An interesting analyses of Microsoft
I came across this interesting analyses of the corner Microsoft has gotten themselves into;
His premise is that the Microsoft business model of selling expensive software to a captive market has broken down. Their replacement is to try and sell crippled versions of Windows on NetBooks and then force the customers to buy a full priced upgrade to a Windows that will actually do what they want. He doesn’t believe this is going to work.
The mark of the immature man is that he wants to die nobly for a cause, while the mark of a mature man is that he wants to live humbly for one.
Roughly Drafted is a great blog (or publication, or whatever). That guy’s articles are always very thorough and articulate - ALWAYS recommended reading.
Anyway, I don’t know that I agree with the upsell theory, as much as I would that M$’ multi-flavored OS biz model erodes consumer confidence… regardless of what shape & size, and platform it resides on. I would chalk up this latest move to M$ simply getting on the netbook bandwagon by any means necessary, even at the cost of a half-baked OS duct taped in there. Their business model has always seemingly depended on a heavy dose of paranoia. Rather than focus on excellent deployment of their key products, they spread themselves too thin by covering their bases in all market segments, trying to be everything to everyone and ultimately disappointing their customer base.
VERY good article.
The market is returning to a focus on devices, not software. Traditionally software had been made available at low-cost/no cost in favor of hardware margins. The rise in software margins at the expense of hardware margins lead to the commoditization of PC hardware and the resulting lack of innovation. It’s no wonder Apple maintains high hardware margins that are the envy of the industry. Apple’s focus is on user functionality via of superior hardware design combined with lower-costs for OS and software upgrades
In order to keep hardware priced low on the Windows platform, there must now be a give on software margins. Hardware prices can not be driven lower by reducing hardware margins any more. It’s a problem of Microsoft’s own making and one that is leading to a reduction in growth potential for Windows revenue. Netbooks are an economic black hole for hardware OEMs and MSFT.