Ballmer: Windows will get more competition
REDMOND, Wash.--Kicking off a financial analyst meeting on Thursday, Microsoft CEO Steve Ballmer addressed the threats to Microsoft's biggest economic engine, its Windows business.
In addition to the usual issues of piracy and emerging markets and Netbooks, Ballmer acknowledged another challenge: rivals to Windows.
Ballmer
"We've got competition coming from a lot of different places," Ballmer said. He talked about the competition from Linux and Apple and the looming threat from Google's Android and Chrome OS.
"I don't know what Chrome OS is yet," Ballmer said. "Right now I just put it on the list for competitive completeness."
That said, he said he does expect more competition overall for Windows.
"We are going to come under attack," Ballmer said. "Any business that is as big...as Windows deserves competition."
However, he said that he expects Windows 7 to be a strong answer to all of those threats, noting that Microsoft understands that Windows is its flagship product.
"That is absolutely job one around here," he said.
Ballmer said the Windows business should grow roughly in line with the overall PC market in the coming year, although he declined to give a specific forecast.
He also walked through the economics of the Windows business, addressing all of the different segments.
"Many of you think we have problems we don't have in the Windows business," he said.
On the Apple front, Ballmer noted that the year was roughly a wash, with Apple gaining some share in the beginning of the year and Windows regaining some at the end of the year.
However, he noted that the company still had work to do with the analysts, counting up the significant number of Macs in the crowd.
"Don't hide it," he said. "I've already counted them. I've been doing it since we started talking...Feel free. As long as you are using Office go right on ahead."
Ballmer's comments follow a disappointing quarter in which Microsoft's revenue was hundreds of millions of dollars less than many analysts were expecting.
"It was kind of a wild quarter," Ballmer acknowledged. "It was a bad economy and we still had a pretty good year."
The company has said it sees the overall economy and its business to be challenging for the rest of the calendar year.
Earlier in his talk, Ballmer also walked through the economics of the search ad deal with Yahoo, highlighting its benefits to both companies, calling it a win-win.
(Credit:
Microsoft)
During her years at CNET News, Ina Fried has changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley. These days, most of her attention is focused on Microsoft. E-mail Ina. 
Microsoft may not have met the 'analysts' expectations, but they are still a profitable company that has done well to weather the economic storm.
As for the Competition, Apple systems are still high end and on cost factor alone will make sure that they won't overtake windows. Google chrome OS is likely to be a failure simply because we are not always connected online...even as a linux user, I am not even remotely excited about chrome OS.
Hehe Ballmer still looks like a used car salesman in his suit. :)
I was waiting for a long time for someone to come up with lean OS, where you can actually see and feel the increase in computer speed. But up until now, the user experience has been hobbled by the OS also betting more bloated with each hardware speed advance. So, waiting for Chrome OS. It will be good. Microsoft should and most likely is addressing this threat internally, not publicly.
Anyway, I don't think anyone is in a rush to use a 1.0 OS based on Linux. If people do buy Chrome OS x86 based Netbooks, its to carry them home, format them and load either XP or Windows 7. Consumers are actually clever that way.
What I believe Microsoft have to introduce in the future is a competitive upgrade system where consumers can get say a Windows 7 Home Premium upgrade from Chrome OS or Ubuntu Linux for say $50. Its better to have those systems running some version of Windows than no Windows that all. They use to do it for products like WordPerfect Office to get customers to upgrade and stay on MS Office. Windows 2000 Professional supported a competitive upgrade from OS/2.
OS X 10.6: 2 SKUs - 1 for desktops, 1 for servers. If you're not running a server, the choice is simple. It is basically the ultimate (or whatever the top tier is called) in both 32-bit AND 64-bit. Simple. Simple. Simple.
no offence but... I smell a anti-competition lawsuit coming if that were to happen...
"If people do buy Chrome OS x86 based Netbooks, its to carry them home, format them and load either XP or Windows 7."
And you "know" that how exactly?
Most people keep Linux on their netbooks if they have it. To put XP on there, you'd first need an external CD/DVD drive.
Whereas the other way around is easy:
You can boot Linux from a USB thumbdrive, and then install it without ever attaching a CD drive. That's indeed what I have done, putting Linux on my netbook which came with XP.
You can boot a windows install cd or dvd from an external usb drive. If you copy the dvd or cd onto a usb thunb drive, you would likely be able to boot from that too (although I haven't tried that myself).
Having said that, I really doubt "most consumers" take their netbooks home and install Windows on them. Why would you bother? They're netbooks, what do they need windows for?
This guy can even embarrass most Windows users.
Absolutely nothing which is why I was surprised.
Even as PC users we have to admit he can be a bit goofy at times..
So it leaves me scratching my head why Microsoft would attack these potential customers. Doesn't make sense.
But look at hte numbers, MAC users still represent less then 10% of the overall PC business. so he is not attacking a larger user base. Also, I am sure MS makes more money from a Windows PC overall than a MAC.
In actuality, he is attacking not a larger user base, but a growing user base... one that presents a long-term threat to the money-farm that Microsoft has had going for all these years.
He's obviously never heard of OpenOffice.
Fanboys always trying to use some open source crap to keep their fanboyism in check lol
Also, without Windows, Office eventually fades too.
http://www.betanews.com/article/IDC-Apple-drops-behind-Toshiba-in-PC-market-share/1247759068
"Apple has dropped to fifth place in the US market according to preliminary second quarter estimates from market analysis firm IDC. The manufacturer had reached the fourth place position in 2008, but has failed to keep up that momentum in 2009, retaining a steady market share while its two nearest competitors, Acer and Toshiba, race ahead.
In the first quarter, for example, the company's shipments shrank by 1.2% year over year; and in the second quarter, shipments were down by 12.4%, according to IDC's Quarterly PC Tracker report."
I am... which is why I mentioned Apple, not Macs :)
--
@mbenedict:
It would help if you used accurate figures, and not rely on outdated predictions that have since turned out to be faulty. Here's an accurate picture:
" The company sold 2.6 million Macs, up 4 percent from a year ago"
- http://news.cnet.com/8301-13579_3-10292380-37.html (July 21, 2009).
It would help if you used accurate figures, and not rely on outdated predictions that have since turned out to be faulty. Here's an accurate picture:
" The company sold 2.6 million Macs, up 4 percent from a year ago"
- http://news.cnet.com/8301-13579_3-10292380-37.html (July 21, 2009).
Wow mbenet you got served.
note: I do use office 2003 on my work machine baught and paid for by my employer.
The other reason? Open Office is a copy cat product - it brings absolutely nothing more to the table above and beyond what can be done with Office. Fact of the matter is people will pay for the real deal instead of load up a product that is free. Now that Open Office is owned by Oracle (the second largest commercial software company) let's see what happens to it...
Yes Open Office is a copy cat product just as browsers are copycats of each other.
They have to be because people are use to an interface and it pays not to shift things around too much.
Still, I would rather pay $0 for Open Office any day, than $$$ for Microsoft Office.
In fact I have a licensed copy of Word which came with my PC that I do not use in favour of Open Office and Google Docs.
That's just me though.
By they way, I'm running Vista 64 and probably will not upgrade my OS until I buy a new computer because there's nothing wrong with my OS right now.
- lack of 3rd party support with drivers (check)
- hmm slow machine? how about a Toshiba Satellite, AMD AthlonX2 64 3gb ram and ATI 3100... decent system... Vista slower than my ancient XP machines? (check)
- can't get software that was designed for XP to run under Vista? (check)
- had to search all over because of pointless interface changes? (check)
- loaded Ubuntu 9.04 to make the system fast (check)
I am bidding on a contract to maintain some Vista machines and try to tweak them... the whole office is PISSED that they replaced their XP machines with SLOW vista machines brand new systems. I have recommended that when Win7 comes out that they dump Vista ASAP.
I'm sure Vista works just fine for your email and web browsing, but for those of us who need to do more, Vista is a SLUG.
Your numbers are a bit off: 80 somthing percent (wish I had a link, but I don't) of issues were caused by NVidia drivers. Other drivers were also problematic. And then there were the security customers who say they were led astray by early ms efforts and changes in the flow. However you put it, most of Vista's problems were caused by 3 parties, not by MS.
They've done a much better job preparing the 3rd parties for windows 7 though. The RC is rock solid and my primary gaming computer.
If I run my game machine (same specs as yours) with XP or Linux, then I have an advantage over you.
Vista turns the latest hardware into yesterdays hardware. It is a downgrade.
Four key areas will tell us what the future will look like.
1. Work/Office
2. Streaming Media
3. Mobile devices
4. Gaming
Microsoft has skin in all the areas listed above and they are a major player. Google is an upstart at best.
"However, he noted that the company still had work to do with the analysts, counting up the significant number of Macs in the crowd."
He can count the number of Macs in general since Apple gives those numbers out at each earnings call. I wonder why Microsoft won't count up and tell us what their Windows unit sales numbers are? (of if they do, why is it hidden?)
Dunno about you, but I wouldn't want to stake my future on being able to run on a competitor's hardware.
A competitor's hardware? What are you referring to, the aluminum or polycarbonate chassis? Apple runs Intel, Nvidia, etc.; they buy pretty much everything from somebody else who designs it first for Windows.
As far as people being unlikely to keep Windows on their Mac, I know a lot of people who have to buy Windows and Boot Camp. My younger sister is one of them. Personally, while I am not one to sneeze at a nice aluminum shell (save for the fruit logo), it's really not a life/death difference. If a MacBook falls to the ground, a hard impact could still shatter the monitor, especially if it lands on some sort of bump (like a child's Hot Wheels on the floor). And unless you're using an OCX solid state drive (I prefer Intel's X25-E), your hard drive will still take a ****, should the machine be running.
Aside from the logo, I have heard too many complaints of Macs overheating inside the stuffy chassis. The frontal heat vents are a novel idea, but apparently not enough. And what does Apple say? "You were probably overworking it." And they're saying this people who only use the machine in an office! There's no graphics editing or gaming going on, and that shouldn't matter anyway.
A couple of quirks you'll find in Windows are temp files and poorly-written, third-party software (which comes with the territory: bigger market, bigger haystack). The solution? CCleaner, WinDoctor, and possibly Revo Uninstaller (in many cases, you can prevent lingering drivers and registry keys by terminating a program prior to removal). Two of these are free. And if you have enough money to expend on a high-end Internet appliance with some A/V editing capability (by no means top of the line), if only because no one told you that you can take Vista online without AV (even XP or 2K after a simple kernel lockdown method), then you should be more than able to shell out $49.99 for a copy of SystemWorks BE. In my eyes, that's a small price to pay for stable USB drivers, an implementation of sleep mode that actually WORKS, and finally, a singular platform that can do everything I need to do without emulation or dual-booting.
"Steve Jobs: Apple had a monopoly on the graphical user interface for almost 10 years. That?s a long time. And how are monopolies lost? Think about it. Some very good product people invent some very good products, and the company achieves a monopoly. But after that, the product people aren?t the ones that drive the company forward anymore. It?s the marketing guys or the ones who expand the business into Latin America or whatever. Because what?s the point of focusing on making the product even better when the only company you can take business from is yourself? So a different group of people start to move up. And who usually ends up running the show? The sales guy? Then one day, the monopoly expires for whatever reason. But by then the best product people have left, or they?re no longer listened to. And so the company goes through this tumultuous time, and it either survives or it doesn?t.
BusinessWeek: Is this common in the industry?
Steve Jobs: Look at Microsoft ? who?s running Microsoft?
BusinessWeek: Steve Ballmer.
Steve Jobs: Right, the sales guy. Case closed."
"The only problem with Microsoft is they just have no taste. They have absolutely no taste. And I don't mean that in a small way, I mean that in a big way, in the sense that they don't think of original ideas, and they don't bring much culture into their products. "
--Steve Jobs
It's no coincidence that Mac sales spiked once they switched to Intel processors and an architecture that could accomodate Windows.
This isn't to say that "Macs suck" or "Windows is better"; it's just to say that "The world runs on Windows." It will probably be that way for awhile.
So maybe Microsoft should come out with some ads where the PC-guy is talking to the Mac-guy, and talking about how he can play all these games and run all this software on Windows. And the Mac guy thinks he can't (because he owns a Mac). And then the PC-guy can say, "Sure, you can. You just need to buy a copy of Windows for your Mac." It doesn't have to be all wiseguy-ish, like the Mac ads. It doesn't have to be confrontational. It's just a simple fact that Windows runs many, many more programs that Mac OS... but Mac hardware can run Windows.
It's a subtle way of saying, "Look, Windows can do more, but it's not either or, since Macs can run Windows."
kumbaya...
In my experience (and I work with these people everyday) I've learned there are two strong reasons why people still use Microsoft on their Macs: 1) their employers mandate it for consistency and 2) personal preference (i.e. comfort level). When you're a mid to large size business and you've been using MS Office for quite some time, the comfort level is hard to get away from--which is also true on a personal level. But I've also met people who, once they discovered what iWork offers (greater graphic flexibility, more animation, easier integration with all your other Mac software, the ability to open and export MS Office documents--just to name a few) they are wowed and then switch. I've been using MS Office on both PCs and Macs much longer than iWork, but I prefer the latter. And iWork is only $79--a price that hasn't changed in the last few years despite dramatic upgrades. Meanwhile MS Office Home and Student edition runs anywhere from $90 to $149. And Apple gets pigeon-holed for always being more expensive?
Personally, I don't think Microsoft is as evil as some in the media claim (though, clearly, there were some abuse of power violations in the 1990s). Apple, Google, Yahoo... they'd all do the same thing that Microsoft does (or worse) if in the same position. I mean, it's not like Apple is known for its open-ness.
And why shouldn't it? You're paying the Microsoft Tax on every new PC - even ones that do not ship with Windows.
Whats Apple's excuse?
...even from people who do not want or use their product? Isn't that extortion, theft, or somesuch?
Try and buy a phone without an operating system.
No one forces you to buy a computer. Its a want not a need.
Apple doesn't sell computers without Mac OSX on them.
Nice strawman. Learn the diff between embedded systems and computers, then try again.
"Apple doesn't sell computers without Mac OSX on them. "
Correct, however they don't offer business buyers one option and consumers another. Dell and HP will happily sell you, as a business customer, a computer without an OS on it. However, odds are very good that the exact same model, with the exact same specs, will require you, a consumer, to buy the OS along with the machine. This is why you can (depending on locale) successfuly take Microsoft to small claims court to recoup that cost.
Thats on Dell for jacking up the price not Microsoft. If Microsoft is not seeing a dime for the sale of that PC what case do have to sue them for?
It's not Microsoft's fault that Dell , HP , etc don't bring the cost savings to the customer..
You weren't honestly expecting Microsoft not to charge anything for their OS were you?
Google for "Microsoft small claims refund", then soak it in. I'm not doing your education for you. ;)
And all I get is a Pro Linux Anti Microsoft site with a FUD agenda...
And the Q2 yes Mac shipments were off but that was before the price drop and this last quarter they had a huge increase in Mac Sales. All pc shipments were off in Q2, and Apple had less of a drop then most companies did Like Dell.
Windows is dead, I am an IT consultant and I don't know any client who wants to move to even Windows 7 from XP, they either want to stick with XP or go to Apple if they need new machines. Windows 7 changes some minor things from Vista but does not fix the underlying problems with windows, they need to create a new windows maybe on top of Unix, just like Apple did if they want to survive and be a solid company in 10 years but either way I do not think they will get there if Crazy Ballmer stays at the helm, he is sinking the ship faster than I ever expected!!!
Things that are not simple changes
DirectAccess VPNless connection to corporate resources through HTTPS - this saves an organization thousands
Countless compatibility improvements (drivers will be based off the Vista base meaning they'll be ready to go)
Countless UI changes (aero quick peek, jump lists, the new file management UI, much improved search)
Not to mention that Windows 7 is optimized to run on some fairly old hardware in the grand scheme of things - that's a huge cost savings.
Now I am a real consultant dealing with real companies and most companies I have spoke to - over 200 in the BC market here in Canada (anti-Microsoft land) have significant interest in Windows 7. All of the large IT shops are testing it.
The end of the year Apple sold a record amount of computers and the PC industry was down. How does he think they "made it back"?
and market share is being measured by what is being sold in a quarter, not the historical installed base.
- by Renegade Knight July 30, 2009 2:27 PM PDT
- Excellent. Now that MS is on record saying that Windows is their flaship product, they have a prime chance to prove it to all Vista users who were left behind when the solution to Vista's being sunk, was to change flagships.
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