Why Microsoft can't compete in the cloud

Why Microsoft can't compete in the cloud

Summary: Azure will be a player in the enterprise space, but it's never going to be the top dog.


In my recent debate with Ed Bott over Microsoft's future, the public bought Ed's arguments that Microsoft will have a bright, shining future with Satya Nadella as CEO. The judge though gave me the win because he agreed that "Nadella's challenges outweigh his support and time window won out. After all, there are a lot of fix-it jobs to do after Steve Ballmer."

Nadella's the right leader for Microsoft, but he's come to late to put the company back on the right path.

That is indeed the problem. Nadella is the right guy for the job but he doesn't have the time to fix all of Microsoft's problems. At the same time as he's dealing with Ballmer's leftover messes, companies such as Amazon, Apple, and Google have moved forward to grab the leadership roles in cloud and mobile. 

Bott said that I think Microsoft can't recover because "my perceptions of Microsoft were formed decades ago, and nothing’s going to dislodge [my] outdated prejudices." He couldn't be more wrong.

True, I have no love for Microsoft's hyper-aggressive business tactics during Gate's reign nor many of its programs, Outlook, Vista, and Windows 8.x. I also think Ballmer was a truly awful CEO who should have been fired years ago. But, I've also long thought that Windows Server, since Server 2003, is an outstanding server operating system, Excel is still the best spreadsheet around, and Azure is a real contender for any serious enterprise cloud deployments.

In short, I see Microsoft's flaws and features with a clear eye. And, when I look at my crystal ball, what I see is a company that needed to transform itself from its PC-centric past to a mobile and cloud-based future three years ago. That didn't happen.

Instead, under Ballmer, Microsoft's squandered its strategic advantages. Today, people still think of Microsoft as the Windows PC company. That was fine in the 00s, but we're in the 10s now. Worse still, while the overwhelming majority of people still use Windows on the desktop, it's not the new and hated Windows 8.x they're using. It's 2009's Windows 7.

Nadella's avowed goal to make "Microsoft … the productivity and platform company for the mobile-first and cloud-first world" assumes that Microsoft can become a mobile and cloud powerhouse.

It can't. It's too late.

By Strategy Analytics' numbers, Android was on 85 percent of smartphones sold in the last quarter. Windows Phone? It dropped to under 3 percent.

The Nokia purchase seems more and more to have been an utter waste of money. The fact that the recent layoffs hit Microsoft's former Nokia employees — 12,500 out of 18,000 — harder than any others says it all. Microsoft attempts to become a hardware power with its Surface devices has also failed. Surface appears to have lost at least $1.2 billion. And, at the same time, Microsoft's hardware initatives alienated its once faithful hardware partners

Special Feature

Windows 8 in Business

Windows 8 in Business

Microsoft has painted bold design strokes with Windows 8, but the business impact remains hotly debated. ZDNet and TechRepublic have the enterprise and SMB perspectives on Windows 8 covered from virtually every angle.

True, Microsoft is finally bringing its applications to other mobile platforms, but the idea that bringing Office to other platforms would let Microsoft "start printing money" appears — according to Jan Dawson, chief analyst at Jackdaw Research — to have gone nowhere

In the cloud space, Gartner thinks Azure is doing OK, but Amazon Web Services (AWS) is still the 800-pound gorilla of the cloud. Now, Azure is good, but good enough to overcome AWS and the boundless enthusiasm for the OpenStack cloud from VMware, Oracle, Red Hat, and a host of other companies?

No, it' s not. Azure will be a player in the enterprise space, but it's not going to be the top dog.

So, here's how I see it coming out. Microsoft will continue to be a giant company, but it will prove unable to dominate the mobile and cloud markets the way it has the desktop market. Without that domination, Microsoft will stagnate and start to fall behind the other technology giants.

If that sounds impossible, then I suggest you're the one living with perceptions of Microsoft that were set in the 90s and 00s. Even the biggest companies can lose their way. 

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Topics: Enterprise Software, Cloud, Microsoft, Mobility, Leadership

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  • Agree 100%

    The iPhone was the first to exploit the chinks in the M$ armor, it provided the opening for consumers to use OSs other the an M$ OS, and the consumers loved it. Then came the iPad, by then consumers were comfortable using a different OS on a tablet. When Google OSs came out the consumer ties to M$ OSs largely disappeared.

    M$ can't roll back the clock, no matter how hard they try.
    • Try this

      Go here: http://www.google.com/trends/

      Now put in "Chromebook" and "Windows 8" as terms. Funny how facts don't match fanboy spin.
      Buster Friendly
      • Don't get bent out of shape

        I'm not saying there are more chromebooks than Wintel systems, I'm saying the consumer perception that there are *only* wintel systems is gone. Consumers are willing to pick and choose the system that suits their needs. And in that regard there has been a major shift since 10 or 20 years ago when the common guy would only get a system with a M$ OS.
        • That's not more

          Google trends does not tell us installed base. It tells us current interest in various things. The interest in chromebooks is just barely above Zune. There's been no shift.
          Buster Friendly
          • Computers don't just consist of PCs anymore

            Smart phones, tablets and Chromebooks are all computers available to consumers. And people buy what suits their needs. My comments were not just about Chromebooks, in fact I started my comment with "The iPhone...", maybe you understand that the iPhone is not a Chromebook.

            The point was there are is a range of computers for the consumer to choose from that was not available before, largely due to the change in perception on the part of consumers.

            If you can't understand then maybe someone else can explain it to you.
          • MS is no go withing Mobile, Try Kingsoft/Quick Office & see

            Kingsoft Office and QuickOffice are great alternatives to MS products, and they dont cost a cent!.

            By being so far behind the curve, MS might be able to monitize some of their products. But its a tall order to overcomes for MS.

            The only place I see MS as a leader is if they provide a decent VS soultion for Android and Apple, and then leverage that towards their goal. Only then would they have suficcient mustard to do anything at all.
          • MS in terms of hardware in the Mobile arena

            Well, I said it when Nokia allowed an MS executive to lead them, they were down the drain and they have.

            MS market share for Mobile phones and Tablets (Surface) sais it all. They are not relevant in any shape or form.

            In terms of OS. I have replaced all by a couple of work laptops for compatibility (win7 64bit) purposes with anything other than Windows 8. And that trend is global, not just unique. No one wants Windows 8.
          • Nokia?

            They sold off an unprofitable business and let their CEO go. They're smaller, perhaps wiser, and back to profitable. They even retained the right to get back into the phone business without any legacy to initiate internal turf wars.

            My heart does go out to the former Nokia folks who lived through this series of notes:

            "Hi I'm from Microsoft where we don't do phones. Let me get started showing you what to do."

            "Hey, the problem around here is too much not-Microsoft."

            "Well, it's not going well, so we sold ourselves to Microsoft where I'll be your boss."

            "Hey, we have to adapt to the future by not thinking the way we used to think here at Microsoft and even though it wasn't you and you haven't had a chance to show that you could be part of this culture change by virtue of actually being from a different culture, 2/3ds of you will be shown the door. I'll still be here: we should have lunch and remember our good times."

            --- subject change ---

            People may start wanting Windows 8 when they see Windows 9. Nothing is written in stone.
          • Computers don't just consist of PCs anymore?

            Funny how some people move the margins around day to day to have the numbers fit their opinions....
          • You don't do that

            Right. ;)
          • The next step - notebooks for Linux

            First it was servers and supercomputers. Then smartphones. Then tablets. Now it's time to kick Windows out from notebook markets. There is not much chanches for Neanderthal like Microsoft. This is just evolution of IT.
          • That is called "a market shift".

            And Microsoft missed it.

            That is how monopolies tend to get destroyed (rather than just broken up).

            The market shifts... and the monopoly can't.
        • What your saying and what your implying....

          ..don't matter a hill of beans.

          Look, its all very nice and cute that there is more than one OS. So what. There has always been more than one OS. Many more.

          Every Linux fan will not only tell you there has been more than just the Windows OS, every Linux fan will also tell you that at least a large number, if not all Linux versions have been better over all than Windows any version.

          So to say "it provided the opening for consumers to use OSs other the an M$ OS, and the consumers loved it. Then came the iPad, by then consumers were comfortable using a different OS on a tablet. When Google OSs came out the consumer ties to M$ OSs largely disappeared.", is such complete nonsense its beyond comprehension a person who could dress themselves in the morning would even say such a stupid thing.

          Firstly, what ties has any consumer that had ties to Windows cut? Generally speaking in the very largest of ways NONE.

          Not any. How stupid can one be to imply that noticeable numbers of people using Windows in the past have cut their ties to Microsoft? Such rubbish.

          Why say such things when they are clearly untrue????

          Absolute nonsense. I travel through offices in locations all over the place and know many others who travel through even far more. Nobody is giving up their Windows computers they have been using for years. I know of nobody who used a Windows computer for school regularly or at home regularly and have given up their Windows computers. Im not saying nobody on earth has, good god, there are 7 billion of us, sure a few here and there have, of course some always have, and every year Microsoft picks up quite a number of brand new Windows users as well. Like it or not, and they still do, and every single solitary look at the issue with even a shred of credibility believes that will continue for some time at the very least.

          Sitting around wishing for Windows to crumble and Microsoft to fall is some illusionary idea that mindless Microsoft haters conjured up as a sport years ago, and year after year after year after year the ABM crowd just dosnt lose at that sport, THEY FAIL.

          Its ridiculous.

          So the iPhone was a new OS and people loved it. I owned an iPhone for three years and I loved it. Fantastic phone, I still recommend them as a very good choice. Better than an Android (in my opinion only) like the Android phone my own wife owns. But what does any of that mean in any real way???

          I can tell you EXACTLY what it means.

          1. Loving the iPhone dosnt mean hating Windows.
          2. Loving the iPhone dosnt mean likening it better or even as well as Windows.
          3. Loving the iPhone dosnt mean any other competent OS, Android included, wouldn't have been loved just about as much being on the first touch screen smartphone.

          You cave to get out of your mommys basement man and smell the same fresh air that the non-teckkies of the world breath. Learn a little about real life man.

          Windows haters are in the tiniest of minorities in the world, its just if your going to travel almost exclusively in the circles where Windows haters dwell, and/or ascribe to some kind of blind faith that Microsoft and Windows is simply godawful and needs to be banished, then of course your going to think and then speak as if people want some way "out of Windows". They don't. Quite frankly, they really don't care that Windows is Windows. It could be bloody Doors and Closets made by the Ubangi Corporation so long as it works and plays as well as Windows does on their desktops and laptops.

          They don't care and you shouldn't either. All you should care about is if it does what you want at a price you can live with then fine. If it doesn't then move on, if you have great. Perfect. I recommend that course of action to anyone who feels Windows for any reason just isn't the OS that meets their needs. Why hang on to a blood operating system if its not doing its job?? You shouldn't, fine, move on.

          But! Lo and behold!! Nobody of any great mention IS moving on. Sure, people have smartphones and tablets and yadda yadda yadda, but they are not giving up their Windows computers and almost NOBODY is doing their spread sheets, professional photo editing or novel writing on a tablet or smartphone. Sorry, but no.

          Nobody who works in an office on a daily basis on a Windows computer to do their work has changed that. AND AGAIN, I don't mean zero in the world, I simply mean the number is so little its laughable and Windows has new users come onboard this year and every year anyway. In real noticeable meaningful terms that's why it amounts to NOBODY.

          Why sit around and dream up some demise of Windows and then cheer about it when your imagined world firstly dosnt exist in reality and secondly even if it did exist why cheer anyway?

          Who cares?? I have tried Linux for a good period of time before and I respect it as a good OS even though I find it ridiculous for my purposes. I wouldn't cheer if Linux was gone. Why should I?? What do I care? I will tell you what I do care, I would like to see people who find Linux useful for them to be able to have plenty of great Linux choices to choose from, that what I care. Why would anyone feel any different about Windows? The only reason I can think of is because they are obtuse and have vested way too much of their own self interest in their operating system of choice and cant live with the fact that a vast multitude of people find Linux of any version not for them. Well too bad. Grow up and who cares.

          This whole article is ridiculous from the title on down.

          "Nadella's challenge: Saving Microsoft"

          OMG!!!! What a pile of crap, and even SVJN knows it. As usual, I should have known when I read the title that something bizarre might be afoot, that of which could only be accountable by being written by SJVN.

          The title is scandalously nonsensical!!

          Microsoft needs saving??? Ha! Should any company in the world need such saving.

          Im not even going to comment further on that because its just so stupid it dosnt need to be explained to normal, reasonable human type people why Microsoft isn't anyplace close to having a need for a savior. It simply isn't. Lets have a look again in 7-8 years and see if they have gone south far enough by then to be looking for a savior, but not today.

          Oh please.
          • Even "Windows haters"...

            ...are sometimes right. And if they were a tiny insignificant minority, neither you, nor many other people would spend so much time arguing with them (seriously, how long did it take you to write that post?).

            In the end, all that really matters is the extent to which an opinion is correct, not who made it or why. And one can be critical or even distrusting of MS without hating it; really.
            John L. Ries
          • @John L. Ries

            Your kidding me right?

            Sure, a Windows hater can be right all the time if all they say are reasonable believable things backed up by facts.

            What? I don't get your point man. seriously.

            And I know as an absolute FACT that people can be critical of Microsoft, Windows and anything in this world without being a hater.

            I not only applaud that; I beg people to come forward and do so!!

            I myself am currently one of the most outspoken people against Microsoft's current push to the cloud and clobber them harshly with every chance I get as a measure and step they are taking that brings far insufficient advantage with significant disadvantage for the consumer with the only true net advantage going to Microsoft's pocketbook. I frequently say that if ever there is a company in IT that boobs things up from time to time its Microsoft and I readily acknowledge built in superior security in Linux operating systems compared to Windows and even some security advantages in OSX, although I do not agree the security shortcomings of Windows is notable enough to avoid its use.

            And yes, I do write long posts. The beauty of posting boards is you can skip what you don't want to read, and I know many will indeed chose not to read mine.

            I can live with that. Easily.
          • @Cayble

            I agree with the OP. Everyone knows family members who years ago went out and bought Dells or HP desktop PCs just for the purpose of sending emails, browsing the web and looking at their grandkids pics. You and I knew that such a PC was overkill for what grandma and grandpa and the kids needed out of a PC. But they had no other choice back then like they do today in tablets and smart phones. You wanted to do these things, you NEEDED to buy a Win or Mac desktop base computer.

            Today the same demographic of users can purchase a tablet or even a smart phone and use it the same way they did their WinPC or Mac a few years ago. Web browsing, viewing photos, checking emails, Facebook and other social site, casual gaming, Netfix viewing, Amazon shopping, eBook reading, taking photos, looking up recipe, video chatting, in car navigation and so much more. All can be done on a easily portable easy to use tablet 'device'.

            Does that mean WinPCs and Macs will go away? No! What I suspect will happen as a result of users now having more choice; the traditional desktop base PC will take a backseat in many homes. We are seeing this happening now actually just ask the kids what they use the most in their homes. The PC Will be relegated to certain specific tasks (truck) while the tablet and other more post-PC like devices (cars) will be used for everything else.
          • I don't consider watching movies or playing games a "truck" activity

            What do your kids play their latest "Call of Duty" series game on, or watch the latest HD Blu-Ray movie on? If it's a tablet or cellphone I feel sorry for your kids. I guess I love myself too much to punish myself by watching an HD Blu-Ray movie on a 10" tablet. Sounds like an exercise in sadomasochism to me.
          • You don't travel much.

            The financial markets are Linux. Windows couldn't keep up.

            The supercomputer markets are Linux. Windows couldn't perform.

            The phone markets are Linux. Windows couldn't keep up.

            The DoD is using Linux more and more. Windows couldn't be secure, keep up, OR perform.

            The fact that you can't see is not a surprise.

            DEC couldn't see either when the market changed. Did you know that the first spreadsheet program was to be done on DEC systems (specifically a PDT-11 http://books.google.com/books?id=Qu0sHMSJaj0C&pg=PT96&lpg=PT96&dq=DEC+PDT11+spreadsheet&source=bl&ots=dtzuQ1CKAB&sig=eMaIilLATbP8-nrD_jPV-vt_mG4&hl=en&sa=X&ei=YHAEVL_aOouVgwSZooCoCw&ved=0CCYQ6AEwAQ#v=onepage&q=DEC%20PDT11%20spreadsheet&f=false) The failure of a salesman, eventually wiped out the company.
      • good

        Now type in Android and "Windows 8."

        A somewhat different result, as long as we all understand that Google hit counts don't really mean anything anyways.
        • good one

          Some others:

          * Zune and Chrome OS are more popular than Windows RT.

          * Oddly (or perhaps not), comparing Android, IOS, and Windows Phone gives current popularity as not very far off from current marketshare.