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Technology news and Jobs arrow Our Blogs arrow Core Dump arrow Microsoft has hit bottom, set for rebound: analyst
Microsoft has hit bottom, set for rebound: analyst E-mail
by Stephen Withers   
Monday, 27 July 2009
Analyst firm Ovum describes Microsoft's results as "dismal" but suggests the worst might be over for the software giant.

The global recession/downturn/crisis (or whatever you care to call it) might not be over. There is clearly some pain still to come, with unemployment tipped to rise over the next year or so. But things do seemed to have bottomed out, and it is time to start looking for good news.

It's not hard to see why Ovum characterised Microsoft's fourth-quarter and full-year results as dismal.

Gross revenues were down 17 percent and 3 percent respectively. And net income was down 29 percent and 18 percent. Only stringent cost-cutting - including the first-ever layoffs at Microsoft - prevented even worse results, according to Ovum research director Warren Wilson.

He reckons that a wave of new products from Microsoft could see its position improve later this year. To me, that's a convincing argument. After all, multiple products are set to be replaced in a relatively short timeframe.

Windows 7 isn't far away. Apart from the upgrade business, a successful debut for the new operating system could release pent-up demand for new hardware. If customers had decided against switching to Vista, there were no compelling reasons for replacing PCs or notebooks across the board.

Clearly, non-consumer customers will still need to come up with a viable business case for hardware or software upgrades, but the Windows 7 release candidate is apparently being received with an enthusiasm that Vista never manages to attract. Getting past Vista removes a significant obstacle to upgrades.

Windows Server 2008 R2 will ship around the same time. New virtualisation and management features could spark renewed interest - especially as virtualisation is seen as a significant factor in reducing IT costs and energy consumption.

What else is ahead? Please read on.



 
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