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Microsoft called a failing giant that only survives by charging prices that ‘bleed customers dry’

January 3rd, 2013 at 10:10 AM
Microsoft Criticism

If you want to read a truly pessimistic take on Microsoft’s (MSFT) current problems, look no further than Forbes‘ Roger Kay, who declares that Steve Ballmer’s company is only surviving because most customers haven’t yet figured out that there are plenty of alternatives to Windows. In fact, other than providing something of a check on Apple (AAPL) and Google (GOOG), Kay says that Microsoft’s only purpose is to extract rents from consumers who only buy PCs because they’ve used Windows for years and are nervous about trying other things.

“[Microsoft] operates a well at the foot of a valley where a large population brings its buckets for water,” Kay writes. “And Microsoft gets to charge a monopoly rent for its ‘magic’ water.  Never mind that there are other wells elsewhere offering cheaper water.  Many people are still in the habit of coming to this one place.”

Kay justifies his harsh assessment by going through a litany of failures and mistakes that Microsoft has made over the past decade. Among them are “byzantine pricing policies” that are “designed to bleed customers dry without a thought to a future beyond this quarter’s results”; the company’s notoriously dog-eat-dog performance evaluation system that renders employees “afraid to do anything other than play palace politics in a descending spiral of shooting down each other’s projects”; and a corporate culture that has led to a mass exodus of talent, most recently including former Windows chief Steven Sinofsky and former chief research and strategy officer Craig Mundie.

Kay even trashes Microsoft’s process for naming its products, noting the trademark spat over its “Metro” interface and the failure of “Bing” to become a verb on par with “Google.”

Kay ends his long demolition of Microsoft by begging former CEO and current chairman Bill Gates to stage an intervention and force Steve Ballmer out of the company, as he says that Ballmer deserves the lion’s share of the blame for the company’s recent missteps. Kay says this has to happen because at the very least, the tech industry needs a company with Microsoft’s clout to compete with Google and Apple for the future.

“We want them to be better than this,” one software developer told Kay recently.  “We want them to be good enough to act as a foil for Apple and Google, which otherwise will take over the universe. Ten years ago, Microsoft seemed totally unassailable. If it’s just Apple and Google, we’re so f—ed.”

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