Thursday, October 27, 2005

FY06 Q1 Results, SteveB Memo, and Non-Compliance

More quarterly financial results and a Steve Ballmer email to boot! Some quick lazy links thanks to Todd Bishop at the Seattle PI:

And some more...

Joe Wilcox has a take on the financial results: Microsoft Fiscal 2006 Q1 Results . It ends with a kicker:

Given Xbox 360's power--easily rivaling many home PCs--I would contend that Microsoft is a computer manufacturer, ala Apple.

Hmm. The Red Herring link up there ends with this bit:

The company also went through a reorganization creating three broad groups comprised of platform and products services, a business division, and entertainment and devices. The reorganization sought to realign various business groups and “speed up execution,” Microsoft said.
 
But the move got a thumbs-down from analysts who said it failed to tackle the bureaucracy and lack of agility that has plagued the company in recent years (see Redmond Reorg Skirts Problems).

That last link, Redmond Reorg Skirts Problems, is a good read. A snippet:

Mr. Cohan suggested Microsoft may need to look at radical solutions, such as splitting up the company, to get its mojo back. "If you split it up into smaller pieces, each of which can act as an entrepreneurial venture, then it could energize the company," he said.

(There's mojo again - is that an emergent term? Maybe if I had started this blog for the first time today I'd rename it Mojo-Microsoft.)

Alright, so how is the stock doing after hours. Is it (baiting my breath) taking off like a rocket like Google this past week, up 10% or more? Click... no, down to $24.45 (exhale / sigh). A general concern is being expressed about XBox 360 and Microsoft being able to sell enough units. People don't have a good idea how many units are going to be available for launch or through the rest of the year. Answering that would relieve some angst (Wall Street + Angst ==> Flat Stock).

Personally, I'm a bit worried about initial XBox 360 impressions. I sat down at the Company Museum and played with one (I'm sure I had a frowny face as I sat in-front of the money losing gift to the gaming community). First of all, the controller is fantastic. Secondly: I couldn't tell any difference in graphics and play from just a regular ole XBox game. Now, I know it wasn't a big huge screen or anything, but if you had started up the game and given me my old Duke controller, I would have been quite convinced I was playing on the good ole XBox. I hope the future games blow away this initial taste.

Given that XBox 360 is supposed to be one of the innovative firecrackers erupting out of our big-bang pipeline, Microsoft needs to do everything possible to assuage The Street that all is good and there will not be missed opportunities for the holidays. As of today, XBox 360 is getting marginalized by supply worry. Now is a good time for a dose of that Ballmer sunshine.

As for SteveB's memo today: I'd like to provide kudos on the last item in the memo: providing quarterly web casts about what's going on. That's great. Even if I'm saving my old wine corks to help shield my orifices from sunshine and smoke, I think the more upper management communicates with the rank-and-file the more the current communication gap we have starts to close. For instance, I wish every VP was as open as Chris Jones on http://blogs/ - the guy went and posted his commitments, for goodness sakes. More honest communication on a frequent basis is nothing but goodness.

One last thing: we all know the term "currency" as applied to building good will with external or internal teams. Something you build up with trust and loyalty and such. Well, we just went and blew our currency with the government and Judge Colleen Kollar-Kotelly over this dumb-ass "Microsoft Only" strong-arm tactic for music-player vendors. I love this snippet from the C|Net article:

An attorney for Microsoft, Charles Rule, said Microsoft regretted the mistake and that "a low-level business person" who was not fully aware of Microsoft's mandate was responsible.

Blame it on the newby flunky. First of all, fire everyone involved. You want to be serious about the credibility hit we just took? Fire the folks involved and let PR know it's okay to say publicly that we've eliminated those folks as part of being dead serious over compliance. And you know, this didn't just slip out with low-level persons coming up with this scheme on their own. This is worse than a demo crashing. This kind of mistake puts the company and the shareholders at major financial risk. The government might go ahead with a forced break-up and split us up into three smaller companies and - oh!

Oooo. I likie. Maybe there's someone working here that's a lot more devious than I can imagine.

(Two week cool-down complete. Comments are back on - enjoy and behave!)

75 comments:

Anonymous said...

Publically firing those responsible for the music player contracts would not be a good idea. A public hanging of the aformentioned parties on the sports fields, now that would do the stock some good. Be sure to invite KING, KOMO, & KIRO as well as broadcast it live over MSN.

This would have a more positive impact on the stock price than anything else announced.

Anonymous said...

It was indeed a newbie business guy who mailed essentially draft documents to external companies without LCA approval. Dipshit, to say the least. Fire his ass. And make everyone in that building repeat their compliance training.

vince said...

I would't worry too much about the 360... yet. If you go back to the PS2 launch, the games weren't that much different from the ones available on the PS1. SSX was probably the best launch title, and that wasn't even a Sony title. Sure, the X-box had Halo, but at least for me, Splinter Cell was the first X-box title that I thought was really impressive.

Generally, the rule of thumb is the really impressive titles don't come out until at least the year after the launch. It just takes a while for us devs to get a hang of the hardware and how to wring the most out of it. It's not entirely a matter of what the hardware can do, either, but getting an entire content pipeline in place that can generate and handle an order of magnitude more data. It's not an overnight process.

Anonymous said...

In fact, it is a wonderful thing that we have large company muscle. Problem is, current system does not encourage using it. For example: what happens if some randome dev lean L64 has a great idea for a new business/feature/product? Will he/she be promoted to PUM? L67-L68? No way! As I have heard so many times, "we are only promoting people 1 level and only once a year" (yeah, officially they say it can happen any time, but reality is different. No way dev lead will become a PUM, at best (if ever) he/she will be a dev manager. Somebody else will get hired to manage the product. Even that will only happen in theory. In practice some random PM will kill the idea at worst and at beat will promote it as his own. 1 million dollar question: why whould anyone at MS come up with a good idea, leave alone defend it? There is no way you will be rewarded (well, maybe one time bonus, that's it).

We need to create a system when ideas and drive is encouraged and heavily rewarde. Not killed or used by other people as it is today.

hrzest said...

Still not so sure why MSFT cares about the stock price that much. It has been stuck for years. It might be just fine.

Companies issue stock to raise money, while MSFT has so much cash reserve that it is using up its mind to spend it.

On the other hand, MSFT has converted stock options to stock rewards. Also stockholders will get very good dividends.

So can anyone explain why MSFT cares about the stock price?

Anonymous said...

off topic. I tried to email you about the comment problem, but you have no publicly advertised email. Did you consider the fact that what would serve your comment needs is a slashcode site?

On an unrelated note - do you need a gmail invite for an anonymous email?

Shachar
minims@shemesh.biz

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

Microsoft cares about stock price because they have a responsibility to earn their shareholders money. They can do it with dividends or they can do it with growth, or both. They appear to be shooting for both.

Anonymous said...

It was indeed a newbie business guy who mailed essentially draft documents to external companies without LCA approval.

Can anyone with half a brain honestly say they didn't laugh when they read that excuse? Let me see, a low level business flunkie formulated an important policy that might change the music player landscape and sent it out all by his lonesome. What was his official job title? "Scapegoat"?

Anonymous said...

Another way to go about it is to pull an opinion out of your ass based on five minutes in front of a demo, and post negative impressions of an important product your company produces, that it's relying on to dig itself out of a hole, before IT'S EVEN PUBLICLY AVAILABLE.

First of all, a reply to the zealot: xbox 360 is three weeks away from launch. Anything that's crap now (single-threaded, blocky graphics, inferior sound) is not going to turn into something amazing before launch. Move on.

Back to the topic on hand - and I feel bad about saying this because I know a lot of people at Microsoft who don't deserve this - but the world would be a better place if instead of mini-Microsofts there would be no Microsoft at all.

Anonymous said...

Can anyone with half a brain honestly say they didn't laugh when they read that excuse? Let me see, a low level business flunkie formulated an important policy that might change the music player landscape and sent it out all by his lonesome. What was his official job title? "Scapegoat"?

I can write a contract up and email it over to a partner anytime I want. Absolutely nothing stops me from doing that. I can skip DealPoint, I can ignore LCA, I can forget my compliance training, I can forget my anti-harassment training, I can forget my standards of business training, I can forget press training, I can forget my "Representing Microsoft" class, and so forth. I can write anything I frickin' want to write, and send it over to half a dozen partners. I can require them to hand over their first born children while exclusively promoting my media product.

I can email this straight from my desktop, or I print it up on letterhead and send it by courier. No one will stop me, and no one will question me.

And Mary Jo Foley will report this as "Microsoft demands unreasonable concessions in media contracts".

Anonymous said...

So this Mini fellow has some issues with stack ranking and competitive rating systems. Reading through some of his posts, do you notice how many times he uses phrases along the lines of - I am lazy, too lazy to do this, do that?

Well this blog site is completely his and he is so lazy and tired to maintain something he wholly owns. Think how lazy and tired this guy feels while doing his work in Microsoft - a company he hates and owns an extremely small fraction of?

Maybe that explains why he is so against competitive rating systems - they really filter out your lazy folks like Mini here.

- hard and smart worker

P.S. The APPL shares also fall when they report their awesome financial reports. Its not just MSFT. And hopefully you know by now that GOOG share has turned into an irrational exhuberence and the folks who hold it has invested too much already to risk any kind of selloff. So they wait for the slightest moments to celebrate and try to get the price up just so that the bears dont get a chance.

Anonymous said...

Did anyone notice the bonus that Jim Allchin just got awarded?

Can anyone explain it?

Does anything excuse it?

Anonymous said...

"Think how lazy and tired this guy feels while doing his work in Microsoft - a company he hates and owns an extremely small fraction of?"


Steve... You finally found us :)!

Seriously, I think Xbox360 need multi-threaded games, now, or Joe Consumer will simply hold off buying the things until Q3, next year, when software that actually can use the hardware is available, and they can do a like-for-like comparison between the Xbox360 and the PS3. Yes, I know: hopefully PS3 will also suffer slow development of games that can use it's potential to the full, but this is just another example of MSFT hoping to prevail through the underperformance of it's rivals.o

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

And the hits keep coming...

Bloomberg is reporting that MS is threatening to pull Windows out of South Korea if they don't get their way with the antitrust regulators. Dumb move Steve, dumb move.

Anonymous said...

The big drag on the company is lawyers. Not just company lawyers but government lawyers. IBM went through a very stagnet period during and for a while after their big anti-trust fight with the government. MSFT needs to do everything possible to get down with the lawyers. Only then can the stock and the company really take off. Idiotic things like the media contract do not help. And the idiot who did that should be fired ASAP. There is no excuse for someone at MSFT not knowing that was a bone head move.

Anonymous said...

Between that and the comments about how the people involved with the media player fiasco should be fired - again without any knowledge of what REALLY happened - you've exposed yourself.

What "REALLY" happened is that MSFT screwed up and is blaming it on some anonymous low-level person. As if some low-level manager would be conference calling Sony all by himself. Please.

Anonymous said...

"I can write a contract up and email it over to a partner anytime I want."

Exactly. Which is why MSFT's compliance program should have a component whereby partners are advised that w/o an LCA stamp or equivalent, no contract from MSFT is valid. In any event, I don't for a minute believe this individual acted alone. They may have been the one to forward the document w/o approval but numerous folks (probably including legal) drafted it/reviewed it/dessiminated it. Agree with Mini, heads should have visibly rolled over this to tell the court that MSFT was serious and to send a message to all employees about the gravity of MSFT's anti-trust obligations.

Who da'Punk said...

Deleted two comments to start my Friday. I'm on the fence about "lazy": how clueless do you have to be for nailing the blog poster for being self-critical and a tad bit humorous?

As for the XBox 360: I have one on pre-order. I believe in its technical potential, money loss aside. But if the demos we have set-up in the museum is typical of what consumers are having as their first 360 experience: we screwed up.

I hope there is a game refresh soon.

Anonymous said...

Xbox was a concern on the CC but the bigger issue was growth. Analyts wanted to know how nearly 50% better PC growth than forecast, only allowed the company to reach the low-end of its guidance (and actually miss the street's expectation). MSN's search-based ad revenue was also a concern now that analysts can no longer be bs'd and actually ask things like "how come you're flat when YHOO is reporting 6% growth and GOOG double-digits?". Which btw eventually got a "we need to do better there". The Q2 downward guidance was concerning esp following Q1 being guided down (kind of a bad trend there). And then Xbox "ramping" vs "spiking" had people worried that maybe there are mfg problems and MSFT won't have the volume it needs at launch. At least Bus Sol grew for once so that was a pleasant surprise albeit that perhaps it means Burgum gets to keep his job for another year. And the accelerated buyback is at least better than another brain-dead one-time albeit that it's apparently already "baked" into EPS guidance for the year (which was another concern for the anlaysts). Net net, I thought the stock would open down for sure. But either MSFT is in the market spending a big chunk of that $19B today, or perhaps finally, having weathered its worst expected growth Q ever, this stock has finally bottomed and folks are concentrating on the better growth/product picture moving forward. Hate to say it, but personally, as a long time holder, I came away from that CC less confident in the longer term.

Anonymous said...

Fire the guy? Maybe. But I remember a story from the early days of IBM: A salesman messed up and cost IBM a 10 million dollar order (we're in the 1950s or earlier here so it was a lot of money). The salesman expected to be fired, and said as much to the president (Watson, not sure whether it was Senior or Junior). Watson replied, "I can't fire you. I just spent ten million dollars training you."

So, the point is, while I understand the desire to see the person fired, maybe there's other, more productive courses of action...

Moving on to the stock... to me, the most frightening sign was that revenue went up 26% year-to-year, and profit went up... was it 9%? Too lazy to check. Anyway, the spread between those two numbers is cause for concern. I mean, it's a big difference whether the stock is priced for 9% annual growth, or 26%...

MSS

Anonymous said...

Let's recap why wall street is concerned:

Products that make money -

Windows
Office

Products that don't (and probably never will) make money:

Everything else (which includes Xbox)

Hopefully Microsoft will sell these products to someone who is dumb enough to buy them thinking they are worth anything.

Stan said...

The last point about blaming the newby flunky is particulary interesting because "a low-level business person" cannot make a decision like that without management approval. Layers of management approval.

I agree with you--if you want to be taken seriously about the credibility hit fire the people involved. If nothing else fire the manager(s) who approved the decision.

Anonymous said...

It seems to me like it is high time for a Mini Microsoft flash mob. Why not organize a mob to get all of the readers of Mini Microsoft to meet up and protest the size of Microsoft ON CAMPUS? Everyone could meet in the grassy area between B34 and B35 outside of Bill's office.

Anonymous said...

"Moving on to the stock... to me, the most frightening sign was that revenue went up 26% year-to-year, and profit went up... was it 9%? Too lazy to check. Anyway, the spread between those two numbers is cause for concern. I mean, it's a big difference whether the stock is priced for 9% annual growth, or 26%..."

No. Revenue increased about 6% and earnings handily outpaced revenue growth. That trend [at least] is positive but MSFT needs to get the top line growing at least double-digits and ASAP.

Anonymous said...

"No. Revenue increased about 6% and earnings handily outpaced revenue growth. That trend [at least] is positive but MSFT needs to get the top line growing at least double-digits and ASAP."

Ah. My bad. I not only read it backwards, I got the numbers wrong too :-<

MSS

Anonymous said...

"Why not organize a mob to get all of the readers of Mini Microsoft to meet up and protest the size of Microsoft ON CAMPUS?"

Because in my experience most Microsoft employees are career minded cowards who wouldn't risk the possible corporate reciprocity. If I had a dollar for everytime something unfair happened to someone in a team I've been on and no one stood up to say anything (even when they knew it was unfair), I'd have made more money than Microsoft stock purchases in the early 80s. It's why I quit. Honestly, it's revolting. It's hilarious to me that "integrity" is a core competency, if that were the case I can think of about 50,000 no hires still working at Microsoft.

The emperor has no clothes said...

I am very much enjoying reading such intelligent commentary about Microsoft's inner workings. As an outsider and someone who left the tech world, I have a somewhat different perspective. Though it may not seem so in Redmond, to a lot of the rest of the business world, Microsoft is a monopoly. For those businesses, there is simply no other choice but MS products such as Word, Excel, IE, etc. if one wants to communicate with one's customers and competitors, and hire management and staff who are skilled with the software and not have to retrain them all.

Microsoft's long-time monopoly position, in my view, is what has keeps it from having to be efficient. The presence of serious, massive competition on every level would have led to its streamlining or its demise long ago. As to breaking it up, look what a "wonderful" effect that had on Ma Bell. It still took many years to generate serious competition and force the Bell companies to get their act together.

As I read MiniMicrosoft, I keep thinking of two things. First, the real lean-and-mean company will turn out to be the one that is sharp enough to finally topple Microsoft from its monopoly position. Microsoft itself doesn't have the motivation of massive competition, and by the time it does, it may be too late.

I know this will probably offend some or all of those posting here, but I haven't seen anyone address the primary complaint of those OUTside of Microsoft, which is that stuff is rushed (or crawled) out the door with too many bugs and not enough care about the end user. Remember Lily Tomlin's routine? "We don't have to care. We're a monopoly."

When I worked in the tech world, we used to do everything we could to avoid upgrading our MS operating systems before our competitors had done so. That way, they got the bleeding edge and forced MS to issue fixes, and we didn't waste time doing the testing MS hadn't done. I won't belabor it, but when people refer to "M$" this is the kind of thing they're talking about. And here you are, Mini, wanting to "improve" Microsoft by making it more profitable.

What I'm saying is, is growth the be-all and the end-all? Perhaps from the employee's point of view -more income - but what about other considerations? Is it a good idea to try to improve the profits of an insensitive company that is only interested in shipping product and upping revenue? From the point of view of the world outside of Redmond, is it in America's (or the world's) best interest for MS to become streamlined and more profitable, or would things be better off without MS? Not wishing you out of a job, but can we also take a look at the bigger picture?

Anonymous said...

MY own worry about Xbox, is that Marketing will lose their nerve in the weeks before Christmas, in light of less than stellar sales, and shave another $20off the price, simply to shift units.

Trouble is, the consumer is getting savvy to this: they wait for the price cuts before they buy, so they effectively force another price cut.

Result? Xbox 360 sells at an even greater loss, and we find ourselves competing in a market where the consumer can happily afford to buy both the Xbox 360 and the PS3, when it becomes available. Indeeed, the lag between Xbox360 launch and PS3 launch could almost have been calculated to allow for this.

This is no longer an either/or fight: the consumer is not forced to buy-into either Netscape or IE... This is a both fight, with the consumer happily sitting on the fence, with both consoles, and waiting to see what happens - confident that they'll get their own way, no matter what...

How to break that deadlock? Well, it's only by getting (usually third party) games shops to ship console x's versions of some new-and-upcoming game a week or so before console y's version comes online, that any clear difference emerges between the two.

And does this whole situation smell like yet another anti-trust case waiting to happen, or what?

Anonymous said...

MY own worry about Xbox, is that Marketing will lose their nerve in the weeks before Christmas, in light of less than stellar sales, and shave another $20off the price, simply to shift units.

Trouble is, the consumer is getting savvy to this: they wait for the price cuts before they buy, so they effectively force another price cut.

Result? Xbox 360 sells at an even greater loss, and we find ourselves competing in a market where the consumer can happily afford to buy both the Xbox 360 and the PS3, when it becomes available. Indeeed, the lag between Xbox360 launch and PS3 launch could almost have been calculated to allow for this.

This is no longer an either/or fight: the consumer is not forced to buy either Netscape or IE... This is a both fight, with the consumer happily sitting on the fence, with both consoles, and waiting to see what happens - confident that they'll get their own way, no matter what...

How to break that deadlock? Well, it's only by getting (usually third party) games shops to ship console x's versions of some new-and-upcoming game a week or so before console y's version comes online, that any clear difference emerges between the two.

And does this whole situation smell like yet another anti-trust case waiting to happen, or what?

Anonymous said...

Heh, I guess I'm with you there, brother,even if you did post twice!

(Jeez, Blogger really stretches that "good enough" line, doesn't it?)

My neighbour asked me about Xbox360 the other day - says: "Why're you guys making a piece of hardware that cost less than one of my car's front tyres?"

Anonymous said...

Can I just revisit an old topic, but definitely related to company performance, innovation and mojo? That is the issue of completely useless managers that add no value to the people they manage. Figurehead power trips is what they are. Can we do away with those? My guess is that there are several thousand that would not be missed in one swipe. And increase the span of control to 10:1 as a way to weed those out. Maybe one of the sure signs of a monopoly is that we do have a TON of pencil pushers around here, people just busying themselves with nothing important, but oh so very busy. Put one of those busy bodies in management and their people suffer to the nth degree.

And did anyone else find Ballmer's email redundant and anemic? Packed with information, but mostly stuff we've already heard. "The Next Wave"...I saw nothing "wavy" about the mail at all, more like a few ripples from splashes long since gone under. Unless by "wave" he meant "hand wave".

Anonymous said...

We need to create a system when ideas and drive is encouraged and heavily rewarde. Not killed or used by other people as it is today.
This was tried in creating the incubation groups in Craig Mundie's organization and in the Office Group. The issue they are dealing with is that Microsoft is a very artificial environment where the typical startup reward system cannot work and the product groups are so stressed already that accepting new technology is the last thing on their minds. Microsoft would do much better to actually spin some great ideas out, fund them a little and grow new ideas outside of the Microsoft insanity.

MattyDread said...

Wait, good question:
"So can anyone explain why MSFT cares about the stock price?"

The top execs are as rich as they need to be. Employees receive grants rather than options. And the "responsibility to shareholders" doesn't fly.

I think Ballmer and Gates look at their responsibility as making sure that if somebody invests in MSFT today, they have a reasonable return in 30 years. They're thinking on a long time frame.

Most sensible investors think this way as well. Sure, GOOG looks great now... talk to me in a few years after you've ridden it back down.

Anonymous said...

Q1 results, SteveB, zzzzzzzzz boring. Let's talk about knocking boots. What's the best place to do the wild thing at Microsoft? Anyone "gotten" the RedWest cafeteria?

Anonymous said...

It seems to me like it is high time for a Mini Microsoft flash mob. Why not organize a mob to get all of the readers of Mini Microsoft to meet up and protest the size of Microsoft ON CAMPUS? Everyone could meet in the grassy area between B34 and B35 outside of Bill's office.

Lol, that's funny. Maybe you could all carry signs saying, "Fire Me!" Everyone wants to get smaller - so long as it's that other guy doing the reducing.

Anonymous said...

Knocking boots? I've done that, in my office in building 4, middle of the day...during the week. Now that's some excitement. Talk about a raise in the stock price.

Anonymous said...

You know, anyone who sends something from Microsoft IS Microsoft - I don't care if it's a temp sitting at the front desk in the B18 lobby.

This lame excuse that it was a "low-level" employee is LAME. Your process of screening and training your employees has failed - if the best and the brightest can't get it through their heads that you guys are allegedly serious about legal compliance - then what are you, exactly? Does anything that comes from you have any real meaning?

I find it incredibly hard to believe that ANYONE at MS could believe that:
* You have compliance training
* You have video and speeches about compliance
* You are in the news for the past 10 years regarding the way you skirt legal compliance
* The governments of severals states, the European Union, and the federal government are all looking at the way you are complying with previous legal orders and agreements
* You have multiple internal and external blogs and e-mail threads about compliance
* You have well-known examples of over-the-top rhetoric ("cut off their air supply", "Kill Google!") in the news
* You have legal representatives reviewing these agreements when they are drafted (Yes, you do! You may not know it, but there's an office building in Seattle that reviews your draft agreements and has a printed copy of every agreement in their offices.)
* You have boxes of printed legal agreements on campus that you can use as a template and SURELY these have the draft language in them about compliance
* You have posters about INTEGRITY and ALWAYS HONEST in the hallways of your offices
* You JUST had your review period where your CORE COMPETENCIES include integrity and honesty

And some "low level employee" is able to craft a so-called legal agreement AND have it circulate?

I'm curious - why hasn't this low-level employee's name been released by the media? I'm sure the name was on the e-mail that forwarded this agreement.

Is this low-level employee one of the 3,023 vice-presidents?

You make a good point about the corporate cowardice of your fellow employees. Everyone seems to be in the "protect my job and stock options" position. That will get you survival - but it sure won't make great products.

Anonymous said...

The issue they are dealing with is that Microsoft is a very artificial environment where the typical startup reward system cannot work and the product groups are so stressed already that accepting new technology is the last thing on their minds.

Well, what exactly they are stressed with? Implementing 17876 feature in Word? Integrating yet another application into OS? Anyway, the point is not about existing groups, the point is about new directions. I mean, new, not 'oh, [Google|Yahoo|Amazon|Netscape|Sun|IBM] is doing this so we should too'. You see, doing nothing or, to be exact, doing something you are told to do is career-safe. It is also very easy to make the case when known competitor is already making money on something. It is more difficult to make the case about new market. It requires a lot of pushing and getting around existing stubborn people and processes without any potential rewards.

Anonymous said...

Pulling Win32 out of South Korea?

FFS! I know it's just a bluff but this has to be one of the dumbest things we've done recently.

I mean, acting like deliberately cutting off an entire very fast growing mkt is acceptable? And then we're surprised when we're investigated for antitrust! Mgt needs to be reprimanded for this one.

Anonymous said...

I totally support the threat from MSFT of pulling out from South Korea. Half the software there is pirated and the MSFT revenues from there is a mere $200 million. Why spend resources having to align your product for a market so insignificant? At some point MSFT needs to take the stance of not allowing their business strategies to be dictated by govts of random, small markets. I mean the US and EU is different but SK? I don't think so.

Anonymous said...

EU and KOR? OS features getting us into trouble?

Part of what we're paying for is the sin of deciding that a web browser and that a media player are core operating system components. Dubya Tee Eff? I install windows media player and it wants to do an OS upgrade? How many of you out there were embarrassed to hear, during the anti-trust proceedings, how IE was too tightly coupled to the OS that there was no way to pull it out without the house of cards coming down? I felt dirty.

A story: sometime after one of the IEs shipped and a lot of the IE developers were disappearing, another Microsoftie and I sat down with the IE test manager to discuss some dependencies between groups. Anytime we'd as a hard question or such about how important something was regarding IE, she would start out, "It is the OS, …" Like the web browser had suddenly become the kernel. It gave me insight into a group that had to utter this OS-line crap over and over. I'd want to disappear from that group, too.

A lot of what ships with the OS are components. And those components have layers, from COM components to the EXE. We should be open and honest here and truly make those components and vendors can resell with various levels of ON and OFF. KOR's solution would be to have to buy a value-added (or, well, value-reduced) version of Windows from a reseller who'd tweak it.

I agree with the contention that we shouldn't be making overly boutique versions of OSs to conform to regional preferences. But we can make it easier by adding some level of install flexibility.

Anonymous said...

Half the software there is pirated and the MSFT revenues from there is a mere $200 million. Why spend resources having to align your product for a market so insignificant?

Jesus H Christ! No wonder our company is so screwed up when its filled with bozos like this. Guess what dumbass. Korea is growing faster than the US/EU. It may not be a billion dollar market now but how about 10 years? And if we're doing one thing right, it's really tightening Genuine Advatage etc - piracy is finally going to come under a degree of control.

Anonymous said...

To the 'only $200m' guy/gal:

OK, so this isn't completely applicable to the Windows platform as an established concern in the face of antitrust - but generally we should be investing in (and then stepping back from!) lots of 'mere' million dollar businesses/markets.

There's no shame in creating something 'only' worth a few million, and some of these will probably graduate into the mega-businesses shareholders love. Point being, you can't tell which these will be in advance!

Ask yourself what it would really cost to make the changes Korea is asking for (amortized by the fact that other govts will probably ask for similar in the future). I'm sure for $200m a year (and with double-digit growth) it would be worth it.

Down with the billion-dollar bet culture (I'm looking at you, XBox) and down with the billion-dollar betmakers!

Anonymous said...

At some point MSFT needs to take the stance of not allowing their business strategies to be dictated by govts of random, small markets. I mean the US and EU is different but SK? I don't think so.

Good, God! Talk about arrogance. South Korea is a sovereign, democratic nation that has a right to make its own laws. If we are going to sell into the market, we have to obey the laws. It's as simple as that.

The notion that we are somehow above the laws of smaller nations goes beyond arrogance to hubris. Fending off open source in the developing world will be hard enough without being seen as an international scofflaw.

Anonymous said...

Following up on the comment that most of the OS is components with various levels of dependency, we also need to recognize that some of those components are failing and some internal competition would be beneficial.

I'm sure we all can name a few components that have horrible design flaws that block wide acceptance. I'm sure we all know of a couple attempts to replace those flawed components with something different, and yet the decision was made at some level to keep developers maintaining flawed designs instead of allowing them to make build the revolutionary new component that they want to build.

Somehow, Monad got through the innovation blockade. We should have dozens of groundbreaking innovations like Monad in each release, not just one. We could have dozens of them if we didn't prevent teams from trying.

This is Microsoft's real failure.

Innovation isn't allowed if it duplicates something that already exists. We need to recognize that a "good enough" design for a previous release isn't necessarily good enough to keep for the next version.

Users need features that convince them to upgrade. Monad is a good start, but we need to untie the hands of the dozens of other innovating projects and let them see the light of day too.

Anonymous said...

Monad got through the innovation blockade.

anyone even slightly familiar with the Monad story knows this is not the case.

Anonymous said...

Care to elaborate what's the inner story of Monad? Or do you belong to the camp which thinks something like rm -rf is a virus?

Anonymous said...

Clarification: Monad is faring much better in the innovation blockade than most components do. It looks like it will see the light of day, unlike so many other projects.

I am not close to the group so I don't know what battles they fought, but they are getting further than other projects that I have heard about.

Anonymous said...

For the scoop on Monad, check out Adam's blog
http://www.proudlyserving.com/

Anonymous said...

Here's a good one for the next blog:

Why must everything be integrated into the OS?

I hear the corporate line on why we should do it, but I haven't heard anyones individual opinion on why.

Some of the reasons we shouldn't is it would make a more stable OS. The upgrade/ship time should be reduced without all the dependancies.

If you think about it, what is the reason that things like IIS, IE, Media Player, Outlook Express, etc are integrated into the OS?

I was loading a SERVER OS on an IA64 last week, and had to patch Outlook Express. What idiot in their right mind would want to run OE on a SERVER?

TheKhalif said...

I hear the corporate line on why we should do it, but I haven't heard anyones individual opinion on why.

Some of the reasons we shouldn't is it would make a more stable OS. The upgrade/ship time should be reduced without all the dependancies.

If you think about it, what is the reason that things like IIS, IE, Media Player, Outlook Express, etc are integrated into the OS?

I was loading a SERVER OS on an IA64 last week, and had to patch Outlook Express. What idiot in their right mind would want to run OE on a SERVER?



I have to agree there. I could never understand the "bundling" phenomenon. That's what almost got the company broken up. If not for the fact that MS only owns IP it woul dhave happened.

I always felt that minimal components should be added to the base OS and other components could be added by users or companies. I mean the average person doesn't care whose browser or media player they use. By just a little "live and let live," MS could have saved billions in settlement fees.

Anonymous said...

We could still keep optional components free if we want to, just make them separate downloads, probably in larger packages like 'Internet' or 'Media', similar to Plus Pack.

Anonymous said...

Yes, yes, and building bespoke systems that satisfy an EU/South Korean/other poitical block stipulation that some large chunk of multimedia, or image processing, or (insert some chunk of none-core OS functionality in here), should not be installed by default, would be much easier, too if we did that. After all, we could still leave it on the install discs... think about it: download, or install from disc? - it isn't that hard to comply and still not lose ground... unless you've already bundled everything so tight together, you can't run an email server safely, without having to install media player upgrades.

But that would be complying withy the "small and modular" promise that was promised waaaay back in the dawn of COM!

Hmm, let me think "Small pieces loosely joined" where have I heard that analogy used before, and for what type of OS (other than in seven year old promotional material for COM/DCOM, of course)?

Anonymous said...

The South Korea threat is a really dumb idea.

The South Korean government is already pushing Linux and open source. Threatening to stop selling MS software to SK will make SK think that its present dependency on MS is dangerous. SK will just work that much harder to become independent of MS.

Microsoft used to be able to get away with these sorts of tactics because it was the only game in town. Now there is an alternative in oss, so blackmail and extortion are liable to backfire. The fact that MS is still using them indicates to me that its leadership is very out of touch with reality.

Anonymous said...

I may be dating myself here, but I remember when (93') the server choice was only between different versions of Unix. You'd pay for the Core OS, and then HAVE to pay for anything you wanted to add on (Driver packages, Networking stacks, etc). At the time I was working for a Telecom software company. As soon as NT came out, customers began to demand we support it, not because it was easy to use, but because they were tired of being nickel and dimed to death by the Unix vendors. We quickly moved to support NT because it was a better value for our customers. I guess customer value isn't important any more.

Anonymous said...

YES!!!!!!!!!!

PLEASE BREAK UP MICROSOFT!!!

:)

Anonymous said...

I am surprised with the kind of people that are getting praised in this group. First you expect the HR folks to come and solve the problems that exist at low levels. Linda Brumel is expected to solve all problems that exist. Then every fat middle management person that leaves microsoft is praised as having contributed incredibly for the success of Microsoft. ( what about the folks that are breaking their backs and still working hard )

Then people like Chris Jones who did a lot of useless things are being praised as heros. Who killed the IE team without any business sense ( IE team is being re-created because of firefox ), pushed longhorn API and messed up alpha longhorn and has a business degree. Not only has he successfully disbanded a good team - he has grown incompetent people to management roles. His org still has a lot of issues and people like him are causing the current problems at Microsoft.

Anonymous said...

There is a difference between integration that provides customer benefit and bundling for marketing reasons.

MSN desktop search is a perfect example of the bundling phenonemon being used in a way that does not benefit customers - it bundles a lot of unnecessary stuff such as promotional links to MSN spaces and ignores most integration possibilities in the one area it is supposed to address - search.

With WDS, if you select the default options for WDS on install, it offers to change your home page, your default web search engine, adds links for MSN spaces and various other MSN properties, and upgrades Internet explorer.

After customizing the installation removing the MSN links etc.,
Windows Desktop Search appears to be nicely integrated with the UI but the upgraded IE and regular explorer search does not integrate the search experience well.

When you bring up the WDS search window you have a search button on the top toolbar that when you click it brings up search companion. Search companion still uses it's own slow search mechanism.

When I open a local folder I now have three Microsoft provided search
UIs - the search button on the main toolbar, the MSN search bar and the search action in the System tasks pane - the search button and search action still use the search companion.

To search the Microsoft KB or MSDN you still have to bring up the Help and Support Center or the Microsoft MSDN website.

Good integration would integrate all of those aspects allowing me to pick and choose what to use without having to change my browser or home page. Upselling MSN spaces is not integration - simply unwelcome marketing.

I currently use both Firefox and IE, Google local search and in addition to several PCs I use for develoment, have a mini-mac that I use as a music store. Of all of these only the Firefox search plug-ins (based in part on Apple's sherlock) comes close

Anonymous said...

MSN Search still kicks ass in a major way. I've installed their V1 and it fucked up my machine (dual Xeon, no less) by slowing it down to a crawl. I've blown it off and promised myself to not install a single piece of software coming out of MSN ever again. Then, about a year later, I got fed up with Google's subpar search of Outlook mailboxes and decided to give MSN Search another try. It's another product completely! Heck, it even indexes source code files.

I do agree about bundling though. If engineering effort spent on bundling was directed at, say, better preview capabilities (so that MSN DS doesn't screw up ASCX and ASPX pages in preview pane and shows them as text) or better UI design, it would have been a much wiser use of engineers' time.

I'm still using Google desktop search at home, though, because it better integrates with Thunderbird and Gmail. It's a pity MSN DS doesn't search Hotmail.

Anonymous said...

I was loading a SERVER OS on an IA64 last week, and had to patch Outlook Express. What idiot in their right mind would want to run OE on a SERVER?

Microsoft is busy turning spaghetti into lasagna.


http://www.findarticles.com/p/articles/mi_zdmsw/is_200507/ai_n14715800#continue

Microsoft's Core OS Division: A Status Report
Microsoft Watch, July, 2005 by Mary Jo Foley

"It's an example to others how you can really work across all the groups," Short said. We simplified the problem and really understood it end to end. Now it's one of the key focus areas for Longhorn."

Speaking of Longhorn, COSD's work won't be finished once Longhorn ships.

"We're looking at this as a long-term thing – way beyond Longhorn," said Short.


http://www.zdnetasia.com/news/software/0,39044164,39259132,00.htm

"The root of the problem was Microsoft's historical approach to developing software – the so-called 'spaghetti code culture' – where the company's thousands of programmers would each develop their own piece of code and it would then all be stitched together at the end."

Anonymous said...

So, what is new here? GOOG is currently up $14+ and MSFT is down $0.01. Same as it ever was...

MSFT would do a lot better if so many people didn't hate the company. That's management's greatest failure and you will pay for it every day.

Anonymous said...

WDS does index Hotmail if you have the Outlook Connector installed. You can get the connector by getting MSN premium (us employees get a yearly discount).

It actually works pretty good.

TheKhalif said...

When will it end?


From:http://arstechnica.com/news.ars/post/20051031-5499.html

The US Supreme Court has refused to hear an appeal by Microsoft in its court battle against Eolas Technologies and the University of California. The Redmond Giant had asked the Supreme Court to review the damages originally awarded to Eolas, and they were expected to argue that as much as US $333 million of the $521 million award handed down by a lower court was inappropriately assessed. The Court declined the case without comment, although I would imagine that it was ignored because Microsoft did not have legal standing to combat an award that has been overturned.

After years of lawyering, 2003 saw Microsoft hit with US$521 million in fines for infringing on a patent originally scored by the University of California. The patent deals with third-party plug-ins, and Eolas Technologies, formed in part by an ex-UC inventor, is the sole company to license this technology from the university. In 1999 Eolas decided to sue Microsoft over its implementation of ActiveX, and UC soon joined the party. Microsoft originally argued that the patent was being applied too broadly, but in 2001 a judge disagreed, saying that the patent covered any "embedded program object" that runs inside a browser. The key notion here is of an "embedded program object," an independent program that runs within another application.


The agony of defeat

fCh said...
This comment has been removed by a blog administrator.
fCh said...
This comment has been removed by a blog administrator.
fCh said...

Please, allow me to briefly (dis/at)tract your attention to the software/product development approach called "SCRUM." Yahoo and Google seem be be using it--at this time, within a limited scope.

My bias would be to say that: SCRUM makes sense when developing technologies that could be described as wide rather than deep. In other words, an ERP package won't fit the model...

What do you think:
Would you personally enjoy such an environment?
In what context and at what 'expense' could such a model be adopted?


For details, check out this posting: Scrum -Agile

Cheers, fCh.

TheKhalif said...

What do you think:
Would you personally enjoy such an environment?
In what context and at what 'expense' could such a model be adopted?



Well, this seems similar to a data model, where the customer works with the developer to abstract all necessary data. From here it becomes much easier to evaluate possible features and "connected\disconnected" states. All types of projects can benefit from the model, especially large cade bases such as Windows or Office.

Anonymous said...

A manager sexually assualting another employee and nothing happens? Have a look at this on the company's core values: http://fishwagon.blogs.com/home/2005/10/core_values_my_.html

Anonymous said...

Apropos of very little except the general issue of antitrust compliance, it looks like the MS "Technical Committee" is looking for a tester whose job would be "assisting the United States Department of Justice and several State governments in enforcing the Largest Software Maker's anti-trust settlement."

Of course, they're not going to bother to actually hire an FTE. Why bother taking on a permanent worker when it's so easy to rent one?

Anonymous said...

As it stands this very moment...I just spoke to a very close person in my life who has spent a substantial amount of "personal" time with Mr. Ballmer very recently. I would like Da'Punk to reply to my post...very substantial.

Anonymous said...

Inside info on Ballmer. I just spoke to a very close friend who has spent some "personal "time with him very recently..Who Da' punk...please, let's connect

Anonymous said...

If you want to write Mini / Who da'Punk, send it to something like private(at)whodapunk.neomailbox.com - but feel free to share you steamy info here!

Anonymous said...

Holiday cheer? Rumor has it that the CMG is not even having a holiday party. This follows a systematic de-escalation of celebratory reward, starting with 2003's holiday gala.