Tech Strategy Trends

Jan 23 2013   10:57AM GMT

Game over for Microsoft? Not quite

Tony Bradley Tony Bradley Profile: Tony Bradley

I’m not sure if he’s based out of Washington, but it seems like Adam Hartung is smoking some powerful stuff. In response to the seemingly tepid reception Windows 8 and the Surface RT tablet received over the holiday season, Hartung is shouting “the sky is falling” from the rooftops, and proclaiming the death of Microsoft. Lest you think I’m being overly dramatic, the title of his blog post is “Sell Microsoft NOW – Game over, Ballmer loses.”

Hartung is sure Ballmer is the worst thing to happen to Microsoft, and that the company will quickly plummet–following the likes of RIM and Palm from once lofty heights to mere also-ran afterthoughts, or possibly complete oblivion. He suggests that Microsoft will be forced to cut up to 60 percent of its 94,000 employees–more than 56,000 jobs–in the next few years.

Seriously? I’m not suggesting Steve Ballmer is a great CEO, and I’m not saying Microsoft hasn’t made some (many) mistakes along the way–but Microsoft isn’t going anywhere any time soon. Judging from the comments on this Windows8Update post, I’m not alone in thinking that Hartung is off base (to put it mildly).

First, Hartung does a lot of comparing apples to oranges, or more like apples to bicycles. He talks a lot about Windows 8 and PC sales, but then goes on to use iOS and Android statistics as an argument in support of the demise of Microsoft and Windows PCs.

Hartung claims that Microsoft dominance has fallen from 95 percent down to 20–citing a Goldman Sachs chart. The chart isn’t looking at PC operating systems, or mobile platforms, though. The chart is looking at overall total devices connected to the Internet. In that respect, Microsoft is losing ground, and it does have something to worry about. It’s a simple reality that the idea of a PC is somewhat dated, and that smartphones and tablets have emerged as primary computing devices for many users.

I agree with this quote from the cited Business Insider post, “Microsoft’s inability to make a smartphone people really love could be a deadly mistake. As people became comfortable with the iPhone, they became open to the idea of the iPad. As the iPad takes off, it is slowing PC sales. As people become comfortable with the iPad, they’re going to be more inclined to buy a Mac to stay in Apple’s ecosystem.”

Here’s the deal. Microsoft has almost 92 percent of the desktop OS market. 92 percent. Mac OS X has a little over 7 percent, and Linux has 1 percent. Mac OS X has gained in popularity, and has increased market share a tad in recent years, but it is highly unlikely that either Mac OS X, or Linux, or Chrome OS, or anything else will pose any realistic threat to Microsoft’s OS dominance any time soon.

As pointed out above, though, the real threat is from mobile devices. Microsoft may not lose dominance of the PC OS market, but the definition of a PC and the relevance of that market is quickly fading. That, however, is where Microsoft still has a long-term advantage, and why Windows 8 is brilliant.

Surface RT is a well-engineered, high quality device…that will probably never be any real competition for tablets like the iPad, Google Nexus, Samsung Galaxy Tab, or Kindle Fire. Had Microsoft brought it to market for $300 or less, it would be a different story. But, the price is too close to an iPad for people to justify. There’s enough about Windows RT that isn’t really “Windows” that it puts Windows RT tablets at a disadvantage.

The Surface Pro, on the other hand–or more precisely Windows 8 Pro tablets in general–are another story. The Surface Pro won’t be available until February, and the existing Windows 8 tablets like the Dell Latitude 10 may not be flying off the shelves…but they will. What’s better than having a Windows or Mac PC with a separate tablet you can take when you go mobile? Having a PC you can just take with you, and still have all of the same data and applications you’re used to with you wherever you go–that’s what.

The PC market is fading because the definition of what defines a “personal computer” has shifted. As long as you consider PC sales and tablet sales as two separate entities you won’t really have a complete picture of the PC market or the relative success of Windows. The market may balk at the dramatic makeover of Windows 8, but people always resist change. Eventually they’ll get used to it. Eventually they’ll need a new PC (or tablet, or hybrid). Eventually Windows 8 will be the number one operating system–and when it is, it will be the first step toward Microsoft reshaping itself to continue as a dominant force in a redefined PC market.

Whether he’s under the influence or not, Hartung is just wrong.


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  • J555
    good Read
    10 pointsBadges:
  • Microsoft is on the right track for the long haul - Bradley Strategy Group
    [...] out this IT KnowledgeExchange blog post by Tony Bradley, principal analyst at Bradley Strategy Group, for a closer look at just how wrong [...]
    0 pointsBadges:

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