Summary: The cause and the effect on Microsoft's results

IT is bad enough that Microsoft's profits fell by about a third [1, 2], but looking ahead at the next 3 months, there is no reason for optimism. There is no release of Windows, no release of Office, and no release of a next-generation anything. With stagnant activity, there is no reason to believe that next quarter's results will be any better than the results of this quarter or the previous one. This is why it is safe to believe that Microsoft's problems have only just begun.

As we shall show in the next post, GNU/Linux is not the only problem Microsoft is facing; GNU/Linux-powered SaaS is another major threat to Microsoft and even Microsoft Office will need to cannibalise itself by going on-line.

Looking at Microsoft's results, here is what The Street has published:

Sorry folks, but Microsoft (MSFT Quote) ain't what it once was. The software giant is losing its edge, as we saw with yesterday's earnings report.

Other publications are equally dysphoric and The Seattle Times fears for the impact it may have on the local population.

The Seattle area has relied heavily on Microsoft to employ a whole generation of its smartest citizens — and noncitizens — at good pay. If it ceases growing, who is ready to take its place?

To name some notable reports on the subject (from Friday):

● Reuters: US STOCKS-Wall St falls on Microsoft results

● Reuters: Microsoft shares slip on disappointing results

● Market Watch: Microsoft shares drop after results disappoint

● Wall Street Journal: Microsoft Shares Decline On Disappointing Results

Shares of Microsoft Corp. (MSFT) fell as much as 11% Friday, erasing much of the company's pre-earnings stock gains, after the software titan reported disappointing results for its fourth fiscal quarter because of a sharp slowdown in software sales.

One blogger opines that "Microsoft is dying."

Microsoft is dying.

It seems to offer no innovation. Its operating systems aren’t sufficiently user-centric. About the only great product it sells – the Xbox – is so heavily subsidised the company loses money on the range.

What happens next remains to be seen. ⬆