This article isn't worth the settlement charges my ISP paid to deliver it. I'm unfollowing TC on Twitter. Seriously guys, give me more articles like you wrote on Palantir that have actual *substance* and *research*, and not just rehashed non-reporting on echo-chamber nonsense getting RT'd by the Twitterati. Thanks.

I'm sure this isn't the first place some one has written about what market cap means, as opposed to making money, but it's the first tech post I've seen that mentioned it. Apple's P/E ratio is so high the only way it makes investment sense is the "bigger fool" theory.

The Bias couldnt be anymore apparent

I bet this was playing in the background when he was typing this up…
http://www.youtube.com/watch?v=ix62PttEfhU

Where is WIN MO? :)

So, we should use unit numbers, not profit, when comparing hardware market share, but profitability is the metric to use when comparing Microsoft's software business to hardware manufacturers, especially those not licensing Windows.

Yes, this was horrible. I hate it when actual numbers are put in front of me and I'm forced to deal with reality.

What this really tells me about Microsoft as a company is not that they are off track from a revenue standpoint, but that they simply need to run an advertising campaign to alter the filtered view most people have of them. Windows 7, Xbox Live etc are actually quite excellent product. I love my iPhone, Macbook etc but can appreciate how far they have come as a company!

Happy Dance

Wow. Dont hear much about msft any more but that doesnt mean there not killing it cash flow wise. Nice to see all the numbers laid out in comparison.

Yes, Microsoft is great with Windows and Office for enterprise customers. Windows 7 also has the customers that didn't jump to Vista because it sucked. But except the XBox Live comment (which should be compared to the number of iTunes accounts), there's nothing much in the consumer space, where the press likes to be.

Strange, as I thought this article was great and almost made up for the rampant iPhone/Apple fanboyism. Well, almost.

"299 million active Windows Live Messenger accounts worldwide" is meaningless, since many people created MSN accounts a few years ago, but no longer use them in favor of twitter, facebook, etc. The MSN accounts are still active due to the linkage to HotMail, but MSN is unused.

actually, this was interesting. We also got to catch a break from the incessant apple-fellatio news coverage that is customary on TechCrunch.

actually, MSN is the most used messaging system in the rest of the world. The USA doesn't mean jack squat in that segment, most of users here are on even more irrelevant systems like AOL(OL) and Ya(told)hoo.

Very interesting. Why has Apple surpassed Microsoft in market cap if Microsoft generates more profit? Is the extent of consumer hype over Apple and Google products reflected in their stock prices irrational in comparison to Microsoft's stock prices? In other words, is Microsoft stock undervalued? I thought business was supposed to be about money. Or does it make sense that the public gives Google and Apple higher valuations considering their growth and the futuristic direction of their products?

<div class="idc-message" id="idc-comment-msg-div-82455223"><a class="idc-close" title="Click to Close Message" href="javascript: IDC.ui.close_message(82455223)"><span>Close Message</span> Comment posted. <p class="idc-nomargin"><a class="idc-share-facebook" onclick="IDC.ui.fb_wrapper(82455223)" href="javascript: void(null)" style="text-decoration: none;"><span class="idc-share-inner"><span>Share on Facebook</span></span> or <a href="javascript: IDC.ui.close_message(82455223)">Close MessageI hope he does an equivalent post every quarter. I'm looking forward to seeing which way the numbers go.

Do all these figures add up to 'No-one ever got fired for buying Microsoft'?

What would have the IBM equivalent post been back in 1990?

Its not the income, its the growth that matters.

Exactly the type of complacency that will slowly lead to Microsoft becoming irrelevant. "Just look at these numbers… everything is rosy and we are still the king of the tech world!" Go ahead, pat yourself on your back. Instead, Microsoft needs to think and act like they are the underdogs (like they did in the 90's). Where you are now is important, but where you are heading is more important; the world is heading toward less reliance on Windows and Office.

close enough :)

ha ha.

"360 million Global Windows Live Mail users."

I've yet to receive a mail from someone using this as a primary, regular mailbox (I'm posting this with my junk live mail account lol)

He provided statistics, where's yours?

Microsoft: we're a turd… but we're a really BIG turd. so suck it!

MSN account still active? Then why can't I log into my old accounts?

Have you read this part:

" 7.1 million
Projected iPad sales for 2010.

58 million
Projected netbook sales in 2010.

355 million
Projected PC sales in 2010."

Azure is a really awesome, and the support is great. Being able to set up multiple instance on the fly is phenomenal.

Microsoft really tries to work hard, yeah sometime they just sit back and relax and let the competition take over. But when they get focused again, they go for the juggler. With WP7 coming in the fall, the battle for smartphone king just got a lot harder.

Wait until 1 year after sharepoint 2010 is offered as an online service. Microsoft will be making serious cash as that product is revolutionary to small businesses and teams. Nothing rivals it, and it is what allows my small business to operate online and compete with much bigger companies.

IBM: $12.3 billion net, $103.6 billion revenue
HP: $9.4 billion net, $114.6 billion revenue

Don't hear a lot about those guys either.

Don't hear any negative press about them either. Can't say that about MSFT, which is what Siegler is referencing.

Put your money where your mouth is and put an investment on the growth of M$ over the next 4 years….. Check mate…

This and the article on Job’s flash letter are my favorite types of MG articles. I didn’t know Win7 was kicking so much butt. And Linux declined? – sad. Still it’s funny as hell reading the what-he’s-really-saying interpretation articles.

You have to split into consumer and business market. It's the same old story, they still have the monopole. A huge amount of important business software is still only available for windows. Classic business don't experiment much, they don't wanna take any risks and so they stay on microsoft.

In the new consumer market they suck. As far as i know is just xbox profitable. But we shouldn't underestimate them, the big profit in the classic business gives them a extremely long breath.

since we're talking numbers and all:

MSFT 10 years -36.84%
AAPL 10 years +931.97%

Market cap = hype. Wall Street is not immune to it.

Awesome.
The real difference is that hard core users and geeks may prefer the Apple thing but real people still prefer the Microsoft thing.

We are comparing MSFT rivals here, not partners.

The numbers are just interesting for other reasons, they indicate that Microsoft has to show it is still in the business.

MSFT is a cash machine these days, and if they cut back on all the waste in their bloated organization they'd make about 1/3 more. But the part of the MSFT numbers that are rather BS is the Apple earnings reference. Apple will have made about $13.x billion over the last four quarters (they reference the 2009 numbers of course). And for all of 2010 they will likely generate a profit of $14 or $15 billion.

Point being Apple is still growing rapidly with new products that are still in their upward growth cycle. MSFT is sucking cash out of franchises that are nearing their expiration date.

Anyone can twist the numbers. Apple make half the profit, but they do it with only a third of the staff.

MSFT have 3 main sources of revenue: Windows, Xbox and Office. The rest of the company is a waste of space. They clearly don't understand mobile devices at all, and as mobile gradually takes over they'll be gradually marginalised by Google and Apple.

I think MS understands pretty well that they are underdogs in some areas. For example, in online services.

The smartphone point is really important, really really important. We keep on talking about iOS, Android, and pretty much every other phone OS aside from WinMo.

The point he makes isn't that there are iPhones and Nokias out there. The point is that we've all been looking short term, having already dismissed WinMo. The point is that in 2014, there will be another 400 million smart phones, and they're ripe for the taking. That 2010 is a drop in the ocean, and being an early mover is trivial.

That being said. My money is on Android. But never count Microsoft out.

In what ways should xbox live be compared to itunes account? I guess you can have fun comparing apples and cows … lol

There are lies, damned lies and statistics. The iPad only release a few week ago. By extrapolation, the number would be closer to 14MM. What other deceptions are in these numbers?

true

HATE EM OR LOVRE EM, THEY STILL MAKE LOTS OF MONEY. AND THEY WILL CONTINUE TO. U CAN COMPLAIN ALL YOU WANT, U PROBABLY WROTE THIS POST USING WINDOWS ANYWAY.

All right, Mr. Siegler, you convinced me. Monday, I'm going to sell all my Apple shares (made quite a small fortune with them in the last 5 years), and then I will buy Microsoft, and I will be incredibly rich, 'cause MS is the future (numbers never lie). And then I will buy Techcrunch (heard a rumor it's for sale) and I will give you a deserved raise for your excellent investment advice!

Stocks are about the future of the company. Profits are from the current state of the company. Saying market is irrational is incorrect.

Let's consider an anecdote, GM sold more cars than anyone else for years. Their new cars had more features, safer and cheaper (inflation adjusted) than their own 10 years ago, and they kept improving it. But, it wasn't enough. It is how your products stack up with your competitor, regarding the new trend. GM's Financial, a division of GM, earned more profits in USA than what entire Honda earns. We know how it ended, almost.

Microsoft is still in much better shape than GM five years ago. But, it did show how unkind capitalism treats a leading company that makes second-tier products.

The execution of Windows Mobile have been extremely poor. Arguably it is the most important new market for the future (not even new to MS). Justifiably, it overshadowed all other successes.

Traditionally, Microsoft have been a late comers to every major markets. So, it wasn't a problem. But, it used to able to catch up 2 releases worth of features by each of its own. Apple has released, not one or two, but 5 major mobile products on iOS. Windows Mobile? Zero.

Google, not even a software company, didn't have an OS of its own, had no sense of design, a single trick pony with no meaningful profit in any other products, made two meaningful major releases.

Even Palm, a company couldn't even make a phone that supports networking for years made a respectable "Pre".

Two years ago, Microsoft still showed how they were winning iPhone by volume.

None of outside successes worth mentioning happened on your platforms. Developer, developer, developer?

Microsoft, don't pretend the number matters more than your products.
1) fries those who pretends things are fine and stops being in denial
2) heads down, works hard, not on investor relationship, or advertising, but on *products* and
3) pays the products people well

amen. at least TC doesn't have Apple in their primary nav like Munchable.

Yup. It's good to be a monopoly.

Like Ballmer said "This is a long game"

And with the money that they have earned so far, they can do whatever they want in the future.

Have you heard about Windows Phone 7?

"MSFT is sucking cash out of franchises that are nearing their expiration date."
Tell me when that HAPPENS.

Awesome post.

Plus there's one other really important thing that Microsoft consistently keeps forgetting:

"150,000,000
Number of Windows 7 licenses sold, making Windows 7 by far the fastest growing operating system in history."

That's great and all but there are 100M iOS devices now and it's growing quickly. Microsoft's largest mistake right now is thinking that the desktop and smartphones are different markets as Apple/HP/Google are moving quickly to converge them. You see Google doing the same as well with Android and ChromeOS.

Yes, Microsoft, 150M licenses of Windows 7 is great, but you keep thinking you're competing only against Linux and MacOSX – and you're wrong.

Wow. Everyone here seems to be missing the point. Microsoft is trying to divert attention using the one thing it has in it's favor — pure size. The fact is they are pissed that they are not getting more press.

The problem is that they are not innovating. They are copying (some would say perfecting). They are the biggest and will remain so for some time. However, until they do something innovative that impresses people they will not get press coverage. This is clearly evidenced by Kinect. Finally, they did something impressive and the press has gone wild over it. When are they gonna learn to apply that to their operating system? Until them, from a cultural and media perspective, Apple and Google are eating their lunch.

the numbers in this article are wrong. Apple's net income in 2009 was 8.3 billion, not 5.7, makes me wonder what other numbers are wrong. http://finance.yahoo.com/q/is?s=AAPL&annual

I love reading the comments from readers referencing how bad Windows Mobile is.

That's great that you guys have opinions, but if you'd open your RSS reader more than once a month, you'd know that Microsoft is putting WinMo behind them and moving on to Windows Phone 7, a totally new platform and user experience that many people are drooling over.

Microsoft has an incredible opportunity ahead in the mobile space with this, as they get to play the underdog and attempt to re-claim a market by doing something completely original. The smartphone game is going to get a lot more interesting in the next six months.

Windows live has 1.2 billion account created and 600 million active users
see http://www.blip.tv/file/3805529 around 00:37

wow, crowd's going OFF in that clip!

XBOX makes money? That was news to me.

I just want to apologize for my early remarks, saying you couldnt ever right a decent article about something not apple.

Actually the article is kind of masturbation over a blog post which should scare the hell out of everyone because it shows that Microsoft feels it is in crisis. Frank Shaw must be a genius we are told.

A turd made of gold and studded with diamonds.

The netflix # was posted alingside the Xbox # because Netflis is one of the most popular applications on the Xbox.

Indeed.

And nerds prefer Windows and Linux.

Windows and Office are nearing their expiration date!? Where do people like you even come up with this crap. Please point out any real competitors in those two markets. Oh and please use actual numbers with links to your sources. Thanks.

xbox is now profitable, yes. But is it a "main source of revenue" as the original poster states? Not at all.

Your display name serves you quite well. But maybe a better one should have been "stupid reader."

Siegler never stated anything about investing shares in MS, he even states that Apple has a higher market cap and everything. Please use some common sense before posting. Thanks.

I had great hope with WinMo 7 when the demo video first came out. It was Oct last year? Since that Apple has *already* major new version AND created a new market on iOS.

Releasing Office every 3 years is fine. WinMo every 5 years, isn't. When IE needed to catch up with firefox, Microsoft released IE every years, not every 5 years.

Netbook is all dead, and they still ignorance enough to include it on the post. Can't they have an executive that actually read news or ever talk to a hardware vendor?

How many people still plan to buy a small, slow Netbook without a touch screen? Of course they have 96% of the market share, because they don't count tablets. Where is the $599 to $799 HP slate? The entire market has gone.

I had great hope with WinMo 7 when the demo video first came out. It was Oct last year? Since that Apple has *already* released a major new version AND created a new market never existed before on iOS.

Releasing Office every 3 years is fine. WinMo every 5 years, isn't. When IE needed to catch up with firefox, Microsoft released IE every years, not every 5 years.

Netbook is all dead, and they still ignorance enough to include it on the post. Can't they have an executive that actually read news or ever talk to a hardware vendor?

How many people still plan to buy a small, slow Netbook without a touch screen? Of course they have 96% of the market share, because they don't count tablets. Where is the $599 to $799 HP slate? The entire market has gone.

Hmm…….. not innovating? What about things like….

Windows Phone 7 (completely new UI that doesnt like like an iphone clone)
Zune (great software and pricing model)
Bing (Photosynth tech, Realtime video and map apps, etc)
Office (facebook integration, windows live integration, etc)
Windows live Sync

These are just a couple things. They have some really great products they make that truly dont get the attention they deserve. I would be a little mad too. It must suck to always be stuck with everyone still percieving you as you were in the 90's. I cant understand why they are upset.

This is a great article, as much as ilike Chrome 'm willing to try IE9. I do have a GMail account but my hotmail account is still my default account, ¿why? because everybody i know still uses Messenger (i'm in El Salvador in case someone wonders) and i use Office (2007) and my PCs all have some kind of Windows OS (my desktop has Vista, ny laptop has 7 and my netbook XP) so i guess MS is still doing fine (more than fine) and i like Apple and use Google but all in all MS is better possitioned to take over the cloud.

We hold these truths to be self evident, all dollars are created equal, that they are entitled to the same ROI, and that what really matters to a company is growth not size:

MSFT: http://bit.ly/chw5SF

GOOG: http://bit.ly/9KsLuu

AAPL: http://bit.ly/bKsaAY

Missing is key information about demographics. If most of the users of Google, Apple are of younger generations then MS has a ticking clock. AOL 2.0.

did you just skip over the entire article? There were a ton of stats that showed they were growing at a faster rate then their competitors.

Where were you during the dotcom boom and bust? Or during late 2008 in fact?

I guess you missed the part of the post where Microsoft's Revenue more than doubled between 2000 and 2009.

Yeah, Zune lovers are such average joes.

The generals are celebrating the last battles, when new wars broke out near their capital.

I guess you haven't heard about Microsoft's multi-billion and extremely profitable server business. Does IIS ring a bell? How about SQL Server? Windows Server? $14billion in revenue and $5.3billion in profits in 2009 from servers alone. Some 'waste of space' right there.

The problem with Microsot haters is the facts keep proving them wrong.

Microsoft cannot innovate their way out of paper bag these days. Windows 7 is ok,(do in 4 steps what you could do in 2 steps on XP, but it looks pretty.) It only "shines" in comparison to the completely awful Vista. And how do you like those great Microsoft television commercials????

It's worth keeping in focus that MS is primarily after the enterprise (i.e. corporate) market and AAPL is primarily after the consumer market. There's cross over for sure, but not as much as you'd think.

I choose to buy mostly Apple products, but nearly every company I've worked for is fully stacked with Microsoft powering everything under the hood.

Two predictions: 1. Microsofts Windows 7 phone will eventually scoop up large chunks of the enterprise market by 2012/13. 2. Their cloud foundation will win over any Google cloud offerings based on trust and data privacy concerns alone. Large corporations "going cloud" just cannot afford to risk their data.

Apple will still be gobbling up the consumer market, but this damages Microsoft very little in the end.

Microsoft doesn't innovate? I think you are completely wrong on this statement.
They just don't capitalize on their innovations. Others come along and show them how to be classy.

wait, "real people" so my mother in law who only uses the computer to pay bills, check e-mail and occasionally shop but literally threw her PC out of a window and went out and bought a macbook isn't a real person? My husband who is technologically inept prefers a mac since it's more user friendly and the tech support is an actual human you can talk to, but he must not be a real person either.

What he really means: "We're posting some stuff because we've seen bad signs and are getting worried." No way 'round that either.

It's worth keeping in focus that IBM is primarily after the enterprise market (i.e. mainframe) and Microsoft is primarily after the consumer market (e.g. PC). There's cross over for sure, but not as much as you'd think.
:-)

The template for this blog is backwards. After reading a page in tiny print, why is there the option to enlarge the text at the bottom, after it is needed? That should be at the top of the page.

Here's Scott McNeally take on it. Eric Schmidt knows him pretty well I guess :) and should Steve Jobs

In 2002, he said at an investor conference: "At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I can get that by my shareholders. That assumes I have zero cost of goods sold, which is very hard for a computer company.
"That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on your dividends, which is kind of illegal. And that assumes with zero R&D for the next 10 years, I can maintain the current revenue run rate.

"Now, having done that, would any of you like to buy my stock at $64? Do you realise how ridiculous those basic assumptions are? You don't need any transparency. You don't need any footnotes. What were you thinking?"

The problem with Microsoft is that when they’ve locked in their users with their monopolistic power, other players in the same game can’t really compete anymore (for example in the OS war). Microsoft got lucky and windows became the de-facto standard and they’re now spreading FUD while keeping a chain on everyone…

He forgot to explain why Apple has more cash on hand. Profit is the only factor that counts here. You can modify these numbers all you want. In the end, only profit matters because this is what share holders want to see. Now, compare profit and you will see Apple eats Microshaft and Google's lunch.

yeah, money is icky (unless it's special unicorn apple money!)

well played

Kinect, Windows Phone 7, Office live, Windows live essentials beta, Media Center… Even the tablet side of their os is pretty good now and doesn't get enough credit. I'm excited to see what they will bring. They do name some of their pretty poorly though (windows phone 7 series)

"Microsofts Windows 7 phone will eventually scoop up large chunks of the enterprise market by 2012/13"

I can't see why WinPhone7 would fare better than RIM and Apple here? Blackberry continues to grow marketshare in the enterprise and Microsoft did very little in the enterprise space on WinMo. The iPhone is making serious inroads to the enterprise and BBerry already owns it.

yessiree… i'm with you! i'd gladly pay steve balmer for a steaming handful of turds.

if microsoft can make that kind of money selling turds to the masses, they deserve to be rich.

it's a wonderful proof that people will buy anything if it's popular. another example? steve gutenberg in the 80s.

are you stupid? Thats not how you project sales numbers.

depends

Really impressive numbers! I did not even think about the possibility of such amout of Windows 7 copies.

The Windows 7, has 2 main ingredient that makes it a success. Right product at the right timing. Hopefully, with the release of its Service Pack 1. It'll still continue to be a hit.

23B to 58B in 10 years? What is the real rate of inflation during that period?

Not really. Enterprise users….
Also, idiot teens grow up to be idiot adults. No money with them.

Countdown until Silicon Alley Insider says, "Yeh, but in the loooooong term (like, a hundred years from now…), Microsoft is really in trouble!"

…3…2…1

I wrote this comment in Ubuntu. With caps-lock turned off.

sounds like your reader base is getting to you MG…

"Saying market is irrational is incorrect."

This is the statement of the century! You have proven wrong so badly lately that you should really say you're joking or something, just to save face.

apart that the above statement is just stupid, Microsoft is making money AND growing a lot more than the competitors, according to the numbers.

A few(!) corrections:
– Facebook/twitter/cloud integration has been built into several linux and mobile distros for a while now;
– a large number of the core 'features' in Windows 7 are copied from KDE and Compiz
– storage clouds have been around for a long time, WLS was just a long-jump onto the bandwagon.
– Microsoft did not make Bing, they bought out the company that made it.

"don't get the attention"? How often do you see an ad for one of the competitors to Windows 7? They've practically had a monopoly in China ever since they were the only ones too unethical to pull out.

Kylie's getting too old…. hmm maybe more Jerry Seinfield campaigns!

I agree, Sharepoint is an amazing product, but it still lacks some polish in the UI department, it's still pretty clunky. The good news is that Microsoft seems to have gotten religion on the subject, and they are improving fast.

Apple does perserve its capital alot more then MS and google they dn't really do acquisitions, dividends, and idk if they do buybacks.

You're saying that in regards to a MG post. You obviously are new to the scene.

well, never paying dividends helps with the cash thing too…

get your fact right little fanboy

Statistics is like politics. Everyone can find "interesting" things. Jobs said that Apple is the largest mobile company in the world…

It's like Top Gear. Clarkson hates Porsches. Always puns them. TechCrunch loves Google/Apple. Always reports about them. It's absolutely pointless, but it's entertaining/popular.

Keep on… reporting about startups… LOL.

Actually, ted, that was my point: I'm not a Hot Shot Silicon Valley Insider, but just a stupid small investor with an Apple portfolio. Now, concerning these impressive numbers, maybe you, with your superior common sense, could help me out: Should I buy Microsoft?

so you're anecdote is about GM whose sole product is 2nd tier automobiles and relating that to Microsoft's potential downfall because they're behind in the mobile space? Very poor anecdote when you consider where Microsoft's revenue actually comes from.

ok, so I haven't heard anyone claim MS isn't ubiquitous. So is McDonalds, and their food's crap. Anecdotal, but I've never spoken to anyone who uses both a mac and pc who prefers the pc. MS aren't buffoons, but their market share can be largely attributed to the sort of inertia that's kept them behind the pack innovation-wise for a while now.

This is such a riot! I may be a MS quasi-fanboy, but I would have found it almost as funny if the names were changed. The WAR lives on, the products and language may have changed but the gameplan is the same (squash the competitor at all costs in whatever fashion you can).

There's something the competition dont have. It's called MS Office. Heard of it?

If MSFT plays it right, they are in for the kill and it will be like the 80's again. XBOX Live on WP7? Think Mobile Halo. That's 18-35 year old male segment right there. MS Office? Blackberry is in big trouble for enterprise users. If MSFT can make a usable phone (ala iPhone) but have the enterprise capabilities, then say we have a winner.

no, you shouldn't buy MSFT. what you should do, though, is realize siegler isn't talking about market cap, but about profitability. as siegler isn't talking about market cap or share price, it's a mistake to say he's trying to convince you to buy MSFT.

Over a 10 year period overall inflation was 26.7%. So, on average (somewhat crude) you are looking at a little less than 2.67% per year. Source: http://www.usinflationcalculator.com/

There's a lot of people who prefer PC's. Maybe those people like an open platform. And maybe those people are actually smart enough to know what they are doing.

To add to to that, I havent met any Mac owners who know their way around technology including the Apple products they buy themselves.

See what I did there.

Generalizations based on personal experiences dont mean shit.

Well, there is the Windows Live Messenger / Mail numbers… and of course Windows 7 is a consumer product (as is Office, too). And the very broad base of users in the Kentucky educational system cloud story make it a consumer-ish play, too.

Good point that there's more media coverage in the consumer space, though… i think this sometimes presents challenges for Microsoft given the business model (i.e., they often don't make the hardware their products run on).

I mean, how many people with AT&T Uverse know they run Windows on their cable box? And then there's the Fiat (Blue&Me), Ford (SYNC), and soon Kia (UVO) cars that run an automotive version of Windows.

I'll say it. I'm running machines with Snow Leopard, Jolie Cloud, and Win7…very much prefer win7 to the other two. It's the OS I notice the least, which to me means it's the most elegant of the three.

Always remember: Two rongs don't make a right!

The bros are unhappy about the finer details of the iPhone 4 video recording app: http://www.blogbros.com/?p=187

Well, like many of other readers, I will never count MS out. They showed a lot of examples how they fought back.

My point was that the product matters. I think market cap means something. I also read from other reader's post that Apple is actually projected to earn more profit than MS in two years.

MS only missed analyst's estimate one ever as I remembered. And, it was the time that Vista was not selling well. OS is still the life blood of MS.

It might be five years or even more, the mobile OS is becoming the more important OS. Currently, MS are 5 major releases away from Apple. Apple is not standing still, and virtually all new and exciting new app are happening on iOS. From what I read, they won't have multitasking when WM7 launch.

For a sub $500 mobile device with Touch, I do prefer iPad over Win7 with tablet support. So, Apple is winning on the price point. It has never happened before.

New and exciting app are also happening with iOS more often than not. The iAd from apple gives another incentive to developer to stay in the platform. So, Apple is trying to win by the ecosystem.

It had been said that fuel efficient doesn't matter when people's fav was SUV. But, then it changed.

A market change (desktop to mobile) plus a economy crisis sometimes does a lot more than expected.

I thought this one was one of the best articles in the blog. Specially putting some perspective.
I´m a apple user and fanboy myself, but it´s also great to recognize that success can be measure for how many people you help, how many people are willing to pay/use your product and not only how "cool" you are.

"What would have the IBM equivalent post been back in 1990? "

Now that's an interesting question! I don't know the detail numbers, but I do know they've evolved and are still a relevent and successful business with ~$100B in revenues and $10+ EPS.

Change is inevitable, but relevance (or irrelevance) is a choice.

Windows Live services stats doesn't mean anything. Personally, I feel the Live services' web interface is downright horrible. I have created my hotmail acc. but have never used it. MS Office had already become a bloatware long ago and the stats seems to be manipulated.

Microsoft is the new IBM. They used to dominate tech but they're no longer a factor. They're not even in the discussion. It's Google and Apple now.

I say they're the new IBM because they won't just die suddenly. They're going into a long term decline. They have so many legacy customers that death won't be imminent. They will be able to ride their existing customer base for years.

Their revenue streams come from products that are very long of tooth (Windows, Office, Servers). They've had no recent successes. They're riding on old products that have just been updated. In fact, you could say that they're in the updates business. Updates are really their only viable business.

Yeah sure. Uh huh. Tell me how your crystal ball works out. They've had no recent successes? Ok, whatever you say. Give me a viable competitor to MS Office and Windows and I will take what you say seriously.

I personally think youre full of it

Hahahahaha. I'm loling.

I also think because of there stigma, that when they try to innovate they won't get any type of cred or even just that one chance where to try prove ppl wrong. Am i wrong in this assumption?

He goes to lengths to minimize the sales of Apple devices, then notes that smartphone sales are headed for a veritable explosion (they’ll be very close to surpassing PCs by 2014, apparently). You have to wonder if tablets will have a similar trajectory.

He can’t exactly take the media to task when the writing is on the wall like this.

Nice article, biased – but nice.

I have found that it seems as if apple is beginning to destroy Microsoft. I’m a huge Microsoft fan, apple is bull in comparison – their iPods and iPhones are a pain in the ass, and a load of crap.

Those stats sure changed my perspective – Microsoft all the way!

They work a hell lot harder than apple. Vista had over 30 million lines of code, apple probably uses some shit like pages to make their os. Their products look nice, they have no functionality, windows 7 looks wow, and works wow.

MS Office and Windows are not recent successes. Those are very old products. They've just been selling updates for years. Updates are their only viable product. They have no new ideas and no new products.

Microsoft used to be able to copy Apple successfully. But recently they've fallen down on the job. For example, I give you Zune.

I actually quite like my Hotmail account, and especially like the photo and Messenger experiences on Windows Live. I think Windows Live is heading in a good direction.

Ok, whatever you say. Give me a viable competitor to CICS and mainframe and I will take what you say seriously ;-)

haha, very true

Mr Siegler,

You are a better writer than this article indicates

Still, it doesnt matter. Windows and Office will be here for a long time.

Office on WP7 will be a killer app that may very well put RIM out of business. Corporate use is what captures marketshare. That's how RIM is number one.

What about XBOX Live on WP7. Tell me if Apple can compete with the potential of Halo Mobile on WP7. This will get more of the male demographic who could care less about Words with Friends

.NET developers are in the millions and far outnumber any iPhone/Android developer out there. Say what you will about them, but they know how to make excellent developer tools. If MSFT plays this right, they can compete and maybe even win.

It doesnt matter if its innovative, as long as its good enough for most people and it sells. That's how they always done it

No he meant "real people" like my mother, who I tried replacing her Windows XP machine with a MAC and she couldn't even figure out how to switch between applications so she called me the next day to get, and I quote "This useless machine out of here".
I purchased an iMac for iPhone development, and I tried my best to use OSx as my primary OS, but I couldn't, so I installed Windows 7 and now my iMac is useful again. I guess I'm "real people" :)

Thanks MG, this is a good article.

First of all. Many Mr Frank's cited sources are not really the direct data sources. This is not a very good way for showing some data in the MS official blog. Sorry for this, but if I were Mr.Frank, I would not do so.

For all those numbers, one number catches my eyes.

The number contrast between windows server and Linux server. The possible real source is
http://www.zdnet.com/blog/microsoft/behind-the-id...

Windows: 73.9%
Linux: 21.2%

I do not know how IDC conducted the research, But, how many percent people in TC are using windows server?

As i know, probably most of website hosting companies, academy institutes, small companies are using Linux servers. Who else are using windows servers except MS, MS cloud, DOD ( possibly), military institutes, and some DC contractors?

I am curious, how is the Mac OS anymore innovative then Windows 7?

I am asking an honest question.

Yes, bc those are products just as widely used among regular consumers as they are in the enterprise world. Oh wait, No, youre wrong. Try again.

Uhh… IBM is still a growing, successful, relevent company, and still much larger than Microsoft. They've evolved, for sure.

Even if they weren't, I think the situation is quite different.

Sure, there's always more work to be done, but Microsoft seems to positive momentum on PC, Servers, Cloud, Gaming, and Advertising. Too soon to way what will happen with mobile, but it seems from the buzz the new Windows Phone 7 will be a big improvement. And then there's the embedded business with cars, cable boxes, portable navigation devices, and a bunch of other stuff. CPUs need operating systems, and "smart" stuff is showing up all over the place. To the extent people want all their "smart" things to work together, Microsoft may well grow their lead in some areas.

'Yeah, the iPad can suck it.'

Smack talk. I love it.

The same thing applies for startups. They are going with Google and Amazon. Once they become enterprise they will not switch to MS.

Idiots are more likely to spend money.

ehm, highly doubt microsoft is misquoting numbers here… But even if they are a bit off by a few billion, microsoft is still leaps ahead of everyone else and that actually comforts me. Imagine a world full of apple's bs restrictions on everything… I'm rather glad Microsoft which doesn't shine in the spotlight very often compared to Apple posted up some of it's numbers, some of them are beyond shocking in comparison to the other biggies. I was very surprised at Linux marketshare, would have thought for sure it was at least 40%, it is after all free and used by virtually every shared hosting provider. Wonder if they are counting in Google's operating system, which is after all based on a Linux kernal, that's like 50,000 servers right there.

You mean – Apple was on the brink of bankruptcy (near zero cap) and was rebuilding from pretty much scratch?

Who said "corporate users is what captures market share?" in response to someone talking about consumer products? Oh, it was you.

"Regular consumers" use Facebook. Old-skool and nerdy ones use e-mail, usually through a web interface. Where does Office fit in that picture? Who cares what OS is under the browser? Who even knows what an OS is?

MS Office on a phone… the idea is enough to make me laugh so hard, I fall off my camel. Would you like to put Encarta on there as well?

this is true, but IBM wasn't toppled – they had to re-invent themselves into what they are today. You could argue that Microsoft is/isn't doing this re-invention. I think they are, but others may disagree..

Sorry, but Tencent's QQ is laughing its ass off. Or is China not part of "the rest of the world" anymore?

If you check out the original blog post, all the numbers have a source attributed to it, which MG removed from his article.

That said, yes, I think the Apple net income number was misquoted.

These numbers are meaningless. What if every company posted license upgrades on commercial products?
You would have similar blog posts in the order of a few hundred thousand.

Here's one that Adobe could write if they so chose to:

" so our new CS5 products will not open a CS4 .psd file. Just as CS4 won't open a CS3 psd file and so on and so forth. So if one person at a company uses said CS5 and saves files to a version system, it will break everyone's compatibility who works for his or her company."

"with that said here are some massive CS5 upgrade numbers, bla, bla, bla, bla……"

"Publish new software, break compatibility or even the ability of the old software to install anymore, create technology fragmentation in any one single company, and voila, forced upgrade licensing numbers in the millions"

"That will bring this meetings minutes to a close, thank you gentlemen, good night."

No grandma, you grandchild can't open use your computer to do his homework anymore.
YOU MUST UPGRADE NOW!!!!

LOOK AT THE GREAT NUMBERS MY COMPANY IS PUTTING FORTH!!!

My money is on MS either doing fairly well with WP7 or using their money to buy RIM.

Netbooks are a perfect example of MS not worrying about being first. The first tablet, like the first netbooks, aren't using Windows. Now, its hard to find a netbook without Windows. I would predict that within a year start to see Windows (or WP7) tablets.

I think folks are missing the point of the iPhone, Nokia and projected smartphone market numbers.

Is Windows Phone 7 too little, too late? One can debate whether it’s too little or not, but it’s certainly not too late. There is still an awful lot of pie to be made in the near future, and if Microsoft executes Windows Phone 7 well, it may very well be positioned to grab a huge portion of it.

Are you implying that IBM died suddenly?

The IBM that makes over $10B profit last year and despite it being "dead" is still worth more than Google today?

That's not a bad "death" at all…

yep, IBM is a dead company…Dead and still making more money than Apple!
Source: Check wiki!

Numbers, shmumbers. Big deal.

Fact of the matter is, consumer products and services delivered by Apple and Google are much more newsworthy than stuff that Microsoft is coming out with (apart from Windows 7 – imo).

Apple is the versace of electronics hardware (and at times – software too). You can complain all you want about "interoperability", "features" and "price". Fact of the matter is, people will buy products that they carry around with them based on how fashionable (and useful) they are.

This is coming from someone who doesn't own any Apple products (until they ship iPhone 4 here in AUS).

I of course meant that CS5 saved files will not open IN CS4, and CS4 files will not open in CS3.

Different companies do different things to force upgrades. Posting your numbers is like posting your kills in an online console shooter.

I believe his stats – but WHO are all these people using Windows Live Mail/Messenger, Azure, Windows 7, etc? I have yet to meet one. Are these middle America and international markets? The people I meet who are doing interesting work today aren't using these tools.

It's called Good Will capitalization. You can never buy good will.

Which part of "active" do you not understand?

It's spelled "Juggalo", just FYI.

I would think Microsoft will do great in the smart phone market. I don't really see Android making it in the long run, unless they figure a way out of all of the patents they are breaking without having any OS patent leverage of some sort. Having said that Nokia makes a smart phone?

> 21.2%
> Actual Linux Server market share, Q4 2009.

That number is based on units sold, from an IDC study. A Netcraft survey which checked >1 million publicly accessible Web servers with valid SSL certificates found linux based servers comprised 41.02% of the servers checked, almost the same as windows (41.59%). Source:
http://en.wikipedia.org/wiki/Usage_share_of_opera...

Of course the real number (of installed units) is much much higher in favor of Linux since the above study was only looking at public servers. Linux is used on many types of servers than just public web servers.

Agree. I don't recall him addressing the GROWTH factor. Yes, MSFT has a dominant share, but isn't the rate of growth slowing?

IE continues to lose market share, Windows 7 is in the "other" category on smartphones, etc…

Wow MG. And we all thought you were an Apple Fanboy. Okay, now I'll take your word, you are just a Fanboy ;-).

Thanks for the post.
Cheers!

Both QQ and MSN are used heavily in China.

Wow, No Snark at all. This is totally unexpected from MG Siegler. I guess I'll have to wait on Gruber or Dilger to go apesh!t over those numbers.

"Microsoft is dead"….roflmao. I can;'t tell you how many times I've heard that especially from American bi-Coastal types who're shocked when they don't see people without Macbooks, iPhones and a d-bag smile.

I also assume this accounts for the countless millions that have MS products thrust upon them by their employers.

My PC laptop (SEWPed for our intranet) has been banished to my desk drawer while my MAC handles my entire workflow. I still have everything set up through the exchange server but I hate the ms office culture. It reeks of inflexible dullness. Why is everyone attempting to integrate with ms office standards but not the other way around. I would love to see what Google architected MS workflow management would look like…

I will admit that I love entourage and most of my time is spent troubleshooting ways around our firewall.

There has always been tablets running Windows 7 since day 1. I have an Atom one. The screen is a bit small at 7". But, the bottleneck wasn't the screen.

1) It is too heavy. Even for Atom cpu, which is too slow, even for Windows 7, it will be at least 2.5lb, including a battery lasting 5 hours. (iPad last 10 hours and is 1/2 lb). I think Kindle is a much better weight for eBook. (even iPad is too heavy for prolong reading)

2) Atom is too slow. Next up is Intel CLUV, which requires another 1/2 lb for battery

3) Applications aren't there. Some seemingly minor things are critical. If you existing app, you found yourself needing the stylus every 2 mins just to scroll. It is pretty hard to hit the little scroll button correctly, especially near the edge.

The Windows Tablet team obvious know all the little things matter. A lot of amazing work been put in. Best full sentence hand-writing recognition, > 99 accuracy. Content sensitive on screen keyboard. Requiring hardware to have the dedicated "log in" button etc. Ribbon is too small for finger.

4) Stylus is fine, when you really don't have to type. But, you do. You just cannot do it without Keyboard for very long. And, you miss the mouse.

5) If you need a keyboard, it is another 1/4 lb.

The problem is Apple is selling HARDWARE.. not licenses.. not cd's.. actual metal and plastic with components in them at HIGH MARGIN. MS is selling Win 7 for netbooks for like 5 dollars to compete with LInux! 58 million netbooks x 5 dollars = 290m dollars revenue with no profit since it cost way more to make win 7 than 5 dollars.

7.1 million ipads x 400 dollars is like 2.8 billion in revenue from one product line!
And apple have the highest margins in the business.

All the Win 7 numbers are coming from OEM's which are heavily discounted or corporations who have to upgrade from XP but were meant to go with Vista (but MS cocked that up). And how much money did Vista end up costing MS?

MS is profitable for sure. But its in decline. The other parts of MS (Xbox, Phone7 etc..) are not picking up the slack left from the declining revenue in the OS business. The share price is an indicator of where the market thinks MS is heading. In that way, it's actually a pretty accurate assessment of MS. Think about it..

Apple on the other hand, in terms of what they put in, and what they get out financially are easily the most successful consumer electronics company at the moment. The figures dont lie. They may not have the scale of Sony, Samsung etc.. But in terms of profitability, who's doing better? definitely not MS.

The figures illustrated (1) The windows tax is still there (2) Vista is horrible.

Put tons of numbers …as if they had no story to tell.
When you are buying a MSF products, you most probably enjoy the experience and usage of it rather than being part of their stats.
This tells a lot why MSF has not been able to generate any appeal in the tech industry over the last few years… Just to much relying on cash cows and no more looking ahead.
We (and They) have seen this before. No matter how strong your cash cow is today, it is absolutely not relevant if you dont have a vision for the future….and disruptions happen today even more faster.

The fact that MSF is not present in the current hype …(and likely regretting it) has nothing to do with market cap and biaised exposure….it is just they have not been able to innovate and get people excited. And no matter how god they are selling 10 years old products …it does not say anythng for the next coming 6 months!

Probably the most important post I've read on TC all year. Now can we please just go back to scoffing at/forgetting about MS for the rest of the year?? kthbai.

Good to know to how distant i-man is away from nokia and ms, while he’s busy over rating about his iproducts tech gaints like nokia and ms are making greats sales besides n8 fries the non-multitasking iphone4 apps is all its got noting more.

He forgot the major decode:
See how we at Microsoft have to get that defensive? We're actually shitting in our pants right now.

@davidralbrecht Please don't let the door hit you on the way out!!!! Good bye! So long! As we say in the west coast—– Later Dude!

Knuckle head :-)

Nearly every Chinese person using the net has a MSN account along with their chosen Chinese based account.

For example anyone in China working with export has an MSN account to chat with customers, etc.

Only recently are people getting Gmail accounts in China. Unfortunately some cities in China completely ban (firewall) Google products.,

When working with Chinese I just ask them to use GTALK as I "hate" MSN.

Browsers don't make much money – they only bring in a few millions from the search deals. Windows 7 for Phones isn't out yet.

bummer…. KenNsf, trailer ain't got a good net connection and his keystone lite beer is warm which makes him cranky.

Also to add to his crankiness he has not slept for a few days since he has been protesting at the G20 Summit.

To top it off he swallowed some chewing tobacco while he was throwing a brick through a Microsoft store window outside the G20 Summit meeting.

Lies I tell you, all lies! The G20 and Microsoft is nothing more than a conspiracy between Techcrunch and the New World Order!

Thats the idea, it broke down the stats given as if it was from Frank Shaw's perspective. That attitude was from 'Frank Shaw' not MG Siegler. Read the article.

Actually, if you read through his posts, it's apparent that MG is an unabashed Apple fanboy… no bias here.

Most Microsoft haters are ignorant about corporate IT. That is where Microsoft makes its money, and where it still dominates, with little sign of slipping.

ok, and I meant jugular

Noboday messes with the Godfather . Love that great company and windows 7 ,office 2010..thats it..it lets me earn my bread and butter ..it is anytime better than wasting my time and money on those little gadgets ( btw , they are good ).

Live Long Microsoft and Live Long Bill Gates.

Yes IBM is still a very large company but their impact on technology is minor now. In the 1970s, when the mainframe dominated computing and IBM selectric typewriters were on every typist's desk, it seemed the IBM was in complete charge of the computer industry. MIS departments looked to their IBM sales guy for instructions on what to buy and how to organize their corporate computing. There was no personal computing.

IBM is still an important company today but only to one market segment (large corporations and government agencies). They got out of the PC business when Microsoft won the battle against their PC O/S. No one thinks of IBM as the leader or the dominant company in computing now. At one time, they were head and shoulders above all other companies in that regard.

Microsoft enjoyed the same sort of technology leadership when PCs became ubiquitous after Windows version 3.5 made that O/S actually usable. The introduction of the bundled Office Suite was a bit of marketing genius that literally killed leading competitors including Lotus and Word Perfect. They then killed off Netscape by copying their product and giving it away in the form of Internet Explorer. For some time they dominated both the desktop and the web. They were confident that they had nearly succeeded in killing off their only real PC competitor (Apple) and the didn't really see Google coming until it was too late.

Now Micrsoft is following behind IBM in becoming a niche player catering to the corporate market. Apple and Google now own the mantle of technology leadership. Millions of people listen carefully when Steve Jobs and Eric Schmidt speak. Millions of people chuckle when Steve Ballmer speaks.

You are confused — MS is primarily focused on the corporate market. Their five major products are Windows, Office, Exchange, SQL Server, SharePoint. Techcrunch commenters seem to know very little about IT, yet are happy to offer opinions.

Nokia is still the largest mobile phone company in the nokia was in the front line of gsm inovation and mobile internet steve jobs is a new comer with a loud mouth, he’s good at publicising pre-existing tech with the ”i” prefix facetime aka video has been around for years itune was bought and rebranded. Iphone wasn’t the first touch smart phone, he wasnt the only one working on and eventually releasing touch tablets ipad is not the best itablet around so shut up!!! Apple. Nokia even sells more mp3′s than ipods

Nokia is still the largest mobile phone company in the nokia was in the front line of gsm inovation and mobile internet steve jobs is a new comer with a loud mouth, he’s good at publicising pre-existing tech with the ”i” prefix facetime aka video has been around for years itune was bought and rebranded. Iphone wasn’t the first touch smart phone, he wasnt the only one working on and eventually releasing touch tablets ipad is not the best tablet around so shut up!!! Apple. Nokia even sells more mp3′s than ipods

nice catch :)

Sharepoint is 0 compared to Plone (www.plone.org) and its opensource, not to start mentioning others … so dont be fooled that sharepoint is the only content delivery system… there are better, faster, cheaper tools out there, already used by many…

You're wrong about the "shut up about the iPhone," by the way. There's more to it than that. What he's saying there is:

"We're coming out with Window Phone 7 this fall and don't think we won't kick some serious ass. iPhone, Android, whatever. Get your wallet out."

Speaking as a developer who knows Silverlight, I have to say I can't disagree. There will be a HUGE number of apps for WP7 *on release day* and more coming, fast.

Nokia is still the largest mobile phone company in world the nokia was in the front line of gsm inovation and mobile internet steve jobs is a new comer with a loud mouth, he’s good at publicising pre-existing tech with the ”i” prefix facetime aka video call has been around for years itune was bought and rebranded. Iphone wasn’t the first touch smart phone, he wasnt the only one working on and eventually releasing touch tablets ipad is not the best tablet around so shut up!!! Apple. Nokia even sells more mp3′s than ipods

The majority of business and consumer users will never read the partisan analysis of the anti-Microsoft crowd covered here and elsewhere. Why? Because the MS products are 'good enough' for their current and/or planned needs.

Amongst this group, there are some that will seek out alternatives, adopt other products, learn new systems, etc. but only to the extent to which it improves their experience and addresses new needs in a significant way. Like it or not, most users don't care about the critical differences between platforms or product lines; instead, it almost always comes down to their reference points for utility and price. MS figured this out years ago and they have clearly benefited from the way in which they structured their business offerings. Sure, you can argue planning and execution as well as the next bystander, but when you compare the major players on core metrics such as, worldwide adoption rates, revenue streams, net income, etc. your overall credibility is diluted when these results are characterized as leading indicators of the growing irrelevance and impending decline of Microsoft.

The reality is that the fervent anti-Microsoft devotee needs MS to showcase their superior judgement amongst those within their self-selected group and also as a way to compare their insights to the sheep-like behavior of the unwashed masses. I'm not describing the typical person who buys an Apple product simply because it's new, cool, different, fits within their budget, addresses a new need, and who will easily switch to another offering for the same reasons, but rather about those that can't accept the ubiquity of the MS footprint simply because it is more widely accepted than their own selection.

I'm curious to know when MS achieved the apex of their success? For those of you in the 'decline' crowd, anyone care to guess how many more years remain before the ruination of MS is complete? For your sake, I hope it is speedier than the tortoise-like decline of the Roman Empire.

Meanwhile, millions of others will continue to happily use MS for whichever parts of their lives are best served by their solutions and also adopt other competitive options as needed. In this context, feel free to consider me as an unwashed sheep. :-)

this is your issue. No serious business app runs on Linux. Either Windows or Unix. Linux is only on web servers. r u kidding me? On what does SAP run on? Win or Un? What does SQL Server Run on, and SharePoint? and Oracle? oh yaaa and those Domain controllers? Vow… leave the list your ignorance is exposed. you are an bird brain. Do you even know the enterprise market? I work with fortune 500 enterprises day and night. Never I see a serious biz app on Linux. And now with cloud in the pipe, only GOOG can protect Lnux because again, Azure is already kicking ass…see the stats again.

well, then you are paying for an open source free OS with a fancy UI built on top of it for twice the price.
Vista was bad, but nothing can beat win 7. Try your workflow on it. or even look at azure, you will improve your profit margin.

win and office are brands not products. tech media are idiots they don’t get it. they only focus on gadgets.

Here is my take:
1) This decade (in spite of these numbers) was very bad for MSFT (Vista, DOJ, EU, has drained MS mindshare. I fel sorry for SB. Also, some of the executives like Robbie Bach and Brian Valentine really ruined MSFT. AAPL & GOOG took clear advantage of this gap and succeeded. For Windows and Office DOJ is a real problem. If MSFT really becomes aggressive, GOOG and AAPL will go crying to the govt. about monopoly. So, know that the numbers in the article are inspite of these hurdles faced. Which is really great. It did not buckle and continued to innovate.
2) Now the other things:
Win & Office are brands and not products. THey are cashcows period
Bing is an insurance policy against google. if Goog penetrates Win & Office, MSFT will penetrate search. Its a game of chess. Right now, MSFT does not need to make money on this, but needs significant insurance and penetration so that if time comes, this can be an attack weapon.
3) E & D:
Phone is in trouble. Strategy was wrong, but MSFT is one of those companies, who realize mistakes and reset the strategy. WP7 is a reset and will take another 5 yrs to get on par with iPhone.
XBOX is a future platform. It is a strategy to combat living room dominance by consumer electrnics and ultimately TV becoming a PC. This is kind of future as well as insurance against consumer electronics.
4) Finally, putting everything in perspective:
AAPL is brilliant for rising from dead and challenging MSFT. At the end best product will win. So both are gr8 companies that keep people like me employed and relevant in this marketplace. Same is the case with GOOG. GOOG is awesome. and finally MSFT is also awesome because MSFT is one of those companies who keep on fighting and provide competition and ultimately the consumer wins. I don't want MSFT to win everywhere, otherwise there won't be any alternatives and the tech jobs will be scarce. Imagine how many ppl joined GOOG from MSFT? around 4000 (IE team, Vic Gundotra, also the guy who made the Google Docs). If GOOG was not there, these people would be still in MSFT and frustrated because of no pay raises and challenges. Now all the 3 companies have to work hard to acquire resources like me and in the end I WIN.

Its amazing that you are so biased that you actually believe MS Office doesnt mean squat.

Youre a joke and you shouldnt even belong commenting.

a-g-G-r-e-s-s-i-v-e.

a-g-G!-r-e-s-s-i-v-e.

a-g—-oh fuck it. It's the end of civilization.

8.8 million iPhones sold
500 Microsoft Kins sold (http://www.intomobile.com/2010/06/18/microsoft-kin-sales-woes-rumor-hints-at-just-500-sold/)

They don't talk about that one.

Apple's first quarter earnings is $3 billion, compared to $4 billion for MSFT, and $5 for Exxon Mobile. Issue for market cap is expected growth.

Microsoft has been flat on earnings for years. Most of the numbers are on downward treends. Apple is up in many markets, normally earns the most in the Christmas quarter, – and likely to exceed Microsoft's earnings this Christmas – simple stock analysis. That's why they are worth more than Microsoft – and soon to pass number one in the world, Exxon.

Scott's understanding of finance may be the reason that Sun lost out. What a non-sensical analysis.

I'm guessing you're American. While here in the States, Windows Live accounts are generally made to use the linked products rather than the Messenger/E-mail themselves, globally, WLM is actually dominant. Most countries outside of the States are very wary of Google and don't embrace their products with open arms. When we were going through our AIM phase, it was Windows Messenger in Asia and Europe. When they say worldwide, they actually mean worldwide.

IBM could have said exactly the same thing in the 80's rubbishing Microsoft.
MS's market cap is not saying that the market thinks MS is going to die, just that they are going to grow slow at best. The market guesses that Google and Apple can grow much faster.

Market cap can rise/fall on a whim, especially in the fickle tech market. APPL may have passed MSFT in Monopoly money, but their market cap is completely dependent on Steve Jobs. He's already becoming a slight liability to the company–albeit, very slight–and he's not going to work for Apple for all eternity. Since market cap is just estimated valuations of companies, let's say Apple continues down their current road of fake innovation; ten years down the line, we won't be fooled and their market cap will have dropped while MSFT will have remained "stagnant," raking in their profits. APPL's done a great job capitalizing on a niche market, but the problem about their niche market is they're making money off a bunch of hipsters. While there are people that use their products because they provide great services, I'm betting you a ton more buy their products because it's the cool thing to do. As soon as Apple runs out of ideas on how to modify the iPod next, people will move on to the next cool thing because that's what hipsters do.

…except that their projected sales over the next 6 months are godly. What you have to face is that Microsoft Office has become a standard and will continue to be so in the visible future. The market is nearly impossible to penetrate because they have such a firm grip on it. You have things like Open Office, which is perfectly fine for normal everyday use, but these open source options just make it even harder for anyone else to join with a paid version. MSFT's point was that they don't need the hype and circus acts of other companies; their products are already either embedded into our lives or are quickly on the rise. And while they're not making great strides in innovation, I do like some of the things they've done; the integration between my laptop/TV/360 is great. I've played around with Windows Phone 7 and it's amazing. Unfortunately, it's probably too little too late, but the fact of the matter is they made a great product.

Once again, the statistic is a global statistic. While Americans, including your friends, consider Windows Live junk and don't touch it, it's a standard globally. Everyone else uses it. Nowhere did MSFT say "360 million American Windows Live Mail users."

Another example? The iPad an the iPhone 4.

You know, it might be different if Apple weren't so **** about their products. Companies use MSFT because they can mix and match to their needs. They can buy cheap computers that do what they need to do. The only reason schools even had Apples was because after Steve Jobs took over for the second time, they made a deal with counties, making them use those PoS G4's. Steve Jobs' opinion is that you cannot make a cheap computer that isn't a PoS (note: Macbook Mini of old), but unfortunately companies aren't willing to spend $1,000 a computer for employees whose needs amount to Microsoft Office and e-mail. If Apple was willing to change their strategy, things might change, but then they would no longer be Apple.

And that's assuming they're buying Macbooks. If they go iMac, it will easily reach $2000 a computer.

Well, according to you, "real people" are rich. I didn't know people were willing to spend a minimum $1,000 on a computer just to pay bills and check e-mails. It comes down to two types of people:

1. People like me who have been using Windows their entire life. I tried out Mac OSx because it was supposed to be godly, magical, intuitive, etc., but I just couldn't get it. It was frustrating, and I'm back to Windows.

2. People who embraced Apple in their early stages and were accustomed to their approach to things by the time OSx came out. To them, everything is completely intuitive and the system is indeed 'magical' because everything "just works."

People who are technologically inept should be able to use both a Windows and a Mac because they don't have that innate bias when they first start up the computer. They immediately adapt to whichever system is in front of them and the other will become unusable. Unfortunately, they're also easier to influence. If you tell them "Macs are easier to use," they'll believe you because they trust your opinion over their own lack of tech knowledge.

If their estimation of an additional 400 million smart phones is correct, these people are definitely ripe for the picking. I'm guessing Android and iPhone will probably get around 200 million of them just by default. Then you have Blackberry and Palm, but these are phones that are kind of stagnant or on the fall. They're great phones, but their user bases will more or less remain the same. I've used Windows Phone 7, at least a WIP version of it, and it's pretty good. A very nice compromise between traditional and the new innovative, consumer-based smart phones. Once it comes out this year and people start realizing what it can do, it should pick up a pretty significant user base, even if it won't compete at the top tier.

and your mom in high school. this is fun. your turn.
(btw – that's what she said.)

You don't need to be a hot shot investor. Profits for MSFT don't mean profits for its investors. Not only are shares expensive, the point behind the article is that while MSFT's market cap may not be on the rise, they're still raking in the profits with what they have. Investing in them now would get you nowhere because they're more or less stuck where they are in the visible future.

Thought I should embellish so I'm not misunderstood. Profits for MSFT do equal profits for their investors, but the difference would be negligible. You're still better off investing in a company like APPL whose market cap is still skyrocketing up.

Actually, while startups like to use Google because of their services, I know a lot of people that prefer not to. Using Google means you're accepting the fact that they'll be taking information from you in return for the services they provide, and that is something that makes a lot of people paranoid. Great for individualsl/startups, bad for businesses.

And it took them 10 years to make it, to boot.

Yeah, iirc, there's integration between WinPhone7 and Office, which is a huge advantage they have over current smartphones in the enterprise sector.

Here's a piece of advise that I got from my teacher back when I attended university. It's something everybody knows, or at least should know, but doesn't really think about.

"It doesn't matter what color you paint the house, the fact of the matter is that its still there."

He said this in a class about Middle Eastern history/politics, but it applies to everything. Numbers can be twisted and used out of context in order to prove a point, and I suppose it's a viable argument that MSFT is twisting numbers to make themselves look better. But the fact of the matter is that these numbers are still there. They didn't come out of thin air.

These numbers were indeed interesting; everybody thought Apple and Google were taking over, and then all of a sudden MSFT comes up "out of nowhere" and shows us that they are indeed still dominating their respective markets. APPL may be on the rise, but it's really hard to argue against 90% market share. Also, Apple may very well be the largest mobile company in the world, if you look at all their different iOS devices, they span over multiple markets and have little competition in many of them. That's good info too. I don't see what you're complaining about.

haaha you just got ripped!

Spinning up multiple instances on command is not a killer feature. Being able to spin up an instance mid-way through the request-response cycle — and still having good performance with the extra startup time — that's a killer feature. Also one-click-deploy and not getting charged anything during the initial development phase are pretty nice too.

They're quoting sales figures. A LOT of linux is not sold and the largest deplyments self-support without contracts, hence Linux always looks bad in that kind of comparison (nobody gets Windows server for free, except MS-Azure). Even web server tracking statistics are way off because the majority of servers are hidden behind load-balancing proxies or corporate firewalls which significantly distorts the results. By most informed estimates the total Linux server share (number of actual in-production servers running linux as a percentage of total) is closer to 80%, but Microsoft HATES that number, so they almost always go with sales-based market share numbers.

They only run Windows in the user interface.
They're running a combination of linux and non-linux RTOS software for everything that actually matters, since Windows is nowhere near the reliability needed to keep a car on the road and not spewing black smoke everywhere.

Of course the fact that XP SP3, Vista, and Win7 all create a WinLive account on install/upgrade, and you can't disable the blasted MSN client without serious technical skill has nothing to do with that statistic.

Exactly. And the better question is where will AAPL be 10 years from now? You want that 10-fold increase on your investment again? OK, they just need to be a 2.5 trillion dollar corp — that's doable, right?

Inflation cut the value of a dollar by 50% in the same time period. Inflation-adjusted EBITDA growth at Microsoft is around 2% over the past 10 years. That's generally considered DOA for growth, which is why Microsoft is priced as a Large-Cap commodity stock in the market instead of as a Growth stock.

IBM: Largest single distributor of Linux; Largest enterprise cloud services play; Largest commercial office suite competitor. I think that counts as a competitor.
HP: Third largest Linux distributor; Third largest smartphone O/S (WebOS); looking to get into cloud services and consumer electronics. I think that counts as a competitor too.

Everyone in this industry both competes in some areas and cooperates in others, it's the nature of technology to require both. The most successful companies are the ones that can hold your left hand in friendship while simultaneously crushing your right hand in competition. Microsoft never has figured out the friendly part.

the "real people" you describe use whatever comes on the machine pre-installed. They're heavily marketed to believe that Windows *is* the PC, and they generally can't justify the Apple premium for simple tasks. I've been switching "real people" to other O/S options, mostly Linux, for years. Most of them don't even notice the difference, since it works pretty much like they expect for web, email, and office productivity; which is about all "real people" use their computer for.

Want to let you know I read this on my iPhone 4. Just sayin’.

Just like IBM about 15 years ago. IBM mainframes are nearly absent from corporate IT today, because they didn't see the commoditization of their core business coming and the mainframe model failed to adapt. It's a simple rule of business that EVERYTHING commoditizes. IBM is doing great today because they adapted in time to a new business reality, shifted to a services model, and allowed others (MS, Oracle, Sun) to build new businesses in the corporate datacenter (which they then support via GlobalServices at higher margins).
There are a lot of signals that point to the commoditization of almost everything MS sells in the corporate IT space. and MS will have to adapt (unlikely at present) or they will, eventually, fail. Monopolies take a LONG time to fail, however, so even if they fail to adapt it may be a decade or more before they start the final slide into irrelevance.

We use Microsoft products all the time and the customers (Banks & financial services) we work with (We are in Asia) all use Microsoft products heavily. Something that surprises most people is that Excel is the most used financial services tool in the world (yes even in the US, every single wall street bank makes very, very extensive use of Excel – and not just as a replacement calculator).

And if people didn't already know this, guess what the world's most used Financial Services software tool is?

Yes it's Microsoft Excel. Hard to believe. But true.

Microsoft is far from dead.

1) Google is absolutely a software company; do you have any idea how much software is needed to run a search engine, gmail, wave, AppEngine, YouTube, etc…?
2) Microsoft survives almost solely because of advertising and marketing at this point, they can't afford to stop that. They do need to refocus on innovative products over the long term, however.
3) Treat the *engineers* well. Product staff figures out what people want (and MS product staff are well-paid and exceptional); engineers create things people never thought of wanting, until they see it.

Who said it was? There are more than 50 O/S options available if you look for them; many (Linux, Solaris, BSD, BeOS) are far more innovative than Microsoft and Apple combined.

I agree about the lack of real conflict between Microsoft and Apple. Those two have been pulling off a faux feud for nearly 10 years.
Windows Phone 7 gobbling anything but humble pie? That's a fantasy. I've seen it, and Blackberry (remember RIM, nearly 3X the WinPhone market share?) still wipes the floor with it for corporate use (and I don't like Blackberry…). Windows Phone 7 will replace the current Windows Mobile market, and grow at sub-market rates until MS buys RIM or gives up.
Azure is a copy of Amazon's offering, not Google's, and IBM is the real winner in Enterprise private cloud. Azure will pick up some business from MS-Only shops and .Net drones, but nobody will trust private data in Azure either; Amazon EC2 is more secure than Azure, and more widely trusted. For anything actually sensitive it'll mostly be a private cloud either built by in-house staff or outsourced (quite probably to IBM GlobalServices).

Ummm Almost all DNS servers run Linux.
Nearly all firewall systems run Linux.
Oracle deploys on Linux before Windows.
SAP runs on Linux and Solaris.
MySQL runs best on Linux (as does PostgreSQL).
Domain Controller is a Windows-specific term; most other systems call them LDAP servers :P

A vast swath of the enterprise landscape is, in fact, running Linux; just because you don't know anything about Linux doesn't mean it isn't widely used by millions of people who do.

Based on your comment record in this discussion, I think your MS handlers might want to hire someone with a bit more knowledge next time, tej.

There is no evidence that Android is violating patents; Apple's recent suits are against UI elements that HTC added.
The companies in the OHA (Google supports Android, but they don't "own" it, the OHS does) have plenty of patents to use in defense of Android, that's why nobody's sued the OHA, it's too dangerous for the big players, and it takes time to setup a patent-troll proxy.

DOD uses very little Windows. It's actually quite hard to get NSA cert for Windows, while Linux is relatively easy (there's an internal distribution just for that). It's the non-military executive branch organizations that use Windows, mostly because they're run more like an enterprise and their IT staff is mostly typical "only knows Microsoft" types.

you sir are an idiot, since when has windows 7, xp or vista required a windows live account… dumb ass.

It's one thing to be impressed by hard numbers in selling the same old box to I-T, but quite another to extrapolate success in mobiles after 10 years of failure. When Windows Phone 7 debuts, it will be 3-5 years behind iPhone. Nobody is interested in Windows Phone 7. Most people do not even know Microsoft makes a phone. Phones are consumer devices. Nobody knows what a "smartphone" is, they know about iPhone and iPad and iPod. If the smartphone market is 450 million in 4 years, a big part of that will be iPhone and the rest will be iPhone wannabes. Windows Phone 7 may not even have copy/paste and multitasking by then.

The cross over is people demanding to use iPhones and iPads at work because they're saddled with a crummy XP box.

360 Million hotmail, er, I mean "Windows Live Mail" users?

Uh HUH. Let's see the 7-day active count, eh?

Innovation means when you create something that is so new it makes all your competitors' products look old. An example is the iPhone in 2007. Compare Palm and Windows Mobile and Android in 2007, when they looked nothing like iPhone, to 2010, when they all look like iPhone. The new Blackberry OS 6 looks like iPhone. iPhone is like a template others are using. That's innovation.

Another example is the Mac in 1984. Over the next 10 years, all competing PC's got a mouse, GUI, 32-bit processor, 3.5-inch floppy, laser printer, and even a clone of the Mac API so apps like Word, Excel, Photoshop, and Illustrator would be easy to port. The Microsoft systems of 1984 are barely recognizable as PC's today because the Mac was the template.

Where is an example of a Microsoft product that did that?

The proves that Microsoft cares more about numbers than their actual users. Just because you have more users doesn't mean they all love your products. I bet 70% or more are because it was the default setup on their new PC.

Users don't equal fans. 1 devote fan = 1000 by default users.

More and more people want to be fans of the companies and products they use.

Microsoft's numbers look good right now, but wait 5 years when a whole new generation who went to high school and college with a Mac or Linux book, with iPhones, iPads, and Androids, become business owners and management. They won't be suckered into going with default MS system their predecessors knew.

This kind of penis self-measuring is a typical step on the road to irrelevance. It's like Blockbuster pointing out they had 80% of movie rentals in 2003. But that is not the most telling percentage, which was that they were 100% DVD and 0% online.

The vast majority of current Windows sales plug into the wall. The vast majority of the installed base runs the 9 year old version. They make the vast majority of their money from their 1980's and 1990's products. XP is essentially "Windows 1999" and the 21st century has been a wasteland for them.

They shouldn't even be talking about smartphones. They have nothing in that market and nobody is buying Zune. There's no reason to think they will buy Zune Phone.

Great piece. You've said a lot that needed to be said. However, there is still a bigger picture:

1) MS will continue to be second-place in any new market it enters. Number Two of a growing market is not bad by any means. But it IS number TWO, and for a company that used to dominate, that's very telling.

2) In some areas – smartphones especially – the numbers you cite, which suggest great growth ahead, will only dwindle in the years to come.

3) Re PCs vs. iPads: Forget it. iPad-like devices are the future. PCs, for the majority of users, are yesterday's news. Look out 5 or ten years. Do you REALLY think PCs don't occupy a smaller and smaller share of the market for computing devices (including smartphones, iPads, tablets, etc.).

4) Cite all the numbers you want, but: Ballmer is a clown. That's fine if you're McDonald's, but not so fine if you are any other company that wants to be taken seriously.

What you are doing is pure speculation that the general tech media does. You don't have any numbers to prove. Prove it to me that PC market is declining. Give me numbers. Prove it to me that MSFT does not have anything like the iPad coming. iPad is awesome, but a very early stage hyped device. I spent 2 hours on that damn thing and found critical pieces missing (web cam, HDMI, USB). I went to Walmart and saw a $498 17.3" laptop 2 GB memory, 250 GB HD, HDMI, 4 USB, and what not…. Now you tell me what will you prefer? If you prefer iPad, you have lost 90% of your value because you will only be a consumer for information forever and not a creator. YOU CANNOT CREATE ANYTHING ON IPAD. So, you will always need a PC (or a Mac) for that reason even if you want to create a small document or do anything worthwhile. Also, iPad does not replace my Television because it does not give me a big screen to watch with my family. Now, how many consumption devices I can have at the same time is the question. For working people, how much time do they have to spend on iPad versus TV and a PC. iPad neither replaces my TV nor my PC. What does it replace then? my wife, my family time? Hell no…. It not what I watch, but with whom I watch. Entertainment is about family experience.
iPad will be very successful, no doubt, I believe it and so I have bought AAPL shares long time back. I firmly believe in a typical American consumer who will buy into the hype, spend money and then become more stupid because all the important stuff will be created out of this country on millions of PCs. The only place I can see using iPad is while crapping to read news or browse. If iPad replaces PCs, I have absolutely lose confidence in the future of US labor force.

Good to get some perspective on the Microsoft "crisis".

I think the implication of that number set is that the market is just beginning to form, so although they're playing catch up right now, the game is in its infancy.

Ah, Apple's PE is under 23. That's below the average PE of the tech sector they are in. It' also lower than their current (30%+ revenues & 50%+ EPS) and long term (25%) growth rate. Its' PE is also below its' historical average. Astronomical would be QCOM back in 2000 when its' PE was over 100 or AMZN today at over 52 even though it's growing at a fraction of AAPL.

That is a lot of marketing talk from MS. The bottom line is this: Where was Microsoft making it's money 20 years ago? Office and WIndows. 10 years ago? Office and Windows. Today? Office and Windows.

If you are a MS exec and you're not worried you're a moron.

You've lost your mind.

There is a lack of added perspective on those numbers (what is actually going down, or threatening) — say: mobile web usage, age and location of Microsoft users, beta-to-paying version conversion for Office 2010. I realise you have to publish fast, but I'm afraid TechCrunch is doing what newspaper have done since 1990, cheapen the quality, hoping to have the traffic remain up like Vile E. Coyote.
Regarding the tone, the most important aspect of it all: this sounds surprisingly defiant and cocky for a company associated with CIOs. I reminded me of extreme-right parties complaining about their lack of coverage in the media… not a good sign, and a risky gambit; not well aligned with the unofficial motto “Change the world or Go home” and more surprisingly for the company famous for imposing bullet-points on us all, not very keen on introducing killer features to justify this success.

It's not just income, it's whether that income/profit is growing. Look at the numbers in a year (or quarter). Apple and google will be a lot closer. Wall street are not stupid they look more at growth than absolute levels of income. So – yes we do look at money. Not just money today but money tomorrow. And we try to guess who has money tomorrow. BTW – the metric used for apple's income in the post was hugely too low. I suspect Apples I come in 2010 will be $12-14B. Pretty close to MS.

@MG Siegler: Spell check much? The word is "aggressive" with two G's.

The smartphone game is going to get a lot more interesting in the next six months.

@Peter sez, “Apple's P/E ratio is so high the only way it makes investment sense is the ‘bigger fool’ theory.”

Peter, stock prices reflect a wide-range consensus of all investors' opinions, and I won't say that mine are better than yours. But it's not hard to justify Apple's high stock price if they keep reinventing markets such as smartphones and not only take major share, but also help drive growth to previously unpredicted rates.

Last quarter's earnings are very useful, of course, in guessing what Apple will earn next quarter and the next and the next… but they are NOT something that any serious investor in growth stocks take as a given for all time.

Specifically, their last quarter of earnings included exactly zero of their iPad, which they're selling at something like $500 million worth per month, and the quarter also was a time when most half-awake potential smartphone customers were aware that Apple was likely to intro a new device Real Soon Now.

Some day, Apple's incredible success rate WILL flatten out: smarter competitors, they're bigger than the world's GDP, whatever. But many investors are betting on a lot more growth before then.

And, of course, you have the opportunity to short the stock and make a killing when everybody else wakes up to your genius viewpoint.

Of course hype is incorporated into Google and Apple's stock value. Look at the dot com boom, everything was valued way beyond its intrinsic value. If you adjust revenue growth to the industry average for next decade or so, the stocks' prices are way above its intrinsic value. Look at Crocs' stock when consumer tastes changed. Irrational exuberance still plays its role in the semi-efficient stock market.

mmmm,I think I'll respect numbers more than anything :)

Yes, we know Microsoft is a juggernaut, what else is new? Here are the real issues, though:
1) Where is Microsoft in mobile? Nowhere. This is going to hurt them in the not very long term.
2) After the Vista debacle, how much pent-up demand was there for a Windows OS upgrade? The Windows 7 numbers are nothing to brag about. You'd sell a lot, too, if you hadn't put out a decent OS in 8 years.
3) Let's display R&D and advertising as a percentage of revenue and then see how they stack up. One of the reasons the market values Apple more than Microsoft now is because Apple seems to get a lot more bang for the buck in this area. Also because Apple is doing much better in growth areas (see #1).

One of the things Steve Jobs stated 13 years ago which still holds true: there is nothing saying that for Apple to win Microsoft has to loose. Just like economy and luxury cars, I think there will always be market room for those who value cheap and ubiquitous, and also room for those who value the user experience and are willing to pay for it.

Microsoft has a lot of power, no doubt.
But having a CEO that people think is a moron, is a problem.
Having all the press saying that MS is declining, is a problem.
The problem is that MS is making it easy for competitors.
I have used MS for many years, But when Vista came out I began thinking about Mac.
The Company I work for use PC's, But an increasing number of employees are bying Mac for personal use.
Windows 7 is a big step forward compared to Vista (anything else should be impossible).
But when you compare it to OS x is is so slow to use. That is a problem.
I will continue to use MS, because I have to. But whenever possible I use my Mac.
People love the iPhone (myself included), and I think that generates sale for other Mac products as well.
That MS is very big is not enough. In this industry things can turn very quickly.
MS needs positive press or else the negative pres will be a selfulfilling profecy.

This is one thing I don't get. Bing, Yahoo!, and, of course, Facebook all take the same kinds of information from people — that's what powers ads, local search, etc. But most of the blame is still on Google…
Sad.

Microsoft has historically been much more profitabile than Apple. So has Google.
The gulf is reducing but they are still ahead.
Not a fan of any of them, just to get things straight.

Apple has awesome margins *for an hardware company*, but successful software companies enjoys even bigger ones.

How convenient that all of his net incomes are out of date. Apple's $5.7B just happens to be measured entirely during the period in which they were required to amortize iPhone sales over a period of 24 months (subscription accounting), which substantially underestimates revenue and profit for the rapidly growing iPhone market.

A quick look at more recent data (which I believe is still a mix of accounting methods) shows that Apple has already grown from $5.6B to $9.3B in six months! Meanwhile, Microsoft has only grown from $14.5B to $16.3B in the same amount of time. This isn't a game Microsoft should be playing.

Idiot teens? Idiot adults? Are you implying that using non-MS products is idiotic?
I mean, although Windows 7 does have a few nice UI features, it's able to hold on to its customer base only because it is compatible with most of the world's software, especially games. Overlooking the enormous software advantage Windows has, it's on par with other operating systems. Also, keep in mind that Mac OS X has some nice polished OS X-only software of its own, not to mention that one needs it to develop iOS applications.

As the world progresses towards touch-based, cloud-based mobile devices, there's no telling which operating systems will end up on top. So far, it doesn't look good for MS, as it's been unable to turn out a good iPhone competitor for five years (Windows Vista, anyone?). Both its Zune offering, which was looking surprisingly promising, and its search engine (MSN, Windows Live, now Bing) flopped.

Don't forget that, as of yet, there is no Microsoft Office (MS's other moneymaker) for iOS or Android (although soon there should be a very light, basic, free online version). The success of MS Office is directly tied to Windows. If Windows fails, Office fails (yes, Office has a large number of Office users, but it's such a small fraction of the MS market share that it won't be able to sustain the giant). Meanwhile, Apple has been able to make their touch-based low-priced office suite a bestseller on the iPad and even Google has been able to bring success to its sub-par, buggy web-based Google docs.

"[Microsoft's]cloud foundation will win over any Google cloud offerings based on trust and data privacy concerns alone."
That's a ridiculous claim. Microsoft's offering is no safer, no more trustworthy than Google's. The only reason Google's trustworthiness keeps being adressed is because Google owns most of the market. Google has stopped using Windows due to concerns over user safety. They terminated censoring in China. Don't say it doesn't care about its users' privacy.

"Apple will still be gobbling up the consumer market, but this damages Microsoft very little in the end."
Apple's interests are leaking into the corporate market just as Microsoft's are into the consumer market. iPhone is already a smartphone of choice for a lot of businesses. Programming for iOS is tied to the Mac. And there is a bunch of great Mac-only professional software (look at Final Cut Pro). And if businesses become more concerned over privacy, they're more likely to move away from Windows, like Google did.
Microsoft, on the other hand, is trying to gain ground in the consumer market, with the Zune, the XBox, Games for Windows, and Windows Phone 7 all clearly oriented at consumers rather than businesses.

Well done with the numbers review. I've posted comments elsewhere when journalist bang on about how great Apple is and advocate the folly of following a stock with such high p/e ratio. So I agree, shut up with the iPhone already. What will happen to Apple if Nokia/Samsung/Motorola/SonyE even Microsoft get their acts together and make an even better phone?

You forgot to mention that Netflix is region-locked to the USA so we, euros, are out of the picture and still need a decent service… oh! wait! We're fucked by author societies and in some cases decicient telecom infrastuctures,..

Blah

Apple has passed Msft in market cap.

Msft tries to dismiss this by posting last years profits and revenues.
Actually in profits and revenues Apple is fast approaching Msft and will surpass it soon.

April 2010 financial results:
Msft profit 4.01b from revenue of 14.81
Apple profit of 3b from revenue of 13.5b.

See Apple's revenue is already within spitting distance of Msft and those numbers without iPad or the new iPhone 4.

Good for Microsoft. The sad reality is they still don't create anything I would get near.

If he's doubled revenue, why has the dividend not been raised accordingly? Why are they retaining all these earnings?

It took until Office 2010 for the first meaningful e-mail management tools to come along, and they are very basic, to be charitable. Where is all the "R&D" money going?

Microsoft also needs to realize we're in a mashup world; these independent and clunky Office inter-op capabilities won't cut it anymore. Time to re-design the suite from ground up. First, why have independent apps? Why not plug in modules?

Second, these "9,10,11 dot zero" revs are obselete, continuious incremental change is the future. Why not subscription model end eliminate big I.T. rollouts that break things?

Finally, dot net is a joke. we waste our time re-writing code simply because Microsoft ordains it obselete. That's lateral, and therefore inefficient, and that's not progress. Why not some useful tools to translate code to their new platforms? We should charge Microsoft back.

"Juggler" was better. Hiring the opposition's key man is corporate warfare 101.

I see two wrong stats in there:

#5
XBox Live has 23 million active users, not 23 million subscribers (as in "paying customers"). Only a subset of those 23 million users are actually subscribing to Xbox Live Gold for about $50 per year, while others are using the free XBox Live Silver.

Guess which part has the bigger share of the 23 million: the free service or the for-pay service? Microsoft won't tell.

#12
Apple's net income was $8.2 billion last year, not $5.7 billion. Even the source that Shaw provides disagrees with him.

I won't even mention the sources that see Apple overtaking MS in net profits by the end of this year.

Yeah, you are right. Here in Brazil, MSN Messenger is the "de facto" standard for IM. Everybody who connects to internet has one MSN account. Actually "MSN" means MSN Messenger here. Hotmail is also big here.
Apple? It's just that company that sells a "gay" phone for US$ 1000.
Google is huge in search as everywhere else, and it's most used service after search is Orkut, a social network like Facebook. Almost every brazilian has an account (although it got so crappy, many people are moving to Facebook).
So far I only knew two guys who used linux in their homes, everybody else uses Windows, even in machines bought with linux installed. There is always "a guy" who installs Windows for US$ 5.

The best thing about Microsoft is the never say die attitude. I'm a opensource and Mac user & love them, but I think the media doesn't give credit to MSFT where it is due. Over the last 3 decades they met many a crisis – arrival of Mac in early 80s, Linux & open source in early 90s and Internet in late 90s, the antitrust of the millennium that all threatened their roots, but they never did die rather they embraced the change & thrived. They kept opening newer revenue streams – Dynamics, SQL server, XBox, Halo, Windows Server in the past decade when they were supposed to have stopped "innovating".

The best thing about Microsoft is the never say die attitude. I'm a opensource and Mac user & love them, but I think the media doesn't give credit to MSFT where it is due. Over the last 3 decades they met many a crisis – arrival of Mac in early 80s, Linux & open source in early 90s and Internet in late 90s, the antitrust of the millenium that threatened their fundamental business model, but they never did die rather they embraced the change & thrived. They kept opening newer revenue streams – Dynamics, SQL server, XBox, Windows Server

XBox Live is the online service that comes with the XBox consumer device. It is free for some content and costs money for other content.

iTunes Store is the online service that comes with Apple's consumer devices. It is free for some content and costs money for other content.

See the similarities?

So I believe MSFT is a good stock. How much MS paid per share in last fiscal period?

While I can understand loving a particular company I don't understand people who hate a company. People who feel the need to declare "I use Linux" or "I use Apple" are like a guy who feel the need to call up old girl friends to tell them he's with someone new. How mentally ill is that? For all the Apple/Linux fanbois – busy reading a blog about MS products – hoping that somehow the old girl friend will just die in a fire or something. Move on with your life already. Sheesh.

I know it's not to your main point, but WebOS is not the #3 smartphone OS, but #6 (behind Symbian, Blackberry, iPhone, Android, WinMo) and will soon be #7, as Samsung Bada phones started shipping a few weeks ago.

Your point being? Just because someone attributes a source doesn't mean they can't be wrong… as you just pointed out…. Microsoft is about to go bankrupt… feel free to attribute me as your source when you print that.

XBox not profitable overall. Microsoft have amassed at least $6 billion in losses on XBox between 2001 and 2007.

Why would you sue the OHA as an organisation? They probably don't have more than a few million Dollars in their budget. You have to sue where the money is.

Not sure what planet you're living on genius but a P/E of under 23 for a tech sector company isn't considered high by any definition I've ever seen…. sure hope you've got someone with a bit of knowledge handling your investments since you're obviously not qualified for the job.

Yeah… and we should definitely listen to McNealy… I mean look at what a great job he's doing at Sun.

I mainly complained about TechCrunch gving in to that Apple + Google are taking over the world.

I agree w/ you. Microsoft's numbers are impressive. If you think it, they are the only ones that can make a proper OS. Mobile, TV, Desktop and enything in between. So, it will be interesting.

Well, I'm in group 1, got a Mac in 2001. And my only use of Windows is because I'm FORCED to by work (I'm an ASP.Net developer of 6 years).

I forgot to switch back to Windows though, cos I'm so busy having an awesome and hassle-free time.

Microsoft's doesn't suffer by comparison to Apple as much as it does by comparison to Microsoft, circa 1995. Ballmer isn't the visionary leader Gates was, MS is now fractured in its leadership and chasing other innovators for mindshare. Fine, Windows is the leader today because 1995 MS made that happen. And the "OS wars" are never over – Windows is the Ford Model T of operating systems and eventually the Ford dominance fell – Windows 90% share is unsustainable. To write an article that says, "Hey look at me, I'm still relevant!" Not a good sign…

Interesting stats but I felt that the article added very little. I don't see what the value of this "decoding" is. It's kind of empty and weirdly confrontational, like the author of the article is this cheerleader sitting on the sidelines, interjecting "Yeah, you tell 'em, Shaw!" after every statistic.

Anyone claiming MS doesn't innovate is out to lunch. Spend some time at http://research.microsoft.com/en-us/. If anything, MS simply doesn't do a great job of letting people know how much innovation actually comes out of that company.

I’d like to see the number of actual windows license sold. Not oem. PC makers made the os choice for you, bacu in 1995…Remember that!

Well, only if they would tell us where all the numbers came from….

If it was true, that would show Microsoft actually doesn't "brag" that much about what they have….But they just did :P

beginning to form? MS has been in the smartphone market for over a decade now. If they weren't able to "form" a market in that amount of time, why should we believe they're able to do any better today?

I stopped reading responses when I saw they were mostly whiners about Apple v. Microsoft.

Does anybody realize that the high sales of Win 7 is due to the fact that Vista is a piece of crap and Win 7 is the forwarding moving path from Vista? Not to mention the nut-grip Windows has managed to achieve. Not that Windows is good, but that Apple has its head up its lower GI about marketing and maintaining its own nut-grip on the Apple product line. Their respective analities are different, but perhaps equal in magnitude, which probably should be translated into the overly inflated egos of the leaders of the companies. Those egos were probably required to get their companies started in the first place, but certainly not so much to keep them going today.

Good post. I think the only "passive-aggressive" number the author didn't interpret correctly was the one about netbook operating system share in the 2008 to 2009 timeframe. The fact is that Linux had more than 90% marketshare in the early days of netbooks, but Microsoft flipped that in just about one year by more aggressive pricing (and the realization by the OEMs that users FAR prefered to use Windows, so spending $30 for an OS was still worth it even for a $250 machine).

DERP!

Given their rate of growth over the last 3-5 years, you know during a depression, and keeping their PE the same, yes it not only is possible, but probable.

For growth rates, look here: http://www.asymco.com/2010/05/19/apples-growth-sc...

Compare those numbers to MSFT, and see what you think MSFT's potential is vs AAPL.

Umm the we's, in the article are so prolific I got confused if he was quoting Frank Shaw.

How about the author just states up front I work for Microsoft, or I Kiss Gate's Mule twice a day or some such so the apparent conflict of interest is out in the open.

I think this also ties into the differences in their R&D models. Apple as proven to be exceedingly efficient in going from product idea to product reality while Microsoft and Google spend millions acquiring random startups that rarely become fully integrated into the company, and have huge bloated and disconnected R&D departments. Also almost all of Apple's development is done in house which just adds to that seamless integration of all their products which I think in the end really benefits the end user. Very interesting read linked below.
http://www.businessinsider.com/apple-and-efficien...

So – everyone ELSE's live mail account is junk?

And you are assuming MSFT net income to stay put? I bet you are a financial analyst for a large financial institution.
MSFT 2010 net income estimates range within 18-20B. It usually helps to quote comparative figures when you are actually making comparisons and not blow smoke up people's asses.

and how about this one
MSFT 25 years +6000%
AAPL 25 years +2300%

And you are assuming MSFT net income to stay put? MSFT net revenues are projected to be 18-20B int the same period.
You should quote that too to make a fair comparison. If that's pretty close, I'm the queen.
Besides it's just an estimate which will most probably be used in the valuation and hence the higher target price.
So you using this figure to justify the growth potential is just flawed.

You haven't met someone using Windows 7 yet? Or MSN? Give me a break.

The most entertaining tech article I've read in quite some time. Viva La Microsoft!

Did you read the original article at all? Every number has a source – most of them outside Microsoft.

Hahahahahahahahahaaha……

MG,

Here's the rub… It is not about the numbers. It's about making quality products. Microsoft sucks at it. Apple gets it. Period. Your numbers (and your MS fanboy approach to this blog entry) disregard the fact that you are talking about the enterprise. Remember enterprise customers are largely bonehead IT geeks who could care less about functionality or ease-of-use. The employees who actually have to use the crap they buy, hate it. They may use MS products, but they don't want to. They don't have a choice. Let's face it, even prison food is is "popular" among inmates, but that does NOT mean it's good. Again, this battle between Apple and Microsoft is about quality. Apple is well ahead of the game with NO competitors in sight. The $10,000 Chevy Aveo is more popular than a BMW, but who really WANTS to drive such a cheap car. The quality sucks. The same is true of Microsoft. The bonehead IT guy where you may work makes you use a PC, but who really wants to. He likes Microsoft, because the poor quality, impossible user interface, error messages, blue screens, etc. keep him employed. If he chose to use Macs, his team would be downsized. Be careful about the numbers MG. The story here is about quality, not unit sales or revenue. I'd rather buy a great product from a company that has less revenue than Microsoft who sells A LOT of crap.

Bingo! Well said.

didn't APPL have something over 3bn in cash lying around that whole time the tech-punditocracy was howling bankruptcy around a decade ago? it seemed to me that they could have afforded to keep losing a few hundred million a year for a while with that sort of piggy bank. but you guys are the financial experts.

Bias?? the guy work at Microsoft, this is a copy of its post! Do you really understand what you read? of curse its biased, but its not by TechCrunch

LOL, nothing more to say here!

Plone will do that to ya….

Yeah, your perspective sure changed there.

Funny how all 30 million lines of code seemed to be in making Vista/Win7 look like OSX.

But it's fun to troll the intertubes, ain't it?

Maybe you are thinking "stock" market, and not market in general.

Using your Kindergarten logic, he could've posted total sales of all Windows Mobiledevices since launch which would be north of 150million. Heck even PocketPC's would eclipse total iPhone sales. Kin is a Sidekick successor aimed at the same teeny bopper market and is not a Smartphone.

Although, I bet you felt really witty after posting that.

microsoft is alive and kicking woo hoo

Microsoft created Word and Excel. And remember when OSX came out and people said, thank God Mac is finally starting to behave like a Windows machine?

If you did any research, you'd know that Microsoft defines "active accounts" as any one that's been logged into in the last month. You're an idiot.

Explain to me how this is anything other than the stock market doing something irrationally stupid? Pets.com also had a great marketcap at one point (which is not to say that Apple is as vapid from a business model perspective as they were). Let's not get seduced by the myth that "the market knows best" – the last couple years have pretty well proved that false.

Lastly, it's worth nothing that MS has paid tens of billions of dollars in dividends over the last 10 years. How much has Apple paid?

Microsoft is a monster. How did they get that way? Thru an abusive illegal monopoly.And by the time the US did anything about it, their position was entrenched. Even tried and convicted, nothing of consequence came of the conviction. Microsoft is a monster that stole most of it's best ideas, used it's monopoly to pull the rug out from all competition, and yet managed to peddle second rate "good enough" crap long enough to lock an entire industry up as a revenue stream. How else could it fund failures for a decade and yet still have the infrastructure to get hundreds of millions of users on MSN? With 15 years of lead time to buy whoever it needed and improve it's products, should we really be impressed by these numbers? Maybe. But Microsoft built it's success on the backs of almost every computer user that suffered thru 20 years of viruses, trojans, malware, hardware failures, lost data and billions wasted on years of patching, re installs, data recovery and just plain crap software. In a just world, Microsoft would be a fottnote, or forced to return it's billions to the industries that suffered abuse at Microsoft's hands for so long.

Tell that to the enterprise world running Windows. They had bad press for the past two decades. What did it result in: a 96% marketshare

Apple competes in the hardware market. They are not a commodity like MSFT. If Apple goes "out", they are in big trouble. As long as MSFT is entrenched in enterprise, they will never go "out"

Do you even know what you are talking about?

Irrelevant just like your whole article..i mean post. Marketshare wins. Marketshare dictates what product is most supported. Its great that you like your Apple products, but please…speak on what you know.

Oh yeah, your car anology sucks. BMW is nice but it aint a good car. Reliable and overpriced.

I should say unreliable and overpriced. All those mid-level luxury cars are crap. Get something exceptional (ala Ferrari) or get something cost and energy efficient (Honda Accord)

I loved it. Though it was great. But I guess I am just a biased retard who thought it was a good idea to buy a Windows Mobile phone — yes, big MISTAKE! I'm a GMail fanatic, own a Nexus One, an iPod Touch (loved it until the batter pooped out), a Macbook Pro, use a iMac at work, used a company issued iPad (blah!), wouldn't trade my PC running Windows 7 in for anything, love Windows Media Center, Anyway, no reason to hate the numbers.

ROFL wy don't you develop in ObjectiveC or such then :P if Microsoft sux and you are forced??? Does Apple even have any web based programming language???? Just stfu you are making web sites in Microsoft environment and you STILL defend Apple? Am i the only one seeing this??????

well I don't know where did you find this information, but I can tell you, my 14 year old daughter and all of her friends throughout Europe are only using MSN Messenger to communicate. They do not even bother to look for an alternative.

Microsoft is not good at when implementing there strategy to work. They were quite older than google but they comprehensively beat Microsoft in all the way whether it is search engine, email, PPC….I mean everything.

Impressive numbers http://harbhag.wordpress.com/

Russia is on ICQ.

Ever heard of Exchange, SQL Server, Dynamics, Project….oh yeah and how about all the revenue that Dell, HP, Lenovo, Acer…make from selling Windows. Waiting for the list of AAPL partners

Do you factor in that MSFT is a software company nad AAPL is a hardwaresoftware company? How about factoring in Dell's revenue, lenovo, Acer…??? Not really apples to apples.

Yeah… 2 years ago.

Yes, Nokia makes a smart phone. Ask Apple… they just stole another Nokia patent with "Facetime."

PS: It's no secret that MS has been incorporating Linux in it's software for years.

Can't wait to edit my xls docs on a 3.7" screen. Lol.

MS created the first word processor and spreadsheet softwares? Really? Really?

And no, I don't recall anyone saying that OSX. I do recall people saying how great it was that MS was finally catching up with Open Source (browser space) and OSX (OS GUI). I still hear an awful lot of people saying how great it will be when MS begins adopting a few basic web standards.

The key word is "active".

Please check your facts.

Years ago, I set up a Windows Messenger account using my personal email address. Sometime over the last few years, MS forced me to setup a Windows Live account in order to use/upgrade the Messenger product.

So I (apparently) am one of those 360 million Live Mail users….. but I have never used the account; I've never sent an email via it; etc.

So that stat is meaningless.

The reason why blackberry grows in marketshare is it's ability to hook into Exchange…. MS = Exchange… MS = WinMo7… As long as MS makes WinMo7 work well with Exchange… it'll be a winner in the enterprise. Otherwise it'll be fail for MS in the enterprise.

MSFT did not buy a company that was Bing. Check for facts. Bing is very much home grown!

IBM's major commodity back in the day was mainframe and hard drives. They didn't change because of Microsoft but rather other companies like EMC, Netapps, HP, Hitachi, etc. And drives…there's a wide market of drives out there. They sold their drive technology to multiple companies. IBM, nowadays, is a very inovative company. Their R&R department is huge and focuses on new technologies that is provides to others based on partnerships. I'm impresses with how that company has changed.
As far as MS, I use both Linux-based OS's (Ubuntu, Red Hat, etc.) and Windows and find that Windows-based is easier to use. It just seems more user friendly (to the general, non-technical user) than others. Apples OS is pretty good too. No question there. Nothing that wouldn't stop a user from going there either. I think it seems to be a more of preference more than anything. What did you start with?? I started with a Commadore 64 way back in the day. From there it's history. Preference seems to be the issue with OS or offerings or programming ease…or the "Dark Empire". I'd say to users…whatever makes them happy!

I agree with completely on this. It's the "fanboy" of the crowd that adds to the entertainment. Let the end-user decide what he or she wants to use. That will decide the fate of the competitors.

Microsoft is not dead , that’s true just for illiterate guys !
Don’t forget that those who are at universities never prefer free win7 to free Linux !

@Joe

If you re-read my comment, it’s about Microsoft-powered consumer experiences, and Windows Automotive certainly does that for Ford SYNC, the Fiat Blue & Me feature, and soon Kia UVO.

You are corerct that “door unlock” might get it’s own cpu in some cars, and it runs an RTOS other than Windows. It’s probably also a very simple 8 bit microcontroller, so not really in the same segment as the rich consumer experiences Ford, Fiat, and Kia are using Windows for.

you should try the new “Wave 4″ Messenger beta… it’s really phenomenal.

Dang, I was looking forward to seeing the number of Kins sold.

I wonder how much MBAs or Apple TVs were sold…

Dohoho you really nailed that on the head… not.

Responding to competitors and the public does not mean there’s some sort of “crisis.”

I can't speak for all demographics, but at least among the teen and twenties population, Apple reigns supreme. Last week when the youth pastor said, "Turn your Bibles to James," I counted 11 people looking up the verse on their iPhones from where I was sitting.

If Microsoft doesn't improve their reputation soon, they may find that the next generation abandons ship en masse.

21.2% – Actual Linux Server market share, Q4 2009.

That is a flat out lie. I'm not going to restate every thing that was pointed out in the comments section of the "source" given for this pseudo statistic. I'll just point to this and let you logically extrapolate this data to smaller scale servers …or continue to delude yourself as the case may be: http://bit.ly/dxFdRJ

And how much of that is actively used? There’s a difference between marketshare (number shipped) and installed base.

I’ve stopped buying Windows machines and reinstalling with Linux now, because I don’t want to count toward Microsoft’s marketshare numbers, but I do have one machine that came with Windows. Windows was on there, well, until it got home. Then on went Ubuntu. I just purchased my second laptop from a Linux-only hardware company called ZaReason.

And I have a MSN account too. Haven’t used it in about 8 years, but it exists. Are they counting me in that too?

Their numbers are inflated by the people who’ve abandoned them with no way to raise our hands and say “I’m out.”

Yet again, you people thinks USA is the world. Compare numbers of users on MSN and any other (even Facebook+Twitter+ICQ) worldwide and you will see the difference.
Just because you guys dont use it anymore, it doesnt mean it isnt used.
For example, Orkut is still growing in places like Brazil. Even more than Facebook.

Dude, they never DID innovate. What they do is get behind you and relentlessly dog you. They’ve never been huge pioneers, but they excel at taking your idea and beating you to death with it.

What about gamers?

Comment to Brian – June 28th, 2010 at 8:27 pm UTC

Ah, Apple produces Quality! That’s what they intended with the iPhone4 and the integrated “call end” button by touching the damn thing! haha

Wake up: I love Quality; but don’t be consumed to find that in Apple (only) or any other vendor. They are (also) in for the money.