Microsoft + CES: End of an era

Microsoft's last CES keynote ever may signal the end of the Windows era. Now the good news: No Speedo on Steve Ballmer

It was the end of an era this week, as Steve Ballmer gave the last CES keynote presentation that a Microsoft CEO is likely to ever deliver. And who can blame them?

Microsoft pays serious coin to command the world's attention every January, and most of the time it turns into an opportunity for folks like me to point out how incredibly out of touch Microsoft is. This last Ballmer extravaganza was no exception.

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Even with Ryan Seacrest (aka the Smarminator) from "American Idol" asking the questions, the Ballmer keynote was a whole lot of meh. Windows Phone 7 blah blah, Windows 8 blah blah, Xbox Kinect blah blah blah. HuffPo journo Peter Goodman describes it in almost Cringleyesque fashion:

Listening to Microsoft Chief Executive Steve Ballmer last night hyperventilate about the company's supposedly stupendous future as purveyor of the planet's life-altering experiences was not unlike watching a heavyset, middle-aged guy strutting through a pulsating club, telling all the slinky, 20-something women how hot he looks in a Speedo.

Thank you, Peter, for searing the image of Ballmer in a Speedo permanently into my brain.

As I and plenty of my readers have noted, Windows Phone 7 and its Metro interface are surprisingly smart and nimble. As Nokia rolls out the smartphones it just announced at CES, we'll see more people carrying WinPho in their pockets. (Though probably not while wading through crowds of people mesmerized by their iPhones to the tune of "Season of the Witch" -- just a guess.)

Assuming Metro works as well on a tablet as it does on a smartphone, we may finally have a viable competitor to the iPad, where the 297 different Android tablets have yet to make a dent. Assuming that Windows 8 builds upon the relative success of Windows 7 -- and doesn't pull a Vista on us -- that should solidify Microsoft's stranglehold on the desktop for a while longer. Assuming Kinect for the PC works as well as Kinect for the Xbox, that might breathe a bit of new life into those tired old desktops.

Those are a lot of assumptions. Even if all of them come true, the question remains whether for Microsoft it's too little and too late.

The news for Microsoft's core enterprise business isn't much better. Forrester Research projects that Windows' share of corporate clients will drop from today's 88 percent to 70 percent by 2013, as the consumerization of IT arrives in force. When consumers are left to choose their own devices, will they pick Microsoft's?

This also raises the question: Does Microsoft's announcement that it's pulling out of CES entirely mean that CES is dead? Not necessarily. Plenty of obituaries have been written about this country's largest consumer trade show over the years (I think I may have composed one or two myself), yet it's still alive and kicking. I don't think Microsoft's departure means much in the long term. When the Japanese and Korean electronics giants depart, then you know CES is in trouble.

The bigger issue, which I've mentioned a few times in this space, is that consumer electronics don't matter so much any more. Every year at CES it's the same: faster, smaller, cheaper, better. That's great. But hardware is a low-margin game for suckers. The money to be made is in software, subscriptions, and services. That's also where all the interesting stuff is happening.

In short: It's the apps, stupid.

You'd think with Microsoft's headlock on desktop operating systems and office software -- not to mention its oodles of cash -- it would be leading the charge. Yet it's not even close. Why is that? I think it all comes back to the man at the top. To stay relevant Microsoft doesn't just need a sea change, it requires a CEO change.

Is this the death of CES? Should we start an Occupy Microsoft movement? Post your thoughts below or email me: cringe@infoworld.com.

This article, "Microsoft + CES: End of an era," was originally published at InfoWorld.com. Follow the crazy twists and turns of the tech industry with Robert X. Cringely's Notes from the Field blog, and subscribe to Cringely's Notes from the Underground newsletter.

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