I agree with Joe Wilcox and his take on the current position Microsoft finds itself in: a very difficult one.
I’m no stock analyst and I’m not going to event try to understand the numbers, but I do think there is an underlying confidence in Microsoft at the moment.
I suspect there’s a few reasons for this. First, and perhaps this is just me, I’ve seen a lot less hype from Microsoft in the last 6 months. The days of flashy launch events seem to have died down (replaced perhaps by better advertising campaigns) and the company is focussing on delivering quality products. The Microsoft PR machine has played its Windows 7 cards very carefully so far, and it seems to be paying off. The sentiment for Windows 7 is very positive.
Much will depend on the success of Windows 7 later this year, and as I’ve mentioned before, it is my belief that Windows 7 will be the release that is looked back on in years to come as the even that saved Microsoft.
And the number of releases lately is very encouraging. SQL Server, SharePoint, Office, Vista all getting hype-low, quality-high updates (Service Packs); BizTalk and IE getting released; new technologies such as Silverlight 3, and Exchange 2010 Beta getting announced (these last two with perhaps with a little more hype than the others, but with restraint none the less).
As Joe notes, this is a time for Microsoft to be pushing out the updates and pre-release so that when the economy turns around and companies start opening their wallets again, there won’t be such a long lead time to adoption.
As you may know I’ve long been a Microsoft fan-boi but that hasn’t stopped me taking shots where I think they deserve it (example). But that said, the Microsoft I’m seeing today is undoubtedly on a very strong foundation (lay-offs and netbook pressures withstanding) in most areas. I will say however that I think they are weak on the mobile and browser fronts and will lose entirely there.
In terms of the result, Chris Liddell (Microsoft CFO) doesn’t talk up it up too much, although he does look for some light in their cost cutting measures. Overall, the down results won’t be turning around in a hurry (from Microsoft PressPass):
“While market conditions remained weak during the quarter, I was pleased with the organization’s ability to offset revenue pressures with the swift implementation of cost-savings initiatives,” said Chris Liddell, chief financial officer at Microsoft. “We expect the weakness to continue through at least the next quarter.”
You’ll note that in general Microsoft hasn’t attempted to spin its bad news. Bad news is bad news.
But overall, I think the news and outlook for Microsoft is good.