Friday, July 24, 2009

Microsoft Revenue "Freezes"... Company Looks to "Reboot"

Omnious signs when the bellwether software company posts its first ever year over year decline in revenue (down 3% for FY09 vs. FY 08 and 17% Q4 09 vs. Q4 08). NY Times details:

Microsoft has closed out perhaps its most difficult year as a public company in less than stellar fashion. On Thursday, the company significantly missed Wall Street’s fourth-quarter revenue target and reported the first decline in full-year revenue in its 34-year history.
Because of the global recession and a slumping PC market, Microsoft has suffered a number of historic lows the last seven months. In January, it initiated large-scale layoffs for the first time in its history. Sales of its flagship Windows software have also declined for the first time ever, as consumers and businesses cut back on PC purchases during the economic downturn.

Source: Microsoft


  1. I think Microsoft is in real trouble.

    Caveat that with the fact that I've always hated Microsoft and wanted bad things to happen to them.

    But people panned on upgrading to Vista, upgrading Office, upgrading development tools, so on and so forth. And I don't think that is going to change in the near future either- a huge percentage of people are going to stay with XP over Windows 7.

    The only thing Microsoft can do is try to force people to migrate by cutting support for older products. But in this environment, especially when you finally have substitutes available with large enough market share to break MS monopolised standards (Apple, Google, and Linux), and a lot of the alternatives are free, I don't expect them to be able to impose their will the way they used to.

  2. Marvelous - where did you come up with the data ?

    I'll agree with Irrational as well. MS's core discipline should be product development - specifically software. Code Red when Longhorn was turned from a bull to a steer led to the disaster of Vista. MS has several strategic problems but the most important: 1)poor execution on the core, 2) no innovation to create new value on the core and 3) chasing unprofitably after a whole bunch of Next Big Things, e.g. Zune