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04.25.09

Why the Future Looks Not Bright for Microsoft

Posted in Finance, GNU/Linux, Microsoft, Vista 7, Windows at 3:24 am by Dr. Roy Schestowitz

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Summary: A look back at a tough week (Vista 7, Web division)

THURSDAY was a very important day. Glyn Moody called it “A Day to Remember” and not just because of the release of Ubuntu 9.04. As we explained before [1, 2, 3], Microsoft reported a huge drop in earnings which shows, as Moody puts it, that “the Microsoft money machine is faltering.” This is not particularly shocking.

And there’s another reason why yesterday was significant: Microsoft announced what are probably its worst quarter results ever:

Microsoft Corp. today announced revenue of $13.65 billion for the third quarter ended March 31, 2009, a 6% decline from the same period of the prior year. Operating income, net income and diluted earnings per share for the quarter were $4.44 billion, $2.98 billion and $0.33 per share, which represented an increase of 3% and declines of 32% and 30%, respectively, when compared with the prior year period.

Now, the global financial crisis certainly contributed to those figures, but I think there’s a bigger underlying trend here, which is that the Microsoft money machine is faltering.

The “money machine” of the leader in GNU/Linux is still getting stronger and Microsoft is compromising profit to suffocate any such competition. Microsoft is said to be offering kickbacks to OEMs that stock/deliver sub-notebooks. It’s Microsoft’s biggest pain at the moment. Even the Microsoft/Redmond press points at GNU/Linux sub-notebooks as Microsoft’s trouble. It wrote about it in a couple of its online magazines.

Vista 7 will hardly be a remedy or a relief for Microsoft/Windows in sub-notebooks. SJVN has just put it to the test and wrote a review where he explains the limitations even with the most expensive version (sub-notebooks will come saddled with a crippled version).

Performance wasn’t the only problem I came across. For example, I was unable to perform two network-related tasks at once. For example, if I copied a file from a network server or watched a YouTube video, life was fine. But if I tried to do both things at once, I ended up with a frozen system.

[...]

I experienced several difficulties running popular applications on the Dell Mini 9. Windows 7′s built-in applications, such as Media Center, felt slow to respond. Other apps behaved sluggishly as well. For example, Microsoft Word 2003 took 27 seconds to launch on the Mini 9; it took only 11 seconds on the HP EliteBook 2530p.

Some problems, such as abrupt slowdowns when trying to run Microsoft Office 2003, Office 2007 and Quicken 2008, were clearly caused by memory problems. There simply wasn’t enough RAM to run them effectively. When I tried to run two or more major applications at the same time, the performance dropped from merely miserable to “Is this thing still on?”

[...]

If you must have Windows on a netbook, XP Home SP3 is still the better choice over Windows 7 — at least, for now. And, even though Microsoft is doing its best to kill off XP, it looks like the PC makers aren’t going to let Microsoft put XP out to pasture after all.

This pretty much confirms issues that we knew about [1, 2]. Vista’s problems are merely inherited by its successor, so application/driver compatibility too is a major problem.

There is other bad news for Microsoft’s emerging division: Microsoft’s Online Advertising Revenue Drops 16%, Time to Give Up?

Perhaps even more significant is the 16% decline in online advertising revenue (just $521 million) with its overall online services posting a loss of $575 million.

It was only recently that Digg dumped Microsoft. For Microsoft to survive the future, it is aware that it must grow on the Web, not just the desktop. Steve Ballmer has just spoken about this in Köln. But it’s still going in reverse; people prefer WIndows XP (from 2001) and they continue to flock to search engines like Google at the expense of Microsoft’s online presence. Remember Encarta?

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10 Comments

  1. twitter said,

    April 25, 2009 at 9:50 am

    Gravatar

    I can comment on how insanely desperate M$ is to shunt search traffic away from google to their own, inferior search engine and how sad the M$ experience has become. I’ve had the misfortune to use M$ Windows at work for a while now. IE’s quick search has no easy or obvious configuration, it’s just “Live Search” or use their cumbersome bookmarks. IE’s address input itself redirects you to their search engine if you make a “typo”. For example, an address like “machine_name.institution.edu” instead of “http://machine_name.institution.edu” takes you to their search. Each machine behaves differently because each has different versions of free crap on them. The new version is often a downgrade in usability and the user is left in a perpetual state of harassed confusion. It is easy to forget how bad things are in the M$ world when you live in the free world. M$ has really earned their bad reputation.

    pcolon Reply:

    If you look step back and look at current trends it seems like a microcosm of general corporate behaviour.

    In the past a company had a long term goal for success. Today they live from quarter to quarter basing their outcome on that.

    G. Michaels Reply:

    Will (aka ‘twitter’),

    By no means am I an IE expert, but since I have 7 and 8 installed here, I’ll try to help you. I assume you’re not using IE6 (good for you), since it didn’t have a search bar at all. So on IE8, you can click Tools->Internet Options->Change search defaults. There you can select Google, Yahoo or any other search engine. There’s even a link at the bottom that takes you to a page with a bunch of other “search providers”, like Amazon, eBay, Wikipedia, etc. Once you select your search provider, if you type something into the address bar that isn’t a URL, it will perform a search on that provider, not on Live search. Also, it will be the default in the search bar, although it does have a nifty dropdown where you can override it temporarily. This is a bit nicer than Firefox in a way, although Firefox does give you a menu item in the search provider dropdown so it’s easier to get to the configuration dialog.

    Also, that new “accelerator” thing IE has (which is also in a way nicer than Firefox) will respect your choice of search provider.

    I also noticed that when you upgrade from IE7 to IE8 it will preserve your search preferences, so if you already have them set up you don’t really have to do anything. This is not the case with Firefox – from 2.x to 3.x it will override whatever you have selected to Google, although in truth it’s not difficult to change it back (in my case, I had been researching something on Wikipedia so I had the WP search selected the day I upgraded).

    The default search engine in IE6 used to be MSN, however if I remember correctly (and take this with a grain of salt) after one of the service packs you could select something else and searches from the address bar would respect that as well. Since we’re talking maybe 6 years ago, I’m not sure how accurate your characterization of this behavior as “desperate” is, considering that since Windows is the most widespread OS in the world, and IE is (still) the most used browser in the world, if there was something Microsoft could do to prevent Google from having > 80% of the search market, they would have done it. Yet Google still has (as far as I can tell) > 80% of the search market, while MSN/Live have less than 4%.

    I suppose if you’re anything like the average Internet user, you probably perform dozens of searches per day, so spending 45 seconds configuring something doesn’t sound like a big deal, unless of course you just want to complain about it.

    I won’t pretend I use anything other than Firefox and Google really (AdBlock lets me actually enjoy the internet again), so my IE expertise is really limited. But I thought maybe you could use a hand. You’re welcome!

    twitter Reply:

    Hi, ass. Do you really think that you bother me by attempts to “out” me? You obviously do, which is why you repeatedly point to who you think I am. Talk about desperate and without merit. Windows is a pig, M$ is sinking and all you idiots can do is harass.

    In any case, I’m not so interested in browsing at work that I’d bother to change anything, which is more typical than you think. Experience tells me that M$ will beg me to change things back and sooner or later an “upgrade” would do it anyway. The five or six clicks it takes per machine would quickly be dwarfed by the nag screen clicks, such as I get betting me to install “quick search” in outlook or more “upgrades” each time I turn Windows off. Like hell I’m going to let Bill’s bag of poison break every app the company wants me to use. No, please don’t tell me how to waste my time fighting those settings too. I know it’s a lie because I have to use the shit every day. Windows is simply annoying.

    G. Michaels Reply:

    So other than the implication that you’re a troll (because only trolls and criminals need “outing”) and the usual insults, your emotional predisposition to some software is preventing you from being happy, not the fact that it doesn’t have the defaults you want, since those can easily be changed in seconds.

    Don’t try to come up with technical or practical reasons to hate Microsoft more, I don’t think you need them. And it only makes you look desperate at best.

    BTW, congratulations on the new job. I take it then that this alleged “blacklist” you claimed you were in didn’t really exist at all? Another figment of your imagination? :)

    And again, you’re welcome.

    Roy Schestowitz Reply:

    It’s bad enough that you come here just to troll. Please stop harassing readers.

    G. Michaels Reply:

    Roy, I’m amazed that you’re actually replying to me? The last time I bothered to actually address what you were saying (click on my name for that) your response was to tell Shane you hadn’t even read my analysis, and promptly changed the subject. I guess all your smear jobs get 100+ comments, so it wasn’t something that needed your attention?

    Anyone who is familiar with your modus operandi has pretty much figured out that any person that questions what you write is a “troll” and a “heckler” and an “astroturfer”, “nitpicking” to “daemonise” and all that, so frankly, I’m not really losing any sleep over your labels here. And hey, at least I’m not beating your nymshifter’s dead Slashdot horse anymore :)

    Tell you what, the next time I post an actual comment about something you wrote and you actually give me an answer, I’ll stop making fun of your emotionally unstable collaborators and their soul-sucking approach to “advocacy”. Game?

    Peace out now, I have to go to bed. Microsoft stopped paying overtime to evil minions like moi after they discovered that those pesky netbooks were behind their completely unexpected and completely unrelated to the recession drop in revenue, even though I can’t for the life of me understand how that could be the case since a full half of them seem to ship with XP to being with :)

    G. Michaels Reply:

    Roy, I’m amazed that you’re actually replying to me? The last time I bothered to actually address what you were saying (click on my name for that) your response was to tell Shane you hadn’t even read my analysis, and promptly changed the subject. I guess all your smear jobs get 100+ comments, so it wasn’t something that needed your attention?

    Anyone who is familiar with your modus operandi has pretty much figured out that any person that questions what you write is a “troll” and a “heckler” and “astroturfer”, “nitpicking” to “daemonise” and all that, so frankly, I’m not really losing any sleep over your labels here. And hey, at least I’m not beating your nymshifter’s dead Slashdot horse anymore :)

    Tell you what, the next time I post an actual comment about something you wrote and you actually give me an answer, I’ll stop making fun of your emotionally unstable collaborators and their soul-sucking approach to “advocacy”. Game?

    Peace out now, I have to go to bed. Microsoft stopped paying overtime to evil minions like moi after they discovered that those pesky netbooks were behind their completely unexpected and completely unrelated to the recession drop in revenue, even though I can’t for the life of me understand how that could be the case since a full half of them seem to ship with XP to being with :)

  2. Roy Schestowitz said,

    April 25, 2009 at 10:34 am

    Gravatar

    They have just officially ended their buybacks programme. They won’t artificially inflate their stock anymore.

    David Gerard Reply:

    It was hilarious when their most recent buyback resulted in a *drop* in price.

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