October 23, 2009

Microsoft: the new IBM?

Microsoft has peaked and is on the way down. For those who watched the rise in the 1980s, and the domination in the 1990s, this is good news. It was a long wait.

In the aftermath of the failure of Vista, there is of course a lot of hand-wringing. Some talk about security, notably following CEO Steve Ballmer's admission:

Mr Ballmer said: "We got some uneven reception when [Vista] first launched in large part because we made some design decisions to improve security at the expense of compatibility. I don't think from a word-of-mouth perspective we ever recovered from that."

Let's go back to the basics. As I described in previous posts, the problem is that Microsoft is sitting on a 20 year legacy of insecurity (e.g., 1). Bill Gates recognised that the pre-Internet design assumption was heading into stormy weather, and to his credit tried to turn it around.

But, it turns out that it is easier to turn around a Blackbird than a supertanker, and even Ballmer's legendary energy didn't substantially challenge the Newtonian physics. I have to hand it to them, at least they tried!

The point isn't whether Vista was sunk by security issues (Schneier), or whether it was sunk by marketing & direction failures (as suggested by Mordaxus). This is backwards thinking. The strategic picture is that security issues had to succeed in order to save Microsoft's dominant position.

The fact now clear is that Vista failed, and this has consequences for Microsoft. Firstly the security problem is still there; so they will still have to figure that one out. But secondly, it still means that anyone concerned with security over the last decade has now had a long time to discover the solution. For the most part it is a mixture of (a) stick with old/simpler Microsoft systems, (b) switch to Mac as highlighted on this blog, or (c) switch to other more reliable (==secure) technologies like web-based, cloud,, smart-phone etc. Thirdly, while Microsoft was grappling with the problem, the PC-to-Internet equation of the 1990s has shifted. It is now a much different place.

Ultimately, it means the end of dominance for Microsoft. Like the year 1989 for IBM, the emergence of the credible alternates is no longer just hopeful talk, it is concrete. And a big correction is needed, and as seen in the chart on market caps, the market has done that over the last decade.

But unlike IBM in 1989, Microsoft does seem to know its fate. Bill Gates is the King, and he sealed his legacy by signalling this pain in a really big way back in 2002. So instead of a mass riot, a run for the bank, a complete collapse of confidence as we saw in 1989, it looks like we are now heading to a more regularised market in IT. The big players are now all within striking distance of each other. They all have some particularly strong territory, they all can defend their territory, and they can all look a the new stuff and wonder if they can get in for some of it. The IT market is now interesting again.

Welcome to the next decade!

Posted by iang at October 23, 2009 12:34 PM | TrackBack

in '96, there was perception of turning point, MDF at moscone ... there was offline talk that they weren't sure how to keep the momentum going ... previously new releases had new functions that users needed/wanted. '96, 99% of the users had 99% of the functions they needed/wanted/used. there was some momentum by users who where conditioned to always get the next release ... because there was something they had to have. in attempt to keep the momentum going there was marketing that started to emulate the '60s auto segment ... always needing to get the new year's model ... whether you needed it or not.

'96 Moscone MDF had big banners about "internet" ... but the theme ... and even bigger banners were "preserving your investment". Basically lots of BASIC programmers writing (somewhat business related) applications ... basically extended it to visual basic and scripting as part of all applications)

The downside was that a lot of applications were done for local business networks that would automatically execute (basic) scripting commands as part of normal operation. This wasn't a great threat in small closed networks ... but extending the paradigm to the open anarchy of the internet ... opened up enormous opportunities for attackers.

In the 90s, majority of internet exploits involved buffer length issues associated with C programming language environment. The start of this decade it started to shift to 1/3rd buffer length related, 1/3rd automatic scripting execution, 1/3rd social engineering (frequently getting users to execute/access compromised things from the network)

Posted by: Lynn Wheeler at October 23, 2009 01:17 PM

Big Cellphone Makers Shifting to Android System

Published: October 25, 2009

Since 1996, Microsoft has been writing operating systems for little computers to carry in your pocket. It was a lonely business until the company’s perennial rival, Apple, introduced the Web-browsing, music-playing iPhone. But now that smartphones are popular, Microsoft’s operating system, Windows Mobile, is foundering.

More cellphone makers are turning to the free Android operating system made by Microsoft’s latest nemesis, Google.

Cellphone makers that have used Windows Mobile to run their top-of-the-line smartphones — including Samsung, LG, Kyocera, Sony Ericsson — are now also making Android devices. Twelve Android handsets have been announced this year, with dozens more expected next year. Motorola has dropped Windows Mobile from its line entirely in a switch to Android. HTC, a major cellphone maker, expects half its phones sold this year to run Android. Dell is using Android for its entry into the cellphone market.

All four of the largest carriers in the United States have now agreed to offer Android phones. When the first Android handset, the G1 from HTC, was introduced last fall, only T-Mobile offered it. Now, Verizon, the largest carrier, is putting a huge promotional push behind the Droid from Motorola, set to be introduced this week. Even AT&T, the home of the iPhone, recently said it would join the Android party next year.

Posted by: (A few more nails in the MS coffin) at October 25, 2009 08:48 PM

@ iang,

Do you remember "Ma Bell" and what Judge William Green did to her?

The decline of IBM has been atributed by some to the fact it fought it's own "break up" battle and won, not lost as AT&T did.

The same question is now being asked of Microsoft.

Fundementaly it's the argument about solitary -v- pack preditors.

To tackle a large organism for food you need to select one of two basic stratagies,

1, symbiosis (live with)
2, predate (prey on)

For the latter as the prey is to be consumed lot's of power and teeth are generaly required.

However this can be in,

1, One organism (tiger)
2, Many organisms (dogs).

Single large organisms tend to be limited in what they can do and very dependant on the evolotion of the prey.

Pack animals tend not to be limited in what they can do and are not realy as dependent on the evoloution of their prey, as they have more varied sources of prey.

Some feel this argument applies to comercial organisations. When they get beyond a certain size by predating they become overly sensitive to market evoloution.

When AT&T was split up it effectivly changed from a large preditor to a pack of preditors. They thus became more flexable and responsive to changes in the prey.

The argument goes further that also all preditors are also being predated in a one way symbyotic relationship from parasites to which it will eventualy sucumb.

To prevent this outcome small organisums enter a co-operative symbiotic two way relationship. Usually this becomes a stable relationship which benifits both parties and aids in their continued existance.

So when seen from the business prospective large organisations that take a preditory view of the market have two choices become extinct or develop symbiotic relationships.

IBM has started switching over, google started out on that path, as did Red Hat.

Others such as Sun and Oracle are trying a mix and match cherry pick type solution.

Only time will tell which is going to be the best in the long run.

But if I had to place a bet it would be on symbiotic relationships with the market not predatory, and with high flexability.

Posted by: Clive Robinson at October 26, 2009 03:30 AM

Microsoft has reported revenue of $12.92 billion in the first quarter of 2009, down 14% compared to $15.06 billion in the same period last year. ...

Posted by: Microsoft Q1 revenue down 14% to $12.92 billion at October 27, 2009 10:32 AM

Economist writes:

Ironically, Vista’s failure stemmed from its ironclad security. Unlike its popular predecessor, Windows XP—which automatically made users also administrators, with the right to change all sorts of things and accidentally leave back-doors open for mischief-makers—Vista’s “user account control” (UAC) technology clamped down firmly on the user’s ability to change settings, download software or even run installed programs. To gain the right to do so, people had to get authorisation from an office administrator. Even then, they were bombarded by UAC interruptions, demanding permission to continue with whatever they were trying legitimately to do. It was enough to drive most people insane.

Just as bad, the locked-down nature of Vista made it run as slow as molasses, needing far more computing power than XP to perform similar tasks. The extra security also led to instability and compatibility problems. In short, Vista broke a lot of things that people took for granted with XP. No surprise that four out of five XP users—some 800m PC owners around the world—refused to upgrade to Vista. The vast majority of those who use Vista today acquired it by default when they bought a new computer.

Microsoft has learned its lesson. ...

Posted by: Vista Blusta at November 1, 2009 01:28 PM
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