http://www.windowsitpro.com/article/microsoft-products/Microsoft-Should-Abandon-the-Consumer-Market.aspx

Depending

on what matters to you, it's been a tough decade for Microsoft. The

company's stock price has stagnated as it matured from a quickly-growing

upstart into a slow-moving, comfortable, behemoth. But in recent years,

faster-moving companies such as Apple and Google have stolen the

limelight, thanks to innovative and exciting consumer products. And

despite the fact that these companies are behemoths themselves, they've

generated significant excitement with shareholders as well.

The

consensus, it seems, is that Microsoft simply doesn't move quickly

enough. It no longer sets the tech agenda, but instead follows other

companies into new markets. Critics have called on the company to pick

up the pace, to move with more alacrity, and demonstrate that its

hierarchical corporate sprawl hasn't choked out the lifeblood of the

company quite yet. I've been pretty vocal along these lines myself.

But

during a recent briefing about Microsoft's cloud computing and

virtualization strategy, a sudden contrary thought hit me. Here's this

company that's so often criticized for not moving quickly enough. But

when it comes to the business market, Microsoft isn't just providing a

unique set of products and services that the competition can't match,

it's doing so in an aggressive fashion. Put another way, Microsoft is leading in the business desktop, servers, and services markets in ways that generally elude it with consumers.

There

are exceptions, of course, with the Xbox portion of Microsoft's

Entertainment and Devices Division being perhaps the only meaningful one

from a revenue perspective. Assuming that all of the revenues that the

E&D division makes are consumer oriented (and they're not), that

division was responsible for just 10 percent of the company's overall

revenues in CY 2010. (Note that Microsoft's fiscal year runs from July

to June; this calculation is based on January to December 2010.)

Of

the remainder of the company, only the Windows and Windows Live

division also generates revenues from individuals, though as I'll argue

in a moment, we shouldn't confuse "consumers" with "individuals." It's

hard to gauge an exact figure, but the entire division earned about 31

percent of Microsoft's revenues in CY 2010. If fully half of that came

from individuals (and it did not), then all of Microsoft's

"consumer"-oriented revenues represented just one quarter of the

company's overall revenues for the year. The other 75 percent came from

businesses.

There's just one thing. It's not that high.

My estimate is that less than 15 percent of Microsoft's revenues come

purely from consumer purchasers. And that's because I draw a distinction

between consumers—that is, people who organize and enjoy digital media

collections, play video games, and engage in other non-productive

tasks—and individuals, which are those people who use technology to

communicate via email and IM, generate and edit business- and

education-oriented documents with Microsoft Office solutions, and so on.

Yes, there is crossover between these groups, though one might make the

argument that people are increasingly turning to non-Microsoft

solutions for their non-productivity technology use. But when you look

at people who purely use Microsoft products as true consumers, it's a

comparatively small group from a revenue perspective.

Let's define

these groups further by comparing people who lean toward Microsoft and

Apple products, with Microsoft being the typical supplier of business

solutions and Apple serving the consumer market.