Friday, April 19, 2013

Letter from the editor: Microsoft may make a comeback or crash

By Winston Alder, Business and Ads Manager

Microsoft (NASDAQ: MSFT) is a company in transition, an industry giant slowly growing old and fading into irrelevance.            

Once a young star with a streak of innovation and effective management, the Microsoft of today is rarely mentioned in the same sentence as any of these qualities.
  

Bearish analysts may be correct in their prediction that Redmond is fading into the sunset, but it may just be a slumbering giant is waking from its nap.
   
Financially, Microsoft is in a strong position. If CEO Steve Ballmer has done anything right, it has been to strengthen the bottom line of his company.
  
Similar to Apple (NASDAQ: APPL), Microsoft has massive cash reserves totaling $68.312 billion and a proportionately small amount of debt at $11.947 billion.
   
However, cash holdings aren’t what matters here — consumer perception and product strength are. This is a cultural change that is damaging Microsoft, as innovation has taken a backseat and profits are the measuring stick of how well the company is doing.
  
This change is reflected in the catch up Ballmer and Co. are constantly playing with the rest of the industry and their complete lack of ground-breaking products.
  
Speaking of products, it has been a long time since a Microsoft product was the hottest selling gadget of the holiday season. By my count, the last time was the Xbox 360, nearly a decade ago and certainly not the Surface, Windows 8, Windows Phone 8 or the Zune.
  
The similarity of these products is glaring. Each has been Microsoft’s response to the iPad, the iPhone and the iPod.
  
Microsoft is the teenager, always one step behind the cooler and older college-age cousin Apple, no matter how hard Microsoft tries. This slow bureaucracy drives talent away while simultaneously hemorrhaging market share and brand image.
  
In my personal experience, it takes two hands to count the Project Leads that have jumped ship to industry leaders or start-ups.
  
A technology company with problems reacting to new tech quickly ends up another Kodak or Atari. While Microsoft is a far cry from a bankrupt camera manufacturer, the similarities are mounting.
  
So this humble analyst has some suggestions to corporate leadership busy reading The Mooring Mast’s opinion section.
  
Start with bringing back the traditional Windows layout — Windows 8 is great on a tablet but horrendous on a PC. Some of us still use a mouse and dislike finger smudges on our screens.
  
Next, chop the Surface back to traditional tablet dimensions, and relaunch it cheaper and with a less confusing name.
  
Finally, foster a culture of innovation and creativity with your Project Leads. Allow them to spearhead good ideas quickly and efficiently, without 25 levels of approval to even begin working on product design.
  
Xbox Music is a bright spot within the Microsoft conglomerate, but most people ask, “what is Xbox Music and can I only use it on an Xbox?” Everyone knows what Spotify is, yet Xbox Music is an unknown service that predates Spotify by two years.
  
Locking Xbox Music to Windows Phone 7 and 8 is a perfect example of the corporate blunders that plague Microsoft: nobody buys a Windows Phone for the music, but millions of people would use it on iPhones and Androids. How no one is pointing this out at board meetings is beyond me.
  
Shape it up Microsoft.
  
There is no excuse for a company with $56.365 billion in cash to continue to hemorrhage market share and cultural identity.