The problem with Techcrunch's implicit interpretation of the Microsoft stats is that they mostly are trailing indicators of a business model. Let's take Office as an example. Does anyone seriously think that it will still enjoy network effects five years from now? It was an exciting (at least financially) business model 15 years ago when Microsoft could basically tax the electronic exchange of business information. Now, Office documents can be at least read, if not written, without paying the tax. Word is hurt by the cultural shift away from using it as a means of generating pretty pieces of paper. Better collaboration tools are slowly eroding the Excel as database-synchronized-by-email model that dominates its use (as a percentage of documents). A large user base is nice, but it doesn't justify a high P/E ratio unless it can be leveraged in the future.
Look at the "smartphone" numbers. The implicit message was that Apple doesn't really have all that much marketshare. Whatever. But, what's Microsoft have? Close to nothing, and there's little evidence that it's going to catch up. No one in his right mind can claim that the "phone" won't replace many (more) current desktop/laptop use cases in the coming years. What slice of that goes to Microsoft?
I don't know much about the CRM space, so I can't comment on the Salesforce.com vs. MSFT thing. But, what's notable is that Microsoft doesn't really enjoy network effects in that space. It must compete like other enterprise software companies -- again, not a model to justify a high P/E. The netbook numbers can be counted as a "save" against consumer-facing Linux distros, but I understand Microsoft to be practically giving away Windows 7 "starter" edition to keep share. Hardly a great model. Furthermore, the OS is little more than a platform for a web browser. Microsoft is doing all the dirty work and making little in return.
What if IBM blogged about its huge mainframe market share in the Fortune 500? Should we be excited about the future prospects of z/OS? How many mainframe customers would gladly get rid of their mainframes if switching costs were lower? 80+%? Look at the number of skilled COBOL programmers out there. Surely such a large development community will continue to propel the platform forward?
What's causing Microsoft's stock to stagnate is that the company has failed to maintain the network effects that fueled its growth and pricing power. They're becoming yet another company competing for consumer nickels and corporate dollars. While that's well and good, it's not the stuff of hocky stick growth curves.
And, Bing? I started using it because of 15% Bing Cash Back deals. Forget doing an actual search or clicking an ad.
"Let's take Office as an example. Does anyone seriously think that it will still enjoy network effects five years from now?"
Absolutely.
Office isn't going anywhere in most business settings. If anything, the last two Office and SharePoint releases have only continued strengthening its position.
I definitely wouldn't bet that the desktop/Windows/Office thick client paradigm will last forever, but I also wouldn't dare bet against it in the near-term.
Considering where OpenOffice.org is today, and the use it's already getting in small companies and even various government departments around the world, it would not be hard to imagine it making a very significant dent in Office profits for Microsoft over the next five years. That's not even getting into the cloud options, however successful those turn out to be on the corporate desktop.
Off-topic, anyone know of a good open source web-based office suite project? It would be nice to have the collaboration benefits of web-based productivity software run from a centralized location, combined with the data security of being hosted on private equipment on the LAN.
Oh boy... My wife led the project of her company's local branch intranet. She wanted to do it in Plone (probably my fault, as I introduced her to it), but central office demanded it to be done in Sharepoint because that's what they use.
I feel sorry for the companies who use Sharepoint for its document sharing/management... In time, it will prove a huge competitive advantage for their competition.
SharePoint is a great intranet and collaboration product, but it's not a document management system. However, you can extend SharePoint with Laserfiche document management. Check it out on our site www.aisww.com or read more on our document management blog: blog.aisww.com
Was this spam? My whole point is that Sharepoint is not a great intranet and collaboration product. It's unnecessarily tied to Microsoft Office products (and it's that way by design), has simply appalling content management (why would I want to buy a second product from a second vendor to make what I bought bearable to use?). The point was that the Sharepoint intranet had half the functionality for twice the budget and twice the maintenance cost of the originally designed Plone-based solution.
Hi,
No, its not spam. I don't know enough about the installation to be able to speak intelligently on the specifics of that project, but we have many clients that use SharePoint for intranets and collaboration while its not perfect for every situation that does not mean its not a good intranet/collaboration product.
My point about extending SharePoint was that you said "I feel sorry for the companies who use Sharepoint for its document sharing/management" and I was addressing that by mentioning a product we use to fill that gap in SharePoint.
There are many reasons for using SharePoint, there's no need for me to get into that here. If you need to add document management to SharePoint, Laserfiche is a nice easy way to do that.
SharePoint integrates impressively well with Word and Excel, for version control and as a data store. Using Office with SharePoint definitely adds value in ways that Office replacements don't currently.
In that way, SharePoint strengthens Office's hold on the desktop, which strengthens the resulting network effect.
To refresh your memory, the article point is that MS is going to be making bank with PCs for a while. End of story (literally - used correctly for once). MS will be selling a gazillion copies of office five years from now.
IBM is still cleaning up with mainframes BTW.
As to whether you should get excited, well I'm not your emotion manager.
Look at the "smartphone" numbers. The implicit message was that Apple doesn't really have all that much marketshare. Whatever. But, what's Microsoft have? Close to nothing, and there's little evidence that it's going to catch up. No one in his right mind can claim that the "phone" won't replace many (more) current desktop/laptop use cases in the coming years. What slice of that goes to Microsoft?
I don't know much about the CRM space, so I can't comment on the Salesforce.com vs. MSFT thing. But, what's notable is that Microsoft doesn't really enjoy network effects in that space. It must compete like other enterprise software companies -- again, not a model to justify a high P/E. The netbook numbers can be counted as a "save" against consumer-facing Linux distros, but I understand Microsoft to be practically giving away Windows 7 "starter" edition to keep share. Hardly a great model. Furthermore, the OS is little more than a platform for a web browser. Microsoft is doing all the dirty work and making little in return.
What if IBM blogged about its huge mainframe market share in the Fortune 500? Should we be excited about the future prospects of z/OS? How many mainframe customers would gladly get rid of their mainframes if switching costs were lower? 80+%? Look at the number of skilled COBOL programmers out there. Surely such a large development community will continue to propel the platform forward?
What's causing Microsoft's stock to stagnate is that the company has failed to maintain the network effects that fueled its growth and pricing power. They're becoming yet another company competing for consumer nickels and corporate dollars. While that's well and good, it's not the stuff of hocky stick growth curves.
And, Bing? I started using it because of 15% Bing Cash Back deals. Forget doing an actual search or clicking an ad.