Microsoft Corporation (NASDAQ:MSFT)’s CEO, Steve Ballmer once said, “The launch of Windows 8 is the beginning of a new era at Microsoft Corporation (NASDAQ:MSFT). Investments we’ve made over a number of years are now coming together to create a future of exceptional devices and services, with tremendous opportunity for our customers, developers, and partners.”
All of that sounded great when I first heard it. But many Wall Street analysts never bought into the hoopla. And, as evidenced by the disappointing sales figures for Surface and Windows 8, it seems consumers never really “bought it,” either.
Clearly, Microsoft Corporation (NASDAQ:MSFT)’s desire to reinvent itself is not going as well as the company had hoped. In fact, I’m not holding my breath to see any drastic changes in the foreseeable future. For that matter, neither is the Street.
Aside from the fact that there’s a gross dislike for the company’s management by analysts, proud supporters of Microsoft have begun to lose patience. Microsoft Corporation (NASDAQ:MSFT) is still getting punished because it’s not Apple Inc. (NASDAQ:AAPL), a company whose hardware focus has led to vast growth in the past decade. Fairly or unfairly, that’s reality. Unfortunately, management has fallen prey to this.
While the company has been trying to be what the Street wants it to be, Microsoft Corporation (NASDAQ:MSFT) has made the mistake of taking its eye off what it’s truly good at. Microsoft now wants to be a hardware company, and thinks it can take Apple Inc. (NASDAQ:AAPL) and Samsung head-on.
Unfortunately, the company is making this transition when everyone else has begun to realize that “software is the new hardware.” Even Cisco Systems, Inc. (NASDAQ:CSCO) has begun to shed its hardware dependence, and is now evolving toward software-defined-networking. Just imagine if Microsoft was able to capitalize on its software expertise to get into the networking business.
Microsoft Corporation (NASDAQ:MSFT) would be able to control the operating systems and the data that travel across network enterprises. While Cisco Systems, Inc. (NASDAQ:CSCO) would still remain dominant, Microsoft would be a legitimate threat. All Microsoft would have to do is pick-off one of Cisco’s chief rivals. F5 Networks, Inc. (NASDAQ:FFIV) or Juniper Networks, Inc. (NYSE:JNPR), which has been trying to sell off some assets and is led by a former Microsoft executive, might be great targets. Microsoft has already had some success in virtulalization, and we see its main rival in the space, VMware, Inc. (NYSE:VMW), making its own moves into software-defined networking.