In what is being called a surprise analysis, Microsoft has been down graded by Goldman Sachs in a recent report. The Goldies seem to feel that Microsoft has lost their way in the technology jungle citing their collapse in the mobile phone market. There is also a concern that the iPad is stripping the sales of PC’s right under Microsoft’s nose. In addition when more tablets come to market that will not be using Windows, like Google’s yet to be released Chromium operating system, the once powerful Redmond based giant could falter.
My friend over at the Oracle wrote an interesting piece, in which it was stated that people are hanging onto Windows XP, and not upgrading to Windows 7. [See the Oracle piece here] In our family we still have 2 computers running XP and others in our family still are using the OS. I personally still use Office 2003, with the exception of running Office 2007 on my personal laptop.
In a recent article it stated that:
They downgrade the firm to neutral, then say Microsoft needs to do the following to get back into Goldman’s good graces:
- A materially increased dividend beyond the recent 23% increase, moving Microsoft into the top 20 dividend-paying companies in the S&P 500 in terms of dividend yield. We believe this would open the door to a larger investor base and keep the company more diligent from a spending perspective.
- A coherent consumer strategy that could involve paring back investments and/or divesting more peripheral assets such as gaming.
- Market leadership in Cloud. Microsoft has a strong portfolio of enterprise data center assets and could become a leader in Cloud deployments, but the competitive environment remains highly in flux, with Microsoft still not a clear “winner,” in our view.
Many have stated in the past that Microsoft should be broken into different companies, so they can better compete with the likes of Google, Apple and others.
My question is this. Should Microsoft be broken down into mini-Ballmers to compete better? Share your thoughts.