Microsoft and the concentration of wealth
Microsoft's Sacred Cash Cow
From the article:
- Why are Microsoft products so endlessly frustrating to use? Even techno-geeks like me get annoyed by Windows. I’m tired of spending the first 10 minutes of my day rebooting just so I can get to work. Microsoft Outlook 2003, the latest version of the company’s e-mail and calendar software, hangs for me about once a day, requiring me to restart my PC. I also have a problem with Word 2003: Whenever I bullet a line of text, every line in the document gets a bullet. Asking Windows to shut down is more of a request than a command—it might, it might not. And recently, Internet Explorer stopped opening for me.
I know I’m not alone. If you’re like me, you’ve invested in technology to become more efficient and productive but mutter about the many frustrations of the digital lifestyle. Technology is my hobby as well as my job, so I regularly ponder why software giant Microsoft Corp., which has more than $56 billion in cash, hasn’t solved more of these problems.
- Microsoft’s attempts to diversify into consumer businesses have yet to pay off: 68 percent of its revenue still comes from Windows and Office sales—more than 80 percent if you include the Windows server software used by so many businesses. The company must protect these core products. “The prime directive at Microsoft is to protect Windows and get customers to buy Windows and upgrades to Windows,” says Matt Rosoff, lead analyst at Directions on Microsoft, a Kirkland-based newsletter.
Microsoft clings to this strategy because it has to. Its stock price relies largely on the continued strength of Windows and the Office suite of applications (Word, Excel, Outlook, PowerPoint, etc.). But Microsoft’s dominance is an aberration in an otherwise competitive technology industry. Windows, Office, and the Internet Explorer Web browser all have greater than 90 percent share of their respective markets. To protect the cash cows, Microsoft must do things that no other software company would be doing right now. It’s a victim of its own success.
Microsoft hasn’t solved many of the software problems I described earlier in part because of the lack of competition.
See also this post on Microsoft.