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4 Popular Misconceptions About Microsoft

2013 August 21
by Greg Satell

Many people are Apple fans.  Many others do not like Microsoft.  That’s completely understandable.  Apple has dominated the last decade by making products consumers fall in love with.

Microsoft, on the other hand, often seems like a lumbering giant.  They have, in the past, been heavy handed, built some lousy, bug ridden products and got themselves embroiled in an ugly antitrust suit.  On top of that, Steve Ballmer can really say some stupid things.

However, what is not understandable and what is, in fact, irresponsible, is that many business writers and tech pundits seem to be positively gleeful about trashing Microsoft (and, alternatively, praising Apple) without even a modest effort to ascertain the facts.  In doing so, they are propagating misconceptions rather than informing the public.

1. Windows 8 Was Supposed To Save The Desktop

It seems to be a fairly common view that Windows 8 is a big bust and that is often the first premise in an argument for Redmond’s impending doom.  Once the dominance in operating systems is gone, business software can’t be far behind.  Once that happens, all is truly lost and Microsoft goes into a death spiral.

There are just a few chinks in that theory.  First of all, Windows 8 is off to a good start, selling 40 million licenses in its first month and 100 million licenses in its first 6 months. Windows phones are quickly gaining share as well.  So what’s the problem?

“Ah,” the Redmond haters say, “but Windows is a desktop operating system and the launch of Windows 8 has done nothing to stop the bleeding.”

Huh?  Anybody with any sense at all could tell from early prototypes that Windows 8 was a “mobile first” operating system.  It should have been clear that Windows 8 was a move away from the desktop and traditional users would hate it, as I noted back over a year and a half ago .

The truth is that Microsoft dumped the desktop and the mouse in favor of a cross platform operating system designed for touch, voice and gesture.  People can differ in their opinions about that, but Windows is certainly no longer solely a desktop operating system.

2. Microsoft Is Losing The Enterprise

The second plank in the “Microsoft is doomed” narrative is that the company is losing enterprise customers.  Here again, the evidence is more anecdotal than factual.  The most common premise for this specious conclusion is that Google and Apple have been making inroads into corporate IT departments through their mobile devices, where Redmond’s offering has been weak.

That’s it.  No announcements of important client defections or failed launches of enterprise products (in fact, its latest acquisition of Yammer appears to be going splendidly).  Just some tech pundits who have noticed a lot of people walking around offices with smartphones and tablets that don’t run Microsoft Office.

The truth is that according to its most recent earnings report, Microsoft’s Business division grew 14% last quarter, pretty good for a mature business.  Further, its often overlooked Servers and Tools division has put up double digit growth for over a decade and is a formidable enterprise business in its own right.

A more honest assessment would be that, while the enterprise is an incredibly competitive area in which you need to service highly demanding and well informed CIO’s, Microsoft has ruled it for decades.  While no one has a birthright, so far there has been no real data to indicate any decline in this area.

3. Microsoft Makes Lousy Products

There is a bit more fodder for critics here, because if one company knows how to put out duds, it’s Microsoft (i.e. Zune, Windows Vista, etc.).  But, then again, who hasn’t?  Google had a number of products, such as Buzz, that never gained traction and even Apple has crashed and burned a few times (i.e. Ping, iAds, etc.).

Nevertheless, Redmond has also put out some excellent products.  Business Insider recently called Excel the best software ever made.  The Xbox has been a leader in consoles for over a decade and the new Xbox One is the closest thing anybody has come to a viable home entertainment hub.  The Kinect was the fastest selling device ever.

Moreover, even Windows, which is often compared unfavorably to Apple’s OS X, has to perform over a variety of hardware platforms, rather than just one. That makes it more difficult to maintain quality, but gives consumers the benefit of choice.  Many see the small difference in performance as a worthwhile tradeoff.

So while it is true that Microsoft has sometimes been  able to attain market leadership without product leadership, they’ve put out some great products too and its new ones, such as Windows 8 (the only true cross platform operating system) and Azure, (its operating system for the cloud), bode well for the future.

4. Ballmer Needs To Win Mobile

Probably the greatest indictment of Microsoft has been its poor performance in mobile. What’s more, it looks like it’ll never catch up.  According to Kantar, Android currently has a 51% share, iOS 41.9% and Windows a meager 4.6%.  However, that’s an increase of 25% over last year and if growth continues, it could be in double digit territory soon.  That’s enough for Redmond to get where it’s going.

What Microsoft is really after is the cloud, where it is putting the bulk of its massive R&D budget as well as the Web of Things, where it has already had some success (e.g. Ford Sync).  It is this area where the decade long success in the Servers and Tools division will begin to take a central role.

None of this is actually a secret, so it begs the question: “Why do so many pundits delight in trashing Microsoft?”  Part of it is probably history.  Any company in business as long as Microsoft is going to have its ups and downs and Redmond has had its share of bad moves and predatory behavior.  Yet, that doesn’t explain it all.

The ugly truth is that many of the people who write about the technology business aren’t experts about technology or business, but gadget freaks and fanboys (and girls).  They read the technology press, pick the facts they like and ignore the rest.  That’s not helpful. In fact, it borders on fraudulent.

While Redmond surely has its problems, those who write about the company should seek to inform, not merely opine.

– Greg

8 Responses
  1. Stefano permalink
    August 21, 2013

    Microsoft is almost 40 years old and employs short of 100,000 employees all around the world. It’s revenue is close to $80B, it’s one of the most recognised brand worldwide. Its products have deeply changed the way we live, communicate, play, work every day. This cannot be just a coincidence or the result of aggressive marketing or unlawful monopoly acts.

    People – as in the human beings – are not stupid. We can be fooled once or twice, but then we smell the hoax and we move away. That’s crowd intelligence and survival instinct, it’s in our DNA as part of our evolution. If Microsoft (as Apple, Nike, CocaCola) had consistently produced cr@p products, they wouldn’t be around for so long. Their success is determined by our – the consumers’ – appreciation of their products and services. Microsoft succeeds because we succeed too in benefiting of using their products in our life. And because Microsoft’s products are so extremely popular, there will always be detractors. This is what makes Microsoft stronger: feedback from the “haters” is invaluable (and free) insights on the quality of a product that helps a company to learn from their mistakes and tune it for better in the future.

    I think there is a bit of arrogance in judging 100 million people who use Windows 8 as their operating system for their computer at home or in the office, if they really hate Microsoft, go and use something else… uhm no, there is nothing else, really? So why everybody complains and than no-one does anything better? Probably the alleged alternatives are not that good after all. Crowd intelligence wins again.

    A clever consumer should question the product, not the maker, when buying something. Get the job to be done in mind when doing your shopping: I need a music player to listen to music when I jog, let me have a look at iPod and Zune… uhm Zune is not that good, fair enough, go for iPod. I need a game console, there’s the PlayStation and the Xbox, Xbox is kinda cool, go for it. I don’t care about the brand behind it (to some extent though, as a reliable brand is also synonym of better customer care and support). What I do care the most is to get my life better using products that make my job done. Whether there is a bitten apple or four coloured squares attached to it.

    Thanks

    Greg Reply:

    Very good points. Thanks Stefano!

    – Greg

  2. August 23, 2013

    Just one little point. You can hardly find an adequately powered non-Apple laptop or desktop that doesn’t already have Microsoft hogging the hard drive. It’s useless to pretend that consumers are making a “choice” when they are being given only one option . (A tiny percentage have the confidence to download Linux and install it themselves.) For the past twenty years, if you wanted a computer, you paid through the nose for a beautiful Apple or got a lower priced box that came strangled with Microsoft. This did not happen by accident. From the 1980’s Microsoft browbeat Dell, etc. with strong-arm contracts that forbid them to sell any hard drive without their OS on it. Microsoft’s lawyers have always been crackerjack, never its programmers.

    Greg Reply:

    Thanks for sharing, Patrick.

    – Greg

  3. August 25, 2013

    I’m one of those four percenters who has a Windows phone. I confess to finding Office on it quite accidentally, since I use my phone primarily to make and receive calls, and read email when out of the office. It has turned out to be pretty handy to have what equates to a hand-held laptop!

    Greg Reply:

    Thanks Carole. btw. Office is now available for iOS and Android as well.

    – Greg

  4. September 5, 2013

    Greg – I see you are still in confirmation bias and denial about Microsoft’s problems 🙂

    Its a good thing that corporations have a natural lifespan – as Steve Jobs said

    “Death is very likely the single best invention of Life. It is Life’s change agent. It clears out the old to make way for the new”

    Microsoft won’t of course die – it will continue in the niche it created (just as IBM did) meanwhile new things are happening which Microsoft probably won’t be able to be a part of.

    The same thing is\will happen with Google, Apple, Facebook etc – something will come along – the weak signals from this future are starting to emerge.

    Greg Reply:

    Martin,

    I don’t think I’m falling prey to confirmation bias (at least with this issue). As I mentioned in the article and elsewhere, Microsoft has plenty of problems and has made grave mistakes. What I am doing is looking at Microsoft from a business perspective and, by any objective standard, it’s an excellent business.

    You say that “Of course, Microsoft won’t die,” but why is it so common for people to claim that it will? This is a company with something like $80 billion in cash that throws off another $20 billion each year, a 35% profit margin and a 30% return on equity. Again, by any objective standard, that’s a fantastic business!

    I think the disconnect is due to the fact that Microsoft has not been a great consumer business. There are some exceptions, like the Xbox and Kinect, but generally speaking they’ve been pretty horrible. On the other hand, they’ve built an excellent business in cloud technology which is growing nicely, but it is often ignored (mostly because their consumer products have been weak).

    There have been some changes lately, so we’ll see what happens, but the only three companies really doing impressive innovation on a large scale these days are IBM, Google and Microsoft.

    – Greg

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