7 ms·

Microsoft is Dead

97 points by rajivn 16y ago

Would like to know if PG's stance on MS has changed

mooism2 16y ago
Microsoft still matter: they control Internet Explorer and they control Windows. If they were to add SNI support to Windows XP, for example, https sites could be hosted more cheaply. But Microsoft is not the monopolist it used to be. PG used "dead" to mean "is not scary any more", not "is slowly going bankrupt". So I think his conclusion still holds.
- raganwald 16y ago
  Absolutely. I think the key point of the article was this phrase: No one is even afraid of Microsoft anymore. They still make a lot of money—so does IBM, for that matter. But they're not dangerous. And I think that's still true, even with the popularity of their latest hand-waving thing. Back in the day, almost everybody writing a business plan had to answer the question: "What will you do if Microsoft decides to crush you?" Nowadays, I imagine they ask that question about Google or Facebook.
  - deleted 16y ago
    [deleted]
  - patrickk 16y ago
    "Nowadays, I imagine they ask that question about Google or Facebook." Does anyone really think Facebook or Google will really crush them, unless you are targeting their vertical directly or you get unlucky and they move into your niche before you gain a proper foothold? I know YC's Kiko got crushed by Google a few years back, but that seems an exception rather than the rule. It seems those companies are more likely to buy you, if what you are doing would add to their existing services.
  - kenjackson 16y ago
    Actually the climate has fundamentally changed in a way that is even bigger than the article. Nowadays people no longer generally fear companies at all. In the 80s companies were much more prone to just crush you outright. Now companies "seem" more likely to buy you out. There is a lot more positioning now for acquisition. When I talk to founders they aren't worried about Google or Facebook crushing them, but are more focused on acquisition, even when attacking core businesses like search. Ppl are no longer not afraid of MS because of something inherent in MS, but because the world has changed.
  - trotsky 16y ago
    I think this applies to Microsoft these days as well. With hindsight, it seems like a lot of the anti-Microsoft sentiment that bubbled up in the 90's and persists to this day coincided with their highly predatory business practices. It always seemed a bit odd when you heard another story of them rifiling through a small startup in "due diligence" only to drop the offer and duplicate in house. In most of those cases the purchase price would have been peanuts to them. I'd say it had more to do with a culture at Microsoft than it did with good business practice. It seems like they realized this and toned down the jackassery. I'm sure someone can point to some counter examples (every megacorp has to have some) but it's undeniable that things have changed.
swombat 16y ago
1) Yes, it still holds. 2) Don't editorialise the headline. It gives a distinctly Reddit-like feel to the place. The correct way to post this would have been to do an Ask HN and include the link in the body. 3) "How many...?" is obviously a poll question, so create a poll.
zdw 16y ago
There are two Microsofts: - The one that does interesting, innovative stuff but a failure/modest success in the marketplace (online, xbox, sync interface for cars, zune, windows phone 7) - The "legacy" one that makes windows, office, and server apps, which makes a ton on licensing. Nobody likes "legacy" microsoft, and it's the most vulnerable, but also has the most momentum behind them. People develop on or support the dominant platform to earn a paycheck, thus the dominant platform stays in place. Until the PC goes away, and there's a huge shift to do real work off our phones/tablets/other non-legacy devices, MS will most likely be dominant in terms of market share.
- aristidb 16y ago
  I like your analysis, but this statement is self-contradictory: "it's the most vulnerable, but also has the most momentum behind them". I think that Windows, Office... is the least vulnerable part of Microsoft, but it's also low-growth.
  - zdw 16y ago
    There's a format lock-in in place. Microsoft's greatest asset is the fact that it controls the file formats used by business (.doc/.xml, and the new xml based ones aren't better or more open). This creates a de-facto requirement to buy microsoft software - in many cases you need a copy of MS Office to render or interact with a document in a way they're used to, and all the documents in a company already are in that format, so the path of least resistance is to buy another copy of MS Office. The web avoids the issue as it embraces non-proprietary formats (or ones that are well understood). Once people get their data in a better place, that's the beginning of the end for MS.
  - kenjackson 16y ago
    Office is low growth with respect to percentage growth. It makes massive money now, and needs massive new revenue to grow quickly. With that said, their growth in absolute dollars is money that every other company would love to have, including Apple, Google, and Facebook.
- encoderer 16y ago
kbob 16y ago
Remember IBM? From 1960 through ~1985, IBM was the only answer for enterprise computing. And there really wasn't any other kind of computing then. IBM Research did everything from semiconductor research to databases to virtual machines. IBM was the hottest stock in the market in the 1960s, passing $600/share. (That's about $4,000 in today's money.) They eventually faded, as their customers moved to a combination of desktop PCs and servers and other companies' servers. IBM is still with us. They're having to reinvent themselves regularly, because the only concept they own is still "Mainframe", and they failed to hold on to "PC". But they're still a huge company selling systems and professional services. I expect Microsoft to go the same way. There will be significant but dwindling demand for Windows for 30 more years. (But probably not Azure, Windows Mobile, or XBox.) They will stay alive, and even prosper moderately, on that business.
- kia 16y ago
  I agree. The fact that you don't hear about an old big company that often doesn't mean it's dead. It has found it's business model and doing well in some not-that-hyped sector. On the other hand, the fact that you hear about 'new-hot-startup' on all hi-tech sites doesn't mean it'll survive it's first year.
  - kevin_morrill 16y ago
    Possibly the most rational response I've seen on this thread yet. Yes they're dead if you're looking for the next hot new thing. But if you're looking at profit---they're the 3rd most profitable public company in the U.S. behind just Chevron and Exxon. No other software/hardware tech company makes more money.
- TomOfTTB 16y ago
  To me the cogent point is that IBM re-invented itself but only after it broke from a line of internally groomed CEOs leading all the way back to the Watsons. IBM was about to be split into pieces when Lou Gerstner was hired from the outside. He's the one who saw the advantage in IBM's footprint and the value it could add to a service based business. He's also the one who put an end to several sacred cows like OS/2 and took IBM's focus almost completely off mainframes. The parallels to Microsoft are actually pretty compelling (For example "Windows Everywhere" is Microsoft's Mainframe imho). I don't think Ballmer has been a bad CEO (like some do) but his time is done. The old tricks aren't working anymore. They need to find someone with a fresh vision if they want to survive.
patrickk 16y ago
I remember reading somewhere that IBM makes something like $8bn per year still from mainframe computer sales. If IBM are doing that - two major computer architecture iterations along the line - (client-server and now cloud coming along), then that bodes well for Microsoft's survival, but perhaps not their relevance. Startups aren't going to go after highly conservative organisations like banks who won't risk changing from mainframes for no obvious gain. So there will be a market for Microsoft technologies (their OS and Office in particular) for a long, long time; long after consumers are mainly using Android/Linux/Macintosh-based tablets or other portable devices to do their personal computing.
- ams6110 16y ago
  For pure transaction throughput, it's still hard to beat a mainframe. The hardware is optimized for it, and so is the software. They are a niche product but a very profitable one.
- rbanffy 16y ago
  > like banks who won't risk changing from mainframes for no obvious gain. So there will be a market for Microsoft technologies Comparing Microsoft products with the kind of reliability banks require from mainframes misses the point. No product Microsoft offers can match 5 nines outside a controlled environment (and most probably, neither inside one)
  - patrickk 16y ago
    Perhaps the point I was trying to make wasn't clear. Certain enterprise customers will always want to work with what they know, (i.e. typically Windows XP and Microsoft Office currently.) So this will be the long tail that Microsoft will coast along, if/when consumers migrate their personal computing to other platforms. Granted, there are certain situations when using an older technology such as mainframes makes complete sense, and there is little benefit to risk a major system upgrade; but there are many other situations where not upgrading seems lunacy (e.g. in an era when people want to have much of their banking online, the old mainframes in the background struggle to cope with the demand.) As an aside, I interned at a bank where one of the tasks I did was adding HTML tags to predefined paragraphs that were in plain English. I did this in Excel, manually, line by line, on a PC sporting Windows XP and a 15" monitor. This could have been done in seconds with a shell script if anyone there had a clue. This kind of ignorance is a godsend to Microsoft who will continue to sell software licences to clueless companies for the foreseeable future.
Matt_Cutts 16y ago
I remember when pg first wrote this. A lot of people misunderstood the headline. From the pg's Cliffs notes: "What I meant was not that Microsoft is suddenly going to stop making money, but that people at the leading edge of the software business no longer have to think about them." That's at http://paulgraham.com/cliffsnotes.html http://paulgraham.com/cliffsnotes.html So the two definitions pg gave in 2007 were "You don't have have to be afraid of Microsoft" and the definition above.
- jdp23 16y ago
  When this came out I was still at Microsoft with a charter of "game changing strategies". There were (and still are) quite a few things that MS could do to reinvigorate itself, but the corporate culture keeps them from gathering momentum: the company's success came in a PC-oriented world, so they don't think from a phone, device, or web perspective; and the lack of understanding of win/win dynamics (which Google rode to success) means they're not able to leverage their huge assets. Since then, the ongoing loss of great people has deepened a huge generational hole. So yeah, this essay has held up real well.
  - kenjackson 16y ago
    Jon, as someone from MS (and with great repute), I'd be curious to get your take on something I've heard from ex and current MS employees I talk to regularly. One issue that seems to come up a fair bit (often not directly) is that MS has a hypercritical culture, where there's always a reason NOT do something. Since they had big money makers in Office and Windows, no one really noticed for a long time.. I hear constant grumbling that people with ideas get their ideas shot down with lots of criticism. Many of these people say that MS would have killed the iPhone, iPad, and Wii had they been proposed at MS in final form. It sounds like a company made of bright people who have no problem finding issues with products, but less good at fighting for new innovation against these same critics.
    - jdp23 16y ago
      Very true -- in fact Microsoft's values include being self-critical, but not being self-aware. Also, it's a very competitive culture, and the easiest way to show you're smarter/better/more powerful than somebody else is to attack them. The net result is that it's an incredibly negative culture, and it really affects people both on the professional and personal side.
Hov 16y ago
I understand he meant that nobody is scared of Microsoft anymore. I guess the question I have is, is there a company that exists that everybody IS scared of? No. So I rather chalk it up to a sign of the times.
- zmmmmm 16y ago
  As recently as last year I was reasonably scared of Apple because they appeared to be accumulating a market power that was transforming the industry itself into something I didn't like. Fortunately, however, Google came to the rescue with Android and I'm now far more relaxed about it. A lot of people claim to be scared of Google though ...
AlexC04 16y ago
According to analytics, I've had 20,000 hits to my website in the last 30 days. 75% of those are reported to be running a windows operating system. As much as I respect the interesting point of view presented in the article, I sometimes wonder if sites like Hacker News and Slashdot don't put us all into some sort of exceptionally nerdy bubble-think. Like with the last week or so when everything I read seemed to say "google sucks", "lynch google", "burn and raze googles offices so they can never spam search results again" What was the rest of the world's reaction to this seemingly endless flood of histrionic blog posts about broken google search results? Crickets chirped and a tumbleweed yawned with boredom. Microsoft isn't dead. From what I see, in the last 30 days Microsoft is a minimum of 75% alive and we'd all be very much richer if we didn't forget that. With the utmost respect of course. Without exaggeration, hyperbole will literally be the death of us all.
- TomOfTTB 16y ago
  There's certainly some truth to what you say but I'd encourage you to look at the context of the conversation here. pg's blog and Hacker News appeal to people who are generally looking at the world from one of two perspectives: investing or as a startup. Keeping that in mind shapes the conversation differently In Microsoft's case I can absolutely see how 75% of the people visiting your website might be Windows Computers. But how many of those people want to be on Windows? How many are using it because there's simply nothing else or because they're just too lethargic to switch? How many are using it simply because they're on their work computer and no one's seriously challenged MS in the corporate space? So Microsoft could very well be dead and not even know it (as pg's addendum to this post makes clear). If you accept that thesis it has very relevant implications to the intended audience. From a startup's perspective it means you shouldn't rely on Microsoft technology and need to pursue a strategy that supports Microsoft's desktop but doesn't build on it (which probably means web apps). From an investing perspective it means looking down the line for any possible desktop competitor that could be viable. Because once that viable competitor comes along the bottom will fall out of Microsoft's profits.
  - Tichy 16y ago
    "How many are using it because there's simply nothing else or because they're just too lethargic to switch?" Isn't that true for any conceivable product? I am using cars because there are no teleporters. I am using a keyboard because I don't have a good brain to computer interface yet. If I had a tablet, it would only be because there isn't a nano computer in my eyeball yet that projects directly on my retina (the real retina, not the Apple display).
savoy11 16y ago
The mere fact he says that is contradictory. If something is dead/not-relevant - people just not talk about it. We have daily Microsoft dead posts here. Meanwhile Microsoft is far from dead, netting 6 billion in PROFIT each QUARTER. And growing steadily with 20% per year. Get your common sense right. Microsoft is a revenue stream - XNA can make your code run on phones and XBox alike and you can profit twice with the same codebase. Use the eco-system, do not lose revenue stream out of stupid prejudice.
kingsidharth 16y ago
> I know they seemed dangerous as late as 2001, because I wrote an essay then about how they were less dangerous than they seemed. Didn't get it. They seemed dangerous because Paul wrote an essay?
- ashearer 16y ago
  If they hadn't seemed dangerous, Paul wouldn't have written the essay.
- corin_ 16y ago
  The 'because' refers not to them seeming dangerous, but to his knowing, in 2007, that they did seem dangerous in 2001.
noelchurchill 16y ago
Can someone please make a website ismicrosoftdead.com similar to http://isitchristmas.com/ http://isitchristmas.com/.
DealsForHackers 16y ago
Replace "Microsoft" with "Google", and this article suddenly captures the zeitgeist of today's startup environment.
Aegean 16y ago
"A few days ago I suddenly realized Microsoft was dead." haha that's a great sentence to start an article.
rywang 16y ago
Microsoft Research is one of the top 10 computer science research organizations in the world. Some of the work done there (such as the Kinect) is game changing and will continue to be a resource Microsoft can draw upon. As an MIT PhD student, I know many people who are eager to work at Microsoft research. [1] http://academic.research.microsoft.com/RankList?entitytype=7&domainID=24&last=0&start=1&end=100 http://academic.research.microsoft.com/RankList?entitytype=7... [2] http://www.wired.co.uk/magazine/archive/2010/11/features/the-game-changer http://www.wired.co.uk/magazine/archive/2010/11/features/the...
- rchowe 16y ago
  But aside from vacuuming up some talent, Microsoft Research isn't going to be a part of any startup or VC's equation.
jcfrei 16y ago
The perception of who's 'alive' really depends on the perspective. If you're dealing with software solution consultants you can't get around IBM - but if you're a small software developer you might just as well never have heard of them. just for the record, take a look at the revenue and employe numbers to see what has changed since the 1960s (big blue is still on top): IBM $95.75 billion / 399'409 (2009) Microsoft $62.48 billion / 89'000 (2010) Apple $65.23 billion / 49'400 (2010) Google $23.65 billion / 23'331 (2010)
- nivertech 16y ago
  Notice that IBM and Apple revenues are higher, because they selling mostly hardware. MSFT selling mostly software with exception of XBox.
  - dgudkov 16y ago
    This isn't true for IBM. In 2009 IBM's revenue from hardware was less than 17% from total revenue. http://www.ibm.com/annualreport/2009/2009_ibm_annual.pdf http://www.ibm.com/annualreport/2009/2009_ibm_annual.pdf
    - nivertech 16y ago
      Services revenue is mostly consultants salaries too. What I mean, that software and advertisement margins are generally higher, than for hardware and services.
j_baker 16y ago
I find pg's proposed way of Microsoft becoming a contender again interesting. I don't doubt that he'd like Microsoft to start buying up more Web 2.0 startups. Granted, that doesn't make him wrong. I just find it interesting.
Stormbringer 16y ago
Wow, lots of hatorade on the drinks menu today. I of course had the same reaction as everybody else to the sensationalist headline... but when I read the article I agreed with pretty much everything he said. I suppose that is fair and preserves my strong PG contrarian streak, the articles everyone else loves I hate, and the articles everyone else hates, I love. ==== From the article: So if they wanted to be a contender again, this is how they could do it: (1) Buy all the good "Web 2.0" startups. They could get substantially all of them for less than they'd have to pay for Facebook. (2) Put them all in a building in Silicon Valley, surrounded by lead shielding to protect them from any contact with Redmond. I feel safe suggesting this, because they'd never do it. Microsoft's biggest weakness is that they still don't realize how much they suck. They still think they can write software in house. Maybe they can, by the standards of the desktop world. But that world ended a few years ago. ==== This is brilliant. And when we look at the Microsoft Kin Phone Debacle of 2010, we see that indeed they splashed the cash to buy a startup (Danger) to get into the smartphone game, but they critically failed the second part of the plan, which is the lead shielding bit. This is why PG is a genius, and this is why we can say that Microsoft is dead. Because they are the problem. The problem with Microsoft is Microsoft. Because they are irrelevant, and to Microsoft being irrelevant is worse than death. One of the things I've noticed about Microsoft over the last couple of years, is that when someone leaves Microsoft, and they blog about it (as you do), and then you get ex-Microsofties arguing with current-Microsofties, is that they have their own weird sub-culture and language that is incomprehensible to anyone on the outside. The more inward focused they become, the less and less relevant to everyone on the outside they will be. This is another sign of their decline. Joel Spolsky said some interesting things about this, on the topic of hiring programmers. Someone asked him how much a programmer should be paid, and he said that across the industry there was a pretty uniform amount of profit that a company can make per programmer - something like $100k-200k, but that there are a couple of exceptions to this rule, one is Microsoft, because the Windows and Office parts of their business are ridiculously profitable, and the other is Google. And that Microsoft makes millions per programmer, so they can afford to go out and hire the good and the bad, in order simply to prevent them from working for their competitors. So they hire all these people, and then ignore them or put them to work on bike sheds. I think it is very dangerous for a company of any size to ignore their smart people, and this is another sign of their decline.
GeorgeTirebiter 16y ago
This sentiment is not new. See "Microsoft at Apogee" by John Walker (founder of Autodesk, and a really brilliant guy): http://www.fourmilab.ch/documents/msapogee.html http://www.fourmilab.ch/documents/msapogee.html Note the date: 9 Feb 1997 (!)
nivertech 16y ago
What means death of Microsoft? It means fragmentation on the desktop (similar to what we have on the mobile): * MacOS X on x86, maybe even desktop version OSX/iOS on ARM? * Wintel (Windows on x86), WARM (Windows 8 on ARM) * ChromeOS on x86 and on ARM * Linux on x86 and ARM (Gnome, KDE, Unity, etc.) I predict that native desktop software will become more expensive, while generic HTML5 versions will be ad-supported or subscription based. Assuming, that HTML5 family of standards will be fully adopted. With all these new AppStores and Marketplaces ISVs will be able to save money on marketing and sales, but they will need to spend several times more money on developing for several desktops platforms/CPU architectures.
Encosia 16y ago
I doubt that anyone working at Sony or Nintendo shares this apathy toward Microsoft's continued ability to enter and disrupt an industry.
ankimal 16y ago
Even 3 years later, this is still true. The only thing MS has is Windows and Office (the only MS product, in my opinion that is real quality). MS will not die but will become irrelevant. The way they kept jacking up PC hardware requirements for Windows, Internet bandwidths will keep becoming bigger and better and "thick" clients will become irrelevant. Everything eventually will be on the web and that day is sooner than we think it is. (For some its already here)
kehers 16y ago
Checks post date. Noticed it is 2007. Moves on

97 points by rajivn 16y ago

Would like to know if PG's stance on MS has changed

Microsoft still matter: they control Internet Explorer and they control Windows. If they were to add SNI support to Windows XP, for example, https sites could be hosted more cheaply. But Microsoft is not the monopolist it used to be. PG used "dead" to mean "is not scary any more", not "is slowly going bankrupt". So I think his conclusion still holds.

raganwald 16y ago
Absolutely. I think the key point of the article was this phrase: No one is even afraid of Microsoft anymore. They still make a lot of money—so does IBM, for that matter. But they're not dangerous. And I think that's still true, even with the popularity of their latest hand-waving thing. Back in the day, almost everybody writing a business plan had to answer the question: "What will you do if Microsoft decides to crush you?" Nowadays, I imagine they ask that question about Google or Facebook.
- deleted 16y ago
  [deleted]
- patrickk 16y ago
  "Nowadays, I imagine they ask that question about Google or Facebook." Does anyone really think Facebook or Google will really crush them, unless you are targeting their vertical directly or you get unlucky and they move into your niche before you gain a proper foothold? I know YC's Kiko got crushed by Google a few years back, but that seems an exception rather than the rule. It seems those companies are more likely to buy you, if what you are doing would add to their existing services.
- kenjackson 16y ago
  Actually the climate has fundamentally changed in a way that is even bigger than the article. Nowadays people no longer generally fear companies at all. In the 80s companies were much more prone to just crush you outright. Now companies "seem" more likely to buy you out. There is a lot more positioning now for acquisition. When I talk to founders they aren't worried about Google or Facebook crushing them, but are more focused on acquisition, even when attacking core businesses like search. Ppl are no longer not afraid of MS because of something inherent in MS, but because the world has changed.
- trotsky 16y ago
  I think this applies to Microsoft these days as well. With hindsight, it seems like a lot of the anti-Microsoft sentiment that bubbled up in the 90's and persists to this day coincided with their highly predatory business practices. It always seemed a bit odd when you heard another story of them rifiling through a small startup in "due diligence" only to drop the offer and duplicate in house. In most of those cases the purchase price would have been peanuts to them. I'd say it had more to do with a culture at Microsoft than it did with good business practice. It seems like they realized this and toned down the jackassery. I'm sure someone can point to some counter examples (every megacorp has to have some) but it's undeniable that things have changed.

swombat 16y ago

1) Yes, it still holds. 2) Don't editorialise the headline. It gives a distinctly Reddit-like feel to the place. The correct way to post this would have been to do an Ask HN and include the link in the body. 3) "How many...?" is obviously a poll question, so create a poll.

zdw 16y ago

There are two Microsofts: - The one that does interesting, innovative stuff but a failure/modest success in the marketplace (online, xbox, sync interface for cars, zune, windows phone 7) - The "legacy" one that makes windows, office, and server apps, which makes a ton on licensing. Nobody likes "legacy" microsoft, and it's the most vulnerable, but also has the most momentum behind them. People develop on or support the dominant platform to earn a paycheck, thus the dominant platform stays in place. Until the PC goes away, and there's a huge shift to do real work off our phones/tablets/other non-legacy devices, MS will most likely be dominant in terms of market share.

aristidb 16y ago
I like your analysis, but this statement is self-contradictory: "it's the most vulnerable, but also has the most momentum behind them". I think that Windows, Office... is the least vulnerable part of Microsoft, but it's also low-growth.
- zdw 16y ago
  There's a format lock-in in place. Microsoft's greatest asset is the fact that it controls the file formats used by business (.doc/.xml, and the new xml based ones aren't better or more open). This creates a de-facto requirement to buy microsoft software - in many cases you need a copy of MS Office to render or interact with a document in a way they're used to, and all the documents in a company already are in that format, so the path of least resistance is to buy another copy of MS Office. The web avoids the issue as it embraces non-proprietary formats (or ones that are well understood). Once people get their data in a better place, that's the beginning of the end for MS.
- kenjackson 16y ago
  Office is low growth with respect to percentage growth. It makes massive money now, and needs massive new revenue to grow quickly. With that said, their growth in absolute dollars is money that every other company would love to have, including Apple, Google, and Facebook.
encoderer 16y ago

kbob 16y ago

Remember IBM? From 1960 through ~1985, IBM was the only answer for enterprise computing. And there really wasn't any other kind of computing then. IBM Research did everything from semiconductor research to databases to virtual machines. IBM was the hottest stock in the market in the 1960s, passing $600/share. (That's about $4,000 in today's money.) They eventually faded, as their customers moved to a combination of desktop PCs and servers and other companies' servers. IBM is still with us. They're having to reinvent themselves regularly, because the only concept they own is still "Mainframe", and they failed to hold on to "PC". But they're still a huge company selling systems and professional services. I expect Microsoft to go the same way. There will be significant but dwindling demand for Windows for 30 more years. (But probably not Azure, Windows Mobile, or XBox.) They will stay alive, and even prosper moderately, on that business.

kia 16y ago
I agree. The fact that you don't hear about an old big company that often doesn't mean it's dead. It has found it's business model and doing well in some not-that-hyped sector. On the other hand, the fact that you hear about 'new-hot-startup' on all hi-tech sites doesn't mean it'll survive it's first year.
- kevin_morrill 16y ago
  Possibly the most rational response I've seen on this thread yet. Yes they're dead if you're looking for the next hot new thing. But if you're looking at profit---they're the 3rd most profitable public company in the U.S. behind just Chevron and Exxon. No other software/hardware tech company makes more money.
TomOfTTB 16y ago
To me the cogent point is that IBM re-invented itself but only after it broke from a line of internally groomed CEOs leading all the way back to the Watsons. IBM was about to be split into pieces when Lou Gerstner was hired from the outside. He's the one who saw the advantage in IBM's footprint and the value it could add to a service based business. He's also the one who put an end to several sacred cows like OS/2 and took IBM's focus almost completely off mainframes. The parallels to Microsoft are actually pretty compelling (For example "Windows Everywhere" is Microsoft's Mainframe imho). I don't think Ballmer has been a bad CEO (like some do) but his time is done. The old tricks aren't working anymore. They need to find someone with a fresh vision if they want to survive.

patrickk 16y ago

I remember reading somewhere that IBM makes something like $8bn per year still from mainframe computer sales. If IBM are doing that - two major computer architecture iterations along the line - (client-server and now cloud coming along), then that bodes well for Microsoft's survival, but perhaps not their relevance. Startups aren't going to go after highly conservative organisations like banks who won't risk changing from mainframes for no obvious gain. So there will be a market for Microsoft technologies (their OS and Office in particular) for a long, long time; long after consumers are mainly using Android/Linux/Macintosh-based tablets or other portable devices to do their personal computing.

ams6110 16y ago
For pure transaction throughput, it's still hard to beat a mainframe. The hardware is optimized for it, and so is the software. They are a niche product but a very profitable one.
rbanffy 16y ago
> like banks who won't risk changing from mainframes for no obvious gain. So there will be a market for Microsoft technologies Comparing Microsoft products with the kind of reliability banks require from mainframes misses the point. No product Microsoft offers can match 5 nines outside a controlled environment (and most probably, neither inside one)
- patrickk 16y ago
  Perhaps the point I was trying to make wasn't clear. Certain enterprise customers will always want to work with what they know, (i.e. typically Windows XP and Microsoft Office currently.) So this will be the long tail that Microsoft will coast along, if/when consumers migrate their personal computing to other platforms. Granted, there are certain situations when using an older technology such as mainframes makes complete sense, and there is little benefit to risk a major system upgrade; but there are many other situations where not upgrading seems lunacy (e.g. in an era when people want to have much of their banking online, the old mainframes in the background struggle to cope with the demand.) As an aside, I interned at a bank where one of the tasks I did was adding HTML tags to predefined paragraphs that were in plain English. I did this in Excel, manually, line by line, on a PC sporting Windows XP and a 15" monitor. This could have been done in seconds with a shell script if anyone there had a clue. This kind of ignorance is a godsend to Microsoft who will continue to sell software licences to clueless companies for the foreseeable future.

Matt_Cutts 16y ago

I remember when pg first wrote this. A lot of people misunderstood the headline. From the pg's Cliffs notes: "What I meant was not that Microsoft is suddenly going to stop making money, but that people at the leading edge of the software business no longer have to think about them." That's at http://paulgraham.com/cliffsnotes.html http://paulgraham.com/cliffsnotes.html So the two definitions pg gave in 2007 were "You don't have have to be afraid of Microsoft" and the definition above.

jdp23 16y ago
When this came out I was still at Microsoft with a charter of "game changing strategies". There were (and still are) quite a few things that MS could do to reinvigorate itself, but the corporate culture keeps them from gathering momentum: the company's success came in a PC-oriented world, so they don't think from a phone, device, or web perspective; and the lack of understanding of win/win dynamics (which Google rode to success) means they're not able to leverage their huge assets. Since then, the ongoing loss of great people has deepened a huge generational hole. So yeah, this essay has held up real well.
- kenjackson 16y ago
  Jon, as someone from MS (and with great repute), I'd be curious to get your take on something I've heard from ex and current MS employees I talk to regularly. One issue that seems to come up a fair bit (often not directly) is that MS has a hypercritical culture, where there's always a reason NOT do something. Since they had big money makers in Office and Windows, no one really noticed for a long time.. I hear constant grumbling that people with ideas get their ideas shot down with lots of criticism. Many of these people say that MS would have killed the iPhone, iPad, and Wii had they been proposed at MS in final form. It sounds like a company made of bright people who have no problem finding issues with products, but less good at fighting for new innovation against these same critics.
  - jdp23 16y ago
    Very true -- in fact Microsoft's values include being self-critical, but not being self-aware. Also, it's a very competitive culture, and the easiest way to show you're smarter/better/more powerful than somebody else is to attack them. The net result is that it's an incredibly negative culture, and it really affects people both on the professional and personal side.

Hov 16y ago

I understand he meant that nobody is scared of Microsoft anymore. I guess the question I have is, is there a company that exists that everybody IS scared of? No. So I rather chalk it up to a sign of the times.

zmmmmm 16y ago
As recently as last year I was reasonably scared of Apple because they appeared to be accumulating a market power that was transforming the industry itself into something I didn't like. Fortunately, however, Google came to the rescue with Android and I'm now far more relaxed about it. A lot of people claim to be scared of Google though ...

AlexC04 16y ago

According to analytics, I've had 20,000 hits to my website in the last 30 days. 75% of those are reported to be running a windows operating system. As much as I respect the interesting point of view presented in the article, I sometimes wonder if sites like Hacker News and Slashdot don't put us all into some sort of exceptionally nerdy bubble-think. Like with the last week or so when everything I read seemed to say "google sucks", "lynch google", "burn and raze googles offices so they can never spam search results again" What was the rest of the world's reaction to this seemingly endless flood of histrionic blog posts about broken google search results? Crickets chirped and a tumbleweed yawned with boredom. Microsoft isn't dead. From what I see, in the last 30 days Microsoft is a minimum of 75% alive and we'd all be very much richer if we didn't forget that. With the utmost respect of course. Without exaggeration, hyperbole will literally be the death of us all.

TomOfTTB 16y ago
There's certainly some truth to what you say but I'd encourage you to look at the context of the conversation here. pg's blog and Hacker News appeal to people who are generally looking at the world from one of two perspectives: investing or as a startup. Keeping that in mind shapes the conversation differently In Microsoft's case I can absolutely see how 75% of the people visiting your website might be Windows Computers. But how many of those people want to be on Windows? How many are using it because there's simply nothing else or because they're just too lethargic to switch? How many are using it simply because they're on their work computer and no one's seriously challenged MS in the corporate space? So Microsoft could very well be dead and not even know it (as pg's addendum to this post makes clear). If you accept that thesis it has very relevant implications to the intended audience. From a startup's perspective it means you shouldn't rely on Microsoft technology and need to pursue a strategy that supports Microsoft's desktop but doesn't build on it (which probably means web apps). From an investing perspective it means looking down the line for any possible desktop competitor that could be viable. Because once that viable competitor comes along the bottom will fall out of Microsoft's profits.
- Tichy 16y ago
  "How many are using it because there's simply nothing else or because they're just too lethargic to switch?" Isn't that true for any conceivable product? I am using cars because there are no teleporters. I am using a keyboard because I don't have a good brain to computer interface yet. If I had a tablet, it would only be because there isn't a nano computer in my eyeball yet that projects directly on my retina (the real retina, not the Apple display).

savoy11 16y ago

The mere fact he says that is contradictory. If something is dead/not-relevant - people just not talk about it. We have daily Microsoft dead posts here. Meanwhile Microsoft is far from dead, netting 6 billion in PROFIT each QUARTER. And growing steadily with 20% per year. Get your common sense right. Microsoft is a revenue stream - XNA can make your code run on phones and XBox alike and you can profit twice with the same codebase. Use the eco-system, do not lose revenue stream out of stupid prejudice.

kingsidharth 16y ago

> I know they seemed dangerous as late as 2001, because I wrote an essay then about how they were less dangerous than they seemed. Didn't get it. They seemed dangerous because Paul wrote an essay?

ashearer 16y ago
If they hadn't seemed dangerous, Paul wouldn't have written the essay.
corin_ 16y ago
The 'because' refers not to them seeming dangerous, but to his knowing, in 2007, that they did seem dangerous in 2001.

noelchurchill 16y ago

Can someone please make a website ismicrosoftdead.com similar to http://isitchristmas.com/ http://isitchristmas.com/.

DealsForHackers 16y ago

Replace "Microsoft" with "Google", and this article suddenly captures the zeitgeist of today's startup environment.

Aegean 16y ago

"A few days ago I suddenly realized Microsoft was dead." haha that's a great sentence to start an article.

rywang 16y ago

Microsoft Research is one of the top 10 computer science research organizations in the world. Some of the work done there (such as the Kinect) is game changing and will continue to be a resource Microsoft can draw upon. As an MIT PhD student, I know many people who are eager to work at Microsoft research. [1] http://academic.research.microsoft.com/RankList?entitytype=7&domainID=24&last=0&start=1&end=100 http://academic.research.microsoft.com/RankList?entitytype=7... [2] http://www.wired.co.uk/magazine/archive/2010/11/features/the-game-changer http://www.wired.co.uk/magazine/archive/2010/11/features/the...

rchowe 16y ago
But aside from vacuuming up some talent, Microsoft Research isn't going to be a part of any startup or VC's equation.

jcfrei 16y ago

The perception of who's 'alive' really depends on the perspective. If you're dealing with software solution consultants you can't get around IBM - but if you're a small software developer you might just as well never have heard of them. just for the record, take a look at the revenue and employe numbers to see what has changed since the 1960s (big blue is still on top): IBM $95.75 billion / 399'409 (2009) Microsoft $62.48 billion / 89'000 (2010) Apple $65.23 billion / 49'400 (2010) Google $23.65 billion / 23'331 (2010)

nivertech 16y ago
Notice that IBM and Apple revenues are higher, because they selling mostly hardware. MSFT selling mostly software with exception of XBox.
- dgudkov 16y ago
  This isn't true for IBM. In 2009 IBM's revenue from hardware was less than 17% from total revenue. http://www.ibm.com/annualreport/2009/2009_ibm_annual.pdf http://www.ibm.com/annualreport/2009/2009_ibm_annual.pdf
  - nivertech 16y ago
    Services revenue is mostly consultants salaries too. What I mean, that software and advertisement margins are generally higher, than for hardware and services.

j_baker 16y ago

I find pg's proposed way of Microsoft becoming a contender again interesting. I don't doubt that he'd like Microsoft to start buying up more Web 2.0 startups. Granted, that doesn't make him wrong. I just find it interesting.

Stormbringer 16y ago

Wow, lots of hatorade on the drinks menu today. I of course had the same reaction as everybody else to the sensationalist headline... but when I read the article I agreed with pretty much everything he said. I suppose that is fair and preserves my strong PG contrarian streak, the articles everyone else loves I hate, and the articles everyone else hates, I love. ==== From the article: So if they wanted to be a contender again, this is how they could do it: (1) Buy all the good "Web 2.0" startups. They could get substantially all of them for less than they'd have to pay for Facebook. (2) Put them all in a building in Silicon Valley, surrounded by lead shielding to protect them from any contact with Redmond. I feel safe suggesting this, because they'd never do it. Microsoft's biggest weakness is that they still don't realize how much they suck. They still think they can write software in house. Maybe they can, by the standards of the desktop world. But that world ended a few years ago. ==== This is brilliant. And when we look at the Microsoft Kin Phone Debacle of 2010, we see that indeed they splashed the cash to buy a startup (Danger) to get into the smartphone game, but they critically failed the second part of the plan, which is the lead shielding bit. This is why PG is a genius, and this is why we can say that Microsoft is dead. Because they are the problem. The problem with Microsoft is Microsoft. Because they are irrelevant, and to Microsoft being irrelevant is worse than death. One of the things I've noticed about Microsoft over the last couple of years, is that when someone leaves Microsoft, and they blog about it (as you do), and then you get ex-Microsofties arguing with current-Microsofties, is that they have their own weird sub-culture and language that is incomprehensible to anyone on the outside. The more inward focused they become, the less and less relevant to everyone on the outside they will be. This is another sign of their decline. Joel Spolsky said some interesting things about this, on the topic of hiring programmers. Someone asked him how much a programmer should be paid, and he said that across the industry there was a pretty uniform amount of profit that a company can make per programmer - something like $100k-200k, but that there are a couple of exceptions to this rule, one is Microsoft, because the Windows and Office parts of their business are ridiculously profitable, and the other is Google. And that Microsoft makes millions per programmer, so they can afford to go out and hire the good and the bad, in order simply to prevent them from working for their competitors. So they hire all these people, and then ignore them or put them to work on bike sheds. I think it is very dangerous for a company of any size to ignore their smart people, and this is another sign of their decline.

GeorgeTirebiter 16y ago

This sentiment is not new. See "Microsoft at Apogee" by John Walker (founder of Autodesk, and a really brilliant guy): http://www.fourmilab.ch/documents/msapogee.html http://www.fourmilab.ch/documents/msapogee.html Note the date: 9 Feb 1997 (!)

nivertech 16y ago

What means death of Microsoft? It means fragmentation on the desktop (similar to what we have on the mobile): * MacOS X on x86, maybe even desktop version OSX/iOS on ARM? * Wintel (Windows on x86), WARM (Windows 8 on ARM) * ChromeOS on x86 and on ARM * Linux on x86 and ARM (Gnome, KDE, Unity, etc.) I predict that native desktop software will become more expensive, while generic HTML5 versions will be ad-supported or subscription based. Assuming, that HTML5 family of standards will be fully adopted. With all these new AppStores and Marketplaces ISVs will be able to save money on marketing and sales, but they will need to spend several times more money on developing for several desktops platforms/CPU architectures.

Encosia 16y ago

I doubt that anyone working at Sony or Nintendo shares this apathy toward Microsoft's continued ability to enter and disrupt an industry.

ankimal 16y ago

Even 3 years later, this is still true. The only thing MS has is Windows and Office (the only MS product, in my opinion that is real quality). MS will not die but will become irrelevant. The way they kept jacking up PC hardware requirements for Windows, Internet bandwidths will keep becoming bigger and better and "thick" clients will become irrelevant. Everything eventually will be on the web and that day is sooner than we think it is. (For some its already here)

kehers 16y ago

Checks post date. Noticed it is 2007. Moves on