http://money.cnn.com/2010/10/27/technology/microsoft_pdc
Microsoft is a dying consumer brand
Steve Ballmer, and the company he leads, are struggling with "the vision thing."
David Goldman, staff writer
October 27, 2010
NEW YORK (CNNMoney.com) -- Consumers have turned their backs on Microsoft. A company that once symbolized the future is now living in the past.
Microsoft has been late to the game in crucial modern technologies like mobile, search, media, gaming and tablets. It has even fallen behind in Web browsing, a market it once ruled with an iron fist.
Outgoing Chief Software Architect Ray Ozzie called out Microsoft's lost ground in a blog post over the weekend.
"Our early and clear vision notwithstanding, [competitors'] execution has surpassed our own in mobile experiences, in the seamless fusion of hardware & software & services, and in social networking & myriad new forms of internet-centric social interaction," he said.
It's not like Microsoft didn't foresee the changes ahead. With a staff of almost 90,000, the company has many of the tech world's smartest minds on its payroll, and has incubated projects in a wide range of fields that later took off. Experiments like Courier (tablets), HailStorm/Passport (digital identity), and Windows Media Center (content in the cloud) show the company was ahead of the game in many areas -- but then it either failed to bring those products to market, or didn't execute.
"In this age, the race really is to the swift. You cannot afford to be an hour late or a dollar short," says Laura DiDio, principal analyst at ITIC. "Now the biggest question is: Can they make it in the 21st century and compete with Google and Apple?"
Some influential analysts think not. Several have downgraded Microsoft's (MSFT, Fortune 500) stock in recent weeks, as PC sales continue to slow and Microsoft struggles with its tablet strategy. The company's stock is down more than 17% this year.
What's wrong with Microsoft
A rundown of Microsoft's major consumer projects finds trouble in almost all of them.
Internet Explorer's popularity has been waning for years, and one recent study showed that for the first time in more than a decade, more people are using alternative browsers. The browser is becoming the single most critical piece of software on a device -- potentially eclipsing the operating system -- but all of the major innovations of the past few years, like tabbed browsing and add-on extensions, came from outside Microsoft.
Windows Phone 7 has promise, but Microsoft dug itself an enormous hole with the subpar Windows Mobile platform. With its market share currently sitting below 5%, developers are taking a "wait and see" approach.
Microsoft's media platform Zune was dead on arrival.
Bing is growing, but substantially all of that growth has come at the expense of its business partner, Yahoo -- not its archrival Google.
Microsoft's attempts to build a social network through Windows Live have failed to gain traction. It has no real answer to Facebook.
Six months after Apple's release of the iPad, Microsoft still has virtually no presence in the tablet market. And its strategy for taking on Apple -- Windows 7 on a tablet, rather than a tablet-specific operating system -- is leaving potential partners cold. Lenovo's technology director recently told PC Mag that his company won't be building around the platform: "The challenge with Windows 7 is that it's based on the same paradigm as 1985 -- it's really an interface that's optimized for a mouse and keyboard."
With Xbox, Microsoft succeeded at innovating: It created a competitive video game brand for hardcore gamers. But even Xbox was outdueled by Nintendo with the Wii, which outsold Xbox by appealing to casual gamers.
Then there's the epicenter of the Microsoft universe: Windows. Microsoft likes to point out that its operating system is its biggest consumer brand and Windows 7 has been selling rapidly. Its new version has sold 240 million licenses in a year, making it the fastest-selling OS in Microsoft's history.
But Windows' momentum isn't from consumers. In fact, consumers are a worry for the Windows division, because they have dramatically slowed their purchases of PCs in recent months.
Rather, the fast sales are coming from businesses, which significantly delayed their purchases of new Windows licenses because Windows Vista was bug-ridden mess. Then the recession hit. A years-overdue corporate PC refresh cycle is now happening all at once.
Meanwhile, Microsoft's executive suite is in turmoil. CFO Chris Liddel, entertainment unit head Robbie Bach, device design leader J Allard and business division chief Stephen Elop have left within the past year. Ray Ozzie joined the exit parade last week.
Consumers matter
Microsoft has a lot of questions to answer, and it will have an opportunity to do so at its Professional Developers Conference in Seattle, which kicks off Thursday.
But PDC, which used to be one of Microsoft's most important and widely attended conferences, is going to be relatively small this year, with only a few thousand people making the trip, analysts say. PDC's hottest news this year is about cloud computing -- vital to enterprises, but not exactly sexy stuff.
So is this Microsoft's Waterloo? Will it become the next IBM (IBM, Fortune 500) -- crucially important to businesses but an afterthought for consumers?
"Microsoft is at a transition point, and there is a risk of that happening," says Al Hilwa, analyst at IDC. "But Microsoft cares much more about consumers than IBM ever did. It's in its DNA, and it understands that it is necessary to stay relevant. I don't see Microsoft ever abandoning consumers."
As Apple has proven, success in consumer products can fuel explosive growth. Apple surpassed Microsoft's market value earlier this year, and is on pace to eclipse the company in sales for 2010.
And if Microsoft cedes consumer ground, it risks its enterprise stronghold. Businesses are becoming more willing to allow employees to use their personal devices for work purposes, and a growing number of those gizmos are Macs, iPads, iPhones and Android smartphones.
So it's up to Microsoft to turn that around by being a leader, rather than a follower, in the consumer market.
Windows Phone 7 is a good start. Internet Explorer 9 has some exciting new features that other browsers lack. And Xbox's controllerless Kinect -- the first of its kind -- is coming this holiday season.
Microsoft just has to hope it's not too late.
Showing posts with label Steve Ballmer. Show all posts
Showing posts with label Steve Ballmer. Show all posts
Saturday, November 6, 2010
Sunday, January 25, 2009
When a Rock Star CEO Leaves the Stage
http://www.washingtonpost.com/wp-dyn/content/article/2009/01/17/AR2009011700356.html
When a Rock Star CEO Leaves the Stage
Sunday, January 18, 2009; Page F02
Frank Ahrens
Companies run by charismatic, high-profile chief executives are exciting to follow, but are they a good investment? Can too much of the company's value depend on one person?
An example to look at is Apple and its founder and rock star chief executive, Steve Jobs.
Jobs, a pancreatic-cancer survivor, has lost a great deal of weight and has appeared less frequently over the past year, stoking rumors of poor health.
Last week, Jobs said his health problems turned out to be "more complex" than previously revealed. He's taking a five-month leave of absence from Apple, turning over day-to-day operations to Chief Operating Officer Tim Cook.
Shares of Apple took a hit. Maybe no American chief executive is perceived as being more crucial to his company's future than Jobs is to Apple's.
Jobs co-founded Apple in 1976 but was ousted in a power struggle in 1985. Apple's results were mixed without him, and the company wandered strategically. In late 1997, Jobs returned. Apple's share price immediately began climbing as Jobs focused his company.
It soared when he introduced the revolutionary iPod and iTunes in 2001 and kept rising with the rollout of the innovative iPhone, hitting nearly $200 per share in December 2007, from about $3 in 1997, adjusted for splits and dividends. It has dropped by more than half since that peak, closing yesterday at $82.33 per share, clearly hurt by the recession. Its losses over the past half-year have been comparable in percentage to those at Dell and Microsoft, but analysts speculate that the stock would be trading higher were Jobs healthy and visible.
If you're an Apple shareholder, you're wondering how deep Apple's bench is.
If you're not, you may be looking around at other "cult of personality" companies with a wary eye.
Consider Rupert Murdoch's News Corp. -- a vast media and entertainment empire that includes movies, newspapers and satellite networks. All of which the 77-year-old Murdoch will turn over to his 36-year-old son James at some point.
World's Richest Man Warren E. Buffett is inextricably linked to his Berkshire Hathaway investment firm. The 78-year-old Buffett has said he has identified potential successors.
An example of a cult stock that has managed the exit of its leader while keeping a relative handle on investor value is Microsoft. Shares of the company's stock held fairly steady in the upper $20s throughout the beginning and middle of last year as founder and icon Bill Gates stepped aside to make way for the company's new chief executive, Steve Ballmer.
When a Rock Star CEO Leaves the Stage
Sunday, January 18, 2009; Page F02
Frank Ahrens
Companies run by charismatic, high-profile chief executives are exciting to follow, but are they a good investment? Can too much of the company's value depend on one person?
An example to look at is Apple and its founder and rock star chief executive, Steve Jobs.
Jobs, a pancreatic-cancer survivor, has lost a great deal of weight and has appeared less frequently over the past year, stoking rumors of poor health.
Last week, Jobs said his health problems turned out to be "more complex" than previously revealed. He's taking a five-month leave of absence from Apple, turning over day-to-day operations to Chief Operating Officer Tim Cook.
Shares of Apple took a hit. Maybe no American chief executive is perceived as being more crucial to his company's future than Jobs is to Apple's.
Jobs co-founded Apple in 1976 but was ousted in a power struggle in 1985. Apple's results were mixed without him, and the company wandered strategically. In late 1997, Jobs returned. Apple's share price immediately began climbing as Jobs focused his company.
It soared when he introduced the revolutionary iPod and iTunes in 2001 and kept rising with the rollout of the innovative iPhone, hitting nearly $200 per share in December 2007, from about $3 in 1997, adjusted for splits and dividends. It has dropped by more than half since that peak, closing yesterday at $82.33 per share, clearly hurt by the recession. Its losses over the past half-year have been comparable in percentage to those at Dell and Microsoft, but analysts speculate that the stock would be trading higher were Jobs healthy and visible.
If you're an Apple shareholder, you're wondering how deep Apple's bench is.
If you're not, you may be looking around at other "cult of personality" companies with a wary eye.
Consider Rupert Murdoch's News Corp. -- a vast media and entertainment empire that includes movies, newspapers and satellite networks. All of which the 77-year-old Murdoch will turn over to his 36-year-old son James at some point.
World's Richest Man Warren E. Buffett is inextricably linked to his Berkshire Hathaway investment firm. The 78-year-old Buffett has said he has identified potential successors.
An example of a cult stock that has managed the exit of its leader while keeping a relative handle on investor value is Microsoft. Shares of the company's stock held fairly steady in the upper $20s throughout the beginning and middle of last year as founder and icon Bill Gates stepped aside to make way for the company's new chief executive, Steve Ballmer.
Friday, December 26, 2008
Steve Jobs, tech's last celebrity CEO
http://money.cnn.com/2008/12/19/technology/fortt_tech_ceos.fortune/
Steve Jobs, tech's last celebrity CEO
With the Apple chief's decision to step out of the spotlight at next month's Macworld Expo, an era comes to an end.
By Jon Fortt, writer
December 19, 2008
SAN FRANCISCO (Fortune) -- Where have all the high-flying tech CEOs gone?
This week the tech world lost another headliner when Apple CEO Steve Jobs made it known that he'll no longer deliver his signature keynote speech at next month's Macworld Expo trade show.
Since the announcement comes the same year that Microsoft co-founder Bill Gates gave up his traditional keynote at another high-tech extravaganza, the Consumer Electronics Show, it underscores the fact that there aren't many superstars left who can rally big crowds and carry the banner for tech.
It had to happen eventually. The sun is setting on the first generation of rebellious whiz kids who invented the PC, commercialized the Internet and grew their companies into powerhouses.
In bygone days, Gates regularly talked up his plans for world domination. Scott McNealy, the co-founder of Sun Microsystems, led a defiant rebellion against Gates and his Redmond, Wash., juggernaut. Craig Barrett, the outspoken former CEO of Intel, ushered the chipmaker's glorious entrance into the age of mobile and wireless computer.
Today, all three have stepped back from operational roles, and are more likely to champion education policy than to unveil the next must-have gadget or service. Even the sole remaining old-school tech CEO, Oracle's Larry Ellison, is keeping a lower profile these days; he's in the news for his yachts and planes as much as anything else.
Help Wanted: A few geeky CEOs
The rest of today's crop of CEOs is a different breed. As innovators like Intel and Microsoft have grown into corporate giants, they haven't looked for clones of their iconoclastic founders to take over; instead, they've looked to manager/salesmen like Intel's Paul Otellini, Microsoft's Steve Ballmer, Hewlett-Packard's Mark Hurd and IBM's Sam Palmisano.
These guys are uber managers, not tech visionaries. They may be business-school rock stars, but engineers don't line up for their autographs.
Given the way companies mature, perhaps it's only natural that the current crop of CEOs looks different from the last. It takes one set of skills to think up a brilliant new idea, motivate starry-eyed recruits and inspire investors. It takes an entirely different set to manage thousands of employees, glad-hand customers and placate Wall Street; and it's rare to find all those skills in one person.
Are there any leaders left with geek cred? Sure - Web 2.0 celebrities like Google's Eric Schmidt, Sergey Brin, and Larry Page, and Facebook's Mark Zuckerberg have plenty - but none of them could be mistaken for inspirational speakers. Likewise, Adobe's Shantanu Narayen and AMD's Dirk Meyer have impressive engineering chops, but they seem more comfortable in the lab than on the stage.
In the end, the guy best suited to draw a crowd and speak for tech is probably Michael Dell - but Dell Inc. is in such rough shape that he won't have much time for speeches.
Which brings us back to Steve Jobs. So as long as he remains at the helm of Apple and its products stay popular, we're not likely to miss his Macworld keynote too much - when he has something to say, he'll figure out ways to draw a crowd. The question is what happens when His Steveness steps away from the company, or when its products are no longer the toast of the town.
When that happens - and it's a matter of when, not if - we may all get wistful about the good old days of the Macworld keynote, when the techies of the world huddled like kids on Christmas, and expected to be blown away.
Steve Jobs, tech's last celebrity CEO
With the Apple chief's decision to step out of the spotlight at next month's Macworld Expo, an era comes to an end.
By Jon Fortt, writer
December 19, 2008
SAN FRANCISCO (Fortune) -- Where have all the high-flying tech CEOs gone?
This week the tech world lost another headliner when Apple CEO Steve Jobs made it known that he'll no longer deliver his signature keynote speech at next month's Macworld Expo trade show.
Since the announcement comes the same year that Microsoft co-founder Bill Gates gave up his traditional keynote at another high-tech extravaganza, the Consumer Electronics Show, it underscores the fact that there aren't many superstars left who can rally big crowds and carry the banner for tech.
It had to happen eventually. The sun is setting on the first generation of rebellious whiz kids who invented the PC, commercialized the Internet and grew their companies into powerhouses.
In bygone days, Gates regularly talked up his plans for world domination. Scott McNealy, the co-founder of Sun Microsystems, led a defiant rebellion against Gates and his Redmond, Wash., juggernaut. Craig Barrett, the outspoken former CEO of Intel, ushered the chipmaker's glorious entrance into the age of mobile and wireless computer.
Today, all three have stepped back from operational roles, and are more likely to champion education policy than to unveil the next must-have gadget or service. Even the sole remaining old-school tech CEO, Oracle's Larry Ellison, is keeping a lower profile these days; he's in the news for his yachts and planes as much as anything else.
Help Wanted: A few geeky CEOs
The rest of today's crop of CEOs is a different breed. As innovators like Intel and Microsoft have grown into corporate giants, they haven't looked for clones of their iconoclastic founders to take over; instead, they've looked to manager/salesmen like Intel's Paul Otellini, Microsoft's Steve Ballmer, Hewlett-Packard's Mark Hurd and IBM's Sam Palmisano.
These guys are uber managers, not tech visionaries. They may be business-school rock stars, but engineers don't line up for their autographs.
Given the way companies mature, perhaps it's only natural that the current crop of CEOs looks different from the last. It takes one set of skills to think up a brilliant new idea, motivate starry-eyed recruits and inspire investors. It takes an entirely different set to manage thousands of employees, glad-hand customers and placate Wall Street; and it's rare to find all those skills in one person.
Are there any leaders left with geek cred? Sure - Web 2.0 celebrities like Google's Eric Schmidt, Sergey Brin, and Larry Page, and Facebook's Mark Zuckerberg have plenty - but none of them could be mistaken for inspirational speakers. Likewise, Adobe's Shantanu Narayen and AMD's Dirk Meyer have impressive engineering chops, but they seem more comfortable in the lab than on the stage.
In the end, the guy best suited to draw a crowd and speak for tech is probably Michael Dell - but Dell Inc. is in such rough shape that he won't have much time for speeches.
Which brings us back to Steve Jobs. So as long as he remains at the helm of Apple and its products stay popular, we're not likely to miss his Macworld keynote too much - when he has something to say, he'll figure out ways to draw a crowd. The question is what happens when His Steveness steps away from the company, or when its products are no longer the toast of the town.
When that happens - and it's a matter of when, not if - we may all get wistful about the good old days of the Macworld keynote, when the techies of the world huddled like kids on Christmas, and expected to be blown away.
Wednesday, March 12, 2008
Microsoft talks Blu-ray support
http://www.gamespot.com/news/6187379.html
Microsoft talks Blu-ray support
CEO Steve Ballmer says the company will work with Sony's disc format "in ways that make sense."
By Brendan Sinclair, GameSpot
Posted Mar 7, 2008
Microsoft backed Toshiba's HD DVD in its losing effort against Sony's Blu-ray in the next-gen disc format wars, but it doesn't appear to be holding grudges. At the company's Mix08 Internet conference in Las Vegas yesterday, Microsoft CEO Steve Ballmer confirmed that Microsoft will be working with Blu-ray, according to a Seattle Post-Intelligencer report.
"We've already been working on, for example, in Windows, device driver support for Blu-ray drives and the like, and I think the world moves on," Ballmer said. "Toshiba has moved on. We've moved on, and we'll support Blu-ray in ways that make sense." The report doesn't mention the Xbox 360 or the hypothetical Blu-ray add-on that has been rumored of, hinted at, and reported on.
As of press time, Microsoft had not returned requests for comment on the issue in light of Ballmer's presentation. However, the company had already addressed the possibility of an Xbox 360 Blu-ray drive earlier this week, with a representative saying, "We have made no such announcement. Games are what are driving consumers to purchase game consoles, and we remain focused on providing the largest library of blockbuster games available."
Microsoft talks Blu-ray support
CEO Steve Ballmer says the company will work with Sony's disc format "in ways that make sense."
By Brendan Sinclair, GameSpot
Posted Mar 7, 2008
Microsoft backed Toshiba's HD DVD in its losing effort against Sony's Blu-ray in the next-gen disc format wars, but it doesn't appear to be holding grudges. At the company's Mix08 Internet conference in Las Vegas yesterday, Microsoft CEO Steve Ballmer confirmed that Microsoft will be working with Blu-ray, according to a Seattle Post-Intelligencer report.
"We've already been working on, for example, in Windows, device driver support for Blu-ray drives and the like, and I think the world moves on," Ballmer said. "Toshiba has moved on. We've moved on, and we'll support Blu-ray in ways that make sense." The report doesn't mention the Xbox 360 or the hypothetical Blu-ray add-on that has been rumored of, hinted at, and reported on.
As of press time, Microsoft had not returned requests for comment on the issue in light of Ballmer's presentation. However, the company had already addressed the possibility of an Xbox 360 Blu-ray drive earlier this week, with a representative saying, "We have made no such announcement. Games are what are driving consumers to purchase game consoles, and we remain focused on providing the largest library of blockbuster games available."
Tuesday, March 11, 2008
Microsoft, Costco CEOs may keep Sonics in town
http://msn.foxsports.com/nba/story/7878668/Microsoft,-Costco-CEOs-may-help-keep-Sonics-in-town
Microsoft, Costco CEOs may help keep Sonics in town
Associated Press
Updated: March 6, 2008
In no way did developer Matt Griffin ever consider owning a professional sports franchise.
With the Seattle SuperSonics seemingly destined for Oklahoma City, Griffin and his big-name partners see no other option than to make a huge financial commitment in an attempt to save the Sonics and pro basketball in Seattle.
"Our interest is not necessarily in being an owner, but seeing a team here in Seattle and seeing KeyArena alive," Griffin said Thursday. "If there was a way to do it without having to own the team, that would be terrific. But these are the cards, (and) we have some generous people here in Seattle that are willing to do this."
Making a last-ditch effort to keep the team, the city of Seattle unveiled a $300 million KeyArena renovation plan on Thursday, along with the heavy hitters of local business who are willing to provide a significant financial stake.
Griffin and his three partners - Microsoft Corp. chief executive Steve Ballmer, Costco Wholesale Corp. president and CEO Jim Sinegal and wireless entrepreneur John Stanton - have agreed to contribute $150 million to the arena renovation, contingent on the group's ability to purchase the SuperSonics or another NBA franchise. Only recently did the group up its offer from about $75 million.
The group hopes to have a viable option for professional basketball in Seattle on the table when the NBA's board of governors meets next month to vote on SuperSonics owner Clay Bennett's application to relocate the franchise to Oklahoma City at the earliest possible date.
"This particular announcement, we think, is a game-changer," Seattle Mayor Greg Nickels said. "The fact that local investors are willing to step up with the first 50 percent of the money to get this job done, as well as the investment they're going to make in buying a team to begin with, changes the game."
While private investment would cover half the arena upgrades, the plan envisions that the city and state would split the other $150 million. Half would come from the city of Seattle, offset by lease agreements and taxes on the renovated arena.
The other $75 million would come from existing taxes already in place to pay off bonds on the construction of Safeco Field. Those bonds are scheduled to be paid off early, and the KeyArena plan would call for the taxes to remain in place through 2016, when they were set to expire.
The state legislature would have to approve a continuation of the taxes.
Microsoft, Costco CEOs may help keep Sonics in town
Associated Press
Updated: March 6, 2008
In no way did developer Matt Griffin ever consider owning a professional sports franchise.
With the Seattle SuperSonics seemingly destined for Oklahoma City, Griffin and his big-name partners see no other option than to make a huge financial commitment in an attempt to save the Sonics and pro basketball in Seattle.
"Our interest is not necessarily in being an owner, but seeing a team here in Seattle and seeing KeyArena alive," Griffin said Thursday. "If there was a way to do it without having to own the team, that would be terrific. But these are the cards, (and) we have some generous people here in Seattle that are willing to do this."
Making a last-ditch effort to keep the team, the city of Seattle unveiled a $300 million KeyArena renovation plan on Thursday, along with the heavy hitters of local business who are willing to provide a significant financial stake.
Griffin and his three partners - Microsoft Corp. chief executive Steve Ballmer, Costco Wholesale Corp. president and CEO Jim Sinegal and wireless entrepreneur John Stanton - have agreed to contribute $150 million to the arena renovation, contingent on the group's ability to purchase the SuperSonics or another NBA franchise. Only recently did the group up its offer from about $75 million.
The group hopes to have a viable option for professional basketball in Seattle on the table when the NBA's board of governors meets next month to vote on SuperSonics owner Clay Bennett's application to relocate the franchise to Oklahoma City at the earliest possible date.
"This particular announcement, we think, is a game-changer," Seattle Mayor Greg Nickels said. "The fact that local investors are willing to step up with the first 50 percent of the money to get this job done, as well as the investment they're going to make in buying a team to begin with, changes the game."
While private investment would cover half the arena upgrades, the plan envisions that the city and state would split the other $150 million. Half would come from the city of Seattle, offset by lease agreements and taxes on the renovated arena.
The other $75 million would come from existing taxes already in place to pay off bonds on the construction of Safeco Field. Those bonds are scheduled to be paid off early, and the KeyArena plan would call for the taxes to remain in place through 2016, when they were set to expire.
The state legislature would have to approve a continuation of the taxes.
Sunday, February 10, 2008
Would Merger Demote Yahoo?
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/03/AR2008020301100.html
Would Merger Demote Yahoo to a Microsoft Front End?
Analysis: The pairing gives Microsoft a needed outlet, but the outcome could quash Yahoo.
PC World
Sunday, February 3, 2008
While dealing logistically and technically with their overlapping online offerings will certainly prove troublesome ifits bid to purchaseYahoo succeeds, Microsoft will at least have an immediate outlet for bringing more of its traditional desktop portfolio to the Web and to a broader customer base.
Microsoft has been trying for more than two years to find a critical mass to adopt new online services beyond search, e-mail and instant messaging under the Windows Live brand -- with little success. Its early MSN e-mail and IM offerings are popular enough with Web users; however, users of Google and Yahoo online services have been loathe to adopt the revamped Windows Live offerings in favor of the ones they're already using.
Not only could that change if the company purchases Yahoo, but Microsoft also will have a ready-made Web front end for rolling out more of its desktop applications as services, said Paul Fox, CIO of Guy Carpenter, a New York-based reinsurance company.
"The Yahoo platform is really what they're buying," he said. "With Yahoo they're tapping into the base culture of the Internet online community that's matured over the last 10 years. It's going to make it easier for people to take a look at and try their services, whereas before it had to be a more conscious effort."
Aside from the usual raft of consumer applications like search, e-mail, maps and the like, Microsoft already has brought some of its many business desktop applications -- such as Office and CRM -- online in hosted, though often scaled-down, versions.
Access to Yahoo's estimated 500 million visitors per month will give it a new channel to deliver what the company now calls its "software plus services" strategy, as well as buy the company time to bring more competitive versions of applications that were originally coded for the desktop to the Web.
Indeed, in the conference call discussing the Yahoo bid Friday, Microsoft CEO Steve Ballmer made a pointed reference to efforts toshed its desktop legacyand move even aspects of its Windows OS to the Web, a trend the company started with some features in the latest version, Windows Vista.
"The Windows user wants to be live, the Windows experience needs to increasingly embrace the Internet," he said. "There will be a Windows Live, there will be an Office Live, as we continue to bring out innovations in which Office transforms and is transformed by the Internet."
Ballmer also likely had the rising popularity of Web-hosted productivity software such as Google Apps, Zoho and Yahoo's Zimbra in mind when considering how to Web-enable Microsoft's desktop software. So far, Microsoft's Office Live has been more of a way for small businesses to get up and running with a Web site and basic hosted business applications like accounting and CRM; however, bringing a full productivity suite to the Web has been Microsoft's plan for some time.
Microsoft also can leverage its own strength among business customers to bundle and technically link applications so customers buy an all-in-one package rather than individual products. For instance, Microsoft has created tight links between a new unified communications product, Office Communications Server, and its Office and SharePoint collaboration software so customers must buy them all together to create comprehensive infrastructure. Microsoft can make similar attachments between online versions of its applications -- or just bundle them together in creative ways -- and market them to a broader audience.
"If Microsoft does something well, it's bundling products and services," said Ned May, director and lead analyst of marketing research firm Outsell. He joked that if Microsoft purchases Yahoo, there might come a day when you start up Windows and "up pops Yahoo and it takes you three days to remove that functionality."
"Yahoo provides a platform in many regards -- an audience of 500 million people to which you can bundle products and new offerings," May said.
Doing quick math, May figured that at "500 million a month for about $44 billion" it will cost Microsoft about $86 a head for acquiring each member of its new audience of Web users. "Not a bad deal," he said.
Would Merger Demote Yahoo to a Microsoft Front End?
Analysis: The pairing gives Microsoft a needed outlet, but the outcome could quash Yahoo.
PC World
Sunday, February 3, 2008
While dealing logistically and technically with their overlapping online offerings will certainly prove troublesome ifits bid to purchaseYahoo succeeds, Microsoft will at least have an immediate outlet for bringing more of its traditional desktop portfolio to the Web and to a broader customer base.
Microsoft has been trying for more than two years to find a critical mass to adopt new online services beyond search, e-mail and instant messaging under the Windows Live brand -- with little success. Its early MSN e-mail and IM offerings are popular enough with Web users; however, users of Google and Yahoo online services have been loathe to adopt the revamped Windows Live offerings in favor of the ones they're already using.
Not only could that change if the company purchases Yahoo, but Microsoft also will have a ready-made Web front end for rolling out more of its desktop applications as services, said Paul Fox, CIO of Guy Carpenter, a New York-based reinsurance company.
"The Yahoo platform is really what they're buying," he said. "With Yahoo they're tapping into the base culture of the Internet online community that's matured over the last 10 years. It's going to make it easier for people to take a look at and try their services, whereas before it had to be a more conscious effort."
Aside from the usual raft of consumer applications like search, e-mail, maps and the like, Microsoft already has brought some of its many business desktop applications -- such as Office and CRM -- online in hosted, though often scaled-down, versions.
Access to Yahoo's estimated 500 million visitors per month will give it a new channel to deliver what the company now calls its "software plus services" strategy, as well as buy the company time to bring more competitive versions of applications that were originally coded for the desktop to the Web.
Indeed, in the conference call discussing the Yahoo bid Friday, Microsoft CEO Steve Ballmer made a pointed reference to efforts toshed its desktop legacyand move even aspects of its Windows OS to the Web, a trend the company started with some features in the latest version, Windows Vista.
"The Windows user wants to be live, the Windows experience needs to increasingly embrace the Internet," he said. "There will be a Windows Live, there will be an Office Live, as we continue to bring out innovations in which Office transforms and is transformed by the Internet."
Ballmer also likely had the rising popularity of Web-hosted productivity software such as Google Apps, Zoho and Yahoo's Zimbra in mind when considering how to Web-enable Microsoft's desktop software. So far, Microsoft's Office Live has been more of a way for small businesses to get up and running with a Web site and basic hosted business applications like accounting and CRM; however, bringing a full productivity suite to the Web has been Microsoft's plan for some time.
Microsoft also can leverage its own strength among business customers to bundle and technically link applications so customers buy an all-in-one package rather than individual products. For instance, Microsoft has created tight links between a new unified communications product, Office Communications Server, and its Office and SharePoint collaboration software so customers must buy them all together to create comprehensive infrastructure. Microsoft can make similar attachments between online versions of its applications -- or just bundle them together in creative ways -- and market them to a broader audience.
"If Microsoft does something well, it's bundling products and services," said Ned May, director and lead analyst of marketing research firm Outsell. He joked that if Microsoft purchases Yahoo, there might come a day when you start up Windows and "up pops Yahoo and it takes you three days to remove that functionality."
"Yahoo provides a platform in many regards -- an audience of 500 million people to which you can bundle products and new offerings," May said.
Doing quick math, May figured that at "500 million a month for about $44 billion" it will cost Microsoft about $86 a head for acquiring each member of its new audience of Web users. "Not a bad deal," he said.
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