Has Microsoft lost it?

You already know my take on it, but there appears to be more to this topic with the financial community chiming in now:

We wanted to share some thoughts on Microsoft (MSFT), which we closed during the quarter.  We believe that we purchased the shares at an attractive time, and for a good while the investment worked nicely.  As has been our habit of late, we overstayed our welcome as the shares peaked after the company announced a very good September 2007 quarter. 

Since then, management has acted in an overaggressive and almost panicky fashion regarding its online offering.  First, it sought to acquire Yahoo! and then after that failed, it announced extremely high internal investment requirements to pursue this “huge” opportunity (read: “Google-envy”).  We doubt the opportunity is what they say it is and wish MSFT focused on its core strength: software. 

The CEO is a very smart and very wealthy man.  Perhaps, he is so wealthy that he has bigger ideas and aspirations than making MSFT’s shareholders wealthier.  We’ve given up on MSFT for now as we feel better investing in companies where management at least appears to be trying to work for shareholders.

I think David is right on with Microsoft losing focus, losing in consumer web properties, losing in search, losing in media players, losing in… well… everything except software.

Knowing the guy, I never got the sense that he is so wealthy that he has bigger ideas and aspirations that transcend the core business of making money. As an unnamed Microsoft whore pointed out the other day via IM, Microsoft is above all things an insecure, arrogant company that cannot stand not being #1 or an ounce of competition, even if the competition pays it licensing fees and royalties. I am not sure if they are arrogant or just afraid – Microsoft has always stood for a seamless computing experience, so they think that if anyone is to get on their territory their doom will soon follow. That is why you see them trying to spread their wings to nearly anything that runs software.

There is a little more to this, as more and more PDC content comes available every day it reveals what Microsoft is actually up to. Developers are writing software that runs on distributed clusters on the Internet. There is relatively little new stuff showing up on the desktop. Microsoft doesn’t own the Internet, it doesn’t control the Internet, and as far as standards are concerned it doesn’t control any of them or for the most part doesn’t even come close to the 10% share.

What is a company with 90% desktop OS market share to do when it cannot move the developers to develop for its market dominant platform and the choice of OS become irrelevant?

You don’t have to look further than Microsoft’s 10-K which lists their going concerns.

Microsoft is about to enter very dangerous territory: It walks into a fight with tarnished reputation for it’s core business, with multiple losses across a wide variety of markets from search to media, and now it opens a huge front with a 1.0 release on the cloud without the comfort of a huge partner sales force it has just alienated.

One has to wonder if Microsoft’s lack of immediate success and fanboy following for their cloud computing initiatives to be announced at PDC simply leave Microsoft as a giant, yet subpar, technology company on the decline.

As the old saying goes: Nobody ever got fired for buying IBM. Oh yeah? And where are they now in terms of the way you view hardware and software? Another blue to bite the dust? We’ll know very soon.