A fear of impending death inevitably strikes all of us that survive the rigours of childhood and the mayhem of the teens and twenties. Old William Shakespeare put it well in Julius Caesar (Act II, Scene II)
‘Cowards die many times before their deaths;
The valiant never taste of death but once.
Of all the wonders that I yet have heard.
It seems to me most strange that men should fear;
Seeing that death, a necessary end,
Will come when it will come.’
Middle age dawns and the world view over the rose tinted lenses of youth seems a bit flat and dull. And, my, don’t your arms seem to be getting shorter as the years pile on!
So too it must seem to the visionaries that guide the helm at Microsoft. And if Microsoft is indeed having a mid-life crisis, we’d all better attend to the ramifications. Despite my ardent desire, I do not yet manage a Microsoft-free business environment and cringe at what may be ahead. I can’t imagine a Microsoft that will not rage against the dying of the light.
Old Nick (Carr) has recently spun more of his ‘Does IT Matter? Information Technology and the Corrosion of Competitive Advantage’ controversy in a column in the New York Times. And true to form the IT industry nay-sayers are abroad with burning brands and pitchforks yet again. As usual Carr makes some acute observations, sweeping generalisations and some not entirely unfounded conclusions—but the red flags are starting to flutter in a freshening breeze.
Did Microsoft’s recent dividend sound any warning bells with you? Those with significant MSFT share holdings doubtless smiled at the $3 a share dividend paid out of the company’s cash mountain ostensibly held in case of major antitrust penalties. Or was it a bribe to keep the shareholders sweet against the prospect of less than stellar growth in the near term?
It’s not just happening to Bill and Co either. Microsoft may be the biggest brand in software, but in recent weeks, some of the other big names in business software, Computer Associates, Peoplesoft, Siebel Systems, Veritas, et al have confessed that their growth isn’t as perky as… well, it used to be.
Lack of stimulus
The software slowdown isn’t just an aspect of some glacial economic change but the bellwether of a basic characteristic of the aging species: software doesn’t wear out like hardware. Without a prod from the producers there isn’t any stimulus to sustain a
replenishment cycle aside from changing business requirements, and in the realm of desktop operating systems, word processors and spreadsheets, that isn’t a seriously vital force anymore.
Who has the budget to ditch usable and useful software for the latest and greatest new flavour with more unneeded bells and superfluous whistles? I recall vividly the dictionary wars when Wordstar boasted X thousand words in its spell checker and Microsoft trumped it with X+1 before Wordperfect crowed about its new X+2 checker. This was repeated ad nauseum for quite a while in the 1980s for this and other features. Now, who cares? RIP
Wordstar and Wordperfect, slain by the MS Office bundle strategy despite their numerical and technical superiority, respectively.
Software replacement historically was in part fuelled by the headlong rush of Intel’s processors in the previous era of computing. Microsoft’s youthful expansion was turbocharged by sales of Windows and Office. Now, as the PCs on the corporate desktop
no longer need to be changed as often as the water bottle in the cooler, Windows and Office manuals are starting to yellow in their binders (that’s a metaphor: who has hardcopy docs anymore? Who has time to read them?) For many businesses, software purchases have reached the point of diminishing returns: incremental enhancements aren’t worth the money to buy or train or to deploy.
It may be when the PC end of the business catches cold, the corporate end of the software world will come down with pneumonia (mostly because of the consumer PC applications
that are burgeoning are a potent antibiotic). Big iron ERP, CRM and SCM program suites that support critical business processes like accounting, customer service and purchasing are having a bad season, too, after the lengthy blood, sweat and tears of the integration process. Billions have been spent over the last decade to install and integrate business processes with these uberprograms. If they work, why upgrade or replace? If they don’t work, get a shovel and bury the dead CIO and CEO.
Next Big Thing
One of the Next Big Things to be lofted is Product Lifecycle Management (PLM). It has been described as yet another inappropriate attempt by the IT industry to package business practices. Some have estimated the complexity and size of PLM to six times that of ERP. Who would sign up for this business upgrade when ERP has been characterised as flexible as wet concrete before installation and as flexible as set concrete after installation?
The writing is on the wall. In his NY Times epistle, Carr cites a recent survey of corporate software buyers that found nearly 75 per cent of respondents want to see less frequent upgrades. Over 20 per cent plan to stop buying upgrades altogether. What’s a steroid-charged, growth-hormone-addicted young software company to do?
Microsoft has tried many of the same old tricks before: new versions of software with subtle appeal but titanium alloy lock-ins, backward incompatibilities, copy protection traps, support blackmail, all-but-mandatory upgrade policies, software-as-service, metered usage, corporate licensing finagles and others, some more fair or foul than others.
No doubt there are new twists in revenue wringing up the same old sleeves. Expect an even bigger veer towards consumer and entertainment applications and services than seen heretofore. How far off can an MS iTunes clone be? Heck, those brilliant guys even managed to take an anticompetitive hit and turn it to their
advantage by giving away software to schools in lieu of paying fines. Now there isn’t a child in the US of A that doesn’t assume that Word is word processing entire, Excel is the spreadsheet and if you want to do a presentation, PowerPoint is the be-all, end-all. And given the saturation bombing of the competition, who can say that the coming generation of Yank biz whiz kids has it completely wrong?
Free standards
If your business operations are entirely dependent on the whims of an aging and revenue hungry monopolist who with debatable benevolence may be reaching a stressful interlude the only refuge may be diversification and risk containment. Fortunately there are some standards in the world that do not yet seem to have fallen to the siren call of Redmond. Roll on xhtml, php, SQL, xml, etc.
While chained to Windows and Office on the desktop, my business runs quite happily on osCommerce, mySQL and a suite of open-source applications that offer all the capability, adaptability and value that I need. Your mileage may vary, as the old car ads in the USA used to say, but as Microsoft turns the screw on its dwindling business revenue base, you may find that an anticipated and planned exit from its upgrade cycle could be increasing in appeal.
Can a change from a Hold recommendation to Sell be far away?
06/09/04
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