Feeling the heat at Microsoft

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What heat?

Microsoft is adding free and paid services to the already profitable operating system and Office products. Why would the company receive less revenue when the range of products has increased?

Here's the relevant question and answer:

Q A lot has been made about the consumer side of Web services, but Microsoft's enterprise business is undergoing a pretty radical transformation as well, with a move to support a mix of Web-based services and on-premise software. On the enterprise side of things, do you see the services world being as good a business, as profitable as the on-premise-only world was?

Ballmer: I think it's better. I mean, if you do it right, it's better. If we do it right, it should be better. My basic thesis, and what I tell our folks--and it's got to be proven in the market--is if we add more value for our customers, it ought to allow us to make at least as much money as we make today, if not more.

We can have service-based offerings that essentially line up with our information worker infrastructure products--Exchange and SharePoint, Office Communications Server--if we have instances that sort of line up to what people do, development and deployment applications, database applications, etc. That is more value. We can help people reduce management costs, deployment costs, operations costs, data center costs...Somehow, if we can help our customers avoid cost and complexity that they have and give them all the value we give them today, there ought to be a trade in there where we get to make a little bit more money and our customers get a lot more value.

[End quote.]

He's discussing additional products to be bought and add-ons able to make existing products more useful and so sell new versions.

The Microsoft-centric view, that the competition is older versions of Microsoft products, continues. He can name competitors and descrobe why he thinks they'll be beaten. And so far he's right.

Posted by: Anton Philidor   Posted on: 03/02/08 You are currently: a Guest | Members login | Terms of Use

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