Re: as consumers have generally stopped buying PCs
It is that, but it's more. These are gross generalisations, forgive me, but they are 'approximately true'
1/. domestic users aren't buying uprated PCS. They are overwhemingly buying tablets, e-readers smart TVs and smart phones. PC's are dull boring and old hat.
2/. Corporations are not buying new PCs either. This is an interesting point I will expand on. Because I used to be one of those business owners who did buy new PC's every year. With windows on.
I bought new because the old either wore out, (4 years was good going for a PC) or simply were not up to the task of running the new and better versions of the applications we needed to run a business.
But at a given point, both the PCs and the applications were simply 'good enough' to run, essentially forever. I have bought the 'budget motherboard' from my favourite clone supplier for almost 20 years now. Both as a corporate buyer and as an end user, and what I have noted in the last few years is that the same money no longer buys me more than it did 4-5 years ago. In fact I cant get a machine at all quite as cheap as I used to, and it is very little faster. OK SSD and a bit more RAM helps, but program load times and the ability to have many programs alive at once is not an overwhelming issue.
So we are running to the end of Moores law it seems. No longer is there an implicit guarantee that today's PC will be 4 times faster than a four year old one.
And now look at the applications in teh enterprise. Overwhelmingly what people were using in my company were:
- interface to a database. That used to be telnet into a Unix box, today its a browser into an SQL server.
- mail and contacts and meetings, word processing, the spreadsheet for some.. In other words MS office.
- specialist job related apps. Graphics for the creatives, IDEs for the techies, and so on.
Now it is probably true to say that actually all these applications are fully mature. There is no NEED to develop them beyond bug fixes. And that is why millions of copies of XP are still running with a 7 year old office suite or later, and running old and still very usable versions of mature specialist apps. Its good enough.
In short, in the corporate marketplace, computerisation has at the applications level reached full maturity. There is no need for more 'features'.
Likewise the hardware has reached a plateau.
Students of marketing theory realise this is symptomatic of when a given market sector moves from 'rising star' to 'cash cow' phase, and then perhaps even beyond it to a 'maintenance replacement and support ' phase.
Corporate buyers are ultimately driven by ROI. If buying this years PC with this years MS offering offers nothing they can't do on XP, they will stay with XP until the hardware gasps and dies. I am still running an ageing copy of XP in a VM together with three Windows apps, all equally venerable, simply because they are GOOD ENOUGH for my needs.
And money is tight.
This is I think the key to understanding the issues that face Microsoft. The hardware and the software is mature, in the corporate environment. There are no more productivity gains to be had. My brother in law who manages big IT transitions, says that the activity is overwhelmingly happening in the server room,. where multiple divisional servers are now virtual machines in a few large blade type platforms. and the new server side apps are Linux based.
Microsft and windows have to transition from a 'more sales every year, guaranteed' to a 'fewer sales every year, and replacement and support' mentality.
Or find a new pond. They are too late to dominate the new consumer devices and there is no new pond in corporate sales, or its shifted in emphasis from machines on desktops to network and server technology - an area they have always been weak in anyway.
That is Microsoft has done the job we wanted it to do and needed it to do: provided a standardised operating system interface on cheap hardware to allow the proliferation of single user applications throughout business. Thanks, but now that's done we don't actually need them to do it any more.
They are sitting on a cash pile of epic proportions, but they have nothing left to spend it on.
If I were they, I'd be buying back shares as fast as possible and getting ready to privatise the thing in order to be able to take it in a new risky direction, if that's what the directors wanted.
Otherwise what faces Microsoft is a slow decline in significance until its basically broken up and sold for scrap as is the fate of so many players in the game.
Biting the hand that feeds IT
