Microsoft Signals the Return of "Expensive Hardware, Cheap Software"
The announcement that Steve Ballmer will step down from Microsoft within the next 12 months and just weeks after kicking off a vast re-org focused on mobile devices can only mean that the future is coming much faster than Bill Gates or Steve Ballmer had ever expected and that without a radical adoption of hardware everywhere, it will leave the company without an existence (sans PC legacy) anywhere. The illness that effects Microsoft and Intel is a back to the future moment as the 30 year PC ecosystem dominance of Wintel will in the years to come likely be viewed as a radical departure from the traditional requirement that hardware and software co-existance is necessary in order to truly dominate. Thus the model of the IBM mainframe, the early Apple Mac and now the iphone/iOS platform shows that one ecosystem eventually dominates every generation, thus garnering more than 60% of the profits. We are way past the tipping point and Microsoft lacks ownership of hardware to drive its way forward. Be prepared for acquisitions such as Nokia as they prepare for a comeback.
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