Microsoft's Real Problem: The Second Coming of Apple

http://www.alleyinsider.com/2008/7/microsoft-s-real-problems-cloud-computing-and-the-second-coming-of-apple

by nickb • 18 years ago

18 16 18 years ago

mattmaroon3• 18 years ago

"It's also probably safe to say that most won't be running Excel, Word, or Outlook, either."

Umm, no. The fact that Office programs are written for Mac is one of the prime reasons Apple is able to make inroads into corporate.

Anon84• 18 years ago

Very true. But the quality of Apple's own replacements (like Keynote) and the ease with which they can interoperate with Microsoft Office (Keynote is a better Powerpoint than Powerpoint) makes the transition very easy. Add competitive pricing to this and Microsoft has a real problem even here.

mattmaroon3• 18 years ago

I would think free alternatives like Google Docs/Zoho probably scare MS more in the long term. I'm still skeptical anything will replace MS office in the foreseeable future (that's just my nature I guess) but I imagine if anything does, it will be something free.

aneesh2• 18 years ago

> "Apple (AAPL) shipped 1.4 million computers in the US during Q2, representing 8.5% market share and 38% year-over-year growth. Mac shipments grew 9 times faster than the overall U.S. PC market (4.2%) in Q2."

Is basic mathematical literacy too much to ask for? When your market share is small, it's easy to grow faster. Apple can cut in to a tiny fraction of Microsoft's market, and growth is huge. But even if Microsoft converts all Apple customers to PCs, the percentage growth will be small. When your market share is 90%, it's impossible for your market share to grow more than 11%, and pretty difficult for your sales to grow at 38% (unless people buy new PCs every 6 months, or you find a big new market). While it's true that Apple's growth is faster, it's hardly as surprising as the article makes it out to be.

My company's computer shipments grew over 10x faster than Apple's -- so about 90 TIMES faster than the overall market. I increased by sales 400% by selling computers to 5 of my friends, since I only sold 1 computer last year. Get my point?

Yes, Apple's growing, but this whole "9 times faster", while true, is misleading, meaningless hype.

> "But at the rate Apple is gaining share, it won't be long before Microsoft begins to feel a real bite."

Yes, but as Apple grows, they can't keep growing at that rate!

For example, MSN/Live search market share grew about 27% from May to June (http://seekingalpha.com/article/85321-msn-live-only-major-se...). But you don't see anyone making a big deal about this, because it's impossible to expect Google to grow at that rate. This situation is no different.

DavidSJ• 18 years ago

Actually, the article did explicitly distinguish between unit growth and percentage growth, noting that:

> More surprisingly, Apple outgrew HP--the world's largest PC vendor--on a unit basis as well:

...

> Q2 U.S. Mac sales grew by 386,000 computers year-over-year, handily beating no. 2 HP, which sold just 222,000 more computers in Q2 2008

...

> Looked at differently, the Big Three sold 1,165,000 more computers in the US in Q2 than they did last year...and Apple sold a third of these additional units.

aneesh2• 18 years ago

Agreed, but that's not my point. The article claims amazing percentage growth, and then uses that to say that if Apple keeps growing at this rate, Microsoft should be scared. It's ridiculous to expect long-term growth at this rate. Maybe the next couple quarters, but not the next couple years.

mdasen• 18 years ago

I love Apple. I've used Apples since grade 2 (first computer ever touched was a IIc). I went through the whole gamut of Macs - LCs, Performas, Quadras, PowerMacs, iMacs, G3s, G4s, MacBook Pro. Apple is going to grow in business, but they aren't going to threaten Microsoft.

Why? Many reasons. Companies don't like being beholden to a single provider. With Windows, at least for the computer, they get Dell, HP, and many others to buy from. There is a huge ecosystem around Windows. I work at an office that uses Exchange for email/cal. Entourage always has little weird anomalies. We have constituent management software that only runs on Windows and we're not going to switch because we have too much data (and it's a terrible, proprietary format).

Plus, the biggest thing, businesses like ABI stability. It's why MS has done so well. While others would break compatibility on both the ABI and API level, MS has kept it stable for over a decade for the most part. It's made Windows cludgy, sure, but customers like it (mostly). Often, when Apple releases a new OS X, there are little things that need changing in programs. Apple seems to have put this more in the past and I'm really excited about Snow Leopard. However, if Apple goes the MS route and demands forever backward compatibility, it's likely that OS X's advantage disappears.

Apple is poised to make inroads, but part of MS' problem is also its greatest feature - backward compatibility. Should Apple follow suit, the pace of development would slow and OS X would get more cludgy. And if Apple ever displaced MS, MS would have the option of breaking compatibility and then leapfrogging Apple like Apple has done to them.

Part of the reason I love the Mac is that Apple is willing to break compatibility to make things better/more stable/more lovable. OS X is at a really great place right now and I'm also glad Apple is going for more stability than in the past, but businesses really want MS-style ABI stability. I definitely see Apple displacing a good amount of MS in the home, but businesses can be more conservative.

I guess I'll see what happens. As someone who was in the fold during the darkest times, I'm just glad to know the company is stable, profitable and growing.

chaostheory2• 18 years ago

"However, if Apple goes the MS route and demands forever backward compatibility, it's likely that OS X's advantage disappears."

Apple doesn't have MS's infinitely hard task of dealing with n variants and combinations of PC hardware and drivers. They also already dealt with major issues of backward compatibility through emulation.

chaostheory2• 18 years ago

No, MS's real problem is not fixing Windows from the ground up, instead of just giving people crappy patches to bloated software. Apple wouldn't be a problem if they kept their past promises with Longhorn.

tx• 18 years ago

Google, Yahoo, Amazon, and other web-based services companies offering functionality and apps for free that Microsoft currently charges a boatload for.

What are they smoking? What exactly do Yahoo and Amazon offer that equals to Windows or Office?

And no, Microsoft does not charge anything for Wordpad (equivalent of Google Docs). In fact, Wordpad is open source - it's been shipping as "RichEdit control code sample" since Visual Studio 4.0 (1996 if I'm not mistaken).

How many years need to pass for people to realize that no, a browser isn't an OS, and no, browsers don't represent any "paradigm shift", simply because winword.exe can learn to do HTTP much easier than browser can learn an equivalent of Win32 API.

schoudha• 18 years ago

I don't think Microsoft even agrees with your statements.

m0nty• 18 years ago

"with the rise of cloud computing, Google Apps, and cloud-based email and IM, choosing Mac is an ever more viable alternative"

I can't see much of a link here. Most businesses I've worked for over the last five years are still wedded to PCs and Windows, and wouldn't ever change -- too much risk, too much potential expense, etc. I would guess that most of the growth in Apple's sales are to home users or very small businesses, not corporate.

I'm a Mac enthusiast, I'm a Linux enthusiast, but I wouldn't recommend most businesses switching to those platforms (on the desktop, at least) except in a very limited set of circumstances.

Microsoft's Real Problem: The Second Coming of Apple

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