So how has Microsoft survived in recent years?
1.
In the seven years from 1997 to 2004, Microsoft has been deeply involved in the crisis of antitrust cases. From the United States to Europe, from Japan to South Korea, almost the entire world's judicial departments are working against Microsoft.
From browsers to players to servers, the fines of 1 billion from judicial departments in various places are really too much for Microsoft to bear. Microsoft's legal department has also been nicknamed the European Union's cash machine.
In order to prevent his "monopoly" status from being confirmed, Bill Gates, who suffered deeply in 1997, even invested US$150 million in the dying Apple to help Jobs develop a new MacOS system. It also helped this old rival adapt to office software products.
It is said that Jobs, who had just returned to Apple at the time, personally called Gates and threatened: "If you don't invest, we will sue you for patent infringement."
Later on, Apple was also very loyal. When Microsoft was deeply entrenched in the monopoly of win98 and win2000 server systems, it launched its own server products in a timely manner. The EU had to shift the focus of its monopoly investigation to multimedia players.
After experiencing so many crises, under the leadership of Ballmer, Microsoft reorganized its product layout. It began to turn its attention to the enterprise market, especially office software and server system products and services. In the consumer market, Microsoft only focuses on the relevant technical standards of new products, and then only charges patent fees and does not directly compete with third-party companies.
Even on the core Windows operating system, it is done half-heartedly. Every new version of the system is divided into a home version and an enterprise version.
Since then, rival Apple has often ridiculed Microsoft's Windows system for being outdated and unprogressive in its own press conferences. And Microsoft's performance is indeed the same. The two generational products launched after 2004, Windows Vista and Windows 8, are all semi-finished products in terms of code quality, interface completion and product experience. It is clear that Microsoft just feels that the PC market has been shrinking, and then uses some semi-finished products to collect user feedback, and then optimizes the product.
.NET, a framework technology product that serves software developers, has been an experimental product for 15 years since its release in 2002. The overly unstable Win10 system simply makes users wonder what Microsoft did in the first place?
The reason for these problems is that Microsoft has been weakening the impact of the consumer market on the company's financial reports, and has long been devoted to the enterprise services market.
2.
Microsoft’s profit focus in recent years has been on office software. Relying on professional office software, Microsoft has early won the global enterprise office market. Server systems and Azure cloud computing, which have developed in recent years, are another focus of Microsoft's revenue.
Today, Microsoft released last year’s third quarter financial report, which showed that Microsoft’s total revenue in the third quarter of fiscal year 2017 was US$22.1 billion, and its net profit reached US$4.8 billion. Among them, the revenue of intelligent cloud services reached US$6.8 billion; the revenue of the productivity and business process department represented by Office business contributed US$8 billion; the revenue of personal computing business shrank to US$8.8 billion, which was the only sector that fell.
Overall, the revenue from the C-end consumer market only accounts for 7.6% of the total revenue. In this part of the business, Xbox game consoles, games, search advertising, office software, cloud services, etc. Products and services also occupy a large share.
In this way, the Windows operating system, which has the most profound impact on everyone's lives, is no longer a key project for Microsoft! As for the mass consumer market, Microsoft relies on its patent reserves that have been deployed first. It has made a lot of money every year from the patent fees it collects from Google, Samsung, Apple, Amazon, Huawei and other manufacturers!
What’s even more paradoxical is that Microsoft collects patent fees from Android mobile phone manufacturers every year, and Samsung alone has reached 1 billion U.S. dollars. This is only the data for 2013! According to public information, Samsung needs to pay Microsoft about US$12-13 in patent fees for every Android phone sold, while HTC pays US$10. Others include LG, Asus, Lenovo, Amazon, and companies that manufacture Linux and ChromeBook devices. Manufacturers also need to pay corresponding patent fees to Microsoft.
Microsoft’s patents cover everything from address book updates, file synchronization, software menus, browsers, and even baseband chip processors for mobile phone calls. The patents accumulated over decades have been passed on to every latecomer. Charge patent fees. These expenses only require cooperation and auditing by the legal team and the financial department. The operating costs are extremely low, and they are basically all net profits. The annual patent fees of several billion US dollars are very eye-catching in the net profit of 20 billion US dollars.
The wool gathered from various mobile phone, tablet and all electronic equipment manufacturers is enough to keep oneself alive. According to 2011 data, Microsoft's Android patent fees were five times higher than its Windows Phone sales revenue.
3.
Why did Steve Jobs, who cooperated with Gates in the antitrust case, finally be able to lead the creation of a new era of mobile Internet! And how can Gates' Microsoft remain indifferent to the irony at Apple's press conferences over the years?
This is obviously not the case!
Microsoft has only given up part of the niche market to Apple, and has never let go of the slightly larger market. This is like the relationship between Intel and AMD! Since Ballmer was promoted to Microsoft president in 1998 and became Microsoft CEO in 2000, he has been promoting the development of Microsoft's new businesses, especially the hardware business. Ballmer sees the future prospects of the consumer electronics hardware business and hopes to make a difference in this field.
From 2000 to 2008, Bill Gates, as the chairman of Microsoft, has been busy building smart mansions for the future.
Faced with such a large market as the mobile Internet, Microsoft has been planning its layout since 1996 and has been pursuing it all the way. However, its own internal interests are confusing and it is unable to unify its decision-making resources and enter firmly. This is a big company disease that is difficult to cure for Microsoft.
From 1995 to 2000, the entire IT industry was caught in the problem of development direction. Should it develop in the direction of high-performance computing and upgrade and replace existing products in the market? Or should it build a mini handheld computer and open up a new field?
Microsoft made two preparations. On the one hand, it strengthened cooperation with the Wintel Alliance and continued to build high-performance computers; on the other hand, it launched the embedded operating system Windows CE in 1996 and entered the fields of industrial computers and handheld computers!
In 1997, Intel joined forces with the entire industry chain to promote RAMBUS's DR DRAM technology. Because Intel and RAMBUS were too ambitious and wanted to increase the memory transfer rate from 100MHz to 600MHz or even 1066MHz, they failed at the end of 1998 due to too many technical defects.
At the same time, because the patent fees paid by Intel and RAMBUS were too high, Taiwan VIA teamed up with a number of memory and system module manufacturers to launch a 133MHz SDRAM solution as an alternative. By 2000, Intel started a patent war with RAMBUS and the entire market began to ban VIA products, causing VIA to miss opportunities for development and giving Intel a chance to breathe.
As a result, the high-end computing equipment plan that was dreamed of reaching the sky in one step came to nothing!
In the same period, Apple quickly launched iMac and iBook products with PowerPC architecture, aiming to enter the handheld computer and light office market.
On the other hand, Microsoft has not been idle. Since 1997, it has cooperated with HTC, a subsidiary of VIA, to develop Windows CE handheld computer products.
In 2000, after experiencing the success of Kangaroo and iPAQ, Microsoft developed a new Windows Mobile based on Windows CE and began to enter the smartphone market. Since then, HTC has occupied 80% of the Windows Mobile device market share. Until 2009, HTC's Windows Mobile devices occupied a large share in the smartphone field.
In 2006, Microsoft launched its own Zune player product after seeing the huge market potential of Apple's iPod and iTunes bundled on Mac computers. This is the first hardware product launched by Microsoft. It also launched Zune, a music management software for Windows computers, and adapted this software to Windows Mobile.
However, Zune, like Dell's MP3 before, was not successful.
In 2002, in order to defeat Apple's iPod, Dell took the initiative to help Apple sell iPods in its own PC channel. In 2004, Dell launched its own MP3 product, which was more cost-effective, but it was too ugly and ended in failure.
In 2010, Microsoft launched two Windows Phone products, Kin1/2.
But all failed.
4.
So far, Microsoft has developed mobile products for 20 years, but Microsoft has never seriously optimized related developer services!
Although Microsoft released the .NET technology framework in 2002, this product has existed as an experimental product for 15 years! Whether it is a Windows desktop system or a Windows mobile system, the API interfaces of Microsoft operating systems have not been unified for many years, and forward compatibility is very poor.
As a result, the developer ecosystem of Windows mobile devices has always been imperfect. Windows Mobile, which has been developed for more than ten years, has a worse number of applications and user experience than iOS, which was launched two years ago.
Microsoft has been unable to fully enter the hardware field due to investors' risk control. Due to the business model of software sales, Microsoft's business department is relatively strong, with "presidents" everywhere. Internal management checks and balances are also an issue.
In the Ballmer era, although he gave beautiful revenue reports, changed Gates' aggressive style into a friendly and harmonious image, and fought against everyone's opinions to acquire Nokia, it was difficult to follow the strategy. Planning to reorganize product development strategy. After all, Ballmer still came out of the business department, and it is still difficult to grasp the product rhythm well.
Even if Ballmer was once Gates’ college roommate, he once far surpassed Gates in math exams.
Since 2014, after Nadella, who is familiar with technology products, came to power and controlled the development of software products, he finally won the recognition of Gates and investors and began to comprehensively lay out the software and hardware technology route.
After WP, Windows RT, and Win10 experienced the embarrassment of being half-finished products for many years, the Windows 10 Cloud system, which is about to be launched, is finally taking the step to transform into a qualified finished product!