Seeking Alpha
Long only, medium-term horizon, tech, solar
Profile| Send Message|
( followers)  

Integration.

You know what Apple (AAPL) is.

You understand its products and its brand message. Apple depends on no other company, not in the making of what it sells, not in selling it, not in servicing it. (Well, no one actually services it anymore... )

Microsoft? (MSFT) That's some Chinese brand on the laptop. It's someone else's application running in the server room. You probably bought it at Best Buy (BBY).

The partnerships that served Microsoft so well in the 1990s, in other words, hamper it in the 2010s. This was obvious at this week's Partner Conference in Toronto, where CEO Steve Ballmer looked as angry as ever, insisting that Windows 8 will be huge, and promised to compete with Apple across the board.

Maybe.

But then why does Microsoft still need partners? And why does it still feel the need to buy basic interface technology like Predictive Pixel. Isn't it self-sufficient yet?

Fact is, Microsoft is still covering-up for real holes in its product line-up, and hiding its real business model. Its real business model involves shaking down retailers, makers of competing products, and corporate America, which still depends upon it for basic productivity.

Not that there's anything wrong with that. Except it's money coming from the past, getting paid into the future, and leaving an unfocused present.

Microsoft is re-charging its entire product line this year, with new Windows, a new way to sell Office, its own tablet and a new Metro interface for phones. (Yadda-yadda-yadda.) Traditionally these kinds of events put a charge into both revenue and earnings. These are also events that take place about once in three years, while with Apple they take place twice a year.

But Microsoft still isn't Apple. It never will be. That's not in its DNA. It needs its partners too badly for that to happen.

So it will remain muddled. When the money flows from Windows 8, after the fourth quarter, and everyone starts thinking Microsoft has its mojo back, do what I'm going to do.

Sell.

Source: What Microsoft Is Missing