[Spliff]

I wish this would come true, but I doubt it. Microsoft is too big, too rich. Still, one can dream . . .

http://abcnews.go.com/Business/print?id=88655

Silicon Insider: R.I.P. Microsoft?
After Dominating the Technology Industry for Years, is Microsoft Poised to Collapse?

Commentary by MICHAEL S. MALONE
Feb. 10, 2005 - Is Microsoft dying?

Business reporters -- like, I suspect analysts and venture capitalists -- develop over time a set of diagnostic tools for analyzing the relative health of companies we encounter. This bag of tricks is mostly subjective, some of it no doubt unconscious, and we constantly test it against experience, most of it bad. That is, every time we get suckered into writing an upbeat story about an evil, incompetent or doomed company, we swear we will never make that mistake again -- then we scrutinize where we went wrong and what warning signals we missed.

This can make us seem cynical after awhile. But let me tell you: there's nothing quite like having some pensioner or widow tell you that they lost their life savings because they based their investments on one of your articles. You will never believe a corporate pitch again.

Needless to say, these diagnostic tools vary with the company. You don't analyze a new entrepreneurial company the way you do a Fortune 500 giant. One of the tools I'm best known for is Folding Table Theory of Start-Ups. It says that when you walk into a new entrepreneurial company and you see a nice lobby and expensive office furniture, that company has its priorities screwed up -- either it is more interested in comfort than success or it is over-capitalized and lazy -- and it will never make it.

By comparison, when you see the start-up team working at folding tables or old army surplus desks, you know that it is properly focused both on getting the job done and financial discipline -- and has a good chance of being a winner. That's what I saw at the beginning of eBay (and Siebel, Tivo, Electronic Arts, Atari and a host of other great companies) and it's telling that Jeff Skoll kept that table near him during his entire tenure at the company.

The health of established firms, especially great ones, is more difficult to diagnose. The balance sheet can give some clues, but, because it captures the recent past rather than the near future, it can fool you. Most veteran reporters look at more subtle clues, like the comings and goings of key employees, slippage in the release dates of new products (or missing features), and subtle shifts in the tone of company news releases, advertisements and executive speeches.

But most of all, at least for me, there is the smell test: the faintest whiff of decay that comes from dying companies.

Looks Can Be Deceiving

Sometimes this smell can surprise you. Years ago, Fortune magazine asked me to do a story about Silicon Graphics, then one of the hottest companies in Silicon Valley. In those days, SGI could do no wrong. It owned the graphic workstation market. It was working with the likes of Steven Spielberg. And its chairman, my old HP boss Ed McCracken, was being talked up for cabinet posts and ambassadorships. I fully expected to write the latest laud on the Valley's hottest young company.

But the instant I stepped on the SGI campus I knew something was wrong. The place just didn't FEEL right. Sure it was shiny and new and filled with shiny and bright employees. The products were great, and the financials were terrific. And yet, the company didn't pass the smell test. It was the little things: the chief executive officer that forgot the meeting with me (who forgets Fortune?), forcing the chairman to vamp for an hour; the much-awaited new product that arrived missing some key features; the sudden loss of some key employees.

I found myself with a serious case of cognitive dissonance. On paper, Silicon Graphics looked great, but in my gut it was a company in desperate straits. I went with my gut, and to Fortune's credit, the magazine backed me. CGI raised holy hell over the article when it appeared -- but subsequent events proved me right.

The same thing happened at Hewlett-Packard. In some very controversial editorials in The Wall Street Journal, I predicted that Carly Fiorina's stewardship of HP would be an unmitigated disaster, and would destroy the world's greatest company. Obviously, Fortune, Forbes and most of the rest of the business press didn't agree -- and all I managed to do was make myself persona non-gratis at HP. But, as this week's news shows, my instincts were correct. [As an aside: If the first words out of the mouth of Carly's replacement aren't "The HP Way is back", the board should fire him, too.]

Is Microsoft Rotting?

That brings us to Microsoft. The other day I had lunch with the CEO of a mid-sized semiconductor equipment manufacturer. SEMs are the forgotten folks of the digital revolution. As the people who make the machines that make the chips that make the electronic products that run the world, they are at the absolute top of the electronics food chain. They typically know about what's coming in the electronics world earlier than anybody else. But their products are so arcane -- who cares about automated wafer steppers? -- the press almost never talks to them.

In the course of the conversation we talked about the coming Intel-Samsung war, the beginnings of a slowdown in the SEM business (presaging a chip turndown next year), and the sad fate of HP. It was in the middle of all this that a notion suddenly appeared in my mind: Microsoft is dying.

Why the sudden thought? Perhaps it was talking about HP; maybe it was the fact we WEREN'T talking about Microsoft (which would have monopolized our conversation a few years ago), or perhaps it was just my instincts were finally putting diverse bits of information together into a single conclusion.

Great, healthy companies not only dominate the market, but share of mind. Look at Apple these days. But when was the last time you thought about Microsoft, except in frustration or anger? The company just announced a powerful new search engine, designed to take on Google -- but did anybody notice? Meanwhile, open systems world -- created largely in response to Microsoft's heavy-handed hegemony -- is slowly carving away market share from Gates & Co.: Linux and Firefox hold the world's imagination these days, not Windows and Explorer. The only thing Microsoft seems busy at these days is patching and plugging holes.

Speaking of Gates: if you remember, he was supposed to be going back into the lab to recreate the old MS alchemy. But lately it seems -- statesmanship being the final refuge of the successful entrepreneur -- that he's been devoting more time to philanthropy than capitalism. And though Steve Ballmer is legendary for his sound and fury, these days his leadership seems to be signifying nothing.

Longhorn's Delayed Release

There are other clues as well. Microsoft has always had trouble with stand-alone applications, but in its core business it has been as relentless as the Borg. Now the company seems to have trouble executing even the one task that should take precedence over everything else: getting "Longhorn," its Windows replacement, to market. Longhorn is now two years late. That would be disastrous for a beloved product like the Macintosh, but for a product that is universally reviled as a necessary, but foul-tasting, medicine, this verges on criminal insanity. Or, more likely, organizational paralysis.

Does anyone out there love MSN? I doubt it; it seems to share AOL's fate of being disliked but not hated enough to change your e-mail account. And do college kids still dream of going to work at MS? Five years ago it was a source of pride to go to work for the Evil Empire -- now, who cares? It's just Motorola with wetter winters.

None of this should come as a surprise to Gates. I remember in the mid-90s he shrugged off the claims that Microsoft was unstoppable by noting that the electronics industry was so cyclical that no company ever stayed on top for long. In that light, Microsoft had a longer run than most. It is still a well-run company, which argues that its fade will be long and slow, like DEC, rather than a sudden death like Wang. And it may yet come back -- there may already be something revolutionary under way in a back lab in Everett or Mountain View -- but, like Yahoo! and Apple before it, Microsoft may have to die in order to be reborn.

For now, though, none of that is obvious. Microsoft is still the dominant company in high-tech, the cynosure of all those things people love and hate about computing, the defining company of our time. It is huge, powerful and confident.

But if you sniff the air, you can just make out the first hints of rot.


Michael S. Malone, once called �the Boswell of Silicon Valley,� most recently was editor-at-large of Forbes ASAP magazine. He has covered the Silicon Valley and high-tech for more than 20 years, beginning with the San Jose Mercury-News as the nation's first daily high-tech reporter. His articles and editorials have appeared in such publications as The Wall Street Journal, The Economist and Fortune, and for two years he was a columnist for The New York Times. He has hosted two national PBS shows: "Malone," a half-hour interview program that ran for nine years, and in 2001, a 16-part interview series called "Betting It All: The Entrepreneurs." Malone is best known as the author of a dozen books. His latest book, a collection of his best newspaper and magazine writings, is called "The Valley of Heart's Delight."

This work is the opinion of the columnist and in no way reflects the opinion of ABC News.
Copyright � 2005 ABC News Internet Ventures

[Mafia]

like you said i doubt it. but i dunno if i want this to happen or not i enjoy not having a bunch of idiots involved with mac os x.

[The Godfather]

Originally posted by Mafia:
like you said i doubt it. but i dunno if i want this to happen or not i enjoy not having a bunch of idiots involved with mac os x.

But no idiot should be operating a Windows computer

[Mafia]

Originally posted by The Godfather:
But no idiot should be operating a Windows computer

lol but they are.

[CD Hanks]

Originally posted by Mafia:
like you said i doubt it. but i dunno if i want this to happen or not i enjoy not having a bunch of idiots involved with mac os x.

It's already happening.

In response to the thread:

Not. Gunna. Happen.

[sugar_coated]

Microsoft is very big so it's death will be very slow.

[CD Hanks]

Originally posted by sugar_coated:
Microsoft is very big so it's death will be very slow.

On a time table of about fifty years, of course it won't matter. But so much that is "important" now won't be then.

If Microsoft were to suddenly collapse in a years time, we would all be screwed by the massive hit it'd bring to the economy.

Heh, I find it funny people are willing to stroke their egos with the thought of OMG EVIL MICROSOFT by entertaining the thought of them going out of business without putting an ounce of forethought into such a concept.

[Spliff]

Originally posted by CD Hanks:
Heh, I find it funny people are willing to stroke their egos with the thought of OMG EVIL MICROSOFT by entertaining the thought of them going out of business without putting an ounce of forethought into such a concept.

The collapse of the USSR had many negative consequences in the short term. Very few people want a return of the Soviet Union, because in the long run, that country and the world will be better off. The same with Microsoft, IMO.

[CD Hanks]

Originally posted by Spliff:
The collapse of the USSR had many negative consequences in the short term. Very few people want a return of the Soviet Union, because in the long run, that country and the world will be better off. The same with Microsoft, IMO.

The Soviet union didn't have their software installed in 90% of the computers in the world. Microsoft does.

BUT YOU'RE RIGHT IT'S ALL THE SAME LOL WHAT AM I THINKING LOL INTERNET!



edit: VVV Point well put.

[Apple Pro Underwear]

Ms's death would be like 20 yrs. and during that course, they would have plenty of opportunity to try and stop it

[Spliff]

Originally posted by CD Hanks:
The Soviet union didn't have their software installed in 90% of the computers in the world. Microsoft does.

BUT YOU'RE RIGHT IT'S ALL THE SAME LOL WHAT AM I THINKING LOL INTERNET!



edit: VVV Point well put.

It's just software. Badly written, insanely insecure software. My point is that the world would adjust in the long term.

BTW, I've noticed that Slashdot has a discussion going about the article with some good comments, both pro and con.

[Lancer409]

Microsoft Death Knell # ___ ?!?!?

[OldManMac]

It could happen, but it won't happen quickly. It took GM thirty years to go from being the dominant automaker, to looking over their shoulders at Toyota today.

[groskit]

lets all hope that microsoft will rot to the ground one day, and people will start to "mass-use" macs.

[gatekeeper]

Originally posted by Lancer409:
Microsoft Death Knell # ___ ?!?!?

Indeed.

But with falling profits and plummeting stock, and having hastened the end of the desktop PC era, Steve Jobs has put Apple again in a precarious position.
-- Michael S. Malone

[Eriamjh]

How many BILLIONS of dollars in profits does microsoft need to survive? I think the "rot" he smells is his own. As much as I would love to see it happen, I say... no way. Unless there is Enron-like incompetence and Worldcom-like fraud involved. No way.

Gatekeeper has it right. This guy said "Apple RIP" back in 2000. He's an idiot. And in spite of our desire to see Microsoft go under, his track record of predicting a company's death is poor at best.

[Twilly Spree]

Originally posted by gatekeeper:
Indeed.

Ouch

and he's prainsing Apple in the MS RIP article at the top. The only thing he's 100% correct about is that the computer industry is a volitle one. From one year to the next you never know who will capture the minds and money of the people.

[iCol]

Let us not forget that the Macintosh also has its flaws. Not as many as Windows, admittadly.

[Spliff]

Originally posted by iCol:
Let us not forget that the Macintosh also has its flaws. Not as many as Windows, admittadly.

Burn the heretic!!

[ryaxnb]

All big, rich, companies die eventually. MS will too. But it will be awhile.

[MilkmanDan]

Just look at IBM. They're completely out of the consumer PC market now. Companies evolve. You can't have the same business model forever, thats just stupid. Apple innovates which is why they're still alive. If MS does fall in the OS market they may find that their stand alone products get better, or that they come up with something else thats new and cool. Maybe they need to become smaller to start making better software. Best of luck to them. Remember, in the tech world, the next big thing can change the entire world.

[moonmonkey]

Originally posted by MilkmanDan:
If MS does fall in the OS market they may find that their stand alone products get better, or that they come up with something else thats new and cool.

Something else?

[Thilo Ettelt]

I guess Microsoft would only die if they were failing to sell their products AND fail to subsequently change their business strategy in order to get back into business. But that's highly unlikely due to their high amound of cash... they could fail so much it wouldn't matter.


- Thilo

[sugar_coated]

A sweeping change that swept micrsoft aside within a few years came from a new hardware that could run multiple operating systems simultaneously.

[CD Hanks]

Originally posted by sugar_coated:
A sweeping change that swept micrsoft aside within a few years came from a new hardware that could run multiple operating systems simultaneously.

That barely makes any sense.

[Zimphire]

Without MS being around, Apple would be as great.

Having MS around is good.

[ReggieX]

Originally posted by CD Hanks:
BUT YOU'RE RIGHT IT'S ALL THE SAME LOL WHAT AM I THINKING LOL INTERNET!

Dude, Internet is serious business! :[

[turtle777]

Originally posted by Zimphire:
Without MS being around, Apple would be as great.
Having MS around is good.

Missing something ?

-t

[beb]

Originally posted by Spliff:
Burn the heretic!!

I second the motion!

[olePigeon]

Originally posted by sugar_coated:
A sweeping change that swept micrsoft aside within a few years came from a new hardware that could run multiple operating systems simultaneously.

They're not selling.

[Jason25]

I like Microsoft, if they didn't make such unstable, incomplete software, I wouldn't have a job.

[Superchicken]

I don't think we'll see Microsoft die, I think we'll finally see Apple's market share jump to around 15 percent, Linux within the next five years if ever a big company gets behind an interface model could jump to around 10 percent, then in a few years we could see Apple at around 25 percent, Linux at 15 percent, which would leave M$ around 60 percent. I think this'd be great for the industry. M$ would have to learn how to write software to keep people away from viable competitors. And OS would become more a matter of personal preference than anything.

[Link]

I think most accurately, Microsoft will be around for a long time to come, but only as a brand.. Bill Gates, and his replacements run a business, not a kingdom -- they will sell whatever they need to in order to make money.

What I'm getting at, is Windows might not have a very long life left in it, that we don't know, I wouldn't be surprised if in 20 years MS sold their OS division to another company and went on with things, much like IBM did with their PC division.

[Daemon2]

I honestly don't care if Microsoft dies. Let the drones do whatever they want. I'll stick to my G5 thank you very much.