Gartner analysts Michael Silver and Neil MacDonald told a conference audience yesterday that Microsoft’s Windows product is collapsing and must make radical changes to its operating system or risk becoming a has-been.
They specifically pointed out the slow adoption rate by businesses - just 6% to date - and the fact that the Vista code base is so large. That means changes take years, and only high end computers can really take advantage of it anyway.
For most early adopters (and all Mac users), the browser is increasingly the only operating system that matters anyway. Windows isn’t really that relevant any more just because of the increasing utility of online applications like Google Docs, which competes with Microsoft Office. Vista could be perfect and it still wouldn’t matter. The fact that it is flawed only makes the situation worse.
Microsoft makes a ton of revenue on sales of software that sit on the computer. $15 billion a year for Windows alone, and another $16 billion for Office and Exchange Server in 2007. That’s 60% of Microsoft’s total revenue, and profits from those groups float the rest of the company. Microsoft isn’t a viable company without their consumer and business desktop software profits.
The real question isn’t “What can Microsoft do to fix their Windows product?” but rather “Even If Windows and Office were perfect, would it be enough to keep Microsoft relevant in the medium term?” I think the answer to that latter question might be “nope.” And that, of course, is why they want Yahoo so badly. Online advertising revenue is their only real hope of long term survival.
“For most early adopters (and all Mac users), the browser is increasingly the only operating system that matters anyway”
That’s why ony morons buy the overhyped Apple crap. Linux is free and has browsers.
Interesting thought.. will is Gartner collapsing?
nah, I don’t buy this. Yes of course we need an os at the moment and vista is bloated but if he was to do some reesearch he would see the next version of windows will be much more slimline.
Also business uses more products that windows and office. SQL server and sharepoint come to mind.
I foresee MS bring out their next OS and it will becalled something like Windows Web.
Linux is free - you can tell by looking at it - lol
The reports of Microsofts demise are greatly exagurated… considering they own substantial shares in just about every conceivable marketplace OTHER then software. They also have a pile of cash that would make most countries in the world jealous.
Jon
http://woodmarvels.com - Create Unique Memories
This is like saying, you don’t need a pc to do computing.. or, pc’s will need no os..
yea.. you just need your cellphone, and the giant pda (google appspot).. LOL
Is this just a way for Gartner to get a lot of free press coverage.
Whatever you think of MS - to say they are on their way out is hyperbole.
But, they could do with shortening development times and cutting all the feature-bloat. It happens to all companies when they become very large, the internal bureaucracy is reflected in the bloat of the products.
MS needs more and smaller web focussed projects.
To do this they need to start hiring (or investing in) a generation younger than their current average employee age.
Sorry, I’m way too old.
The *real* questions are about *when*. *When* will Google Docs be a serious competitor for Office? It isn’t at the moment. *When* will Microsoft’s share of the desktop OS market see a big drop. It still looks pretty dominant to me.
If it was true that the Windows and Office product lines are “collapsing”, the company’s revenues would be collapsing too. So far, that doesn’t appear to be the case.
If a collapsing business is one that puts billions of dollars of profit in the bank every quarter, even after investing hugely in potential future revenue streams, I’ll take two please.
What with all these “web apps will take over the world” crap?!
People do more than just write letters and surf the net.
How am I gonna get the power of Photoshop online? (no, that Photoshop online is crap….). Do I really want to use Google Documents for sensitive stuff?
What about games? I’m not gonna spend my time playing endless Tetris clones on a web browser…
We will always need a specific OS and whoever says otherwise is just not facing reality.
gartner is in la la land. i myself is an advocate of the usage of free stuff but i dont think Google Docs come close to MS Office. he’s delirious, and to say the MS vista will collapse, i dont think so.. PCs can only improve in the future and then it will be highly compatible with vista. i use vista and os x and i think i need them both for productivity. but osx will never EVER overtake windows…
i hate vista! i think macs are most best, but i have simple xp again now. i agree about this vista being dead. i really not like vista when it came on my new laptop so i had some boy i know take it away and put up xp again which is better for me. yahoo is good though. sad to see yahoo go to vista bastards microsoft. just what i think though…
This is also what I have observed. the times of Windows has permanently gone. Nowadays people do not care about what kind of OS they are using because more and more apps are running on the server, not on the desktop. Actually any OS with a browse should be OK, which should be a disruptive trend change for Microsoft.
It should be a deadly mistake for Microsoft not to recognize this trend in much earlier years. They should admit it is a mistake invest so much money, so many development resources, and so long time time to make Windows Vista, which is actually not demanded by the market at all. If many years ago Microsoft used the money and resources for Windows Vista to develop a Yahoo clone or Google clone, they should be in a much better position now.
In this case I strongly in favour of the idea for Yahoo to try all the best to avoid being bought by Microsoft because it is unfair for such a desktop dominant giant to continue to dominate the web. Bye bye, Microsoft.
@Bob
While I think that more than one operating system can survive, and the browser will not completely take over the world, I certainly think web apps will take over the world. And web apps or suites of web apps could have more user lock-in than operating systems in the future.
What really matters is who can best market and actually deliver the servers and information that consumers rely on. I don’t think the Microsoft Yahoo combination would have much synergy because, even if Microsoft combines the two companies’ advertising networks and makes them more efficient, it won’t suddenly make Yahoo or MSN a better destination for consumers. It might be cheaper after such a deal, in the quite irrelevant long-run, for Microsoft to package a number of popular web applications together for consumers, but it would take them years to get it right. And they could fuck it all up.
If Gartner had all the answers - wouldn’t they be as big as Microsoft?!
What makes their analysts any more qualified than Microsoft’s analysts?!
Microsoft an afford to hire the very best, so undoubtedly they are looking into all reasonably possibilities. When compelling evidence is obtained, Microsoft will redefine itself or pursue appropriate modifications.
They hire the very best; they must have had a reason to come up with Office Live.
As far as Vista is concerned, it is just not practical in today’s businesses to upgrade so much is involved now
Vista is amazing = in fact, it is a work of art. Things can only get better from here
Also, if Microsoft tried to tightly integrate their own web applications with their operating systems, it would likely drive a lot of consumers directly away from them in search of a better interface and greater flexibility.
Hasta la Vista Vista?
I’ve never used Vista, but I have to say the author is overly optimistic when talking about the rise of Google Docs. If I’ve got something important to do that I can’t afford to lose, I’ll bring up… MS Office. Even when I’ve got notes to write that aren’t particularly vital, I’ll still use MS Office. You can just fire it up on whatever computer you happen to be using and save your stuff on a USB stick. No pesky logins, no endless passwords, no losing stuff if your flaky internet connection (remember, we still have those outside Silicon Valley) goes down. MS Office has been around for years, enterprises trust it, I trust it, it’s solid and the new 2007 version takes it light years ahead of any of the web-office suites and leaves Open Office in the dust.
“Even If Windows and Office were perfect, would it be enough to keep Microsoft relevant in the medium term?”
Honestly? You are now questioning the medium term viability of a company with more earnings than every other company you have written about in the history of your blog combined. I can’t quite remember the appropriate economic term to describe your analysis but I think it might be “retarded”.
“Microsoft isn’t a viable company without their consumer and business desktop software profits.”
Good point chief, taking away a $30 billion dollar business does impact the economic viability of Microsoft. Are you going to take that line of thinking to its logical extension and tell us that Google wouldn’t be doing so well without its search business or that Amazon would really lose its economic viability if books didn’t exist?
What a joke. Seriously guys, step out of the web2.0 echo chamber for a while will ya? There’s a lot more going on than browser usage in the real world. The web is not going to replace the OS anytime soon.
What a strange conclusion to reach. Microsoft need significant online ad revenue to survuve medium term. Is this going to be the only revenue model for large software vendors like Microsoft? absolutely not.
They are experts are writing software that people are prepared to pay for. I think people will always be prepared to pay for software online or offline. Microsoft just need to sharpen up a little going forward when it comes to giving people what they want. But that enormous market of large enterprise customers isn’t going to evaporate, corporations move slowly on these kind of decisions and the current alternatives are not necessarily huge pulls for large corps.
embarrassing post, techcrunch needs to re-up on their meth supply , you guys are clearly getting sleepy
Sorry but a complete load of tosh.
The vast majority of the world aren’t geeks like us! Most Americans can’t find Iraq on a map, do you think they’d know what Google Docs is?!
Oh, and macs are for girls.
Maybe this explains why the new breed of philanthropists like Gates empahsize giving away their money faster than the Rockefellers etc. who have tended to structure their foundations to try to last forever. The story has always been that the new breed of philathropists wants to have a significant impact within their own lifetime etc etc. But maybe Gates (and others like him) need to give away the money fast because the stock of the companies that underlie their wealth can lose most of its value rather quickly…….
MS has so much cash and so many engineers, it surely won’t be hard for them to find a solution other than Yahoo…
Well, lets make Microsoft Bleed it Out!
Bleed it Out!
Michael, you disappoint me with this article…
You know that the future of Microsoft / offline and online technology is not so easy to predict.
Getting tired of link baiting stories based on no real statistics or evidence.
“For most early adopters (and all Mac users), the browser is increasingly the only operating system that matters anyway”
So true, I mean, I never use Mail.app, Skype, Photoshop, VMware, TextMate, iTunes, iPhoto or any of that other crap. All I need is a browser! It does all those things can do *and more*! Oh wait…
Rubbish. I think it is easy for people to get carried away with what the near future will bring, but the web has a loooonnnggg way to go before people can do everything through a browser.
Even the more mature web based apps like photo editors and google documents are not as powerful as their PC based counterparts, and then there are things which are just better suited to PC based apps such as:
1) Converting files (e.g. X to DVD)
2) Burning files to CD/DVD
3) Letting users download with BT or News Apps
4) Allowing users to view their own media on their PC.
All of which require more processing power.
I think a more likely future is where the web becomes a supporting platform for PC based apps, allowing users to have their data backed up and made accessible online with less functionality being made available with the browser based versions of the applications (e.g. users use word 2007, with their documents saved on their PCs and backed up online as well with users being able to access, read, edit & create documents through a simpler browsed based version of word, like that offered by google docs).
MS nearly had it right with XP and then they took it to the next step of bloatware with Vista. Slim it down Microsoft, cut loose some developers and take a hint, put XP in the OPEN and allow development. And, if you are buying Yahoo, merge it with IE and hire some security. We are nearly all on broadband and our net is on 24-7, why not boot up to the browser? Put your office products on your Yahoo website, like Google Apps, and kick it into gear.
Vista is bad - requires more clicks to do the same thing as XP. Windows Mobile has the same silly stylus keyboard - Wake up MSFT
With a visionary like Ray Ozzie you can safely bet that Microsoft is coming up with a net-centric strategy. BTW Ray was dropping several hints about the “mesh” of devices. So MS is finally working on something akin to hailstorm (ca. 2000) and .NET.
p.s. Like the Germans, Never, ever write MS off.
Online advertising revenue is their only real hope of long term survival.
What a load of crap. I mean, really.
“Online advertising revenue is their only real hope of long term survival”
Boo-Yah Mike!
You are the man!!!
Great Post!
“Online advertising revenue is their only real hope of long term survival.”
Are you serious? You think the largest software producer in the world’s only chance of survival is online advertising revenue?
Yea, lets forget about all those server licenses, massive community of developers buying their IDEs, entire channel of partners, automotive, mobile, and home/consumer markets as those dont mean anything, right?
And you really think most businesses are going to move all their daily office tasks (MS Office Suite) onto the web immediately with Google docs?
Jeez, how off point can you get.
“And that, of course, is why they want Yahoo so badly.”…no, its clearly not…
This sory is based on a limited perspective!
ofcource, home users, business executives etc only need a browser.
but what about all those developers, graphic designers..etc..inshort all power users ..they all need a heavy duty offline operating system …web is still not equipped to do C# programming!
“Microsoft isn’t a viable company without their consumer and business desktop software profits.” Wow, how incredibly insightful!
These guys are right, like it or not. It’s becoming fact before our eyes and denying this trend can be lethal for anyone in this business !
10,15 years down, there may very well be no such thing as “software installed on a desktop computer” anymore. The incentive to move online will be huge indeed, the computers needed to run the apps will be very inexpensive, connection speeds will have gone through the roof, computing power will be shared, software will basically be free, and collaborating on work online will be the norm…
the internet will never be a full solution for anything google docsis good and stuff, but there are times you want to get something done when you dont have internet, internet is not up all the time it goes out once in a while and you cant stop that.
You can not do everything on the internet and people will see that, you may have online text editors, photoshop etc. but are they as good as the versions that run on your computer.
Heres a question about Vista will collaspe and thats why the want Yahoo. What does Yahoo offer that helps Vista that MSN or Windows Live doesn’t
Would you rather go get on a computer connect to the internet, go to the website login etc. or get on a computer load app and start, or what happens when you go to the computer intending to get on the net and you see the network or internet is down oh well you can’t do your work or reach it for that matter.
Whats with these shitty Os’s that rely on the GPU to drive the UI, Shitty Windows Vista, incredibly crappy Mac OSX..especially Leopard.
Lets go back to Windows 2000 and OS9?
Talk about a slow news day.
Holy shit jorgebg. What a mess … you better stop wasting your time on Techcrunch and start putting much more effort on your work before someone asks for his money back (ie. http://www.ayto-camarena.com ).
pretty amazing all the comments in here are completely reactionary and rely only upon their individual perspective as it stands right now. this article is reporting findings that are indicating a business timeframe which is about 3 to 5 years from now.
now, think five years ago, even three years ago, did any of the comments think that firefox would present a clear danger to the dominance of Internet Explorer? Now turn the vision the other way, can you see the changes in web technology that is 3 to 5 years away? Judging from most of the comments above, no.
Honestly, in that time frame`there will be greater advancements in web apps than in local apps, in fact the advancement in local applications will be to provide more seamless connectivity with online applications.
I would expect such a silly MS bash piece to be posted on some Apple fanatic site, not a respected site like TechCrunch!
Um, and few give Gartner props for having any credibility these days…
I think Vista doesn’t add enough value to XP to be a viable product. And considering all upgrade issues why not keeping XP or another vendor’s current OS? The client OS is post-mature now, the next big thing will be the web OS.
Sometimes you need stuff out of internet.. I mean work without internet and right now google don’t do that.. Until this happen microsoft office will still be relevant.. however vista is already a has been…. microsoft is looking for a great internet platform since everything they do online was a flop… this is why they are looking for the best online compagny Yahoo..
they need to be more online to connect PDA with internet solution with their windows vista stuff.. this is why yahoo is their only solution.. Yahoo got a huge traffic.
Microsoft need yahoo to move forward but yahoo only needs a better vision to work with their huge among of traffic
I still use Windows XP lol…
Michael, Microsoft only wants Yahoo! so it can take over the world. You know this as well as anyone. It’s one of the few *large* companies Microsoft might be able to get away with buying and Yahoo!’s mass talent exodus brought stakeholders from “no way, giant evil corporation, suck it” to “hmm, if this ship’s going down, we may as well take a few billion home, but let’s piss of Microsoft by making this really difficult for them.”
Wow their are so many just silly statements in this post it is hard to believe that it is meant to be serious analysis.
>“Microsoft isn’t a viable company without their consumer and business desktop software profits.”
Anyone else laugh out loud when they read this? It sounds something from a 5th grade book report. Let me guess Apple is a viable company without their electronics and computer hardware profits?! Glad we got that sorted out.
>“Online advertising revenue is their only real hope of long term survival.”
If this is case for MS than it most be so for every single software company in existence, correct? The valley echo chamber must be pretty loud this morning.
>Windows isn’t really that relevant any more just because of the >increasing utility of online applications like Google Docs, which competes >with Microsoft Office.
Hilarious and braindead statement. Despite the fact that TechCrunch constantly predicts the death and futility of MS office everytime Google adds even the slightest feature to their online stuff the large scale corporate uptake is essentially nil. Office 2007 is pounding out the door to both business and consumers faster than 2003 ever did. On both PCs and Macs. Did Gartner leave this curiously unmentioned? MS dollar share of productivity software HAS GROWN over the last year and yet you guys are consistently convinced that it is done. I’m not saying MS doesn’t have lots of problems but after a certain point statements like this make you just look delusional.
As a recent convert to Linux I can vouch it does every I need a PC to do. Can’t think of any application where it isn’t strong. Arguments like not having access to PhotoShop are valid, but could be resolved by Adobe releasing a Linux version. Linux is capable, fast and free, and these days very user-friendly. So..