-thousands-of-code-commits-every-month/

    Lot of LibreOffice developers are taken direct orders from Suse and Redhat even Oracle is in there still.

    LibreOffice listens more to corps want. Particularly now that Corps can send there own coders and not have to sign over ownership of there developers code to another company.

    You don’t need to make stuff up with the major projects Tar they have very good stats on who is doing what. When you attempt to make something up you end up look like a twit.

    Kernel.org developers are greater than 80 percent company. Libreoffice is a good 60 to 70 percent company funded. With the rest being unknown.

    Tar you don’t know FOSS lot of projects are built for the man.

  6. 6 Robert Pogson Jul 22nd, 2012 at 8:41 am

    Tar wrote, “They certainly aren’t seeing a need to switch away either, are they?”

    When XP is finally laid to rest some portion of businesses will have switched to GNU/Linux at least in part.
    “This year’s Enterprise Linux survey shows that affinity among new and veteran Linux users continues to increase at the expense of Windows and Unix. Eighty-four percent of organizations currently using Linux have expanded its usage over the last twelve months, and continue to rely on it as their preferred platform for “greenfield” deployments, as well as for mission-critical applications.”

    The desktop is a green field for many users of PCs. They just run a few applications and for many a browser and a web application do it all.

    see Linux Adoption Trends 2012: A Survey of Enterprise End Users

    Businesses may not be rapidly deploying a lot of GNU/Linux thick clients but they sure as Hell will roll out a lot of GNU/Linux thin clients and servers.

    “Part of this growth is due to Linux’s role in two of today’s biggest IT trends: supporting the increasing level of “Big Data” and achieving productivity and security gains with virtualization and cloud computing. Enterprise Linux users show steady progress on all of these fronts and a clear preference for Linux as the foundation for these trends.”

  7. 7 Clarence Moon Jul 22nd, 2012 at 1:45 pm

    they sure as Hell will roll out a lot of GNU/Linux thin clients and servers

    Just ask the Linux Foundation, eh?

  8. 8 oiaohm Jul 22nd, 2012 at 5:52 pm

    Clarence Moon there are other documents by IDC that say the same thing. But you have to pay for those.

    A lot are going to web based with byod. Yes buy your own device being something like an android table or ipad. Cisco systems was the first todo this internally. Yes Cisco Systems also does a lot of Linux migrations as well. Cisco systems normally models around the phone system and byod solution. Redhat models around the thin client mostly. Ubuntu models around the thick client desktop mostly with some thin.

    If you are a nasty person like me its interesting to start a cat fight between all 3 of those. You hear each of the current advantages and disadvantages.

    So yes there are two major Linux deployment types at moment. Byod and thin-clients. With a little done using Ubuntu mostly being thick clients.

    Byod and thin-clients don’t help MS bottom line.

  9. 9 Robert Pogson Jul 22nd, 2012 at 9:56 pm

    Clarence Moon wrote of the movement to thin clients, “Just ask the Linux Foundation, eh?”

    Nope. Those guys are more concerned about embedded systems, and servers than desktops/clients. No. Just ask Gartner, IDC or even M$. They will all tell you that virtual desktops of several flavours are hot and GNU/Linux can run them all.

    “According to Gartner, this year the enterprise install base reached the crossover point between Windows and OS-neutral applications. The trend is for more applications to be OS neutral, thus undercutting the need for full Windows-based PC deployment. At the same time, thin and zero client devices are adding on protocol support, primarily to enable graphics and audio applications so that the thin client user experience matches the performance seen on a dedicated user system. “

    see Thin Clients, Fat Pipes Herald Post-PC World

    An interesting characteristic of thin clients is that because of fewer moving parts and cooler operation they tend to last twice as long as a thick client so that even with relatively modest shipping rates, the installed base now exceeds 10% of PCs. The other factor that causes stealthy evolution of thin clients is that some organizations convert thick clients to thin clients so the user doesn’t need to know there has been a change. They may actually see the same apps running on the server and not know it.

  10. 10 Clarence Moon Jul 23rd, 2012 at 6:55 am

    An interesting characteristic of thin clients…

    Terminal-server architectures have been around for decades and calling the terminal a “thin-client” does nothing to change the landscape. For most enterprise opportunities, the architecture never went totally away and that is why terminal emulators were invented for PCs.

    The more modern version of that is to provide network service connections to local clients that perform the same sort of distribution of tasks more efficiently over a LAN or web connection. Applications with individual user focus mostly remain as traditional PC apps. As long as a single critical local app remains on an employee’s PC, though, the OS will tag along.

  11. 11 Robert Pogson Jul 23rd, 2012 at 7:19 am

    Clarence Moon wrote, “As long as a single critical local app remains on an employee’s PC, though, the OS will tag along.”

    Nonsense. Any application can be replaced and it might as well be on the server for most apps unless huge volumes of data originate locally. That’s limited to multimedia production. Really huge volumes need clusters of machines in any event.

    The local app and local thick PC are an unnecessary burden on IT. That a few servers can do the work of many PCs makes the thick client obsolete.

    few expensive servers + many cheap thin clients will usually be much less costly to buy and to maintain than few expensive servers + many expensive thick clients

    e.g. For small/medium schools, $5K of servers +$10K of $100 thin clients is $15K while $2K of server + $30K of $300 thick clients is $32K, a factor of two more money for probably worse service and much more maintenance. Many thin clients need a few minutes of setup at installation (security password and protocols) and no maintenance for the next decade while a typical thick client has a few % failure-rate per annum and one or more updates per month while using more electrical power.

  12. 12 Clarence Moon Jul 23rd, 2012 at 3:29 pm

    Any application can be replaced

    That is mostly true, I would agree, but the market is not driven by absolute possibilities. Rather the customers in the market look for satisfaction of their needs first and select reliable vendors with a familiar history as a close second.

    Over the past 20 years, MS Office has come to dominate most corporate desktops and procedures and local applications have been created to use its interfaces or the connection libraries available withing .NET. The successful corporations are focused on doing more business, not on cutting corners on costs, Mr. Pogson, and you do not seem to understand that fact of business life.

    Perhaps schools in desolate regions and some government agencies are now destitute as Tea Party types get tightfisted with the taxpayer’s money and are driven to Linux or, more likely, continued use of existing systems. However, the companies making good profits are focused outwards and that saves them from having to deal with Linux or other undesirable changes.

  13. 13 Robert Pogson Jul 23rd, 2012 at 6:04 pm

    Clarence Moon wrote, of people who use GNU/Linux, “Perhaps schools in desolate regions and some government agencies are now destitute”.

    Chuckle. Like Plymouth, England?

    “”We run Ubuntu throughout and a proprietary operating system on a few PCs”. The desktops are virtualised, using the open source virtual machine solution KVM. “There are two servers that serve the KVM instances of Ubuntu desktops, which allows the schools to make good use of the computer hardware resources.
    This way, starting up the Ubuntu desktops takes a user typically four seconds, Kemsley says. “That is ten times faster than the time needed to login to the proprietary alternative.” The Ubuntu desktop is used in 80 percent of the time, notes Kemsley.”

    Sounds like they are more concerned with performance than price. The Tramar School mentioned in TFA had a “Good” rating (better than satisfactory), including use of computers.

  14. 14 oiaohm Jul 23rd, 2012 at 10:45 pm

    What is the application is key.

    Clarence Moon for the people on the move
    InstallFree Nexus with Microsoft Office and InstallFree Nexus with LibreOffice.

    Also for the person who only need to view the odd not highly classified document that does not open you don’t need to give them MS Office you give them chrome.

    “Over the past 20 years, MS Office has come to dominate most corporate desktops and procedures and local applications have been created to use its interfaces or the connection libraries available withing .NET. The successful corporations are focused on doing more business, not on cutting corners on costs”

    Successful business have focused on have a dependable system. Lot cases for internal usage due to MS Office design bugs using like web based CRM’s or equal have worked out to make information inside the business more move effectively than using MS Office and running into OLE errors between users causing document not to open or excel errors causing projections to be wrong.

    The sad reality is MS Office is not the base to a dependable system.

    Going forwards you will need online version of office suite you can run in your private servers. So people using tablets and so on can view the business documents. Since in the byod world the business does not own the device the person is accessing the companies records from so you may not be able to clear it when they leave. So you simply cannot place the data on the users end device.

    You can set up your own private versions of like installfree using http://sourceforge.net/projects/guacamole and other options.

    Clarence Moon so the real question is what configuration is your office. Thin-client, diskless thick-client, PC style thick-client or byod.

    A business can operate with all 3. MS Office might or might not be on the end devices. byod does force a lot of stuff to be done thin for security reasons. Also byod prefers that nothing of the business has to be installed on the device so items like guacamole to provide MS Office access are used quite a bit.

    The landscape has changed a lot. Clarence Moon the question is can MS Office keep up.

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My observations and opinions about IT are based on 40 years of use in science and technology and lately, in education. I like IT that is fast, cost-effective and reliable. I do not care whether my solution is the same as yours. I like to think for myself.

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