
Microsoft, capitulation and the end of Windows Everywhere - revorad
http://ben-evans.com/benedictevans/2015/7/8/capitulation
======
orf
A couple of choice quotes:

> PCs aren't going away any time soon, any more than faxes or mainframes did,
> but they are the past, not the future

Faxes and mainframes faded into corners of businesses, and this is never going
to happen with PCs. Sure, maybe desktops, but everybody I know has a laptop
and uses them a lot for certain tasks (some of which have been superceded by
their mobile, addmittedly). There are just some things you can't do on a
mobile - plug a HDMI cable into it, play half decent games, torrent, write
your disseration. PC's will evolve but saying they will fade away like faxes
is a bit silly IMO. Phones are also newer, change faster and are replaced a
lot (once a year/2 years) whereas a laptop lasts a lot longer and people are
more resistant to upgrading (if it ain't broke don't fix it, which is
something that doesn't seem to apply to buying new mobiles. Perhaps it's
because moving PC's is a _pain_ if you're not technical).

> Windows had actually ceased to be the dominant development platform in the
> late 1990s with the rise of the web

You should tell that to the endless numbers of of .NET developers (who didn't
exist in the 1990's) and enterprises that run on Windows. Having apps run in
your browser is cool, but a quick glance at my start menu shows a _lot_ of
non-web software, all developed for (and on) Windows.

~~~
msabalau
From a consumer perspective, it's unclear why a typical person needs a pc or
laptop. For video content, a Chromecast is easier than fiddling with plugs and
almost as cheap as an HDMI cable. A console provides a vastly superior gaming
experience to a similarly priced laptop and almost no one needs to write a
dissertation. And if you need to type at home for some reason, a $120
chromebook will do the job just fine--that may be a "laptop", but it's one
that's worse than irrelevant to Microsoft.

And smartphones are better than PC in all sorts of ways. They can always be
with you, they can function as a camera and video recorder directly, they
aren't a box into which you need to figure out how to get your content into.
They take up less space, and can easily be customized with cases for style and
self expression.

Home computers started as a niche interest, and they'll return to that.

~~~
quanticle
>From a consumer perspective, it's unclear why a typical person needs a pc or
laptop.

Simple ergonomics. Forget dissertations, I get annoyed writing Hacker News
comments on my phone. Technology may change, but human physiology doesn't, and
until we get telepathic interfaces, a "human sized" interface is going to be
most comfortable for any task that takes longer than a few minutes.

~~~
sospep
Try talking to it. Voice recognition is really good on most platforms today. I
realize that its not always an option but can be very handy at times.

~~~
norea-armozel
I tried doing that with a tumblr blog I have and it didn't work out. It's
faster and easier to write by keyboard. Seriously, I can't see how anyone
talks to a phone while trying to get their thoughts out. Correcting a sentence
or copying/pasting a series of sentences is much easier with a mouse/keyboard
combo than a touchscreen/voice combo.

------
Mithaldu
Comparing phones and PCs is ridiculous. Comparing the sales rate of a new
technology with the one of an old wildly different technology is jumping the
shark. Or just sheer naivety.

Edit: Just noticed: The first graph also compares unit numbers instead of how
many dollars changed hands, making it even more silly.

~~~
kisstheblade
Also good to remember that PCs (desktops) and laptops are really good enough
already. Nobody _wants_ to replace them if they don't really need to. My work
laptop is 5 years old and still functions perfectly, and is about as powerful
as new laptops. And I actually use the thing 8hrs a day so if there was
something "better" I'd switch immediately.

So who really cares if kids need a new shiny phone every christmas to be hip?
It's just a "gadget" for now.

~~~
Mithaldu
That's what i meant with the old vs new thing. :)

Nowadays smart phones are getting LOTS of sales because the technology is
evolving a lot and humanity as a whole is still "on-boarding". There's
actually a reason to buy new ones every year as the new models are
significantly different.

------
acqq
Better think in the Steve Jobs' parallel: the PCs are the trucks, the mobile
devices are the cars.

Are there much more cars than trucks? Certainly yes. Are the cars making the
trucks completely not needed? Certainly no.

~~~
chadgeidel
To continue to abuse that analogy, Trucks are probably selling better now than
20 years ago because they are "cheap" luxury cars. In this analogy, perhaps
the "gamer PC" is the "truck" of the computer age?

~~~
ethana
Just so you know, trucks (F150, Silverado, RAM) have been consistently selling
in the top 5 spots. The only 'car' sell at the top 5 is the Toyota Camry ;)

~~~
chadgeidel
Yeah, I know. I was hedging with "probably" because I don't have the hard
data.

------
cwyers
Phones and tablets may some day supplant the PC as the primary devices for
consumption. But PCs are certainly not going to be replaced as the primary
devices for creation. Moreover, almost every app you use on a phone or tablet
and every web page you view is powered by a server on the other end, and those
servers are going to be PCs for the foreseeable future. Phones don't replace
PCs, phones create demand for servers that PCs can and will fulfill.

~~~
tsunamifury
Phones have already supplanted pcs in many forms of creation, photography,
messaging, data gathering, gps, and many many more.

The phone is now a primary photo editor for the majority of users. It's where
I'm authoring this comment right now.

~~~
loco5niner
Editing pictures for facebook and creating comments in a forum are are not
particularly "forms of creation". Photoshopping a magazine cover and building
a website are.

As for photography, messaging, and gps. Well, of course. Those are a natural
use for that form factor. I'm not going to take my laptop out to take a
picture... (I'm kind of surprised you didn't mention that the phone is better
for making phone calls too).

~~~
toborrobot
Nobody would take their laptop out to take a picture, but plenty of people use
Skype on a laptop.

Maybe it's a quirk of history that modern phones are named after the
telephone; most phone usage involves reading text, not speaking or listening.

~~~
loco5niner
And both of those uses are examples of consumption, not creation.

------
threeseed
Microsoft's strategy is quite clear. One Windows app, deployed everywhere with
a focus on productivity and smart services. In no way has there been any
capitulation. In fact Microsoft leads the space. Does Apple have universal
apps ? No. Does Google ? No. And does Apple or Google have an equivalent to
Azure's strategic analytics plays ? No.

The platform game is not short term. And I would be turning my attention to
Google who look in far worse shape long term. They are still very much an
advertising company dependent on search revenues. And they haven't
demonstrated much ability to expand into other markets.

~~~
mattzito
Well, you're conflating various things here:

> One Windows app, deployed everywhere with a focus on productivity and smart
> services. In no way has there been any capitulation. In fact Microsoft leads
> the space. Does Apple have universal apps ?

The value of universal apps are debatable, but let's say Microsoft does rule
that space. When $some_crazy_high_percentage of delivered phones are android
and iOS, the market has spoken - people dont' care about running the same app
on their phone and their desktop. Even if Microsoft successfully makes a shift
to offering their app development platform on iOS and Android, they're now
doing that from a position of weakness. There's certainly money to be made
there, but its the difference between a serf and a lord. Microsoft is the lord
of its own domain when they control the phone platform, and is a serf in
Apple's.

But then you switch to something else:

> And does Apple or Google have an equivalent to Azure's strategic analytics
> plays ? No.

But that's an entirely different rodeo than the whole thrust of the article,
which is the declining dominance of the PC and Microsoft's lack of success in
the mobile space. Apple doesn't even care about the enterprise computing space
from that perspective, and Amazon absolutely does want to offer those
analytics - it's an entirely different set of competitors.

So, sure, yes, Microsoft is doing cool stuff with Azure, which is great, maybe
that's the future of the business. But that's a very different business than
owning 90-something percent of the software powering every personal computing
device in the world.

~~~
cwyers
> So, sure, yes, Microsoft is doing cool stuff with Azure, which is great,
> maybe that's the future of the business. But that's a very different
> business than owning 90-something percent of the software powering every
> personal computing device in the world.

Is it? Phones and cloud services aren't in competition, they're complimentary
services -- phones create demand for cloud services.

~~~
mattzito
> Phones and cloud services aren't in competition, they're complimentary
> services -- phones create demand for cloud services.

Sure, from the standpoint that devices create demand for computing services,
which these days are delivered via the cloud. But there's a lot less of an
inherent advantage that Microsoft has in that environment.

On top of that, the money to be made is a lot lower. Let's throw out a
scenario here - Microsoft trades its OS dominance for a dominance in cloud
computing. They lose all of their OS revenue (unlikely to happen) in exchange
for having a huge chunk of the cloud computing market (also unlikely to
happen).

If we model this out - Amazon AWS in 2015 will make roughly $6b in revenue,
which is about 10% of the total public cloud market in 2015 according to IDC
In 2018, this market is supposed to be 128b. Let's say that Microsoft in 2018
has 2x Amazon's current market share, which would be a huge success by any
measure, that gives them ~$24b in revenue.

Which is half of what they made in business software licensing in 2014.
_Half_. They made 40 billion just on the business licensing end of their
traditional software business.

I fully believe Microsoft will continue to live and innovate and potentially
succeed in this brave new world, but it will do so at a huge long-term impact
to its revenue and size.

------
enochroot
Benedict's comment on this thread:

> I love how conservative and backwards-looking Hacker News can be. PCs rule!
> Phones are toys!

Source:
[https://twitter.com/BenedictEvans/status/626173995566497792](https://twitter.com/BenedictEvans/status/626173995566497792)

~~~
mahouse
He always acts in a very mature way when people disagree with him. ;P

~~~
benedictevans
I aim to meet comments at their own level ;) Have a look at the first posts.
Was that not an accurate description?

------
guiomie
If windows continuum is well designed, I believe this could be a trend
reversal. Lot's of people need a laptop/pc beause you simply cant produce good
work with a tablet. But lots of people want just one device.

------
fourmii
Can't believe he's using Uber as an app that's not on PCs but smartphones,
because I want to pull out my laptop to hail a car.. And those other examples
like Pinterest, Instacart and Instagram are pretty silly too, don't people
just use their browsers?

~~~
tdicola
That's the point. Those apps will never make sense on a desktop and just
drives home the point that touting universal apps & easy porting of mobile
apps to desktop is pointless.

------
MarkMc
This is a great summary of tech history and where Microsoft went wrong. If
this one article could be sent back in time 15 years Bill Gates could have
doubled his net worth by now.

There's no doubt that Microsoft has lost the mobile platform and the value of
Windows has declined. But still, I'm much more optimistic than Evans about the
future value of Office - it's quite possible that in 30 years most enterprise
businesses will still buy an Office subscription as standard. Just as Apple
creams almost all smartphone profits despite a 15% market share, so Microsoft
can get outsize profit for productivity apps by concentrating on enterprise
businesses.

------
mythz
The "Big 4" Technology Companies: Apple, Google, Facebook, Amazon all have
their primary business models around targeting consumers of which the trend is
that more of them are turning towards using Internet-capable mobile devices as
their preferred computing device. This isn't a hypothetical trend far off into
the future, Apple is already the largest company in the world because of its
success and focus on non-PC devices.

This is why Devices vs PC Market share is very relevant for gauging Company
trajectories, the gateway to consumers is moving "Post-PC" to Internet Devices
where those with business models that benefit from a strong mobile presence
are set to prosper in future.

With Microsoft's flailing Windows Phone and Surface their grip on consumer
mind-share is steadily declining, they've still got Office to target end-users
but even this is focused on Business users whilst Xbox and Minecraft targets
gamers. Skype's a popular App that they may be able to do something with, but
ultimately it's just an App on a much larger Mobile ecosystem.

Their Azure cloud platform does benefit from Companies hosting their Mobile
Web Service on Azure and Windows/SQL Server Licenses so they'll have a healthy
income for many years to come, but unless they have a prosperous mobile
strategy they're going to miss the next lucrative computing platform which
will affect their mindshare with Consumers and overall growth vs the Big 4.

------
loco5niner
Phones and tablets are great consumption devices, but not so much for say,
building a web site.

------
Shorel
Don't forget people buy more cellphones because they get stolen more often.

Smartphone makers have little to no incentive to change this.

