Microsoft Can Only Keep Growing The Hard Way: By Clawing For Market Share (MSFT)

Microsoft Can Only Keep Growing The Hard Way: By Clawing For Market Share Login With Facebook | Login With Twitter | Login | Register SAI Home Tech Entertainment Wall Street Markets Strategy Sports Lifestyle Politics EuropeData Misc. Your Money Video Latest Your News SAI Home Mobile Enterprise ToolsMedia Digital 100 Silicon Alley 100 Innovation Document Center HiveTapePRContributors Follow us on Facebook and get updates from SAI posted directly to your news feed 

Enter you email address and zip code to set up customized email alerts.

Email Zip Microsoft Can Only Keep Growing The Hard Way: By Clawing For Market Share Matt Rosoff | Sep. 14, 2011, 7:59 PM | 490 | 7 A A A   x Email Article From To Email Sent! You have successfully emailed the post.

Image: AP

See Also: Ballmer Lays Out The 7 Most Important Products For MicrosoftSteve Ballmer Just Gave A Shout-Out To ZuneMicrosoft Still Loves Yahoo, Even Without Bartz
Steve Ballmer and other Microsoft execs just finished talking to financial analysts for three hours, and while they tried to paint an optimistic picture -- as they always do -- it was really clear that Microsoft has no big ace in the hole to drive growth this year.

Instead, it's going to keep doing what it's been doing for the last decade -- trying to dominate the markets it already owns, and clawing market share away in other areas.

Take a look at what Ballmer mentioned in his speech as big areas of focus for the company's current fiscal year (which started July 1). None of these areas -- not one -- will add $1 billion to Microsoft's top line (let alone bottom line) in the current fiscal year.

The launch of Nokia Windows Phones. Microsoft thinks they can become a "very strong third ecosystem in the smartphone world." But recall that Microsoft only charges about $15 for each copy of the Windows Phone platform it sells. If the Nokia Windows Phones are a hit, Nokia will gather most of the revenue -- not Microsoft.The integration of Skype, which Ballmer hopes will clear regulatory hurdles in Europe in teh next few months. Skype is a "very very" real business, as Ballmer said -- but even so, it's only got $900 million a year in revenue. Microsoft is going to use Skype to boost other businesses -- Ballmer mentioned enterprise meetings via Lync, Xbox Live, and Windows Live. But as a standalone revenue source, it won't make much of a dent.Lync videoconferencing. Video meetings are a big trend, and his videoconferencing and IM app for corporations was one of the few product demos during Ballmer's speech. It's a fast-growing part of the Office family of products -- revenue was up 20% last quarter from the previous year. But it's also growing from a small base -- probably well under $1 billion at this point.Adding TV to Xbox Live. Neat idea if Microsoft can get the licenses signed. But the Xbox is a tiny part of Microsoft's overall business -- its division contributed only $1.3 billion in operating profits and $8.9 billion in sales last year. Microsoft's total operating income was $27.2 billion, and its total sales were just shy of $70 billion. Small potatoes.Windows 8. That's a cost center for FY'12, not a growth generator -- the product almost certainly won't be out until late calendar year 2012, or Microsoft's FY'13.Office 365. Office and its related products (Lync, Exchange for email, and SharePoint for collaboration) are the company's biggest and fastest-growing areas right now. Office 365 is the online version of these products. It's going to be important for helping Microsoft to make more money in China -- it's a lot harder to pirate a service than software -- and to capture more money from small businesses. But it just launched in April, and Microsoft declined to say how much uptake it's getting or what mix of Office revenues it expects to come from Office 365 this year. In fact, COO Kevin Turner -- the second-most powerful man at Microsoft -- noted that Microsoft actually made it easier to add Office 365 services to existing software contracts last year, and that's helping to drive growth. In other words, enterprise software is still the main driver here, and the transition to services will take a while.

Looking at all this, it's clear that Microsoft is not about to pull an Apple and come out with some great new product that makes revenue skyrocket.

Instead, it's going to ride the PC growth rate to keep selling Windows and Office, convince corporate customers to add new products, and try to take market share away from enterprise software competitors like Oracle (in databases), IBM (email), and VMWare (in virtualization).

That's not a sexy story, but it's allowed Microsoft to grow revenue pretty consistently at about 10% per year during most of the last decade, with the exception of the big downturn in 2008 and '09.

Please follow SAI on Twitter and Facebook.
Follow Matt Rosoff on Twitter.
Ask Matt A Question >

Tags: Microsoft, Windows 8, Office 365, Skype, Big Tech, Xbox, Steve Ballmer, Windows Phone 7, Nokia, Serious | Get Alerts for these topics » Advertisement: Short URL Share: Twitter Facebook Buzz Digg StumbleUpon Reddit LinkedIn Email More about embedding posts »Embed More about Alerts » Alerts Newsletter x

To embed this post, copy the code below and paste into your website or blog.

600px wide (preview)400px wide (preview) 300px wide (preview) Blackboard Home » Edit » Microsoft Summary Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to... More » Edit » Nokia Summary Nokia Corporation is a Finnish multinational communications corporation that is headquartered in Keilaniemi, Espoo, a city neighbouring Finland's capital Helsinki. Nokia is engaged in the manufacturing of mobile devices and in... More » Edit » Skype Summary Skype was founded in 2003. It’s based in Luxembourg, with offices in Europe, the US and Asia. It’s owned by an investor group led by Silver Lake and which includes eBay Inc, Joltid Limited and Skype founders Niklas... More » Edit » Steve Ballmer Summary Steven A. Ballmer is CEO of Microsoft Corporation and has worked with the company since graduating from the Stanford University Graduate School of Business in 1980. Bill Gates, who attended Harvard undergraduate with Ballmer... More » Edit » Windows Phone 7 Summary Windows Phone 7 is a mobile operating system developed by Microsoft, and is the successor to its Windows Mobile platform. It is aimed at the consumer market instead of the enterprise market like its predecessor. It launched in... More » Edit » Xbox Summary The Xbox is a sixth-generation video game console manufactured by Microsoft. It was released on November 15, 2001 in North America, February 22, 2002 in Japan, and March 14, 2002 in Australia and Europe and is the predecessor... More » Matt Rosoff is Silicon Alley Insider's West Coast Editor Contact: e-mail: AIM: mattrosoff Subscribe to his RSS feed | twitter feed
View his Google+ profile Ask Matt a QuestionRecent PostsBallmer Spot-Checks Financi...Microsoft Still Loves Yahoo...Steve Ballmer Just Gave A S... The Water Cooler
Receive email updates on new comments!cvszEmail7 Comments 0 0 Flag as Offensive kevin72 on Sep 14, 8:33 PM said: Or internationally. The vast majority of the world still doesn't have PCs or Tablets. Reply 0 0 Flag as Offensive pu$ybref on Sep 14, 9:10 PM said: @kevin72: At first, all my friends first getting on the internet wanted to video chat, then they got tired of that, then just texted, then got tired of that, most dont even talk on the internet anymore, just log on to play some youtube files, the novelty has worn off, GAME OVER DUDE. Reply 1 0 Flag as Offensive JohnCha on Sep 14, 8:45 PM said: Don't forget by extorting money from Android manufacturers with useless patents that they aren't even going to look at after they license them from MS. Reply 1 0 Flag as Offensive James Watts on Sep 14, 8:54 PM said: "Instead, it's going to keep doing what it's been doing for the last decade"

Working towards the lowest common denominator. Great move. Reply 0 0 Flag as Offensive lizhias on Sep 14, 8:54 PM said: ===== { w w w }{better-----wholesaler }{ us } =======

welcome to this website----free ship ping accept pay pal----

we provide all kinds of high quality shoes and the other things

if you are interested in it don't hesitate to search our website

hoping you can have a good shop ping experience

--- -- (w w w ) ( cabikini ) ( c o m ) --- ---- -- Reply 0 0 Flag as Offensive Eko Zen Strive Prasetyo on Sep 14, 9:12 PM said: Oh I am sure Ballmer will claw things up, literally. He is crazy like that. Just look at him! Reply 0 0 Flag as Offensive jar jar on Sep 14, 9:25 PM said: So with Windows 8, Microsoft will charge $15 for the phone version.
$30 of tablet version, $200 for desktop version, and $1000 for server version.

So how is Microsoft going to maintain their profit margin, better start buying
arm chip manufacturer, flash memory.

One OS to rule them all. Reply Join the discussion with Business Insider
Login With FacebookLogin With TwitterName (Required)Email Address (Required but never displayed)URLComments (You may use HTML tags for style)Join the discussion with your Facebook Login Send Us A Tip!LIVE: The LatestSee full page »Get SAI Emails & Alerts Learn More »Customized instant email alerts(sample)Business Insider Select(sample)SAI Select(sample)SAI Chart Of The Day(sample)10 Things In Tech You Need To Know(sample)Apple Investor(sample)Google Investor(sample)Microsoft Investor(sample)More:The Wire Select(sample)Clusterstock Select(sample)Money Game Select(sample)War Room Select(sample)Sports Page Select(sample)Politix Select(sample)The Life Select(sample)Tools Select(sample)Europe Select(sample)Your Money Select(sample)Money Game Chart Of The Day(sample)Sports Page Chart Of The Day(sample)10 Things Before the Opening Bell(sample)Politics in 60 Seconds(sample)Instant MBA(sample)Marketing Mondays(sample)Breaking News Alerts(sample) Advertisement Your Money NASDAQ Composite 2,532 +40.4 (+1.595%) S&P 500 1,173 +15.81 (+1.348%) NYSE Composite 7,110 +89.17 (+1.254%)

Active Users on BI right now...
Click for more live stats »

Game Changers In Tech Innovation

THE ELITE: These Guys Are Google's Very BestYes, Microsoft Did Change The World More Than Apple10 Things Missing From Apple Products That We Desperately Want BackHere's What The Apple TV Will Be Like Gina Bianchini's New Venture Tries To Change The World One Step At A Time BONUS: Are These 10 NYC Startups You've Never Heard Of Brilliant Or Bombs?  Startup Document Center Templates To Jump Start Your Business Business Plan Exec Summary Sample
By-Laws Financial
Model See All » Become a ContributorRead MeHarry McCracken

|Windows 8: The Verdict Isn't In

Hasty thoughts on Windows 8 based on cursory use of it aren’t all that useful. 

John Gruber

|Why Does Microsoft Keep Showing Us Unfinished Products?

Florian Mueller

|Serious Threats Forced Google To Buy Motorola 3

Geoff Cook

|Google+ Solves A Problem No One Has 2

Jay Yarow

|Don't Mean To Be Rude, But Mike Arrington Wasn't A Very Good Angel Investor 8

Personal Branding Blog

|Positively Share Your Personal Brand

Deborah Sweeney

|Advice During a Deep Recession

Rick Robinson

|Aol + Yahoo! Should Begin and End With Mobile + Local

Tom Johansmeyer

|NO FACEBOOK IPO UNTIL LATE 2012

Kapitall

|Broadcom to Buy NetLogic for $3.7 Billion: Memory Chip Stocks with Hedge Fund Buying

Kapitall

|Cable's Cloudy Future: 5 Cable TV Stocks Bucking the Trend

Greg Voakes

|LinkedIn Reaches 5 Million Students in Partnership with Experience

More » The HiveAbout The Hive »What Smart People Are Reading Right NowJefferies Describes The Endgame: Europe Is Finished | ZeroHedge10The 2011 Disrupt SF Battlefield Final Round Companies | TechCrunch9When it comes to disclosing potential conflicts of interest, New York Times shouldn’t throw stones at Arrington | Poynter.7Yahoo for Sale: Possible Bidders Circling " Including Marc Andreessen " as Board Pressure Mounts - Kara Swisher - News - AllThingsD7A VC: Six Slides, Three Slides, or No Slides6Along With Subscriptions, You’ll Soon Be Able To Update Twitter From Facebook | TechCrunch5With 600K Members, Fab.com Goes Beyond Flash Sales And Sets Up A Virtual Pop Up Shop | TechCrunch5Psst: The Foursquare Push API Is Coming Out This Afternoon | Betabeat " News, gossip and intel from Silicon Alley 2.0.5AOL, Microsoft, Yahoo in Ad Deal vs. Google - Peter Kafka - News - AllThingsD5Move Over Social Media; Here Comes Social Business | Fast Company5MoreLessSee All »Most Read Read  Commented  Recommended 

REMINDER: Here's Who Gets Crushed If Greece Goes Bust 647,916 Views

Meet The Richest Person From Every Major Country In The World 335,136 Views

WHERE ARE THEY NOW? What Happened To The People In Microsoft's Iconic 1978 Company Photo 143,111 Views

EXCLUSIVE: What Happens Inside A Fancy Wall Street Party At A Museum 119,007 Views

Obama Sends Out Creepy Email: 'Sometime Soon, Can We Meet For Dinner?' 117,716 Views

Obama Sends Out Creepy Email: 'Sometime Soon, Can We Meet For Dinner?' 296 Comments

NOT AGAIN! Audience At GOP Debate Cheers For Death 137 Comments

RUMOR: Sarah Palin Had A One-Night Stand With A Future NBA Star When She Was A Sports Reporter In 1987 106 Comments

Why Social Security Is A Ponzi Scheme And Rick Perry Is A Genius 93 Comments

Now 62% Of Americans Think Obama Is Doing A Lousy Job On The Economy--And They Hate His Jobs Plan 82 Comments

Loading, please wait... powered by See more » AdvertisementThanks to our partners A-Z Index Companies Authors Tags Site MapLatestContributorsVideo Tools Job Listings Lists & Rankings Digital 100 Silicon Alley 100 Silicon Valley 100 Clusterstock 50The Life 50 America's Best Colleges Best Business Schools Sexiest CEOsMore Your Account Register Change Your Email Preferences About BI About Jobs at BI Masthead Contact Advertise Mobile Follow BI Email Newsletters Alerts RSS Twitter LinkedIn Facebook Verticals Tech Entertainment Wall Street Markets StrategySportsLifestyleToolsPoliticsEuropeData CenterMisc.Your MoneyVideoLatestPR

* Copyright © 2011 Business Insider, Inc. All rights reserved. Registration on or use of this site constitutes acceptance of our Terms of Serviceand Privacy Policy.| Disclaimer

Powered by MongoDB | Hosted by Datapipe | Web analytics by Empirical Path

var _comscore = _comscore || [];_comscore.push({ c1: "2", c2: "9900186" });(function() {var s = document.createElement("script"), el = document.getElementsByTagName("script")[0]; s.async = true;s.src = (document.location.protocol == "https:" ? "https://sb" : "http://b") + ".scorecardresearch.com/beacon.js";el.parentNode.insertBefore(s, el);})();

View the original article here

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

THE GOOGLE INVESTOR: iPad Market Share Grows While Android Tablet Share Shrinks (GOOG)

The Google Investor is a daily report from SAI. Sign up here to receive it by email

Image: AP

GOOG Strong In Up Market 
Markets are on the rise for a fourth straight session after major central banks coordinated efforts to offer liquidity into the strained European banking system. Shares of GOOG are up strong, exponentially more than the rest of technology. Catalysts include continued Android momentum in the smartphone and tablet markets worldwide; Motorola acquisition approval and integration; regaining ground in China in search and pushing forward in mobile; any signs of life for Google TV (including Motorola); the roll-out of Google Music and social network Google+; and progress in other newer initiatives (location-based services, mapping, gaming, Chromebooks, etc.). The stock trades at approximately 11.2x Enterprise Value / EBIT, inexpensive relative to historical trading levels.

Why Did Google Buy Zagat? (TechCrunch)
Marissa Mayer, Google's VP of maps and local, says that aside from the strong brand the company has created over the past 32 years, Zagat has a lot of great partnerships, content, and a great team behind it. "We thought there was a lot of value for our users," she says. "Users want to know, what to expect when they're going somewhere." Could spell trouble for OpenTable. Zagat will remain separate from Google Places. And it's ZaGAT, pronounced like cat.

Android Tablets Lost Market Share In Second Calendar Quarter (Various via iDygest)
According to IDC, Apple not only continues to dominate the global tablet market, its share of the market continues to grow while Android's slips, even to the hands of RIM's PlayBook and HP's TouchPad. Worldwide media tablet shipments rose by 88.9% on a sequential basis and 303.8% year-over-year in the second calendar quarter of 2011. Apple took a 68.3% share in the second quarter, up about 3% from the first quarter. Android tablets slipped to 26.8% of the market from 34% in the first quarter.

Microsoft, Yahoo And AOL Team Up To Take On Google (All Things Digital)
In an effort to outsmart Google, AOL, Yahoo and Microsoft have reportedly agreed to share remnant ad inventory with each other. Can anyone say collusion? Bing now powers Yahoo search in North America and the two companies share advertising sales and revenue, but Google still brings in the lion's share of online-ad cash. Under the plan, each of the companies will sell each other's "Class 2 display" inventory or leftover banner ads the companies can't sell on their own. Why doesn't Microsoft just buy both companies?

Google Buys Patents From IBM (Bloomberg)
Google has acquired a group of 1,023 patents from IBM. Terms of the transactions were not disclosed. The transaction is the latest move in the ongoing arms race in the mobile computing business. In particular, the company would appear to be seeking ways to protect Android.

Julian Robertson And Sequoia Say Google's A Great Investment (Seeking Alpha)
Julian Robertson is an investing legend. The Sequoia Fund isn't too shabby either. Both like Google as an investment idea. How strong is Google's search share? The days of someone coming up with a clever algorithm and competing against Google in search are essentially over. There’s really only one competitor out there and that’s Microsoft. And we all know what a money pit that is.

View the original article here

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.