Microsoft and the Terrible, Horrible, No Good , Very Bad Week

Posted by: Stephen Wildstrom on September 18, 2007

Things are not going well for the colossus of Redmond. The European Court of First Instance has upheld a $613 million fine for antitrust violations. Now IBM, which Microsoft drove whimpering out of the PC applications business several years ago, has joined the growing list of companies and open source efforts mounting ever more threatening attacks on Microsoft’s lucrative Office franchise.

IBM announced today that it was reviving Lotus Symphony, a productivity suite originally built around the dominant Lotus 123 spreadsheet, as a free download for Windows and Linux users. The new Symphony uses the Open Document Format standard, which governments are increasingly requiring but which Microsoft is resisting fiercely.

Microsoft Office is so deeply entrenched in large businesses that it can probably never be blasted out. These enterprises have invested in customizations that cannot be transferred to alternative programs and the cost of recreating them is prohibitive. But these same organizations have shown great reluctance to upgrade to Office 2007.

For everyone else, the alternatives are worth a look, whether they are full client applications like Symphony, OpenOffice, Corel Word Perfect, otr Apple's iWork '08 for the Mac, or such Web-base programs as Zoho, Google Apps, or ThinkFree.

While the combined market share of the alternatives is minuscule today, they are a long term strategic threat to Microsoft. The Office business has long accounted for about half of the company's profits, and while the cash cow will go on producing, it is increasingly difficult to see where any growth is going to come from.

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Reader Comments

John Davis

September 19, 2007 04:27 AM

Until recently Microsoft was playing catchup. Now it's really starting to fall behind. With ALL of their hardware attempts to diversify losing money, they are finally reaping what they have sown.

I agree, I don't think MS will actually die, but it's certainly not the Goliath it once was.

John Davis

Ramon Casha

September 19, 2007 04:47 AM

re "Microsoft Office is so deeply entrenched in large businesses that it can probably never be blasted out."

You mean, just like WordStar, WordPerfect, Lotus 1-2-3, the IBM PC, Netscape, ....

Richard Jones

September 19, 2007 09:43 AM

I would love to pretend that M$ is really crushed by this, as there is noone who dislikes their business practive or products more than I do. But we have all been singing this song for years, and every time something happens we all say "Oh Oh, the end is coming for M$" then every year they remain pretty much unphased. M$ is cemented in industry, no matter how much those of us that use good products (Open Source or Apple) would like to admit.

Steve Wildstrom

September 19, 2007 10:23 AM

@Ramon Casha--Those products in their day had market shares that rival Microsoft Office's. But Office's entrenchment is not just a matter of market share. Corporations have made massive investments in customer programming, templates, workflow systems, and other collateral products built around Office. Unless an Office alternative supports all of this, which is unlikely,it is unlikely to displace Microsoft from the enterprise.

Sam Cook

September 19, 2007 11:17 AM

I think MS Office is a great program. I also feel it is overpriced. It doesn't seem to have much room to grow either. How much more do you need or want it to do? However, one thing I think would make a killer app is to have a document program that is more along the lines of a publishing program so that all types of OLE objects can be easily worked with (better than Publisher). Also Access reports could be made easier to design, although I haven't checked out 2007 to see how it handles it yet.

ronski

September 19, 2007 02:45 PM

I'm sure the fine gents at M$ will figure out ways to grow their Office cash cow. They're able to sniff out money the way a jackal sniffs out dead blood!

Ted M.

September 19, 2007 03:04 PM

Microsoft can remain dominant if they do a couple of things: 1) Create a telepathic interface so the suite can simply do anything you can think up, and 2) Make it free and web-based. Bundle this with .NET and Passport, making the possibilities endless! (/joke)

Sid Sontag

September 19, 2007 03:15 PM

All Microsoft has to do is make an ad-based MS Office package, which I believe is currently being developed. Somebody noticed a patent application a few months ago about ad-based applications coming from Microsoft. Once they do that and the consumer has to pay like $29/year + ads or even free + ads, its game over.

Microsoft is slow to evolve but they have that luxury and still dominate

JohnJ

September 19, 2007 03:28 PM

Lotus Symphony is just a minor variation of the mediocre OpenOffice, which has gone nowhere.

MS Office 07 has been getting rave reviews. (See PC Magazine Online.)

Harshal

September 19, 2007 03:46 PM

I don't understand all the MS haters. Especially who uses Apple stuff. I love both apple and MS. MS is the company which gave us rock solid concepts and easies of all applications. Lotus Notes and 123 were the worst apps I have ever used and had a steep learning curve. I still don't know how to use some part of Lotus Notes although I am using it for last 7 years. It sucks. admit it.

Anything that is hard to learn and difficult to convert in any format will be thrown out. MS office 2003 onwards supports XML. IT will never die. XML can go from anywhere to anywhere.

Guys Admit it. MS will never die and they will always be leader and biggest market share holders for generations to come.

Stupid Apple is doing same thing with iPhone, they did with MAC. These people will survive but will never be able to capture the market share in large enterprise world. Consumer market may be.

People did not like Windows XP and was reluctat to use it until it really came down as leader. I admit that MS made huge mistakes with XP. But they will crush the linux, MacOS market with Vista. They have learned their lessons.

It is a fashion out there to hate MS and really stands any point. good luck you Ms haters.

Steve Bulker

September 19, 2007 04:26 PM

I don't think Microsoft will lose its dominant position anytime soo.
Their Office Suite still has large number of followers.
Worst case scenario: they can get into chair business.
I already see chairs flying...

Richard Jones

September 19, 2007 05:16 PM

Harshal, you make the mistake of believing that Apple's only goal is to "get vast majority of market share" where as in reallity Jobs' vision has long been to be the Porsche of the computer market rather than the mass. Having used Lotus for sometime, your right... yuck. Open Office on the other nad, not bad at all for what it is. Its not that people hate M$... I love the XBox 360 and wouldn't buy any other gaming console... I love M$ Office and think it is the best Office Suite out there. There OS, well to put it nicely... stinks for anything productive.

B

September 19, 2007 05:23 PM

Yeah... and companies are going to stop buying Cisco network equipment because Netgear is so much cheaper. Watch out Cisco. HP better plan an exit for it's printer business because large corporations everywhere are going digital! The end is near for HP's cash cow. Dell better rethink its strategy too because corporations are going to realize what consumers have known for a long time - generic clones like eMachines are cheaper. In fact, now everybody is listening to the nerdy IT guy who runs Linux on his homebuilt -- because all along he's had all the strategies to save tons of money.

sloggerKhan

September 19, 2007 08:13 PM

I've taken a look at lotus symphony, star office (free via google apps), open office, ms word 2003, and occasionally 2007. I have to say that I expect an open source office suite to become the standard for teachers, home users, and students. There aren't any compelling reasons to pay for office unless you are a big company and have wasted lots of money developing your own VB plugins. Must say that I like the tabs in lotus symphony, hopefully that will be a feature someone puts into OOo.

Jack

September 19, 2007 08:36 PM

MSFT will have to bite the bullet and adopt OSF. Too many heavy players - i.e, the European Union - are clamoring for it. MS are taking a huge hit in the press for reluctance to adopt.

Corporate America will probably use Office until the year 2100, but the US Government is also pushing for cross-platform compatibility, leading MS to the Open Source solution.

aylmer

September 19, 2007 08:37 PM

In the Philippines most of the institutions and users are MS addicts because we can download them freely and buy pirated copies at a very low price equivalent to being free. So by pirating we became dependent to MS Products. And through the years we cannot separate from the grip of MS. Thanks to MS!

Jeff b

September 19, 2007 08:42 PM

Open Office.Org. use this it is the best.

Pod

September 19, 2007 10:37 PM

@Steve Wildstrom:

Uhhh... and I guess you believe corporations did NOT make massive investments in custom solutions around Lotus 1-2-3, WordPerfect, etc.? Duh.

Leo Danuarta

September 20, 2007 01:13 AM

To those (such as Harshal) who cannot understand why people hate Microsoft :

(a) It is NOT that we think MSFT products are useless. Of course not. MSFT Office 1997 has been phenomenally good product. Likewise Windows XP. However, we passionately dislike the fact that MSFT always releases faulty and/or bloated products ... and stability + security will only arrives two or three patches / service-packs later. I do not see any functionalities in Office 2003 (even less so in Office 2007) that are so absolutely "must have", for example; I can only see a few added capabilities that "might be inetersting" but you have to offset the benefits with gigabytes of extra weight in the software. I don't even bother mentioning Vista !! MSFT supporters may think that Vista will crush Linux, but numerous IT commentators have observed that Vista opens a real chance for Linux to get noticed and receive renewed interest - simply because Vista is soooo bad.

(b) More important than (a) above, is MSFT principle of leaching and sucking dry its customers with endless licence fees and/or highly restrictive ways of what we can do with their products that we have spend our hard-earned cash to purchase. Its use of DRM is a case in point. Likewise their forcing us to take a rootkit which can shut down our PC if they suspect we are using illegal software. What about consumer rights ? Those who spend their hard earned cash on genuine MSFT software, only to have it shut off because MSFT server malfunctions and suspects the legally purchased software to be pirated ?

So, those of you who support MSFT, good luck and have fun being leeched dry by M$FT. The rest of us who have found acceptable quality in Linux are happy to accept the small minus points of OS (as compared to stable veteran MSFT products) in exchange for FREEDOM - freedom from being leeched, and freedom to use the products in our own ways.

Ken Sherman

September 20, 2007 02:08 AM

If you don't understand why so many people hate Microsoft you either have your head firmly stuffed into the sand or you don't really want to know how unethical this company really is because you'd have to change your opinions or
your making money off the current lock in that Microsoft provides.
Everyone who knows what they've done and has an ethical bone in their body refuses to have anything to do with them and tirelessly tries to inform others.
Have some guts and do some research.
For those of you who think MS will never die, it's all downhill from here. And things tend to accelerate headed downhill.

John

September 20, 2007 02:28 AM

I think its a value issue. If you see value in MS, buy it. Otherwise, get OpenOffice.org and send a contribution. I thought I was sending in US dollars but the OpenOffice.org contribution page's currency translation ramped up my modest contribution another $10 bucks or so (I'm not complaining, I use OpenOffice 7 days a week). I wonder how people who can barely afford a computer will be able to pay about the same price for MS Office.

Steve Donley

September 20, 2007 03:28 AM

Someone posted "It is a fashion out there to hate MS" . Yes it is ! Have anyone of you , those who blame MS , ever worked with Open Office or any other open program . It sucks . I've been trying for one month to make the program not to convert numbers into dates , no luck . The help page didn't helped either .
I admit that Ms products are somewhat overpriced , but at least they are easy to use and they have great support .

Kunal

September 20, 2007 07:47 AM

Software as a service (SAAS) is not yet proven. In fact, the amount of revenue that all companies make using the SAAS model is pathetically low.
MS have little to fear.
As a business user, which would you prefer? A secure, readily available word processor, spreadsheet and presentation software (MS Office) sitting on your machine or some relatively unsecured software sitting far far away on some server (Google, etc), needing a fast internet connection to access?
SAAS has far too many issues to be ironed out before it becomes a real threat to the PC, license-based model.

FooBar

September 20, 2007 08:21 AM

OpenOffice.org is Good Enought™, and has the right price: free. Benefit/Cost = infinite!!!

(And they just released 2.3.0!!!)

FooBar

September 20, 2007 08:24 AM

"Corporations have made massive investments in customer programming, templates, workflow systems, and other collateral products built around Office."

Office is reminescent from the paper document era, when you expected to write a document and print it out. ("What You See Is What You Get", etc).

The trend is to have everything online, and there's where Microsoft fall short.

For everyday use, OpenOffice is good enought.

Steve Wildstrom

September 20, 2007 08:56 AM

@Pod--Two words: Visual Basic. In the days of Lotus 123, etc., custom program consisted of macros that were automatically, or at least relatively easily, ported from 123 to Excel or from word Perfect to Word. In the late 90s, Microsoft introduced visual Basic for Application to Office and programming became much more complex. I(t is these visual Basic customizations of Office that are not transferable to alternative products.

Joe Turner

September 20, 2007 08:59 AM

I speak only based upon my experiences as the owner of a small business. In that capacity, my firm joins others small businesses in America which comprise a group employing more than 90 percent of the American work force. Whether or not my remarks are indicative of other business owners is for the reader to decide.

Every time Microsoft introduced a new operating system, rather than make my life easier and more productive, it has cost me grief and money. Once the new software is installed - then surprises crop up. Something isn't compatible or programs don't look the same or IE becomes the primary browser instead of Firefox.

Microsoft consistently has shown a lack of interest in supporting legacy software. Here is how it worked for our company when upgrading from Windows98 to WindowsXP. First, I had their site scan my computer for compatibility issues. The results presented by their scan were that virtually all of the existing software would have to be replaced. So, instead of a few hundred dollars per machine, our company was looking at potentially thousands of dollars in expense.

So, I put off buying XP ... until a machine failed. Then, an XP based machine was purchased and used with our company's most commonly used software. All of it ran!

The Microsoft check had been misleading from my perspective. Had I known the existing software as installed would run, we would have upgraded much sooner ... because the hardware handling capabilities of XP is superior to Window98.

The only inconvenience was that a scanner had to be replaced because proper drivers were not available for its use with XP.

The lesson was that the operating system software provider is not providing information accurate enough for a small businessman without an available IT professional to confidently purchase their product.

Recently, VISTA became available. From all that I've heard it is a memory hog that offers little improvement in daily operations for a firm that routinely needs to use common word processing, spreadsheets and presentation software. I've heard that not only does VISTA require addition memory capacity, but it functions in a manner such that legacy software may not work on it. Here we go again! Except, the warnings this time have been from a variety of sources and more frequent that what I'd encountered with XP.

Unless there is good reason, why would a small company want to upgrade software? My focus is to keep the company operating without disruptions and to save money whenever possible. This perspective has financial implications for MicroSoft. I bought a computer at the time VISTA was being deployed. Instead of a machine loaded with VISTA, I purchased a refurbished computer from a major manufacturer loaded with Windows XP. It works fine and is compatible with all my existing software and hardware.

A company such as mine needs to produce every day. The routine is simple. Write a document, crunch some numbers make a presentation. I think others such as attorneys and consultants of various sorts are in similar positions.

Without a technical staff to guide us, and without abundant extra resources to cover any unexpected contingencies, we'll opt for the least uncertainty and the most responsible fiscal choice. Our goal is to avoid down time. I will buy used XP equipment before upgrading to VISTA if further research confirms Vista will not handle my legacy software or the operating system requires new hardware.

Chagri Lama

September 20, 2007 09:59 AM

Seems to me that the only solution is for M$ to listen to what is going on in its backyard and among its customers - and adapt!

To that end, they have to listen to the messages: 1. bloated software, 2. expensive

When you put these together and seek a solution, a lot can be done.

Example: "break the monolith into stones". Let the customer buy a much-much cheaper package with just a nucleus of features, at a fraction of the price of the monolith. The customer gets a nimble package, inexpensively. The customer does not feel ripped off paying 80% of the price for 80% of the features he/she will NEVER-EVER use!

Should the customer need a new feature, it can be added as an add-on from M$, for some smallish $$$. Now the product is much more adapted, it answers the needs of the customer and not just M$' need for revenue growth.

It was mentioned how reluctant people and businesses are to upgrade to Office 2007. I can add my own anecdotal evidence. For years I resisted mightily going to Office 2003 and used Office 97 across Win95, Win98, and WinXPPro. With Vista (inherited with the laptop, not willingly upgraded!) I also inherited Office 2003. It isn't bad, but is bloated in a horrible way. Office 2007? You've got to be kiddin'!!! Over my dead body ...

Mike Johnson

September 20, 2007 10:22 AM

The news gets worse for Microsoft. Projity has open sourced a free replacement of Microsoft Project. OpenProj is available on Linux,Unix, Mac or Windows and is a complete replacement that even opens existing native Project files. Microsoft Project costs $1,000 OpenProj costs nothing. Microsoft Project drives over $1 billion in revenue for Microsoft and is on 7% of all Office desktops. That may be past tense on all of them !!!! OpenProj has 100,000 downloads in the first month.

Steve Murray

September 20, 2007 10:51 AM

"People did not like Windows XP and was reluctat to use it until it really came down as leader. I admit that MS made huge mistakes with XP. But they will crush the linux, MacOS market with Vista. They have learned their lessons."

Are you stupid? Even consumers are reluctaNt to upgrade to Vista, partially because of security flaws and compatibility issues, and enterprises and big business are even more reluctant... Vista feels slapped together, and honestly, OSX is a much better operating system, the article is correct in saying that M$ is so deeply entrenched we'll never blast it out, but when it really comes down to it, Window is an inferior product, you either open yourself up to the mercy of the internet, or you have a security warning every 30 seconds. You need to have a PhD in computer sciences to figure out some of the cryptic error messages and find out what problems with your machine are. Save yourself the headache and get a Mac, forget Windows, and M$ and everything that they have to offer, because although they have the market share, they are the inferior product.

Steve Murray

September 20, 2007 11:01 AM

And one other thing, to the guy who said he loves his Xbox 360, I enjoy playing mine too, however since I bought it on launch (Nov. 22/05) I have gone through 3 of them and am currently waiting to recieve my 4th replacement. This is indicative of M$'s "commitment" to quality, and I'm am not an isolated case, just go to google and type xbox 360 problems and issues... M$ is a half assed company, making half assed products and releasing catch up patches/service packs when they realize they messed up albeit a little late. The only reason M$ is still where it is in the industry is because they are coasting on a wave that started a long time ago, and if we know anything about coasting on waves, eventually they run aground. I for one hope it's sooner rather then later.

I also agree with the person who said Apple is not looking for market share, but to be the Porche of the industry, when you make a better, more complete product, you have to charge more for it, however you will sacrafice mass-appeal for sex-appeal, which is fine by me, I'd rather drive a Porche then a Ford any day... How about you?

Richard Jones

September 21, 2007 10:00 PM

Steve Murray, I am actually the guy who said both things that you made reference to, hehe. I knew of the XBox 360 problems... I've been lucky enough to not have any, so far. Having said that, Sony Play Station is infamous for similar problems with newer consoles. That being said, I am completely not an M$ fan.

I love my Mac and wouldn't trade back for anything. I also used to really enjoy using Linux. Now I just don't have any need for it. My Mac will do everything and run anything that Linux will. The only difference is that it is wrapped up in a nicer UI and provides a more pleasurable experience, IMHO. Apple really does have the high end market cornered and they are perfectly content with being where they are.

Harshal

September 25, 2007 02:04 PM

Wow, I was surprised to see so many comments on my comment.
Let me answer each of them,
1. If Apple is not looking for mass market why it is now using Intel based Macs and also allowes Windows to run on it using Bootcamp?
(Technically I like the idea and I am waiting for Leopard to be released on Macbook Pro so I can buy it and run it with My favourite Windows. my wife can use Mac Os for her pro-tools stuff)

Upgrades is part of the life in IT and according to my own experience lot of people ran under same problems when Windows XP came out like they are having with Vista now. It is a part of the life.

According to my experience Windows Vista is a fine product and better than XP. People usually go for new Os only when they buy new PCs or servers otherwise rarely they buy an upgrade.
Buying new machines and an upgraded OS is alwasy cheaper than upgrading only the OS.

Hardware costs are falling like crazy and memories and HDD space is abundant. I would like to ask Joe Turner that even with a small business it is easy to buy the new hardware with cheaper options out there and upgrade to new OS automatically.

You are certainly not going to stand out in the line (like iPhone lines) to buy vista release or new Os release in future.

2. Linux lovers, I have been there, done that.
As a fact Linux have more security flaws and need more patches than Windows.
Also with any Open source software it is always easy for the hackers to crack it than any propritory softwares. MS products are exploited beyond the limit because they are easy to get and debug and find the hacks.

If you buy porsche and try to crack it need more time and resources.no easy money.

I don't give a damn to firefox as it is very inferior to IE. IE 7 is robust and love it.

I agree that MS is trying hard to cleanup it's image from the XP SP2 fiasco and delays for Vista. But hey every other computer has it and it is still the best and cheaper options than porsche.

If I am small business and have lessa money why do I care about Apple or OSX or Linux which requires more technical abilities than just buy a PC for half the price and use it.

Also with my business documents I won't put it online as my privacy is important and also I don't want to pay hefty price for internet and infrastructure access. Online office is for consumers and not for business.

Since windows is used by 90% people out there it is bound to have more problems than 10% using Apple.

I love Apple no doubt but I always prefer to use Windows becuase so much stuff out there can be helpfull for me.

If Apple blames MS for monopolies then why they sell iPhone only with AT&T. I don't want phone manufacturer to restrict me with certain manufactured. They messed up big time. I love my T-Mo. they unlocked all my past phones (7 of them) whenever I requested it and visited Europe.

MS sucks at PR level and they messed up and caused a grief to few people out there who cried more than other people.

MS do not care for people using pirated software outside the USA and europe as they know they can control the market and let them have an habit of using it. Even If entire USA stopped using MS product MS will still be a leader only based on other markets.

Stop hating MS. Just understand that it is tough for Gates to manage this big organization.

US government tried to dis-integrate the AT&T and now it is back one big Org.


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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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