Microsoft Is Still the Windows Company

The price of MSFT shares continues to rise despite the shrinkage in PC-sales so investors seem to believe “Microsoft isn’t "just that Windows company" anymore.”
see Microsoft no longer the Windows company. Does Wall Street agree?

They are wrong. Without that other OS needing M$’s servers holding hands, authenticating, sharing files etc. There would be millions of servers eliminated. Without that other OS being the only OS to run M$’s office suite, one whole division would be a shrunken head. Without huge investment in those two or three segments, there would be no need for a lot of databases running on M$’s server as well. You see, it’s a house of cards. It’s the current large installed base holding it all up. Slow PC sales, cloud services from Amazon and Google, and diversification of PCs to other platforms based on Linux, all render the products M$ supplies unnecessary or over-priced.

So, how long will the installed base keep M$ afloat? That base has been flat for a year or two now and it has nowhere to go but down. The decline will pick up speed as it goes because the same networking/positive feedback effects that built the monopoly will soon work against it. Already huge businesses, schools and governments have severely cut their dependence on M$. The advantages of that move will become more clear and more economically feasible just as they were with Android/Linux and ARM.

The first to go will be consumer PC licences. Consumers are mostly fine with Android/Linux or GNU/Linux on ARM and x86/amd64. Businesses are the most locked in with $billions invested in M$’s technology. They will ride that investment into the ground but we already see that XP survives because businesses don’t want to buy anything more from M$. That will grow as more businesses see the advantages of escaping monopoly. M$ just cannot compete with $0 licences and better performance and longer-lived infrastructure.

For businesses to really get the hint they will have to see not only GNU/Linux being “good enough”. They have to see the necessity of adopting GNU/Linux for survival/competing. The high cost of maintenance/security is obvious. The ability to abandon M$’s office suite for Libreoffice became obvious for many when ODF came along. Governments have embraced and thrived with ODF. Businesses can as well. Tools like Google Documents and LibreOffice make it easy to change.

If a business has a mess of GNU/Linux PCs they don’t need M$’s server/client licences, nor M$’s office suite, nor M$’s databases, nor anything M$ offers. Think M$ can live off its cash for a while? Yes, but they can’t grow and they can’t remain huge. They could diversify but they would have to work for a living and criminals just don’t get that concept so they will struggle and die instead. Within the next few years, investors should sell short, probably about the time the pile of cash becomes less than a few $billion.

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 and tagged , , , , . Bookmark the permalink.

4 Responses to Microsoft Is Still the Windows Company

  1. bw says:

    “At the rate things are going, the installed base of Android/Linux will exceed Wintel in units by 2015 and people are using them for things they used to do on Wintel…”

    I see no reason to argue with the first part of that although I am not personally convinced that it is a certainty. I do quibble with the notion that they are likely to be a total replacement for Wintel computers. If you look at your favorite statistics on internet use, you see that Wintel and Mac and classic Linux still totally overwhelm the aggregated iOS and Android and WP and Blackberry usage combined for whatever it is that the web stats are measuring. That strongly argues that people are not using mobile devices even for internet accesses as often as they use PCs. We have a number of years now of experience, so there is a valid conclusion to make, I think.

    That wasn’t the original point anyway, which was that people buying Android or iOS phones and tablets are not changing their expectations about PCs as a result of that use.

  2. bw, ignorant of the fact that more Android/Linux on ARM units are shipping than Wintel these days, wrote, “Very few consumers have ever seen such a thing. they are apathetic to what is under the hood of their cell phone or tablet and only concerned about it being an Apple device or a substitute.”.

    At the rate things are going, the installed base of Android/Linux will exceed Wintel in units by 2015 and people are using them for things they used to do on Wintel…

  3. bw says:

    “They are wrong. Without…”

    Remarkable tenacity but a horrible lack of insight and understanding here. All these mavens are wrong and you, seated on your newly resurrected mower and attacking the dandelions with vigor, are the only one to see the light?

    “Consumers are mostly fine with Android/Linux or GNU/Linux on ARM and x86/amd64.”

    Very few consumers have ever seen such a thing. they are apathetic to what is under the hood of their cell phone or tablet and only concerned about it being an Apple device or a substitute. You confuse this with preference. Buying a cheap tablet does not translate into buying a Linux PC, particularly when there are none for sale anywhere.

    “For businesses to really get the hint they will have to see not only GNU/Linux being “good enough”. They have to see the necessity of adopting GNU/Linux for survival/competing.”

    And how do you suppose that is actually true? Even if it were, who is going to tell the tale? Linux is promoted as hard as it can be by Red Hat, SUSE, and maybe even Canonical, but that has been going on for years or even decades and what you see today is what you get with such a lame effort. Nothing is going to make it suddenly arise overnight. There is no incentive to do so for the software vendors or for the hardware vendors.

    “They could diversify but they would have to work for a living and criminals just don’t get that concept so they will struggle and die instead”

    lol. I guess you didn’t read your own cite.

  4. jason says:

    “but they can’t grow and they can’t remain huge.”

    That’s probably why they have resorted to being a patent troll and leaching off software that isn’t theirs, like Android.

Leave a Reply