Frank,
If you were less emotional you should realize that Steve Balmer
has MSFT-stock and options. So if he talks the tech-sector down,
including his own company, he has a very good reason for doing
so.
Maybe you remember an article by Bill Gates, written 31 may 1999.
It is an essay about the future of the PC. And the future of MSFT.
He's touting that there is no doubt that the PC is and
will stay the center of computing.
A few (very funny but also sad) quotes from Bill;
Predictions for first-quarter global sales were bad; the PC era
was finally ending. In fact, sales grew at a healthy 19 percent
annual rate. Worldwide, well over 100 million PCs will be sold
this year.
Mistake nr. 1. There are PC's, Network Computers and Net PC's.
Bill thinks (or thought) that a NET-PC is a PC. From that point
of view he is right about the increasing sales.
But what he didn't understand is that the NET-PC is in fact a
fat Network Computer. More and more Net-PC are used as a Network
Computer.
When you understand this, and more and more people seems to realize
this, than we can say that the sales in PC's decrease. And the
sales of NC increased.
For most people at home and at work, the PC will
remain the primary computing tool; you'll still want a big screen
and a keyboard to balance your investment portfolio, write a letter
to Aunt Agnes, view complex Web pages, and you'll need plenty of
local processing power for graphics, games and so on.
Mistake nr 2. He didn't understand (it is very hard to believe,
but it are his own words) that the difference between the
net-approach and the PC has absolutely nothing to do with
functionality. Everything that can be done on the PC can also
be done on a network-computer. And if not so, it will be soon.
Moore's law works also for bandwith. (Balmer stated a few days
ago MSFT also intents to offer Office-product over the internet)
At the same time—and many who doubt the PC's staying power
of the PC miss the point—the PC itself will be getting more powerful, more reliable and simpler to use. Even though the
underlying hardware, networks and software will become more
complex, that complexity will be hidden from users.
Mistake nr. 3; more powerfull; Nope, less powerfull, computing
will be done behind the scene. Ask Citrix, Oracle, Intel, IBM,
Hewlet Packard, Dell, Compaq etc. for example. And since a few
weeks, you can also ask Steve Balmer.
Mistake nr. 4; underlying hardware, networks and software will
become more complex. Nope, that was in the client/server-age.
We just entered the net-era.
Mistake nr. 5; Those who doubt the staying power of the PC miss
the point. No further comment necessary, I believe. Balmer told
us two weeks ago Microsoft shift focus from the PC to the net.
Talking about missing the point!
He ended the article with:
Given my job, it's hardly surprising that I'd say this.
But I'm betting Microsoft's future on it.
Need I say more. Microsoft is really in big, big trouble.
In the client-server age they had a monopoly. In the network-
era they are nr. 53 in line, or so (at this moment, ok).
Oracle is the new number 1.
I have no idea why Bill made such classical mistakes. It is almost
hard to believe that he is that stupid. But who am I to judge.
I believe there are possible explanations
1. Bill simply didn't get it (possible, maybe he'd better finished
his school)
2. He was not willing to canabalize his own business
If the latter, he should visit Michael Dell. He can explain this
better than I do.
What did Larry see that Bill didn't see. Let's try to simplify
what the net really means.
Let's keep it simple;
- Take 2 white sheets.
Sheet nr. 1; Bill's approach.
Draw 10 circles, draw a line from every circle to the nine others.
Sheet nr. 2; Larry's approach.
Draw 10 circles, a very big one in the middle, 9 small around it.
Draw a line from every small circle to the big one.
Their are billions of PC's around the globe. Use your imagination.
In what model should you invest? Even Bill gave up recently.
So were do we stand. Oracle is investing big in model nr. 2
for 3 to 4 years now. Microsoft woke up in the recent months.
(Not be cynical but Microsoft's hotmail runs on SUN's hard-
and software. Check it yourself if you like.)
Anyone read the Goldman & Sachs-report. 1,5 triljon in 2004.
Oracle and Sap the winners. Anyone read the name of Microsoft.
So, I believe it is fair to say that Microsoft has never
been more in trouble than ever before. (Remember: But I'm
betting Micro soft's future on it. How extrememely painfull,
but it is the truth).
What is Microsoft strongest point? There big fat wallet.
What is a good thing for Microsoft to do. Buy as soon as possible,
as cheap as possible, to try to close the gap with Oracle,
Sun, Hewlett Packard, (Compaq is next in line, do your own research).
What companies don't have a fat wallet, but are actually
cash-burners.
Yep, the promising start-ups. If the stock-market tanks, will
this be in favor of the start-ups, or will this be a good thing
for Microsoft? And will it help them to buy there way into
the net-era. So they can climb for 153 to 23 in line for example.
Draw your own conclusions of course. I have already drawn mine.
Long on Oracle, Compaq, SAP, US Web & AskJeeves (last one to do
you a favor. They signed a contract with MSFT this week).
Succes with your e-mail campaign. You are doing me a great favor.
With regards,
Paul
PS Maybe it is a good idea to ask Balmer or Gates for comment.
Maybe this is a better (and less frustrating) idea than starting
an e-mail campaign agianst them. Good luck, anyhow.
PS This story is written on a Windows 95 OS-system. And I'm
not a regular Microsoft-basher. I'm just flabbergasted by
their mistakes, IMO.
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