First National Bank of Bill

What business is Microsoft in, anyhow?

Fabio called your dear Auntie into the living room last night to display his latest creation. We’d been eating take-out food for a few weeks—such was the depth of his artistic inspiration—but the result was worth it: a wonderful trompe l’oeil marble mantelpiece painted around our authentic gas-burning fireplace. Trompe l’oeil, of course, is art that “fools the eye”; it might look like expensive marble, but it was really just the dear boy’s skill with paint on plaster.

You see, things are not always as they appear. For example, you probably thought that Microsoft was a software company. Far be it from this one-time ukulele player to argue with her darling readers, but it seems to me that the software business is merely the start of the story. Now that Microsoft is maturing, it seems obvious that there’s a different plan behind the windows: the metamorphosis of the company into a bank.

Before you decide that Auntie has finally lost the last of her dwindling supply of marbles, consider the evidence:

1. All that cash, of course. Microsoft is sitting on top of a pile of money to the tune of around $50 billion. Who else has that sort of money lying around? Why, bankers, naturally.

2. Look at some of the software Microsoft has been snapping up lately: Great Plains, Navision, Solomon. What better way to make the transition from software company to banking company than through business software? And there’s the venerable Microsoft Money, with its online banking functionality, as a consumer tie-in.

3. It turns out Microsoft is already in the financing business. If you’re not in touch with the Microsoft Certified Business Solution Partner side of things, you might not have heard of the Total Solution Financing program. It’s a one-stop way for businesses to finance the cost of new software, hardware and consulting to run Microsoft solutions, administered by Microsoft Capital Corporation.

It might seem odd to you to start with a software company and end up with a bank, but, in fact, there’s lots of precedent for this sort of thing. Chemical Bank, for example, was originally just an appendage of the New York Chemical Manufacturing Company, which gradually got out of the chemical business entirely. The Bank of Manhattan was an offshoot of the Manhattan Company, which was founded to bring water to New York City. And the historic Bank of England was founded as a sort of scam to give King William III the funds to fight a war with France.

Of course, Microsoft isn’t planning to fight a war with France—at least, not that we know of here at Chez Auntie. But it is in the business of maximizing shareholder value (and now that the stock is paying dividends, shareholder return, as well). Given the increasing difficulty of building new versions of Windows without running afoul of consent decrees and class-action suits on the one hand, and the rising threat of open source and free software on the other, doesn’t it make sense to have a fallback plan?

Think about how easy it would be to make the transition. Instead of “Click here to start,” Longhorn could ship with “Click here to deposit.” Traditionally, banks gave away toasters with new accounts; Internet Explorer is already generous with pop-ups! The constant recurrence of “trustworthy” in Microsoft press releases could just be softening us up, subliminally, to drop our cash into Redmond’s vaults. Besides, what computer user wouldn’t get a kick out of being able to actually withdraw money from Microsoft for a change?

So, there’s my story. Still, Microsoft continues to be a fairly small company, so it’ll need some help from those of us out here in the partner community to make the transition. I wonder whether a Microsoft Certified Branch Bank will need two MCSEs or three on staff?

Got a better theory to account for the facts? Or a better place for Microsoft to invest those billions? Send and e-mail and let me know.

About the Author

Em C. Pea, MCP, is a technology consultant, writer and now budding nanotechnologist who you can expect to turn up somewhere writing about technology once again.

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Reader Comments:

Tue, Apr 13, 2004 Joe-Bob New Orleans

Steve - can you say that again in English?

Thu, Mar 18, 2004 Anonymous Anonymous

Time wasted.

Thu, Mar 18, 2004 Anonymous Anonymous

I hate this column every time I read it.

Wed, Mar 17, 2004 Gill S'Pore

NO matter what the auntie writes, it is always fun to read. I like the part about "Microsoft Certified Branch Bank will need two MCSEs or three on staff?" LOL

Wed, Mar 17, 2004 Royce Orange, CA, USA

I can see that the writer did some homework on this article. I liked it. I always enjoy reading someone who covers news on a long-term-trend basis. But Fabio? Come on, he's played out.

Wed, Mar 17, 2004 Anne Stanton Norwich, VT

I actually found this idea fascinating and it ties into the concept of the CITP'er. What per say is a CITP'er? A CPA who has passionately embraced techology and is certified by the AICPA as "the bridge between technology and business" Who better to understand the business innards than a CPA? and who better to communciate the business goals with the technical team than a CPA who also is technical certified as not only various letters such as MCSE, MCP and CNE, but also as a CITP'er?

Microsoft has mastered being a software development company, I suspect perhaps a spin off might be just a bit fun.

Wed, Mar 17, 2004 Steve Anonymous

This post was useless, contumacious, and lacking any insight whatsoever. It is clear that holding the retained earnings is used as a shield from litigation and to allow the expenditure of cash to acquire companies and not place the company in a debt posture.

Perhaps a little more financial analysis and a little less Al Franken style witticism would unfog those eyes?

Wed, Mar 17, 2004 Anonymous Anonymous

Probably right. What about GMAC Financial Services (GMAC-General Motors Acceptance Corporation), which also offers mortgages? Bill's got the grow bug, and he's going to keep on growing til he pops.

Wed, Mar 17, 2004 Brian S NY

just sign Earth over to Bill already and get it done with so he can come up with patches for the ozone layer as well as Windows......

Wed, Mar 17, 2004 Anonymous Anonymous

Rant? I thought it was humorous. And while I don't think for the near term, that a bank is likely, the information about chemical bank is interesting...

Thu, Mar 4, 2004 Anonymous Anonymous

another useless rant

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