The News Gets Worse for Poor, Pitiful Microsoft

Instant karma's gonna get you
Gonna knock you right on the head
~John Lennon.

It's 2009 and I'm sure the powers that be at Microsoft are hoping it's going to be a good one without any tears, but even as the old year closed, the news kept getting worse for the software giant.

Just yesterday the web surged with news that 30 GB Zunes were freezing up, apparently the victim of a Y2K-type clock bug where the Zunes rebooted and froze as of January 1, 2009 Pacific Time. And this morning, Ars Technica reports that rumors are flying about a massive layoff on January 15 involving 17 percent of the worldwide work force. Not exactly the stuff that dreams are made of.

First, the Zune

The Zune has always been an iPod wannabe, never quite gaining the cool status that Apple seems to be able to achieve without breaking a sweat. From what I've read and heard, there are many features to like about the Zune, but when you are going up against the world's most popular MP3 player, you are going to face a perception issue, especially when these two companies are involved, regardless of the quality of the product.

The conventional Apple-Microsoft wisdom--fair or not--goes something like this: OSX is stable and secure and Windows is not, so even though the Zune has absolutely nothing to do with Windows, it simply feeds the perception that Microsoft creates insecure products vulnerable to a myriad of security issues. I have to point out, I've never heard of such an issue afflicting an iPod (or any other MP3 player for that matter). It actually makes me almost feel bad for Microsoft (or perhaps it's just not-so-instant karma for years of questionable business practices).

The Layoffs

The layoffs, if true, are part of a pattern in the technology industry and certainly not isolated to Microsoft. Just last month, Adobe laid off 8 percent of its workforce (or about 600 people). Rumors have it that Google has let go thousands of contractors (although it's really hard to confirm this story and Google has not been forthcoming about it). So that Microsoft could be laying off 17 percent of its workforce (or about 15,000 people) is hardly a surprise. The economic slow down means people are buying less software, certainly waiting to upgrade and with Microsoft's issues around Vista, it's all coming together at a bad time. (At least Microsoft waited until after the holidays; give them credit for that.)

The Future

If Don Reisinger at Cnet is right, we might be seeing Windows 7 by the end of the year, although I have my doubts about that. Reisinger argues that Microsoft needs to put Vista behind it as quickly as possible and while I agree, it would be foolish to put out Windows 7 before it is ready and fully tested. The last thing Microsoft needs is another Vista and it needs be very careful this year.
I believe the company has reached a critical cross-roads for Windows, especially on the consumer side. It needs to hit a home run with Windows 7 to get its momentum back.

If it releases a half-baked version of Windows 7 before it's ready, I believe consumers will give up Windows altogether. I know many people who have already. Microsoft needs to stop the bleeding, and maybe a stable Windows 7 could do that. Regardless, it just seems to keep getting worse and even corporate behemoths needs need some good news once a while. If you doubt that, consider what a weakened Microsoft would mean to Google, but that's fodder for another day.

[kanaku]

(Surprisingly) I don't enjoy reading about 'tech-based' companies failing (not even Microsoft), specially since we are a community who make our living through technology. This news isn't too good, I almost wish I didn't read it... *goes to brainwashing clinic*

I still appreciate the blogger for increasing my awareness though.

[SkateNY]

I agree. No one is rushing to go out to buy Windows Vista. No one is rushing out to buy a Zune. Few people seem to care about Windows 7.

Microsoft dropped the ball a long time ago. Complacency, arrogance, and a misguided belief that their customers would continue to pay through the nose for their products in the absence of viable competition.

It simply is not in Microsoft's DNA to compete, particularly when they have to come from behind. That's not what they do. What they do is buy out and/or stomp on potential competitors, and then sit still until another potential competitor shows up on the horizon. They underestimated Apple, Google, Yahoo! and Linux (not to mention operating systems for handhelds, especially smart phones). And guess what? Each one of these companies quickly stole market share from the giant behemoth, in large part due to the obvious flaws in Microsoft's products. And it's only getting worse for Microsoft.

Microsoft can't play catch up. The best they can do is some version of damage control. They spoiled themselves by developing a culture that thrived only in an environment in which there existed no competition. They don't know how to win the big game, any big game, when they're trailing late in the game. And now, it's getting very late, probably too late.

You don't see any tears being shed in the rest of the tech sector? That's because there aren't any. Nobody cried for smaller companies and viable start-ups when Microsoft either crushed them or bought them out in a hostile manner. When you throw the boomerang, it comes back twice as hard.

Microsoft created their own mine field. Sad that they never anticipated they'd have to walk over it themselves in order get back to where they were.

[Techwriter10]

Thanks for the thoughtful comment. I think you've nailed it and it's what I was referring to regarding the karma. MS has made its own bed and it is fully responsible for where it finds itself now, but I don't think it's too late. A company that large with that many resources has the means to rebound, but will take some serious innovation, not as you say, simply buying or copying the competition. Do they have it in them as a company to do that? Hard to say, but you can't rule out any company that's as deeply entrenched in enterprise computing as they are and one that has as much cash in the bank.

If Microsoft were to fail completely as kanaku suggests, I think it would be a disaster because as I alluded to, it would leave Google alone on the playing field with far too much power left unchecked. For better or worse, Microsoft acts as a check and for that reason alone, I think they remain an important technology company. But as I said, I don't see them going away completely. That's not going to happen, but I could see their influence continuing to diminish over time.

[bugmenot]

You have no idea how ridiculous your headline is. All the 8,000 Linux distros <b>combined</b> equal something like a 0.94% market share.

[Lead Goat]

Apple is ascendent in all areas. The two MS cash cows have been milked and are being put out to pasture. Last one out, don't bother to close the gate.

[Techwriter10]

Bugmenot, even the most ardent Microsoft supporter has to admit that it was not a great year for Microsoft.

[Jim5667]

Oh good! With any luck, Microsoft will go broke, and we can all be happy another American business has tanked. And you'll be able to say you saw it coming long before everyone else. Won't that be great?

[Techwriter10]

I never suggested that I would be happy. If you read my piece all the way through, you will see that in fact, I think Microsoft is a necessary check against Google's power, but even beyond that I would take no glee in Microsoft's downfall if that were to happen (and as I wrote in a comment, I don't see them going away, merely diminishing). I would like nothing more than to see the company pull through and come up with innovative strategies for success.