Oh, for goodness sake, Microsoft isn't going to die. It will continue to be a giant in the tech industry, but like the rich geezer on Viagra hanging on to a 20 something gold digger, the company isn't going to have much mojo.
What do you do when your business relies on your charging a hefty premium for something that no one is willing to pay for? That's the essential problem facing Microsoft with Windows.
While you can argue with the soothsayers who predict market drops to a fraction of a percent, usually being wrong at every turn, you can't argue with trends: Windows is just not going to be dominant and Microsoft doesn't have an answer for what it does with its OS in the future, other than more of the same.
Although the second-quarter shipments enjoyed a 1.8% sequential growth, consumer demand was still weak despite the promotions and product launches by brand vendors, including Intel's and AMD's new CPUs, Microsoft's Small Screen Touch (SST) project and brand vendors' cheap tablets and price cuts, according to Digitimes Research's latest figures.
The Street is not happy either:
But given the dire state of the PC industry, which has been in perpetual decline, Microsoft now appears to be constantly "in transition." This now seems to be the popular excuse for the company's weak recent results, including its recent miss in its GAAP gross margin, which declined by five points in the fourth quarter.
Missed estimates is one thing, but I can't overstate enough the magnitude of this new reality. Nor can I ignore the company's slashing of prices of its failed Surface tablets in hopes of increasing higher adoption. Unfortunately, the strategy, which has come at the expense of better margins, is not working. And now Microsoft is running out of options.
Screw the recent re-org because the people re-org'ing or being re-org'ed are the same people who didn't have a clue before. Well, that's not fair entirely. They may have a clue but they can't do much about changing things because there is a giant cash cow called Windows sitting right there in front of them, eating away at any chance they have of changing themselves from the inside out, but keeping their veins pumped with the sweet heroin of no work mountains of cash (actual mountains of cash and not just metaphorical ones).
Microsoft should have built a new brand in mobile, a completely new mobile OS that had nothing to do with Windows and everything to do with not repeating the mistakes of Windows. It built a new brand with X-Box and didn't, mercifully, end up calling it Windows Game Box or some thing like that (you know they would have done that had they not feared diminishing the Windows brand back in the late 90s, early aughts). So, nothing was holding them back from doing refreshing their OS business.
Instead, Microsoft is doing exactly what it cannot afford to do anymore: keep every Windows user happy or, as it really relates here, keeping all of its corporate Windows users happy by promising some gigantic, unworkable Windows cross-device utopia.
Yes, my profound take on everything is that Microsoft needs a new OS. One that is not subject to the licensing whims of its Windows sales department. An OS that can take on Android, which only Microsoft is equipped to do.
Then, Microsoft could mine all of its corporate partnerships for applications and services that it can move to its new OS and coin that business instead of the OS.
I am a genius. Microsoft can back up the money truck to my front door any time they are ready to implement my ideas.