Very little numbers in that WSJ story

The MSFT press release is here:
[microsoft.com...]

And it looks bad:

Microsoft Corp. today announced revenue of $13.10 billion for the fourth quarter ended June 30, 2009, a 17% decline from the same period of the prior year. Operating income, net income and diluted earnings per share for the quarter were $3.99 billion, $3.05 billion and $0.34 per share, which represented declines of 30%, 29% and 26%, respectively, when compared with the prior year period.

These numbers are quite a contrast to those posted by Apple [webmasterworld.com] earlier.

Well, Apple is a much smaller company and their markets are quite different. Apple makes money on their hardware. Microsoft is a software maker. Microsoft also makes a lot of their money on the corporate/enterprise side. I don't think that's necessarily a fair comparison.

I talked with a regional MS Director recently and the 4Q results are in line with what I heard then. Enterprise and corporate environments are not expanding now and there is no incentive to spend money on moving to new software versions. Therefore that part of the market is almost in a stand-still. On the desktop side there is still movement because of replacing of old hardware and selling of OEM products with new hardware.

Silicon Valley will be of little boost for the near future, all of California is in some serious financial trouble and people are losing their jobs/homes etc in record numbers.

I think we're seeing a case of too many new gadgets and apps combined with too few leisure dollars to spend, MSFT still seems well positioned on that front when things recover.

Given the economic circumstances, I'd say Microsoft is doing pretty well.

Other than Google, some defence contractors, and a handful of green energy startups, are any technology companies doing better than this?

Ok, drug companies are doing pretty well too from this blown-out-of-all-proportion pandemic swine-sniffle.

Kaled.

There's another real problem too: when Google release Google Chrome OS, it'll probably be Windows-compatible by inclusion of the WINE project. It's only a theory, but it could mean a big hit to Microsoft's sources of revenue. <snip>

[edited by: engine at 3:51 pm (utc) on July 24, 2009]
[edit reason] See WebmasterWorld TOS [/edit]

If only MSFT has some big money-making project to launch in the near future.

Oh, wait...

I haven't tried WINE but I know enough about Windows to be very sceptical of any claim to being able run Windows programs reliably - hell, Windows struggles to Windows programs reliably! I'm sure developers could get their software to work ok under WINE, but the reality is most won't bother unless there is money in it.

And if money is the motivation for people using UNIX/WINE/Chrome-OS instead of Windows, that means they want free software so that means developers won't make the effort to make their software WINE compatible. Sure, some stuff will work fine and other stuff will work ok, but it's a huge leap to assume that WINE is going to kill Windows.

Chrome-OS will have to kill off all the other versions of Linux before it has a prayer of making major inroads into Windows market share. I could be wrong, but techies tend to use Linux and techies tend to be very aware of privacy issues, consequently they are very suspicious of Google, consequently, they are not likely to switch to Chrome-OS in droves.

Even on netbooks, where Chrome-OS would have the best chance of domination, it could easily fail if Microsoft continue to supply and support XP at minimal cost.

Kaled.

[edited by: engine at 8:04 am (utc) on July 25, 2009]
[edit reason] Tidying up [/edit]

bill:

Microsoft is a software maker

And a hardware maker(/vendor) as well: keyboards, mice, zune, ... and has a strong partnership with those who sell hardware to have a version of windows included with every box they ship. Something that's pretty hard to avoid, just ask the Linux fans how hard it is to buy new hardware from the "A" brands without paying for a useless -in their eyes- windows license.

kaled:

Other than Google, some defence contractors, and a handful of green energy startups, are any technology companies doing better than this?

Apple for starters, and they play on the -oh the irony- higher price points
in the market [typically the harder hit part of the market in an economic decline], yet they make significant increases in both revenue, profits and profitability in a quarter where Microsoft makes for decrease on all of them.

Yes, I was generalizing in terms of their primary income stream. It's still an Apples & oranges comparison. ;) It's easy to see that Apple is making most of its revenue off iPhones, iPods and iTunes, and not the Mac which still only has single digit market penetration (and I believe has lost market share this year).

I haven't looked at Apple figures, but I'm sure you're right. Their success in recent years stems from new products and diversification (within a limited sphere). There can be no doubt that Apple are innovators that deserve their success. If they were to bite the bullet and license the manufacture of Mac-compatibles (thereby concentrating on selling the OS) they could probably threaten Microsoft.

Kaled.

thereby concentrating on selling the OS

Apple has historically used many open source software as base for their Mac OS series (the Mach kernel, FreeBSD and NetBSD for example) so it can hardly be defined their core product.

I didn't describe Mac OS as "their core product".

Looking at IBM and Microsoft, the lesson from history is that there's more money to be made from computer software than computer hardware. Initially, Apple revenue would fall but an increase in market share should more than fix that.

It's also worth noting that whilst a PC-compatible computer can only run Windows, a Mac-compatible computer would be able to run both Mac-OS and Windows, so manufacturers would inevitably migrate to Mac-compatible hardware, which would itself be highly beneficial to Apple.

Kaled.