Thursday, July 23, 2009

Interesting Contrast

Definitely a sign of the times: Two days ago, Apple announced another best non-holiday quarter ever, handily beating analysts' predictions. Today, the once-unstoppable Microsoft reported a 17% drop in revenue, marking the first full-year decline in revenue in Microsoft's history and missing analysts predictions by a wide margin.

It's obviously a good time to be a Mac user. It's been a long time since I've heard anyone predict the death of Apple (a favorite pasttime of analysts and pundits for years) and ignorant comments about Macs being "toys" or "not for serious work" are almost non-existent except for a few bitter and lonely commenters on Reddit and Digg.

The problems Microsoft is having, no they are not Microsoft's fault. It's the global slowdown and other things that they have no control over and couldn't have possibly predicted.

Let's face it, Microsoft has "Victim Syndrome". They're not fixing their problems because they haven't truly accepted that they're doing anything wrong. They go so far as to pat themselves on the back for cutting costs and laying people off, saying
In light of that environment, it was an excellent achievement to deliver over $750 million of operational savings compared to the prior year quarter.
Seriously? Operational savings? That's a pussy way of putting it, but I guess "layoffs" sounds too negative. And how does the word "excellent" even get worked into reporting a substantial decline in revenue? And how do they title their release?
The company delivered operational efficiency and innovation in a difficult environment
Now, compare that with Apple's post-Jobs earnings statement from December 2000 where they had some similar problems. Right in the title, they called their results "disappointing". Although Apple pointed out the global PC slump as a contributing factor, the reasons they gave for the loss were that they didn't plan well enough. Apple's approach was, when you cut through the anaylst-speak, to say "we fucked up, we know it, and we're going to fix it". They acknowledged the problem.

Microsoft, on the other hand, is trying to convince everyone (themselves included, perhaps) that they are still headed in the right direction and are doing just great, despite overwhelming evidence to the contrary. What they should be telling us is that they've got problems and they know it, and they've got a plan for fixing those problems.

Microsoft needs an intervention, badly. They need somebody to be a real friend and tell them the harsh truth: that they've got a problem and they need help.

I've said it before, but I think Microsoft is desperately overdue for a change of leadership. It takes a long time to turn a big ship around, so the sooner Microsoft can get someone with vision at the helm, the better it will be for Microsoft.


baspey said...

> Now, compare that with Apple

I wouldn't say that Apple is a model of transparency either. Remember when Steve Jobs said he had an hormone imbalance, when in fact he was waiting for a liver transplant...

I agree that Steve Balmer should leave. This guy is a clown! Reminds me of when the USA were led by Georges W. Bush.

Jeff LaMarche said...

I never said Apple was a model of transparency. I said that they owned up when they had a company problem. The admitted something was wrong to the shareholders and analysts.

Apple has never been a model of transparency and I wouldn't try to claim they were. But when Jobs was having a liver transplant, the company was doing fine. Earnings, profits, all metrics that would matter to the shareholders were rosy. Different issue altogether.

My point is not to defend Apple's secrecy, it's just to point out that you can't fix a problem if you won't admit you've got it. I think Apple has been good about owning up to at least their major problems since Jobs came back.

bobby1234 said...

Microsoft is broken. I get so annoyed when I have to use XP (or any microsoft product). There are so many weak points to their software, things that have been broken or poorly done for generation after generation. But instead of fixing they just ignore them.

If microsoft want to survive (in the long term) they need to fix their products. Not just bring out a new broken beta product. They need to get it right, you know make a product that ... "just works".

Too many of my friends become frustrated about how much they have to know about operating systems and pc just to do their day to day business... frankly they don't want to be pc experts they just want to use the flippn thing... (rip opportunity for conversion...8->)

warmi said...

" frankly they don't want to be pc experts they just want to use the flippn thing"

Nah ... the reason OS X appears to be running so much better is for the same reason a typical XBox is much more reliable than a typical PC. They are both running on a limited subset of well tested hardware ...
In other words, they are not playing the same game - Microsoft is selling an OS designed to run on just about every hardware out there and to blame them for occasionally failing at a game that Apple doesn't even attempt to play is somewhat misleading.

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rich said...

Businesses are like old people, live in their complacence, Companies like GM, AOL MS are like a bunch of old farts who never acknowledge their own mistakes and never think out side of the box. Using their Mafia style marketing, Knowingly and irresponsibly, MS shoveled millions of copies of their virus prone so called operating system garbage into everyone's home. It's only a matter of time before MS dies, when that time comes, I will be the first one to cheer!!

Rodrigo Camargo said...

To say that Microsoft is going to crash is like to say that capitalism will be replaced by some other governance. We know that the thing doesn't work as expected but the size of it doesn't allow a full replacement, I guess. I'm listening to the Microsoft's crash since Linus Torvalds had that idea. Maybe the future will be a little more share the space with the buddies than anything else.

Jeff LaMarche said...


You're making a bit of a jump. I didn't say Microsoft was going anywhere. I said they were in trouble and didn't seem to have accepted it.

It is inevitable that they will. The question is when, and how much damage will happen before then. There's already been a lot of damage, so you can't argue that Microsoft is just fine and heading in the right direction, unless you're Balmer.

But I absolutely do not think Microsoft is going anywhere. Microsoft will continue to be not just a viable platform, but the dominant platform for quite some time.

But the writing is on the wall that they need to change, and most people outside of Microsoft seems to see it.

And despite what you probably think, I don't want Microsoft to fail. I want them to get off their asses and put out a great operating system. I want Windows 7 to be measured by some other yardstick than "it's not as fucked up as Vista". I absolutely want competition, but Microsoft isn't giving it. They're riding on past successes, installed base, and vendor lock-in, and that's not a sustainable long-term strategy.

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