Where Microsoft is getting it wrong (again) – UPDATED
Posted on July 23, 2013
Scroll down for update
First published 23/07/2013
“While our fourth quarter results were impacted by the decline in the PC market, we continue to see strong demand for our enterprise and cloud offerings, resulting in a record unearned revenue balance this quarter. We also saw increasing consumer demand for services like Office 365, Outlook.com, Skype, and Xbox LIVE,” said Amy Hood, chief financial officer at Microsoft.
Microsoft’s latest set of quarterly results show that its ARM-based tablet offering, the Surface RT, has failed in the market, leading to a massive write-down.
While results for the three months ending June 30 this year were generally positive for the enterprise side of Microsoft, the company booked a US$900 million (A$981.5 million) “inventory adjustment” for Surface RT.
The Windows division however saw its operating income more than halve in the last quarter, from US$2,422 million for the same time last year to US$1,099 million.
Too late she cried?
When Microsoft is forcing small business customers into the cloud (removal of SBS line of servers) they are giving them a choice to go elsewhere (Google apps instead of Exchange server for example) and with Office 365, end users are buying Androids/iPads & not PC’s to use emails on the go – hence the “decline in the PC market” as stated by Microsoft’s quarterly statement . In the business market Windows 8 isn’t a success in any sense of the word and in the consumer market it can’t hold a match to iOS or Android. Microsoft, yet again, has been caught out (remember the Web browser & Search engine wars), the `PC’ is not a personal computer any more – Androids, iPhones and iPads are today’s PC’s (Both Portable and Personal Computers) and the desktop is a business machine. Maybe Microsoft needs to alter is flavors of Windows – Win 8 (Mark 3) – tries to make inroads in the portable computing market and Win 7 (Mark 2) and SBS 201x (Yes I’m a SBS zealot!) to concentrate on the business market.
In my opinion Microsoft yet again is focusing on the wrong target and can’t see the domain from the forest (attempt of some IT humor), that is, focusing on “The Cloud” and not the consumer (be it business or personal). Gone are the days of Microsoft being the big kahuna in all things computing, there has been a paradigm shift/split in the operating system (OS) market that Microsoft has been too slow to react (yet again), that now they have lost the opportunity to have one OS system rolled out to suit everyone.
Years ago it was all Microsoft and IBM – will MS go the same way that “Big Blue” did? Will the “Surface” go the same way that the IBM Jr did? Only time will tell.
UPDATE – 27/08/2013
There is hope yet – did he jump before he was pushed?
Is consolidation on the cards? Are the past glory days just that and will MS become a smaller leaner business focusing on it’s core business of server software and business operating systems by dumping BING, Xbox and the surface? Lets hope the new CEO gets the mix right. I still fear that the (true) SBS range of products won’t get resurrected because of all of the CLOUD centric hype.