M$ as a Bear

Bears are special animals. In addition to tooth and claw they come with the weapon of bulk. If they want to cause a problem they need only step on you or lie on you and you are toast. Bianca Bosker of the Huffington Post writes “Microsoft’s Cracked Windows: How The World’s Technology Juggernaut Lost Its Buzz And Became The ‘Underdog’

TFA is insightful but the term “underdog” does not apply to M$. Underdogs do not cause their own failure. They fail because they are too small, weak or old to survive. M$ is none of those. M$ is failing because its recipe for success is the destruction of competition leaving a vacuum in which anything it produces will sell. Nature abhors a vacuum and the vacuum created by M$ is now filling with small cheap computers not controlled by M$. M$ cannot stop ARM+Android because it has nothing in the pipeline to fill that space. All the $billions spent on R&D have been spent on preventing competition in the x86 space, not ARM. The bear, M$, has fallen off a cliff and its bulk is of no value in free fall.

The software that runs on ARM has to be minimal and modular. The bloat M$ pushes just does not fit. Otherwise, M$ would already have cross-compiled and produced something that does fit. Instead they have phoney “7” which didn’t even copy and paste. The only way M$ or any business can survive in the current IT market is to produce product that can compete on price and performance. If their software does not run on ARM it cannot compete at all on performance and “the tax” means they cannot compete on price. Some of the current market for ARM is high-end over-priced stuff where M$ would love to sell, hiding its price, but the bulk of ARM in the next year or so will sell into emerging price-sensitive markets where the tax will not fly. People will not pay double or triple the price for the honour of keeping M$ relevant.

The existing personal computing market where M$ has huge lock-in and buy-in by “partners” is still growing so M$ is a long way from dead but they can no longer assume huge margins and guaranteed sales. Indeed, the more millions that have seen GNU/Linux running on ARM without M$’s influence, the faster ARM will invade the space now occupied by x86. That is just a splinter, a crack, but by the end of 2011, retail shelves will be full of small cheap computers running ARM. M$’s “partners” will begin to put GNU/Linux on x86 in order to compete on price and the margins will vanish. Instead of 80%, margins will be of the same order as hardware producers, a few %. There will be no room for “the tax” and layoffs will be in order to remain anywhere near as profitable.

A few years of reduced margins will make M$ a smaller dog but until then, M$ is still a dangerous bear and they will use the sword of software patents to try to delay the inevitability of competition in the emerging spaces. Then, M$ may quickly become an underdog in the sense that the world will gang up on them and trash M$’s reputation and bulk with expensive counter-suits and the loss of many $billions in software patents.

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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One Response to M$ as a Bear

  1. Richard Chapman says:

    The only thing worse than a bully is a bully with an inferiority complex. Microsoft loves to use the “poor little old me” foil whenever they feel the least bit threatened.

    If what we see on the outside holds true for what’s on the inside, then I think a slow decadency to market equilibrium is a likely path for Microsoft like you said Robert. But my suspicion is that Microsoft is breaking current and certainly future laws (Laws created to prevent a future Microsoft [If the laws exist, then why does Microsoft exist?].). If the shroud that protects Microsoft were removed, they will go down like the Hindenburg

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