Here’s the closing paragraphs of my weekly update at GigaOM Research. I started by looking at recent news about Zygna, Accenture, and Intel, who are all being whipsawed by the shift away from the PC and the rise of proximal devices (smartphones, tablets, and other ‘mobile’ devices). I finish with Microsoft:
Last fall, Microsoft CEO, Steve Ballmer, outlined his new vision for Microsoft in a letter to shareholders, and rumor has it that this week he will be announcing a major reorganization of the company to try to make that vision a reality. Bottom line: I think much of that reorganization will fail because he is still gambling on Windows and Surface to break through, and they won’t.
But what might emerge from the ashes of that house on fire could be a credible player in the very different world of enterprise IT coming down the pike. Let me characterize it:
100% Cloud — We are continuing to hear reasons why companies cannot move everything into the cloud, but in the final analysis they are quibbles disguised as prudence. Ultimately, anything that can be done on premise will be possible in the cloud, with the exception of physical on-site security (which is like pretending that your money is safer in the cookie jar under your bed than in a bank).
100% Proximal — There will be functionally zero stationary computing devices in just a few years, and people will be always on, wherever they are.
100% IT-less — The downturn in Accenture’s fortunes is the start of a collapse in enterprise IT consulting, and that will rapidly cascade across the industry. Why? The use of cloud-based enterprise software and proximal hardware cuts a huge hole out of the middle of what those consultants configure for their clients. Note that this won’t stop with outsourced IT staff: it means the end of IT internally, too. (Yes, companies will still own computing devices — on the factory floor, and in the hands of retail clerks. But increasingly they will be communicating with back office software running in the cloud.)
I am going to get a lot of flack for zooming ahead five years based on these trends, but I will stand by the prediction.
This is the deep background on the future of enterprise software in general, and specifically the form factor of future cowork (collaborative and cooperative) tools.
The enterprise software companies that will weather this sea change will be the ones that drop their efforts to stop the tide. They will have to make the change that Krzanich is making at Intel, betting on the future instead of fighting it.
One last prediction: Ballmer’s reorg this week — if it comes as expected — will be a hedge. The reorg that will indicate that Microsoft has turned the corner will be when Ballmer leaves the company, and a new CEO joins, shuts down the company’s hardware efforts, and deadpools Windows. I give Ballmer another year, at most, before the shareholders demand his head.
Morris gives a quick summary of some Android ‘desktop’ machines — mostly tablets that can dock with a keyboard, like HP’s Slate 21, various Acer products, and Samsung’s ATIV Q — but misses the point completely, sounding almost apologetic for suggesting these things might have utility.
I’ll go strongly in the opposite direction. Windows is (nearly) dead, especially on smartphones and tablets. Android will soon be the largest OS in the world. Inevitably, Android will become the largest player in the shrinking laptop/desktop market. Mac OS X and Android are the one-two punch for Windows, and that includes the desktop/laptop market, too.
Microsoft continues to move away from a commitment to its own OS and hardware platforms. We’ll be playing Xbox games on iPhones in no time.
Perhaps no coincidence this is announced a week before the rumored reorg in Redmond?
Windows is (nearly) dead, and we tumble into the post PC era, and they can’t get anyone to use their phones or tablets. But Microsoft still has opportunities in the enterprise software space, so long as the company doesn’t spend everything in an attempt to resuscitate the rapidly cooling carcass of that OS.
(via GigaOM Research)
Rick Sherland of Nomura Holdings, cited by Ian King and Dina Bass in Microsoft’s Surface Tablet Is Said to Fall Short of Predictions
There is no going back for PC sales, and for the decreasing number of users that require a ‘real’ PC there are other solutions that are significantly better than Windows 8-based PCs, especially high-end, well-designed OS X-based laptops.
We are well past the time of Peak PCs, and Microsoft doesn’t really have a response. So far they have sold less that 1.5M Surface tablets since October’s launch. Apple sold over 22M iPads in the last quarter of 2012 alone.
Jun Dong-soo, president of Samsung’s memory chip division, doesn’t think much of Microsoft’s latest efforts:
John Paczkowski, Windows 8 No Better Than Vista, Says Samsung Exec
“The global PC industry is steadily shrinking despite the launch of Windows 8,” Jun said. “I think the Windows 8 system is no better than the previous Windows Vista platform.”
No better than Vista? Too cruel, too cruel.
And Jun was just getting started. That Vista quip was part of a one-two sucker punch that ended with a slag of another one of Microsoft’s big new efforts.
“[Microsoft’s] rollout of its Windows Surface tablet is seeing lackluster demand,” he said. “Meanwhile, previous vigorous pitches by Intel and MS for thinner ultra-books simply failed and I believe that’s mostly because of the less-competitive Windows platform.”
A brutal commentary on Windows 8, which has so far utterly failed to catalyze PC sales.
When will Microsoft’s board finally get rid of Ballmer?
Somehow I missed this post from Sarah Lacey in December, when Yammer crashed for a day, and Pandodaily’s entire work flow crashed along with it.
Let this be a warning for companies trying to run their business on freemium cloud apps. And as a business owner, here’s my response to cloud companies: If you expect me to run my company on this, it has to work. I don’t give a shit how pretty the UI is. I don’t give a shit about your mobile app. I don’t give a shit how cutesy your name is or if your company has a mascot of some cute animal. I don’t give a shit if I’m paying you or not paying you. It has to work. And should something go wrong, you owe me some sort of communication letting me know when it’ll be back up.
In the early years of Salesforce.com, the users would go apeshit if the service was down at all. This was even before the era of social media when venting was a lot harder, but the outcry was still huge. CEO Marc Benioff used to sigh and point out that the software was up more than 95 percent of the time — something that users should be impressed with.
But the message was loud and clear: If you want us to stop using on premise software and use this instead, it has to work. Back in those days, people used the analogy of electricity with on-demand or SaaS or Cloud software. You just turn on the light switch, and there it is! Like magic! If that’s the pitch, you have to deliver with the reliability of electricity or plumbing or whatever your utility analogy is.
And because Benioff understood selling to customers and marketing, he got this. And Salesforce got rapidly better.
The problem with so many of the new generation of software moguls and the obsessive move to the “consumerization of enterprise” is that they don’t know how to build enterprise-grade software that doesn’t crash. As consumers who just want to Tweet witticisms, we can forgive a Fail Whale. When a Fail Whale can bring your business to its knees, it’s simply not acceptable. It’s when launch first and iterate later will cost you your entire customer base.
Especially enjoyed the description of her team trying out a bunch of alternatives to Yammer, desperately trying to get up and running again.
And this one-liner:
Using Chatter is like watching your dad trying to moonwalk. “Hey, look, kids! We can be cool and social too!”
Now Microsoft is only left with two instant messaging/video/voice solutions to juggle, Skype and Lync. One too many I think, so I am betting on Skype: the better brand.
Burglars break into Microsoft campus, steal iPads, but ‘no Microsoft products were reported stolen’ (via 9to5 Mac)
Two stats almost collided in my stream today, with one similarity: small numbers that say a lot. First, an astonishingly small proportion of Facebook users — 0.067% — in the Facebook Governance Vote. That’s a hundreds of millions shy of the 300 million self-imposed requirement for Facebook to take any notice of the results. Which, of course, might be the result Facebook wants.
A second minute number comes from a study from Chitika that shows 0.13% of North American tablet traffic is coming from the Microsoft Surface tablet, which you could try to spin as ‘slow initial uptake’ but which I call ‘death eating a soda cracker’.