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07.31.10

Microsoft’s #1 Cash Cow Doesn’t Sell Well Anymore, Steve Ballmer Pressured to Leave

Posted in Microsoft, Office Suites, Steve Ballmer, Windows at 1:18 am by Dr. Roy Schestowitz

Calf

Summary: Microsoft’s Office sales are said to be “disappointing” and the Wall Street Journal foresees more trouble ahead

Microsoft Office 2010 has been receiving poor reviews, but as noted before, Microsoft hyped it up far too much (marketing budget alone almost reached $100,000,000). See for example posts like:

Microsoft Office 2010 sales are disappointing, says a report which IDG mentioned:

“This fact highlights the challenges for Microsoft going forward for Office,” Baker wrote. “A strong product launched into a saturated market faces considerable headwinds. Even so, sales of Office 2010 in general have to be characterized as a bit disappointing during the first two weeks.”

This isn’t particularly surprising and as Canonical’s Matt Asay points out yesterday:

n Wednesday’s Wall Street Journal, columnist Holman Jenkins, Jr asks if “Steve Ballmer is a failed CEO?” then forecasts Microsoft’s feeble future even as it banks record profits. Microsoft is a company stuck in the glory years of the 1980s and 1990s – truly glorious years for a company that built not one but two massive cash cows: Windows and Office.

The profit margins of Windows and Office gradually erode as competition increases. Microsoft’s Windows profits decline over the years, leading to more and more layoffs and an increase in Microsoft’s debt. Don’t believe the accounting hype like Asay believes it. Ballmer inherited a company with huge cash reserves which were depleted.

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4 Comments

  1. Agent_Smith said,

    July 31, 2010 at 10:48 am

    Gravatar

    The press is bashing Office 2010 http://www.pcworld.com/businesscenter/article/201145/five_reasons_you_dont_need_microsoft_office_2010.html

    But I read Mr. Asay’s article… I kinda pity that article, he, giving good tips for Micro$oft ?
    Anyway, once, M$ wanted to be like IBM. Then, it should accept to fade away like IBM’s fading…

    Dr. Roy Schestowitz Reply:

    IBM never quite faded (especially in servers) and in the early days it collaborated with Microsoft.

  2. Agent_Smith said,

    July 31, 2010 at 11:35 am

    Gravatar

    Yup, I know, but the IBM from the 50′s or 60′s is no more. They are shrinking in size and in power. Maybe not that much, as we would like it to(software patents), but it’s nowhere near the juggernaut it once was.

    Dr. Roy Schestowitz Reply:

    The same is true about their home country, which is why they move the workforce eastwards.

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