Sunday, July 16, 2006

Intel-ligent Re-design

The Intel employee count is bigger than Microsoft and Intel is a way different company. Intel has one-hundred thousand employees. May Microsoft never be so cursed. Intel decided that you can get too big and too many decision makers can block effective decision making. So this past week Intel announced 1,000 management positions are being eliminated and analysts hint at further layoffs.

Could your group be more efficient and agile and focused without a layer or two of management?

The only extra insight I can add here is to take Guy Kawasaki's layoff advice (though more geared towards Web 2.0 startups and their upcoming "pop!" days ahead): "#2: Cut deep and cut once:" Guy Kawasaki - The Art of the Layoff. It's no fun waiting for the other shoe to drop and your best folks will tend to say "to hell with this" while living with the stress and the ambiguity of wondering what's next and when. Oh, additional insight: Dear Microsoft HR: please don't go and hire all these displaced Intel managers. Sugar on top.

Other interesting going ons on the Minidar:

Financials: FY06Q4 financial results are coming up this Thursday, 7/20. Allow me to ask this to our executive leadership: guys, is there anything going on that Wall Street might be, well, surprised by? If so, how about letting it loose before Thursday? More sugar.

The Microsoft Financial Analysts Meeting is the following Thursday, 7/27. My wish: Ballmer gets up there and gives the same frank heart to heart he did within his keynote at the recent Microsoft Engineering Excellence conference. Integrated innovation: bad idea. Innovate first and then integrate: much better idea. Straight forward common sense stuff like that makes me see the clouds parting and the sunny future breaking through.

Underwater Options: in the world of rebel-rousing for the stocks, one commenter has this idea:

Do you have underwater options expiring this month?

On 7/24, a week before they expire, go to your SSB account and exercise 1 option. Pay the difference between fair market value and your strike price (this will be somewhere between $0 and $40). Microsoft will handle the paperwork, the volume will remind management that we options holders are still here, and the cash you pay to exercise the stock will go to Microsoft (as non-negotiable options, Microsoft must broker the exercise). Win-win, as they love to say.

And if there are institutional investors looking to engage with stock-price-aware discontented Microsofties, getting popular press for an idea like this out would certainly serve as a rallying point, if not a sobering reality check. Other ideas? (Ooo, I better be careful, less I need to start delivering this in a hall vs. via blog... I guess I help put the Red into Red Herring).

Eeek! An unhappy IT lord: Microsoft shutters Windows private folders CNET News.com - here we go and release a relatively cool tool that also helps justify Windows Genuine Advantage (see, sugar on top!) and then we go and yank it fast when the corporate IT lords fret over it. This is a key example of what's truly wrong with Microsoft today when it comes to features. We are so obsessed over getting the IT department happy with deploying our bits in the corporate world that we forgo (or yank) features that users might actually want to use. Sure, throw a policy key or two in there so that the IT lords can turn it off. But don't abandon customer centric features. Is it possible to take Total Cost of Ownership too far? Yes, and this is a dead end path that ends with a pile of the easiest to maintain features of all: the ones we never ship out of fear of IT backlash.

Let's see if some of the big-bet features in Office are enough to cause a user-driven upswell to get the IT departments to upgrade to Office 2007 before 2010.

Joshua Allen has a good write-up, too: Better Living through Software » Blog Archive » Oh No!!! People Will Love It!

Isn't there some popular book about innovation people love to quote that tells you how it's sometimes a really bad idea to do what your customer wants?


82 comments:

Anonymous said...

"here we go and release a relatively cool tool that also helps justify Windows Genuine Advantage"

I am still trying to figure out how to turn my little red windows security alerts shield OFF. Very irritating. There is nothing about WGA now or in the future that is worth using by any law abiding license purchasing customer. The sooner MS figures that out and comes up with a truly innovative and customer supportive solution the better.

To me, freebies for installation is just plain bribery. Customers don't like to be bribed and are more likely than not to see it as an excuse to dump the company that does as soon as possible. Get a real marketing person to handle this, not someone who is thinking in terms of sales and license recovery--it is backfiring, every time one turns on the computer.

Also, Mini, re Intel. A lot of those 100,000 positions are manufacturing, unlike Microsoft. Very different. In many ways Microsoft is larger than Intel.

Good to see you suggesting Christensen. The new managerial buzzword for the rest of the decade at MS will be "paradigm shift" which was popular a few years ago.

Anonymous said...

Monster.com is the most revealing of the job sites, because it charges companies real money to post ads.

Jobs posted recently by Microsoft for Redmond WA and vicinity:

http://jobsearch.monster.com/jobsearch.asp?cn=Microsoft&sort=rv&vw=b&q=&zip=98052&rad=50&re=112&refine=1

There are quite a few. But take a look at the skill sets they're looking for. For comparison, try the same search with Amazon instead of Microsoft.

TheKhalif said...

Howdy Mini,

Good post. The most interesting part was how Sir Steve is realizing that it's easier to write 50 small programs that fir together than it is to do 1 large program that does what the 50 small ones does.

ALso the quote about not always listening to your customers. Hit Nail On Head.

Sometimes your customers will be like PMs who don't understand how thing work or don't work in a SW stack. I have had internal customers ask for thing sthat were, um, how should I say not only dumb but nearly impossible to implement dependably.

I hope that MS realizes that BlcakComb will repeat the same LongHorn scenario if everything includin gthe person who installs the kitchen sink is thrown in.

As a devoted .Net developer I need MS to be more "partner-friendly" so that is becomes easier to push .Net apps. .Net 2.0 is a great application platform and MS shoudl actually be pushing Mono with GTK#.

I'd love to add .Net apps to Linux. I think Intel's "epiphany" is as much due to pressure from AMD as a desire to re-org.

MS doesn't have that kind of pressure and has become complacent.
They (mgmt) should be looking to release more things like Windows For Legacy PCs.

A thin client with machines that have (or will have ) 2GB RAM will allow people to open more productivity apps and help MS to better handle mem alloc and thread creation.

I finally did install Vista as a VMand I can say that just like XP it provides one or two things that I consider an upgrade.

I do like the NEW START BAR. I used the SIlver theme for XP and that silly green start bar is making me crazy.


Why can't I change that?


Also I like that there is no more TXT Mode setup. It seemed pretty responsive and I may install it as an OS and not VM.

But speaking of Intel and Vista, what is your take on whether this last delay was because Intel barely has an IGP that can run Vista?


I mean how can Dell preinstall an OS that will creep along like molasses?

I noticed a few weeks ago that one or two IGPs got qualified, but I find that hard to believe.


From my experience that will not be a good experience for someone with lots of Windows open.

Anyway, on topic. I hope that MS does trim the fat and get on track to being truly responsible for the PC market.

There is no competition. No one will overtake Windows. That's a great place to start. Exchange in my mind is more important than Office. As is SQL Server.

Providing infrastructre tools can be very profitable as IBM can attest to.

I'm signing out but keep fighting the good fight.

Josh Bancroft said...

Intel's reduction of 1000 managers has been bittersweet for a lot of us. One the one hand, it's heartening that they recognize that there are too many layers of management, and have exercised Intel's first actual layoffs in 20 years ("redeployment" is usually used instead) targeting that management excess.

But it sucks for those 1000 people that got laid off (even if they got decent severance packages), and it creates all kinds of uncertainty and fear in those of us who were left without our manager all of a sudden.

I agree that it would have been better to follow Guy's advice of "cut once, cut deep". The atmosphere at Intel Thursday and Friday was palpably different - you could feel people walking on eggshells, and now EVERYONE is wondering if they're going to be next...

Anonymous said...

Come on, Mini...that's one of my few reasons left to come to work anymore. I've got all these different managers who think they all have 80% of my time, so I have to keep them a little confused about what I'm actually working on. (It's great to point one at the other with a request for resources, and watch the squabble shake out.) I'd be in big trouble if headcount was reduced to where I only had one manager. He/she might be able to figure out how much time I'm actually working on deliverables!
I mean, isn't it fun to play schedule chicken?
j/k

Anonymous said...

Intel has one-hundred thousand employees. May Microsoft never be so cursed.

Mini, open the headcount tracking tool and do some basic math.

FTE + CSG + Other = ...

Anonymous said...

Mini, glad you're back. Was getting a bit bored w/o your insights.

Anonymous said...

The link below relates to the topic Intel-ligent re design as well as the last set of topics, Mini.

Article link in the International Herald Tribune today re the changing cultural environment that is rejecting Apples ipod and itunes philosophy. Its not just the EU--it is deeply cultural not only with Europeans, but this very very American customer, who's family has been here since the 1700's.

Pay attention softie.

'For Apple, Europe becoming a tougher customer'

http://www.iht.com/articles/2006/07/16/yourmoney/music17.php

Anonymous said...

If somebody offer an insight like last quarter on selling MSFT a day before reporting, I will take the advise seriously this time.

It is not fun to lose money big time.

Anonymous said...

Oh, additional insight: Dear Microsoft HR: please don't go and hire all these displaced Intel managers. Sugar on top.

I doubt the laid off are particularly incompetent. They are probably politically less connected and unlucky. It is the organization that puts people in unproductive roles by "promoting" them.

So maybe some of them will be fine individual contributors (ICs) who could contribute to MS as ICs. On the other hand, we have some folks who ought to go back to being ICs or just leave MS.

For full disclosure, I already work for MS and have never worked at Intel and don't know anyone who is about to be let go.

Ihar Filipau said...

http://politics.slashdot.org/article.pl?sid=06/07/16/1654217&from=rss

Slashdot picked up the EC v. MS case discussion. Most of the time it's flame and funmaking - but there are some interesting thoughts too.

ventureless said...

Big fan of your general goal of slimming MS down, however not so sure if Kawasaki's #2 is the right thing for a company that will continue to be large like Microsoft (and Intel as well). I think cutting the unproductive managers is the right thing because they have a huge compounded impact on everyone else. Cutting lots of ICs would create too much uncertainty and lack of confidence... more than it's worth if you agree with the reality that MS will continue to be big no matter how cool this blog gets!

It'd be interesting to see more Intel insider feedback in these comments, looks like there's some already.

Anonymous said...

and then we go and yank it fast when the corporate IT lords fret over it.

I think MS needs to decide if Windows is a corporate OS, or a consumer OS.

Right now, they're trying to serve two masters, and are pleasing neither of them. On one hand, the consumers are saying "We want new features, and we want them easy to use". On the other hand, the corporate IT departments are saying "We want to control what our people do with their PCs in order to lighten our workload". The two Venn bubbles don't necessarily intersect.

When Win98 was still around, the division was clear. NT/2000 was for companies, Win98 was for home users. Now that the OS's have been consolidated (XP/Vista), one: It becomes harder to manage the product, and two: You end up pleasing neither of the two audiences.

Mini-Edit said...

Clean L68+ people and VPs. Cut the ranks of PUM, GPM, Group Manager and Test Managers. Fire the HR bureaucrats and Microsoft will get better.

Anonymous said...

Corporate IT Lords?

Bite me.

Every single time that a corporate application crashes. When there's a bug in Word. When Access doesn't work the way someone wants it it. When the ISP takes a 4-hour dirt-nap. When the building AC goes out and a rack has to be shut down or fry. Who takes it in the shorts?

The IT "Lords".

Can we re-write Word? No. Have Access magically create multi-user secure web-enabled databases from the cobbled-together crap an accounting intern made? No. Control the ISP, or the building maintenance? No.

So what makes you think, even for a New York Minute, that we haven't already been on the firing line because some "gotta have the shiny thing" senior middle mgmt bozo installed this My Private Folder "cool tool" and immediately forget the password that was "securing" the files for a $250,000 project?

I'm here in Redmond, Mini, working IT for a company with 4000 people internationally, 1000 in the US. Some of our staff has been in MS advertisements - there's no dearth of Kool-Aid here. But you want to blame the IT lords? No.

Blame the users to whom your company gave a loaded gun.

Anonymous said...

So, I'd be interested in comments or a post on the MyMicrosoft changes as people see them now. Here we are almost two months into this "thing" that they said were to take immediate effect. I still don't feel any fuzzier about the review model, seems management has gone off into their cave again to make all the decisions and transparency seems to be still not there. I saw overpriced food show up in my cafeteria, and that seemed to prompt the food that was already there to raise it's price as well. I don't have a Starbucks machine in my kitchen. The new discounts that were supposed to be on PRIME are not there yet. Drycleaning, grocery delivery? Could the implementation of those things be any lame? So really, is this it?

PentrinoVI said...

1000 of 100000 = 1% so it is hardly a huge thing. Intel loses about 5% through attrition every year anyway.

Josh B. is right about the pain though. No way mistakes aren't going to be made. On the other hand, it may be an opportunity or relief for some.

I wrote a bit about it here:

http://unofficialintelblog.blogspot.com/

Anonymous said...

"Over the last five years at Intel, the number of managers has grown faster than our overall employee population. Our efficiency analysis and industry benchmarking have shown that we have too many management layers, top to bottom, to be effective."

Agree that INTEL and MSFT can't be compared directly. However, suspect that this [Intel] statement would be just as applicable to MSFT and that MSFT would benefit from a similar benchmark against appropriate industry peers. Does MSFT have the guts to even begin that process though, far less act on its results? I seriously doubt it - but it would be a great thing if it happened.

E said...

I can't believe that I am responding to some of the trash that has been posted, but when has a reduction in force ever been viewed as a positive on Wall Street? Sure, Intel is firing 1000 managers, but what were they managing in the first place?

Microsoft does have to decide which master it wants to serve, the consumer or the IT user. While both valuable to the bottom line, continuing to try and serve two masters will only further erode the support base from both ends.

However, I can already forsee Microsoft's solution: another Vista edition. Window's Vista Corporate IT Version (which will then be broken down into three more verisons).

I don't have the solution on what Microsoft should do, but if you look at the recent stock slide, most investors, myself included, say what you guys are currently doing is not working.

The question is this: What event will spur Microsoft to make some actual structural changes. Will it be a large decline in Consumer OS Share? Will it be a horrible quarter?

joe said...

mini:

you know... christennsen's book isnt about innovating by big compaines.

its about big companies getting destroyed by small upstarts that run circles around old, lumberring dinosaurs who are trying to maintain their dominance in a dead market.

you know, like microsoft.

Anonymous said...

Hey Mini, if you want to get outraged about something, take a look at the latest update to our Stock Policy - there was an announcement about it on hrweb, look for "retirement benefit".

So apparently now is there motivation for people to retire (Martha would say 'a very good thing')! If you are 65 years old or 55 and have worked at MS for the past 15 years straight, you can continue to vest your stock awards after you retire.

At first, sounds super - and for the right people, another way to motivate them to stay at MS rather than bail and enjoy life.

The unfortunate thing upon furhter review - anyone at the company can participate. So who is >= 55 years old and retiring after > 15 years of service to MS later this year? Jim Allchin. Nice timing if you ask me. Maybe we should say that the execs have earned enough while they were at MS and they don't need us "shareholders" footing the bill of their next yacht or beach front home on poverty rock or Medina?

Sad thing is, I'm not really shocked since the same thing happened when Steve offered to buy out everyone's options. As others have described, it was really a cover to keep a bunch of partner / exec folks who had large grants totally under water. They should never have let execs partake in that program, it basically reinforced there was no accountability for the stock price. And take a look at the proxy statements for the last two years on who participated... Jimmy Allchin! He made over $6M just through that exchange.

I'm glad HR sent me mail last year saying my option grant that is at $33.7 is going to expire this year. Better get on exercising that right away.

Anonymous said...

Come on Mini, the stock's only down 62% since Ballmer took over - what's the rush to make substantive changes? [sarcasm]

Anonymous said...

Kevin Turner came up big this week stating that enterprise search was Microsoft's house and all challengers would be backed down. On a similar note, IBM claimed that mainframes are their domain and nobody better try to whip them at mainframes. Do you have an intranet at work? Good. Now send us your money.

Anonymous said...

Good post. The most interesting part was how Sir Steve is realizing that it's easier to write 50 small programs that fir together than it is to do 1 large program that does what the 50 small ones does.

Right. A good example of integrated innovation is peanut butter and jam. Or pancakes and syrup. Technology really doesn't improve your reach in that regard.

Anonymous said...

The unfortunate thing upon furhter review - anyone at the company can participate. So who is >= 55 years old and retiring after > 15 years of service to MS later this year? Jim Allchin. Nice timing if you ask me...

Tinfoil hat a bit tight there? Allchin's vesting schedule is undoubtedly rigidly determined by his employment contract, which is not at all like the employment contract used by us common oiks. I'm sure he has a golden parachute, but it has nothing to do with this.

Anonymous said...

So, I'd be interested in comments or a post on the MyMicrosoft changes as people see them now. Here we are almost two months into this "thing" that they said were to take immediate effect. I still don't feel any fuzzier about the review model, seems management has gone off into their cave again to make all the decisions and transparency seems to be still not there. I saw overpriced food show up in my cafeteria, and that seemed to prompt the food that was already there to raise it's price as well. I don't have a Starbucks machine in my kitchen. The new discounts that were supposed to be on PRIME are not there yet. Drycleaning, grocery delivery? Could the implementation of those things be any lame? So really, is this it?


I am still waiting to see if this company will take a different attitude towards dev ICs this August, now that we are having so much trouble hiring. If not, I am out of here.

Anonymous said...

However, I can already forsee Microsoft's solution: another Vista edition. Window's Vista Corporate IT Version (which will then be broken down into three more verisons).

Try to have a clue about what you are talking about before posting. The merits of the strategy aside, 3 of the 7 Vista editions are already aimed at business environments.

Anonymous said...

Clean L68+ people and VPs. Cut the ranks of PUM, GPM, Group Manager and Test Managers. Fire the HR bureaucrats and Microsoft will get better.

AND Dev Managers. Wouldn't want to leave them out

Anonymous said...

Corporate IT Lords?

Bite me.


Bite yourself. IT is justly reviled. I have worked both sides--inside and outside the IT department. The loathing people have for your field is very well justified. Maybe not you, personally, but look around you. Malcontents would be too polite a word to describe the human detritus that settles into IT.

Anonymous said...

Folks, how many employees are ready to exercise 1 share of the options that expire worthless?

After 12 yrs at the company and seeing my share of the sh*t, I am in !! Get me some company.

Anonymous said...

Lol, now I don't feel so bad about taking the cash payout on all those options :-)

CorpMonkey said...

I'm very interested in Thursday's disclosure. It was publicly announced today that MSFT will be changing around our ledger a bit when reporting. My question is how long that will distract analysts from finding another missing $2.4 bln ;)

Anonymous said...

Big fan of your general goal of slimming MS down, however not so sure if Kawasaki's #2 is the right thing for a company that will continue to be large like Microsoft

I think you missed the point of Kaawasaki's rule. If you're going to have layoffs, don't have multiple rounds. Get it all done the first time, so people don't sit around waiting for the next round, wondering if their number is up. The worst thing you can do is cut a few today, realize it wasn't enough, cut a few more two months later, realize that wasn't enough, do round three six months later...

That if disruptive.

IT Lords. Misunderstood geniuses, or santimonious morons? You decid... oops, port shutdown cut that message off.

Anonymous said...

Microsoft does have to decide which master it wants to serve, the consumer or the IT user. While both valuable to the bottom line, continuing to try and serve two masters will only further erode the support base from both ends.

Repeat after me:
Microsoft serves the IT user. Microsft serves the IT user! Microsoft serves the IT user!
Microsoft has decided. The profit margins on volume licenses (read: IT contracts) are vastly vastly greater than those on retail and OEM sales (read: individual consumer). Like it or not, but when it comes down to it and choice A benefits the IT departments, while choice B benefits the consumer, choice A will be the winner. That may not hold true in departments like XBox (where there is no corporate volume license market), but like it or not, this is the solid reality in Windows and Office.

Anonymous said...

I can't believe that I am responding to some of the trash that has been posted, but when has a reduction in force ever been viewed as a positive on Wall Street?

It's fairly straightforward. Reduce the number af employees, and you reduce the wages expense. Reduce the wages expense and you increase the amount of profit. Increase the amount of profit and the EPS increases. Then the share price usually increases also.

Charles said...

I think MS needs to decide if Windows is a corporate OS, or a consumer OS.

Right now, they're trying to serve two masters, and are pleasing neither of them. On one hand, the consumers are saying "We want new features, and we want them easy to use". On the other hand, the corporate IT departments are saying "We want to control what our people do with their PCs in order to lighten our workload". The two Venn bubbles don't necessarily intersect.


Arguably, the problem slightly restated to clarify the issue is should Windows be "a corporate application stack, or a consumer application stack"?

Were Windows actually just an operating system, corporate IT could layer on the applications that suited its security, maintenance and IP management requirements, while home consumers could instead layer on those (ostensibly fewer and simpler) applications which suited their individual needs and tastes; applications which could have been developed by Microsoft as optional additions had Windows actually been architected as a general purpose OS instead of a single purpose internet browser (to employ a bit of hyperbole); applications which could have have been easier to develop unencumbered by arcane interdependcies which presently entangle Vista; applications which (in aggregate) could appeal to a broader audience and thus generate more reveneue than does Windows/Vista; applications which would rely on well understood, exposed and licensed OS interfaces which satisfy the US DoJ an EUC and avoid the sanctions and penalties currently (and yet to be) imposed.

Why, golly, such a straight forward OS could even be ported to other hardware architectures (as NT once was), enabling the application stack to likewise be ported. And further, an OS that simply manages the real resources of a computer can more readily be adapted to manage real resources on behalf of many virtual computers (see history of IBM's VM operating system and PR/SM, Amdahl's hypervisor, and VMWares present market command of virtutalization).

Then Microsoft would have had a cross-platform enabled product line (OS, RDBMS, application stacks, comm and synchronization layers, etc.) all ready to compete across platforms with IBM, Oracle, Sun, etc, and been enabled for virtualization as well. Home consumers could select those applications which met their needs and Corporate IT could select theirs, and everyone could run on whatever hardware suited their environment.

But Nooooooooo! (apologies to John Belushi) IE and everything since for decades had to be part of the OS - I'm looking at you Bill, you 'genius' marketeer and system architect.

Microsoft, the company, does not need to broken up but rather shaken up, while windows the OS indeed needs to be broken up, separated into a true general purpose resource managing OS and the application enabling functions (like .NET) separated out into subsystems and application specific features (like IE) seperated out into applications.

Do that and the engineering, support and infrastructure problems and processes become managable, products become shippable, business becomes reliably plannable, new customer market segments become targetable, and competitive threats overcome with profitable customer-oriented products instead of monopolistic bludgeons. What a concept.

Anonymous said...

AND Dev Managers. Wouldn't want to leave them out

Why not? Add pm/dev leads to the list as well.

Anonymous said...

I think it is sometimes instructive abd elightening to hop back intime and read what people were predicting, just a few years ago. Here's what they were all saying to us, almost exactly 3 years back; they're talking about tight integration, many-layered dependencies and software projects that depend upon each other so much, that tehy can hold one another up in a never ending mud-wrestle of feature-slippage:

http://news.zdnet.com/2100-3513_22-5053699.html

Read, there, about just about every gripe and complaint now being aired on here - except it is being presented as big plus factors in favour of the MSFT way.

And this for Peter Houston:
http://news.zdnet.com/2100-3513_22-981552.html

Which is worth it, just for this one comment:
"The challenge will come if customers start rejecting the proposition that there is value in integration. We've placed a big bet on an integrated offering. We've grown our share year after year and have reason to believe this is the right approach. If it comes down to those two alternatives, we're very happy to compete for customers' business."

Let me be clear - I am not attempting to ressurect some lame, character-assassination thread, here, but, I have to ask: does anyone know if Peter Houston still thinks this?

It wasn't so much the customers who eventually spat this one out, in my opinion, but internal teams, who have come to recognise the unsustainability of this approach. Houston is now trying to merge AD, and I'm hoping that he, too, has learnt the lesson from betting "tightly integrated" against "small parts, losely-coupled".

Anonymous said...

"Microsoft has decided. The profit margins on volume licenses (read: IT contracts) are vastly vastly greater than those on retail and OEM sales (read: individual consumer)."

Mike, sitting in the kitchen, looking over the Morning Mini, and quietly lets the blogger's words sink in as he sips on that strong cup-a-jo. It's 8:15 am and he has no need to see clients today, thinking instead of working on that special little idea of his in the barn. Maybe some day he will have oodles of employees with IT guys who make all the computer buying decisions. Right.

One thing for sure, when he gets there, as a professional, the first thing he will do is write the CEO a letter, explaining why he would never consider Microsoft as a choice for any products, let alone an operating system.

And too, as he whittles away on his little project, he is contemplating taking a day to write to all the large computer manufacturers and explain gently and reasonably to them why he will not buy any of their products in the future if they have Microsoft products on them.

And finally, as he reviews the idiocy of the bloggers comment, he pauses, chuckles a second and thinks, its the customers stupid.

c said...

The short path to Technical Fellow:

http://www.sysinternals.com/blog/2006/07/on-my-way-to-microsoft.html

I wonder what level he would be if he'd joined Microsoft in 1996. And how few of those awesome tools we would have if he was slaving away on, say, MSN Messenger.

Anonymous said...

I'm very interested in Thursday's disclosure. It was publicly announced today that MSFT will be changing around our ledger a bit when reporting. My question is how long that will distract analysts from finding another missing $2.4 bln ;)

I seriously doubt if anything substantial will be said on Thursday. They will save all the big announcements for July 27th Financial Analyst Meeting.

Anonymous said...

You guys that keep demanding RIF must be pretty sure of your own status. I mean, who's to say that you, yourselves won't be among the victims of a wide-scale RIF?

Anonymous said...

"It's fairly straightforward. Reduce the number af employees, and you reduce the wages expense. Reduce the wages expense and you increase the amount of profit. Increase the amount of profit and the EPS increases. Then the share price usually increases also."

But Microsoft makes record profits almost every quarter. Profits have no relation to stock price, as far as Microsoft is concerned.

Anonymous said...

this may be a little out of context here, but have any of your teams had additional insight into how they are doing reviews this time?

Lazlo said...

'Softies, a question about management layers. Exactly how many links are there in the chain of command between BillG and a typical MSFT employee who doesn't have anyone reporting to them? At my job (~16,000 FTEs) the head of the company is five layers up: me -> my director -> my VP -> my SVP -> the CIO -> The Boss. Nobody under the CIO has more layers than that -- it may vary in other orgs though not by much.

I get the impression that there are at least seven or eight layers at MSFT, maybe more. True? If so it explains a lot.

Anonymous said...

I remember a presentation that a partner gave to my team a few years ago about how our only advantage over open source is that we all work in one place under one management structure during regular business hours, so we can worth together more effectively and take on projects that require an unprecidented level of cooperation between developers and teams.

Talk about a solution in search of a problem. It's not a legitimate business strategy to attempt an arbitrarily high level of complexity just to one-up the other guy.

Anonymous said...

"I don't have a Starbucks machine in my kitchen."

I too have been wondering when the Starbucks I-Cup will be installed into our building. So far it hasn't shown up yet...

Anonymous said...

And finally, as he reviews the idiocy of the bloggers comment, he pauses, chuckles a second and thinks, its the customers stupid.

That's quite all right, sport. Every field has a lunatic fringe.

KevinB said...

Just curious - what's the reaction of Redmond based employees to Sun's new "Open Office" campaign?

Seems pretty cheeky to me, but I'd like to hear your reactions.

Anonymous said...

"But Microsoft makes record profits almost every quarter. Profits have no relation to stock price, as far as Microsoft is concerned."

"Record profits" is a deceptive metric. The fact is, that over the past 5 years, profits at MSFT have lagged revenue growth BADLY. Additionally, for much of that time, the company was busy diluting the shit out of the stock to pay insiders. Finally, execution issues have been increasingly front and center, which has damaged credibility and resulted in a lower multiple being awarded by the market. Note that these are all within the company's ability to control. Instead, for much of the past 5 years, they've ignored them with the expected result - a stock that's off 60+% from its high and has flat-lined for 3+ years.

Anonymous said...

Any move to trim management, especially poorly functional management should be encouraged. Microsoft has so many totally incompetent managers, especially in the test discipline.

I learnt about a horror story in the SQL server test organization of how unprofessionally a lead had conducted himself and written an outrageous bitchy review for his report. The lead though incompetent in every way - project management failure, people manager failure, hardly familar with technologies. Yet this lead seemed to have survived merely by having "contacts", coffee, lunch/dinner with all the right people. Needlessly to say the team was utterly demotivated. People left and hardly anyone who joined stayed on! Ironically this person is still a lead, if not in the same immediate org!

So I am all for trimming management. In many cases, instead of building careers they land up being inhibitors and a useless overhead.

Anonymous said...

On Mark and Bryce from Winternals coming to MS, this is great news. And it goes a long way to show that Microsoft is still the place to be - for very smart people that is.

Anonymous said...

"Exactly how many links are there in the chain of command between BillG and a typical MSFT employee who doesn't have anyone reporting to them?"

I found this"

"Those inside the organization can confirm this by digging through HeadTrax or the Global Address Book (GAB) to count the managerial levels -- I've found up to thirteen."

on 'Packet Storm' blog here: http://255255255255.blogspot.com/

Not my words, but its in the first couple of paragraphs of the current blog about rifs:

True or not, I don't know.

Anonymous said...

'Softies, a question about management layers. Exactly how many links are there in the chain of command between BillG and a typical MSFT employee who doesn't have anyone reporting to them? At my job (~16,000 FTEs) the head of the company is five layers up: me -> my director -> my VP -> my SVP -> the CIO -> The Boss. Nobody under the CIO has more layers than that -- it may vary in other orgs though not by much.

I get the impression that there are at least seven or eight layers at MSFT, maybe more. True? If so it explains a lot.



I did a quick scan of the GAL and found a lot of ICs in the 7-9 layer range and a few at 10. If we assume that each layer of management can handle at least 8 direct reports (10 is a better target), then the magic number is 6. Even if we assume the top two or three layers can only handle 5 directs each, 6 is still the magic number for a company our size.

Sounds like we need to remove 1-4 layers of management ...

Anonymous said...

"Financials: FY06Q4 financial results are coming up this Thursday, 7/20. Allow me to ask this to our executive leadership: guys, is there anything going on that Wall Street might be, well, surprised by? If so, how about letting it loose before Thursday? More sugar."

Why? Tanking the stock is the only thing this management team excels at. Also, it wouldn't be a post-00 MSFT earnings call w/o some major negative surprise or concerning forward guidance. Watch the stock - the fear heading into every earnings call is now palpable and invariably, the stock sells off hard into the close on that day (the exact opposite of the pre-00 action). Face it, a Microsoft earnings call today holds ZERO suspense: MSFT will likely come in at the low end of its own revenue guidance, should make earnings before one-time charges but won't beat or miss by more than 1-2 cents regardless, will guide down for next Q in some substantial way but leave guidance for the year unchanged in the hopes that investors are stupid, will highlight one or two successes on the Q no matter how trivial to the overall while ignoring ongoing pathetic execution in strategic areas that significantly impacts the bottom line. If asked about the latter in the Q&A, will grudingly get into it and try and put lipstick on the pig via the usual excuse-fest (product transitioning, corporate realignment, streamlining for efficiency, investing in the amazing future potential they see, etc.). And of course, will end with management reaffirming how very bullish they are about the future despite their caution for the upcoming Q(s).

Anonymous said...

"Any move to trim management, especially poorly functional management should be encouraged. Microsoft has so many totally incompetent managers, especially in the test discipline."

Especially in bldg 50, on the floor between 2 and 4.

Unfortunately, those charged with the trimming get a completely different perspective about those whom need to be trimmed, because that perspective is provided by those you want trimmed.

It can be an outstanding revelation to get the opportunity to provide your perspective to someone three levels above you - and realize that in some/many cases, they simply don't have a clue about the practical issues being faced by the folks trying to implement the very same features/processes that are reportedly progressing so swimmingly.

Mr Sinofsky, when you get a moment, I hope you'll drop in on a few random peons and request this kind of feedback. And make sure that those who should have been at the helm instead of "messaging" and "managing their careers" get their day of reckoning.

Anonymous said...

>"Folks, how many employees are ready to exercise 1 share of the options that expire worthless?"

I would join in the protest, but after a decade of working for Microsoft, I just can't afford to waste $22.

Anonymous said...

... how unprofessionally a lead had conducted himself and written an outrageous bitchy review for his report. The lead though incompetent in every way - project management failure, people manager failure, hardly familar with technologies. Yet this lead seemed to have survived merely by having "contacts", coffee, lunch/dinner with all the right people. Needlessly to say the team was utterly demotivated. People left and hardly anyone who joined stayed on! Ironically this person is still a lead, if not in the same immediate org!

But for the comment about technical acumen, since the person with whom I have experience does keep up with technology, this sounds like an experience I lived around last review period in one of the Windows orgs. Same outcome: the reward was to move the lead who'd alienated his staff up and out of the way of the people responsible for doing the work. He left his team in shambles and the teams near it full of post-nervous-breakdown refugees from his team. It took me a good 6 months of reduced productivity to recover. This is not an appropriate situation to put a gold star achiever into. No, I'm not a slacker, I got two on other teams before that one.

IMNSHO, if you affect a team that negatively, you need to be OUT, or at the very least, put back into one of the positions whose vacancies you caused and given the "opportunity" to live as an IC with the aftermath of the bad decisions you made as a lead. Promoting such a person, as a kindler and gentler way to solve the problem, isn't the way to keep the problem from happening again. That action ensures that neither the person at fault, nor ambitious observers who might be looking for a way up, get the message that this is unwelcome behavior.

Hmmm.... of course.... maybe as corporate politics go, it isn't unwelcome behavior. And maybe the problem isn't hopeless leads, but the mid-level managers to whom they report either lacking backbone or a sense of what doing the right thing looks like for the company as a whole.

Thinking about it (LisaB, are you listening?), looking for orgs in which leads with lots of attrition and trouble filling heads have been promoted, and looking at cronyism among the mid-levels in that area, might not be a bad place to start the process of mini'ing Microsoft.

Anonymous said...

PacketStorm 255255255255.blogspot.com says

in management-land, and that there are too many monkeys in the tree.

-

Another tribe of monkeys called HR is also sitting in the tree.

Anonymous said...

""I don't have a Starbucks machine in my kitchen."

I too have been wondering when the Starbucks I-Cup will be installed into our building. So far it hasn't shown up yet..."

Five reasons you probably don't need to worry about your Starbucks Coffee Machine at Microsoft:

1. Balmer is really pissed at Starbuck's Howard Schultz for selling the Sonics, and thereby upstaging a classic Microsoft strategy of bait and switch.

2. In the realm of all things, if you can, go out on a clear night, away from any city lights at about 3:00 in the morning and look up at the visible trailing arm of our pinwheel galaxy, noting the remnants of an ancient cataclysmic collision of another galaxy arm merging in its wake and consider what is important. (thinking about incoming asteroids, comets and pending ramp up of WWIII also has the same effect).

3. The head of HR is Catbert.

4. I am Catbert.

5. This is a test of employee values the pointy haired guy and I are running in your midst.

Backup plan: go to the web, order a coffee maker of your preference, get a nice metal thermos that will look real blue collar and make you cool at work, go to Costco and buy their two lb bag of Kirkland Starbucks beans for $10. Yer done! (you will need a coffee grinder though).

Anonymous said...

Guys, should we expect a pay adjustment anytime soon i.e. bigger than last 2 yrs raises? The reason I ask is because new hires at level 59 are easily paid more or very close to level 60 employees today. Isnt this unfair?

Anonymous said...

Wondering if I'd be so lucky as to get suggestions or viewpoints from some of the excellent, good looking people who write and comment on this blog.

I'm entertaining an offer for an SDE position in one of the groups at Microsoft Research. I read this blog semi-regularly but can't recall anyone commenting on what's it like to work at MSR. What do people think? Am fresh out of grad school so no experience at Microsoft except an internship. Thanks!

Anonymous said...

This is how Microsoft ends,
This is how Microsoft ends,
This is how Microsoft ends,
This is how Microsoft ends,
Not with a Vista but with a Mini...

Anonymous said...

'Softies, a question about management layers. Exactly how many links are there in the chain of command between BillG and a typical MSFT employee who doesn't have anyone reporting to them? At my job (~16,000 FTEs) the head of the company is five layers up: me -> my director -> my VP -> my SVP -> the CIO -> The Boss. Nobody under the CIO has more layers than that -- it may vary in other orgs though not by much.

You can't compare 5 layers in a 16k FTE org with a 60k org. It's apples to pears. Add in the fact we have 40k contingent staff - how many are in your 16k FTE org? Bear in mind contingents are managed via the same org chart as FTEs.

I work in the field as a L63 (corp)/L61 (field) manager of IC's (as opposed to a manager of managers). There are 8 levels between Bill & I. Compared to the customers I work with, this is not bad - it's not the best, but it is by no way the deepest org tree. Take a look at the chart in banks or big Government departments, neither of which typically have as many employees as MS. Then you see REAL unnecessary depth.

As an aside - anyone know why the field job levels are 2 above corp in general? It's not for $$$ reasons, given the package for corp people is not as good as most of the subs.

Anonymous said...

"And of course, will end with management reaffirming how very bullish they are about the future despite their caution for the upcoming Q(s)."

Exactly. Meanwhile, folks like AAPL are blowing the doors of their quarters:

Apple profit rises 48 pct, helped by iPod sales

And seeing their 5 and even 10 year stock performance leave MSFT in the dust:

Apple vs MSFT - 5 year chart

I guess we're just being impatient and/or failing to take a long enough view. Right.

an ex softie, now at google said...

Regarding the compare of msft to aapl and the fact that aapl is now "kicking our butts"?

Yes, you are looking at things wrong. You should look at the entire picture.

MSFT vs. AAPL (the complete picture)

During the personal computer ere, I was lucky enough to be heavily invested in MSFT and did very well. Much better than had I been similarly invested in AAPL.

The personal computer era is over. Now, we are living in the network era. Lets look at another chart.

MSFT vs. GOOG (the complete picture)

or

MSFT vs. YHOO (the complete picture)

Now that we have transitioned out of the personal computer era, you will find growth in other places.

Anonymous said...

The rumor I heard about the i-cups was that there was some contract dispute between the Bean providers and MS Dining.

Anonymous said...

I'm entertaining an offer for an SDE position in one of the groups at Microsoft Research. I read this blog semi-regularly but can't recall anyone commenting on what's it like to work at MSR. What do people think?


If you plan to spend your whole career at MSR, go ahead. If you want to eventually move to a product group, then don't. Researchers can't teach you product quality dev processes so without prod group experience, you'll be stuck there forever.

Anonymous said...

Is there something preventing you from buying Apple stock? Apple's stock has no relation to Microsoft's at the moment (Apple is primarily a Consumer Electronics company, Microsoft is primarily a PC Software company), so comparing the too brings no light. Just buy Apple stock if you want to. Just be sure to sell it before it slides back down (despite today's report, APPL is down more than 30% from Jan 2006).

Anonymous said...

Any move to trim management, especially poorly functional management should be encouraged.

Even if well-functioning management has to suck-up to lousy (but "well-connected") management in order to keep their jobs that doesn't make them good management. It makes them malleable. That's it. I guarantee you if Microsoft is stormed by a greater power, these people won't be standing next to you in the battlements. They will be looting the vaults and making off with as much as they can. They will figure its their reward for having to serve jerks for as long as they did.

Anonymous said...

Private folders was not our finest hour. It is better off dead.

Anonymous said...

"Apple's stock has no relation to Microsoft's at the moment (Apple is primarily a Consumer Electronics company, Microsoft is primarily a PC Software company), so comparing the too brings no light."

At the moment or over the past 10 years in fact - but AAPL was just one example. You could pick almost any major MSFT competitor over the past 5 years and get a similar chart with MSFT lagging badly. And they don't have to be in the exact same segment as long as they compete for the same [tech] investor $.

Anonymous said...

"As an aside - anyone know why the field job levels are 2 above corp in general?"

They actually have to deal with customers and don't have all the perks of campus?

Anonymous said...

"Now that we have transitioned out of the personal computer era, you will find growth in other places."

Funny, Ballmer says no other company is as well positioned as MSFT and Gates says Ballmer is the best possible CEO for MSFT. So are they both lying or wrong or are you? BTW, my point wasn't that MSFT's stock performance should be better than any high-flier upstart in an emerging growth area. It was that it's been pathetic even for a modestly growing industry titan and management needs to get off their collective asses and start addressing that - versus paying themselves 100's $M for doing such a "great" job.

Anonymous said...

I work in the field as a L63 (corp)/L61 (field) manager ...

I've been here a long time - both in the field (US only) and at corp, and this is the first I've heard of 2 level differences between field and corp.

Most field people I know who came to corporate actually took a level cut for the priveledge of working in mecca. My move was "lateral".

Can any softies shed some light on this?

Anonymous said...

There is one big problem with the idea of cutting staff at MS or anywhere:

if the management structure is already out of touch and out of whack then they will keep tame pets and kick out the wild horses.

It's not likely that inefficient management will even cut staff randomly, but will more likely to be cutting the best people.

When heads roll it is always politics that decides whose.

Thomas

Anonymous said...

I know this is late for this blog entry, but...

For the guy that wanted to be an SDE at MSR - I'd say go for it. The other writer was correct that there is a lot of disconnect between the product teams and research, but that's probably a good thing. When you do interact with the product teams, it will be with folks that WANT to talk to you. And the MSR guys always seemed a lot more collegial to me than the average product team.

Anonymous said...

There's an irony in all of the complaining over mismanagement, the stock price and the slams against IT.

I think the folks in the Redmond ivory tower really are utterly disconnected from reality. Mini's IT rant demonstrates it well.

Microsoft continues to follow old patterns and adhere to bad old habbits in a world that is transforming around them.

Only within Redmond's walls can someone really not understand why IT (and consumers as well) would be reluctant to install/deploy the massive piece of bloatware that is Office 2007.

Increased price, an ENORMOUS footprint, the total overhaul of a UI that has been around for 10 years and all in exchange for what? Worse performance, a (marginal as usual) increase in commodity features and a (claimed) increase in productivity if you can get people to relearn everything they know? That's the answer to Google? It's a joke. THATS the reason why the stock is flat. It goes well beyond ineffective management.

Vista broken into 7 SKUs, SA mandatory for the Enterprise edition, BitLocker (the one feature of EE that means anything), lacking compared to 3rd party apps, the all new Vista UI not matching the all new Office 2007 UI, and neither of them matching any other app that is likely to run on the platform. The list of bad decisions which demonstrate a TOTAL disconnect from the reality of computing today and where it is going is ENDLESS.

At this point, why WOULDNT a customer simply deploy Open Office if the next MICROSOFT Office is going to require extensive retraining and an uncertain document conversion requirement?

Ranting against IT? You'd be dead without them and every year Microsoft gets worse at catering to them (yet the folks that post on this /blog mind bogglingly think their managers are PANDERING to IT to the DETRIMENT of MSFT!)

Meanwhile, Microsoft has not made ONE interesting move in the consumer space despite BLINDINGLY obvious examples set by Apple, Google, MySpace, Skype and every other more interesting company with a better grasp of where computing is heading.

You want a strategy that would actually have a shot at rescuing the sinking ship? Drop Office as a consumer SKU all together and release it for consumers as a pure web service BROWSER based app (before Google finishes the rest of their Office suite).

Keep a fat client SKU around for enterprises and power users and create a CONFIGURABLE UI and footprint that doesnt FORCE change and bloat on folks that DONT need it. Provide IT the tools they need to very easily configure the footprint of said app and deploy it and offer them compelling tiered pricing that doesnt attempt to blackmail them into spending top dollar for every desk that has a worker that needs to type a memo.

Honestly, the only two areas where Microsoft doesnt appear to be dangerously stumbling are dev tools and SQL server.

There is no way that level of failure can be blamed entirely on management. Maybe even YOU'RE to blame as well Mini. Ready to get in line for the layoff?

I've been reading this blog for a while, but this particular comment really brought a lot of clarity for me. The devs in Redmond really just dont "get" the needs of their customers and what both consumers and IT want and need (here's a hint - it isnt bigger, fatter, more power hungry apps that are impossible to deploy and support). As long as Redmond continues to ignore customers and assume that "they know best" and that IT is "pathetic and lazy" Microsoft will remain vunerable. As long as Redmond remains deliberately blind to the fact that CONSUMERS want SAFE, CHEAP, FAST and EASY and not big, massive, expensive, hungry and laden with rarely used features, Microsoft will remain vunerable.

I really hope you get what you wish for. A massive wave of new management that sweeps in and bashes the rest of you over the head with what you clearly sorely need - a nice dose of reality.

Anonymous said...

I've been here a long time - both in the field (US only) and at corp, and this is the first I've heard of 2 level differences between field and corp.

This is actually true, but if you have worked all your life in US you would never experience this. This is more international problem. In addition to that amount of responsibilities in international 61 is higher then in corp. role at 63 and basically any move to corp. is a demotion in terms of impact you can bring to the company as part of your job.

Microsoft is losing a lot of strong people from international subs, who would never relocate to Redmond due to this stupid HR leveling rules.

Anonymous said...

We should embrace and enhance our mediocrity by taking advantage of our considerable cash flow.

I wonder if anyone in Finance has ever considered the option of converting to dividend trust/quasi-REIT status. Employment and infrastructure would be reduced to support and enhancement of core products and most income would be paid out as dividends quarterly. I'd guess that the annual payout rate would exceed 15% even while retaining a nice cushion. If that doesn't encourage stock appreciation, I don't know what would. SteveB still has delusions of ruling the world though, so it's probably not a valid option.

Anonymous said...

Check out Intel's wrongdoing at
malfy.org.

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