Thoughts on Microsoft's Future

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By Luwingo
March 27, 2009

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Some time back (last June, if I recall correctly), I posted about the Lenovo Thinkpad laptop that I had then recently bought and converted into a Linux box. Since that time, I've become an avid user of many things F/OSS. A great deal has changed since then. I've found myself thinking about, and using, software in ways I never knew were possible. I've learned an enormous amount about the software I use and the way I use it. I've learned to like using the command line- it's better, in fact, than using the GUI for quite a lot of things. Most importantly, I've pretty much completed my conversion from MSFT fanboy to MSFT agnostic. I still like MSFT very much- but not as an investment or even an investing prospect. Below, I offer a (rather long and rambling, I admit) series of reasons for this.

After using Linux for about 8 months (BTW, I switched from Mandriva to Ubuntu in January and have never looked back since), here's what I've concluded: MSFT is in trouble in the consumer environment unless it comes up with something completely radical, and I find the odds of this happening to be minimal at best. I believe that Microsoft's hammerlock on the corporate IT market will continue quite safely for years to come, but I strongly suspect that MSFT will be seeing its market share in consumer computing erode slowly but surely over the next 5 years or so.

Here's why: Linux distributions are faster, more stable, more secure, and increasingly, easier to use by far than Windows. I currently run Windows Vista and Ubuntu 8.10 on a dual-boot system on my laptop, and I also run an OLD copy of XP as a virtual machine on my Ubuntu partition, and out of the three, I certainly find Ubuntu the easiest and most fun to use.

Using Ubuntu today reminds me of the thrill I got 15 years ago when I first started using computers properly- anyone remember the old Apple IIe? That's what I started out with. And that's what Ubuntu feels like- it's almost like being a kid again, staring wide-eyed at this amazing machine that did all this cool stuff that I only begin to comprehend. The difference this time is that, if I want to, I can actually peek under the hood- and understand what's going on.

The difference in user experience between Ubuntu and Vista is measured in parsecs, not miles. Particularly noteworthy are the tabbed browsing within the GUI and the 3-D desktop you get with Compiz Fusion. Vista doesn't have multiple workspaces, or tabbed GUI browsing, or a full 3-D desktop that can be rotated to display the entire polyhedron on your monitor. Ubuntu asks you for your password whenever you want to change a major system setting or install new software, which is what should happen. Vista slaps you with a wet towel when you want to do something as simple as launching an application or changing any setting, unless you forcibly remove the towel.

Then you have the applications within Windows. Within Vista, everything looks shiny and glossy, but then you start using stuff and you realize that nothing has changed. Everything is just as buggy and crash-prone as ever- and, worse, because of all the .NET nonsense that's been tacked onto the core operating system, things run like molasses after a while. And then there's my biggest bugbear: Vista doesn't come with Office software by default, so once you've forked over a couple of hundred bucks for the latest version of MS Office, you install it and you find that you have no idea where anything is anymore. Nothing makes sense in the drop-down menus, so you spend all your time trying to figure out how the hell you're supposed to get anything done in Excel.

With Ubuntu, though, you get OpenOffice 2.4.x by default (and the next version, 9.04, will come with v3.0.x, which is considerably better). OpenOffice still has a few kinks in it- try opening up certain types of Word files or really big Excel spreadsheets in OpenOffice and you'll get a nasty crash sometimes- but it's got features in it that Office just doesn't. It's little things within Calc- like, say, when you use array formulas. In Excel, if you reference an entire range of cells and press the Ctrl + Shift + Enter combination, you often get errors because only one cell in the destination range is updated. With Calc, the entire range is pasted over automatically. Also, you can now run VBA code natively within Calc- I've tried it, and it rocks. The compatibility is not 100%- there is stuff in Excel that will not run in Calc, usually in the form of 3rd-party add-ins and the like- but the amount of stuff you can do with Calc is so great that it's getting to the point where it's a truly viable replacement for Excel.

No matter what you want to get done (except maybe gaming), Ubuntu has a way to do it. Office software? See OpenOffice. Music? Use Rhythmbox or Amarok to play your tunes as a far superior and cleaner alternative to Windows Media Player. Burning CDs or DVDs? Try Brasero or Serpentine. Ripping media? Try Grip, Thoggen, or any of the other solutions for copying and encoding digital files. Watching DVDs? My personal favorite is gxine, but MPlayer, Totem, and Kaffeine aren't bad either. Specialized numerical computations and programming? Use R, my favorite programming language, or Octave, or SciLab, or combine any/all of them with EMACS and ESS. Gaming? Well, it's not perfect, but Wine and Cedega offer some decent (but not great) alternatives to installing a virtual machine. Speaking of which- you want a VM installed? Try Virtualbox or KVM or Qemu. Web browsing? The ubiquitous Firefox is the perfect choice, though there are plenty who still like SeaMonkey or Opera. Can't do without Internet Explorer? Well, if you HAVE to use it, there's IES4Linux too. Email? Try Thunderbird with Lightning and Sunbird or download Evolution for a complete experience. IM? Pidgin works beautifully on multiple accounts, eliminating the need for 3 different IM clients on 3 different accounts. Want Web 2.0 functionality like you get with Silverlight? Try Moonlight instead. If you want a home media center, why shell out big bucks for XP or Vista Media Center? Try MythBuntu or KnoppMyth instead- you won't experience the system bloat and you'll get some great features included that you won't get in the Windows solutions.

There is one big gap in Linux's capabilities right now: bleeding-edge games. If you're a hard-core gamer, you're stuck with Windoze. This is not because of hardware- device drivers have been written for the latest GPUs and sound cards for Linux that allow F/OSS to take full advantage of the awesome capabilities of the latest and greatest hardware- but because of software. The best games just aren't written for *NIX environments. This, however, may change in the future, and I'll get back to that later.

With Linux, the choices are endless- which is why Linux is intimidating to first-time users. With Windows, you get a very limited set of choices that you have to build on, and increasingly I've found that the building is getting too onerous to bother with. Windows Vista is slow, vulnerable, annoying, tedious, and distinctly unfriendly. There's plenty of horsepower beneath the butt-ugly hood of Vista, to be sure; but, like EVERY WINDOWS OS IN HISTORY, any Vista install is going to experience severe bloating over its lifetime.

This brings me, in an extremely roundabout way, to my main point. Microsoft has two basic cash cows- Windows and Office. Both are under attack in ways they've never experienced before. Of the two, Windows is arguably in better shape because, well, people NEED Windoze. People don't NEED Office- it's just a useful accessory that rounds out a system. In the corporate IT environment, you can't really do without Office and Windows for various legal and practical reasons. But in the home environment, who needs to be tied down to Office and its unnecessary and burdensome costs? Similarly, who needs to be tied down to Microsoft's annoying, restricted, and proprietary file formats when the F/OSS solutions are compatible with both MSFT standards and other standards?

What's worse is that I get the feeling that MSFT has kind of dropped the ball with developing these core products, and this is particularly evident with Office. Microsoft hasn't made any really useful changes to MS Office for a long time. They've just added in more junk than it really needs, in the name of making it "pretty". Furthermore, it strikes me that MS Office really isn't necessary for most users. Consumers want to be able to edit and send documents quickly and easily- fine. Use Google Docs. You want something more sophisticated? Okay, use Gnumeric and AbiWord. There's no real need anymore to buy the full version of Office- or even the student version.

The emergence of Google Docs as a viable alternative to Excel and Word documents brings me to my final point about cloud computing. It seems to me- and I claim severe ignorance here- that MSFT has lagged behind rivals Google and Amazon in this field. Consider: Google allows you to create a Google-based corporate email account for a low monthly fee with vast amounts of storage and tremendous built-in capabilities that rival everything that Outlook has to offer. For new and emerging small businesses, why waste time and disk space installing MSFT products when you can do everything at a lower cost on Google's servers?

Furthermore, consider what happens when you want to build and deploy a new application. As recently as a year ago, you would have to build everything in a Windows IDE, test the software, and then waste huge amounts of time debugging and re-writing code to deal with the problems experienced by end-users due to the quirks of their native IT environments. These days, all you have to do is build a virtual app (usually with a JeOS version of some Linux distro powering it), send it out to your customers, and let them deploy the app on their own servers- limited debugging time, no time wasted dealing with loser complaints, just time to write code and nothing else. These things amount to a code writer's dream. You can do this with relative ease using VMWare's (proprietary) products or Sun's (free) Virtualbox offering, but you are currently restricted to using ONLY F/OSS JeOS applications. Why? Because Microsoft refuses to let you create multiple virtual instances of the same Windows installation. This means that the vast majority of really bleeding-edge virtual applications are being developed in non-Windows environments, to run on servers with arbitrary operating systems, and Microsoft loses out on quite a bit of potential revenue.

I said I'd get back to the issue of gaming. Well, here's a very interesting story about "cloud gaming": The time will come when people no longer have to be tied down to a hardware or software platform to play the best games. When that day comes, what will the justification be for buying an expensive Windows client instead of a cheap and just-as-effective Linux client? With a Linux client, you just have to ensure that basic hardware drivers for a video card, sound card, Internet connection, and mouse/keyboard exist- that's it. When this happens- when, not if- Microsoft's last real reason for being "the only game in town" in operating systems will be blown away.

So, what's Microsoft's future? Despite what I've written above, I'm no MSFT-basher. I think MSFT is a great company that makes great software. Its software just isn't "great enough" any more. I use F/OSS any chance I can get now, and I love it- I love the thrill of learning something new, I love the way I can do (almost) everything for free, and I love the speed, responsiveness, and absolute stability of the software that I use. These are attributes you just don't get from Microsoft software any more. I believe MSFT will continue to maintain a choke hold on the corporate market long into the future, but I believe that everywhere else, it continue to lose market share and "mind share", and that its ability to innovate will decline in the corporate sector too.

That is why, looking to the future, I see a subset of 3 outcomes. First, Steve Ballmer will have to leave. Let me be perfectly clear: Mr. Ballmer took control of MSFT, the stock price has gone from nearly $120 to below $20, and has spent over 4 years doing nothing but treading water. This, despite MSFT's absolute dominance in its most important markets, and despite vast investments in areas such as search, home entertainment, and R&D. That is not the record of a successful CEO.

Second, MSFT will shed its non-core businesses. The Zune product line should be put out of its misery and the search division should face up to the fact that it just isn't good enough compared to Google and Yahoo!. Once MSFT streamlines a bit more and realizes that throwing huge wads of cash at the wall in the hopes of making some of it stick is no longer a viable option, then maybe we'll see some progress.

Third, Ray Ozzie (or someone else) will come up with a really killer idea that no one else has ever thought of, and it will completely change the company's fortunes. I see this as the least likely outcome. I have enormous respect for Ray Ozzie's achievements (Lotus Notes is the one notable exception- we have to use it here at work, and we HATE it for the PoS it is), but I know a little something about the way good ideas that start within a company's R&D environment never really make it to the top of a large organization. Microsoft isn't a large organization. It's a HUGE organization. The odds of a disruptive technology making it that far up the line are a little low for my liking.

In the interests of full disclosure, I want to make it quite clear that I have no financial interest in MSFT whatsoever. And, for the reasons I've outlined above, I probably won't any time soon either.

MSFT's day, in my opinion, is more or less done. They'll hang around for a long time yet- hugely profitable, conservatively managed, cash-rich, and capable of outspending everyone else, but also boring and stodgy. Normally I have no problem with boring and stodgy- as long as I see a business that is deeply undervalued. With Microsoft, I think the business is fairly valued and has been for quite some time. The only reason I would invest in MSFT is for the dividends- and those aren't quite juicy enough for me to shift money away from JNJ, PG, or XOM, thank you very much.