Yesterday Microsoft announced two major accomplishments. The selling of 175 million Windows 7 licenses and also a whopping revenue of some $16 billion dollars. But this doesn’t tell the entire story of about what Microsoft is doing right and what they are doing wrong. In my opinion it would seem that Microsoft has done something right with their latest OS. They have also been doing well with their office products. Yet for some reason they continue down a path where they want to expand into other areas, and they always seem to stumble.
I recall that when I was taking a history class in college, one of the professors I had asked a simple question. Why do we study history? The simple answer was so that we could hopefully not repeat the same mistakes we had made in the past. I realize that this is a more complex than it should be, since we humans seem to continue to repeat the same mistakes we made in the past. Microsoft seems to also be repeating past mistakes as well.
Though their Windows 7 and Office products are selling extremely well, a look at their other divisions reflect a different story. Their search engine Bing continues to loss money. Their failed attempt at KIN, the social networking phone, also was a flop and their entertainment division ran at a loss as well. Which makes one ask, why? Why continue chasing products that others are producing when it drains profits?
Does anyone remember BOB, MS Money, Encarta, Office Accounting and the latest KIN fiasco? People are not going to buy products when others have a superior product. They are also going to be reluctant to buy a product that they fear may be discontinued without notice. The X-Box is a great example of another semi-failed attempt at entering into a market already over crowded with superior products. Does any one remember the over heating issues that cost Microsoft about $1 billion to fix for the X-box?
Does Microsoft really think that people will flock to their new Windows 7 powered phone? I believe they are going to have another money loser no matter how good the phone is.
What do you think? Shouldn’t Microsoft just do what they do best?