Techradar.com discusses the behemoth software maker’s struggle for survival.
Microsoft is still making enormous sums of money, but cracks are appearing in its $16 billion Windows business. The death of XP has been postponed several times â€“ the current rash of ultra-small, ultra-cheap laptops don’t have the horsepower to run Vista â€“ and while Microsoft claims to have sold 180 million Vista licences, many of those licences are for machines running XP.
As Jane Bradburn of HP Australia told reporters in July, “From 30 June, we have no longer been able to ship a PC with an XP licence. However, what we have been able to do [is] to ship PCs with a Vista business licence but with XP pre- loaded. That is still the majority of business PCs we are selling today.”
There’s no compelling reason for users to upgrade: Vista requires more powerful hardware than XP, and it’s been plagued by driver problems and incompatibilities. As a result, it’s faced an avalanche of bad publicity â€“ some of it deservedly so, as users found that their devices didn’t work.
The bad publicity isn’t helping enterprise adoption. According to Forrester analyst Ben Gray, “Desktop operations professionals tell Forrester that they see the value in standardising on Vista, but many are having a hard time convincing their CIOs that the move isn’t a risky bet, given the mixed reaction it’s received in the press and the speculation surrounding what to expect after Vista.” Forrester reports that 8.8 per cent of enterprise customers have migrated to Vista; 87 per cent are still running XP.
The ‘mixed reaction’ has been a gift for Apple, whose ‘Mac vs PC’ campaign mocked Microsoft ruthlessly. The ads worked: according to BMO Capital Markets analyst Keith Bachman, “More than 50 per cent of customers buying Macs in Apple stores are first time buyers.” …
So has Microsoft lost it? A company with 93 per cent of the worldwide operating system market, rising revenues, a $60billion turnover and around $22.49billion in operating income is hardly struggling. However, the world in which Microsoft operates is changing dramatically, and Microsoft knows it. …
Microsoft is fighting back on multiple fronts. It’s “developing versions of our products with basic functionality that are sold at lower prices than standard versions”, but more importantly it’s chucking enormous sums of money at things that may or may not work. …
To many observers, the way in which Microsoft’s online division is haemorrhaging cash is a sign that Microsoft has missed the boat â€“ but the ‘let’s throw money at this until it works’ approach has worked in the past for Windows, Office, Internet Explorer and Xbox, none of which were immediately successful. Microsoft may not be the leader in search, cloud computing or mobile phones, but the combination of determination and deep pockets is a powerful one.
Hat tip to Meaningless Hot Air.