The slow death of Microsoft

The Microsoft research lab here in Cambridge has some of my best friends working for it, and many people for whom I have a great respect. I count myself lucky that there’s a great degree of overlap between those groups! Many of them are doing some very cool stuff.

And yet, I’ve felt for some time that Microsoft is a dying company. For a year or two I’ve been discussing this with friends and colleagues and there seems to be general consensus. MS has huge reserves of cash, and a monopoly position which means that its pulse will beat for a long time to come. But it beats ever more slowly, and despite good work by the researchers internally, frankly, nothing interesting has come out of Microsoft for a very, very long time.

There are three key problems that it faces.

The first is that operating systems are commodity items. It’s been more than 6 years since I’ve had a Windows machine and I haven’t missed it a bit. You can get capable operating systems from several sources, and nobody gets very excited about which one they have any more. In this respect, I think Microsoft is very like AT&T. They provide a useful service, so you hand over the money. But all the interesting stuff about phone calls comes from whom you contact and what you say to them, not from who provides the wires. The wires ceased to be a novelty some time ago.

The second problem is that Microsoft Office is becoming less and less relevant. Almost everything I write now ends up in electronic, not paper, form. On the rare occasions when I want to write a letter, I use Apple’s Pages, not Word. If I wanted to write a book, I would almost certainly use OpenOffice. Both are arguably better suited to those tasks. The only times I fire up Word nowadays are when somebody – usually a law firm – sends me something for which the ‘track changes’ feature is necessary. (Younger companies tend to use more up-to-date tools for collaboration). I also prefer Keynote to Powerpoint. Excel I do still use, but – here’s the important point – I wouldn’t part with any of my own money to upgrade any of these three-year-old programs. For me, and for many others, they have that word ‘legacy’ hanging around their necks.

The third, and most telling, nail in Microsoft’s coffin was highlighted for me in a talk given by a former Microsoft employee who had recently moved to Yahoo. I can’t remember his name, for which my apologies. But I remember very clearly what he said.

He had developed a new feature for Outlook/Exchange in 2004. It was a cool feature and was due to be incorporated in the next release, in 2007. But then it was deemed to be a little too aggressive to include it so quickly, so it was postponed until the following release, which will presumably be in 2009/10. Six years after he finished it! When he moved to Yahoo, he would implement a new feature and it was not unusual for someone to ask, “Could this go live this afternoon?”

That’s why Microsoft are almost certainly dead, at least in terms of having any real impact on the world’s future development.

Aha! While I was in the middle of writing this, I came across Paul Graham’s recent article saying just the same thing:

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.

There is, I think, one caveat here.

Microsoft have never succeeded in anything that didn’t depend on the monopoly they established with Windows and Office, despite the huge subsidies they can and have thrown at each and every attempt. With one exception.

The XBox.

That seems to be going well for them, which may mean Microsoft has a bright future making games consoles. But it’s hardly the same company. The Microsoft era that we’ve known for the last 20 years is drawing to a gentle close. I can’t say I mourn their passing.

Enjoyed this post? Why not sign up to receive Status-Q in your inbox?


I was just trying to say the same thing to Julie the other day. I could not put a finger on why they were declining exactly (and saying it’s because vista is such a nonevent doesn’t work) but this pretty much sums it up.

Microsoft was declining when I was there back in 2001. In 2004, they paid a $3 a share dividend, or $32 billion that Microsoft couldn’t find a use for (or at least not a better use than returning to their investors to put on the open market). If you don’t have a plan for growth, the tech world considers you dead. In this time period, people began describing Microsoft more and more as a place with great benefits, not as an exciting place to work.

A softie I was talking to the other night could only emphasize all their other products – rather than software. Which basically means the Xbox . I also thought they were gaining some market share in phone software as well. But you are totally right – what is the advantage of an individual moving to Vista or a new office version?

As an aside I went to their London offices recently for a Wiki wednesday – after 10min the receptionist gave up trying to print me a personalised badge, as the PC was running so slow!

I’d take a contrary view. On the desktop Vista will make lots of money since it’s shipped pre-installed by PC vendors, there is almost no chance that OS X, desktop linux, or OS neutral web-based apps will make really significant inroads into home or business client usage in the near future. Microsoft has moved into other areas that have lower public visibility (middleware, application integration, BPM, database) but which generate large amounts of money in both software and services, and where the ability to make product changes quickly aren’t as important as other benefits like performance, reliability or conformance to standards. I’m sure this is just a consequence of a maturing business – Microsoft morphing into a company more like IBM. Incidentally, agreed about the XBox, and I wouldn’t put it past them to make a success of some future iteration of the Zune player, even though the first generation was a bit of a dud.

Pretty much everything in the business world evolves and changes, so to think that Microsoft is going to keep going as the juggernaut it’s been is to assume in the 50s that nothing would change about the Detroit auto industry. Plus, of course, there are all the reasons in your post; thank you for writing this up.

Once a critical mass of people realize that free != bad, there’ll be a bigger rush to open source.

As for Word, I don’t just use because I write about and traing OOo — I really dislike Word. I used it happily on a Mac in the mid 90s and since then it’s been driving me crazy whenever I have to touch it.

I, too, like Excel more than the rest of MS Office, and I, too, only use Word when I have to “track changes” using its method.

Yet I’m using spreadsheets less and less for a variety of reasons. The ability to get the results I want reliably is one (see A second is the ability to get the results I want easily and effectively (

Dave Clark said “Id take a contrary view. On the desktop Vista will make lots of money since its shipped pre-installed by PC vendors”.

A contrary view to his contrary view is that OEMs would still be shipping XP if Vista didn’t exist. Microsoft will only make _more_ money from Vista if they charge more for it than XP, which they are attempting to do by splitting Vista in to so many different flavours/SKUs and upgrade options.

Microsoft can’t die soon enough. I really dislike the web sites that ONLY work with IE. Or only with Windows Media Player. I have been using OO.o for about three years now and I don’t miss Office. I believe that as the mass of non-M$ users grows then we will see faster changes in the decline of the Monopoly of M$. I like the software that lets me drive in the direction I want to go, not the software that is like a railroad train where I have no choice.

A trendline certainly becomes obvious when one looks at recent Microsoft products, Zune,Vista, Office 2007 all show a lack of understanding of what people want. All of these lackluster products are bloated,incompatible and unreliable for day to day use. They were released because it was release day, not because they were finished, or even particularly useful. This shows a company not focused on providing value to customers, but in building revenue streams and let the customers be damned. The X-Box are sold below cost, so I don’t know how sucessful a business they can build if it becomes more profitable for the game companies to write for another platform. Many game platforms and companies have come and gone in the last 30 years, it would not suprise to count Microsoft among these. The server business is the only core revenue stream they have, should that go away, the ship goes under. If businesses must stay more competitive to survive, then the cost of software will be a factor in the success or failure of any startup, which makes MS less inviting by day. They recently decided to sell XP for 3$ in the the third world, so they are getting closer to the proper price, they only need another 66% price cut and it will be selling for what it is truely worth. My office runs XP, we won’t be upgrading to Vista, we are upgrading to Ubuntu.

The real evidence is this: my company has been providing commercial support and development services for systems built on open source since 1998. Business has always been steady, but we’ve seen a 500% increase in business – particularly for web-based technologies – in the past 6 months. The market is getting savvy. Linux experts are graduating from universities. 50% of software being developed today (according to a survey that was listed on slashdot, but for which I can’t currently find the link) targets Linux as a platform. It’ll be interesting to see what OpenMoko and the pretty amazing Neo1973 platform does in the mobile space… interesting times, indeed.


Yep – I couldn’t agree more with this article (“The slow death of Microsoft”).

With the notable exception of Apple, operating systems and office suites are now both commodities. Vista is an absolute joke, it really is – particularly given that it was pushed out the door by a company that has cash up to the ceiling….. It just goes to show that all the cash in the world doesn’t mean that you can make something that’s useful.

My main PC runs Linux and I’ve recently bought a second old box that now has OpenBSD on it (which I’ve found to be excellent). MS would have to **pay me** a three or four-figure amount of money before I’d install Windows again (and even then, I’d take the cash, reformat the hard-drive and reinstall Linux or BSD….. :-)) )
– Andy

The Slow Death of Microsoft (or at least some wasting away)…

Pretty much everything in the business world evolves and changes. The Detroit auto industry, for instance, has gone through some changes. A lot of phonograph companies are no longer in business. And so even though it seems impossible to think…

[…] some neural network simulation (or some prediction algorithm) to predict the death of Windows. Read this […]

Got Something To Say:

Your email address will not be published. Required fields are marked *

To create code blocks or other preformatted text, indent by four spaces:

    This will be displayed in a monospaced font. The first four 
    spaces will be stripped off, but all other whitespace
    will be preserved.
    Markdown is turned off in code blocks:
     [This is not a link](

To create not a block, but an inline code span, use backticks:

Here is some inline `code`.

For more help see


© Copyright Quentin Stafford-Fraser