What will come of Microsoft Retail?

It seems that Microsoft has also decided to get into the retail business, and will be selling Microsoft products at retail outlets at various locations. Some say that this is a mimicking of Apple Stores, and some say Microsoft can also succeed where others have failed. The question before us today then, is whether or not Microsoft can make their retail stores successful, and if this will help their overall business. It is my belief that Microsoft should abandon the idea of Microsoft Retail, and stay focused on making software, and distributing the software to vendors.

I don't know exactly what caused this notion to start up, but it's bordering on the ridiculous. The only reason Apple stores are successful is because you can't buy Apple computers anywhere else, save for a few retailers. The fact is, Microsoft products are already at practically every retail outlet that carries computer products, and most of the time Microsoft products are already bundled into computers, so there's no need to specifically look for Microsoft products. Microsoft products are the norm, and so there really isn't a reason to get new retail stores that specifically sell Microsoft products. I have some serious doubt about how successful these Microsoft stores will be, because they are essentially competing with themselves, and the people who market their products. There's really no reason for this. A better idea would be to ask retailers to make a Microsoft only section, and even then I don't think it is necessary, because most of Microsoft's products come with the products, without anyone having to ask for it.

If Microsoft were to open its own stores, chances are, nobody will go there, because you can already get Microsoft products everywhere else. It's not a matter of helping customers getting more convenient service, but simply that you are putting together a whole bunch of Microsoft Products in one store, and not sell anything else. If we look at history, most retailers have failed, and Apple is the only one that hasn't. Why is this? It's not because Apple is great at retailing, it's simply because there's demand for Apple products, and you can't get them anywhere else, so people go to Apple stores. If Apple allowed many more stores to sell their products, I suspect Apple would see significant increase in sales, but then their own Apple stores will see same store sales decline.

We can already see that these Microsoft stores will not be helping Microsoft gain more sales or customers, and so the next question is, can it help Microsoft's business?
The answer to this is most likely a no as well. Every retail store that Microsoft has to operate will increase Microsoft's expenses, and thus increased their fixed costs, which amounts to lower profit every year. The greatest businesses are able to generate maximum profit and a high rate of return on equity, whereas the poor businesses have to continually increase fixed costs in order to grow, without actually increasing profit potential. Microsoft has always been one of the best businesses around, largely because it focused on software, and thus their fixed costs were extremely low, while production costs were practically non existent once you factor in the volume of software being sold. This allowed them to continue to reap hefty profits, without the hassle of having large expenses and/or production costs and price competition. Microsoft has been able to follow this philosophy, and thus generating many cash cow products that bring revenue without Microsoft spending on them heavily. The biggest cost that Microsoft had was research & development, but once you had the product, you could product it without incurring more production costs. Now that Microsoft wants to enter the retail market, they need to rent more, buy land, pay more employees, and they also have increased production costs by having to put their products at every store, unlike when they just loaded copies of software onto hardware from other manufactures.

This all adds up to the fact that, Microsoft will have a difficult time to make their retail operations successful, and if they ARE able to, then they have some VERY talented management. With the hire of a Wal-mart veteran, and the Microsoft internal reforms, they may be able to pull it off, and allow easier access to everything Microsoft, while increasing their brand name value, but that road will be long and hard. Fortunately, they may be able to snatch up land and lower some of their long term costs by starting this operation during a depression. Unfortunately, if they start in the middle of a depression, they won't see powerful results for a while.

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Microsoft cuts jobs in cutting-edge profitable strategy

It was just this morning that Microsoft released their earnings report for the second quarter ahead of schedule. Originally, they were supposed to release the report later today, but they came out with the report and have announced a job cut of 5000 positions. It seems that the rumors about a 17% job cut were in fact wrong, but Microsoft has indeed suffered slightly in this depressing economy.
Yesterday, I wrote a post on how Microsoft couldn't possibly lay off 17% of its workforce, and it appears that I was slightly correct, and also slightly wrong.

While Microsoft has blasted ahead with profits from its Xbox division, and sustained profits from many other divisions while retaining investment, they too have suffered from the bleak economy. Due to businesses and consumers cutting their spending, Microsoft's Windows sales have been going down, and caused Microsoft's earnings per share to be $0.02 lower than analysts' expectations.
Microsoft managed to obtain slight revenue growth, despite the economic conditions. Throughout this quarter, Microsoft has showcased plenty of new software innovations and continued to invest in new products. From what we can see, although Microsoft was affected, they will continue investing in the long term, and has practically 0 chance of failing.

I said yesterday that it was highly unlikely for Microsoft to really cut massive amounts of jobs, however, the figure of 5000 jobs is still slightly disturbing. But Microsoft also says that they will continue to hire more, so in actuality the amount of workforce they are reducing is about 3000 positions. 1400 jobs will be cut immediately, and the rest will follow over an 18 month period. From my opinion, Microsoft has made an excellent choice. Cutting 1400 jobs right now will help them to sustain profits in the short term. Meanwhile, cutting the rest over a long period of 18 months will help Microsoft to make themselves more profitable, while keeping less staff. The announced hiring by Microsoft will also help Microsoft continue their position as the industry leader, because Microsoft definitely has enough cash to invest aggressively in new products, while competitors are in weaker positions. Microsoft should take this time to invest heavily in their existing product lines, and invest more into their new ventures. Even though in the short term they may have a lot of spending to do, this will undoubtedly put them in far better position in the long run.
The strategy Microsoft should take right now is to invest in products, while cutting down on marketing and other similar expenses. Microsoft doesn't have to market its products heavily right now, because there are far less people trying to buy new things, but they should resume heavy marketing as soon as the economy lights up just a little, and especially when they release Windows 7. From what Microsoft has done so far, it appears they are following this strategy quite well.

An interesting fact I noticed was that Microsoft started their massive advertising campaign just before and during the start of the major depression we're experiencing right now. Whether this was intended or not, this definitely helps Microsoft, by having marketed right before the depression, and not many other companies will be advertising during or even a little after, thus, Microsoft has gained an advantage here. Plus, from what I can tell, the use of Seinfeld in the ads while the ads weren't exactly perfect, may also contribute to reminding customers of Microsoft during dark times. It's unlikely for other companies to start massive ad campaigns during the depression, so as customers go through the depression, they will be reminded of Microsoft's ads that don't necessarily target Microsoft products in general. Then Microsoft can resume mass advertising after the depression and continue their marketing without further problems.

The outlook for Microsoft is highly positive over the next few years, from my point of view, seeing as Windows 7 is a huge improvement from Vista, and will ultimately net Microsoft some serious cash. Then, with their strategy in place, Microsoft will be in a strong position as they emerge from the depression. The only problem is we don't know how long the economic turmoil will last, so the rebound may take quite a while, and outlast the release of Windows 7. But I'm confident that customers will be itching to get Windows 7 regardless of the economy, after what happened with Vista's image (even though it wasn't all that bad as an OS).

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No way Microsoft is laying off 17% workforce

Recently the rumors have escalated enormously concerning whether Microsoft would be laying off 17% of their workforce. The FudZilla blog was the one who originally reported this outrageous rumor, and some other blogs/news sites claimed to have confirmed it and/or predict the same.
Very soon, Microsoft will be releasing its earnings report, and that's what has caused all these rumors to spike, in discussion of exactly how much Microsoft has been impacted by the depression.

Now, first of all, Microsoft has been barely affected considering some of the problems in other industries and companies. Seriously, Microsoft has a huge $19Bil + in their bank, no wonder they don't have that many problems. If anything, they're probably trying to take advantage of the issues currently in its competitors, and attempting to improve themselves.
I highly doubt Microsoft profits will have gone down by a large margin, albeit it will have been affected somewhat, considering that consumers are no longer buying as much, and businesses will not be investing as much either. However, the nature of their business causes many businesses and consumers to continue purchasing their products even during a downturn in the economy.
Microsoft most likely has weathered the economic problems so far much better off than other companies, and I believe they will exceed analyst expectations in terms of earnings and profits. Unlike other companies, Microsoft has continued to invest in new products and research to develop new product lines or continue old product lines. They have also improved various existing betas and services. In fact, you can even see the vast list of beta applications and platforms they have available on their Microsoft Connect website. Just this past half of 2008 and now 2009, Microsoft released beta versions of notable products including Internet Explorer 8 Public Beta 2, Windows Live Essentials, Windows 7, Windows SDK and others. It's obvious that Microsoft isn't going to stop their R&D anytime soon, nor are they cutting back on expenditures by a large margin.
Also taking a look at Xbox 360's enormous success this holiday season compared with other products during the recession we've experienced, Microsoft still holds major advantages and they are complying with customer demands for cheaper products, while sustaining viability and increasing market to defeat the competition. Plus, I think Microsoft is in excellent position to take maximum advantage of the depression with the release of Windows 7. From my experience, Windows 7 is already fine and ready to go whenever Microsoft wants. All they're looking for is some feedback and perhaps minor bug fixes.
With Windows 7's massive performance upgrade and improvement from Vista's issues, most customers can't wait for getting their hands on Windows 7. Especially now that there's a depression going on which might last quite a while, Microsoft's plan to market cheaper products will definitely help them. Customers no longer desire expensive computers as much as before, so many are getting the low-cost laptops/desktops with as much performance as they can pack without upping the price. Thus, Microsoft's Windows 7 improvements allow them to be in excellent position to market to these customers and will ultimately make Windows 7 highly successful, as well as get rid of Vista's tainted brand.

In such a situation where their money is plentiful, having tiny debt compared to their vast reserves of capital, and where they are in a great position to be marketing and creating new products, they can't possibly be seeking to downsize by 17%. that rumor is absolutely outrageous. While it may be true that Microsoft has slowed on hiring, that's just a part of the way a depression works. Nobody wants to overspend during such times because you never know when it'll really end. Microsoft may be looking at small layoffs in certain sections that aren't proving to be profitable, in the manner that they have always used to deal with economic issues. I highly doubt they will engage in massive company wide layoffs, unless they think they can become even more profitable, in which case I still doubt the layoffs will be as large as 17%, because such numbers are generally only shown by companies in serious debt and are failing in some way. This is one of the most profitable companies in the world that we're talking about here, and they have practically no debt, while their cash reserves are enormous.

Obviously, Microsoft isn't going to lay off 17% of their work force, but only time will tell, and we will find out their situation as the earnings report comes in. I feel inclined to believe their earnings may have increased, rather than slowed down.

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5 Reasons EU plan to cut IE from windows will fail

Recently, the European Union (EU) has decided to take serious legal action against Microsoft, by claiming their Internet Explorer (IE) should not be bundled with Windows, because it is anti competitive and is taking advantage of Microsoft's immense market power. They want Microsoft to stop immediately, and change their marketing tactics so that Internet Explorer will no longer be bundled with future releases of Windows. They have not made any statements concerning whether Windows can come with different versions with and without IE.
Now, it may sound fine, but this logic is seriously flawed. There are too many reasons why Internet Explorer is essential to the Windows OS, and taking it off will not help consumers at all. Here's a list of reasons for why this plan must and surely will fail.

1. Internet Explorer is a part of OS
Unlike many other programs, Internet Explorer is not just any other program, but rather a part of the windows environment and operating systems. There are a variety of functions in Windows that are based on Internet Explorer, and cannot be done with Internet Explorer or another browser, and even sometimes, only Internet Explorer will suffice. Windows uses Internet Explorer to read .xml files, to set up configurations settings for various functions, to set up router settings, and much more. If we take out Internet Explorer, we are taking out a vital aspect of Windows.

2. All browsers need to be downloaded
Internet Explorer comes with Windows for one main reasons: to let users use the Internet quickly, and without hassle. Now, where do we get new browsers? Obviously, the INTERNET! And how are we supposed to get these browsers if we don't have one to begin with? There are some methods, including possibly ftp and other protocols available with command prompt, etc, but will NORMAL users be able to do this? The answer is no. They rely on the simplicity of web browsers to get around, and they probably can't get a new browser, without using Internet Explorer to download one! Thus, we have a computer that is cut off from the Internet, unless we hire somebody or ask somebody else to use sophisticated methods of downloading software.

3. Users want simplicity
For most users, the hassle of getting a new browser is far too great, and that is exactly why IE holds so much market share. The fact is, people don't want to download new browsers because there's too much hassle! Everybody just wants to get on the Internet, and be done. They don't care how bad Internet Explorer is, as long as it gets them to where they want. This is precisely why taking off Internet Explorer is not helping the consumer, and in fact causing a vareity of problems in accord with problem 2.

4. If Internet Explorer can be cut off from windows, then so should the browsers from other Operating Systems right?
Well if it really were this case, why don't the EU chase after every company or operating system? All they want, is to take off and unbundle Internet Explorer from Windows because the EU is a big Microsoft hate group. All the operatings systems around come with a browser, because it's the only natural thing to do. Most people use the computer because they want to access the Internet, so we shouldn't be impeding their desires. Of course, a computer can do many things without the Internet, but our world revolves around the Internet! Most average consumers even use the computer solely for that purpose! Thus, the EU can't strip every Operating system of their browsers, and they shouldn't strip Windows of IE.

5. Without programs like IE, Operating systems could end up with nothing left
If they can really take off IE, then in theory, they should take off every program every OS comes with. What's left of that? Maybe the recycling bin, control panel, and basic system features such as the registry. Perhaps not even that. Registry editor is a program by windows too no? So is recycling bin and all the tools in control panel. Why don't we get rid of those? Then whats left? It's very simple actually. By removing every software except the OS, what we have left is the command prompt, if you can really call it an "operating system". Here's an idea, how about Microsoft lose this case on purpose, then make a version of windows called Windows 7 Command Prompt Basic, and include nothing but command prompt in that version? I'd like to see how the world and the European Union would react. I doubt the anyone will buy this version, and even complain about it to Microsoft or the EU. Then Microsoft will just issue a statement saying they are trying to abide by the EU's laws, and making a version of Windows with just the core. In fact, this will barely affect Microsoft if they did this anyway, because people will only buy the "premium" version.

Conclusion
The EU has absolutely no grounds to be complaining about Microsoft's marketing tactics, because it's not really marketing, it's just putting a piece of software where it belongs. Internet Explorer isn't being bundled WITH Windows, it is a PART of windows. The EU cannot do anything to Microsoft, and even if they did, they would have no public backing at all. There is no way this case will go through, and I'm surprised such a ridiculous notion has even been proposed. It goes to show what Microsoft hates will do.

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It's astounding why people hate Microsoft

It really isn't a surprise to me at all, but it's always appalling to see that most of the world seems to hate Microsoft for causing the computer revolution available to the lower and middle classes.
As you probably already know, a few days back when Windows 7 was released, I wrote my review on Windows 7 Beta, some of my reliable sources alerted me to the fact that after my review got into the social media, certain people (or rather, most) commented on it by quoting all sorts of lie-filled sources with improper and rigged benchmarking (especially on an OS BETA, which is prone to benchmark faults), as well as claiming I was being paid by Microsoft.
Obviously, (or maybe not) this is not the case, and we are in no way affiliated with Microsoft. The review is simply what I experienced from the beta itself, without bias from my "views" (which I assure you, are not in support of Microsoft's anti-competitive ways, but understand that they are legal).

I may have remarked during the review that one should at least think about trying Windows 7 before making unfortunate assumptions. Obviously, Microsoft tried very hard to market Vista to people who wanted more simple OSes, and yet wanted security without "annoyances" which was a commendable effort, only it failed. What surprises me most is how people seem to think Windows 7 is another Vista, even when I was already surprised at how many people didn't seem to understand how great Vista was as an improvement in software technology.

While Vista had drawbacks, it was necessary to pave the way for future OSes. As well, Vista was a great advancement regardless of what some people might say. Most NORMAL users of Vista aren't complaining, but only the people who think they "speak out for the general population" and think they are good with computers, claim Vista is a huge pile of waste.

This is what I have to say to them: If vista were really so bad, then change the settings so that it doesn't annoy you, if you're so good with computers... If most people didn't like Vista, they could just get linux or some other system. I assure you, if everybody was so troubled by Vista, they would definitely either switch back to XP, or do something about their predicament. The fact is, they don't. Only the people who want to continue with the massive online upsurge in negative propaganda, would complain. If all these people knew what they were doing, then they could easily change some settings. Why are they still complaining and not trying to be more productive if Vista is harming their productivity? Some people might even try to claim that other OSes are gaining ground fast on vista as proof of this. Well, 2 years is definitely long enough to have made plenty of true vista haters switch. If vista and Microsoft products were all that bad, they would've been out of business long ago! Of course Apple is growing faster than Microsoft. What can you expect from a company that has ALREADY taken up basically every computer in the US? Oh and by the way, it's a monopoly because there's nobody better than them. If there were, then it wouldn't be a monopoly.
Some people say that Bill Gates and Microsoft only became a monopoly because of their special circumstances and the way Bill Gates took advantage of IBM's power and his own power. That may be so, but if they didn't do that, nobody would be here arguing about this. Only the super rich would be on the Internet, and they wouldn't bother subjecting themselves to petty arguments such as this.

In any case, Microsoft may be anti-competitive, but Windows 7 is fine, and reviews should only be based on the actual merits and problems of software, not because of bias.

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