Microsoft and Innovation

MS is not really a consumer company. They are a very profitable “enterprise customer” company. Their consumer plays, like Bing, are giant money pits, losing millions of dollars. Meanwhile they quietly make hundreds of millions on enterprise software.

Zune (iPod knock-off), Danger (acquisition that was a part of Microsoft's Premium Mobile Experiences (PMX) team and now discontinued), Kin (new touch screen cell phone for social networking developed by Microsoft and now discontinued), MS Mobile or “Pocket PC” (original phone OS) are all failures. Yet they continue to pour money into them. X-box isn't bad, but it loses money too! But their embedded software, database software, and web server apps are money machines. Plus Win7 is preinstalled on about 90% of all PCs.

Yet they want so bad to succeed with consumers and beat Apple. Sort of like the nerd trying to get a date with a cheerleader.

MS CEO Steve Ballmer at the company’s Financial Analyst Meeting Thursday, “No one is asleep at the switch….We have got to make things happen. Just like we had to make things happen on netbooks, we have to make things happen on Windows 7 and slates.” ("Windows 7" confusingly is not the new operating system that replaced Vista, but rather the new phone OS which is meant to challenge the iPhone – again ((after Danger, and Kin)). Slate is MS speak for the iPad. Steve Balmer = idiot! Just sayin'.)

Remember, MS is being totally whipped in the smart phone market with iPhone, Google Android, and RIM Blackberry kicking their butt, not to mention a good product from Palm which was purchased by HP and should start to appear in HP phones. (HP is another PIM pioneer looking to recover their former glory as PIMs morphed to smart phones).

(PIM is an old acronym for "Personal Information Manager. In 1992, Apple coined the term "PDA" or Personal Digital Assistant for the Newton. I prefer the older term and give most credit to Palm, the company that really popularized the PDA or PIM. I further think that, besides Blackberry, the Palm phones were really the early foundation and implementation of what we now call smart phones. Technology is an evolution ... not a revolution. You can't believe everything you read in the advertisements!)

As I mentioned before, MS Servers & Tools Division had a great quarter with Windows Server, SQL Server, and System Center growing in double digits. Meanwhile, Online Services Division saw growth with Bing capturing market share, but they continue to bleed red ink. MS Business Division Revenue is off the charts, while Entertainment and Devices (phones, Zune, etc.) is down from last year. OEM revenue is up (Windows 7 preinstalls), but is that really a consumer success or is that just PCs being sold at Best Buy, HP, and Dell? Hmmm. Is MS going the way of IBM and becoming a business and enterprise computing company? I think so -- heck, I know so!

Only Balmer seems confused. Did he even get a date for the prom, or did he take his cousin? And now the big question: when are they going to dump Balmer? The guy needs to be "flushed”!!

Originally written on August 1, 2010.