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Sunday, September 25, 2005
The news about Microsoft's radical reorganizationrings as a prelude to either splitting the company into three separate corporations or perhaps selling off one or two pieces of the company. The new organization looks too much like three separate companies that are designed to all survive alone, writes John C.Dvorak. As the stock has not reacted so much to new announcements & a general dullness pervades the company with good talent rotinely leaving, John sees that Microsoft is relatively moribund with the exception of the Xbox team that has attracted the best within the company. And with $60 billion or so in the coffers Microsoft is essentially sitting on two cash cows - the Windows Operating System and the Office Suite. The Xbox group has the potential to be a cash cow. Too many cash cows makes a lazy company. These three entities could easily be spun into new companies . John notes that this concept is nothing new - Motorola, HP & IBM have done it in the past. He extends his thinking and sees that the Windows part of the company will retain the name Microsoft and sell Windows XP, Vista and anything related to operating systems and OS development,the Office suite folks and all the applications will be spun off into a new corporation with a new name & a third company which will be the Xbox Corporation will be a stand-alone game and hardware company selling all sorts of hardware and all the games for the Xbox. Since it is the most dynamic and exciting of the three new corporations it may be presented to the public as an IPO with the current owners of Microsoft ending up with some sort of preferred stock. When can these happen - in a year or two as the new divisions must first settle in as independent entities, speculates John.
|Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld