Microsoft must embrace 'grim option' of Windows cannibalization

Microsoft must be ready to accept, as has Apple, that it's better to cannibalize one's own sales than to let others do it, a research analyst said today. "This is going to be a tough shift for Microsoft, to ask them to now accept that the world is a very different place than it used to be," said Al Gillen of research firm IDC. That shift is the corporate reorganization unveiled last week to support a radical strategy of retreating from decades of selling packaged software and advancing on sustainable services and potentially-lucrative devices. Corporate reorganization As part of the reorganization, Microsoft will consolidate all of its client OSes, including Windows 8, Windows RT, Windows Phone 8, Windows Embedded and Xbox, into a single engineering group led by Tony Myerson, head of Windows Phone, which was part of a soon-to-be-defunct Entertainment and Devices division. "The Windows desktop client and mobile have a lot of common functionality, and a combined group could have a lot of synergy," Gillen said of the under-one-roof reshuffle. Like most outside analysts, Gillen and his IDC colleagues believe that the marriage of Windows under Myerson will eventually lead to a common code base, which will in turn let developers write an app that runs on the "Modern" side of Windows as well as on Windows Phone. "The larger question that remains is whether a consolidation of the operating systems engineering work and the consolidation of the client division will make it not only possible, but also more probable, that Microsoft will make the right decisions," Gillen and other IDC analysts wrote in a recently-published research note. And those decisions may include a big and bitter pill for a company that, for better or worse, is identified by "Windows" as much as by its "Microsoft" nameplate. To pull off the switcheroo from software to "devices and services," Microsoft may have to abandon the high margins of the former for the lower margins of devices. "[It] may mean taking actions that cannibalize some dimensions of its business through the sale of lower-cost, lower-profit products," Gillen wrote in the note. "Historically, Microsoft has resisted internal cannibalization, and while such a move may still seem like a grim option, it remains infinitely more attractive than allowing competitors to do the cannibalization on Microsoft's behalf." Move to devices CEO Steve Ballmer himself hinted last week at that approach when he hammered home the phrase "family of devices" in a public memo outlining the reasons for the corporate realignment. In that memo, Ballmer relegated Windows to a "shell" -- his word -- subservient to the device, a 180-degree turn from Windows-as-preeminent, the common denominator of virtually all PCs. If that's the case, and if Microsoft is to capture a meaningful share of the phone and tablet markets as its historic base, the personal computer, shinks, the company must produce -- either on its own or in partnership with OEMs -- mobile devices that consumers and businesses want. It's failed to do that thus far. IDC, then, was suggesting that Microsoft must, at least in the main, sell devices based on lower prices. And the only significant component of a Windows-powered device that can be cut further -- hardware margins are at or very near the bone, and have been for years -- is the Windows license. Microsoft watch Someone made money off the Surface RT: Former Microsoft asset manager charged with insider trading Microsoft to name new CEO in early 2014 Microsoft's CEO search and the art of non-denial denials Microsoft exec hints at separate Windows release trains for consumers, business EU signs off on Microsoft-Nokia deal U.S. antitrust regulators OK Microsoft-Nokia deal Mum's the word: Microsoft board 'doing really well' at keeping quiet Scroogled swag sells out as some buyers go for the gag Gates talks CEO search, but reveals zip In role reversal, Ballmer stays composed, Gates chokes up, in shareholder meeting More in Microsoft Update download quick heal total security 2013 full version with crack download mediaheal for virtual drives crack download wechat for blackberry 9780 download adobe flash player for htc touch 2 download java for mac os x lion 10.7.3 download any video joiner full version download flash player 11 2 x64 download dota allstars 6.59 ai plus map download bahasa untuk kamus nokia e63 download idt high-definition audio codec driver for xp