Apple continues to gain at the expense of Microsoft

A few years ago I blogged that I thought Apple had peaked.  I no longer feel that way.  The main reason I’ve changed my mind is that Steve Jobs is no longer at the company.  Yes, I know everyone who never worked for him thinks Steve Jobs was some kind of god (and all the sycophant know he was a god); but Job’s Achilles heel was always B2B. Strangely enough, for a man who created large businesses he didn’t get large companies and especially never got what drives IT organizations. More than that, he didn’t like doing what’s needed to sell into big business.  Now with Jobs is gone, Apple can move their products into the corporate environment.  A perfect example of what never would have happened if Jobs was alive is the deal Apple now has with IBM. 

Interestingly enough it’s just not Jobs being gone that has created this opportunity for Apple but it’s also a weak Microsoft letting this happen.  Which highlights my thinking, that is, Microsoft’s earnings do not yet show how much trouble they’re in.  Microsoft is turning into Yahoo – a past leader who lost touch with customers and technology and now is just hanging on.  Microsoft’s products are old and weak.  They’ve missed major trends, producing second rate solutions as a response e.g. search engines, smartphones, tablets, online office apps, cloud services, development environments … Their development organization is so internal focused that they forgot there are actually customers out there; resulting in the creation of subpar products that technologists hate using and are confusing for end users.  While Microsoft misses out on all the latest technology trends Google and Apple are poised to eat their lunch. 

A big indicator of what’s going to be hot in IT organizations in five years are the skills Silicon Valley companies are looking for in engineers today.  Ten to fifteen years ago sixty percent of Silicon Valley companies were looking for engineers who knew .net and other Microsoft centric skills.  Today less than 1% of engineering jobs in the valley are for Microsoft centric skills.  The top engineers are being drafted into solving big data issues – centered on technologies like Hadoop – a Google/Facebook developed open source technology.  Where the less math centric programmers are being hired to develop web apps, using Google and Apple developed open source technology.

Based on this, I see Apple and Google continuing to rise at the expense of Microsoft. The big question is, can Microsoft’s new chairman change their course and turn Microsoft around.

My story of Tiananmen Square

On June 4, 1989 I had just gotten back from traveling in China when the government killed the students in Tiananmen Square. I spent the next few days glued to CNN watching what enfolded; shocked since four days earlier I was there, in Tiananmen Square.

The question I had then that I still have today is, What happened in the other cities?  Back in 1989 I was touring China with my mother.  We started our trip at the beginning of May in Shanghai.  I was told that the building across the street from our hotel was a sports stadium.  There were a number of people in front of that building dressed in white carrying banners.  When we asked our tour guide what was going on, she told us it was a sports rally for a local team.  I remember thinking, those are the strangest sports fans I’d ever seen.  

As our trip progressed and we visited more cities, it became apparent that these people with banners were more than sports fans. About a week into our trip CNN started covering the student protest story. This was the first time we learned that the people with signs were part of a country wide uprising.  The first large protests we saw were in the city center of Suzhou. As our trip continued and we visited more cities, we found each progressively filled with citizens marching in solidarity with the students.  By the time we got to Xian there were tens of thousands of people marching in solidarity. Also, by the time we got to Xian all western broadcasts were blocked.  I remember watching Chinese TV, not understanding a word they said.  What I saw were a few young men being interviewed.  These young men were having a hard time remaining conscious during the interview.  A local Chinese person told me that the young people were protest leaders in Beijing.  They were being sleep deprived.  To this day I have no idea if that assessment was accurate.

In Xian our hotel was at the top of a large traffic circle, which was the center of the protests.  Since we no longer had access to any western news I went outside, found people who spoke English, and asked what was going on.  There were copies of hand written sheets of paper pasted up on walls.  Asking around, a man who spoke English politely told me it was underground news describing what was going on in Beijing.  Another English speaker asked me what I thought of their students.  When I replied, “They’re amazing” he smiled and said, "we all are so proud of our students."

Someone else explained that the students were demonstrating for freedom.  What I learned from the people in the street was their definition of freedom and democracy was different than how those words are used in America.  At that time in China each street had a representative who reported to an area representative, who reported to a town representative, this chain of representatives went all the way to the top.  If someone on a street needed a job, wanted to go to school, wanted to change jobs or had any other basic life choice they had to go to their street representative and ask for a favor. That the street representative had a lot of power over their lives and corruption was rampant.   I learned that people wanted an ability to make life choices, what schools to apply to, what jobs to apply to, and ability to leave a job and go to a different job without asking their street representative.  I was told the students were trying to change the system, so that the people had more control over their daily lives.  

Every evening we were in Xian I could look outside of our hotel window and see tens of thousands of people walking down the street in solidarity.  This went on for hours.  This was not a small group of people walking in a circle, it was tens of thousands of people who joined in the protest. Whole families were part of it, dads pedaling a bike, moms balancing on the back and a child balancing on the handlebars. They were joined by large groups of people carrying a company banner singing their company song.  

When we finally got to Beijing, the protests and the energy was amazing.  The streets down town were impassable by bus.  We got out of our tour bus about ten blocks away and walked to Tiananmen Square.  The atmosphere was casual, lots of people with banners, whole families out showing their solidarity.  

Also in Beijing we visited the parents of a friend of my mothers.  His father spoke English and told us how worried they were for the students; that the Chinese government does not like instability.  He kept on saying this will end in disaster.  Looking back, it was the first sign of troubles to come.

Microsoft’s real problem

Ten to fifteen years ago in Silicon Valley when a software developer was looking for a new they found that roughly sixty percent of the companies were looking for people fluent in Microsoft technologies like .Net, C#, VC++, or MFC.  Fast forward to today, the skills that companies are asking for in Silicon Valley are either app development or big data, all of which use open source programming languages like C++, PHP, Java, or Python.  I estimate only one to two percent of the available jobs are for people with Microsoft centric skills.

What Silicon Valley does now, IT departments do in five years.  This is a fact that has been true for a long time.  Microsoft’s bottom line still looks strong, but if virtually all the new development is in areas other than Microsoft, then Microsoft will be then next Yahoo -- A big company that once had a leadership role and is now fighting for relevance.