PC makers and their customers continue to push back against Windows Vista. Software as a service (SaaS) and open source are giving Microsoft fits. Yet, it’s far too early to bury Microsoft. Here are seven reasons why the software giant’s empire won’t completely fall anytime soon.
1. Big Profits: Although profits fell 11 percent during its most recent quarter, the company still generated $4.39 billion in net income during the period. That’s roughly $49 million in pure profit every business day during a 90-day quarter.
In stark contrast, Red Hat’s net income during its most recent quarter was $22 million. In other words, it takes Microsoft less than half a day to surpass Red Hat’s entire quarterly profits.
2. Windows Installed Base: Some folks may hate Vista, but the operating system’s installed base has grown to 140 million licenses, up from 100 million in January. That’s impressive and pathetic, considering all of the folks who are downgrading to Windows XP or jumping to Mac OS X or Linux. Alas, The VAR Guy concedes that the Windows installed base continues to beat the competition by a wide margin on the desktop.
3. Managed Service Providers: Sure, MSPs and software as a service (SaaS) experts are embracing open source applications. But they’re also flocking to hosted versions of Microsoft Exchange Server, Microsoft Dynamics and Microsoft SharePoint, among other options. In fact, many MSPs are buying up Microsoft software partners in a race to enter the SaaS market.
4. Server Applications: Microsoft’s server and tools sales rose 18 percent to $3.3 billion, helped by the launch of new versions of Windows Server and other major software franchises, notes the Associated Press. Do some quick math, and it’s difficult to find any other server-centric software companies generating more than $13 billion in annual sales while generating near-20 percent annual growth.
5. Independent Software Vendors (ISVs): Ultimately, Microsoft’s primary customers are ISVs — the very folks who keep writing more and more applications for Windows. And even open source companies such as SugarCRM say they are more than happy to offer apps on Windows Server.
6. Market Fragmentation: Sure, Oracle has acquired numerous application providers. But generally speaking, Microsoft remains the only major software supplier that has a full arsenal of options — operating systems, tools, databases, application and online services.
7. Xbox Marks the Spot: Revenue from the division responsible for the Xbox 360 video game system ballooned 68 percent to $1.58 billion, which Microsoft attributed to robust demand for game consoles, noted AP. More importantly, kids (including those fathered by The VAR Guy) are hooked on the Xbox Live video game service.
With any luck, Microsoft’s business developers will steal a few pages from the Xbox Live online service experts.
Yes, Vista was a pathetic product upon its arrival. And Microsoft will continue to take some lumps for the next few years. But the Internet and open source were supposed to kill Microsoft in the 1990s.
Looks like all those deadly blows were merely flesh wounds.
Tags: | Dynamics | Exchange Server | Microsoft | Profits | SugarCRM | Windows Vista | Windows XP
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NO… but I can sure drive my big-ass lawn tractor over their headstone and leave ruts marks in the plot, all the while spitting on it.
DOUGman: If Microsoft turns up dead, it looks like you’d be among the suspects in the case.
The only reason Microsoft has such a strong foothold is because clueless consumers think that Windows is what a computer is.. heaven forbid there be anything out there. It’s what they’re used to, and humans just don’t like to change. We hate how butt-dragging slow and unreliable Windows is, but we get stuck in the rut of a familiar routine.
If people stopped automatically thinking that Macs are stupid and Linux is too hard without even trying, Microsoft’s pedestal would start crumbling.
Oh and another thing… $$ is a big ol fat factor too. You remember that one dude.. Gates or something like that? Yeah… him…
@E. Hanson, You said ” We hate how butt-dragging slow and unreliable Windows is, but we get stuck in the rut of a familiar routine.”
I have been using windows wince 9 yrs now. My current state of windows is,
1. I haven’t reinstalled windows Xp since 2 yrs
2. I have 756 MB ram with Centrino Processor
3. My C drive has just over 500mb free space.
4. I have more than 10 Heavy applications installed apart from MS products.
5.My computer still does not go slow any time .
6.I browse internet like 10 hrs and never got a virus since 3 yrs.
7. I dont see a reason to try another OS and learn everything from scratch when it just works fine for me.
Underline : You need to know how to use your computer an OS be it any. Its useless to say one is good than other. So just learn how to use and stop blaming
Ashish: It’s good to have some XP fans weighing in on this site. Microsoft does have its positive traits — the company did, after all, free us from expensive Unix systems.
However, Microsoft and the PC industry did us all a disservice by promoting Vista on under-powered PCs that weren’t equipped to properly run Vista.
Microsoft customers who are looking to buy a PC right now are caught between a rock and a hard place. Vista ain’t all that great, and misinformation about XP — is it available, isn’t it, and for how long? — is confusing some buyers.
While I agree with most of the points raised, I wonder if it’s worth pointing out that it’s impossible to get an accurate figure on Linux growth? Most of the businesses that my company provides IT for switch to distributions of Linux that they don’t pay for, and thus, wouldn’t be counted in a statistic like this. Therefore, while The VAR Guy accurately points out that _sales_ of Server 2008 are growing by 20%, no body knows how much Unix servers are growing by. It could be 1%, it could be 1000%.
Furthermore, I imagine that a substantial number of those sales would be to replace / upgrade 2000 or 2003 infrastructure, unless I’ve misunderstood that figure, so it doesn’t necessarily mean that the gross number of Windows servers out there has increased by 20%. But either way, that is very impressive!
Finally, for people like Ashish, Linux or BSD’s goal isn’t to win users! If you like Windows, please stick with it. It’s just about having an alternative. For me, I find that Unix servers are easier to install, patch and maintain. Obviously, the majority of the industry disagrees with me
Timothy: Your line “It’s just about having an alternative” is right on target. This freedom really didn’t exist in the 1990s during the rise of Windows 95. And you’re correct: Tracking Linux sales is difficult since counting pre-loads on desktops sold doesn’t reflect all the free/online downloads. The VAR Guy assumes, by the way, that you’re using the terms Unix and Linux interchangeably. Not exactly accurate, but he gets the general idea.
The VAR Guy: I’ve always thought Linux, or GNU/Linux referred to Linux systems, and Unix included all UNIX-like systems, ie the BSDs, Mac OS X as well as Linux & GNU/Linux. Is this not correct?