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Xbox evidence that Microsoft is no good?

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sappo

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I've always questioned Microsoft's ability to compete head on with other giant corporations. Undoubtedly a large portion of their strategy is to elimite their competitors and then reap the spoils. Copyright laws provide Microsoft with a much larger hedge of protection they do for other industries ie. entertainment. In addition, since you cannot reverse engineer software, I believe Microsoft enjoys an almost unprecedented burrier to competition.

That said, I think Microsoft is actually a very poor company that enjoys (IMO) the most enviable niche ever in business. I think the reason that the Xbox has been a total flop is simply because they cannot compete outside of their software niche. The Xbox is actually a wonderful product. It's technology is far superior to the PS2, its games are much easeir to write in comparison, and it is armed with a HUGE promotional budget. But the Xbox has managed to lose close to $1 billion for the compnay! The future doesnt look too bright for the XBox considering that we're already hearing lots of talk about the next generation of consoles.

True, MS makes good keyboards and mice, but it is almost laughable that the largest company in the world is dedicating any of its resources to this market segment. Besides, I cant imagine they get any significant revenues by selling mice, keyboards, and controllers.

It is my belief that MS cant compete out of thier niche. If anyone can tell me otherwise I'm all ears.
 

ziptieboy

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Kansas
I completely agree with everything you have said up there, but I also have something to add. Microsoft can't compete outside of their niche yet. Who cares if the xbox lost $1 billion dollars? Microsoft sure as hell doesn't! They still have people buying their software, and that will support their console ventures for a long time to come. Once Microsoft finds a way to compete with the PS2 and Gamecube in the world of consoles, they will rule yet another portion of our highly technological lives. Who knows, maybe they will actually revolutionize consoles in some way. Maybe they already have.

Who knows, but, that is my thought on this subject.
Now back to studying for Chem. UGHHHHHHHHHHHHHH

Scott
 

William

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Location
Tuscaloosa AL
sappo said:
I've always questioned Microsoft's ability to compete head on with other giant corporations. Undoubtedly a large portion of their strategy is to elimite their competitors and then reap the spoils. Copyright laws provide Microsoft with a much larger hedge of protection they do for other industries ie. entertainment. In addition, since you cannot reverse engineer software, I believe Microsoft enjoys an almost unprecedented burrier to competition.

That said, I think Microsoft is actually a very poor company that enjoys (IMO) the most enviable niche ever in business. I think the reason that the Xbox has been a total flop is simply because they cannot compete outside of their software niche. The Xbox is actually a wonderful product. It's technology is far superior to the PS2, its games are much easeir to write in comparison, and it is armed with a HUGE promotional budget. But the Xbox has managed to lose close to $1 billion for the compnay! The future doesnt look too bright for the XBox considering that we're already hearing lots of talk about the next generation of consoles.

True, MS makes good keyboards and mice, but it is almost laughable that the largest company in the world is dedicating any of its resources to this market segment. Besides, I cant imagine they get any significant revenues by selling mice, keyboards, and controllers.

It is my belief that MS cant compete out of thier niche. If anyone can tell me otherwise I'm all ears.

Ok, lets suppose you have billions of dollars and you can choose your management team(we are going to play a Warren Buffet excersize here). Do you think you could on the first launch of your product into a very entrenched industry against some very smart and tough competitors do well, especially when you have a minority of game developers? Do you think it would take yourself some time to topple Sony if that was you aim? I would think so, and I think it would be reasonable to assume so. I think the XBox has been a good launch for them. I don't think it did as well as they hoped it would, but it didn't flop and they aren't giving up either. To MSFT, the X-Box isn't about beating Sony in the console market, its about establishing themselves at the center of the home entertainment industry, and thats what you are going to see more of next time around, and thats something Microsoft is VERY ready for(they have been researching and thinktanking this since oh 1994ish).

Microsoft is a top notch corporation. They produce a good Free Cash Flow and have virtually no debt and 76 billion dollars in cash. So they lost 1 billion to get their name out there in this new market, they will take that. I think they thought it would be a loosing venture(as have been a lot of their launches against some entrenched competitors before), but one thing that has distinguished MSFT from other companies is they don't give up if they see the prize 10 years down the line. XBox2 is going to do much better and be a much better product than the already impressive showing the XBox made(and that was just as important as anything).

As for their niche, remember they enjoy because they put themselves there. It didn't just happen, they did it by working the hardest, spending the most money, and taking the right risks along the way to get there. Gates and Balmer are two extremely smart and shrewd businessmen, they understand the industry as well as or better than anyone, certainly on the software side. Microsoft caught onto the console late, just like the internet, but its as important to them now as Office and Windows is, and thats not a good outlook for Sony.

The XBox was supposed to be a flop. While not a booming success, its better than almost everyone gave them.
 
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sappo

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Re: Re: Xbox evidence that Microsoft is no good?

William said:


Ok, lets suppose you have billions of dollars and you can choose your management team(we are going to play a Warren Buffet excersize here). Do you think you could on the first launch of your product into a very entrenched industry against some very smart and tough competitors do well, especially when you have a minority of game developers? Do you think it would take yourself some time to topple Sony if that was you aim? I would think so, and I think it would be reasonable to assume so.

The launch of the Xbox is very similar to the original PS, which was a HUGE financial success. I think it would be crazy to think that the XBox2 will be anywhere near as successful as the PS2.


I think the XBox has been a good launch for them. I don't think it did as well as they hoped it would, but it didn't flop and they aren't giving up either. To MSFT, the X-Box isn't about beating Sony in the console market, its about establishing themselves at the center of the home entertainment industry, and thats what you are going to see more of next time around,

Your right in saying the purpose of the Xbox was not to dethrone Sony. Ultamately it's to make money. I disagree with you that it was a good launch. Nvidia has been very reluctant to embrace the xbox2. It's pretty difficult to have a sucessful launch if your suppliers are thinking of pulling out of your future ventures.



and thats something Microsoft is VERY ready for(they have been researching and thinktanking this since oh 1994ish).

I have no problem with companies that enter a market segment and improve it with technology and innovation. Microsoft hasnt done this in the past decade. What i dont care for is the stragety that MS has historically taken: Use virtually endless profits from another market sect to fund a venture that loses money until the competition is eliminated.

If the Xbox launch is any indication, then we can breathe a sigh of relief because It proves (in my opinion) that this is not always a formula for success.


Microsoft is a top notch corporation. They produce a good Free Cash Flow and have virtually no debt and 76 billion dollars in cash. So they lost 1 billion to get their name out there in this new market, they will take that. I think they thought it would be a loosing venture(as have been a lot of their launches against some entrenched competitors before),

I think this is evidence to prove my point. Companies just dont have $76 billion on hand. It's not a good thing in Warcraft, and it's not a good thing in business. That's why i think they spend so much money on facilities --they need to spend it somewhere. I think they spend so much money because they are scared they have so much cash on hand and very little assets to show for it. Ironically, all this spending hampers thier ability to cut back on unnecessary costs and be competitive.


but one thing that has distinguished MSFT from other companies is they don't give up if they see the prize 10 years down the line.

MS hasnt competed toe to toe with any company for 10 years.


XBox2 is going to do much better and be a much better product than the already impressive showing the XBox made(and that was just as important as anything).

Remember, I said the Xbox was actually an excellent product, so you cant say the xbox2 will do better because it's a better product.


As for their niche, remember they enjoy because they put themselves there. It didn't just happen, they did it by working the hardest, spending the most money, and taking the right risks along the way to get there. Gates and Balmer are two extremely smart and shrewd businessmen, they understand the industry as well as or better than anyone, certainly on the software side. Microsoft caught onto the console late, just like the internet, but its as important to them now as Office and Windows is, and thats not a good outlook for Sony.

It is my belief that a combination of "the system" and luck (ie, not being able to reverse engineer software) made MS what it is today. An example of this would be post WWI/ pre WW2 Germany. They were royally shafted after the war. It was only a matter of time before they would shake off the laws and sanctions that put the country in poverty.

As i mentioned, I believe they have the most enviable niche EVER in business. They were the first grow an empire in the market sect, and consequently, it's impossible to compete with them.

People say Gates a great businessman all the time. I read his book Business @ The Speed of Thought. I was thoroughly unimpressed. I even cringed when i read that he had been approving each and every business travel expense until some CEO dude (dont know which) told him that was stupid.


The XBox was supposed to be a flop. While not a booming success, its better than almost everyone gave them.

You just said it was NOT a flop. Either way, it was undoubtedly a financial flop. And you cant really make an arguement that it was a successful venture for future consoles because of Nvidia isnt showing much interest in it.
 

Nevandal

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May 18, 2003
"Microsoft is a very poor company. . . "

-Duh


And for the record, Wal-Mart is the world's largest company.
 

William

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Nevandal said:
"Microsoft is a very poor company. . . "

-Duh


And for the record, Wal-Mart is the world's largest company.

Wrong. Here we go on market cap size from my random selections:

GE: $276 Billion
MSFT:$260 Billion
WMT: $228 Billion
Citigroup: $201 Billion
Coca-Cola: $108 Billion
Exxon-Mobil: $240 Billion
BP: $153 Billion


So no, thats three companies right there that are bigger than Wally World :). Wal_mart has also fared well in the bull market, GE and MSFT have been hammered.
 

William

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Re: Re: Re: Xbox evidence that Microsoft is no good?

[The launch of the Xbox is very similar to the original PS, which was a HUGE financial success. I think it would be crazy to think that the XBox2 will be anywhere near as successful as the PS2.

No, Sony with the PS2 got out first and held the highwater from the previous generation, They built a good console(inferior to the XBox, but this is where loyalty and getting there first come in). XBox2 won't enjoy that.

Your right in saying the purpose of the Xbox was not to dethrone Sony. Ultamately it's to make money. I disagree with you that it was a good launch. Nvidia has been very reluctant to embrace the xbox2. It's pretty difficult to have a sucessful launch if your suppliers are thinking of pulling out of your future ventures.

Its about money, but its not about money now. Its about making money and positioning themselves for whats going to happen in 5 to 10 years. Go to the library and pick up Gates' book called the Road Ahead, tell you exactly what they are doing right now.

I have no problem with companies that enter a market segment and improve it with technology and innovation. Microsoft hasnt done this in the past decade. What i dont care for is the stragety that MS has historically taken: Use virtually endless profits from another market sect to fund a venture that loses money until the competition is eliminated.

What wrong with using your resources. You know why IBM is so huge and still gets more patents than any other tech company each year, because they built themselves from profits in mainframes.

If the Xbox launch is any indication, then we can breathe a sigh of relief because It proves (in my opinion) that this is not always a formula for success.

Not sure what you mean. Microsoft got what they wanted in their product release. No one expected them to go in and claim the number 1 spot, thats absurd. Go back to my thinking excersize and reasonable ask yourself if you had Microsoft's resources could you have had a better launch? The answer is no.

I think this is evidence to prove my point. Companies just dont have $76 billion on hand. It's not a good thing in Warcraft, and it's not a good thing in business. That's why i think they spend so much money on facilities --they need to spend it somewhere. I think they spend so much money because they are scared they have so much cash on hand and very little assets to show for it. Ironically, all this spending hampers thier ability to cut back on unnecessary costs and be competitive.

I didn't exactly get in to why they had it either. Its been building up because they were very tentative about doing anything during the years of court battles, so they just banked their cash. What do you mean spend it on facilities? They have all the assetts they need. Windows and Office. They don't have large unnecessary costs. Again, I go back to Warren Buffet, the shrewdest investor of our time. He has said time and time again, Microsoft is one of the brightest and healthiest companies in America. Microsoft isn't the same company that AMR or UAL is, their cost structure is lower and profit margins are higher(they are about 10-12 though in revenue for the tech sector, Big Blue tops that list). Ballmer is a really smart guy. They don't waste money, and haven't yet. They have tried to use some of the cash in the past such as trying to acquire Intuit, but that deal was blocked. And now, with the dividend tax cust(and some other factors) Microsoft is going to be shelling the money back to the shareholders in the form of dividends again filling Buffet's belief: "The company should distribute the money in such a way as to offer the great ROI for the investor. If the best way to do this is to keep all revenue for itself and reinvest itself in the business, then it should do so. If not, it should start paying out a dividend".

MS hasnt competed toe to toe with any company for 10 years.

Sun, Netscape, AOL, Borland, and Corel would disagree with you there.

Remember, I said the Xbox was actually an excellent product, so you cant say the xbox2 will do better because it's a better product.

Why not? Just because you have the best product, doesn't mean you are top dog, I can provide countless examples of that. However, continually putting out good products, making it better, and making yours more and more attractive to the customer will increase your sales(Microsoft has signed more and more game developers to the XBox now, thats something they lacked when they jumped in, and probably the most important thing).


It is my belief that a combination of "the system" and luck (ie, not being able to reverse engineer software) made MS what it is today. An example of this would be post WWI/ pre WW2 Germany. They were royally shafted after the war. It was only a matter of time before they would shake off the laws and sanctions that put the country in poverty.

I have no earthly idea what Germany and Microsoft share, unless you see Gates as Hitler, but I will just put this down as an "apples and oranges" comparison and just ignore it. Please explain the system.

I will say this though. You could have five companies that had the source code to XP. Whichever company had Gates and Ballmer running it would win. They have a grasp of the industry that no one else has. Thats one of the problems with splitting microsoft down the middle a couple of times(one of the breakup plans). It doesn't matter that much. The company they go to wins.

As i mentioned, I believe they have the most enviable niche EVER in business. They were the first grow an empire in the market sect, and consequently, it's impossible to compete with them.

I wouldn't exactly call them a market niche, and its certainly easier to compete with them. The steel empire carnegie set up has no comparison. It would be like Gates running IBM, Microsoft, Intel, HP, Dell, and a few other companies. In addition to just running those companies, he would serve on the boards of so many other companies along with other executives so he could control not a sect, but an industry. Carnegie had it much easier.

You know what though, IBM was in the same position once. You don't compete with Microsoft by building a better windows, because you can't beat the business model. I am almost certain you can cook yourself a better burger than McDonalds will serve you, but could you build a company bigger than McDonalds, no(Going again to Buffett, this is what he calls a consumer monopoly and is one of the first things he looks for when investing in a company).

People say Gates a great businessman all the time. I read his book Business @ The Speed of Thought. I was thoroughly unimpressed. I even cringed when i read that he had been approving each and every business travel expense until some CEO dude (dont know which) told him that was stupid.

You may have been unimpressed, but the results speak for themselves. Gates understands both sides of the fence, he understands business, and he understands computers. IBM was absolutely desperate to pry him away once upon a time(93-95ish) to be their new Chairmen and CEO(They did fine with Gerstner). And Gates as brilliant as he is, also had Ballmer with him, another very astute and Brilliant guy. Go and read some books such as Hard Drive, How the Web was Won, etc. and you will get a much different view of him. Also helps too look at others in the Industry, so pick up a book about Apple, and hell Jack Welch's new book was great. While your at it, a study of Warren Buffett won't hurt either. Gates had his faults, but 90% of the boards in the tech field would jump at the oppurtunity to have him as their CEO.

You just said it was NOT a flop. Either way, it was undoubtedly a financial flop. And you cant really make an arguement that it was a successful venture for future consoles because of Nvidia isnt showing much interest in it.

So what if Nvidia isn't interested. They have enough problems in their bread and butter field right now without having to devote resources to doing the next box either. Microsoft isn't setting themselves to be the Console company 10 years from now, because you won't have a console. Microsoft is setting themselves very quickly into the home entertainment industry. Convergence, where your TV and Computer merge into one. XBox is a step to that, XP Entertainment Center(or whatever its called) and then new wireless pad for home internet access are all baby steps in the direction. This is what Gates has seen since 93(and about missed the internet because of it), and he is going to put Microsoft into the position of being at the forefront when that happens.

But please, get a grasp on some of the fundamentals of business before you critisize MSFT's business model, you don't get to be the second largest company in the world because you were dumb or lucky. Business is too cut throat for that. McNeally, Ellison, Jobs, Kahn, and others would have eaten Microsoft up a long time ago.

Warcraft!!! :rolleyes:

If you won't I can explain why Microsoft's cash reserve shows exactly why they are such a strong company, and not a weak one.
 
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sappo

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No, Sony with the PS2 got out first and held the highwater from the previous generation, They built a good console(inferior to the XBox, but this is where loyalty and getting there first come in). XBox2 won't enjoy that.

Not sure what you mean. Microsoft got what they wanted in their product release. No one expected them to go in and claim the number 1 spot, thats absurd.

You missed my point. The original PS was a huge success for Sony. In comparison, the Xbox was a miserable flop. Sony had just as much competition with Sega and Nintendo. You admit that the Xbox2 wont be as successful as the PS2.


I have no earthly idea what Germany and Microsoft share, unless you see Gates as Hitler, but I will just put this down as an "apples and oranges" comparison and just ignore it. Please explain the system.

Basically what I'm saying is that copyright laws and the fact that you cannot reverse engineer software provided a goldmine that was just waiting to be tapped. In a sense 'the system' made MS great, not Gates. Put another way, if Marty McFly hopped into a Delorian and abducted Gates before he started Microsoft, we'd still have a Gates-like dude AND a Microsoft-like company today. And like today you'd still have people that would say that person is a great innovator because he has all this money, bla bla bla.. When in fact, they got there largely because they were at the right place at the right time.

In other words, if gold wasnt discovered in 1849 in San Fran It would eventually be discovered by someone else. It is my belief that Gates more or less stumbled on this goldmine. Now of course I would have to give him some credit, but how "smart" do you have to be to discover that someone needs an OS to run your computer? Gates wasnt the first one to do it, he was simply the first one to build an empire with it.


What wrong with using your resources. You know why IBM is so huge and still gets more patents than any other tech company each year, because they built themselves from profits in mainframes.

There's nothing wrong with using your resources. However, when you abuse your monopolistic powers, which our courts have found, you are engaging in illegal business practices.


Sun, Netscape, AOL, Borland, and Corel would disagree with you there.

Sun -> I'll give this one to you. While I dont think they've been standing toe to toe with MS for 10 years, this is your best example.

Netscape -> R.I.P. Faced the entire wrath of MS because Netscape's business model was completely consumed by MS

AOL -> less than 10 years. Plus, AOL hasnt faced the whole wrath of MS as i dont think MS feels too threatened by them.

Borland -> Again, hasnt faced the entire wrath of MS

Corel -> Alive today because of thier graphics programs, which have not incurred the might of MS.... Unless you consider MS Paint "might" :)

You want competition look at Toyota and Honda and Ford and GM... Or our airline industry, or the food industry. Competition should be the RULE not the exception!



Why not? Just because you have the best product, doesn't mean you are top dog, I can provide countless examples of that.
That's my point. Even with a superior product, MS hasnt been able to penetrate the market, acquire a loyal following from suppliers, or make money. Sony did it with thier first console.


They have all the assetts they need. Windows and Office.

I will say this though. You could have five companies that had the source code to XP. Whichever company had Gates and Ballmer running it would win.

Thats pure speculation, but I'll play along....
Ok, Redhat gets to be one of the five. I'll even go along and say Gates and Ballmer "win." But in that case, you'd HAVE to agree with me that the real winner would be the consumer. Why? Because companies would then be able to reverse engineer XP.

Microsofts most lucrative trade secrets would be shot and the company would wind up feeling more boated than MediaPlayer8. Microsoft would be foreced to downsize tremendously and engage in practices that are "normal" in business... ie. not have 70+ Billion just sitting around doing nothing.. and liquidate much of thier rediculous campus in washington.

As I said, the inability to reverse engineer software is perhaps MS's greatest stength. True other software companies enjoy that strength too, but they dont have the monopolictic leverage.

Maybe Gates/Balmer are wonderful CEO's. What I consider a good CEO is one that turns a company from being bankrupt prone into a leader in thier industry... Or one that is able to make a company stand out from the rest, despite having an even playing field (ie, the CEO of Southwest). By this benchmark, Gates and Balmer are unproven at best.


So what if Nvidia isn't interested.
One of the most important skills a business can have is to form alliances with other businesses. So far they have failed here. The problem is compounded further because without a chip provider for their console, MS is SOL. Im quite surprised you see this as trivial.
 
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William

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You missed my point. The original PS was a huge success for Sony. In comparison, the Xbox was a miserable flop. Sony had just as much competition with Sega and Nintendo. You admit that the Xbox2 wont be as successful as the PS2.

Actually sony didn't have much competition at the time, Sega and Nintendo absolutely flopped on their faces.


Basically what I'm saying is that copyright laws and the fact that you cannot reverse engineer software provided a goldmine that was just waiting to be tapped. In a sense 'the system' made MS great, not Gates. Put another way, if Marty McFly hopped into a Delorian and abducted Gates before he started Microsoft, we'd still have a Gates-like dude AND a Microsoft-like company today. And like today you'd still have people that would say that person is a great innovator because he has all this money, bla bla bla.. When in fact, they got there largely because they were at the right place at the right time.

In other words, if gold wasnt discovered in 1849 in San Fran It would eventually be discovered by someone else. It is my belief that Gates more or less stumbled on this goldmine. Now of course I would have to give him some credit, but how "smart" do you have to be to discover that someone needs an OS to run your computer? Gates wasnt the first one to do it, he was simply the first one to build an empire with it.

Thats not logical at all. Gates is a unique person. We wouldn't have a microsoft if Gates hadn't been along and that I am certain of. He didn't discover you needed an OS, but he was the FIRST person to recognize that he could build his business without having to delve into the hardware part of it, a fact that was lost on guys like Steve Jobs and IBM. Gates didn't swim with the current, he swam against it.

There's nothing wrong with using your resources. However, when you abuse your monopolistic powers, which our courts have found, you are engaging in illegal business practices.

You have failed to show how Microsoft entering the console business is abusing its monopolistic practices. You want to debate MSFT vs. someone, name them. I am ready.


Sun -> I'll give this one to you. While I dont think they've been standing toe to toe with MS for 10 years, this is your best example.

Actually I think its the worst, but just by looking at the court cases they have filed between them, this is certainly one of their primary competitors.

Netscape -> R.I.P. Faced the entire wrath of MS because Netscape's business model was completely consumed by MS

They faced the full assault of Gates. When Gates "discovered" the internet, he oriented the company full steem ahead on that path. He tried to buy netscape and they refused. He threw the gauntlet at Netscape and Microsoft one. I would say they faced the full brunt of Microsoft and Gates then.

AOL -> less than 10 years. Plus, AOL hasnt faced the whole wrath of MS as i dont think MS feels too threatened by them.

Actually Gates issued an ultimatum to Case along the lines of "join me or die" though a tad more elegant. Thats what MSN is, and actually has done a decent job of whittling away customers from AOL(though it can be argued that was more AOLs doing). But MSFT issued the challenge, though AOL definately won. In fact, Case is the only exec. I can ever think of that Microsoft has thrown the gauntlet too and not only survived, but won.

Borland -> Again, hasnt faced the entire wrath of MS

I really suggest you read up on the Borland/MSFT fights. They were nasty, and Kahn and Gates were not friends at all.

Corel -> Alive today because of thier graphics programs, which have not incurred the might of MS.... Unless you consider MS Paint "might" :)[/quote[

Yeah, but their office suite took a pounding from Microsoft. Actually, Microsoft floated a lot of cash to Corel.

You want competition look at Toyota and Honda and Ford and GM... Or our airline industry, or the food industry. Competition should be the RULE not the exception!

So you want to mandate that we regulate competition, in effect force it to happen. Lets just suppose for a second that you own a company called OS inc. Your OS is by far the best out there. PC Magazine gives it a perfect 10/10, Maximum PC gives it their Kick *** award, and the unix/linux people love you for some reason. Nobody's OS is even close to yours. And because of your OS, your brilliance as an businessman, and the confidence of millions of shareholders, you have a 90% market share. Should we now split your company in half to get competition?

You can't mandate competition and say it has to happen. If all consumers want Fords, then Ford is going to sell a lot more cars. What happens in the auto industry? Not everyone wants a ford. Now, in the PC industry, if you don't like Windows, you can go to the infinite flavors of Linux, Unix, or buy a mac. The problem is that J6P doesn't like Apple's cost, and doesn't have the desire to go the "promised land" to learn Linux(assuming he could actually get an install to work).

Mandatting competition is more dangerous than letting the industry play itself out. IBM was a monopoly once, except they had even more control on the industry than MSFT does now. And there is competition coming from the Linux crowd(who still haven't gotten their act together). MSFTs market share is around 85%, and its shriking, and they are getting whipped in some areas they used to own(servers mainly). Give it time, you are going to see competition in the industry. But competition isn't the rule, if you offer what people want, they shouldn't be forced to have to look at something that isn't as good(and Linux isn't an option for J6P yet).

That's my point. Even with a superior product, MS hasnt been able to penetrate the market, acquire a loyal following from suppliers, or make money. Sony did it with thier first console.

Its called entering an entrenched market, same sort of thing Toyota did when it released its Lexus line in the very early 90s(think that was the date). You can't expect to win your first time out, its an unreasonable expectation. Some companies do that, but many don't. It doesn't mean that you failed either. Microsoft's share in the console market(which as I said is going to disappear in about 10 years) is going to increase with each launch. Watch it.


Thats pure speculation, but I'll play along....
Ok, Redhat gets to be one of the five. I'll even go along and say Gates and Ballmer "win." But in that case, you'd HAVE to agree with me that the real winner would be the consumer. Why? Because companies would then be able to reverse engineer XP.

Microsofts most lucrative trade secrets would be shot and the company would wind up feeling more boated than MediaPlayer8. Microsoft would be foreced to downsize tremendously and engage in practices that are "normal" in business... ie. not have 70+ Billion just sitting around doing nothing.. and liquidate much of thier rediculous campus in washington.

As I said, the inability to reverse engineer software is perhaps MS's greatest stength. True other software companies enjoy that strength too, but they dont have the monopolictic leverage.

Maybe Gates/Balmer are wonderful CEO's. What I consider a good CEO is one that turns a company from being bankrupt prone into a leader in thier industry... Or one that is able to make a company stand out from the rest, despite having an even playing field (ie, the CEO of Southwest). By this benchmark, Gates and Balmer are unproven at best.[/B]

You mentioned two different types of CEOs. The first is called a turn around specialist(and usually aren't CEO positions either). One of my parents best friends is a high level turn around specialist who has worked with Sunbeam, Budweiser, and a few other companies. I think Gates made Microsoft stand out from everyone else in 1982, they just haven't had to do so since. Of course, you would also have avoided Jack Welch and his ability to totally transform GE, but hey, if you think those are the only great leaders, then more power to you. Your benchmark is stupid. Yeah, by that one they are unproven, but Microsoft has also done two things, they have kept their position, and they have avoided bankrupcy.

You think having 70 billion is a waste. Well actually it shows the stregnth of Microsoft's fiscal management. Its shown that Microsoft has avoided "diworsification"(Peter Lynch's term). Diworsification is the act of having excess resources and expanding yourself into places you have no expierence and hope for growth in, or on an extreme, no business being in. Lets take one of the greatest examples of this thats still falling apart. AOL buying Time Warner. AOL had a very valuable currency, stock(something Microsoft has that is just as valuable too, but back to AOL). So they decided they should use it for something. In their brilliance they bought a media company. Not a company like Earthlink, not a broadband provider(though they got one in the merger), but a corporation in an entirely different industry. Look what happened, both parts right now are in shambles. Case is now wanting to spin the merger apart(a good idea for both parties).

This happens all the time. Peter Lynch had some fairly good examples of tobacco companies buying shoe companies, food companies buying retail outlets, etc. To see a recent example of a company making an acquisition that would boost its business yet keep it in its core market, would be Cisco buying Linksys. Cisco makes and understands the networking and the networking business. They had the resources to use to grow the company(this goes back to the Buffett "use the money for best ROI") and the made a fairly smart and astute acquisition that put them in a new market they weren't in, but a familar enough market. Now with 76 billion in cash, Microsoft could say oh buy GM(market cap is 108 billion as of a couple days ago), but that wouldn't exactly be an astute move would it? As I said, it wasn't them that exactly wanted to pile up the cash, but one they felt they needed it for the various court cases they fought and also will now be able to start paying out a dividend(an EXTREMELY astute move). Now, I will admit it is a little absurd to have that much cash sitting around in the bank, but Microsoft's largest gamble(worked out fairly well on their side actually) was MSNBC partnering with GE. MSNBC hasn't worked out too well for GE(the former head of MSNBC is now over running Foxnews). But Microsoft hasn't had anything to do with it till now, which is pay a dividend(not going to alleviate it much either).

Now back to your reverse engineer thing. Its an advantage, but its something that any number of people would have enjoyed, not just Microsoft. What it doesn't address is the fact that Microsoft isn't the only company that could keep people from reverse engineering its software, any one who wanted to put the resources out to build an OS would enjoy that. Lets look a company Microsoft crushed, Novell. Novell used to be the company for networks. Microsoft decided that looked like a good industry for them to expand into, and they did. Now both companies enjoyed the ability that you couldn't reverse engineer the software, but Microsoft won(for various reasons, they really pushed novell, and novell couldn't keep up).

The great CEOs are just that, great. You can put them anywhere and they would suceed. Jack Welch had a PhD in Chemical Engineering and understood plastics. Yet he took the helm of GE, and turned it upside down. He took the largest company in the world, and made it grow, with an incredible growth rate too. He came into an enviable situation, at the helm of the largest company. So you would say that he was an untested CEO. Well GEs big businesses now weren't there when he took over. NBC, GE Credit, and GE Medical weren't the revenue streams and cash cows they are now. Bill Gates and Ballmer are the same mold, as are other CEOs. You can't make up some metric to judge the "great" CEOs by that eliminates the majority of CEOs out there. Just keeping a company working is a gargantuan task, one that gets bigger and bigger the larger the company is.

Bill Gates is a unique person. You take your delorian and keep him from starting Microsoft, the industry would look very different(for one, IBM probably has greater control on the industry than MSFT does). There wouldn't be another Microsoft, and I don't think the industry would be in as good of a shape as it is today. I think Microsoft is the best thing for the consumer(looking at what the linux guys are touting as a better option is pathetic actually). To present the worse case scenario, Apple becomes your monopoly, and Apple is a company that controls everything, absolutely everything.
 

Avatar28

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I don't know that I'd exactly call the X-Box a flop either. It came out at about the same time as the Game Cube, made by an established player and former king of the industry, and appears to be soundly spanking it. Not only that, but in some places, the X-box is only a few percentage points behind the PS2 in sales.

Personally, I'd say that's a pretty good job for a first attempt against a firmly entrenched market leader.

Also, as far as them losing money on the X-Box, that's expected. When consoles first come out the makers almost ALWAYS sell them at a loss. It's usually takes a few years until the R&D costs are paid off and hardware costs come down. The PS2 is just now making money I believe and it had a year's head start on the X-box.
 

Movax

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sappo said:

Basically what I'm saying is that copyright laws and the fact that you cannot reverse engineer software provided a goldmine that was just waiting to be tapped.

The only reason you can't reverse engineer it is 'cause the EULA says so. You're signing a contract.

sappo said:
.. When in fact, they got there largely because they were at the right place at the right time.

Very true....

sappo said:
... but how "smart" do you have to be to discover that someone needs an OS to run your computer? Gates wasnt the first one to do it, he was simply the first one to build an empire with it.

Well, he was more lucky than anything on this. He wasn't so smart as to realize they needed an OS, but he was asked by IBM to provide one. Originally he was only asked to provide a BASIC interpreter, but then IBM's deal on the CP/M OS fell through, so MS found an OS for IBM as well. Where Gates WAS smart was to make it clear to IBM that they would only license the software, not sell it to IBM. They then went on to license it to any and all other PC manufactures. This was smart, 'casue if the IBM PC flopped I would think MS would have made a lot less money then if they sold it for a one time price. Seems that MS somehow knew that the PC would be a big thing.


sappo said:
There's nothing wrong with using your resources. However, when you abuse your monopolistic powers, which our courts have found, you are engaging in illegal business practices..

I agree that MS did some bad things, but I don't know if they did anything illegal IMO (except for the obvious, like the stacker and ms-dos 6 thing).... Well, maybe they are evil.


sappo said:
One of the most important skills a business can have is to form alliances with other businesses. So far they have failed here.

Hmmmm.. Intel? IBM?

X-box was a smart move. MS can wait for other's to develop the hardware, pick a time when the current hardware looks good and use it in the next X-box. Backwards campatability is simple. The only thing holding the X-box back in the future is people's dislike for the company. As far as an entertainment center, it has all kinds of potential. There are already mods that can be done on an x-box that make it into an mpeg player, juke-box, ftp server and allow it to connect to network shares.
 
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sappo

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Movax said:

The only reason you can't reverse engineer it is 'cause the EULA says so. You're signing a contract.
Isnt it impossible to reverse compile? Otherwise, why was it such a big deal when parts of the source code were leaked?

Movax said:

I agree that MS did some bad things, but I don't know if they did anything illegal IMO (except for the obvious, like the stacker and ms-dos 6 thing).... Well, maybe they are evil.
This isnt a matter of opinion. US courts found them guilty of monopolistic practices. And for the past (what?) 4 years they have assembled the best legal team possible to try to litagate themselves out of the court ruling.
 

Movax

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I think it is a matter of opinion. Just because the government officially states something doesn't mean I agree with it. Okay, they may officially have done something illegal, but I don't agree with anti-trust laws. Is it right to punish a company for being successful? I'm kind of in-between on this. I think MS has done some bad stuff, but generally their success a result of smart marketing and business moves.

If it was legal to reverse engineer and reverse compile windows code, there would likely be windows source available for download on websites. Anything is possible. With todays optomizing compilers it is very difficult to reverse compile, but it can be done. One of the reasons you can't get windows 2000 (for example) for the x-box is cause MS would prosocute who ever developed it.
 
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sappo

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Movax said:
I think it is a matter of opinion. Just because the government officially states something doesn't mean I agree with it. Okay, they may officially have done something illegal, but I don't agree with anti-trust laws. Is it right to punish a company for being successful? I'm kind of in-between on this. I think MS has done some bad stuff, but generally their success a result of smart marketing and business moves.

If it was legal to reverse engineer and reverse compile windows code, there would likely be windows source available for download on websites. Anything is possible. With todays optomizing compilers it is very difficult to reverse compile, but it can be done. One of the reasons you can't get windows 2000 (for example) for the x-box is cause MS would prosocute who ever developed it.
By definition something is illegal if the govt says it's illegal. Wheter or not you agree with it is a different animal. The most avid pothead will tell you weed is illegal.

The govt isnt punishing MS for being successful, they were punishing them for putting other companies out of business and for forcing computer makers to include windows on their computers. There are lots of examples of very successful companies that didnt use questionable business practices. The govt doesnt go after them.

About reverse engineering: Making something illegal doent mean it wont exist. That's akin to saying that if they outlawed illegal copies of windows they would all go away. We all know that's not the case.
 

eh?

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sappo said:
This isnt a matter of opinion. US courts found them guilty of monopolistic practices. And for the past (what?) 4 years they have assembled the best legal team possible to try to litagate themselves out of the court ruling.
Thats nothing great. Our courts also found OJ simpson innocent. And you can be sued if your a bartender that serves a person a drink and then that person goes out and get in a car accident.

I agree with William. Microsoft didn't just happen to fall into what it is now. They worked hard to get there
 
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sappo

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Perhaps i should start a thread on what the definition of is is.

Edit:
Ok here's the thing. According to dictionary.com, illegal means "prohibited by law." Courts interpret the law, therefore if the court finds that the defendant engadged in illegal activity, they have done something illegal. Plain and simple. So you cant say "I don't know if they did anything illegal IMO" because the law does not depend on your opinion. What you CAN say is, "I dont think think what they did SHOULD be illegal."

Now, drdingo21, your OJ comparison need not apply. The defense that OJ's lawyers made was that he did not commit the crime. NOT THAT MURDER SHOULD BE LEGAL.

We know that Microsoft forced computer makers to carry Windows. We know that Gates wrote to people fellow execs to declare a "jihad" on Netscape. Microsoft's defense was that what they did shoud be legal, the courts disagreed. Now, you can believe whatever you want. But for goodness sakes, call a spade a spade. Microsoft illegally used monopolistic practices.
 
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Movax

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You are right. But what I am trying to say is that, to me, a government ruling doesn't mean much. By saying "I don't think they did anything illegal" I am in fact saying I don't agree with the court ruling. See? Because they government says something is true, doesn't mean I agree. If I am convicted of a murder I did not commit it does not make me guilty. So I CAN have an opinion.

Anyway, X-Box rules.
 

William

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sappo said:
Perhaps i should start a thread on what the definition of is is.

Edit:
Ok here's the thing. According to dictionary.com, illegal means "prohibited by law." Courts interpret the law, therefore if the court finds that the defendant engadged in illegal activity, they have done something illegal. Plain and simple. So you cant say "I don't know if they did anything illegal IMO" because the law does not depend on your opinion. What you CAN say is, "I dont think think what they did SHOULD be illegal."

Now, drdingo21, your OJ comparison need not apply. The defense that OJ's lawyers made was that he did not commit the crime. NOT THAT MURDER SHOULD BE LEGAL.

We know that Microsoft forced computer makers to carry Windows. We know that Gates wrote to people fellow execs to declare a "jihad" on Netscape. Microsoft's defense was that what they did shoud be legal, the courts disagreed. Now, you can believe whatever you want. But for goodness sakes, call a spade a spade. Microsoft illegally used monopolistic practices.

First off, you need to distinguish which court ruling. Microsoft has admitted to no wrongdoing in the Netscape matter(though one can argue about today's settlement). And please, don't argue that they admit by assembling a damn fine legal team. Every one wants the best, and the gov't lined up its best to face MSFT. If you can afford the best, you get the best.

The gov'ts case was about Windows and bundling Internet Explorer with it. Now I will go ahead and state something right now, telling microsoft it can't integrate IE into windows is like telling GM it has to use a square steering "wheel" and only include three tires with each car they sell. Integrating IE with windows is a good thing, and has resulted in a better expierence for windows users.

Anyways onto the court, of course the court said, Microsoft what you did was wrong. But then they also said, but it wasn't really that wrong on a relative scale, so we are going to slap you on the wrist(well that was also a result of no good remedy either). It was like giving Microsoft a traffic ticket. The gov't didn't sue Microsoft because they put people out of business, they sued them because people like Orrin Hatch were getting millions from Sun, Oracle, and Novell and pushed the Justice Dept. into action. It wasn't a consumer cry, it was a cry of people that were angry and jealous(and yes, I fully believe that statement for those three companies and the guys that were/are running them). Some of the government remedies were laughable too. Bundle netscape with windows. Thats like telling Coke that for every six pack it sells, one of the cans has to be a pepsi, or telling Goodyear one out of every four tires it sells has to be a BF Goodrich. What people don't get is that you don't play nice in business, it doesn't allow it. You don't play a game of grab-*** with your rival, you look for the chance to put a knife in their back. When you run a business, you have one single obligation. And thats to grow the value of the company to the shareholders(employees are an extremely close second). Apple bundles all sorts of things with its operating system, but thats not illegal. Its a double standard I have a lot of problems with(course, if you flip market share around, apple has a much greater monopoly too).

I could also go into things like the fact that the gov't actually sancations effective duopolies(as bad as a monopoly really, they don't compete with each other) so that a double standard exists between industries. I can point out the fact that only Microsoft can get sued by Sun for not playing nicely with Java, so they drop their java support, only to be sued again by Sun(your ****ed no matter what you do essentially). I could also say that consumers have long since had a choice on what they want, and they have chosen microsoft, that microsoft has a monopoly because users chose them because what Microsoft offered, while not perfect(and nothing is perfect) was more appealing than other platforms for quite some time. I could point out that Intel enjoys many of the same privelages Microsoft does in its market, with virtually the same amount of control and pressure, if not more so at times.

But to consider all of that would require a reasonable approach to looking at what Microsoft is, and thats not something anyone seems to want to do. Its hip to criticize Microsoft and applaud Linux, because Microsoft is the big bad brother and linux is some sort of demi-god(which it isn't).

Nope, Microsoft is a big company, but I don't even think they even fit the term monopoly. They don't have the control or size that the other monopolies of the past had(Standard Oil, US Steel, ATT, and IBM). Those companies would be the equivilant of the combined companies of Microsoft, Intel, HP-Compaq, and probably IBM and Sun as well. That would be a company that would have a true monopoly, and the types of companies Sherman/Clayton were designed to break up. Microsoft isn't that, they catered to J6P, the majority of the industry and J6P has chosen Windows.
 
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sappo

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William, I can see that you've made up your mind on where MS fits into the industry. Bill Gates and MS are the best thing for the industry. If ever I bring up an example why this might not be the case (ie, The flop of the Xbox as compared to the PS1, Gates approving all traveling expenses as a CEO(!), Gates declaring a jihad on Netscape) you just say they aren't perfect, but they are the best thing for the industry. That's your opinion; to each his own.
 

cack01

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Sorry sappo I'm going to have to agree with William so far. Especially with the M$ monopoly argument.

As for the XBOX, I think it has been a huge success. The fact that this thread was started supports this. The XBOx has made a huge impact on the industry, and expecting them to turn a profit is almost ridiculous. Did you know for the first few years Amazon.com never even came close to turning a profit? Does this mean that it was a complete faliure? Nope. It takes time to turn profits in the tech industry. There is so much money put into R&D its almost silly to expect that a company can turn a profit during the first year or years in M$ case. Also they entered a market where there are only two main competetors both of which are house hold names. Just being able to gain a foot hold in a market like that is reason enough to believe that the XBOX has been somewhat successful. Although I'm am not sure on this, hasn't the XBOX sold more than the GC? If this is true why not start a thread on the Game Cube also, since we all know for the most part Nintendo had wished to sell much much more of their wonderful little box.

I read an article on ign during E3 on how by 2004 there will be the same if not more titles for Xbox than compared to the PS2. I can not find this article, if I do I will link to it. If it turns out to be true, it will drive a major blow to the PS2 side of the argument, since it seems it is really the only argument the PS2 people can rely on.
 
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