I have been in this business a very long time (ahem, over 35yrs) and the one thing I have observed over the years is that it seems like there is a cyclical nature to they way tech companies go up and down. There was a time when everyone thought Apple would rule the world with the Mac, it was so much better than DOS, and then MS came roaring back with windows, then people thought Apple was down for the count and they came roaring back with the the Ipod and Iphone. Sure some companies drift into obscurity and go out of business while new ones come on the scene (eg. Google) but the really good ones figure out a way to become relevant again (e.g. IBM, Watson etc.). It will be interesting to see if MS is able to do the same. I hope so, we still need some big companies like that that are willing to invest huge sums of money on research, it cannot all be done with start ups.
You picked one example (Apple) that supports your thesis (technology is cyclical).
It is, however, an exception to the rule.
Computer industry is littered with bodies of slain giants: Borland, Sybase, Lotus, Wordstar, Personal Software (VisiCalc) etc. The rest are companies that stabilized into a success (Oracle, eBay, Microsoft).
It's exceedingly rare to make a come back (IBM, Apple are 2 examples I can think of).
Would we really consider IBM as a come back? From a B2B and patent revenues perspective I concede this could be a possibility, but from a B2C perspective, surely that ship has already sailed?
Remember that IBM Posted an 8 Billion Dollar loss in 1992. It was on the verge of being broken up. To go from there to a ~$212B Company with Revenues of $104B and Income before tax of $21B. --> I think IBM still counts as one of the biggest corporate turn-arounds in history.
IBM was never any good at B2C. Getting back to B2B played to it's strengths.
That's an interesting perspective, but I have to question how much value Microsoft research alone has added versus the many start-ups that Microsoft has worked with in bringing new technology to market.
Microsoft didn't invent the Kinect, it was developed by PrimeSense and brought to market by Microsoft (if I've got that right).
As the cost of much of the large technology plays comes down, and it can be done easier, I think we'll continue to see large companies continue to rely on start-ups to provide the initial impetus of ingenuity. I suspect it has always been that way. Don't forget Microsoft was a start-up which took advantage of IBM's scale to build their market advantage.
The Kinect is a depth camera. Nothing new there. PrimeSense had one that was a lot cheaper than existing ones, and Microsoft bought it. It was primarily the cost of the device that had PS in the running.
The skeletal tracking was totally Microsoft's stuff; in fact, it was an utter surprise to PrimeSense when it was announced (that was fun -- they had no idea what we were really doing with the camera until very late in the game).
So: PrimeSense: Depth camera.
Microsoft: EVERYTHING else (from the firmware and the drivers on up, including a /bunch/ of manufacturability stuff that PS had little experience in).
They can survive for a long time still but in the end they will be just another dinosaur. Apple was lucky, Steve came back and had ideas that changed the world in many ways and at the exact right time in history. I was at Apple a year before he came back and left thinking it was doomed. MS is still a strong company with a lot of money, but they have nothing that will change the world and their own future. The future belongs to those who can invent it but revolutions are hard to come by. What do they have that will give them a massive advantage over everyone else? Nothing I can see.
The combination of PCs, tablets, phones, search, consumer services, living room entertainment, a compelling software and server stack, and the best R&D in the world gives them the potential to do things other companies can't do.
Microsoft is incredibly well suited to compete in the future. Although it is easy to dismiss Microsoft due to their stumbling in the consumer market in the past couple years, you have to realize this is going to be a decades long battle for Apple, Google, Amazon, and Microsoft.
Out of those 4 companies, I'd say Apple is the one who needs to diversify their profits and rapidly improve their ability to create services.
Xerox had the best R&D in the world as well. (PARC)
What MS needs is that ability to turn R&D into products.
Of the 4 companies... I would say only Apple has the DEMONSTRATED ability to turn R&D into products. I would say MS is the CLEAR leader of the 4 in terms of raw R&D. Google really does look more and more like a one trick pony. And, curiously enough, Amazon is the company I could see getting its tentacles into the most parts of the global economy over the long term. (Well... Amazon and Facebook)
But all of that ignores unexpected external influences... like the NSA scandal.
Microsoft does have incredible R&D. If they did some serious culling of whatever bureaucratic cancer has infected the company, they could probably make some compelling B2C products. I bet their B2B products will sustain them for a while, though.
Microsoft has a couple of massive advantages that most hacker's tend to dismiss.
1. A massive workforce of MS developers. Not the ones employed by MS themselves but the huge number of dot net developers out there. Apple has a decent amount of developers now but MS and Java dev numbers still dwarf Obj-C devs. MS also has developers at every level of the stack. Low level C++ to the web with ASP.NET MVC and Javascript.
2. Microsoft has proven that it can produce quality software at every single level of the consumer technology stack. OS, B2B, B2C (office, Visual Studio), Mobile OS/APPS (One note on iOS is a really well done app and windows 8 mobile has not sold well at all but it's still very well designed and developed) and xBox proves that they can establish themselves in new markets, and Massive scale services (Azure). None of the other major players have this.
Apple - I love apple products and software but never have I seen so many failures at services as Apple has put out. iCloud is a great example.
Google - Great services in the SaaS sense but so far has done a pretty poor job on the PaaS area. Google App Engine is pretty far behind Azure and AWS. Plus they completely ignore desktop computing as a whole.
Amazon - The clear leader in the PaaS field with AWS. Azure is a great service but AWS has had massive success. The kindle fire is still a pretty weak offering compared to the others on the mobile device side.
Microsoft - Windows 8 mobile is a good OS but it lacks the great apps/well designed hardware to drive adoption. Windows 8 on desktop has been a flop sure but windows 7 was a pretty good success and I'm willing to bet windows 8.1 will do alot better than windows 8. That's their pattern since Windows Me. Flop-Success-Flop-Success. Azure is a great platform as a service. Reliable, fast, and good pricing with a lot of great features that even AWS doesn't completely match, though AWS still has some features that Azure needs to catch up on.
So MS has proven ability on all levels and a huge group of experienced developers to help drive adoption. Where they have fallen down so far IMO is that mobile has always been a sideshow. Not the main focus. So they create subpar devices and fail to drive developers to great the great apps that are needed. The big question is if they can truly design a great piece of hardware. If they do then they are in position to control huge pieces of the industry again.
All that said the latest previews of the next X-Box don't leave me feeling good about their future.
Not if the rest of the company is unable to turn the results of that research into products that aren't just another vehicle for shoving Office down people's throats.
Do you know what I'd love to see? Somebody building gorgeous Linux laptops and desktops. As in Apple-gorgeous. With all the drivers working fine and dandy. With awesome specs, with half-yearly updates or even rolling updates. I thought Canonical might do it but they seem intent on partnering with hardware vendors. Why is this not doable? I think there is System 76 but they are not drool- and lust-worthy and I don't now why. It must be possible. Android shows that it can be done for a certain class of devices, why is it not possible in the laptop and desktop space? All you'd want is say 5% of the dwindling PC market to make an absolute bundle.
Oh yeah, the Microsoft reorg. Yay, go Ballmer, yay!
Linux 'is free'. Very difficult to get people to pay a premium for 'free'. You have to charge less for a PC with Linux on it, since there's no Windows license it should cost less, right?
Without getting people to pay a premium, it isn't possible to make things that are 'Apple-gorgeous'. Not to mention the Linux market is so small to begin with...
You just have to make the hardware very very desirable and do the integration right. Like what Sony does with consoles, Microsoft does with consoles, Apple does with nearly everything, and most Android phones do now.
Android proves nothing of the sort. People don't necessarily buy Android because they like it, but more because because it is pushed to them by the parties that directly make money off it: the carriers and their data plans and contracts. Google makes money from the ads people see on those phones (which, apparently, it shares with the carriers, so you can see how the incentives line up.) The hardware makers get the scraps (which are still plenty, as Samsung demonstrates).
Note that the parent is also wrong: Linux PCs typically cost more than their Windows equivalents because there's no crapware to subsidize the cost.
> Do you know what I'd love to see? Somebody building gorgeous Linux laptops and desktops. As in Apple-gorgeous. With all the drivers working fine and dandy. With awesome specs, with half-yearly updates or even rolling updates.
Which is a very nice piece of kit by all accounts.
The article is wrong by the way. It says, "has not articulated a unique and compelling vision for the future of computing since Apple’s iPhone rocked it to its core in 2007"
Yes, the iPhone was a big deal but Linux is and has always been a far bigger deal. Microsoft can out-spend and out-compete anyone on their own turf. They cannot do this with Linux as Android shows. This really does seem to signal that Microsoft may have to become a lot more like Apple in the hardware/software integration stakes. If you think of the very log view (30 years) there is no way any company can build and maintain a monopoly in any one sector indefinitely. What other company has ever been able to do that? The PC market is dwindling. And eventually there will be a third player and then a fourth player. Eventually Microsoft is going to have to port Office to Linux.
I think it would be even better for PC manufacturers to have a mechanism for all OS vendors to report BIOS bugs and similar where all of them are treated equally.
Bit of a song and dance getting a full featured OS (like Debian) onto it to make it developer ready. Unless you are suggesting always using the Pixel for remote development.
"The new Microsoft is no longer the enabler of technology delivered to consumers with help from Intel, Dell, HP, Lenovo, and other partners. The new Microsoft has realized that it’s going to need to do it all itself"
It would change a lot if it were true. I find it hard to believe that Microsoft plans to build the expertise necessary to abandon Intel, though. And though they're making inroads into building their own hardware, I don't think they're in any position to abandon their OEMs yet, either.
Abandon is too strong. Microsoft depends on PC OEMs for most hardware innovation (for Intel that includes Ultrabook). Microsoft could become more proactive and lead, it has the talent and the desire; it is already doing it with Phone and Surface.
Let's look at the surface rt (also if it has a really low market share in the tablet worldwide market), it has destroyed the others wrt-tablet.
Look at microsoftnok... ehm, nokia. They are pratically a branch of microsoft and infact they have discouraged other competitors to join the windows phone ecosystem.
It means that, if microsoft starts to make its own hw also for the pcs market, there will be a big problem for other manufacturers to stay in the same market.
Apple may live in a world where it is they only manufacturer for the hw in which runs his sw because they have create the first recognized brand in the world and they are like the "cool people of tecnology", but microsoft can try it? Looking at the actual marketshare of wp8 and surface RT or PRo, i think nope.
Their first iteration of Surface was weak. Win8 is really rough around he edges, and the hardware was awkward in some areas.
But they have strong points too, and the next version will probably be better. They are still experimenting, trying to figure out exactly they want to do.
Intel has known for a while that it has to take the lead in designing and marketing (the Ultrabook is an excellent example) if they are to stay relevant. I'd say Microsoft is in a similar position.
I wouldn't want Intel to think I am to be dependant. The Surface RT line makes a statement. A weak one but it is nonetheless a statement.
Microsoft has created a non-intel living room device, the X-Box.
Dropping support for the OEM's in the Phone and PC space would be an interesting move, which I think they could carry off quite quickly. I don't think they are headed in that direction myself.
This might mean a return to the 80-90's where the vendors were responsible for an uniform hardware + software experience and no crapware was being installed on the systems.
Too little, too late. Windows is going to linger for quite a long time still just because of the massive market penetration, but it's getting obsolete.
