Friday, 14 October 2011

In The Wrong Place at The Wrong Time

The company that Microsoft staff describe as 'Just noise' or 'Just an advertising company' made quite a noise and sold a lot of adverts yesterday.

Google announced a very impressive 26% rise in quarterly profits to $2.73bn up from $2.1bn in the same period last year with revenues reaching almost $10bn for the same period as well, which was up 33% on last year.

The astute mathematicians amongst us will realise that the profitability of this business is just extraordinary and the resources it is accumulating are equally impressive. The future looks just as good as its mobile operating system, Android, makes great in roads in the smartphone market and now the tablet market as well. On other market fronts, the take up of Google's answer to Facebook, Google+, was very heartening while it will make great play of its Google wallet concept in the next year as it attacks the voucher market which is so in vogue right now.

In the meantime, as the client computing market changes appreciably and quickly, PC and netbook sales have dropped dramatically meaning that the opportunity for Microsoft to continue accruing rising revenues on its Windows operating system are diminishing while its share of the smartphone and tablet market operating systems is pitiful. Equally, the opportunity for sales of its client based productivity software such as Office will fall as clients change. Microsoft has all but capitulated in the search and advertising market while its partnership with Nokia may be too little, too late to get it a  share of the mobile operating system opportunity.

What Apple and Google have done is to redefine the whole concept of client computing, the operating system that runs the devices and how software is delivered, costed and refreshed on these devices, using the Cloud to its fullest extent. Steve Jobs and his counterparts at Google have moved us all into a different place that has changed the way we use computing devices at a very personal level which is directly linked to how we work in business. For RIM, the founder of business-grade mobile communications with applications, it was another sorry week as their network failed them giving their customers' executives the final excuses that they needed to switch off the Blackberry future.

There is always a lag in these things and the next 2 or 3 quarters will be a very interesting time for Microsoft and a very bad one for RIM. There could be a case made that Microsoft is in the wrong place at the wrong time, while RIM has had its moment and failed to see the future.

There is definitely a case that the main players have vastly underestimated the success of Apple and Google. Some may call it 'noise' but you can't argue with numbers.

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