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Microsoft is (not) dead
I just returned from a very disappointing Web 2.0 Expo in San Francisco and came across this commentary by Paul Graham of Yahoo! on Microsoft finally dying. Yes, they are dead - didn’t you know?
Paul Graham claims that there are four reasons why Microsoft is “dead”:
“The most obvious is Google. There can only be one big man in town, and they’re clearly it. Google is the most dangerous company now by far, in both the good and bad senses of the word. Microsoft can at best limp along afterward.”
I agree that Google is certainly the 800 lbs gorilla - in search and online ads. Mr. Graham fails to recognize that Microsoft is into many other businesses including gaming, OS, enterprise applications and its office suite. So yes, while Google rules the search and ad business online they certainly do not own the entire world of technology. And remember what Google themselves have said about search - we’re just at the forefront. A lot will change in this industry over the next ten years and every major technology company is working on some sort of search initiative in their labs (I recommend The Search for more on this). While Google is clearly the leader in this space, don’t think that Google can’t be out “Googled” by a competitor, much the same way they out smarted MS, Yahoo, Alta Vista, etc on search with little resources compared to their larger competitors.
On this point, Graham also states:
“Gmail was one of the things that put them over the edge. Gmail showed they could do more than search.”
And Froogle showed that they can fail at things other than search. These guys are human. Â
Point two:
“And that was the second cause of Microsoft’s death: everyone can see the desktop is over. It now seems inevitable that applications will live on the web—not just email, but everything…”
What he is talking about here is Ajax. Let me just say that desktop apps being replaced by applications “living on the web” is years away. I saw nothing at Web 2.0 that would tell me that desktop apps were dead - nothing. Contrary to popular belief, not everybody is “always on” all they time. I guess no one is using desktop office suites anymore? And have you used Google spreadsheets - it has a long ways to go. Even the VP over Google apps at the Web 2.0 show admitted that they use MS office in their department. That alone tells you that this statement is off base. While AJAX and web apps are cool - MS will only continue to use and create their own applications here that will be used by millions upon millions of users.
Point three:
“The third cause of Microsoft’s death was broadband Internet. Anyone who cares can have fast Internet access now. And the bigger the pipe to the server, the less you need the desktop.”
How is it that MS isn’t benefited by broadband and everyone else is? I guess he thinks broadband has leveled the paying field - I think it only helped MS along with everyone else. I already addressed the desktop/always on issue.
Point four:
“The last nail in the coffin came, of all places, from Apple. Thanks to OS X, Apple has come back from the dead in a way that is extremely rare in technology. Their victory is so complete that I’m now surprised when I come across a computer running Windows.”Â
The guys on TWiT (yeah, Leo Leporte) said that’s one of the most ridiculous statements they’ve ever heard. Apple only has five percent of the market. Furthermore, Apple is struggling right now. They just pushed back release of the iPhone and Leopard. Computer sales are less than expected for last quarter and iPod sales have slowed substantially. Apple will be fine - the iPhone will do very well but Apple is far from “the final nail in the coffin”.
Furthermore:
“I’m glad Microsoft is dead. They were like Nero or Commodus—evil in the way only inherited power can make you. Because remember, the Microsoft monopoly didn’t begin with Microsoft. They got it from IBM. The software business was overhung by a monopoly from about the mid-1950s to about 2005. For practically its whole existence, that is. One of the reasons “Web 2.0″ has such an air of euphoria about it is the feeling, conscious or not, that this era of monopoly may finally be over.”
Paul Graham just went to work for Yahoo. I wonder if he thinks Yahoo is doing well? The guys at TWiT said it best, “Microsoft will be worth a helluva lot more than Yahoo! in five years.”
Mr. Graham has some advice for MS to get them back on their feet:
“Buy all the good ‘Web 2.0′ startups. They could get substantially all of them for less than they’d have to pay for Facebook.” (emphasis added)
Gee, where do I start here? I just got back from the Web 2.0 Expo and I thought it was a joke. If the companies that exhibited there are a complete representation of the whole Web 2.0 movement, then I think MS is just fine staying away. Does Paul Graham really think that MS is going to defeat Google and Apple by buying up the likes of Vidder, Blogtronixs, FatDoor, leaptag, RSS bus and a plethora of other “good Web 2.0″ start ups. Please! I wonder how he defines “good”? Maybe he thinks MS should pick up Justin.tv?
and…
“Put them all in a building in Silicon Valley, surrounded by lead shielding to protect them from any contact with Redmond.”
You know, he might have a point here. MS is only the most profitable company in the history of the world. We wouldn’t want any Redmond influence on all those newly acquired Web 2.0 companies that aren’t making any money. Good point.
Well that was a big waste of time. Anyway, Microsoft is not dead and will continue to thrive. Sorry, Paul.
Their victory is so complete that I’m now surprised when I come across a computer running Windows.
This echos my own reaction. Whenever I see somebody using Windows I think to myself “geez, why are you doing that to yourself?!”
Left by Connor on 04/19/2007@Connor:
After having used both, I feel the same way about Mac users.
Left by Chris Knudsen on 04/19/2007Despite all the negative buzz, Microsoft will do just fine. However, they are clearly losing ground on all fronts. Can you name one area where Microsoft is actually growing?
Left by Blake Snow on 04/19/2007As much as I enjoy bashing Microsoft, I think there are a few facts that suggest that Microsoft has not even been put on life support:
Left by Rand Bateman on 04/19/20071) They have plenty of cash. With enough cash a corporation can buy immortality. If you cannot create something people want - buy it.
2) Not everyone is an adopter. There are plenty of people using Office 2000 and will be using it for years to come.
3) It will take a while to get everyone comfortable with web applications. Even if the web apps are as good as desktop apps, many people do not like the loss of control. What happens when my connection goes down, or I am on a plane, or . . .
4) Hunger is a great motivating factor. Big businesses lose their creativity because they are fat and happy. Push one to the brink and occassionally you will see a new creature emerge. Blake Snow recommended JUICING THE ORANGE to me. It has several great examples of nearly dead companies returning to be contenders. and
5) Bill Gates and the other smart people at Microsoft. Like them or hate them, they know how to play the game.
?Quieres dormir con fosforo?
Google is not that good. Just take a look at Google translate. One would have thought that with all the money being poured into AI they would have done better.
Still as other contributors have said “money talks”. If you can’t find the hidden variables in a Markov chain (vital for precision searching) buy it!
Left by Ian Parker on 04/23/2007Hi Chris - thought I’d leave my first comment on your excellent blog. I don’t think Microsoft will ever die. Their cash on hand is a staggering amount of money. I don’t think they innovate. I don’t think they do very many things well (Vista) and I don’t think they’ll ever be the kind of company that makes people want to get a tattoo of the Microsoft logo on their arm, but they won’t die - ever.
As for this statement “They (meaning Apple) just pushed back release of the iPhone and Leopard. Computer sales are less than expected for last quarter and iPod sales have slowed substantially. Apple will be fine - the iPhone will do very well but Apple is far from “the final nail in the coffin†well now we have to agree to disagree.
The only accurate statement in that paragraph is that Apple pushed back Leopard. Of course looking at the massive delays in Vista, they probably figured Microsoft set the bar low there.
The iPhone has not been delayed - visit my blog applephoneshow.com for several articles pointing to it meeting its June deadline. As for the rest of it, I don’t know what kind of sales Apple needs to impress, but these numbers are from their last filing…
Apple posted revenue of $5.26 billion and net quarterly profit of $770 million, or $.87 per diluted share. This compares to revenue of $4.36 billion and net profit of $410 million in the year-ago quarter (Q2 2006).
Apple shipped 1,517,000 Macs and 10,549,000 iPods this quarter, representing a 36% increase in growth in Macs and 24% increase in iPods compared to the year-ago quarter.
Microsoft or any other tech company would probably be pretty forking happy over those numbers! Sorry I said forking but you said we can’t use frack
Keep up the good work!
Left by Scott Bourne on 04/28/2007Hey, Scott! Great to see you posting on my blog! I was commenting on Apple numbers from the previous qtr, which was what was available to me when I posted this post. Apple had a great qtr as reported last week and as you point out here.
As far as the release of products goes - time will tell and yes, MS sucks at product releases and really needs to clean up their act here.
Left by Chris Knudsen on 04/28/2007[...] The latest Web 2.0 incarnation to come out of the somewhat short sided Ycombinator is Overhear.us. Overhear is described as: “Some things you need to say at work are hard to say at work. So every organization has a “grapevine” for information that’s too sensitive for company email. The problem with the grapevine is that it’s inefficient. Word spreads from person to person via phone calls and conversations in hallways. By the time a story gets to you, who knows how much it’s changed? [...]
Left by Chris Knudsen on life, business, and entrepreneurship » “Overhearing” more on Web 2.0 lameness on 05/07/2007