Monthly Archives: April 2008

Microsoft Apocalypse 2018

April 2018. DIGooGle makes popular a GigaCrunch post: Microsoft Apocalypse

Vista was the beginning of the end. A few years after its launch, the debacle was inevitable. First the SMEs and SOHO abandoned Microsoft when it stopped Windows XP support. By that time Google had launched G-Enterprise, consisting of Google Apps + Skype Enterprise Edition + + Goobuntu Enterprise Desktop + Android Nomad Office. To this package companies could add Google Shared Drive, as a common network storage, and Apps Engine to develop the company Intranets, Extranets and any company web application.

SMEs, fed up with Microsoft tyranny on expensive licenses for  Windows, Office and Exchange,  moved to G-Enterprise. Not only companies saved licenses, but also increased productivity, shifting employees mindset to use network collaborative tools like Google Docs, Salesforce or Skype. Meantime, the Cloud on which these tools resided was safely managed by Google. Microsoft SaaS offering came too late, and no one trusted Hotmail as a serious email for work.

Multinationals followed the G-Enterprise trend some years later, hitting severely Microsoft licenses sales, with the Server segment already dominated by Linux.

On the consumer front, Apple ended being the winner. After some Microsoft viral campaigns that destroyed Microsoft image, consumers were embarrassed of admitting they had been fooled to buy Vista. Apple got even more iconic and stylish, and not having a Macbook or an iMac just meant you were not in. Some teenagers issued (and won) lawsuits against their parents for the emotional damage of forcing them to use a Windows PC instead of a Mac. Linux still commanded some market share, thanks to LinuxMCE, mainly used by lovers of P2P file-sharing free content. Linux remained the warranty for freedom against any monopolistic move from Apple.

Such was the hit taken by Microsoft with its loss of licenses income, that it was forced to split and sell its two profitable businesses: 

  • first the gaming business went to Google that transformed the console into Gbox360 featuring targeted advertisement within the games, 
  • then the on-line business, branded Yahoo Live, went to News Corp, that had already acquired Facebook years before

Microsoft software license business was finally acquired by IBM, still nostalgic of a decision they should have made 40 years earlier. Microsoft was merged within IBM Lotus division, that surprisingly still managed to sell to banks. Windows was renamed OS2 Warp Second Edition, and IBM licensed it to Lenovo PCs and Thinkpads.

A sad ending for a company that transformed the world with its software.

Note: This fiction prediction might not come true. We expect Microsoft puts the means to avoid it.

Mobile Music keep growing in Japan

Thanks to KDDI Lismo music service, 90% of the digital music sales in Japan comes from mobile, according to Wireless Watch Japan. The Record Industry Association of Japan (RIAJ) has reported 2007 figures, with total sales increasing for third year in a row, and with an spectacular 91% increase in Mobile Music downloads.

Quoting Music Media Watch, :
“Total music sales for 2007 in Japan came to JPY 466 billion (US $4.66 billion). While CD/DVD sales declined 4% from the previous year, digital downloads jumped up 41% to JPY 75.5 billion (US $755 million), comprising 16% of all music sold in Japan. Mobile downloads accounted for JPY 68 billion (US $680 million), more than 90% of the total figure for digital sales.”

Japan is the biggest mobile music market in the world, fifty times bigger than the German one. This raises 2 questions:

1) Would it be so successful if the RIAJ had imposed a tax on mobile phones to account for (or rather to legitimize) piracy?

2) Will the 3G iPhone be able to grab a significant share of this market? Will the iPhone succeed in Japan?

Why Google should buy Skype

Add GMail, Google Docs, Google Calendar, and Skype in a package. Is there a better value proposition for SMEs and SOHOs for their IT and Communications infrastructure?

Add a Linux distro for the business desktop, supported by Google, and you have a killing package for the small and medium business, with an unbeaten TCO.

Google is determined to enter into the corporate market, as the recent partnership with demonstrates. Large enterprises and multinationals might be reluctant to outsource part of their IT to Google, arguing concerns on security. Yet Google Data Center is more reliable than most corporate data centers. A fire two years ago in their Data Center sent hundreds of servers into ashes. No Google end-user was impacted.

It might take longer to convince large companies, but for SMEs the proposition is too strong to be neglected. Skype, with SkypeIn and SkypeOut, plus Google reliability, is a terrific solution for enterprises, benefiting not only from cheap voice, but also from IM, Videocalls, file-sharing, and potential integration with Gmail and Google Apps.

Microsoft should be worried.

Nokia disappoints, Google exceeds expectations

Nokia google
Nokia Q1 results have disappointed analyst, even if revenues grew 28% YoY to reach $20 billion and net profit reached $1.9 billion, up 25% from last year. Nokia shipped 115 M handsets in Q1, 27% YoY growth, with strong performance in emerging markets (Asia, Africa and Middle-East). Still Nokia lost market share from 40% to 39% worldwide.The average price per handset decreased to $125, from $132 in the previous quarter and $141 in the first quarter last year, consequence of the price pressure in emerging markets, and of losing ground on the high-end market to iPhone and Blackberry.

Despite the double-digit growth in revenues and profits, Nokia shares lost 13.5% on Thursday. The market seem to discount a decrease in margins as a result of the loss of brand leadership to iPhone, the threat of Android following iPhone’s revolutionary concept, and the erosion that Blackberry takes on Nokia sales to business customers.

The Market is re-positioning Nokia from the top high-end brand to the top brand in emerging low-price markets.

Meantime, Google exceeded expectations with a 42% YoY revenue growth up to $5.2 Bn, with a net profit growth of 30% to $1.3 Bn. The paid clicks in the first quarter were up 20 percent from a year ago, against the reports from comScore, the Web audience measuring firm, warning a sharp decline in clicks. Google stock surged 17%. The potential Microsoft-Yahoo merger creating a stronger competitor to Google does not seem to worry investors either.

See more details on NYT’s:

Nokia Disappoints Investors With Forecast

Google Defies the Economy and Shows Profit Surge

How much is Skype worth?

eBay announced results, and Skype was part of them. Skype revenues have increased 61% year-on-year to reach $126M. Skype added 33M new users for a total of 309M. Skype makes most of its revenue with SkypeOut, where the tariffs barely cover the interconnection costs to finalize the calls in the telco’s networks. So even if revenues grow, the margins are still slim, and there is no outlook that the margin will improve unless there are new (paid) features or the business model changes.

Even if the number of users would grow exponentially, that would also have an impact is cannibalizing SkypeOut, as some users move from traditional phones to Skype, making SkypeOut not required to reach them.

Being optimistic we could forecast net profits in the range of $10-$30M per year, that at a Price-Earning Ratio (PER) of 15 would value Skype at a maximum of $450M.

As a user, Skype rocks. Technically it is superb: very wise P2P concept, high voice quality with bandwidth adaptation, very decent videocalls, IM, file sharing, SkypeOut…  Even with a proprietary technology, non-IMS compliant, it delivers all that IMS promises to deliver. Absolutely great.

But the value to the user is not necessarily related to the market value of the company. eBay is aware of that, and according to GigaOM, expect news over the weekend. TechCrunch predicts that an alliance with Google could be coming.

Born to run

After the experience of watching Vista SP1 clip, you deserve to listen and watch the actual Boss.

I hope it made you forget  Vista video.

Vista SP1 video: Is this a viral marketing campaign from Apple?

The level of taste is not there. Whether a spoof or the real thing, this video of Vista SP1 is making Microsoft image sink even more, compared to the stylish Mac OS X.

If this video is part of a viral campaign, the awareness has clearly been created, but the associations that the video inspires are far from helping Vista and Microsoft. Microsoft should better start renewing their image. Soon people will be embarrassed to say they have Vista, and be associated with the level of taste of this video.

Just have a look at the blogsphere reactions: TechCrunch, Engadget or The rise and fall of Microsoft’s civilization: Caught on video.

Do you know anyone that is embarrassed to say they have a MacBook or an iMac?