>"Microsoft is PC company, nothing more, as demand for PCs shifts to mobile."
I doubt Forbes serves its website from an iPhone.
B2C is a small portion of Microsoft's business (though massive on an absolute scale). From the days of their agreement with IBM, Microsoft has always been grounded in B2B relationships. The fact that the author can mention Dell, Nokia, and HP indicates a strength that companies to which they are often compared such as Google and Apple, lack - Michael Dell's B2B relationship with Microsoft helped make him a billionaire.
Under Balmer's tenure, Microsoft has become a stable mature company which has consistently realizes massive profits through established long term relationships with their customers. Microsoft started paying dividends a long time ago. It's not a growth stock.
Balmer remains CEO because he is not beholden to Wall Street. He's second only to Gates as a shareholder. They can look long term in a way that other companies cannot and direct Microsoft accordingly - because Balmer's job isn't at risk based on some two bit analyst's opinions.
I'll agree there's a strange blind-spot in much tech reporting on Microsoft. It consistently misses Microsoft's stable, mature and solidly profitable B2B business. Even if worse came to worst, they could sail off into that land IBM pioneered, remaining happily profitable for decades to come.
But at the same time, Ballmer has made some horrible blunders. The XBox was nearly strangled by their obsession with beating Sony out of the gate with the 360. The Zune was a disaster. The years of utter denial regarding WinCE vs the iPhone and Android. Groove. Danger. Skype. The complete lack of a functional ecosystem between their own first-party products. [1] The critically successful Windows Phone being artificially hobbled by bureaucratic concerns [2]. Mismanaging the entire tablet sector for years, only to show up three years late with a confusing compromise...
In short, nothing but their B2B business (and you can lump much of their Windows licensing money in as part of that) has been run well.
[1] XBox Live vs Games for Windows Live, XBox Media Functions vs Windows Media Center, Zune vs XBox Marketplace (and don't get me started on the mess that they created when they tried to finally centralize media under the "Zune" service brand...)
[2] The name is absurd. Why not "Metro"? Why didn't they just put it on a tablet and call it a day? Why are they finally delivering a Metro-ish tablet, but under a different architecture and name and with some obtuse desktop metaphor lurking under the covers?
Saying there were obvious, preventable mistakes is different than saying the entire product is a blunder.
The early release was a mistake. A mistake that cost them billions of dollars and did nothing to help them measurably "win" against Sony. [1]
The nonsense being grafted onto XBox Live and the dashboard in general is also a mistake. [2]
The 360 is an overall success despite those things.
[1] The 360 succeeded largely on the strength of XBox Live and Sony's shooting themselves in the foot over-engineering --and thus overpricing-- the PS3.
[2] Allowing publishers to erode the experience. Muddying up the formerly-clean media experience with largely nonsensical divisions of functionality is a mistake.
There is a counter argument in the book "The Race for a New Game Machine" that makes the case that the early release was a key factor in passing the PS3. If next XBox holds on, it will be money well spent.
I'll certainly take a look at that, but I remain unconvinced thus far.
The PS3 was demonstrably price-bound for its entire first few years on the market. The existence of the 360 or its early lead just didn't seem to matter. And the "needed to launch first" position has a habit of entirely writing off any negative effect of having poisoned gamers against MS Hardware quality. (Which to that point had a spotless reputation.)
Microsoft owns it. They could build a worldwide phone network on top of it. They even have a hardware partner with deep penetration in the developing world.
They may yet blow everyone's doors off with first-class integration of Skype. But given their position in the marketplace, and carrier's dislike of anything that pushes them toward being dumb pipes any faster, color me pessimistic.
They could also seriously upend the market with a skype-only no-phone-plan, PMP/phone that runs off wifi and/or prepaid data. That could justify the price of the Skype purchase as well. And I'm just as pessimistic about that.
I'm not saying they won't ever do anything with it. But they paid a pretty penny and thus far don't seem to have any coherent plan.
I'm pretty sure they have confirmed that Skype will have deep integration in WP8. And look at BBM, iMessage, Google Voice... the carriers may not like these things, but so far they've been unable to stop them.
If Compuserve and AOL had a veto over what browsers people could use, yes, that would be a decent analogue.
It's not that Microsoft needs carrier approval in a technical way. But they absolutely need to be on the carriers' good side in a business sense. If Microsoft is pushing products that will erode carrier profit margin, the carrier stores are not going to push Microsoft's phones.
And Microsoft has had little luck to date selling phones without their help.
The US model of carrier subsidies for mobile phones is not only limited in its geographic scope, it is exceedingly vulnerable to disruption for the same reasons that cable and traditional phone companies carry internet traffic for a flat fee.
I didn't say Google was a better name but here goes.
Bing is physically difficult to speak. And as every fourth grader who has taken math knows, Google actually means something. Bing doesn't mean anything; it doesn't even evoke any thought or emotion.
Based on http://toolbar.netcraft.com/site_report?url=http://forbes.co... they don't use Microsoft software either. As for Microsoft's profits, anyone who has read The Innovator's Dilemma can see all of the signs of a late stage great company that has failed to address disruptive innovations. They will continue to have great profit margins as they bleed customers until they wind up with no business left.
I doubt Forbes serves its website from an iPhone.
B2C is a small portion of Microsoft's business (though massive on an absolute scale). From the days of their agreement with IBM, Microsoft has always been grounded in B2B relationships. The fact that the author can mention Dell, Nokia, and HP indicates a strength that companies to which they are often compared such as Google and Apple, lack - Michael Dell's B2B relationship with Microsoft helped make him a billionaire.
Under Balmer's tenure, Microsoft has become a stable mature company which has consistently realizes massive profits through established long term relationships with their customers. Microsoft started paying dividends a long time ago. It's not a growth stock.
Balmer remains CEO because he is not beholden to Wall Street. He's second only to Gates as a shareholder. They can look long term in a way that other companies cannot and direct Microsoft accordingly - because Balmer's job isn't at risk based on some two bit analyst's opinions.