Monday, July 26, 2010
Despite its huge profits, Microsoft has a popularity problem
Measured by profits, Microsoft trounces Apple and Google. In the most recent three months, Microsoft earned $4.52 billion, versus Apple’s $3.25 billion and Google’s $1.8 billion. But, dear investors, where is the love for this beaten-down company?
Frank X. Shaw, Microsoft’s vice president for corporate communications, recently tried a new tack to win respect. In a June 25 blog post titled “Microsoft by the Numbers,” he compared Microsoft’s record in various business categories with that of competitors.
Unfortunately, by trying to argue that Microsoft is doing well in all areas, including those dominated by Apple and Google, Shaw fails to show Microsoft at its best. Lost from view is what arguably is Microsoft’s very best story – its transformation into a powerhouse supplier of the specialized software that meets the complex needs of large corporations, what the trade calls selling to “the enterprise.”
Microsoft’s enterprise software business alone is approaching the size of Oracle. But despite that astounding growth, Microsoft must accept that, fair or not, victories on the enterprise side draw about as much attention as being the No.1 wholesale seller of plumbing supplies. Microsoft won’t receive the adoring attention that its chief rival draws with products like the iPad.
In a conversation this month, Shaw explained what prompted him to write his post. “I noticed some pretty critical conversations going on in the technosphere among the technorati,” he said. “There’s a gap between that conversation – ‘the company is not doing well, period’ – and what the company is actually doing.”
In the blog, he writes, “With Windows 7, Office 2010, Bing, Xbox 360, Kinect, Windows Phone 7, in our cloud platform, and many other products, services and happy customers, 2010 is shaping up as a huge year for us.”
By encompassing just about every product category under the sun – and then calling out Apple and Google, of all targets – Shaw draws attention to Microsoft’s weak spots.
Bing, its search engine, attracted 21.4 million new users in one year, Shaw says. Very well, but he does not mention the following: in 2007, the company’s online services group lost $604 million; in 2008, $1.2 billion; and in 2009, the year of Bing’s introduction, $2.25 billion.
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