Wednesday, October 12, 2005

Where do we go from here?

Let's see... here in the West the aspens are turning. They turn in clusters, because their roots connect them. No, no, not right. How about: recently, while propping my forearms on a tilted rake handle, I watched the big-leaf maple leaves swirling down around me and meditated on the various concerns of how the postings, conversations, and focus of the little Mini-Microsoft blog seems to be way off topic from its early days. How did the focus end up (look to left, look to right) here? Is it way off the path I was beating?

What's up with the focus on stack ranking, The Curve, process, and bureaucracy? What does that have to do with making Microsoft a leaner, agile organization that's able to shed off accumulations of dead drift-wood and get back to quickly producing fan-damn-tastic software products and services that brings in boat-loads of cash and makes shareholders clap their hands together, looking upward, shouting, "I believe again!"

So, yes, the original blast off post didn't have those topics on my agenda-radar. When I talked about stack ranking, it was more about how to play the game and get a good score vs. what a brain-dead ancient industrial-era performance appraisal device stack ranking (aka rank and yank) is.

(Short story time: when I was an individual contributor, I didn't know there was a stack rank. I learned a little bit about stack ranking from my first good manager. It wasn't until I was a lead and I was told to show up as some long meeting that I found out the full story of what the process involved. If only it also involved us puffing cigars and sitting in plush leather seats. Well, after I found out about stack ranking, I went on a mission to spread the word about how performance evaluation works to my reports, just so that they could understand what I meant by "visibility" and what goes on behind closed shades. Over time, more and more people have learned how our performance appraisal works. Even more so, I hope, due to the postings and conversations here. Still, though, I'll run across people that I'm giving career advice to and they'll respond back to me, quizzically, "The what-rank?")

When you turn your focus on one thing - say, finding out why Microsoft has been stumbling over itself and losing key talent - other items and issues you might have ignored in the past flare up and get your attention. You read business books and magazines and web sites vs. learning XQuery (fortunately, no loss there).

  • What does it mean to grow rapidly?
  • What are the consequences?
  • What common problems that exist in other corporations might exist in a maturing Microsoft?
  • What strategies exist to recover from these problems?

Usually, I say Microsoft's key assets are the people working for it. Actually, Microsoft's key asset is probably the monopolistic domination of desktop software and office software and cash that currently brings in. So people are next in line as Microsoft's key asset. And as the quality of hires and their day-to-day accomplishments suffer, so does Microsoft. Our engines of creation sit between our ears and are wired to the ten digit money makers clicking away on our keyboards. We all work on a team of some sort, and our work is interconnected when it comes to delivering quality results. Heh, maybe Scooter's aspens are an appropriate analogy... anyway, anything that impedes quality results impedes delivering fan-damn-tastic results and shareholder value.

Low quality, bad hires and bad acquisitions poison our company. Increased size results in increased management levels meaning that mid to upper management needs new processes to understand what's happening where. Lack of annual dynamic restructuring creates fiefdoms and cronyism and a complete breakdown in responsibility and accountability. Curve fitting results in folks doing what's best for themselves vs. what's best for their product and the shareholders. Forced review results rob people of their passion to do a good job. People playing the system keep around poor performers to ease their review model.

But, I've said all that before. What else is there to say, now that the public light has been shined all over those gripes?

I feel naive in making this remark, but... there's no justice. I want justice. Justice is a funny thing to ask for in a corporate world, I know. But as of late, justice seems to be sorely lacking at Microsoft and it is sucking the passion and inspiration out of people.

I want those who have screwed up to be shown the door. I want those who have done an excellent job this past week to be told, "Hey, that's a great job!" vs. their manager holding their tongue, aware that the curve might trend their report downward. I want folks to speak their mind and help start putting forth proactive change. I want VPs and GMs to go without the new big pay-raise incentive bonus until after everyone else have been given reasonable compensation. I want less VPs and GMs. I want a flattening of all organizations with a goal, within the next few months, to remove one layer of management cross-company. I want a corporate efficiency-cop that people can bring in to help streamline their org.

I want Microsoft's re-invention into a blazing, just 21st century company to be the innovative turn-around that books get written about for many years to come.

And, yes, I also want a milkshake. Preferably, one from Fat Burger. Oh, and less posters.

But what's an individual to do in seeking justice and cutting back on inefficiencies and bureaucracies? It's great to have all these desires and to pontificate upon them, but what can you actually *do*? What has worked for you? Have you done something proactive that turned out well? Have you chucked your sabot into some dumb process and where able to get back to being productive?

Random shallow ideas from the tips of my fingers:

Destroy all meetings. If you can't outright decline meetings, try to coalesce them. Always challenge the organizer for an agenda and goals. If they push back, remind them and their lead how much money every meeting costs Microsoft. Be an ass in meetings: ensure people take ownership for problems discussed before leaving, instead of having a bunch of good intentions that require another meeting later to dole out. With a bit of basic behavioral modification, you can unmake those meeting-happy contributors.

Cause trouble now. Eh, you've got about a month to cause trouble until you have to slip into hyper achievement mode going into the mid-year review. An informal stack rank is usually done then and you have to do the usually visibility games right before that to remind people about how great you are. But if you have an idea that might cause all hell to break lose, best to try it now. Write the VP with your ideas of how things could be a lot better. Now's the time for taking risks. And again after the mid-year is over. Then it's back to being a shinning cog above all other cogs.

Learn. Read some books about successful software development patterns and adopt them with fierce visibility. If there's a good group on campus that people brag about how well they do, drop in and learn more. Bring it back to your group. If feature-crews are da bomb, see if you can get your group to learn and adopt them. Bring in ideas for techniques that reduce waste and rob people of doing the job we hired them to do.

Leave. As always, I have to present this option. I'm putting down my little pied-pipe and reminding you of my meta-purpose: a smaller Microsoft. That probably means you, as good looking as smart as you are, are someone I'd prefer to see work elsewhere. And justice and satisfaction are usually a lot easier to find in smaller companies. If you leave, don't do so in a vacuum. I'd certainly appreciate a comment here on why you left, or at least a link to your own post.

So, back to meditating around the falling leaves, how did I end up here, griping about process and other crap? I realized the growth of Microsoft has fostered a negative environment flourishing in process engineered by a growing middle management to keep itself busy. This is something the smaller Microsoft never had to deal with, yet we're still applying ideas and concepts from a smaller Microsoft. If I was smarter, I'd have better ideas to apply to the big Microsoft. Right now, I just want a big shake up that shines the light of responsibility on everyone, president to new-hire, and if your contributions to Microsoft's bottom-line aren't up to snuff, well, it's time to move on to find a better fit. And trend towards a smaller Microsoft.

This all said, I probably won't be posting about meta-problems like bureaucracy for a while unless something egregious comes my way. I'm going to dial the knob back and, if I post anytime soon, be on more direct smaller topics. I've been meaning to write my anti-CLR post for a while (ooo, that's a gonna be a fun one!). And I'm entering my own phase of shining above my peers so I'll be spending less time here and more time at what pays the bills. Take care.

 

56 comments:

Anonymous said...

I like the 'poster' comment. Back in 1995, a new guy joined my group from Intel. I asked him about the big difference between Intel and Microsoft. He told me 'Posters -- At Intel, you've posters everywhere talking about company culture and values, and there is nothing like that at Micosoft. I hate posters'.

Today, I understand why he also left Microsoft....

Anonymous said...

I just left, so I'm helping towards your goal of a (slightly) smaller Microsoft ;-) I really liked the people I worked with, and learning more about coding. Yes, I was a tester who wanted to do more coding and I took every possible opportunity that came my way. However, after "taking one for the team" with a low score I didn't deserve, and another review where every single thing on it was a surprise, and being told I had to be a dev-level coder to merely keep my exisisting job ... I decided I was being used. The real question, Mini, is how can Microsoft expect its employees to value the company when they clearly don't value or respect their employees? Why are the sacrifices from the bottom up, and the rewards from the top down? I wish you and my former co-workers luck -- unfortunately, I think you are going to need it.

oadfji said...

Let's face it, my M$ job was outsourced because the M$ board wants a smaller M$ too. In the long run, all of Redmond campus will be outsourced to cheaper labor pools in other countries. And why not? M$ is a giant and rich trans-national corporation, there only interest is making more money on top of the huge cash reserve the have already. Really, this is free enterprise in action.

Anonymous said...

I've been meaning to write my anti-CLR post for a while (ooo, that's a gonna be a fun one!).

Oh! Oh! Mini! Will you leave no sacred pig unroasted?!!!

Anonymous said...

"I want Microsoft's re-invention into a blazing, just 21st century company to be the innovative turn-around that books get written about for many years to come."

Good goal Mini but I'm not sure Ballmer or Gates share it. Specifically, I think their view is that MSFT is on the right path and perhaps just needs some tweaking. I hope I'm wrong about that because if not, the only book that's going to be written is "MSFT - Fall of an Empire". I like your suggested book better - as should all employees and shareholders.

p.s. Good luck with the reviews - I guess you can't point to your blog for extra credits :-)

Anonymous said...

There are some ugly truths out there that people don't want to face:

1) MSN is worthless, we need to get rid of it and 90% of the people in RedVest, Lakeridge, etc need to go. They're a drain on resources and they never should have been hired.
2) No more "in office retirement". That doesn't just mean MSN Auto and Home. We have a bunch of "managers" with one or no reports and those losers need to get booted from the company.
3) Test Automation doesn't work for everything. If it's not practical, stick with good testers who just plan and execute good testing. I trust them more than I trust automation anyhow. That being said, I think it's good when testers at least understand code.
4) Fire SteveB
5) We don't need to create anything new, we need to improve things that already exist. That's the best (and most profitable) type of innovation.
6) The review/stack ranking process is horrible. The average employee spends many hours and sometimes days working on it. Lose it. Find something better. If Lisa Brummel can't, fire her.

This is a great company, but much of it needs to just die a quick death.

Anonymous said...

"1) MSN is worthless..."

Worthless is pretty strong but clearly ineffective. Unsure how much is internal execution issues vs being under orders not to encroach core apps. Regardless, I think MSFT needs to be a major player in this space so something has to be done to bring results and accountability.

"2) No more "in office retirement""

Agree. I cannot fathom the logic of any mgr having less than 5 reports. MSFT should be aiming for more like 7-10:1 minimum.

"4) Fire SteveB"

Let him step down for "personal reasons" - he's earned it.

"5) We don't need to create anything new"

Agree with the focus on "improving what exists". Disagree on the "don't have to do anything new". With MSFT's R&D budget, MSFT should routinely be coming out with innovative solutions vs constantly playing catch up to others.

"6) The review/stack ranking process is horrible. "

No doubt but not sure where this took on the life as the singular problem at MSFT? MSFT's problems are primarily cultural, strategic and execution. Fix the culture to something that better focuses on serving the customer and accountability for results, get more viable strategies (vs trying to buy your way to success due to poor ones) and execute better, and eventually, even the stack rank system will work better because at that point, actual performance not percieved performance is what the company will be all about.

Anonymous said...

Interesting post today from Rick Segal where he summarizes his own post-interview with a bunch of former Microsofties, how things are going for them now, and if they'd come back to Microsoft. Another nice data point. Though it looks like Scoble whups Mini's butt when it comes to the luv.

Anonymous said...

"Good goal Mini but I'm not sure Ballmer or Gates share it. Specifically, I think their view is that MSFT is on the right path and perhaps just needs some tweaking."

I agree. Gates' goal, from the very beginning, was to make Microsoft the king of everything in software. Microsoft, as gigantic as it is today, is only maybe 1/25 of where Gates wants it to eventually be, and to get there it would have to become much larger -- think IBM size (330,000 employees).

Unless Gates changes his mind and gives up his life-time ambition, things are only going to get worse.

Anonymous said...

Minimsft --

You need a vacation, maybe even a multi-month leave of absense. That said, let me rant on the horrible, horrible term "Individual Contributor".

It is demeaning. It is infantilizing. One is either "management", or a nine-syllable babble-speak creature known as "in-di-vi-du-al con-tri-bu-tor".

I write software for a living. Not for Microsoft, though I have been reasonably successful over the years (I need not work, these days). But, I do not contribute. I design. I go into the zone for days at a time and solve hard problems. It leaves me exhausted and drained, but I take satisfaction in the results. I break down dysfunctional behaviors in my software development organization, forcing change. I diagnose other developers' post-deployment problems at customers in spite of reactionary customer admins. I nurture the few good young developers in my org, and evangelize for the ones who deserve H1Bs. I cheerfully admit my mistakes, to encourage others to not be defensive. I meet with customers, current and potential, pitching our new release and dancing around it's deficiencies. In short, I produce, in every way that I can for my organization.

What I do NOT do, is fucking contribute. "Contributing" is something you do with your change in the red cross coin box at the checkout line.

Let's change the nomenclature to "managers" and "producers".

Anonymous said...

Hey Mini, I think that it's about time to turn off this blog. The posts should stay up for people to browse, but I think that you've hit the max on new ideas that will come in. Actually, the dev/test flames were a little embarrassing. I guess that's what you get when you focus on hiring kids straight out of school that may know a lot about algorithms, but no nothing about building really large software systems. The ones that get turned loose with lousy managers are going to have to learn everything the hard way, sigh.

Might I suggest that you distill this blog into a book? You could call it Core Dump - How to have a career at Microsoft ;-) I know this isn't your original intent, but just like penicillin, sometimes experiments produce unexpected results that are worth keeping. You'd be doing the world a service. If I knew then what I know now, I probably would never have come to Microsoft.

As far as your original purpose, I think that you've hit the limit of the effectiveness of this medium to communicate to people that can make a change. Anything more after this is just boat rocking. Personally, I'm rather pessimistic that the senior management at Microsoft will care one way or another about the injustices reported here, nor ever believe that they are as pervasive as they are. Either way, the ball is clearly in their court now.

You're a righteous manager Mini, but I think that you can honorably acquit your sense of duty at this point. I may not have agreed with everything you said, but I do believe that your motivation is good. I respect that a hell of a lot more than some of the disingenuous stuff coming from the MS leadership.

Anonymous said...

What's up with the focus on stack ranking, The Curve, process, and bureaucracy? What does that have to do with making Microsoft a leaner, agile organization that's able to shed off accumulations of dead drift-wood and get back to quickly producing fan-damn-tastic software products and services that brings in boat-loads of cash and makes shareholders clap their hands together, looking upward, shouting, "I believe again!"

I dont think that making microsoft LEANER and AGILE is necessary to make Microsoft a customer-pleasing, shareholder-rewarding, efficient company. Having a diverse range of products has its own POWER. Microsoft, now has its reach and influence in so many areas: Operating Systems, Programming Languages, Internet Search, Web Portals, Database Systems, Enterprise & Small Business, Office etc. etc etc. I think there is a lot of opportunity in Microsoft’s hands to create a substantial impact on the way people see and think about software. Microsoft was able to integrate diverse products to create innovative features: Office has integrated support for playing media files inside word documents for example, Visual Studio.NET provides seamless support for accessing SQL Server. I do not think a leaner Microsoft would be able to provide such innovations.

If problems at Microsoft are due to the inefficiency of the management or unreasonable processes, then making it leaner is no likely a cure, unless these issues are addressed. Not all leaner companies are successful. Even Google, that started leaner and agile and redefined notions of Internet Software Development, is looking to expand its empire into several areas (Wireless Internet, NASA collaboration, Partnership with Sun Microssystems, Google Talk, Gmail).

It is quite easy to say cut down people, cut down products, work one thing and do it well. As efficient it seems, it would bring its own problems. A company that focuses on just one thing is less secure. Only with a diverse range of products, can a company withstand losses in some areas by balancing them with gains in another. Maybe all that Microsoft needs is a wonderful paradigm for leading and managing the massive company it has grown into.

Anonymous said...

MSN is worthless, we need to get rid of it and 90% of the people in RedVest, Lakeridge, etc need to go. They're a drain on resources and they never should have been hired.

With all due respect, I see that there is a lot of immature attitude towards MSN at Microsoft. To an outsider, it seems, why everyone's falling on MSN, what about some other CRAPPY products that Microsoft makes and what about the teams involved in making them.

Maybe people are jealous of the ski-lodge type MSN buildings :)

I think MSN Search stood upto Google in a very brave manner and it is successful, I think it stands 2nd in the Internet Search Area. Ofcourse its not first, but what is Microsoft first at except on Windows and Office

What about MSN Spaces? All my friends use them. MSN Spaces gained popularity inspite of Google's famous Blogspot. I do not think crappy people or Red Vest people can create such an impact and compete with a giant like Google with such reasonable success.

What about MSN Virtual Earth? It has wonderful features that are not available in Google's version. What about MSN Desktop Search? Did it not stand upto Google's.

If you observe right, MSN has had reasonable success in many ventures. I think MSN is better than most other crappy teams at Microsoft.

And, to the newer generation, if you want to make a new-generation impact on how the world uses software, join MSN and forget about Windows and Office

Anonymous said...

In reply to: I dont think that making microsoft LEANER and AGILE is necessary to make Microsoft a customer-pleasing, shareholder-rewarding, efficient company. Having a diverse range of products has its own POWER.

Oh please! This reminds me of the "Voodoo economics" of the 80s.

Did you it ever occur to you why Steve Ballmer has implemented meager salary increases for the past few years for the worker bees? Did it ever occur to you why you are seeing growing levels of outsourcing in India and China? Even Steve Ballmer knows that maximizing earnings drives up the stock price.

I found a good article (using Google btw) for you related to the relationship between stock price and earnings:
http://www.smartmoney.com/options/index.cfm?story=sfo-earnings1111

Yes, it is good not to put all your eggs in one basket, but all of your eggs that you do put on the market need to be Grade A if you want them to sell and it doesn't make sense to pay $50 for a chicken if you can find a another chicken for $20 who lays more and better eggs.

I noticed on an earlier blog the recommendation to outsource HR. From purely a financial perspective, I think this would be a good business decision for certain aspects of HR. For other aspects, it might make sense to have jobs moved to lower cost labot markets (Arkansas is much cheaper than Seattle for example!). However, I have a feeling that the people in Microsoft's HR department would not be as willing to agree to these changes as quickly as they have been in sending development and test jobs to India ;-)

As a final comment, it sounds to me like Steve Ballmer and his executive management team are cutting salary costs primarily in groups at Microsoft that do not include people that fall in their social circle. Sorry to use the word chicken again, but I think that Bill and Steve are too chicken to rock the Seattle economy with paycuts or layoffs in the mid to upper levels of management, although this may be in the best long-term interest of Microsoft. I hope that Bill and Steve learn a lesson from Boeing. As you will recall, the Boeing executives seemingly felt the need to leave town in the midst of extensive layoffs.

Suchit Agarwal said...

Shocking.
I am an undergrad student in one of the most prestigious colleges of India and I dreamt about ``making it to Microsoft'' when I completed my degree.
Is the situation in Redmond really this bad? 14 out of 16 people working for Microsoft seem to be disgusted by the way the organization works. From blaring comments on the performance evaluation process, to the management, to different technologies, everyone seems to be complaining.

Is the organization really falling under its own weight? Or is this just a bunch of losers who have nothing better to do than to criticize their own source of income, and that too not in a way that can improve it but by just writing blogs and commenting on them?

Anonymous said...

I'm an engineer that has worked for large, international oil and gas companies. My background is oil and gas exploration and production. I've been through this dance and come out the other side.

First, organisms don't evolve without enviromental stress. As long as they are successful, there is no motivation to change. The greater the environmental stress, the more-radical the evolution.

Microsoft will evolve when the situation becomes desperate. Microsoft's senior management isn't yet desperate enough to start throwing each other out of the liferaft. They still think they can appease the sharks by sacrificing peons.

If you want to take a look at a flattened organization, take a look at the exploration side of oil companies. You've seen the television commercials and stories on Discovery Channel. They successfully complete these monster offshore development projects with a very lean organization. However, they didn't evolve that organization voluntarily.

Anonymous said...

'I think MSN Search stood upto Google in a very brave manner and it is successful, I think it stands 2nd in the Internet Search Area.'

It has 10% of market share (way after Google, Yahoo). And just because of initial IE preset to www.msn.com.

The problem is that MSN is not trying to bring something new, MSN just follows and tries to copy Google which is not exactly a good way to succeed.

Anonymous said...

Enough of the MSN-Dev-Test-3.0 shit already. We got the point.

Suchit Agarwal said...

"Microsoft will evolve when the situation becomes desperate"

Got the point.

About MSN, I think MSN Virtual Earth is doing really good. Also, I read somewhere that MSN is going to launch its new webmail based on AJAX, something codenamed ``Kahuna''. Seems like MSFT is doing a lot of work behind those doors and faces, but I dont understand how come MSFT is losing the public agreement it used to have in early 90s!

Anonymous said...

I want folks to speak their mind and help start putting forth proactive change.

It really depends upon who speaks their mind and who is listening. There is something called persuasion bias where someone with more social influence can stomp on anything you have to say have it relegated to an idea not worth pursuing. That social influence can be deserved or not. It often does not matter whether the person with more social influence is right or not.

The very people who are more visible and able to effect change more easily are the very ones for whom the existing system is working just fine.

There is going to have to be a massive number of people making noise about what they believe is wrong with the company to get past all the goalies that think everything is just fine.

That number is too large for a VP to have a sit-down meeting with everyone who has something to say on the subject.

In politics, this is often done with form letters for an issue on a web site where you fill in your name and email address and click "send" if you agree with what is said. The email is directed at one or more persons who can affect change.

In this case, you would also have to present one or more possible solutions to the problem or you're going to be considered one of those "negative people" that is just causing trouble.

Or, you could try to get the issues added to the annual company poll. However, you would have to get past the goalie in charge of determining what softball questions get added. In this case, you would just be setting yourself up for being a victim ... again.

The form letters could be stored on an external web site and cut-and-pasted by those inside the company who agree on the issue.

You will need an externally available score card of how many people voted for each issue in case you end up mailing another goalie and they claim that very few people wanted that change.

You could create this score card by building a web based survey outside the company since you won't know who cut-and-pasted each form letter.

Who can we get to set up that web site and distill what has been said here?

Anonymous said...

"And, to the newer generation, if you want to make a new-generation impact on how the world uses software, join MSN and forget about Windows and Office."

Just think boys and girls, you can come to work for an organization which has been around for 10 years and has lost billions of dollars! You can work for a division that everyone at Microsoft knows is a graveyard for employees that couldn't meet the hiring bar elsewhere! You can work for a division in Microsoft where no one else in the company thinks you're pulling your weight or worth keeping around! You can constantly ship crappy, buggy web applications which people will only use because their default broswer is Internet Explorer!

Yes, come to MSN and forget about those stupid products which make the company money!

Anonymous said...

Here's a question unrelated to this posting: MSFT has been hiring like crazy for folks with background in Lean and Six Sigma. They have contacted me several times -- for different positions -- for the past year. What's the state or perception of Six Sigma there and how is MSFT using it to improve their operations?

Anonymous said...

OK, so say you make MSFT a lean, mean coding machine. Say your team builds fast, feature-rich, bug free apps. You do it on schedule, too. Cool!

To get here you shoved out all of the extra people and process that get in the way of fast, efficient software development. But what might you have lost by shedding all of those extra layers of the company?

Can you localize your app effectively to sell it all over the world?

Does it have useful documentation: help, sdks, troubleshooting guides, case studies, tutorials?

Can you communicate to your customers why they should pay you for this app, and get them/their boss to write the check?

Do you even know whether your brilliantly coded, non-crashing app solves a useful problem, and people have a reason to use it at all?

Does it play nice with other software (including, but not limited to, other MSFT apps)?

Is the UI intuitive and appropriate to the task you're trying to do?

Did you address accessibility? Will your app meet ADA requirements so we can sell millions of copies to govt. agencies?

I suppose you remembered to make sure our trademarks and other intellectual property are protected?

Did you protect that brilliant, innovative idea with a patent? Are you infringing someone else's patent (accidentally, of course)?

Not all of these things are fun to do, and they probably seem like distractions much of the time -- particularly if it's not your area of expertise or interest, so you don't have a stake in understanding the end value. If you don't understand and value this part of the software development process, it's easy to dismiss as useless bureaucracy, and to dismiss the folks doing it as non-contributors and in the way.

A lot of these details are extremely valuable and help turn high-quality software into a high-quality product that people -- all sorts of people all over the world -- can understand and use.

Just a different perspective.

Anonymous said...

"Just think boys and girls, you can come to work for an organization which has been around for 10 years and has lost billions of dollars! You can work for a division that everyone at Microsoft knows is a graveyard for employees that couldn't meet the hiring bar elsewhere! You can work for a division in Microsoft where no one else in the company thinks you're pulling your weight or worth keeping around! You can constantly ship crappy, buggy web applications which people will only use because their default broswer is Internet Explorer!"

Or go to work for Xbox that has lost $4B in just 4 years and is on track to lose another $1-2 this year. Or Bus Sol that's spent about that much and has flat growth. Or Mobile that lost some 15-20% marketshare to Symbian this past year. Or come to the really "successful" divisions like Windows which have adapted the Ernst and Julio Gallo motto to "we will ship no software before its time" and just finished wasting the effort of 4,000 programmers for 3 years before figuring out they had a problem. But not to worry, the VP still got a $20M stock bonus. Of how about Office which is barely growing at all because for 5+ years they've been shipping marginal upgrades that have steadily eroded the percieved value of an upgrade? Oh, and he got a $20M stock bonus too.

MSN isn't MSFT's problem. MSN is a symptom of MSFT's overall problems.

Anonymous said...

Caught Andy Grove being interviewed last night. He was talking about the music industry and made the point that management teams which have truly excelled in the past, are the ones who struggle most when the game changes. I think that sums up MSFT's problem. Gates/Ballmer/Raikes were a great tag team for 20 odd years. But recently, with the internet, adoption of broadband, move to services and globalization, they really appear to be out of touch - consistently. Ballmer and Gates should give this some serious thought and decide whether it might be time to hand over at least the day-to-day reins to someone else.

Another topic Grove addressed was healthcare which reminded me that this is an area MSFT should get much more involved in. I know there are some efforts underway currently but the $ that will be spent in this space over the next several decades are staggering and the problems to be solved in many cases would benefit from technology. GE has already figured this out and is making even bigger bets to position themselves appropriately. If a giant like them thinks it will be worthwhile for their top/bottom line, then it should be even more so for MSFT's. IMO, it's only a matter of time before ORCL makes an acquisition in this space. How about being first for a change?

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

Sadly, slashing a bunch of people and slimming Microsoft up won't happen. All the well-intentioned advice from Mini-MSFT will fall on deaf ears. Things will continue on as usual. Google will continue to dominate the web, Apple will dominate digital media, Sony will dominate consoles. Microsoft will continue to try very, very hard to milk the two cashcows and persuade people to upgrade from Office 2000 and Windows XP when they don't feel they need to.

Anonymous said...

'Of how about Office which is barely growing at all because for 5+ years they've been shipping marginal upgrades that have steadily eroded the percieved value of an upgrade? Oh, and he got a $20M stock bonus too.'

The Office problem is that it has such a market share that there is not a room for any additional growth (simply, when you have almost 90% market share, where you can grow?).

Anonymous said...

"Windows and Office make money. MSN makes a bunch of talentless hacks employed when they don't deserve to be. The whole division is a big no hire."

They make money largely because of their past, not because of current execution which is pathetic at best. 5 years for an OS release? Are you kidding me? Another 12 mths for the first semi-innovative version of Office in what - 7 years? And hey, what % of installed customers are actually running Windows XP and Office 2003? Was that 50% after 5 years for XP and perhaps half that for Office 2003? How impressive. NOT. Windows and Office can't even compete well against their own previous versions and last time I checked, both were getting their asses kicked by OSS especially in the developing world.

Bottom line, MSN is a chronically underperforming division in a broadly underperforming company. Pointing out the former w/o addressing the latter (or worse, suggesting it isn't true) doesn't solve anything. Pop quiz, which do you think is hurting the stock more - MSN's continued laggardly performance or the delays and development fuckups that have characterized Vista? MSFT needs to get its overall house in order not waste cycles sniping between siblings.

Anonymous said...

Lots of good comments, several of which I want to reply to.

The third poster down: You are the poster boy for arrogance. So anybody with a complaint is incompetent. Anybody who thinks the review system is a joke doesn't have the talent it takes to actually work at Microsoft. Wow. And THEN you have the gall to ask people to answer your question? You've got a lot to learn about human nature, pal. Most people who know the answer will be tempted to answer you with a middle finger due to your attitude. And then, for a parting shot, you tell people to grow up? Grow up yourself. Learn that people who disagree with you aren't necessarily wrong and/or stupid. Get over yourself enough to respect others a bit.

"Unless Gates changes his mind and gives up his life-time ambition, things are only going to get worse."

This is my perception also. Bill Gates has to win. Having won yesterday isn't good enough - he has to win today. I think it shows that he is fundamentally insecure, which seems really odd, but he sure acts that way. And Microsoft's corporate culture is in many ways a reflection of Bill's insecurity. You can't fix the culture without either fixing Gates or getting rid of him. And then you can start to fix the rest of the organization...

"Let's change the nomenclature to "managers" and "producers"."

This whole comment is one of the most insightful things I have read in a long time. And as a "producer", I like the implicit slam on management - but the slam is a bit unfair. Good management is incredibly valuable. But self-absorbed, incompetent management contributes nothing but inertia.

"Can you localize your app effectively to sell it all over the world? Does it have useful documentation: help, sdks, troubleshooting guides, case studies, tutorials?" And a lot more along those lines...

Yeah. Here's the thing: All those functions got added for a reason. But all those functions slow things down. You can be big, or you can be lean, but it's almost impossible to be both. You can have agility, or you can have everything integrated. You can't have both. And if you have two teams that have to integrate their stuff, you have to have somebody controlling/managing the interface between the teams. It adds management, and it slows down both teams.

But it's possible to do it better. Microsoft needs to realize that it isn't a small company any more, and needs to organize like a well-run big company. Seems to me that it's on Steve Ballmer to do that, and he isn't, or he isn't up to the job.

MSS

Anonymous said...

"The Office problem is that it has such a market share that there is not a room for any additional growth (simply, when you have almost 90% market share, where you can grow?)."

Totally disagree. GE has proven again and again that when you think you've saturated your current market, you don't give up and settle in to play defense. Instead, you analyze the market and in most cases, will find that what you're actually addressing is really just one part of a much broader market. When you expand your focus to include that broader definition, magically, you don't have 90% share and have plenty of room to grow. BI, VOIP, video-conferencing, Speech-enabled, etc are just a few examples of where MSFT can grow Office (and to be fair, some work is happening there albeit at a snail's pace).
Additionally, with most customers still on Office XP and previous, the market saturation argument just doesn't fly even if you don't believe in the "expand the market definition" strategy above. Office growth currently sucks not because the market is saturated but because many customers see little/no value in upgrading. That's clearly a failure on MSFT's part to either build a sufficiently compelling product and/or market it effectively - not some law of large numbers. Mgt likes to ignore this fact and reference "tough comps" while patting themselves on the back and compensating themselves like Kings. What a crock. The installed base of PCs is 50%+ greater than 5 years ago. So all it would take is decent success of a new compelling Office within the installed base to drive major % Office revenue growth. But of course that takes a willingess to understand customers needs and actually deliver compelling products. Finally, take the HP Laserjet example. HP dominated the market for Laserjets. When inkjet technology came about (much of it HP dveloped) there was major resistance to promote inkjets over Lasers because the latter had higher margins. Luckily, cooler heads prevailed and HP became a leader in inkjets as well. Along the way, they discovered that even though margins on inkjets were much lesser, the more freqent consumable needs were a gold mine. Translation for MSFT? Maybe there's a whole market for Office as a service that could be monetized via something other than license revenue? After all, with folks upgrading Office on avg once/5 years, perhaps an ad-supported Office service could actually generate more money over a 5 year period that a one-of license. Of course, if you start off with the premise that you can't grow, then you won't bother exploring these or [hopefully] better options...

Anonymous said...

"I cannot fathom the logic of any mgr having less than 5 reports. MSFT should be aiming for more like 7-10:1 minimum."

I think this is totally wrong. All the management experience I have tells me that a person cannot effectively manage more than five people.

Let me say that again, with emphasis, A person cannot effectively manage more than five people.

In order to be an effective manager, you have to be spending time each and every week with your reports. Even the very best of them. I'm not talking about 1:1s, although that's one part of it. But think of all the time spent in coordination, making sure the information that you receive filters down to the correct people. This is the part of the job that makes people refer to managers as "overhead" -- a necessary evil that doesn't really contribute to the end result.

My rule of thumb is, each report eats up about 10% of your time. So if you had eight reports, you would be spending 80% of your time doing nothing but being management overhead. Four days out of five spent just shuffling information around. Which means, very little time to do the "real" work of a manager, i.e. strategic thinking and planning.

Managers, however, are not allowed to slough off their planning work. The end result is that the management portion is generally short-changed.

The higher level your reports, the easier they become to manage (and thus the more reports you can have). But before I left MS I was a third-level manager, and even though I only had very experienced, dedicated people reporting to me, they still required a lot of managing.

Anonymous said...

"You can be big, or you can be lean, but it's almost impossible to be both. You can have agility, or you can have everything integrated. You can't have both."

To use a football analogy, MSFT isn't going to be a running back again but it could turn itself into a linebacker vs the current nose guard.

Anonymous said...

"Windows and Office can't even compete well against their own previous versions and last time I checked, both were getting their asses kicked by OSS especially in the developing world."

Name an OS which is making more money than Windows? Name an Office suite which is making 1/10th of Office? OSS is actually a huge mess right now. Some of the companies out there have realized that they can't make money by selling support so they're trying desperately to make OSS software proprietary without pissing everyone off. If you think infighting is bad here, ask a Debian or Ubuntu user what they think about Red Hat. None of them makes money, none of them are user friendly at all and basically done so far is take away UNIX market share. Microsoft has actually grown taken market share consistently and made money from it's server line.

The idea that the company is failing if people don't upgrade everytime an OS or Office version comes out is absolutely absurd. That's like saying Toyota is a failure because I don't get a new Prius every year when the newest "version" comes out. It's a long term game about what percentage of the market any of your products have, because eventually those customers will upgrade their systems. You say this as if it's Microsoft's fault that my Grandmother hasn't bought a new computer since 1998. Sorry, not everyone upgrades their system every five years, that's not a problem for Microsoft.

TheKhalif said...

You need a vacation, maybe even a multi-month leave of absense. That said, let me rant on the horrible, horrible term "Individual Contributor".

It is demeaning. It is infantilizing. One is either "management", or a nine-syllable babble-speak creature known as "in-di-vi-du-al con-tri-bu-tor".



Finally someone who agrees that that is a very bad term. I'd rather be a team memebr.

Anonymous said...

OSS is actually a huge mess right now.

oh.... really?

Google seems to be making money on all open-source platforms.

Cisco uses open source firmware in all their routers.

And, there are others.

So, it seems that some companies can and do make money using open source software.

They dont make money explicitly selling operating systems; a concept that is purely BillG's creation, and giving credit where credit is due, he did a damn good job of creating that business.

Open Source is commoditizing operating systems, and eventually all generalized computing applications.

The price for commodity products asymptotically approaches the marginal cost of production.

What is the marginal cost to produce a copy of software? Very, very close to ZERO.

So, what will happen to the cost of commodity software? the price of software will go towards zero.

As for the car analogy: Funny thing about physical goods, they eventually wear out and need replacement. So, Toyota et.al. will alwyas have a future market for cars.

Software does not wear out; you will never find a case of an if statement rubbing against a for loop, and causing objects to grind to a halt.

Why would you ever need to buy another copy of office, if the one that you're running works perfectly fine, and will run forever? You wouldnt, and neither would I.

And where is microsoft with commodity proces software, that never needs to be upgraded?

Anonymous said...

"Office growth currently sucks not because the market is saturated but because many customers see little/no value in upgrading. That's clearly a failure on MSFT's part to either build a sufficiently compelling product and/or market it effectively - not some law of large numbers."

Well, no, it's not necessarily a failure on Microsoft's part. I mean, someone talked about adding live video to a Word document. One word: Why? Do you really think there are many people who are going to buy a new version of Word because it can do that?

Stronger: Do you really think there are many compelling features left for Word? For Office? I mean, really, for at least 90% of users, Office already does everything they need/want it to do, and more besides.

The problem isn't necessarily because Microsoft is failing to have vision or to market well. The problem is that the product is mature. Sure, live video is a sexy feature, but it isn't anything I actually care about having in Word.

The upshot is that both the OS and Office are becoming mature technologies. There aren't that many important features that aren't already in there. It's getting harder and harder to make people care. It's just where you are in the market, it's not a corporate failure.

But it is a big corporate problem. Mature products have low margins. OSS is getting all the features anybody cares about. The cash cows are going to have almost-as-good equivalents that are effectively free. This is big trouble.

MSS

Anonymous said...

"I just left, so I'm helping towards your goal of a (slightly) smaller...."

Wow! exactly my story...and that is why I left..not that my coding abilities were not good..they were excellent..I did grt informationals from a couple of groups for dev positions...but I eventually decided MS is not for me and went to a smaller and more dynamic company. And I agree with you that people were nice...I definitely did not expect the friendly gestures from my team and managers once they new I had decided to leave..and atleast they seemed to be making an effort to understand why there is no excitement in working at MS anymore..I feel sorry that MS is just hoarding a lot of talent and wasting it...

Anonymous said...

"Name an OS which is making more money than Windows? Name an Office suite which is making 1/10th of Office?"

None, but what do you think MSFT's current valuation is based on? What matters for the latter is the growth trajectory - and we both know how that's going.

"OSS is actually a huge mess right now."

And it can continue being a mess - that doesn't mean it won't continue to negatively impact MSFT's growth and margins and/or that service company's won't use that free platform to challenge MSFT.

"The idea that the company is failing if people don't upgrade everytime an OS or Office version comes out is absolutely absurd"

It would be and thank god I didn't say it - try reading. MSFT is failing because its not developing innovative, compelling products in sufficient number and its current structure isn't allowing it to keep up to more nimble competitors. As a result, its overall growth is anemic.

"Sorry, not everyone upgrades their system every five years, that's not a problem for Microsoft."

Actually, the "good enough" factor is probably MSFT's single biggest problem and is largely responsible for growth slowing to 8% last year and 6% in Q1. Not everyone upgrades their systems every five years, but when less than half do and new growth markets appear challenging, MSFT had better find the combo of products/marketing to turn that around - unless of course you want a stock price that goes with 6% growth which, despite even MSFT's dismal stock performance, is a lot lower than here.

Anonymous said...

The cash cows are going to have almost-as-good equivalents that are effectively free. This is big trouble.

If you read Clayton Christensen's "Innovator's Dilemma", you will find that you just described how Disruptive Technologies take out large, profitable companies.

They create a "good enough" solution at a price point significantly lower than the big companies product, and watch as the big company restreats upmarket, eventually ceding all ground to the Disruptive Tech.

Open Source has passed the "good enough" threshold for many applications already, and is approaching that in other applications rapidly.

Again, credit where credit is due: MSFT was once the disruptive technology, and beat out DEC by forcing commoditization of Hardware.

Its a cycle.

I feel sorry that MS is just hoarding a lot of talent and wasting it...

if microsoft hoards the talent, the talent cant compete with microsoft, microsoft has been known to do exactly this, if not to benefit from smart people, to make sure that they are working for you instead of a competitor.

Anonymous said...

"One word: Why? Do you really think there are many people who are going to buy a new version of Word because it can do that?"

No, but I do think that if Office addresses a bigger part of org costs (ie travel via video-conferencing, telephone vs VOIP, etc) then the overall value prop increases. And at ~$200/user every 5 years, you don't have to do much to make it a wise corporate investment. On the other hand, if you do little and increasingly look similar to no/low cost alternatives, then you shouldn't be surprised that you'll increasingly come under price pressure.

As far as OS's being mature, I reject that completely as well. Ask the average user whether they think that current OS's are everything they should be. Most imo will answer no, far from it. A lot more work can and should be done to expose even existing capabilities. Office 12, for example, appears to be a good start in that direction on the app side. Hopefully Vista will be as well on the OS side.

Anonymous said...

An OS will not be mature until it effectively removes the hierarchical filesystem, because, hierarchical filesystems suck ass.

Anonymous said...

"Google seems to be making money on all open-source platforms.

Cisco uses open source firmware in all their routers."

This is a pretty lame comparison. For one thing, neither creates packaged software and licenses it with new desktops. Secondly, Google doesn't "make money with Open Source", it runs it's servers on open source. It makes money from advertising. Cisco similarly doesn't "make money with Open Source". It could create it's firmware on any platform and still make money. Oh, and Microsoft's profits are more than twice what both of these companies produce.

Let's look at two of Microsoft's nearest open source competitors for the OS -

Novell (SUSE, and everything else they offer) - $750,240,000

Red Hat - Gross Profit $158,590,000

Microsoft - Gross Profit $33,590,000,000

Note the extra three zeros at the end. Wow, it's nearest competitor has profits that equal less than 3% of it's profits. I'm really impressed by how much open source is making them money.

What about Office software? How much has Sun made with StarOffice? How much money has Open Office made (they certainly haven't dented Microsoft's revenue at all)?

If anything is a huge non-performer on Wall Street, it's Open Source software.

"And where is microsoft with commodity proces software, that never needs to be upgraded?"

The problem is not that the software never needs to be upgraded, it doesn't. What needs to be upgraded is the equipment it runs on. With processor speed and hard drive space doubling every few years that's quite a few upgrades. When people get new systems, they get licenses for new software.

(x_X)[FaCe](O_o) said...
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joe said...

You havent refuted any points, you've simply said "Microsoft dominates where its dominant". No shit.

But why is Google running its servers on OSS, and not Windows?

Why is Cisco not using CE or XPe on their routers?

The answer is: These companies can find a good enough solution at a better price point.

Yes, Microsoft dominates the x86 microcomputer OS market, just like DEC dominated the Mini computer market, but is there a future for this market, or will it get disrupted out of existence?

Let me concede some points, no one is going to "become the next microsoft", and sell more operating systems, or Office Suites than MSFT. It just aint gonna happen.

Whats going to happen is that the game is going to change, and microsoft will be trying to play on their home turf, while everyone else is playing on a different field.

As for the hardware upgrade treadmill, this is another false economy that will perish, shortly.

If you own a house, and buy a fridge, and you pay $1500 for it, you expect it to last 10 years or more.

If you buy a computer for $1500, you can only expect 2 years? 3 at the most? What sense does that make?

we're in for some interesting upheavels in the computing world, as this industry finally matures.

Anonymous said...

"It would be and thank god I didn't say it - try reading."

Yeah, that is what you said. You said:

"And hey, what % of installed customers are actually running Windows XP and Office 2003? Was that 50% after 5 years for XP and perhaps half that for Office 2003?"

In other words, there's a problem with the business because people aren't upgrading to Windows XP and Office 2003. While I can understand why you believe your other comments, the implication here is simply absurd. Try reading what you wrote.

Microsoft does have a problem with growth, but to me that is a result of the MSN and Home divisions sucking. Fortunately, it has an enormous amount of cash which it can use to move into new markets when they appear. It certainly doesn't have anything to do with how nimble it's competitors are. Red Hat/Novell/Sun/Oracle, nimble? Give me a break.

Every couple of years someone proclaims that Microsoft is dead. Folks like you line up as pallbearers, walk the casket to the burial site, gently lower the casket into the ground and breathe a sign of relief that the evil empire is dead. Then you look like an idiot when the casket is opened to reveal that there is no body inside.

joe said...

Most likely, and hell lets say 95% chance, Microsoft will evolve into an IBM-like organization generating most of its revenue off of consulting services to large corporations.

This would be the retreat upmarket in the face of disruptive technologies.

The other 5% is a spectacular collapse along the lines of DEC.

But, as everyone here can agree, microsoft has a ton of cash sitting around, and can buy its way out of several mistakes.

Anonymous said...

"But why is Google running its servers on OSS, and not Windows?

Why is Cisco not using CE or XPe on their routers?"

This isn't all that an important of a question. Why are 98% of the people looking at Google's website using Windows?

Google makes $.05 or $.10 per person in advertising. Microsoft makes at least $90.00 per person (I'm just guessing though) for pretty much all those same people.

Why is Palm putting Windows Mobile (it's competitor's) on it's Treo line? Microsoft started behind Palm and now they are using Microsoft's software, why didn't you bring that up?

You seem to be focused on the small picture, the big picture actually looks really good for MS.

chunnibabu said...
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Anonymous said...

"In other words, there's a problem with the business because people aren't upgrading to Windows XP and Office 2003. While I can understand why you believe your other comments, the implication here is simply absurd."

Of course there's a problem when half your customers haven't adopted your new product even after 5 years of them being out in the market. I'm not suggesting that this alone is the source of MSFT's problem but pretty obviously, it's a major problem.

"Microsoft does have a problem with growth, but to me that is a result of the MSN and Home divisions sucking. Fortunately, it has an enormous amount of cash which it can use to move into new markets when they appear. It certainly doesn't have anything to do with how nimble it's competitors are. Red Hat/Novell/Sun/Oracle, nimble? Give me a break."

All of MSFT's emerging bets are sucking which only exascerbates the overall growth problem now that Windows and Office are barely growing at all. And yes, MSFT has enourmous amounts of cash which unfortunately they routinely substitute for intelligence. Ergo, Xbox or even your favorite whip MSN. Redhat is growing far faster than MSFT and releasing OS revs about 2X as fast. Novell/SUN/Oracle/ agree not too impressive - although even ORCL didn't take 5 years to update its core database. But let's talk about SalesForce.com, GOOG, AAPL, YHOO, Symbian, Firefox, Apache. All out growing, all out-executing MSFT.

"Every couple of years someone proclaims that Microsoft is dead. Folks like you line up as pallbearers, walk the casket to the burial site, gently lower the casket into the ground and breathe a sign of relief that the evil empire is dead. Then you look like an idiot when the casket is opened to reveal that there is no body inside."

And every year lately MSFT management proclaims that growth and emerging unit success are "just around the corner" and meanwhile growth slows to a crawl, web sites such as this emerge with all sorts of employee concerns and the stock is within a breath of its 52-week low an flat with 1998. But I guess shedding some $250B+ in market cap since 00 is just a flesh wound and everyone with concerns including the market generally are just missing the obvious. Right.

Anonymous said...
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joe said...

98% of people hitting google use windows? I'm pretty sure that its more like 80%, but dont worry, you're only off by a factor of 10.

please try to use reality-based metrics.

Anonymous said...

"All the management experience I have tells me that a person cannot effectively manage more than five people."

I call BS ('I challenge your assumptions'). How exactly do you spend those 10%/direct of your time? I suspect you are not accounting very well for time/direct or you are micromanaging.

Anonymous said...

"I'm pretty sure that its more like 80%, but dont worry, you're only off by a factor of 10."

It's more like 90%, so I'm off by 8% (and closer than your wishful thinking).

"Microsoft Windows eventually came to dominate the world personal computer market with a market share estimated to be still around 90% for desktop personal computers."

http://en.wikipedia.org/wiki/Microsoft_Windows

Anonymous said...

"But I guess shedding some $250B+ in market cap since 00 is just a flesh wound and everyone with concerns including the market generally are just missing the obvious."

I'm sure you were saying the same thing a year ago, five years ago, ten years ago, 15 years ago... just like all the other fanatics who hate MS. Good, keep saying it. Microsoft laughs all the way to the bank.

Who da'Punk said...

Okay, I'm hitting the big [Pause] button.

No more comments for a while. Like what Scoble ran into on Channel 9, I'm tired of people crapping all over this space with random comments of dubious content. I've been pretty liberal on allowing anonymous comments in the hope that some real gems would come through. The gem supply seems to be running low.

The noise is more than I'm interested in being the host to. I will spend random moments blowing away all comments that are below my own personal bar. Should I ever turn comments on again, I'll blow away crap-comments as soon as I can.