One of the Nails in M$’s Coffin

Somewhere in the early 1990s, M$ really got the concept of monopoly. Everything they did was about killing competition. Almost nothing was done to give end-users great software. They created Lose 3.1 and Lose ‘9x. They had a shot at producing great software because of the abundance of resources that monopoly gave but then came Internet Exploder 6 (saw it at work yesterday at my bank… discussed it with the manager…) and NT became XP and malware took over the world of IT.

In all that time, shareholders reaped short-term gains. Insiders reaped huge windfalls. End users suffered one indignity after another. A better product was not produced until 2009 by which time the world had seen a better way to do IT: GNU/Linux on desktop and server and Android/Linux on mobile devices. M$ has climbed to the top of the “shareholder value” ladder only to find it’s not resting on anything. The monopoly is a house of cards now that OEMs are discovering they can cut M$ out of the stream of revenue. M$ is scrambling to put something forward in the mobile space buying Nokia (more or less) and pushing a laughable product consumers don’t buy and suing competitors to hold them back. In a year or two all this will bear fruit and M$ will be on a downward slide with no bottom.

Somewhere along the way, M$ became short-sighted, focusing on immediate returns with no thought for the future. The vehicle that is that other OS is about to hit the ditch, having too much inertia for the curve in the road. M$ has made the EULA so onerous, the performance of the OS so low, the burden of malware so great and the price per unit so high that end users are looking for a way out and they will take whatever the OEMs and retailers put in front of them that’s not from M$. We saw the eeePC with GNU/Linux bought in such volume that ASUS could barely keep up with demand for months. Android/Linux and iThingies are outselling M$’s offering by a wide margin. Thin clients running GNU/Linux are selling well. It’s only a matter of time before all retailers are offering good notebooks and desktops running GNU/Linux, Android/Linux even on ARM processors. That’s the death of the Wintel monopoly.

Even the deeply locked-in corporate world does not love M$:

  • In a recent survey, only 7% of one group of organizations had completed a migration to “7”.
  • In August 2011, 71% of PCs in that group of businesses had XP installed.
  • 13% have “7” running on less than 1/4 of their fleet.

If that dedicated group are not following M$, the world with its millions of freedom-loving people anxious for change will not.

See a review of a thoughtful book on this topic (capitalism gone wrong) at Forbes: The Dumbest Idea In The World: Maximizing Shareholder Value

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.
This entry was posted in technology. Bookmark the permalink.

47 Responses to One of the Nails in M$’s Coffin

  1. oiaohm says:

    Clarence Moon in fact you are wrong Google does sell android. Early access to source code of Android is paid for in developers partners agree to put up so many developers for access.

    Yes the traded item is just not cash. It is still sold. Size of Android OS market currently over 300 developers from companies outside google as payment for early access to the source code.

    How to convert that to a cash value and get back to cost per unit figure that is eep.

    Its not zero by definition for the sale price of android. Boy is it a hard number to work out could be a few cents per unit or less.

    Yes this is the problem there are items sold in the FOSS world in very strange ways when the code base is not open to everyone. Access to the code base is sold.

  2. Clarence Moon says:

    It is merely a matter of definitions, Mr. Pogson. I would expect you to see that. Some companies, Samsung, Nokia, and HTC to name three, actually do sell WP7 based smart phones. They do pay Microsoft a license fee. I will agree that there are not so many and 7%, may be the ratio of WP7 phones sold to non-WP7 phones sold, or the ratio may be even lower.

    That only goes to set the size of the market for WP7, though. It is plainly not zero. So what is the size of the market for Android? No one sells it, so it is, by definition, zero. Ditto for iOS and whatever RIM calls its OS.

    Remember the actual argument with Mr. Kozmcrae is over the value of the market for Windows 7 and Windows desktop-dependent Microsoft products and whether the value of the markets for other things are significantly higher or lower. I do not deny that the value of the market that is dominated today by Windows 7, namely the “desktop OS market” is likely to decline in the future due to erosion caused by use of phones and tablets, but I do say that it remains a very substantial chunk of money and a chunk of money well worth Microsoft’s time and effort to collect.

  3. Clarence Moon wrote, “That being the case, it would seem that Microsoft actually has 100% of the mobile phone OS market, “

    Not even close. The market value of a mobile OS is $0 thanks to FLOSS, GNU/Linux and Android/Linux. What M$ has is 10% of the over-priced OS mobile market.

  4. Clarence Moon says:

    “Microsoft has barely 7% of the mobile phone market.”

    Microsoft has 0% of the mobile phone market. They don’t even make phones. (Anymore).

    Microsoft makes and sells a software product named Windows Phone 7. It is available to phone makers who pay Microsoft some sort of license fee, presumably, to use it. It is very plain that there are not very many people buying phones that use it and so I would expect that Microsoft’s revenues are rather poor for this product. On the other hand, who else is selling such software? I cannot think of a single company.

    That being the case, it would seem that Microsoft actually has 100% of the mobile phone OS market, small as it is. Perhaps it will increase in size over time, since there is so large of an unsold potential. On the other hand, that market may never develop and people may just go on making their own OS or using a no-charge product. If vendors do not see any ability to create any strong product differentiation based on the OS, then anything goes and that aspect is essentially the same for all. No market for an OS product can exist in that condition since there would not be any money in it.

  5. oiaohm says:

    Clarence Moon Samsung legal department is currently busy with apple. Apple wanted 10+ dollars per unit. Samsung not interested in paying that.

    “The reports are that Microsoft is collecting a $5 to $7 royalty for each Samsung Android smart phone”

    This in future could change rapidly. Taking royalty on a product you don’t control in future could be that you are not being paid at all.

    NFC in andorid is usable in more interesting ways like direct paypal to paypal payments with information transferred by NFC.

    So basically an android phone can be used as a touch and go credit card and a iphone cannot. I call quite a major difference.

    Android can also be mesh network the devices. Ok have to root some phones todo it others play with the adb shell. The hardware is mesh compatible. Iphones hardware is not.

    So two hardware differences providing differences in usage. Basically android can still be a phone when the phone towers are not working by mesh. Hopefully one day switching to mesh mode will be a android menu option.

    Yes referring to android phones as like CB radios is very correct. CB radios don’t require a central tower and the hardware in android phones don’t require a central tower either. Software is a little weak and does not support mesh well out box.

    There is differences at hardware level. Also android you can get models with slide out keyboards. Iphone no such option.

    Basically its going to come down to the hardware and to be truthful the iphone hardware options sux.

  6. Kozmcrae says:

    “It is too bad that it is unsupported by any facts.”

    There are plenty of facts out there Clarence. Go look for them, it will do you good.

  7. Kozmcrae says:

    “…and its major layer app, MS Office.”

    But that’s not what you said Clarence. You said the desktop. Microsoft’s $40 billion, from the Windows desktop is not bigger than all the other non-Microsoft pieces of the technology pie. I’ll take your word for that number because the desktop is not bigger than everything else. If you are going to start “layering” on their other crap then that’s a different number.

    Microsoft has barely 7% of the mobile phone market. That’s a huge market. It combines hardware and software. Microsoft sells keyboards and mice for the desktop. How much does that add up to?

    You really want to hang on to the desktop. It’s losing its glamor. It’s not the big scary monster it once was. Its glory is fading fast, being replaced by little electronic thingies. Don’t ask me why that is because I don’t know why.

    Get used to the idea that the desktop is just not that important anymore.

    Let me add a prediction to that. When Windows 8 is released, the desktop will become even less important.

  8. Clarence Moon says:

    Your ability to paraphrase is as inadequate as your other abilities, Mr. Koz. I made no claim whatsoever as to “always will be successful”. Rather I elaborated on the notion that it will eventually go away, fading into just a fond memory of good times. But I guess that doesn’t fit your notion of what you want to say.

    As to how “pale” $40B is compared to all the other markets combined, what markets are you referring to? Coal mining? Oil production? Without checking, those markets may be larger than $40B per year. But the market for phone OS is not. Not even when combined with the market for tablet OS. Not even when you add in all the apps income from iTunes, the Google app store, and Amazon’s apps. Not even when you add in all the OS used in embedded devices.

    All of those markets combined are insignificant compared to the money Microsoft is getting from the sale of desktop OS and its major layer app, MS Office. Then, of course, there is the money that Microsoft gets from the server OS side of things. While not as massive as revenues from desktop Windows or MS Office, server money is bigger than the other mobile app and OS money, too.

    You have a wonderfully intense attitude, Mr. Koz. It is too bad that it is unsupported by any facts.

  9. Kozmcrae says:

    “What he fails to see is that it is still bringing, directly or indirectly, well over $40 billion a year to Microsoft’s coffers.”

    Let me paraphrase you: Microsoft always was, so it always will be successful.

    Let’s just say that that $40 billion is correct. It pales in comparison to all the other markets combined. You are still holding up the desktop as some kind of holy grail only this time you are pointing to the money.

    There are people who are now just beginning to use computers who will never touch a desktop. Microsoft and Intel put all their cards in with fat, bloated devices and now that strategy hurting them.

    The desktop, no matter how much money it’s making for Microsoft, is not going to be the deciding factor in who controls personal IT. You are suffering from “Victory Disease” Clarence. It’s far too easy to ignore the warning signs when things appear to be what you want them to be.

  10. Clarence Moon says:

    Mr. Koz has served up too many straight lines to ignore here, so I will violate my principles to reply. The desktop, of course is the desktop and nothing else and Mr. Koz is uselessly redundant in so noting. What he fails to see is that it is still bringing, directly or indirectly, well over $40 billion a year to Microsoft’s coffers. That overall business is still growing, if only slightly, and is not showing any sign of disappearing overnight. But even if it did, Microsoft is not going to abandon collecting its money right up to that, currently unforeseen, ending.

    I guess that the only thing that will be left to talk about after it is gone will be “the good old days” and how so many got so rich with such a simple thing. For that matter what will the “GNU/Linux” fans have left to talk about?

    Back in my youth, I was a ham radio hobbyist, building my own transmitters as was the fashion and hobnobbing with others who were similarly interested. We set up mobile stations, pretended to service emergencies, and had a beer and pretzel get together once a month. 16 year-olds could drink the 3.2 beer legally in Ohio back in those days, if you are wondering. Ham radio then was analogous to Linux today in that it is an interesting hobby for a small percentage of people who can show it to have some beneficial use in society even if it is not a mainstream item.

    Then CB Radio came along and everyone had their own inexpensive mobile capability to take along on casual road trips. Android, I think, is to Linux as CB was to ham radio. Anyone could use it without having any sort of technical understanding or interest in it as a hobby beyond its actual use.

    All that went away eventually when cell phones appeared in every driver’s hand. Android today really seems to have no distinguishing features relative to Apple’s iPhone. Is there anything that Android does, does not do, or does at all differently than iOS? I don’t mean technical details of the APIs involved, I mean from an end user’s point of view. I’m reasonably technically educated and aware, but they look 100% the same to me. Even the prices seem to line up these days.

    Without any such differentiation, it will certainly end up with all phone OS being considered the same thing. I would expect that the innards of an HDTV from Sony, Toshiba, LG, Panasonic, or any other brand differ significantly from brand to brand in terms of technical composition, but they all do exactly the same thing and products are not selected based on those specifications, just the buyer’s overall attitude about the cost and appearance.

    If you equate the ultimate fate of the PC to ham radio, you can see where some day the PC will be replaced by other devices, even the same cell phone as did in radio as a mass market item.

    As to Samsung:

    The reports are that Microsoft is collecting a $5 to $7 royalty for each Samsung Android smart phone, so what is best for Samsung may actually be what is best for Microsoft, but I do totally agree that Samsung is in business for themselves and will do what is best for their own interests. That is true for every commercial company involved in this business. I think that it is even a legal requirement that all companies do exactly that, even Google.

  11. Good point. Samsung is well diversified and can survive and thrive no matter what M$ does. Samsung will do what is best for Samsung, not for M$.

  12. oiaohm says:

    Clarence Moon no google did give makers a scare with acquiring hardware company.

    Result was new support for Tizen that in prior life was meego.

    Basically Windows Phone has gained nothing from the scare other than another competitor in its future.

    Basically 2012 is when Tizen will enter the market. So there will be another open source OS fighting for market share. Tizen has quite a huge backer in Samsung.

    Does MS have the resources to bribe Samsung off as well??? I think not.

  13. Kozmcrae says:

    “Consider that somewhere between 93 and 95 people out of a 100 who are using a PC are using a Windows PC today.”

    Clarence is an idiot. You forgot Clarence, the desktop doesn’t matter when FLOSS and Linux practically own every other market. So you love to move the topic to the desktop because that’s Microsoft’s last stand.

    The desktop is fading fast. What are you going to talk about after its gone?

  14. Clarence Moon says:

    Mr. Aikiwolfie, you make specious arguments about things that show you are not giving the forum the thought that it deserves. Consider that somewhere between 93 and 95 people out of a 100 who are using a PC are using a Windows PC today. If you are selling Windows PCs, whom would you target? The vast majority of those who are already using them or the few who are not?

    Apple Macintosh users are hard core fans of Apple and it is a frustrating thing, I would imagine, to try to convince them to buy a PC. Linux fans are, from reading the articles posted here, even more of a difficult sell. No one in their right mind would waste any time at all trying to crack such tough nuts.

    On the other hand, if you believe even a small amount of what Mr. Pogson and others say about the shabby treatment that Windows users have received at the hands of Microsoft, you can easily see that Windows users are extremely docile and forgiving and easily swayed by the merest flash and awe. That is the fertile happy hunting ground of the Wintel salesman!

    No one can make money selling upscale MP3 players other than Apple. Their iPod is the standard of comparison and anything less is just trash in the eyes of the consumers. Certainly the Zune will never rise to any sort of visibility in such a market. It is like Linux in the PC world, namely too little, too late, and ignored by all.

    I suspect that the same is likely to be true in terms of the smart phone market. Apple has the iPhone and others sell something else. Blackberry was once the king, but the power of the iBrand was too strong to resist. It looks like Android is the far and away leader in the “other” category and should remain so unless Google’s move into the hardware business spooks the other phone makers and shoos them in another direction. Wouldn’t it be ironic if that happened and they were all driven to Windows Phone?

  15. aikiwolfie says:

    @Clarence Moon: Dude you’re talking out of your arse. Microsoft has plenty of opportunity to convert Apple customers and Linux users. Microsoft claims desktop Linux is a threat to desktop Windows in it’s tax forms. So you’re “too few” argument is questionable at best.

    Microsoft tried to take on the iPod and iTunes. But their offering was so restrictive nobody wanted it. Zune never made it out of North America because it sucked as a product and it’s associated services also sucked.

    Microsoft laughed in the face of Apple when they announced the iPhone. “Nobody would want it”, Ballmer crowed. How wrong he was. Now Microsoft are busy infiltrating genuinely successful mobile phone companies and using their patents to fight off the competition. And as for Nokia? Well nobody is buying their Windows Phone 7 offerings. Sales are so low Microsoft and Nokia refuse to release the figures. Which is what we saw with Zune, Vista and Windows 7.

    Companies that go through structural reorganisations every other year to make the books look good and are then forced into cutting product lines at an alarming rate are not doing so well. Microsoft’s share price hasn’t budged in over a decade while competition like Apple, Google and IBM are over taking them.

    Frankly Microsoft are displaying all the warning signs of a company that’s about to implode.

  16. Kozmcrae says:

    “NO worse than yours, Mr. K.”

    But you can’t say it without a cliche. You have no imagination. You rarely stray from your narrow vision of the world and your delivery is flat. But worst of all, you love to talk about yourself. Somehow you think we want to hear you talk about yourself but we don’t. Trust me on this oldman. No one wants to hear you talk about yourself.

  17. OK, at a Christmas party, Joe shows Charlie Brown his new uber-powerful PC. Charlie has to have one even better. He can shop around on the web and wait ten days for delivery or carry one out of his neighbourhood PC shop… Choices. Choices. Our “consumer society” is built on satisfaction ASAP. We are even told here that people want to over-spend on IT so why not pay the overhead of bricks-mortar-salesmen?

    Where I was in the North, often, purchases had to be delayed a whole year due to weather and shipping costs, air versus ice-roads. We would get some kind of a budget and purchase order requests could be made against that meagre budget for a few weeks in the spring to be delivered in the depths of next winter. Many times teachers brought stuff back in their luggage rather than wait. Still, often we were told we could not order anything from the web. It had to be on paper from a printed catalogue and sometimes such and such a supplier, no others would do.

  18. oldman says:

    “Pure arrogance.”

    NO worse than yours, Mr. K.

  19. oldman says:

    “Basically on-line is forcing the end to massive numbers of machines preinstalled with windows.”

    As long as what comes out has windows pre-installed, that is a distinction without a difference.

    @Pog

    “The cost of shipping and time for processing/shipping do matter.”

    To some perhaps, but IMHO not as much as you think.

  20. Kozmcrae says:

    “Pure Fantasy…”

    Pure arrogance.

  21. Bricks and mortar will always have a share of the market. People do want to try before they buy. You cannot do that online. The cost of shipping and time for processing/shipping do matter.

  22. oiaohm says:

    oldman and to go on-line effectively long term being able to hold min ammount of stock imaged with at MS OS the better. So you are able to image with the OS the customers are ordering.

    Basically on-line is forcing the end to massive numbers of machines preinstalled with windows.

  23. oldman says:

    “oldman The issue is not going away. How are physical retail going to compete with on-line retail.”

    You can think all that you want but in the end it wont matter. The fact is that brick and mortar computing stores have been dead for at least a decade, and I would make the case that once the personal computer was made a commodity (Now over 25 years ago) it was all over but the shouting for the small guy.

    As far the issue not going away is concerned, I am afraid that you are wrong. it will go away along with physical retail, which will either go online or die.

  24. oiaohm says:

    oldman The issue is not going away. How are physical retail going to compete with on-line retail.

    Thinking out side the current operating solutions are going to be required.

  25. oldman says:

    “The world of computer supply is going to break open basically.”

    Pure Fantasy…

  26. oiaohm says:

    Clarence Moon note I am not predicting a Linux win short term.

    I am predicting that retail will have to change to closer to customer OS being set. Multi versions of Windows is a big problem just the same as Linux on shelf.

    Now Windows 8 could kinda slow this down. Lets say they did away with specialist versions of Windows. This would remove the need to move the OS setting closer for a while and stall off Linux for a little while.

    The world of computer supply is going to break open basically.

  27. That’s about right. What to do with XP machines is the final battle for the desktop. Clearly “7” is not the answer to any real problem for many. People and organizations have many real choices beside taking another step on the Wintel treadmill. The longer XP stays alive, the more web and mobile apps get written and the stronger FLOSS becomes. M$ locked itself in the same way it locked OEMs and businesses. They cannot change without breaking the mould.

  28. oe says:

    I’m guessing M$ abandonment is like a sigmoid curve, the changeover has not entered the step slope yet but it coming soon, just a matter of when.

    I grew up in R-128 in Mass in the 80’s when DEC (Digital Equipment) was the almighty seller of enterprise computing; their proprietary VAX-VMS OS was sought by all small to medium enterprises, IBM had and retained the Mainframe market for itself but had lost a lot to DEC through the 70’s except for the high end niche. DEC had plants everywhere through Eastern Mass by the late 80’s and it seemed like a new facility for manufacturing the minicomputers and software development opened every six months – they were like Redmond but in the 80’s. DEC even foresaw the PC, they released the Rainbow line of computers with twin 5.25in floppy drives; I used those in high-school and they were good machines. But DEC subsumed their role as an ancillary to the VAX-VMS minicomputer; after all they owned enterprise computing for all but the very largest corporate customers and no sense upsetting their profitable line with the Rainbow….”Windows on everything” sound similar, anyone?
    DEC was powerful and cash rich and seemed invincible. Anyway the rise of the PC and the enterprise networking mainly Novell Netware drove the nail in their coffin, with 15 years all their facilities were shuttered and they were sold off to Compaq, the downward decent came suddenly and rapidly.

    Similar paradigm shifts are underway that will affect PC-desktop in enterprise computing now and there effect are manifesting slow for now but the velocity will only accelerate…I think these are:

    1) Power conservation and ARM (this includes smart thingies), Green computing, reducing direct and indirect power costs is a priority in sourcing IT now and buying sufficient is the volume purchasing driver here. ARM based computing whether in thin- or thick-clients is happening. LINUX has the headstart here. Cost reduction and simplified licensing scheme’s are seen as huge additional benefits. Yes some 10-20% will need the Adobe Photoshop or other piece of PowerSuckWare, but for most transaction workers (of which I seem to be now these days) the FOSS-ARM machine that allows webapp access and OpenDocument manipulation is becoming compelling.

    2) Web-based Apps – There is a huge push in data bases to dump compiled frontends that are tied to any OS and allow HTML5 interfacing. Blackberry’s, Android phones, some FOSS users and then all the Windows users enjoy a common unified access. I’ve counted over two dozen platform dependent apps in my personal sphere dumped for WebApps in just 5 years. Google Apps is just the most visible change along with wiki-ware like Drupal to the end consumer.

    3) Server side migration downwards to client desktops – LINUX has won in the server racks for big-iron serving for databases, web, numerical cluster computing, basically everything but login identification for Windows clients and other AD stuff, though SAMBA ain’t bad for the small to medium end there either. So IT folks who aren’t click-monkeys but actually thinking types are finding GNU/Linux is up to the task.

    4) Open standards, similar to #2, there is a push for open standards in data exchange as heterogeneous computing catches on. (apps data formats, interchangeability, data-exchange, wiki’s and documentation). I have seen less confusion over the last 5 years dealing with Americans when I send documents out in ODF format, Europeans were 5 years ahead of us, and the formats seem increasingly welcome.

    5) Virtual computing – By this I means that you desktop paradigm, fileset and workspace are the same whether your in the lab on a smart thingie, on a netbook/laptop while on a business trip, or at the desktop furnace/thick-client or desktop ARM thick/thinclient. When at the previous work you could suspend your work on any given CentOS PC to include work shut the machine down, go else where in the facility and bring everything up where you left off, CentOS GNU/Linux majic. You could even SSH in and work and if the LINUX back iron servers failed, the local workstations dropped into thick client mode and you could continue ahead if your files were in the local disk – a cool setup. All the Windows Machines were a failure they tried Roaming Profiles for about 8-9 months which was a poor attempt to provide the same hardware independent experience but that was terminated as they never could get that working.

    These five effects are driving a paradigm shift away from the desktop-centric PC to the anywhere computing, in the lab, at the desk, on the road. Its going to slam the Monopoly hard and it’s coming is indeterminate, but it will come and when the switch-over accelerates it will be as rapid as DEC’s demise was.

  29. Kozmcrae says:

    “All I can say is that various Linux fans have been predicting victory in the market for Linux computers for over a decade now and it has not happened yet.”

    I’m not putting a time limit on anything. I’m just saying that FLOSS is more like the natural resource water. It gets used but never used up. It’s not a company, organization or government. Microsoft like any other company can die, be broken up or just evolve to the point of being completely different. FLOSS is not subject to the forces that shape companies.

    FLOSS will be around after Microsoft. It will be around after Google and Apple too. FLOSS wins.

  30. Clarence Moon says:

    All I can say is that various Linux fans have been predicting victory in the market for Linux computers for over a decade now and it has not happened yet. “Wait until next year!” is always the cry, making them sound like die-hard fans of some long suffering sports team with nothing but hope to ever show for their dedication. Well, Tampa Bay once won the Super Bowl, so anything can eventually happen. It just doesn’t seem very likely to happen very soon.

  31. Imaging a PC takes way less than an hour. One only needs to transfer a few gigabytes. A gigabit/s NIC can transfer that in a few minutes. Clonezilla needs only transfer the used blocks. The formatting of a truly blank hard drive does take a few minutes more, but it certainly is way less than an hour. This is one place that GNU/Linux wins in a big way. Because GNU/Linux mostly uses dynamic linking, most packages do not contain tons of static versions of what other packages built statically already contain. This same feature that allows GNU/Linux to run more processes and users per gigabyte of RAM also means disc-images are smaller/faster.

  32. Kozmcrae says:

    “MS could give away Windows and still make plenty from Office and Server.”

    Microsoft has a lot of “headroom” to give stuff away or to give “discounts”. It buys them time. FLOSS isn’t going away. It has all the time in the world. Microsoft has a finite amount of time, FLOSS an endless amount of time. Microsoft loses.

  33. oiaohm says:

    NT JERKFACE
    “I like how you try to depict Linux as the slayer of MS when it is Apple that has provided them with competition on the desktop.”

    Apple is mostly priced too high to be truly effective competition against Microsoft. Yes they have provide some competition. Microsoft needs competition on the same hardware platform it is on.

  34. oiaohm says:

    Clarence Moon my point is the current OEM of the PC world will have no option but to lower price with the battle that is coming.

    There will not be larger market share to go round.

    ARM is wanting to bust the market. Arm device makers have been producing 100 dollar and less phones for ages they are are use to lower prices.

    PC OEM vendors will face declining revenue as the competition gets stronger from the Arm device makers. Arm device makers are use to income of a few dollars per device.

    Particularly that MS is going to release Windows on ARM. I can see a lot of PC makers cursing all the way to the bank over this.

    Clarence Moon
    “If you really think that way, then it is certain that you come from a low volume society that could tolerate such a hitch in the flow of commerce.”

    I come from reality. High volume normally don’t buy from retail in the first place. If you are selling on-line the 1 hour processing before sending basically will not be noticed as long as you have systems like dell and hp use in there warehouses. Where you can process a few 1000 from blank to OS’s require at a time and have them auto packed. Yes online high volume have no such issue with imaging on demand. They are doing it daily straight from the OEM’s themselves on-line. You send a order the machine you ordered from a big OEM on-line did not have a OS on it before you ordered.

    Less than a 1 hours is fact to deploy image on them. Most people don’t notice the computers from HP Dell and others if you blank the harddrive autodefault to network boot. Wonder why. Software the makes like HP and Dell is using is like clonezilla with script. Yes the evil beast you can hook up 48+ to a 48 port switch and do 47 machines in a single hour from a single master source. Yep the imaging process is just connect network cable and apply power with a image over network. Don’t even bother hooking up screen. Also most people have also failed to notice that most dell and hp computer don’t complain about missing keyboard or mouse either any more in a way that stops boot out box. Guess why that disrupts imaging.

    All the OEM computer from big OEM’s are in fact designed to be network imaged these days when have a blank harddrive inside.

    The hitch is very min in fact. The store can have so many of there blanks prep up for sale. But lets say Windows 7 Home is moving and Windows Professional is not. If you order 20 machines 10 of each when you run out of Windows Home you have to wait for a shipment to come in. So you might lose the customers to online merchants.

    So you can have shelf space for lets say 4 of each. That leaves 12 out the back to image how customers want. In fact if you got creative they could be auto imaging out back to replace the shelf stock as they sell past register.

    This is basically a lot effective supply line Clarence Moon. With a supply line like that a store could respond to a custom order for Linux or any other rare selling OS. By saying please come back in 1 hour and we will have it for you. Ordering on-line the customer will not have what they want in 1 hour.

    Why will retail do this in time. Is that they will not have a choice. With online ordering customers have no reason to wait for your store to order in the machine with the OS they want. If you have to order it in as a physical retail store. They might as well go to a online store direct from OEM and order it that way and cut the middle man you out.

    Basically it will either be physical retail go out of business or they become far more responsive to customer requests. To become more responsive the multiplicity SKU will have to be solved the same way the on-line retailers are doing it. Other wise you are competing with one hand tied behind your back.

    Basically commerce has changed. Online is seeing to this. Physical retails will have to work out how to provide customers requirements straight up or at-least inside a few hours where ever possible if they want to stay in the game. Why not 24 hours to have it shipped from you country supply source is that a online provider will be able todo that.

    If you can get something now and not wait you will be prepared to pay more because you did not have to wait.

    This is better for commerce Clarence Moon not to have waste due to being stuck with units you did not sell either.

    Your reality is way off Clarence Moon. You are talking about market conditions about 3 to 4 years back. The market has changed major-ally. Retailers have to change or die. Their choice.

    Yes the end of the MS single OS option will come. On-line will see to that.

    “One can only wonder why you should miss a few minutes a year of server up time, as you claimed, with so much leisure available.”

    Who says I am here when I am doing nothing. Lot of automated stuff can be running while I am here. Checking results and that they do run. Well run networks you do have a lots and lots of waiting. Just to be there in-case something goes wrong.

  35. NT JERKFACE says:

    MS could give away Windows and still make plenty from Office and Server.

    Anyways where does Apple fit into your ‘Wintel monopoly” viewpoint? I like how you try to depict Linux as the slayer of MS when it is Apple that has provided them with competition on the desktop.

  36. Clarence Moon says:

    Well, Mr. Oiaohm, you are in fine form today, I see!

    Your gibberish generator is humming along and you have even managed to get your insult insert function working again. Good job!

    I fear that your reading comprehension option is still on the fritz, though. You say

    “They don’t but is reality. ARM wants in to the desktop space. The raspberrypi is 35 dollars.”

    which was offered in reply to my assertion that OEMs cannot afford to significantly lower prices without increasing volume to keep their revenues from declining and that there is not enough price elasticity in the market to allow that to happen. Since you missed the mark so widely, I cannot begin to understand what your point might be.

    I did find it somewhat telling for you to suggest that the answer to multiplicity of SKUs was for the merchant to just buy blank machines and image them with what the customer desired on the spot. “Less than an hour to do so” you opined. If you really think that way, then it is certain that you come from a low volume society that could tolerate such a hitch in the flow of commerce. One can only wonder why you should miss a few minutes a year of server up time, as you claimed, with so much leisure available.

  37. oiaohm says:

    Clarence Moon
    “OEMs do not relish the idea of lower prices for their products, either. If they are to reduce the price, they will need to increase their volume, else they will be in a state of decline. But the PC market is relatively mature and not likely to grow much in response to a general price reduction.”
    They don’t but is reality. ARM wants in to the desktop space. The raspberrypi is 35 dollars.

    There will be a lot of arm devices for around the 100 dollar mark. Coming from vendors who don’t use intel processors. This is the reason Windows 8 is doing arm support.

    Clarence Moon
    “OEMs have an in-place support network of thousands of trained call center folk who would need to be augmented by folk trained on Linux.”
    In fact no Dell, HP staff in call center are already trained to be able to assist directly with Linux issues with any of there machines.

    Clarence Moon
    “That would extend to multiple SKUs for the same machines, one with Linux and one with Windows in the most common scenario where the OEM would have to offer a mixture of products to keep Windows customers as well as service Linux customers. ”
    Already happens

    Its the retail end that everything falls apart. If you are dealing straight with any Major OEM directly as enterprise you can order almost all there machines with Linux images installed.

    Retail stores that has limited shelf space where Linux is not displayed. And online stores that don’t trust there consumers that they will not just buy on price missing the fact the cheaper one is Linux.

    Basically the inefficiency claim is bogus. Most people are not aware that most computer made by OEM’s are stored COA less. Reason you might want that machine with Windows 7 Home or Windows 7 Professional on it both require a different COA stuck on. So yes OEM already have the over head multi-able OS’s to worry about. Only so many machines are preped up at with a COA at time of order. This also reduces number of machines to dispose of when MS changes versions.

    So Linux image to enterprise customers is just done from the clean skin pile with a Linux image instead of a Windows one.

    The Freedos ones are even more insane. Freedos ones are just a computer picked up from the clean skin stack a freedos disc thrown in the box no imaging at all. Cost to OEM freedos is the cheapest. Don’t bother ringing up for support on freedos. Yes its nothing strange that the freedos disc cannot even install on the machine. Its call the token OS to keep MS happy.

    Basically there is no issue OEM side supporting Linux Clarence Moon they do it all the time. Lower overheads in fact support the Linux. Not as many kickbacks for the Linux or freedos.

    Really if you get the chance you visit either HP or Dell warehouse near you. There machines for imaging and packing computers is quite cool.

    Now if you could move what is done at OEM storage to store there would not be a problem at all. Customer comes in asks for X OS machine ok come back in 1 hour will have it imaged for you and ready to go. Yes it takes less than 1 hour to image a machine.

    If you want to talk about retail having major problems with too many OS’s this is not just a Linux thing there are too many Windows licenses as well. It is a problem. Only solvable if retail can be getting clean skin machines and stick the customer requested license on at that point.

    Customers having legacy data issues will also happen with the change to arm.

    As per normal Clarence Moon you name says it all. Moon slang “To pull down one’s pants and present one’s buttocks to onlookers”. Basically make a complete arse out yourself. Yes gets funnier when you know there is a Clarence hotel in Taz and a few other countries. So there is such thing as doing a Clarence Moon. Please try in future not to live up to the name you are using.

    Little bit of homework about the OEM would have told you the store computers clean skinned and image them on demand.

  38. Clarence Moon says:

    I simply cannot understand your logic, Mr. Pogson. On the one hand you claim that “they have declined from the height of their power” yet they have higher revenues and profits than ever before. That hardly suggests any sort of decline, considering the general state of all major businesses with the current economy.

    I would think that the notion of OEMs abandoning Windows as it gets less expensive for them would be counter to the conventional wisdom that the OEM would surely obtain a higher profit in the case of lower unit costs. What incentive would they have to abandon Windows in your scenario since profits are just getting better and better? You seem to postulate that they are chomping at their bit to run away, but you offer no proof of that.

    I might further say that the “per CPU” licensing of MS-DOS was done away with some 18 years ago and has never had any effect on Windows sales. How you can note that as some reason for a mass change in direction for OEMs is hard to follow.

    I just see no reason on earth for OEMs to abandon Microsoft. First, there is the problem that they would likely alienate a large portion of their market that is comprised of customers who expect continuity of use of their previous software and accumulated data. They are used to a fairly bumpless transfer of information from an old to a new machine and would look askance at something that didn’t work as expected. They would doubtless return the machine for a refund as they did with the Linux netbooks several years ago. They would perhaps acquire higher margins, but on drastically reduced sales levels.

    OEMs do not relish the idea of lower prices for their products, either. If they are to reduce the price, they will need to increase their volume, else they will be in a state of decline. But the PC market is relatively mature and not likely to grow much in response to a general price reduction.

    Then there is the immense cost of change. OEMs have an in-place support network of thousands of trained call center folk who would need to be augmented by folk trained on Linux. Right now, they only have one set of people and do not have to manage logistics for multiple opportunities. Having two solutions results in higher costs since one cannot fill-in for another as easily as now. The net result has to be extra staff for the same number of sales that need support.

    That would extend to multiple SKUs for the same machines, one with Linux and one with Windows in the most common scenario where the OEM would have to offer a mixture of products to keep Windows customers as well as service Linux customers.

    How many of each to buy? (if you are a retailer) How many of each to manufacture in anticipation of orders? (if you are the OEM). That is not a comfortable thought if your annual sales are in the millions of units as are those of the big OEMs.

    All that inefficiency will have its cost and will have an effect on price. I would expect that the net net would make computers cost more than now, even for the ones with the free OS.

  39. M$’s lock-in for OEMs is that they cannot forgo the revenue from selling M$’s licences. The less that is per PC, the more free OEMs are to ship other kinds of personal computers. There was a time when M$ required every OEM to pay M$ for every PC shipped regardless of the OS and a higher price per machine if they were not all that other OS. That has long gone away and OEMs are free to do what they want. Android/Linux has shown that OEMs have options and can survive without M$. All an OEM has to do is to start shipping GNU/Linux and they are off the treadmill and having larger margins.

  40. Kozmcrae wrote, of M$, “They may not exist in 10 or 20 years.”

    At the rate M$ is diversifying they could live off their bank accounts for that long with no other income. The client and server divisions are my chief interest and I see the client share continuously shrinking. The server share will follow that sooner or later. M$ may never go away but they will become a “normal” business with no monopoly very soon. All of their current investments are just delaying tactics: suing over patents, and “8” on ARM. Whatever they do, they will never have a monopoly on ARM so, as ARM grows, their client division will shrink. They have declined from the height of their power but the shear volume of the installed-base licensing keeps them going. That will dry up now that the installed-base of that other OS is on the verge of declining with the retirement of XP in 2014. A huge share of those seats will go to ARM, thin clients or GNU/Linux, all taking away M$’s share.

    On ARM, currently, M$ offers “embedded”. On thin clients, M$ offers incredible complexity and more licences. That other OS cannot compete with GNU/Linux in performance.

  41. Kozmcrae says:

    Clarence, your logic, simply stated, is: Microsoft has always been successful so it always will be successful.

    There are dozens and dozens of companies that once dominated various markets and they no longer exist. Why should Microsoft be any different? Microsoft has no magic shield that will keep it from going out of existence sometime in the future for some reason/s or another. Same goes for every other company that is dominate now. They may not exist in 10 or 20 years.

    GNU/Linux is not a company. It is not regulated or subjected to the same forces as companies are. It will most likely out live Microsoft by many years. In other words, GNU/Linux will win in the end.

  42. Clarence Moon says:

    I do not understand how you can suggest that Microsoft’s reduction in the average PC license fee is going to drive OEMs to replace Windows with Linux, Mr. Pogson. I don’t think that we are talking about the same thing.

    My belief is that Microsoft revenues for Windows versions is the classic “pay me now or pay me later” sort of proposition and that all anyone can do to evaluate their business is to track their financial results. That is not a totally accurate measure, of course, given the volatility of economies in various parts of the world that contribute to Microsoft’s overall sales, but it is as good of a metric as we have.

    Microsoft is a cash cow sort of company with moderate overall growth, which sets it apart from traditional companies whose market dominance is comparable to Microsoft’s. Their business is relatively mature and is going to move more with world economy than with any other force.

    You are correct in saying that they are not likely to participate in the rapid growth of the smart phones and tablets, but you are mistaken to think that condition will have anything to do with their continued dominance of the desktop/laptop business.

  43. Kozmcrae says:

    Clarence, you are repeating everything I said about Microsoft albeit in more words and leaving out the last part. Behind all that marvelous “winning strategy” is a looming tragedy. To the Japanese Admirals and Generals who new the score early in WWII they called Japan’s fantastic first 100 days of the war, “Victory Disease”. Microsoft believes their own FUD. That’s a problem. Maybe some day it will be labeled “Monopoly Disease”.

  44. Clarence Moon wrote, “nothing is on the horizon that is in any way new and likely to change what has been going on in these circles for years and years.”

    Oh, yes there is. Look at M$’s revenue per PC shipped globally. That number is down 20% or so in the last few years. Have you noticed their prices declining? I though not. They are losing share rapidly.

    3Q 2011 PC shipments – 91.8 million

    M$’s client revenue: $4.8 billion, $52 per PC. They claim to sell 50 million licences quarterly so they are getting an average of $90+ per licence but their share of PCs is down to 50/91.8 = 54%.

    3Q 2008 PC shipments – 80.6 million

    M$’s client revenue: $4.2 billion, $52 per PC (no change resulting from the great “7”)

    3Q 2005 PC shipments 52.9 billion

    M$’s client revenue: $3.05 billion, $57.65 per PC.

    At the same time prices for licences have risen… so share has fallen a lot.

  45. Clarence Moon says:

    You seem to be looking for some solace in the numbers you report here, Mr. Pogson, but, speaking as a business planner of sorts, which I am these days, I think that you are missing the silver lining in Microsoft’s cloudy position.

    Consider that Microsoft’s principal market is the hundreds of millions, if not billions, of existing users that are, as you like to say, “locked in” to the Windows train of product releases. Microsoft has no opportunity to convert Linux customers, they are too few and far between to matter much to them. They have no real opportunity to sway Apple Macintosh users, they are too tough of a nut to crack economically. The easy way for Microsoft is to up sell or resell their existing base.

    Microsoft, overall, has been doing pretty well the past couple of years financially, all things considered, mainly the shabby world-wide economy. They are too big to be a counter force, their fortunes are married to the world overall. With such satisfactory financial performance in the face of a slower than expected migration to newer products, it would seem to me that their fortunes are much brighter than they would have been had their recent revenues been fueled by rapid conversions to their current product.

    As it stands, they have a long ways to go and a lot of profitable ore is still in the ground for future mining operations. “It’s only a matter of time…”, you say, but nothing is on the horizon that is in any way new and likely to change what has been going on in these circles for years and years. Linux has long been a viable candidate for OEMs to promote, but they have never found any advantage in doing so and have generally refrained. Retailers are themselves locked into what the OEMs produce and the OEMs are not producing anything that is different.

  46. Kozmcrae wrote, “It’s easy to continue with a losing strategy when you have a ton of money and you’ve been winning all the battles.”

    Last night I watched a movie on Netflix about WWII in the Pacific. No long-term view supported Japan’s strategy. It was win early or die as they over-extended themselves allowing larger forces to destroy one outpost after another all the way back to Japan. The concept that any one organization can take and hold territory everywhere in all situations is just stupid and bound to fail. No matter how hard the employees and partners work, the structure is just too fragile and inefficient. Sucking in USA and much of the world of IT into Wintel may eventually be seen as the economic equivalent of war crimes. The ghosts of willing victims, the ghosts of partners and the ghost of M$ will haunt the world for generations.

  47. Kozmcrae says:

    There are historical comparisons for what Microsoft is experiencing now. It’s easy to continue with a losing strategy when you have a ton of money and you’ve been winning all the battles.

    When this is all over and has become part of our historical experience, we will have the benefit of knowledge we don’t have access to now. That knowledge will uncover just how desperate Microsoft’s position is right now and just how empty their boastful supporter’s arguments are.

    No doubt this prediction will bring on howls of laughter. I say laughter is good for the soul.

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