Monday, December 3, 2007

How many (successful) business plans does Microsoft have?

One.

And it is not working anymore.

In the Windows world - We  (Microsoft) make Windows, somebody (the Independent Hardware Ventor - IHV) makes the hardware as cheaply as possible, and you run somebody else's software on it to do useful stuff (The Independent Software Developer - ISV)

Sometimes, the 'ISV' is the company that provides you with the data or the service plan to make the other two useful.

We use this business plan over and over and over again:

Our product : IHV : ISV

Media Center
HP,etc
The cable companies

Urge, etc

Windows Server
HP,etc
another part of Microsoft - the SQL guys, for example

Samsung, etc
Your phone company

This model worked great, back in the day when 640k of RAM was enough for everybody, but it does not work anymore.

Here's one example. (Windows Mobile is getting massacred in the marketplace by iPhone.)

Why is this failing? Well, two reasons, at least:

You call the Microsoft helpdesk, because something is wrong with your smartphone/mp3 player/whatever. Microsoft blames the IHV (who made the gadget, as cheaply as they could), who, in turn blames the ISV (who don't have any real interest helping you after you purchased their crappy software), who, in turn, blames Microsoft (who tried to design their software, by committee, for a variety of the IHV's and ISV's whims.)

Second reason: Computers are changing into consumer electronics. 10-15 years ago, you needed to know about IRQs and DIP switches to run a computer. Today, your teenager picks a laptop based on its color.

Back in the days when computers were complex, consumers had to put up with the complexity and buck-passing of the Microsoft-IHV-ISV system.

These days, with great consumer electronics products like the iPhone around, the Microsoft-IHV-ISV system is a dinosaur.

The times we've tried to set up a new business plan (the Zune, the XBox), we get to some limited success, after digging an enormous hole. Yes, XBox is profitable (now) - but go take a look at how much money we've sunk into it already.

3 comments:

Des said...

Just read the blog, I think your right about the model being outdated. Which is why 7 is needed sooner rather than later... before the model is obsolete.

Hopefully the Hardware will catch up in time for 7 to be released, one of the reasons Vista is seen as poor is that there are limits to the hardware its installed on. Most laptops run 32bit Vista, which limits Vista.

Right now, Microsoft should be thinking about making more hardware devices like the zune and 360, but making their software for those devices better. Ignore the monopoly charge because lets face it MS does not have a monopoly on consumer devices, Zune and 360 are not leading the field!

The 360 should have the option of installing an limited OS or at least a web-browser, hopefully the 360s replacement/sucessor will shine.

Personally Ild like to see a new 360 Media Center which records TV, is a computer running a browser and maybe a modified version of XP, cripple it a little if you have to by restricting access to the graphics hardware, but let it run versions of Office with Ads.

Make it do the stuff that people want it to do for fun, and make the hard drive and ram upgradeable with standard hardware.

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