Microsoft? Is that still a thing?

Microsoft? Is that still a thing?

Summary: Microsoft's new Surface tablet-cum-laptop is clearly intended to challenge Apple's market domination. But is it too little, too late?

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TOPICS: Apple, Microsoft
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Microsoft's new Surface tablet-cum-laptop is clearly intended to challenge Apple's market domination. But is it too little, too late?

Twenty years ago, Microsoft was synonymous with computing. The company still has a massive presence in businesses across the world. But in the past five years, Apple's share price has risen 380 per cent, while Microsoft's has been dead flat.

Yet, the company does have clear strengths. So what's the problem?

In this week's Patch Monday (on Tuesday) podcast, you'll hear our initial impressions of the Surface, recorded immediately after Microsoft's announcement, and then a deeper discussion of Microsoft's position in the marketplace. The picture isn't pretty.

"I think that Microsoft's position in the business community is a lot more tenuous than what people think," said technology author and broadcaster Paul Wallbank.

"I [go] into meetings with senior managers and directors of businesses and that, and they've all got iPads. This line that we've got to buy Microsoft, no one will get sacked for buying Microsoft products, that's going by the by," he said.

Business strategy and implementation consultant Kate Carruthers thinks Microsoft is trying to do too many things at once.

"Just look at Microsoft and how much they've got to digest at the moment. They've just taken Skype, they've just picked up Yammer, they're launching a tablet that's not really a tablet because they're still in PC mindset — that's an awful lot of stuff for a big organisation to do globally," she said.

"Everything that they've got that's social is kind of broken. SharePoint's broken. The number of corporates that I'm talking to that are talking about swapping out SharePoint for other solutions, including Yammer, is remarkable."

And then there's the challenge to Microsoft's traditional bread-and-butter income streams: licences for Windows and Office that cost hundreds of dollars. As application architect Benno Rice pointed out, Apple has set the upgrade price for the new Mountain Lion version of OS X at well under $50. How will Microsoft make up for the inevitable price reductions?

The consensus? Surface is indeed too little, too late — and Microsoft chief executive director Steve Ballmer must go.

To leave an audio comment on the program, Skype to stilgherrian, or phone Sydney 02 8011 3733.

Running time: 32 minutes, 16 seconds

Topics: Apple, Microsoft

About

Stilgherrian is a freelance journalist, commentator and podcaster interested in big-picture internet issues, especially security, cybercrime and hoovering up bulldust.

He studied computing science and linguistics before a wide-ranging media career and a stint at running an IT business. He can write iptables firewall rules, set a rabbit trap, clear a jam in an IBM model 026 card punch and mix a mean whiskey sour.

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17 comments
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  • "Microsoft? Is that still a thing?"
    No
    gikku-2ce6c
  • Judging a product before it's released? Hmm, impressive ZDnet.
    Sure, you raise some strong arguments but don't be so quick to judge. Apple was told iTunes wouldn't work, the iPhone wouldn't work, companies were told the mouse wouldn't work, a fps wouldn't work. And more recently DayZ wouldn't work. Yet look at all them. Derp.
    InterKnight
    • >iTunes wouldn't work

      got that right. User experience is a fail. Un-intuitive. Full stop.
      nowend
  • I own a largish company and I must go to different meetings. All the CEO's I know have IPads but we all think they are nothing but super toys. Try using Outlook, or multitask or work without arrows on the keyboard and you will know what I mean. I watch videos and read books and play a few basic games and that's it. I won't be standing in a queue but I will be one of the first to buy a windows tablet.
    Anzen
  • I absolutely agree with Anzen. Every exec I know using an iPad or the Android equivalent loves the mail/browse/news aspects but laugh at the "business" side. Microsoft has a real opportunity and certainly the depth to make a huge impact in the enterprise with the Surface. Paul Wallbanks comments are seriously flawed given the numbers of Win7/Office 10 installations and Kate Carruthers seems to be in la-la land given Microsofts' $80 billion revenue & 100,000 employees. Too many things at once? Seriously, where do you find these people?
    smiley1960
  • Sorry, but ZDNet - this post / podcast takes the award for DUMBEST COMMENTS EVER. I don't even know where to start, but seriously - WTF? Could you sound any more ignorant of the reality of this situation? Could you sound any more pro-Apple if you even tried? Seriously, I could write 1000+ words on just why this entire post is nothing more than anti-Microsoft, pro-Apple linkbait.
    mkopelke
    • Um, in our conversation via Twitter just now, you said you hadn't listened to the podcast yet... just to be clear about the basis on which your comments are being made. :)

      While I've been enjoying our chat, in general it does annoy me when people 1. comment without having listened or 2. say that what's said dumb or wrong or misinformed or whatever without saying, specifically, what the problem is -- because I can't learn anything that way.
      stilgherrian
      • Have now listened to the podcast, and I think this post actually summarises the podcast effectively well. Allow me to offer some more concrete thoughts:

        "Twenty years ago, Microsoft was synonymous with computing. The company still has a massive presence in businesses across the world. But in the past five years, Apple's share price has risen 380 per cent, while Microsoft's has been dead flat."

        True. But at the same time it has to be said that share price is not the only way to judge the financial success or otherwise of a company. For example, Windows 7 has sold 600m+ copies - how does that compare to the darling Mac OS X?

        Besides, let's be honest - Microsoft is basically blue-chip stock these days. Since when has that been a bad thing?

        "Yet, the company does have clear strengths. So what's the problem?"

        My thoughts? A hostile tech blogosphere which is happy to give Apple a free pass on virtually everything, and heavily criticse anything Microsoft ever does. A big problem here is that people are prepared to pass judgement on Microsoft products without ever using them. I find that bizzarely odd.

        "In this week's Patch Monday (on Tuesday) podcast, you'll hear our initial impressions of the Surface, recorded immediately after Microsoft's announcement, and then a deeper discussion of Microsoft's position in the marketplace. The picture isn't pretty."

        Here's my biggest issue with the podcast - you even admit that the keynote was still going when you started recording, and yet the panellists felt compelled to pass judgement on a product we barely know about, claim that it is not going to challenge the iPad (particularly in the business sector). I know we live in a world of immediate news coverage, but surely SOME time was needed to reflect on the announcements before jumping in and passing judgement?

        "I think that Microsoft's position in the business community is a lot more tenuous than what people think," said technology author and broadcaster Paul Wallbank. "I [go] into meetings with senior managers and directors of businesses and that, and they've all got iPads. This line that we've got to buy Microsoft, no one will get sacked for buying Microsoft products, that's going by the by," he said.

        Like I said on Twitter, why do we think this is? Is it because the iPad is inherently better than a Windows laptop, or just because it's a thinner, lighter, easier to use product than a Windows 7 laptop? In either case, surely Windows 8 + Microsoft Surface is the perfect return salvo from Redmond? It has the ease of use of iOS, along with a thin & light form factor?

        You all even comment on how entrenched some MSFT technologies are in the corporate world. Surely that is another indicator as to why MS Surface could succeed here?

        Business strategy and implementation consultant Kate Carruthers thinks Microsoft is trying to do too many things at once. "Just look at Microsoft and how much they've got to digest at the moment. They've just taken Skype, they've just picked up Yammer, they're launching a tablet that's not really a tablet because they're still in PC mindset — that's an awful lot of stuff for a big organisation to do globally," she said.

        OK - sorry, but there's a massive factual error here. MSFT might be buying Yammer, but it's not a confirmed purchase. Still just a rumour. I find this a lot in MSFT coverage - facts are never properly reported. The Verge are terrible at this, as are Engadget. ZDNet are not really any different.

        Besides which, here's a question - does anyone ever comment that Samsung / LG / Panasonic / Sony do too much? Not normally. These are also global companies, with hundreds of thousands of employees - and yet for some reason MSFT always gets singled out as apparently spreading themselves too thin.

        I mean, how is their Skype purchase spreading them too thin? They just bought the company - still the same people doing the same thing in the same way. Not as if Microsoft now has to take away engineering resources to work on the app.

        They are a big company. I am sure they can do a few things at once.

        "Everything that they've got that's social is kind of broken. SharePoint's broken. The number of corporates that I'm talking to that are talking about swapping out SharePoint for other solutions, including Yammer, is remarkable."

        Ummm, SharePoint is a web-based content system, Yammer is a social network. Two very different things. Besides which, this is a hugely vague general statement to make - and certainly not one that is contradicted in the podcast.

        "And then there's the challenge to Microsoft's traditional bread-and-butter income streams: licences for Windows and Office that cost hundreds of dollars. As application architect Benno Rice pointed out, Apple has set the upgrade price for the new Mountain Lion version of OS X at well under $50. How will Microsoft make up for the inevitable price reductions?"

        A fair enough point, but let's not forget that even if you include iOS sales in with OS X sales, they still pale in comparison to Windows sales. I don't see Windows 8 being a negative on this point, in fact I see it reversing the trend in some ways. Windows 8 is modern in a way that Windows 7 & Vista weren't, and I think this is going to work in Microsoft's favour.

        "The consensus? Surface is indeed too little, too late — and Microsoft chief executive director Steve Ballmer must go."

        Probably is too late, but then given this is a market that is still growing, and has Android at a sliver compared to the iPad, I think anyone could easily come in and dominate. Windows 8, and Surface as an extension, are an excellent response to this threat from Apple and Google.

        As for Ballmer needing to go, this is the man who brought us Windows 7, the 2nd generation XBox 360, the Kinect, Bing, Windows Phone, oversaw the Skype purchase, and brought us the upcoming Windows 8. OK, so some of these products have not sold hugely well (yet), and I do think have received some fairly hostile coverage from the tech blogosphere, but honestly - is it fair to say that Ballmer is the problem? Or is he just cleaning up the legacy of Bill Gates?

        I know it's easy to say that Ballmer has had enough time, and should go now. But he's had 4 years - if that rule was applied to Steve Jobs when he came back to Apple in 1996, he should have been ousted in 2000. Which means the iPod, iPhone, and iPad might never have come to market.

        Something to consider, at any rate...
        mkopelke
  • Going to agree with the other posts here, was highly unimpressed with the 3 guests. Comments like (paraphrased) 'Nothing's changed in Microsoft since Steve Balmer took control' are baffling. I'm not saying Microsoft is the best out there, but wow. SB started in 2000 as CEO, and there's no way they do business the same as back in those days.

    Other observations like lots of CIO's looking at SharePoint alternatives means Microsoft's in trouble in that area - CIO's should always be looking at alternatives. Looking doesn't mean they find something better and spend their money on it.

    Next, talking about the strengths of Microsoft. Nothing was even mentioned about their server offerings, active directory, exchange, systems center suite etc - some of Microsoft's biggest and best stuff.

    It just sounded like Stilgherrian was surrounded by 3 people who disliked Microsoft and didn't provide fair and balanced opinions/analysis of the situation.

    There were so many other 'bad' comments and thoughts I can't remember half of them now, it's one painful blur.
    GGP-e5363
  • Thank you for the detailed comments. Overall, I think we're all looking at the same facts, broadly, but coming to different conclusions. And that's fine. It's a dialogue.

    I think it's worth remembering how I framed the discussion in the podcast introduction. A long-term two-decade look at Microsoft's position in the universe.

    Twenty years ago, Microsoft was all-dominate. Now, it's one provider of many in each of several markets -- operating systems, cloud services, productivity software etc. No need to list them all.

    And by the all-important measure of share price, Microsoft had flatlined while the rest of the industry has continued to soar. Despite the "but there are other measures" thing, well, no. Microsoft is business. What the business is worth, what it returns on the shareholders' investment, is what defines it as a business.

    That's why I find the "cleaning up the legacy of Bill Gates" comment odd. Bill Gates' legacy was a soaring share price.

    Sure, there are many subtleties to the story -- technical, bureaucratic, and more. But you can't tell every detail of every story in every podcast or news story.

    Monday's launch (US time) was billed by Microsoft as not-to-be-missed, so it seemed a useful opportunity to comment on what was announced, plus think about this bigger-picture stuff.

    I make no apologies for focusing on a few specific points that I thought might be interesting and illustrative: I'm the producer, that's my job. I make no apologies for choosing the panel I did: all three are the exact opposite of platform zealots, people I knew would bring a broad perspective. I think you can hear my surprise as the consensus emerged. I make no apologies for not mentioning every Microsoft strength, product or service: in limited time you focus on the things you think are important to explain the analysis.

    Or you focus on the things that occur to you at the time. The podcast was recorded live to "tape" with minimal editing. It's not scripted nor rehearsed. As a "media object", Patch Monday isn't investigative or documentary journalism like Four Corners or Background Briefing. It's a chat show.

    The fact that the recording started before the event finished is neither here nor there. I've gone back to check. The recording started at 0951 AEST, and the liveblogs report nothing of any real substance having happened that late. The event was scheduled to start at 0800 AEST so, hey, I'm going to blame Microsoft for running late and not getting to to the point.

    Steve Ballmer has been CEO for 12 years, not 4. The buck stops with him.

    I've gone back to see if that consensus view of Ballmer was off-key. I will admit to mocking him, but I do personally find his on-stage persona to be just plain baffling. Why would you even?

    (A note to the hard of thinking. The fact that I find the character of Steve Ballmer to be bizarre does not mean I support the characters of other companies' CEOs.)

    Kate Carruthers later found and tweeted a link to a significant US venture capitalist calling for his sacking last year.

    I see that Ballmer's Wikipedia entry includes: In a May 2012 column in Forbes magazine, Adam Hartung described Ballmer as "the worst CEO of a large publicly traded American company", saying he had "steered Microsoft out of some of the fastest growing and most lucrative tech markets (mobile music, handsets and tablets)".

    Ouch.

    This is already much more than I'd planned to write, and my editor has indicated that there's some other things that I'm meant to be writing.

    So I'll wrap by repeating that this was all long-term stuff. No-one imagines that Microsoft will vanish tomorrow, this year, next year. (On the other hand, consider what just happened to Nokia!) With Surface, Microsoft needed to do something that didn't merely catch up with other platforms but leaped two or three years ahead, and I don't think they've done that. Maybe there's still an ace up Ballmer's sleeve. Maybe. I fear not.
    stilgherrian
    • No question but that Steve Ballmer's time is up. I'm sure there's something he must have been good at over that past 12 years to keep his job that long, but I can't think of any spark of vision or imagination that has transformed the company or prepared it for the future. Mostly he's just been minding the shop, making sure the regular customers keep coming back, without bothering to create new ones.

      In 10 years, Microsoft's name will have a mildewed, fusty aroma - the scent of faded grandeur, of glories past. "Oh, I remember them..."
      Gwyntaglaw
  • The comparison of Microsoft with HP or IBM is relevant IMHO.
    Their products will be isolated in large corporates with large legacy PC networks deployed to support legacy apps written over the past yrs.

    Today's announcement of WP8 with an NT core shifting from CE illustrates the knot Microsoft is tied into, the mistakes of the very recent past with WP7 and the complete lack of forward planning and vision. Anyone who got burnt today with the demise of WP7, not even a year after the Lumia launch, will surely think long and hard before drinking from that kool-aid cup again.

    Microsoft is yesterday's thing, it's glory was the launch of Windows 95, and that buzz has long since faded. They've been trading on past deeds for a dozen years and it caught them out, the next dozen years will be hard for Microsoft and anyone tied to them.
    gikku-2ce6c
  • I couldn't have said what mkopelke said any better.

    And my god, what a shallow and pathetic podcast. Commentary from people who didn't even bother to watch the full presentation or even bother to take the time to really listen, read and understand what Microsoft is doing - just read some headlines. How much time have these commentators spent using Windows 8 - none, how much time have they spent using Windows Phone 7 - none. They all admit they formed their opinions based on what they've read online.

    In 25 years of my professional career starting with selling Commodore 64's, Atari, ZX-80 & Apple part-time in Australia's first ever computer department (Myer at Chadston in Melbourne) while finishing school (I was programming in basic at school), I don't think I've ever seen a more embarassing display of hyperbole, hypocrisy and clear bias against a tech company like Microsoft over this past week.

    If I had seen similar headlines and commentary when very similar situations occured with Apple and Google over the past few years I wouldn't care but it is now totally out of hand.

    I simply cannot explain the constant negative and largely uniformed and out of touch (with the enterprise world) attitude of so many so called 'tech experts' and commentators in relation to Microsoft.

    There is simply no objectivity and perspective left around consumer or even enterprise tech any more and in Australia it seems to be at least 100% worse.

    I've commented online at ZDNet USA, TechCrunch and many other sites about the ridiculous comparisons of Microsoft to Google or Apple and other ridiculous claims, revisionist history and other claims. Some 75% of Microsoft's revenue comes from small business, mid market, enterprise amnd government - not consumer. And most of these revenues come from business related software from Windows Server to Exchange, SQL Server to many other software suites. Microsoft has tens of billions in the bank, drives record profits and revenues and PAYS DIVIDENDS. It also has a 12 year + heritage of hardware and is #1 worldwide with mice and keyboard peripherals.

    It also makes me laugh that Windows still has 92%+ market share on the desktop, Hotmail is still #1 email service, Windows Live Messenger is still #1 messenger client, Exchange is #1 enterprise email software, Office is about 94% market share, SharePoint generates billions and I could go on and on and on.

    Like the other commentators above all of the feedback I get from many, many businesses are they cannot wait for Windows 8 and they are all asking for Windows Phone. All of the iPad comments above are 100% spot on in business and most of the executives who have them have quickly gone back to laptops.

    This attitude completely baffles me and it really is quite frankly just unprofessional....
    MartinW1
    • mean to say '...they cannot wait for Windows 8 tablets vs iPad's....'.
      MartinW1
  • Towards the end of the podcast I did say one of Microsoft's strengths are the thousands of techs, developers and partners who have a lot invested in supporting Microsoft's products.

    Judging by the hatred of the comments, it looks like there's a lot more scared MCSEs out there than I thought.
    paulwallbank
    • Wow

      That's a lot of bias still showing paullwallbank. MSCE's have nothing to be scared of, nothing is threatening Micrsosoft's enterprise space. Unless you were trying to demonstrate your lack of understanding...

      Also great work on completely ignoring that you might have been even slightly wrong, and calling everyone else wrong and scared.
      GGP-e5363
  • Yawn

    A hollow and boring Apple fanboy diatribe.
    Tim Acheson