M$, Trying To Work For A Living

M$ has been living off its desktop OS and office suite cows for more than a decade. The desktop OS cash cow has dried up considerably. Indeed, “Further down in its 10-K filing, Redmond reports that it upped its sales and marketing budget for the Windows Division in 2013 by a jaw-dropping $1bn, which included an $898m increase in advertising costs "associated primarily with Windows 8 and Surface."Got that? Microsoft spent more in a single year advertising the Windows 8 and Surface launches than it took in from Surface sales that same year.”

see Microsofts Surface sales figures are in, and they’re ABSOLUTELY HIDEOUS.

From the 10-K: “Windows Division revenue increased $839 million. Surface revenue was $853 million. Revenue from commercial licensing of Windows increased $487 million, while unearned revenue from commercial licensing also increased, reflecting continued support of our platform. In addition, we recognized $540 million of previously deferred revenue related to the expiration of the Windows Upgrade Offer. Partially offsetting these increases was a decrease in OEM revenue.
OEM revenue decreased 3%. Excluding the impact of the Windows Upgrade Offer, OEM revenue decreased 10%. This decrease primarily reflects the impact on revenue of the decline in the x86 PC market, which we estimate declined approximately 9%.”

Of course, M$ blames the market instead of its product but fails to mention the Android/Linux on ARM market is booming (Android/Linux smartphones up 52.3% year over year and Android/Linux tablets up 247.5% year over year)… End of an era, I’d say. Wintel just cannot compete on price/performance. Even WARM can’t compete on price/performance when M$ doesn’t have to pay itself licensing fees. How are OEMs and retailers supposed to sell that?

Even M$ admits this risk: “We derive substantial revenue from licenses of Windows operating systems on personal computers. We face substantial competitive challenges from competing platforms developed for new devices and form factors such as smartphones and tablet computers. These devices compete on multiple bases including price and the perceived utility of the device and its platform. Users are increasingly turning to these devices to perform functions that would have been performed by personal computers in the past. Even if many users view these devices as complementary to a personal computer, the prevalence of these devices may make it more difficult to attract applications developers to our platforms. In addition, Surface competes with products made by our OEM partners, which may affect their commitment to our platform.”

The only questions remaining is will the reorganization increase sales or will it just hide the continuing debacle and, will the SEC punish MSFT for leading on investors? After all, investors were shocked to learn Surface was not selling despite Ballmer’s ravings.

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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10 Responses to M$, Trying To Work For A Living

  1. dougman says:

    Since Surface crap and Win8 is not selling well, monkey boy will PROVE to everyone they are just stupid and he is right.

    He thinks keeps trying to sling crap at the wall, in dire hopes that something will stick, but fails to realize that crap smells most foul and who wants that?

    http://www.neowin.net/news/ballmer-states-that-windows-is-not-selling-well-next-gen-surface-in-testing

    The issue here is simple. Windows RT is the first-generation version of a new kind of Windows that is completely incompatible with the Windows desktop applications you actually use and much of the hardware peripherals you already own. And Surface RT, based as it is on current generation ARM hardware that was designed for smart phones and media tablets, is simply too underpowered to provide a satisfactory experience.

    Nothing can change these basic truths.

    Windows RT does everything slowly. Everything. The day-to-day experience is terrible.

    Save your money and get an Android Tablet.

  2. lpbbear says:

    I recently had a Win8 all in one system come in for a reload. Reason for the reload? The incredible much ballyhooed security had allowed it to become infected with spyware/malware. (rolls eyes)
    Anyway this system was mounted on the wall in a warehouse and even though it had a keyboard and mouse hooked up the employees had taken advantage of the new “touch screen”. It looked like a bunch of kids with popsicle stickies all over their fingers had attacked this brand new system……nice! I didn’t bother to clean that up.
    During the reload I removed the idiotic “Metro” screen. While I was finishing up a couple employees thanked me for getting rid of that crap. They said they “hated that screen”.

  3. dougman says:

    YEP. It was a post on Slashdot, thought I share as it made me chuckle.

  4. I presume most of that should be in a big SARCASM! block… 😉

  5. dougman says:

    The Surface is a wonderful device that I love to use.

    My seventeen kids all fight over the privilege to use it and they all want to replace their iPads with a Surface.

    They’re just flying off the shelves, and the local stores can’t keep them in stock. I have to drive 200 miles to buy more.

    At work our productivity increased 1,022% when we replaced all of our ipad and android tablets with the Surface. It’s so cute and convenient, I just can’t keep my hands off of it.

    M$ is a brand that inspires no confidence from consumers, and the only one who actually likes them are simpleton sysadmins.

  6. dougman says:

    Dell only needs to look at Novell and Nokia to see, that being in bed with a whore leads to troubles later down the road.

    Also to add:
    http://readwrite.com/2013/07/31/nokia-grows-frustrated-with-microsofts-pace-in-windows-phone

    But, before the trolls barge in and say, “Oh but look!, M$ made XXXXX more in 2012 from Windows Phone”

    In its latest SEC filing, M$ said Windows Phone revenue increased by $1.2bn in the year to 30 June, 2013. True, the amount of money Microsoft made on smartphones grew in 2012, but this is due to Android extortion racketeering rather than Windows Phone and that number included an “increase” in “patent licensing revenue” lumping it in with the puny sales of Windows Phones.

  7. lpbbear says:

    http://allthingsd.com/20130730/asus-pulling-back-on-windows-rt-chairman-says/

    http://www.computerworld.com/s/article/9238928/Microsoft_s_2B_loan_to_Dell_comes_with_strings

    That just leaves Dell making this product…..which is why Microsoft wants to buy Dell out and or control Dell.

    Ooops, more bad news for Mickeysoft.

    http://slashdot.org/topic/bi/early-surface-sales-pitiful-microsoft-reveals/

    Too bad soooo sad.

  8. dougman says:

    All M$ did was piss off OEM’s and prove to the world that they are incompetent as a hardware provider.

    For example, look at their backward design:

    http://cdn.robgonda.com/wp-content/uploads/2012/06/Microsoft-Surface1.jpg

    M$ Surface – ONE WORD – Lack of Applications.

    The majority of Return-IT app’s are awful and littered with ads, of which developers are not being paid anyways, as the entire Surface ecosystem is DEAD.

    Same thing with Windows 8, why develop something that no one wants.

    M$ is trying to push hardware manufacturers to either adopt Windows 8 or the RT operating system on their tablets, but are facing an uphill battle where it is unable to compete against Android in the battle of tablet operating systems. So they sue, extort and whine about it, which leads to a dead-end road and alienates yourself from the market.

  9. matchrocket says:

    Something is rotting in Redmond.

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