It’s Friday, which is my day to write nuttier things. I can imagine the Fox exec making the cancellation decision calling out, “You’re terminated.”

Look at their last quarterly report, it shows that profit was falling at a greater rate than revenue. They do not publish prices that they actually sell to businesses and OEMs but my theory is that they are using Linux and OSX as bargaining chips to get discounts. Office is also under a lot of threat because it is good enough and there are alternatives now. I think the competition is moving too fast for Microsoft, Ubuntu releases every 6 months and Apple has a new OS every 18 months.

This is why Ballmer always talks about a reset, I think that their revenue will halve in the next 5 years and that will have a very serious impact on a business designed to run on $60 billion per year. If they have such good information about businesses renewing, why can they still not predict next quarter’s revenue?

What is going to save them from the reset?

(To be fair, while the previous strategy switches pretty much meant starting over for customers, Zune HD should just extend the existing Zune Marketplace experience. But if they try to “integrate” with other services, all bets are off. My guess is it’s more about internal power politics than customer experience, or even business strategy.)

billybob: MSFT derives most of its OS revenue from corporate Software Assurance (SA) contracts. Joe has written about this extensively in the past. But the short story is, a lot of companies skipped or severely delayed installing Vista, and MSFT salesfolk are having a hard time selling new/renewed SA contracts due to both Vista bad press and economic pressures. Whether you consider it a new OS or Vista SP3, Win 7 is significantly improved in use, deployment, and press over Vista. Between that and long-delayed hardware/OS refreshes, Win 7 should mean improved corporate deployments going into 2010.

Unless everyone decides to go thin client all of a sudden, which seems unlikely. In the long-term, maybe. Over the next three years, no.

VERY NICE JOB!!!!!!!

(Eat your unappreciative little heart out, eWeek!)

Azure is a flop, it went down for 24 hours and nobody noticed, when Google goes down for a few hours, the world discusses it for days after.

The Zune is always going to fail if they insist on only selling it to 5% of the market.

Which means you are right about your recommendations for Microsoft’s direction. They should converge Windows Mobile and Zune so that they overlap and price/function is the only differentiator. Just as the iPod Touch and iPhone do today.

I am also guessing that iPhone sales are declining for two big reasons: 1. Because the people who can afford them and the data plans that make them truly useful are a very bounded market, and 2. Because people are waiting for the iPhone 3 and aren’t in a hurry to buy technology that will soon be obsolete.

Will people who buy an iPod Touch or Zune HD to play games comprise the market that will provide the most profit? I dunno. Blackberry Curve and Bold aren’t nearly as cool as the demo-doll iPhone, but its market share is driven largely by business, which means by people who make money from its value and don’t just use it for entertainment.

Of course, I could be wrong and the gaming sector could very well swamp the business value sector. Hey, Fox cancel “The Terminator” TV series, which was the ONLY network TV show that I regularly watched and followed. Which means that this old fart is way out of synch with the rest of the market. If people were like me, for example preferring the 3-hour History International documentary on Alexander the Great instead of the Hollywood version, then all of the rich folks in Hollywood would instead be working as waiters, waitresses, or other low-paying jobs. Jerry Seinfeld would be just another poor working stiff. Tom Cruise would be a household name ONLY in his own house and nowhere else.

And eWeek would be on its hands and knees begging Joe Wilcox to come back so that their readership could rise from zilch back to its former levels.