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Extortion is a good business

Extortion is a good business

Posted Jun 5, 2013 7:44 UTC (Wed) by khim (subscriber, #9252)
In reply to: Extortion is a good business by anselm
Parent article: Ubuntu bug #1 closed

It's worse than that. Short-term they will be better off if they'll stop producing Windows Phone, sure. But long-term they'll lose the ability to dictate rules to the industry - and the Microsoft's business model today is built around such control. Of course it may already be too late as this [relatively old] article describes. That is why Microsoft is so desperate. Steve Ballmer even said so himself: if you actually take a look at the 1.3 billion phones that get sold, I’d prefer to have our software in 60% or 70% or 80% of them. Monopoly was desired and expected at the time.

The future lucked certain: market share of Windows Phone slowly but steadily grew and Microsoft was pretty sure that it'll have at least 50% of market soon ("60% or 70% or 80%" was the real hope) and then people will be forced to continue to use Microsoft's things "as they always did". But iPhone reversed this trend and Android (along with the idiotic idea to drop all compatibility from Windows Phone 7 and restart the whole franchise) blown up all plans. Now Microsoft is in position "we need to either force Windows Phone on people somehow or we need to reorganize the whole company - similar to what happened with IBM twenty years ago". And since total reorganization of Miccrosoft means, most likely, the end of the story for Steve Ballmer... as long as he's in charge Microsoft will throw good money after bad.


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Extortion is a good business

Posted Jun 5, 2013 8:44 UTC (Wed) by anselm (subscriber, #2796) [Link]

Short-term they will be better off if they'll stop producing Windows Phone, sure. But long-term they'll lose the ability to dictate rules to the industry - and the Microsoft's business model today is built around such control.

In the mobile phone market, Microsoft never actually had that ability (not for want of trying, though), and now it would require nothing short of a miracle for them to gain that ability. (A meteorite strike on Mountain View and Cupertino might do the trick.)

Microsoft's problem is that they don't generally do all that well in markets where they are not the dominant player. They were in the right place at the right time when IBM needed an operating system for the PC, and the rest of the Microsoft story essentially followed from that, together with a good portion of sleazy tactics and the financial wherewithal to assimilate other people's innovative ideas.

If you look at pretty much any market that is not desktop PC OSes and office-type software – apart from mobile phone OSes, think of server OSes, databases, CRM, ERP, HPC, embedded systems, game consoles, WWW search engines, and so on –, Microsoft is just one player among several or many and usually not the clearly dominant one (or even a particularly innovative one). With tablets, smartphones and appliance-type »PCs« such as Chromebooks beginning to encroach on the classic »desktop PC« market, Microsoft sees pushback even there, and it is a fairly safe assumption that unless they get their act together soon, one way or the other the days of Microsoft-as-we-know-it are counted.

Extortion is a good business

Posted Jun 5, 2013 9:30 UTC (Wed) by dlang (subscriber, #313) [Link]

windows 3.1 was really good for it's day, win95 was also pretty good (although by then the sleezy tactics were in full swing)

Microsoft used it's OS dominance to gain the office dominance, and since then the two have feed each other. If you wanted to interact with other companies and the vast majority of people who were using Windows, you had to use Office, and to use Office you had to use Windows (and while there were Mac versions, they were always behind so they really didn't work well)

the biggest danger to Microsoft right now is loosing this "you must use microsoft for everything to be compatible" position. since Tablets and other mobile devices are succeeding without being completely compatible, the idea of using a non-microsoft office product and expecting other people to be able to use the results is a growing trend

each step that pushes microsoft back (be it mobile device use or just running microsoft apps on a citrix server on in a VM while the other apps run natively), weakens their network effect and lays the groundwork for the next erosion of their power.

Extortion is a good business

Posted Jun 5, 2013 10:43 UTC (Wed) by pboddie (guest, #50784) [Link]

Agreed. People should not underestimate the network effects that Microsoft can benefit from. Particularly in back-office systems there are plenty of ways that Microsoft are seeking to expand their influence by locking customers into solutions one after the other.

Certainly, mobile platforms are a weak point for Microsoft because the annoying end-user wants to use something other than Windows Phone, meaning that they have to indulge those users, but they have plenty of ways to make those users' lives difficult and plenty of experience with worsening interoperability and pushing those users to Microsoft's own platforms over time.

Extortion is a good business

Posted Jun 5, 2013 21:09 UTC (Wed) by dlang (subscriber, #313) [Link]

even in the enterprise environment, Microsoft lock-in does not go over that well anymore. Mac laptops are just far too common, and while Microsoft does 'support' OS/X, it doesn't do a very good job of it. As a result a noticable percentage of users are unhappy with the Microsoft-only solutions.


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