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Date: Sun, 26 Jul 2009 23:02:05 +1000Figures for the last quarter indicate that the PC sector is experiencing a significant downturn. The big losers so far, are hardware manufactures. And things are not going well for some software companies. For example, Microsoft has announced a 17% decline in profit. Although many analysts have just nodded sagely and pronounced that this was not entirely unexpected ... Over all, considering the phenomenal losses in the hardware sector, the software segments of the economy seem to be traveling fairly well. Microsoft, in particular, may have done very well to limit their decline to such a modest amount. |
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However times such as these do raise some questions about the marketing strategy that firms such as Microsoft have employed. In Microsoft's case it raises some important questions about how they will proceed in the next few quarters.
In particular, the strategy of unsubtle inducements to upgrade combined with the deployment of software bloat which gobbles up the previous decade's hardware performance gains, at last, seems to be a discredited business model. Not only is this unpopular but continued deployment may eat away future revenue.
Hardware manufactures are only just beginning to feel the pain. In the coming months they will be bleeding from every orifice and as the red ink really starts to flow, the more desperate might commence tentative explorations of alternatives to the Microsoft "ecosystem".
Microsoft have used the word "ecosystem" a lot in their micro-speak. And the use of this ecological term in their advertising and press releases may have been a significant tactical blunder. Because the Microsoft structure is more like a monoculture than something as diverse and robust as a an "ecosystem". Ironically the emphasis of of the word "ecosystem" might just remind some customers of how sick, moribund and disease prone, the binary cloned Microsoft monoculture really is.
Over the years, Microsoft have weeded out third-party providers and "business-partners". For any genuinely independent third-party software developer, a partnership with Microsoft is probably going to be short-lived, and the prospective partner would be well advised to count the fingers on his hands before and after he shakes on any deals.
These days, most of the software that ships with a new PC is supplied by Microsoft. Almost all the software services supplied to the customer have been tightly integrated into the operating system. In many cases they have been cemented into the actual kernel. Much of this has been done in order to give the impression of a seamless interface .. So that the ill-informed customer perceives nothing but Microsoft as far as the eye can see.
Like a vast field of the same Laboratory strain of corn, this Microsoft monoculture is fragile and requires constant intense maintenance and lots of artificial fertilisers and pesticides.
And in times when many of the farmers in the Microsoft ecosystem can't afford to buy new equipment, it is going to be difficult to persuade them all to pull up the current strain by the roots and replace it with the new W7 variety ... Except of course the hapless Vista customers, who will regard it as a form of salvation.
Lately, Microsoft's famous rivalry with Google seems to have taken a curious new twist. When Google announced a new free operating system for netbooks (Chrome-OS), Microsoft countered by announcing they would supply a "free" cloud-based version of their lucrative "Office" application suite.
This tit-for-tat response does seem a little incongruous. The "Free" operating system that Google are offering will be nothing more than a re-badged version of Android, which is just a re-packaged version of Linux. It was "free" before Google offered to give it away, and thanks to the GPL will continue to be "free" even in the unlikely event that Microsoft should vanquish their nimble Open Source rival. In fact Google had the operating system sitting there, almost ready to roll. By announcing it now, all they do is rain on Microsoft's parade, just as it was about to march into the warm glow of a bright new Windows Seven dawn.
By hinting that they might give Office away for "free", Microsoft are only announcing that they will not hesitate to cut off their own legs, just above the knee-caps, in order to compete with Google.
It all makes for exciting copy, but it is not going to change the fact, that Microsoft cannot compete with an Open Source product by giving their own products away. Still, your humble blogger will be delighted to watch them roll out this fascinating new suicidal stratagem.
And then on the other side of the Software world, Palm have issued an update for WebOS.
This was to counter, what many say, was an attempt by Apple to block the Palm Pre from accessing iTunes.
And if the new patch for WebOS, allows the Palm Pre to access iTunes, uninterrupted for the next few months, then we can all agree that it was a little mistake ... or perhaps a misunderstanding?
However, if Apple should counter with another update to iTunes, which blocks the Palm Pre yet again, your humble blogger can only hope that somewhere in the dark dusty corridors of the DOJ (Department of Justice), some government bureaucrat is doing his or her job, and carefully assembling a file on Apple's activities ... Because such an abuse of raw market power by Apple would, like the Microsoft - DR-DOS case, last century, appear to violate the spirit, if not the letter of US Anti-trust legislation.
Although for the time-being, according to a recent New York Time Article, it seems that the US administration is reluctant to be too zealous in pursuing Anti-Trust prosecutions.