IDC is out with a new report that explains the almost absolute dominance of Microsoft (MSFT) in the both the consumer and business information technology (IT) sector: Drag and drop. That term has nothing to do with moving a mouse or finger around a screen but refers to the aftermarket that Microsoft $60-billion-plus annual sales revenues drag with them and the drop in meaningful competitors with which Microsoft has to deal because of the drag.
It's truer of the business sector of course because -- despite PR, including even some of Microsoft's PR -- the business sector is Microsoft's sweet spot and heritage. But it also applies to the consumer sector where Microsoft's ability to play both sides works perfectly with the way both sides -- consumer and business use of IT -- are melding as people work at home and 'facebook' at work.
The IDC hard numbers are here. But the quick take is that Microsoft partners account for 30-to-40-something percent of the entire annual worldwide IT spend of a trillion and a half dollars: systems, software, services and telecom in IDCspeak (or at least in ancien IDCspeak). There is probably some double-counting with HP (HPQ), IBM and Oracle (ORCL) partners but there is also a lot of revenue flow among pure Microsoft partners to balance that out.
You look at these numbers and you see why IBM and HP exited the systems market (except for their decreasing proprietary cash cows) and sought status as an implicit or explicit Microsoft services partner. (Ironically, these numbers also illustrate why Oracle entered the systems business--because it didn't believe it could do what HP and IBM did.) You see why SAP tentatively choreographs its kabuki dance with Redmond. And why Intuit, unlike SAP, doesn't even pretend to chase another partner. You see why Agile, Borland, Cognos, Digital Insight, Frictionless... (I could run the table but you get the picture) are long gone. You see why Lawson (LAWS) and Epicor (EPIC) or being taken over and taken private despite Microsoft's weak ERP offering.
Despite all the lamentations of the open source zealots and Apple (APPL) bigots and the Googlers, the market has spoken. The open source zealots are anti-market (exaggeration for effect). Apple wants to keep all the money for itself. And Google (GOOG) doesn't know what it wants to be when it grows up: an open source zealot, like Apple or like Microsoft.
(Truth in advertising: the IDC report was sponsored by Microsoft and I used to work for and still occasionally consult to IDC.)
-- Dennis Byron