PC Industry pundit Robert X. Cringely comments on Microsoft’s xBox news – excerpt:
It’s an expression made popular in Silicon Valley years ago by Andy Grove of Intel: “inflection point.” It’s that abrupt elbow in a graph of growth or decline when the new technology or paradigm truly kicks in, and suddenly there is no going back. From that moment, the new stuff takes off and the old stuff goes into rapid decline, whether it is a new standard of modem, a new video game, a new microprocessor family, or just a new idea. I think we’ve just hit such an inflection point and—though most of us still don’t realize it—the personal computer, video game, and electronic entertainment businesses will never be the same.
There are three pieces to this puzzle. First, as I noted last week, Bill Gates deliberately blabbed some details about the next xBox game system, which is to be officially announced this week. This gaffe, which I don’t believe was a gaffe at all, came for specific reasons that are still not clear, but the implications of Gates’ remarks ARE clear—that xBox 360 will perform many functions that currently require a home computer. Not only will xBox 360 play video games, it will play music and movies, surf the web and probably even offer a non-PC platform for voice-over-IP.
What message does this send to Microsoft’s hardware OEM customers that make home computers? What is Microsoft saying to Dell, HP, Gateway, and others? For all the customer bullying we saw proof of in the Department of Justice’s anti- trust case against Microsoft, one thing the kids in Redmond never did was propose to undercut their hardware OEMs by building a Microsoft PC. But now that’s precisely what Gates has proposed, and it is coming in time for this Christmas.
I don’t know why Microsoft would make this move at this time. Maybe the game business has become more important to them than home PCs, maybe some particular advantage over the PlayStation3 just has to be touted, Maybe Microsoft feels at a disadvantage to Apple’s upcoming movie service. Whatever the reason, there is no going back now: Microsoft is in direct competition with its own customers. Full article >
We can answer the “why” question with a number of different answers, all pointing to the same problem: commoditization, open source and other alternatives (Apple, anyone?) – but the bottom line is making good with shareholders is their mission and its not a battle they’ve been winning lately.
Microsoft isn’t and hasn’t been a growth company for some time. Going after your customer’s business is one strategy for injecting some growth back into the business, at the expense of independent software makers and OEM hardware vendors everywhere.
Who benefits? Those that supply and build hardware for Microsoft, among others. Certainly ATYT was an example today.
I still think they are in the fight of their lives, but perhaps Microsoft has decided that consumers, rather the information technology professionals, is the big growth area and that’s one battle they may well have a sustainable edge at winning.
05.05.13 22:58 #