“Windows 8 joins a growing list of Microsoft’s failures and missed opportunities – instances where the software giant was either caught out, or where Ballmer pooh-poohed the competition and later had to eat his words and burn billions of dollars playing catch up. A gargantuan share of the technology sector, and accompanying revenue, that could have gone to Microsoft has been lost to Google, Apple and Samsung, a trio that has snapped up the online ads and search, and phone and tablet markets.”
see Hey, Teflon Ballmer. Look, isn't it time? You know, time to quit?
While Ballmer fiddles, M$ burns through $billions in R&D and can’t make a new product that sells. The channel is plugged with old product and it’s not moving off retail shelves. They are even going to give away the next release, fixing the gross deficiencies of “8″. From where will future revenue come? Businesses using thin clients and Android/Linux smart thingies? Cloud services? A cloud application that requires purchasing a client application? I don’t think so. Tying everything to a sinking Windows TM client will pull the plug on future revenue. “7″ did save the company from the Vista fiasco when they refused to fix Vista for $0 but there’s no saving M$ from the missed opportunity to expand on ARM. Moore’s Law and Intel will not give M$ back that opportunity. By the time M$ develops a new product, the world will have moved on.
In the meantime, M$ is having to reduce prices over a shrinking share of IT. In a year or two, their revenue will plunge and the cash to placate investors, OEMs and retailers will be gone.
The balance sheets and dividends do look healthy but only if you don’t look too closely. Current liabilities come to $32billion and longer-term liabilities come to $25billion. The value of the common stock at $66billion could vanish rapidly. $2billion of their net cash from operations, $9.6billion, was previously deferred revenue. A year ago that was just a few $million. Further, deferred revenue, mostly long-term volume licensing, was down $2billion. The unearned revenue for Windows was down $800million per quarter when their “hot”, “new” product “8″ should be selling like hot cakes. It’s not. That means the gravy is product customers paid for which they may never receive. That’s not a sound business plan. That’s not a way to maintain the loyalty of customers. Discounts and give-aways may not be enough.
At the same time that Ballmer is mismanaging the store, */Linux on ARM is outselling Wintel by many units per annum and */Linux is moving onto legacy PCs in a big way. 2013 has nothing but downside for the client division. The server division is stuck between the client and the cloud. The world does not need M$ taxing IT anywhere these days, not HPC, not servers, not the cloud, not mobility and not the client.