Via Mini-Microsoft I found the article Microsoft Investment Requires Too Much Patience - Barron's which contains the following excerpt

Some of the issues that worry analysts:

    1. It was clear from the presentation that many of the growth prospects will take 5-10 years to bear fruit.
    2. The company overspends ("nothing would delight analysts more than a nice big round of cost-cutting.")
    3. The businesses MSFT says it's entering (e.g. advertising and consumer electronics) are far more cut-throat than its current mix.
    4. Microsoft's focus on building internet infrastructure rather than building sites that bring in users is "backward."
    5. Bill Gates's plan to pass control of product development to Ray Ozzie "will not be a smooth one."

RE: Item #4, it seems weird for analysts to say Microsoft shouldn’t invest in building internet infrastructure but instead on building websites. What do they think you need to build the websites? It’s not like data centers are free.

Now playing: Kanye West - Stronger (feat. Daft Punk)


Wednesday, August 1, 2007 7:50:53 PM (GMT Daylight Time, UTC+01:00)
I think the theory is that you're supposed to concentrate on your area of core competence.

If Microsoft doesn't have a lot of experience at building infrastructure, and isn't particularly good at it, it ought to be outsourcing and buying that in from other companies. That way it can concentrate on what it's supposed to be good at: business and consumer software.
Wednesday, August 1, 2007 8:19:28 PM (GMT Daylight Time, UTC+01:00)
When I read that I interpreted it as referring to MS' "live cloud" initiative: that's the infrastructure/backend they're building, not datacenters per se.
Wednesday, August 1, 2007 10:00:15 PM (GMT Daylight Time, UTC+01:00)
FWIW, I read it as "why build a huge infrastructure when you don't have enough compelling web properties to drive traffic on that infrastructure?".
Thursday, August 2, 2007 12:47:53 AM (GMT Daylight Time, UTC+01:00)
I agree with Andrew.

Microsoft is building out the capability before they have the demand for it - anticipating demand, which has a chance of not being met.

The argument continues; people should be paying more attention to web properties, and not long-term investments, because Microsoft is behind, and falling farther behind, on a number of fronts from search to social networking.
Michael Griffiths
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