Tuesday, July 25, 2006

We Are FAM-ily! - Links+

I look forward to the day when Microsoft leadership can strut onto the stage at the annual Financial Analysts Meeting to the glorious high-fiving pumping sound of Sister Sledge letting loose with a victorious "We Are FAM-ily!" as everyone celebrates the incredible ascent of the Microsoft stock price.

It won't be this Thursday.

The discomfort has set in and the pointy sticks are out. No more of this waiting until next year or the product pipeline of glory on the way. It's time to get down to the brass tacks. "Show us the money: where it's being spent, where it will be spent, and where it's going to be coming from."

What questions would you ask if you were an attendee at FAM? Mine would focus on accountability and, as part of looking where the money is being spent and rewards for our current accomplishments, wanting to understand more about the upcoming August SPSA grant-award, what % level it's going out at, and what the total cost of that is. How has it been a good investment with a good return?

Other interesting things:

  • Vista slip? One commenter thinks the buy-back we've announced is meant to stabilize the stock should we soon announce a Vista slip.
  • WSJ: thank you for the kinder, gentler Steve Ballmer graphic with the recent Zune article. It's much improved over the snarling Orc Ballmer.
  • Swan song for Microsoft's music allies CNET News.com Speaking of Zune: Zunked? Are we screwing our partners? I don't think so. We've given them a great platform to implement Plays for Sure and plenty of time to innovate long before we come along and try implementing a device. Anyone who can implement a WiFi sync has my money. Freaking wires. I just want to come home and unbeknownst to me have any interesting syndicated content (like a podcast) synchronized to my device so that I can discover and listen to it the next day. Plus Zune is a platform, too.
  • Good long comment on Big Bets: Long Term investments: how long is long enough? Microsoft has ruthlessly killed projects off in the past or sold the properties off. Have we lost the cancellation mojo? A number of discussions in the last post went over the financials and wondering when enough is enough and it's time to throw in the towel (now that we have an abundance of those). Are we playing to win or playing not to lose?
  • The Post Money Value The Microsoft Manifesto - Rick Segal's take on the recent Twelve Principles.
  • Workplace Advantage Planning - Adam Barr discusses the designs being worked on for new workplace areas at Microsoft. What do you think? Given that at least one comment was posted about this with great envy I think some folks are looking forward to working like this.
  • Misunderstanding "The Innovator's Dilemma" - Mr. Barr again, spanking me for a coupling of The Innovator's Dilemma with the pulled private folder feature. Nice read, even if it hurts. That original thread here was interesting because (1) some IT folks weren't too happy with my grumbling, (2) others pointed out that it's really hard for us, having one OS now, to serve two masters: consumer (more whizzy features!) and corporate (nothing new! Don't break anything! Keep it stable!). It's a pickle.
  • Musings on Software and Technology » Blog Archive » Whats going on - Musing on the Mini-Microsoft-like sites springing up (plus an interesting comment from Shel Israel). Let's see, the active list looks like:
  • Official Google Research Blog Hiring The Lake Wobegon Strategy - I've been meaning to drop this link in for a while. Something I didn't know about Google hiring: the hiring manager is not allowed to be part of the interview process. Google hires for the company, not for a particular position. Hmm!
  • iCup? Oh where is my Starbucks iCup? Perhaps a war over Starbucks beans? Perhaps we just have to wait until summer is over?
  • Mini-Microsoft Cutting Room Floor (Feed) - What The HECK? Yes, occasionally I'll share the kind of comments that just don't make it through now that I'm moderation 100% of the time. I wish for a better commenting system with a secondary "all comments" page where I can bring up into the cream the comments I approve and everyone can roll-around in the ones I don't, should you desire. But this will do for now. Some of the comments just about make it... if only they just didn't go and use that ever so witless M$. Others can just be wildly off-topic or just something I don't want to show up here. Okay there. Not here.

And lastly: I think it's too early to judge the review system change. All I know is that there are probably a legion of managers wanting to string-up whoever was responsible for getting rid of the performance curve. It must take ten times the amount of effort to enter numbers into the review tool and try to reconcile compensation across the organization. I don't think this is a bad thing - it's the kind of work we get paid to do.

But the stack rank is still there. But we can be honest with our review feedback. Kind-of. The curve is still there, just sort of blurry and a bit more gracious.

The dissonance of change is pretty heavy right now and, personally, I'm feeling a leadership gap to help us keep our balance now that the training wheels are off and we're wobbling along down the road. My guess is that we'll develop some best practices out of what we learn this year to have an even better next year. But right now? Scuffs and scabs.


111 comments:

Anonymous said...

Vista slip?
I work on Windows, and the latest builds look GREAT! Bug count appears to be under control, and less and less teams are in the "red" status-wise every day. If RC1 ships in August as expected I see no reason why we can't RTM in October and meet the expected release date. There has been NO HINT of a slip from the execs internally, and we're all driving hard to ship RC1. I've been surprised that there haven't been as many DCRs and changes as I expected between Beta 2 and RC1. So from those of us on the inside, it doesn't look like Vista will slip. If it does, then one or more teams seriously dropped the ball late and heads should roll! Thousands of us have been working long hours this nice summer to get this baby out the door. I'm optimistic we'll be celebrating RTM before Halloween.

Anonymous said...

"What The HECK? Yes, occasionally I'll share the kind of comments that just don't make it through now that I'm moderation 100% of the time."

It was a typo. M$M&M should have been M&M&M, a parody sub parody on M&M Syndicate from Catch 22. Yo, Lt. Minderbinder. What do you mean Pardon? Nice to know I made the B string anyway. Not once but thrice.

Interesting thing about modding an XBox case is that Microsoft unwittingly created a cult of modders out there with a subculture market of hundreds of XBox (pc too) parts that can be purchased or built to modify your XBox. It's got to sting since you are selling them at a loss. Why not target that market instead of arresting them? Google case mods and XBox mods. You will see what I mean.

Anonymous said...

I love the enthusiam and optimism of the first post! But I dont think all teams across the board are in a similar state. I know that my team isnt.

Also, regarding Vista quality, there are still a lot of bugs and now many of them are not being fixed in order to meet the deadline. Having said that, there is little doubt that Vista, when it ships, will still be way better off than XP.

Regarding Vista shipping - I havent heard any rumors other than the one posted here but I wouldnt be too surprised. Remember, BillG is 80% sure of meeting the current deadline...

Anonymous said...

I hope the comment about Vista not slipping is correct but in our group that ships products on Vista (and not a part of Vista), the dates are not holding. The test passes are delayed because of issues with builds. It could be a blip but it isn't looking all smooth for sure. At best it is too close to call, at worst, there is a slip lurking out there.

Anonymous said...

Love the CRF, especially the comments added by Mini on why the comment didn't pass muster. And THANK YOU for sparing us from bores who think typing "M$" is the soul of wit.

Anonymous said...

There is something odd about the speculations here - a while ago, our stock dropped because we said we are going to hire more people and spend more money. And now we are going to drop again because we are RIF'ing?
Are our execs so crazy as to do a 180 degree turn on their word to the analysts? "We need to invest more and hire more talent ..." and a few months later "We need to cut costs and get rid of the bozos we have been hiring ...". What credibility will they have inside or outside?
While I agree that there is practically no accountability at PUM and above roles, I still don't think that our execs are THAT stupid.
Time will tell but if you are wrong, can we expect a "mea culpa"?

Anonymous said...

Dear Mini,
Lately i am getting a bit tired of the flood of links and copy/paste entries you've been posting here. What happened to the good old blogging days where you pourd out your creative suggestions and even funny remarks? Are we hitting writers block?

Anonymous said...

There has been NO HINT of a slip from the execs internally, and we're all driving hard to ship RC1. I've been surprised that there haven't been as many DCRs and changes as I expected between Beta 2 and RC1.

------------
Execs are ALWAYS in denial, up until the last moment. I see the daily status mails sometimes and just laugh my ass off. In many cases, we have two or three times as many bugs as we were supposed to have at a certain point in time, yet execs still say that we're on target. Then at the last day, they slip the schedule a week or two. So instead of focusing on realistic targets, they put people in fire drill mode to hurry up and check a bunch of not fully tested turds in. Then after the milestone they need to go fix their mistakes.

As for the amount of churn between B2 and RC1, there has been quite a bit. The GOOD news is that most of the change is resulting in more stable builds with fewer regressions. Beta 2 is a very stable platform for self hosting. That's pretty rare when it comes to MS OS's. Most waited for RC1 before making the leap.

Anonymous said...

"I'm optimistic we'll be celebrating RTM before Halloween."

Of course this prediction is bound to come true, since the RTM celebration was held just shy of three years ago.

While it's great that Vista is now apparently on track, beware that unbridled optimism may lead to self-deception, unrealistic schedules, and elevated outsider expectations.

For good or bad, Vista's delivery problems have already become public and expectations have been adjusted lower. Remember that the street doesn't like unpleasant surprises. It may be nasty now to forecast another slip, but it'd be far worse if the slip wasn't made public until January.

Anonymous said...

Regarding the Extreme makeore link, mini... He sites:

'MSN: 44% headcount growth'

All I can say is: "Sweet Jesus! What do they all DO?"

Anonymous said...

"I just want to come home and unbeknownst to me..." - different topic, I know, but all the unbeknownst to me features of ANY product are the ones that cause the most trouble... both in terms of unexpected behaviour and security vunerabilities.

Anonymous said...

If MS is abandoning private offices, then I absolutely will not be returning any MS recruiters' phone calls. Cubicles are the #1 indicator of management that doesn't know the difference between programming and typing.

Anonymous said...

anon windows dude:

Hey, that sounds great, but isn't it the same thing we heard at regular intervals for the last six years?

If you can get this SP4 masquerading as a major update out the door, then hooraaay! but I'll believe it when I have it in hand.

Ray Myers said...

Can the white knight Ray Ozzie innovate AND reorganize at the same time?

Truth is, the latter is what's needed...now!

I say, drop everything but Vista, call in a reorg guru (surely, there's someone out there who taught it to the Japanese who will now teach it to us!) and hang on tight!

IMHO, what needs to happen and soon?

1.) Reduction in force
2.) New Mission Statement
3.) Attitude adustment/humility counseling
4.) Innovation core
5.) Roaming Ombudsmen/ Ombudswomen department reporting to savvy top manager
6.) Red phones to top management
7.) "Endarounds" your manager encouraged ala Wal-Mart
8.) Collaboration mandatory and regulated through ombudsmen
9.) Slimmed down communication responses via IM/Email

Anonymous said...

Re: Vista slip - if anything kills us at the last minute, it will be application compatibility. I *still* can't find sufficient drivers for my 2-year-old machine at home to run a recent copy of Windows for x64. App compat has been a red flag ever since the Longhorn Reset. Not because the app compat folks aren't working hard, or aren't the right people to fix it - they are - it's just a hella huge problem to solve.

Re: Mini - I second the comment above about the tone of the blog lately. Too many links (often to Mini clones, which seems like a way to be narcissistic without seeming so). Not enough editorializing. You created an alternate stream for the comments, could ya consider the same for links?

Re: some of the reorg comments above (esp. Ray Myers) - You have no idea on earth how you'd actually DO any of those things in a team, much less a 60000+ person company, do you? Most of the items on Ray's list sound like dissatisfaction with his own local team, and a string of bad managers, and problems with just how he individually is the most productive day to day, than serious, proven strategies that work. Myopic much?

Anonymous said...

Which stupid exec(s) approved the WiFi capabilities in Zune? WiFi will drain the battery so fast that will render the device useless. It also increases complexity and price. Not to mention it's really a feature for geeks. It's definitely not for normal consumers. Zune is doomed before it starts. WiFi will have its place in the future, but not now.

Anonymous said...

As a long time shareholder I hope Vista does not slip. Brier Dudley columnist for the Seattle Times mentioned in his blog that Goldman Sachs analyst Rick Sherlund has backed out the Vista numbers from March 2007 projections and moved it to April 2007. I usually don’t pay attention to anal-ysts but Rick Sherlund has long been suspected as being the mouthpiece of Microsoft by Wall Street. He has been the analyst since Microsoft went public and usually floats ideas for Microsoft to get the streets reaction.

The delay will create some bad PR for Microsoft, but it really does not hurt the back to school season. There is really no advantage for MSFT to ship in Jan vs. April since OEM’s need 4 months before they test and install Vista. MSFT may lose between $200 - $400 million in revenue per quarter, but they will get it back the next quarter. If the delay goes into May, then God help us.

http://blog.seattletimes.nwsource.com/brierdudley/2006/06/ - Title “Sherlund blames Vista and Xbox, not Google, for MSFT”

http://www.thestreet.com/_tscfoc/tech/ronnaabramson/10166093.html - article from 2004.

Anonymous said...

"Not once but thrice."

Correction, four times.

Mini, see CRM comment on DRM and Registry.

Anonymous said...

If you would like to see a working example of where MSFT should move, look no further than the XBOX team. The only positive comments out of our earnings call was the growth in XBOX. I realize XBOX is not yet making money, but this is not what is yet important. What is noteworthy is the culture, size and sheer passion that is driving this group to INNOVATE. People in XBOX are excited to come to work, passionate about the products and remain extremely agile. The sky appears to be the limit with a competitive marketplace that is great. Consumers are excited about XBOX Live and the 60 + percent attach rates to consoles is the evidence. The rest of MSFT needs to take notes as it appears that a great number of groups have lost their way via a watered-down culture of complacency.

Anonymous said...

Elimination of marketcap equal to 2 Worldcomms + 1 Enron, more fines than any other company in history, write offs of close to 20 billion in bad investments. Bernie Ebbers and Ken Lay get sentenced to jail, Steveb and Billg get to keep their jobs.

Say it with me - -
2 Worldcomms + 1 Enron
2 Worldcomms + 1 Enron
Largest fines in the history of business.

Anonymous said...

Posts #3 and #4 above don't jibe with public statements from Allchin among others:

"We still feel very good we can get it to broad availability this year," Allchin said, but reiterated that the product still must meet certain quality standards. "If the team gets in trouble about quality, I will delay this product."
( http://news.com.com/Microsoft+revamps+Vista+testing+schedule/2100-1016_3-6032330.html )

"We took a lot of pain for moving the date before, but quality will remain the top thing. However, we feel very good about where we are at"
( http://arstechnica.com/news.ars/post/20060524-6902.html )

But if bugs are being not-fixed to meet deadlines, isn't that different from having quality as the "top thing" ?

Anonymous said...

Mini-
The filter is a little tight.
I've made two comments, none were posted.
I think you might be screwing down too tight. The blog will lose relevance and interest if this persists.
Thanks

Who da'Punk said...

Dear Mini,
Lately i am getting a bit tired of the flood of links and copy/paste entries you've been posting here. What happened to the good old blogging days where you pourd out your creative suggestions and even funny remarks? Are we hitting writers block?


Dear Tired,

Like I explained in "All Good Things" I'm hitting the mental pause button. But you know, even I tend to believe that a large part of this blog is the comments, not just the mini-essays I put up. Maybe? So I've felt somewhat responsible for keeping the pot stired during these Days of Pause.

Ergo, the link posts I've made.

And I'm recharging while Microsoft goes through important changes.

During this, I understand I might very well fade away and if I don't have anything interesting to say when I'm recharged to un-fade, then that's that.

Re: Mini - I second the comment above about the tone of the blog lately. Too many links (often to Mini clones, which seems like a way to be narcissistic without seeming so). Not enough editorializing. You created an alternate stream for the comments, could ya consider the same for links?

I point to Mini-like sights should folks be intersted in reading other good posts while I'm eating bon-bons and reading summer novels. It's a service, not an indulgence.

I'm pretty sure.

Folks have suggested themes for the future. I'd be interested in hearing more ideas around that, too.

Mini.

Anonymous said...

Dare I guess Vista will have a new game? I saw prakashsayeth's blog title, "I have been Mini'ed", and thought, ah, the ideal game for bored developers. Minisweeper!?!

Several levels, natch. RIFfing through the teams, and you blow up when you hit some senior executive. You get sent back to the very bottom level when you hit SteveB.

Unfortunately it seems I've been beaten to it by Mjinga Wawa. Has he actually written anything yet?

Yours Eponymously
Epon

Paulsc said...

If you really want to see a Mini-Microsoft, then abandon private offices for cubicles. I'll be out the door quicker than you can say "boo." If I wanted to work at some drone beehive IT company, I would have applied there.

Anonymous said...

Innovate?

I really don't think Microsoft innovates. Microsoft is like the Japanese model of software development. What Microsoft has is staying power. Everyone has heard the "Don't buy a 1.0 Microsoft product, wait until version 3 comes out". Staying power isn't so bad if the products eventually come out good and are making money. But I always get quesey when I hear the innovate word come out of Ballmer.

The Japanese put cup holders everywhere in cars. They didn't invent the car. Microsoft is adding wifi to a iPod (Zune).

The Japanese added heated toilet seats. They didn't invent the toilet. Microsoft/Longhorn/Vista has embraced RSS.

Microsoft added IM after it was created elsewhere

Microsoft added the video player after it was created elsewhere

Microsoft created the xbox after Nintendo.

Microsoft "borrowed" GUI technology after it was invented by PARC.

DOS was bought for $50K.

Anonymous said...

"'MSN: 44% headcount growth' ... All I can say is: "Sweet Jesus! What do they all DO?""

What do they do? They waste their time re-implementing scrolling boxes, scroll bars, and scroll wheel support in DHTML. Look at the Live Search results page. Results are in box with its own custom scroll bar, and clicking your scroll wheel *overrides* the default browser's scrolling and does its own thing! And then people wonder why middle-clicking on a result to open it in a new tab doesn't work.

Way too much time spent reinventing the wheel.

Anonymous said...

"If MS is abandoning private offices, then I absolutely will not be returning any MS recruiters' phone calls. Cubicles are the #1 indicator of management that doesn't know the difference between programming and typing."

It's up to teams if they want to try something other than offices. It's not up to just the teams' management, or upper-level executives. Certain teams decided on their own to experiment with other workspace arrangements, and these teams have found benefits to their new arrangements. It all depends on the team, what type of work they do, and what type of people they are.

If requiring a private office is mandatory for you to even consider working at MS, then you are probably not open-minded enough to belong here in the first place.

Anonymous said...

Workplace Advantage Planning - Adam Barr discusses the designs being worked on for new workplace areas at Microsoft. What do you think? Given that at least one comment was posted about this with great envy I think some folks are looking forward to working like this.

I think it's my post you're referring to -- and to clarify, I did not post out of envy for new-agey work environments for the MSN mouseketeers and their substance-free brethren in EE and elsewhere.

Rather, I posted out of frustration that our bottom line is being drained to create work environments that make useless groups more "productive", thereby decreasing the productivity of actually useful groups. If you're gonna spend bucks on facilities, build some more offices so we don't have to double up, stop taking all the conference rooms offline for VPs, and bribe the city governments to give us more parking.

-MiniD

Anonymous said...

Re: Vista slip - if anything kills us at the last minute, it will be application compatibility. I *still* can't find sufficient drivers for my 2-year-old machine at home to run a recent copy of Windows for x64. App compat has been a red flag ever since the Longhorn Reset. Not because the app compat folks aren't working hard, or aren't the right people to fix it - they are - it's just a hella huge problem to solve

That's actually DRIVER compatibility that you're complaining about. That's a different problem, and it's just as complicated.

x64 never had widespread OEM adoption, so finding drivers was somewhat of a chore. There are good websites out there like planetamd64.com that can point you in the right direction. MOST onboard parts have x64 drivers
somewhere, but maybe not directly from the PC vendor. You're better off looking at the site for the motherboard vendor. Wifi and imaging (printing/scanning) are 2 huge areas that are still trailing in x64 drivers. There will be a lot of added driver support for Vista x64, so hopefully you'll find that your parts will be supported. Post the make/model of the machine here and someone may be able to point you to drivers. See - who says no good can come from Mini? ;)

Anonymous said...

If you would like to see a working example of where MSFT should move, look no further than the XBOX team. The only positive comments out of our earnings call was the growth in XBOX. I realize XBOX is not yet making money, but this is not what is yet important. What is noteworthy is the culture, size and sheer passion that is driving this group to INNOVATE. People in XBOX are excited to come to work, passionate about the products and remain extremely agile. The sky appears to be the limit with a competitive marketplace that is great. Consumers are excited about XBOX Live and the 60 + percent attach rates to consoles is the evidence. The rest of MSFT needs to take notes as it appears that a great number of groups have lost their way via a watered-down culture of complacency.

Wow, somebody really bought in to the Kool-Aif.

I spent several years in Xbox. I remember those early days of naively thinking the org was peopled (and more importantly, managed) by the type of hungry, eager-to-innovate, passionate employees you envision.

It wasn't.

Don't get me wrong, there were indeed some strong performers (and still are). People who really went above and beyond. The half-dozen or so people whose cars I'd come to know as they were among the handful who'd often be in the parking lot before mine.

But guess what? Just as I've read so many examples of here and have heard similar anecdotes from friends all over campus, eventually those passionate innovators found themselves on the outs because of their non-adherance to "the Microsoft way." Meanwhile, complete wastes of space (I'm talking people I worked on projects with who as far as I could determine never contributed anything, let alone anything of value) were kept around because they happened to have some nepotistic "in" with the right people (or, in some cases, possess a status of "other than caucasian male").

Even before the deep RIFing began in 2003, you could tell that the average Xbox employee had lost faith in management (replacing Ed Fries as overseer of MGS' titles with "old boy" Shane Kim who can't even play games without getting nauseous was a significant blunder that people still can't believe even after he was subsequently marginalized and largely supplanted by Peter Moore).

Seriously, if you were in an org that just laid off 76 people (and that's not counting the contractors who were let go as well, which pushed the number over a hundred), would it make you just a little sick to see the same org announce the promotion of three new General Managers a few weeks later? And this after announcing that Indie Games was being sold off as well, resulting in the loss of a studio that had brought us nothing but decent titles (Inside Pitch wasn't really their fault).

That was far from the only instance of new management positions being created while the rank-and-file kept getting cut. That was the last straw for many of us.

Sadly, while there are a couple of friends of mine still in Xbox, people who are determined to try to turn the ship around despite the bridge being manned by the Keystone Cops, a lot of very good people pulled up stakes and moved on. I even know a couple who've been effectively "assimilated" and, while they're not kool-aid drinkers, they've decided to take the path of least resistance. I spoke to one of them last week and he mentioned how he's finally realized things aren't going to get better and started looking for a new job simply because he can't respect himself for the quality of work he's being forced to do at MGS.

During my time at MGS, I met a lot of FTEs in other orgs who expressed similar sentiments about how great it must be to work in Games. They, like you, were sadly very wrong. It could have been great. It should have been great. But having the effort helmed by people whose business was business and not games (even Ed Fries was a career Microsoftie) brought in way too much politics and process. I can't help but think that almost any other game publisher/developer must boast an environment closer to the innovation and passion you envision. After all, most of them were started by people who actually knew something about games and didn't feel that learning more was beneath them (make no mistake, this is nothing more than a resume tick for a lot of the folks in management).

I should acknowledge, as I and others have said here before, that Xbox still may turn out okay given that Nintendo isn't attempting to compete directly and, more importantly, Sony seems determined to shoot themselves in the foot with the PS3.

I also should acknowledge that Robbie Bach may very well turn out to run the entire Entertainment org better than the above might indicate. After all, he might actually have some interest in that.

Anonymous said...

Xbox growth a POSITIVE? Are you nuts? MS loses $400 a pop on that train wreck.

All you're doing is buying customers, and you can ask any of the dot.coms how well that strategy plays out. Spend a couple billion getting people onto the Xbox, and then wave good bye to the money when Nintendo, Sony, or anybody else ships the next game console flavor of the week. There is NO brand loyalty in console games. NONE.

Ray Myers said...

Response to detractors of my Ray Myers reorg laundry list:

1.) Thanks for the "air time"
2.) Your attitude is "Microsoft Typical"; i.e. - if you didn't think of it, it won't work. And, if you DID think of it, it won't work 'cuz no one will listen.

Those laundry list items have either been implemented in industry or deal with "open communications". They don't need countless meetings and layer upon layer of managment fiefdom-protecting discussions to implement. All they need is to be brought out into the sunlight.

Hewlett-Packard does it. 3M does it. Google does it.

They need one, charismatic, forceful and brave leader who simply...does it.

Anonymous said...

"If you would like to see a working example of where MSFT should move, look no further than the XBOX team. The only positive comments out of our earnings call was the growth in XBOX.I realize XBOX is not yet making money, but this is not what is yet important. What is noteworthy is the culture, size and sheer passion that is driving this group to INNOVATE. People in XBOX are excited to come to work, passionate about the products and remain extremely agile."

Please tell me you're kidding? Sure, Xbox's contribution to revenue was notable, but so was its massive loss for the year. And Sherlund is forcasting Xbox continuing to hurt MSFT margins through 2008 before contributing to them in 2009. At that point, Xbox will have lost some $5-6B+ cumulatively. Assuming it could make SONY-style margins from then on - which is a very unlikely assumption - it would take 10-12 years just to payback the initial investment far less generate a positive overall return. This is the model you want MSFT to move to? I'm all for passion, agility, innovation, a lack of complacency, etc. and perhaps Xbox has elements of all of that. However, it's clearly not the ideal model for success and frankly, holding it up as the example to your other product groups whose profits make your existence possible, seems less than gracious.

Anonymous said...

'MSN: 44% headcount growth'
All I can say is: "Sweet Jesus! What do they all DO?"

So the number I hear on the radio this morning was 10,000 new employees hire by MSFT this year. Costs: What does the average MSFT employee make a year? And huge benefits.

NAS said...

I really don't think Microsoft innovates.

By your standards, no one in the industry (including Apple or, of course, ANY OSS developer) innovates. What is the point you think you're making. Mini, can't "Microsoft don't innovate!" be added to your filter? It is a tiresome bit of lore that really says nothing on close examination.

Anonymous said...

""We Are Family" song was used as the theme for the 1979 baseball world champion Pittsburgh Pirates. It is also widely considered a gay anthem. It was also covered by Minneapolis riot grrrl band Babes in Toyland."

From your Wikipedia link. Hmmm. Mini, are you trying to tell us something? Not that there's anything wrong with that.

Anonymous said...

"If the team gets in trouble about quality, I will delay this product." - Jim Allchin

I just can't help noticing the slight "I vs. they" split in this quote. If they, the team, get in quality trouble, then I, the leader, will make the decision.

On one level, that's right. On another level, it's taking credit but not blame. You're going to steer in the right direction if things get bad. That's great. But weren't you steering while things were getting bad? If so, say "we" instead of "the team", to show that you were part of the problem.

And if you weren't steering when things were going bad, why weren't you?

OK, in the large scheme of things, it's a real minor complaint. But I fear that it shows a leadership attitude that is a much deeper problem. I could be wrong, of course.

MSS

Anonymous said...

to Ray Meyers:

Your points, 1 by 1:

1.) Reduction in force
Preaching to the chior here. But, the RIF should be done to improve agility, not reduce cost. The problem we have with too many people isn't that they cost money, but that our current management can't coordinate them. The objective can't be to just reduce costs, or the RIF will backfire.

2.) New Mission Statement
Trite, value-empty consultant-speak.

3.) Attitude adustment/humility counseling
How arrogant does someone need to be to suggest someone else needs humility counseling? Physician heal thyself.

4.) Innovation core
What the hell does that mean? More value-empty blather.

5.) Roaming Ombudsmen/ Ombudswomen department reporting to savvy top manager
Get the savvy top manager and the ombudsperson is unnecessary.

6.) Red phones to top management
Useless if top management won't understand the concerns expressed over the Red Phone, and unneccessary if they will understand.

7.) "Endarounds" your manager encouraged ala Wal-Mart
Skip-level 1:1 are a good idea. Won't cure everything, but still useful.

8.) Collaboration mandatory and regulated through ombudsmen
Mandatory collaboration is one of our biggest problems. You want to delay Vista another three years? This suggestions obviously comes from someone with no idea what is actually wrong inside the company.

9.) Slimmed down communication responses via IM/Email
No disagreement from me on this one.

Charles said...

They need one, charismatic, forceful and brave leader who simply...does it.

I would generlly agree with your sentiments, though I would argue the kind of leader needed is one who pro-actively develops an executive team (rather than simply allows one to acrete), plans strategically around competitive strengths and avoids weaknesses, and focuses on and demands results (not reasons or excuses). Such a leader will identify whatever needs fixing (as well as what doesn't) and will execute commensurately, remoreslessly, inexoribly.

Charisma, forcefullness, bravery, etc., are adjectives which apply to some people but in fact have little to do with competantly leading a large corporation. Similarly, your earlier list might aid communication lower in the ranks, but will do nothing to turn a company around as the leadership has to have some core competancies to begin with and no amount of 'communication' will impart them.

Anonymous said...

Xbox growth a POSITIVE? Are you nuts? MS loses $400 a pop on that train wreck.

Actually, they do not lose 400, it's much less. You obviously do not understand the execution of Microsoft’s console strategy. This is far from a .com business model. Sony and Nintendo do not have the capital that Microsoft has; meaning, this is an 'arms race'. It is an investment to capitalize on the console market share in return for a greater share of game licensing revenue. Eventually, Sony will not continue to sell consoles at the same margin loss Microsoft has, they cannot afford to. Proof is already apparent in Sony's recent rumored price for the PS3. Consumers will not pay 600-700 dollars for a console when they can spend 300-400 and get a more robust experience (LIVE, Windows integration, etc.). This will shift market share into Microsoft’s favor. To call Microsoft’s investment, and quite frankly, it’s ‘bet’ on the living room strategy a train wreck is why you are probably not leading a company.

Think about it, what is the most exciting product to come out of Microsoft in the last 5 years, SQL Server? Windows XP SP2? No, it’s the XBOX and XBOX Live.

Anonymous said...

If you want to know how MGS is going to "win" the games market look no further than Shadowrun. They've spent three years ripping off Counterstrike except with elves. It looks horrible [walk animation when going up ladders], it plays horrible, it's pissed off the fanbase of the license and at this point its main role in the universe is as poster child for Live Anywhere. Once again, trying to launch some new technology takes priority over shipping great software that actually uses it.

Anonymous said...

Well, the HIRING sure ain't mini-msft.

http://seattlepi.nwsource.com/business/279005_msftjobs27.html

Microsoft Corp. bulked up for battle with Google and other rivals by adding more than 10,000 employees worldwide in the past year -- the largest annual increase in the company's history.

That graph should scare you, mini. It's J-shaped and not slacking off.

Here's the problem- the only way to grow the business this company knows is to be an 800 pound gorilla (who gets to sit wherever he wants). That's why you have Zune muscling in on PlaysForSure partners. That's why Microsoft is horning in on Adobe (with the expressions stuff), IBM, Oracle, anyone else. Basically, unless you're seliing Microsoft's stuff for them in the channel, beware the talk of "partner", if you develop on their platforms- because the fact is Microsoft will eventually want the money YOUR company is getting to fund THEIR growth.

"We are Microsoft of Redmond. Prepare to be assimilated".

The only way this DOESN'T happen is if Mini is right-- the company gets scaled back, "rightsizes" and concentrates on doing SOME things, important things, but not all things, that absolutely delight customers, instead of EVERYTHING it possibly can in the software industry, to which customer response is "uh, yeah, OK, we'll buy some of it because we have no choice, you crushed the competition with a stack of dollar bills" .

Anonymous said...

Only Ballmer et al could tank the stock on the day they host financial analysts. Nice job guys -give yourself some more SPSA awards.

Lazlo said...

There is NO brand loyalty in console games. NONE.

There's some, actually. I bought a PS2 instead of an Xbox partly because the PS2 was able to play all my old PS1 games. (Not necessarily a good example, though, given that I'm going with Nintendo next round no matter what the backward-compatibility landscape looks like on PS3.)

Anonymous said...

Reuters UK article: Microsoft sees no immediate return on Zune player

http://today.reuters.co.uk/news/newsArticle.aspx?type=internetNews&storyID=2006-07-27T191205Z_01_N27313748_RTRIDST_0_OUKIN-UK-MICROSOFT-ZUNE.XML

There you go again Microsoft. Cheap games, cheap music. Bread and Circuses in the dumping wars for multimedia hoohyah.

Anonymous said...

"Think about it, what is the most exciting product to come out of Microsoft in the last 5 years, SQL Server? Windows XP SP2? No, it’s the XBOX and XBOX Live."

And the value of that to shareholders has been what exactly? Zero contribution to profit, $5B of losses which have detracted from earnings and therefore the stock price, increasing questioning of management's business acumen, etc. And now we have Zune. A few more "exciting" products like this and MSFT will be out of business. Here's an idea, how about generating excitement and making a profit? Is that too much to ask from one of the most highly paid management teams in the world?

Inactivist said...

Sony and Nintendo do not have the capital that Microsoft has; meaning, this is an 'arms race'. It is an investment to capitalize on the console market share in return for a greater share of game licensing revenue.

True enough: Gillette and Schick probably lose money (or don't make much) on each razor handle they sell; it's those recurring revenues they're after - the hundreds, if not thousands of proprietary, patented razor blade cartridges they want to sell to every handler owner.

So, a good question is, is the Xbox Microsoft's 'razor handle' ? Is that model valid in this market? Is it a good gamble?

Nintendo, Sega, Sony all think so: I doubt any of them make money on the boxes, at least until manufacturing costs come down on a new design - they all subsidize the market to some degree in order to rake in the long-term, recurring revenues from game licensing (if you've never done games development for a Japanese-company game box, you're in for a big surprise when you find out that you are really working for Nintento/Sega/Sony to some degree.)

I don't know about MSFT's Xbox developer licensing model, but if it's anything like the other game box vendors, MSFT will be rewarded with handsome revenues from every title sold (regardless of who did the actual development work) if/when the Xbox becomes a dominant player, and game titles proliferate and sell well.

That day may never come, but it's probably a good gamble, if MSFT has the cajones to stick with it.

mazola said...

As far as the long-term 'investment' in Zune goes, lets look at MS history when going after market leaders:

- MS vs Netscape (browser wars). MS wins against a company with no money (and no OS leverage!).

- MS vs Sony (console wars). MS doesn't do quite so well against a company with some money. MS ships product, but doesn't see a profit coming any time soon.

- MS vs iPod. Apple has $9.5 billion in the bank, no long-term debt, a dominant market position, and there is no OS penalty this time around.

How much money is MS prepared to lose in this investment? I'm thinking it's more than 'hundreds of millions'.

bauhaus_sea said...

From today's Seattle Times, a day late and a dollar short: http://seattletimes.nwsource.com/html/businesstechnology/2003157671_microsoft28.html

Again, MS is chasing after somebody else's good idea(s).

How about focus on nailing the basics, folks, like gettting an AWESOME Vista out the door that blows everyone's socks off and won't require infinite amounts of iterations for the consumer in the form of monthly "Security Tuesday" updates?

Ray Myers said...

Ray Myers reorg plan...round 3:

Let's put this in Geek Speak; maybe that will help:

What is a system?

1. Input - The information and tools necessary to perform a task.
2. Process - The task of using the information and tools to "build" something.
3. Output - The finished product.
4. Feedback - Measuring and reporting on the quality of the Input, Process and Output.
5. Control - Measuring, adjusting and reporting on the quality of the Input, Process, Output and Feedback.

Let's assume MSFT has few problems with Process and Output; i.e. - they hire good people to accomplish the difficult tasks given to them. If that's the case, then where are the true problems?

1. Input - Faulty reasoning re: what should be processed. These are the results of poor management decisions on "what should be built". They are the results of management's own faulty output. Can you think of some lame projects that should never have seen the light of day?

2. Feedback - from the given input, is the process and output qualitative and quantitative? Don't lie now...is your chunk of Vista on time? And, did you have the balls to question the project (Input) in the first place? Also, is it possible that, when good people writing good code learn of bad or skewed feedback, that they lose trust in their managers? Additionally, when these same people GIVE feedback that is not listened to, could they lose faith in their managers and their company?

Feedback at MSFT is broken.

3. Control - How are Input, Process, Output and Feedback doing? Well, if Input's unrealistic or flawed and Feedback is broken...not too well. How can one effectively control that which is out of control? This suggests that, if you bring Input and Feedback up to speed, your system will work, right?

Makes good sense to me. So, Microsoft, begin to look closely at your Input and Feedback mechanisms for each and every one of your corporate systems starting with ones which will affect employee morale the most. Then, apply the system approach to solving these problems and start to eat your lumbering elephant...one bite at a time.

(I can hear the jaded naysayers barking now!)

Anonymous said...

Hi Who da Punk,
I hope you're enjoying some well deserved mental rest from work and the blog. I often read it, sometimes don't agree but always find it interesting. You don't need to post this, just an idea for a future post. Not to be a complete Pollyanna but it looks to me like some things are working at MSFT. Some examples are the growth YOY of the very mature EPG business and the somewhat amazing growth of SQL server YOY in the past few as well. What would be the chance we could look at some of the positive things that are happening and quit beating the gloom and doom drum for one post?
Thanks for considering -- sign me Field Gal

Anonymous said...

"workspace advantage" site should be renamed to "office space". Do that and it would be terrific. Do not forget send TPS report before EOD. Happy birthday, mister Lambert. And do not even think about resigning of Steeve Balmer. He has PEOPLE SKILLS!!!

Anonymous said...

You have to see this vista demo failure
http://video.msn.com/v/us/v.htm?g=851c886e-92ac-40df-9b54-a89f0aa68bc1&f=gadget_01&fg=copy

Worse it happend at the Analyst meeting

Charles said...

Let's assume MSFT has few problems with Process and Output; i.e. - they hire good people to accomplish the difficult tasks given to them. If that's the case, then where are the true problems?


Mr. Myers, your modelling of a corporation, its markets, partners, competitors, customers, investors, schedules, contractual comittments, and regulators, let alone its product planning, development, and sales channels is incredibly naive and simplistic.

Microsoft does have major problems with "Process" (e.g. source management & product build and test process are practically non-responsive to needed product changes) as well as "Output" (e.g. Vista and Office need to actually ship to deliver "output") as well as "Input", "Feedback" and "Control".

The true problems are a poorly architected OS, antagonistic customer relations, haphazard and ill-planned marketing tactics ("Fast Follower" and "Embrace and Extend" are why Microsoft has no real strategy other than "me too" and "catch-up"), but mostly an inexperienced management team with a "geek" mindset that lead the company into its troubles and that is neither prepared nor incented to make corrections.

Plus an increasingly impatient customer, investor, and regulator base which is disinclined to extend much more time - time (or lack thereof) - another aspect of your "system" you overlooked.

There is ever so much more to cost-effective, productive, profitable and sustainable management of a corporation and its business than modelling (even complex heuristic modelling) of a system.

Anonymous said...

From today's Seattle Times, a day late and a dollar short:

http://seattletimes.nwsource.com/html/businesstechnology/2003157671_microsoft28.html


Thanks for posting that. My favorite excerpt:

"Ballmer said some people have had a hard time understanding the "multicore" strategy and its implications."

Yes, Steve, and judging by your inability to succeed in any of these ventures outside of Windows and Office, I think you're at the top of that "some people" list. Unfortunately, you continue to be blissfully unaware and will continue to waste shareholder money attempting to compete in new arenas while populating the respective management teams with your frat brother execs who have no accountability and no understanding of the market they're entering.

How many more billions do we have to piss away before the light bulb goes off above Ballmer's head that you can't just buy success in these new arenas? Hire people who understand the market and are passionate about succeeding in it and for once, apply this rule starting at the top rather than the bottom.

Anonymous said...

You have to see this vista demo failure
http://video.msn.com/v/us/v.htm?g=851c886e-92ac-40df-9b54-a89f0aa68bc1&f=gadget_01&fg=copy

Worse it happend at the Analyst meeting


Brutal. As they pointed out in their commentary, there wasn't really any "ambient noise" to distort the signal until people started laughing later.

However, and I'm sure some might argue with me here, I have a suspicion that demo wasn't totally on the up-and-up anyway. Look at when he says "Dear mom" and it comes up "Dear aunt." Does "aunt" sound anything like "mom?" It might be the closest thing if you only load in about fifty words total to the "wreck"-ognizer and make a careful attempt not to vary from your planned script. When the audience laughed later on, the "wreck"-ognizer quickly coughed up a string of words, many of which the demonstrator had already spoken (though they weren't necessarily recognized when he said them).

If someone from the team wants to call BS and explain how in any rational universe "mom" could possibly be recognized as "aunt" please do so. For now, I think Toto just yanked aside the curtain and MS was left with even more egg on their face than just the demo failure (as in the only thing worse than a failed demo is a failed, rigged demo that fails in such a way as to expose the rigging).

Ray Myers said...

Charles, above, said:

“Mr. Myers, your modeling of a corporation, its markets, partners, competitors, customers, investors, schedules, contractual commitments, and regulators, let alone its product planning, development, and sales channels is incredibly naive and simplistic.”

Say that to the Wal-Mart employee who recently suggested the lighting department put fluorescent bulbs in their ever-burning display lamps and saved the company millions, and…you might be right.

Fact is, you ARE right. Huge problems like Microsoft’s NEED to be solved with na├»ve, child-like curiosity and simplistic thinking.
What I attempt to do, is to break out some common denominators such as faulty Input (poor planning and innovation selection) and Feedback (Abject denial and misrepresentation of the quality and quantity of the process), apply those two “broken” steps to System Theory within the confines of one single entity – Microsoft – and draw some simplistic – yet plausible – conclusions about what needs to be done.

Rather than obfuscate as you do, I simplify. It’s the only way to “begin” to heal, otherwise, the elephant is simply too big to eat. System theory (or any other simple theory) works in this case because it identifies two major areas of dysfunction at Microsoft. It implies that attention to their repair would benefit both Process and Control thus bringing stability to the system.

Your inclusion of outside systems – customers, partners, etc. – only serves to highlight the dysfunction being passed on to those systems as a result of faulty Output. Therapeutic communities like to use the example of the “toy mobile over a child’s crib” as how this dysfunction can affect others in the system. Touch one of the characters in the mobile and…the others all react in some unique way.

Apply simplistic system theory to this problem: “Microsoft has a problem marketing new ideas to the world.”

According to you, Charles, this is a problem with Process. I say you are correct, only if the people engaging in the process a given tasks they are capable of performing. If I had to guess, many Microsoft marketers without market and product savvy are given Herculean Input requests to make “something happen” with said product. And, without the courage to Feedback that they could use some professional help, they invariably underachieve. Using my model this again turns out to be a problem primarily in Input (faulty expectations) and Feedback (misrepresentation of the quality and quantity of the process). The resulting Process is only a by-product of the failure to address the issues inherent in Input and Feedback.

Too simplistic? Perhaps. Does it make sense? I believe so. Anyway, it would be a great place to start…eating the elephant.

Anonymous said...

I agree with the previous post (regarding the demonstration of Vista's voice recognition).

MS seems to specialize in DMD (Demonstrations of Mass Destruction). One would think the wizard behind the curtain would at least give the demo a run through under expected conditions--people whispering, breathing, A/C on, wind blowing outside building. But no! The wizard is busy having a psychotic break and it makes it out to the projector.

Long live Vista!

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

Hi Mini,

I'd love your thoughts on Zune. http://seattlepi.nwsource.com/business/279236_msftfinances28.html says "hundreds of millions of dollars" Hundreds of millions of dollars? That's a strategy? We're going to throw money at this until it becomes profitable?

Anonymous said...

You act surprised... Don't you all remember a similar situation several years ago when Jim Allchin, during the Antitrust hearing tried this exact same tactic? He produced a video demo that showed the detrimental effect of removing IE from windows, etc.

No, I wasn't surprised. In fact the spectre of that earlier "demo" was very much on my mind when I was writing that comment.

Still, it looks like they might have gotten away with this one. The news report just concentrated on how bad the demo was. If it was rigged as I suspect (and still managed to fail), they apparently didn't notice or didn't want to make the allegation.

Anonymous said...

Why can't you all just accept the fact that the Entertainment and Devices Division will never be profitable and was never meant to be?

Charles said...

Mr. Myers:

Your inclusion of outside systems – customers, partners, etc. – only serves to highlight the dysfunction being passed on to those systems as a result of faulty Output.

Au contraire! They provide input requirements, are part of (or ought to be) the development and marketing process, and they do (along with regulators and investors exert some controls. But mere feedback to otherwise intransigent and inexperienced senior management won't change anything.

Apply simplistic system theory to this problem: “Microsoft has a problem marketing new ideas to the world.”

According to you, Charles, this is a problem with Process.


No, Mr. Myers that is your oversimplification in your own words.

My words (and meaning) were distincly different, weren't they. But then my words didn't help your argument, did they. And so you've imputed some of your own to me to suit yourself.

Too simplistic? Perhaps. Does it make sense? I believe so.

Of course you do, but then you've not left yourself any alternative. When your only tool is a hammer, every problem becomes a nail.

You have the last word.

Anonymous said...

"Why can't you all just accept the fact that the Entertainment and Devices Division will never be profitable and was never meant to be?"

Um, because this is business, not charity.

If you don't want to ever be profitable, go join the Bill and Melinda Gates Foundation.

Anonymous said...

"Um, because this is business, not charity.

If you don't want to ever be profitable, go join the Bill and Melinda Gates Foundation."

The Entertainment & Devices division is all about 'Defensive Marketing'.Nothing more.

Anonymous said...

Why can't you all just accept the fact that the Entertainment and Devices Division will never be profitable and was never meant to be?"

Um, because this is business, not charity.

>
Microsoft charity for partner. L68 and high get milions dolar no work or profit.

Anonymous said...

I am not a microsoft employee but IMHO Microsoft is actually winning the game console war(but slowly). the game industry has slowly evloved into a new area which Microsoft actually has a very big advantage - the platform for online games. if you are not very into games you can search for the story how Blizzard's WOW is taking a big share of the whole pc game industry. Microsoft is a OS vendor and the XBox live clearly shows the edge here. on the contrary Sony is particularly bad at this. I have owned many sony products over the years, and I haven't seen ANY decent software/service that sony bundled with the software. They released a Linux kit for PS2 but it didn't translate into anything other than a toy for Linux fans.

Ray Myers said...

Charles, if I sat in a meeting with you and brainstormed, you would attack the methodology, obfuscating the idea. A good moderator would not allow that.

Charles, we are brainstorming here. This is not my senior thesis. My "brainstorm" is that: system theory fits as a methodolgy for simplifying the analysis and fixing of some of the flawed Microsoft projects and attitudes.

Let's try another: A message comes down from on high to eliminate free towels in the company athletic facilities. The manager of the facilities, upon receiving this Input, begins to Process the request by posting signs saying such. He views the Input as flawed, thinks his company is making a mistake and gives feedback to his boss. Under the current regime, this goes nowhere. Why? Because his boss' Feedback system is flawed. However, there is a new system in place called, "The Red Phone" which permits protesting without repercussion. Given that the athletic facility manager's testicles have fully decended, he makes the call and the word gets through, perhaps to a corporate Ombudsman, who has top management's ear. More rational human beings negotiate with HR and Bill to suspend the towel punishment and an uprising is averted.

NOTE: This same reasoning could be applied to the $1.50 download fee being charged by a corporation which, until this quarter, that was NETTING $3 billion in profits PER QUARTER!

This new corporate subsystem permits unpunished Feedback from all other corporate subsystems, thus resulting in ideas seeing the light of day in a dark boardroom.

Charles, this really IS the last word, don't you think?

Anonymous said...

With all the discussion, one has to keep in mind that all the news and press this last week did not harm the stock price. Friday was up 1.59% with after hour trading dropping it back down .12 percent. While I admit that MS seems to be in a trading range. Go figure.

I am beginning to think stockholders are like the American public home PC users, naive and gullible and somewhat bovine (tending to stampede for no reason other than the others are doing it too).

Mini, until MS does two things in a row for many months in a row, I see no changes in strategy from MS management: i.e., lose money in core business coupled with further stock price drops radically from where it is now. If you get that perfect storm and Balmer is still there, well. . .

Anonymous said...

MS vs Sony (console wars). MS doesn't do quite so well against a company with some money. MS ships product, but doesn't see a profit coming any time soon.


Actually, MS has lost against companies with little or no money. PocketPC was supposed to redefine the PDA, but Palm, burdened with court costs (from their separation from US Robotics) was able to hold the market. (Some consider it a moot point today, since all current PDA functions are folded into the cell phone, but MS is struggling there as well.) The last hands-down win that Microsoft had was IE over Netscape. Since that time, any new category Microsoft has entered has turned into a shoving match - with Microsoft pushing heaps of money onto the table and competitors rallying their best effort and the ABM (Anything But Microsoft) crowd to box them out. If Blu-ray (Sony) beats out HD DVD (MS/Intel) then consoles could be unprofitable for a long time.

Anonymous said...

CNN article below shows that hiring more HR is good for company. Increase HR headcount to make microsoft better.

http://money.cnn.com/magazines/fsb/fsb_archive/2006/07/01/8380516/index.htm

Anonymous said...

Enron employee speak in court. MSFT employee speak in minimsft blog.

http://biz.yahoo.com/ap/060730/enron_sentencings.html?.v=3

Anonymous said...

Is it possible for a date to be included along with the time on the postings? Hello? Hello? Operator? Hello?

Anonymous said...

MS can use the profits from Xbox and Xbox 360 to help pay for the Zune launch. And once Xbox becomes profitable, Microsoft will have three profitable "pillars" it can use to help pay for Zune.

Anonymous said...

If you get that perfect storm and Ballmer is still there, well. . .

At this point, Ballmer has conceded all key decision making to others in the company. He knows that if he listens to Ozzie and Mundie and does what they ask, then Microsoft has a fighting chance. He has to be a straight pass-through though, and not meddle in any way. If Microsoft can use Win/Office profit to bankroll Live/Devices the company may have a shot. The stock might go up and Ballmer might take his place in the pantheon of not-too-mediocre CEOs. However, it all has to go like clockwork.

Anonymous said...

"The last hands-down win that Microsoft had was IE over Netscape."

I don't want to start an ABM vs Softie argument here, but it was not quite hands down. If anybody remembers their history, AOL bought Netscape just at a critical time and slit its throat in favor of using IE as a browser kernel.

And the ABM community has never quite forgiven MS or AOL for that, thus the war has continued to this day with Firefox, Opera, EU anti-trust, US anti-trust and so on.

Certainly, AOL is now as finished as Netscape was then. What goes around comes around, I guess.

Anonymous said...

I don't want to start an ABM vs Softie argument here, but it was not quite hands down. If anybody remembers their history, AOL bought Netscape just at a critical time and slit its throat in favor of using IE as a browser kernel.

IE had something like 75% browser share by that point. What killed Netscape was the fact that they spent five years or so rewriting the entire thing between Netscape 4.0 and Mozilla 1.0 (shades of Vista). By the time IE 5.0 and 5.5 came out Netscape 4 was widely reviled as the worst browser in use on any platform. IE was winning every comparison and review being published.

Anonymous said...

However Ballmer gets it done, he definitely has his adherents. A friend of mine returned from a show recently and was amazed at the vigor and exuberance that Ballmer showed on stage. He will certainly go down as one of the more active and engaging CEOs for sure. Since he did have to manage through the post-DOJ fiasco, I guess we can give him a few more years latitude.

Anonymous said...

Worth looking at Scoble's notes on BlogHer. Since Microsoft is heading into services territory and since so much of services relies on communications and positive customer interaction there should be plenty of opportunities for women at Microsoft. Microsoft has been described at various times as a boy's club or fraternity. Its also been implied that Microsoft needs to work on being a little more honest and sincere. Here we might get two birds with one stone.

Charles said...


Charles, this really IS the last word, don't you think?


Hardly, but as you seem to want further response from me, I'll make one final attempt to elaborate on the point you keep missing.

This new corporate subsystem permits unpunished Feedback from all other corporate subsystems, thus resulting in ideas seeing the light of day in a dark boardroom.

Mr. Myers, the ideas proposed by many inside and outside Microsoft (including yours minimally as a result of someone reading this blog) have always "seen the light of day in a dark boardroom", to borrow your phrase.

What you fail to realize is that they like it dark in the boardroom. They understand the arguments and have rejected them. Microsoft is run the way it is not by accident for lack of feedback, but by design in spite of feedback.

Over the decades, those poor (yet deliberate and conscious decisions) have built up a corporate culture that will be very difficult to change, even should it want to 'hear' and implement the feedback it is given. Look at what it has taken to get HR to revise the employee review/rating mechanisms.

But the remaining, nearly intractable, problems are:

1) a poorly architected OS (stemming from Bill Gates 'boardroom' decisions to entangle everything in Windows) which makes further evolution of Windows and its dependent products very difficult (witness the problems that have plagued Longhorn).

2) A lack of strategic marketing (stemming again from 'boardroom' decisions to be a "Fast Follower" and "Embrace and Extend" of nearly every technology or competitor remotely perceived to be a threat), resulting in a haphazard and loss-leader product introduction mentality, exploiting none of Microsoft's strengths save perhaps its monopolistic share while encumbering it with numerous new weaknesses comensurate with always being a follower with after-thought, also-ran products.

3) A "passion for technology" groupthink rather than a passion for success execution which has so infused the company that it has very few insiders who know what success looks like or how it is achieved, repeatedly, sustainedly, profitably, legally.

The issue is not how to formulate a systemic model of an idealized Microsoft. No matter how good the model, the prevailing attitude is to ignore what any model might suggest (including fairly prosaic business and profit models) opting instead for inexperienced 'shooting from the hip'.

The issue is how to infuse Microsoft at all levels and functions with better, more experienced business and technical judgement and execution, while correcting the existing product, profit, and legal problems without undue damage, within a dwindling window of opportunity.

As I have noted previously, Microsoft has a great many bright people who know "how to do" (including how to input, output, feedback, process and control to again borrow your concepts - as well as write code and advertise products), but seemingly almost no experienced people who know "what to do" at each of those steps, let alone overall.

Anonymous said...

Two comments here are just really uninformed and beg a response.

The first is that "MS only wins against companies with no money".

It almost seems ridiculous to have to say this. Anyone who feels qualified to discuss technology should have sufficient history to not need to hear it, but Office, SQL server, Windows Server and Visual Studio are clear examples of MSFT "winning" against wealthy, entrenched, competitors.

Even the "OS advantage" doesnt really fly because, if you know your history, you know that there was a time when Novells lead (one example) seemed insurmountable. And beloved Apple, with their endlessly evangelized "long lead in having a GUI", somehow totally squandered that lead and lost badly.

I notice though, that to the true believers, no other company missteps, it is always that Microsoft exerts "unfair advantage". Thats a juvenille view that doesnt jibe with reality. Old guys like me who lived through this period as tech pros remember it well. It is either pure ignorance, or pure prejudice, to completely write off any MSFT success as "luck" or "rackateering". Thats just not how it happened despite what you want to believe.

The second point that needs to be addressed is that "MSFT doesnt innovate"

This conveniently narrowminded definition of "innovation" that is conveniently always hurled at MSFT is really irritating. Again, it seems that in a discussion between well informed participants this wouldnt need saying, but Ill say it anyhow.

Why is Nintendo an innovator when Atari had created an industry while Nintendo was making playing cards? For that matter, was Atari the "innovator"? After all, non-programmable game consoles had already sold millions and the Atari 2600 wasnt even the first programmable console.

Why is Apple *any* kind of innovator *at all* when they were successfully sued by Xerox over the Mac GUI immediately after release since they stole the IP blatantly from Xerox PARC. And why is the iPod an "innovation" when MP3 players were already on the market and the Sony walkman had already proven that portable music was a million unit seller?

The answer is that "innovation" means a lot of things. Apple, Nintendo, Atari AND Microsoft *are* all innovators. When you try desperately to *remove* Microsoft from the list based on personal prejudice you just look ignorant.

Anonymous said...

"Microsoft has been described at various times as a boy's club or fraternity. "

Described as a boy's club? It is a fraternity. Windows division has many thousands of employees (15k?). Less than 30 in total are women in levels 65 or above (mid level managers). It isn't even close to the percentages of other orgs like the field or MSN. Things will not change anytime soon.

Anonymous said...

"The issue is how to infuse Microsoft at all levels and functions with better, more experienced business and technical judgement and execution, while correcting the existing product, profit, and legal problems without undue damage, within a dwindling window of opportunity."

I'm a former MS sales employee and agree. Additionally, there's a need for fresh eyes even in some cases where general competence exists. For example, permeating the recent analysts meeting was a belief that 10% growth in mature business is a great result. Why? That's barely more than PC growth. Few if any sales or management teams would expect to keep their jobs for simply accomplishing the market rate of growth. IMO, if you go in with an assumption that 10% is a good result, you're going to aim for that and make decisions accordingly. What if the go-in assumption was 20%? That would call for a radically different approach and probably a radically different product set. Is that bad? I don't think so. Is it unachievable when more than 50% of the installed base in still on older products 3-5 years after new product launches? I also don't think so. If a product is sufficiently compelling (i.e. solves a real problem) and marketed well, customers will buy it. This "good enough" phenomenon that seems to be the favorite excuse at MSFT today, is really a failure to make "compelling enough" products and/or communicate their benefits appropriately. As a result, growth sucks, customers take forever to move to new versions and marketing launch costs are going through the roof as MSFT tries to push a marginal product into an increasingly resistant user base. MS isn't owed an upgrade - it has to earn it. It sounds simplistic and I don't mean to underestimate the difficulty level, but MSFT needs to take a page out of Jobs' book and aim for "insanely great" releases every time out. The days of shipping marginal upgrades that eventually become good 2-3 revs later just isn't sufficient anymore and worse, sets an expectation among customers that they can skip 2 out of every 3 releases without losing much. Some groups - to their credit - are beginning to do that. But it needs to be a corporate-wide ethos vs haphazard.

Anonymous said...

Regarding an earlier thread, how is XBox supposed to defend the Windows business? Do people buy PlayStations instead of Windows? Do PlayStations only work with Macs? What is the strategic play here?

Same thing with Zune. iPod/iTunes works fine with Windows right now, so people are presumably buying Macs because they want to, not because of their music players. Does Microsoft expect to capture a small fraction of Apple's tiny market share because Zune is so cool that Mac users will buy new PCs to use it?

Anonymous said...

I was amazed by the comment my wife made this morning overbreakfast. SHe is a teacher and is the resource person for computer issues at her school. She was commenting on the Idea that Micro Soft is going to charge for Office betas. She rolled her eyes and commented.. where will it end. She already has issues with MS over Encarta as a teacher. Nothing like 35 cut and paste papers from Encarta on a homework assignment.

The bottom line is that instead of encouraging people to look at the new office this "rumour" has turned her off MS. I know she was looking at Open Office previously, but now she is looking at requesting all assignments use Open Office and save the parents a few dollars on MS software. She tried to find an email address on the MS site to voice her concerns and Even I looked after she bemoand there is no address for general complaints or comments.

Not good. If this is all it took to finally drive her to looking at alternatives, maybe MS should be looking at the reactions from teachers and others in her field.

Anonymous said...

"If requiring a private office is mandatory for you to even consider working at MS, then you are probably not open-minded enough to belong here in the first place."


Here, here. When my team went to an open floor plan there were a handful of stodgy old farts who left because they wanted their privacy so they could keep playing Dune or talking to their relatives on the phone all day. Good riddance.

Anonymous said...

Ballmer's Range Rover may signal a change

Don't buy his Range Rover argument (Steve's entitled in my view and is still pretty frugal/grounded for a multi-billionaire). But he does make some accurate comments about the FAM and analyst reactions. Unsure about his final conclusion that Ballmer doesn't care. Would have agreed a few years back, but think Steve now realizes that continuing to ignore the stock is going to result in increased employee defections, harder hiring and if shareholders get pissed off enough, possibly even result in his removal - in which case he can kiss all his long-term strategies goodbye.

Anonymous said...

So...to the above comment on the number of Microsoft hires in FY07 I can tell you that it will be significantly below FY06.

Has anyone noticed that finance is not releasing PCN's in lump sums like they have in the past and that many of our team are effectively out of PCN's? On top of that we have not been issued our scheduled alottment for FY07... What's funny is that we have deliverables that our Partners are counting on and while we may have massive amounts of dead weight on other teams (Office, Windows etc) our team is desperate for the PCN's and we're starting to miss deadlines since we can't hire the people we need to hire.

As for HC in 07 -
What I have heard is a 40% reduction in the overall hiring numbers for FY07... and the reason is they told recruiting to go off and hire 8-10,000 people in FY06 (thinking they'll never come close) since we all know our recruiters are terrible? Right?

Well guess what girls...they hit the number we gave them and we've got a headcount problem and an even bigger space problem than we had in December.

If we're going to start RIF'ing in other groups, please give us your PCN's.

Anonymous said...

Well, this is interesting times indeed. I agree with the previous posters that think MSFT is trying to outmuscle competition, wear them out, to take over their markets. I belive it could actually work too. Sonys new console seems to become slightly too expensive. Maybe they tried to hard to beat XBox hardware-spec rather than looking at market needs/whishes.

How many more is increasingly using WMV/WMA MSFT-proprietary formats than MP3/MPEG/Real? I belive this is the first step to get a future broadcast market based on internet. Think about it, everybody becomes, or is already, depending on MSFT OS + WMV/WMA-protocols and broadcast-companies need servers/software to provide broadcasts with MSFT technology. Now add MSFT based mobile to view video, XBox replaces the old cablebox...

The only thing one can criticize is perhaps that they really do battles on many fronts. They got to be careful with how much they have afford to spend. If too many investments goes bad, or not turn to profit, they can become a little short of cash, but i rely on Ballmer to have a firm grip around MSFT economy not letting it slip too far.

Also MSFT should not neglect the cash-cows. Should Vista or Office turn out to not sell as expected MSFT can be in trouble for battling away on so many fronts.

We'll see in a couple of years if Sony is still in the console-buissness or if Google is still Googling.

Anonymous said...

"What's funny is that we have deliverables that our Partners are counting on and while we may have massive amounts of dead weight on other teams (Office, Windows etc) our team is desperate for the PCN's and we're starting to miss deadlines since we can't hire the people we need to hire."

Short term pain for longer term gain. MSFT needs to cut back dramatically on hiring and probably take at least a 5% RIF company-wide following the launch of Vista and Office. If accountability goes up at the same time (big if), then maybe managers across the company will finally have to choose between continuing to support their non-producing buddies (and risk failing) or finally cut them loose. Won't help your group in the short-term but could save the company long-term.

Who da'Punk said...

Administrivia: deleted a comment written under a Microsoftie alias that wasn't actually written by that person.

Anonymous said...

Described as a boy's club? It is a fraternity. Windows division has many thousands of employees (15k?). Less than 30 in total are women in levels 65 or above (mid level managers). It isn't even close to the percentages of other orgs like the field or MSN. Things will not change anytime soon.

Level 65 or higher is a MID-LEVEL manager??? There can't be too many of these in Windows. How about comparing the number of total manangers at this level to the number of women managers. Otherwise you're comparing grapes and watermelons.

Anonymous said...

Here is something to move the stock: Brian Valentine is being ousted this week and "friend of Sinofsky" Jon DeVan is taking his place.

I hope it doesn't mean yet another Vista slip.

Anonymous said...

A Land Rover is a Ford. Look up www.ford.com. Ballmer is still being loyal to his dad's company.

Anonymous said...

Hey, I don't know where else to go with this question...

Does anyone know when "the big spsa payout" is supposed to happen? I thought it was sometime this month. Anyway, the reason I ask is simple. My office is currently being swamped with senior microsoft partners looking to explore options, to consider employment with my firm.

What I am trying to get a handle on is if this is the first wave of Vista related attrition, or is this people planning on moving on after the first slug of the big $1m payday, or is this the first wave of the rif?

I am just curious. It seems odd that we would see so much activity now.

Thanks!

p.s. - posting anon to protect those reaching out...

Anonymous said...

Anybody out there been to the Ballmer/Ozzie road show for campus folks >= L65? If so, I'm wondering what you thought of it -- I heard Ballmer actually showed signs of being self critical...

Ray Myers said...

Charles, you're last word is very listen-able. I co-sign on most of it.

And so, it comes down to this, IMHO:

1.) The only thing that's really changed at Microsoft is...the entering into Jerusalem (to use an analogy, no sectarianism intended) of Ray Ozzie.

2.) Will he and his disciples create a huge following, soon, or...will he turn over the tables of the money changers and piss off all of the turf-conscious high priests?

3.) What's different here is that Rome (stockholders) wants Ray to succeed.

4.) Armed with this knowledge, his Ozzieness must fight the good fight on two (2) fronts:

a.) Technical - bringing new pillars (not salt) to Microsoft and thus new revenue streams. But, more importantly, I believe...

b.) Organizationally - Ray must take DRASTIC measures to weed out the turf-building-sychophantic-yes-men/women and replace them with...disciples, believers and followers.

This must be done now at every management level. If not, Ray's group will be a freshly-beating heart in a cancer-ridden body. And we know who wins that war.

Any ideas on how Ray should go about this?

Anonymous said...

re: Brian Valentine - he's not being "ousted this week", as the above commenter noted. Per email, he's staying through Vista RTM, then moving on to "something else".

Outright firing him right now would a) be really distracting and b) never happen, b/c he's part of the special boys' club that can do no wrong. Even if he did something on a par with Martin what's-his-name from a few weeks, he'd get quietly placed somewhere else.

In other words, BrianV's getting the same chance to quietly fade away that JimAll got, and that countless other VPs and mid-managers got, when they should have gotten uncermoniously booted out the door. Rewards for past performance, I suppose.

And Jon DeVaan isn't really coming in until post-Vista. (And he's bringing his useless deadweight "Engineering Excellence" group with him - that plus the COSD clowns makes me shudder to think what it will be like to get anything done in Windows starting next year...) This is all positioning for Sinofsky's Brave New World.

Anonymous said...

"Regarding an earlier thread, how is XBox supposed to defend the Windows business? Do people buy PlayStations instead of Windows? Do PlayStations only work with Macs? What is the strategic play here?"
Yes, they do. Or better: they have a low-spec PC and whatever version of Windows came with it and a PlayStation.
I think the plan for Xbox in the long term is to reduce the gap between Windows and consoles when it comes to games, because it is relatively easy to port games from Xbox to Windows.
There will be a point where people will buy a cheap PC running Windows instead of a console, because the PC will have a bigger and better selection of games available.
I'm not sure if this is going to work, because so far I've seen more titles coming from PC to Xbox than the other way around, but I'd bet that the 360 is our last dedicated console and that all elements of Xbox will be integrated over time into Windows. "Live Anywhere" is only the start.

Anonymous said...

And Jon DeVaan isn't really coming in until post-Vista. (And he's bringing his useless deadweight "Engineering Excellence" group with him - that plus the COSD clowns makes me shudder to think what it will be like to get anything done in Windows starting next year...) This is all positioning for Sinofsky's Brave New World.

-
JonDe is a microsoft hero. He and EE team will make windows a tiger again.

Anonymous said...

http://news.com.com/Microsoft+reshuffles+executives/2100-1012_3-6100954.html?tag=nefd.top

is a link to a cnet article
"Microsoft reshuffles executives"

Talks about most recent reorg announcements.

Mini, whats up with your letting personal attacks through again rejecting reasonable criticism of MS in general? Must be stock related. I love your hypocritical bounce system. I sure hope the crits that never see light get to your management anyway.

Anonymous said...

And he's bringing his useless deadweight "Engineering Excellence" group with him

I've seen similar comments a few times (dunno if it's the same poster or not). Can you elaborate? The EE guys I've worked with are seriously smart and I thought a few were on their way to even bigger roles. Maybe I've just been lucky, but I'd love to hear any contrary experiences.

Anonymous said...

Level 65 or higher is a MID-LEVEL manager???

You better believe it! If you thought getting to 65 was hard, wait till you get there. At best, you'll make it to 66. Rumor is you don't get to 67 unless 'the company' thinks you'll make partner (68). And you don't make partner unless SteveB signs off personally on you. Result: a lot of mid-level managers get 'stuck' in the 65-66 band.

Anonymous said...

There will be a point where people will buy a cheap PC running Windows instead of a console, because the PC will have a bigger and better selection of games available.

This is completely wrong. The point of the XBox is to sell it at a loss and make up all the money in game licensing fees. There are no licensing fees for Windows, so if this is the strategy, then the only part of the XBox business model that's left is to lose money.

devdivdude said...

What happened to fiscal responsibility?

So the Windows Genuine advantage team (WGA), the ones who have been getting the subject of all the class action lawsuits, are being forced to budget and be “responsible”.. they have an aggressive goal of $43Million in sales transferring non-genuine “counterfeit” software holders into “genuine”.. they are all about making money this year. Ok fine, it’s a tough year. Unlike other groups they are getting headcount however so good for them. Sounds normal –yes?


So why, why, why in the name of heck are they (an org of about 100 people) going on a Microsoft paid one week cruise to Mexico from Los Angeles (airfare form Seattle included). They only have to take the vacation time. Have Joe Peterson (VP) and Brad Graziadio (PUM) lost their minds?

I work my butt off in Windows and these media hater targets are going on a CRUISE after complaining that money is tight.. where’s the justice!!!!???

devdivdude said...

EEG?? A group where people would park and "rest and vest"..

I'm glad JonDe is getting out of there, he has great ideas and can make a difference in Windows land.

Anonymous said...

i am tester in the sql looking to move out to a different group. I enjoy testing, however i am sick of the slow growth curve in sql. I have been at the same level for over 2 years now and got utterly screwed over by my previous lead, who for the record was an idiot at best. which other groups are similar that I should avoid? suggestions would be helpful.

Anonymous said...

There will be a point where people will buy a cheap PC running Windows instead of a console, because the PC will have a bigger and better selection of games available.
This is completely wrong. The point of the XBox is to sell it at a loss and make up all the money in game licensing fees. There are no licensing fees for Windows, so if this is the strategy, then the only part of the XBox business model that's left is to lose money.

Gee, thanks for telling me, Einstein.
Let's see, that business model works for Sony because they have a relatively small loss and a big market share. And with the maturity of the production process that they should have by now I'm quite sure they're selling at a (maybe small) profit.
With Xbox we have a large loss per sold console, and a market share not big enough to compensate for it. We are loosing billions on Xbox that we're not going to see back for a long time even if it becomes profitable.
If you see Xbox as a defensive move it makes more sense: People who buy an Xbox don't buy a Playstation, and over time could be converted into Windows users. At that point we stop throwing away money and don't develop or sell another Xbox.
And what stops us from requiring licensing fees on Windows? If Live Anywhere is in any way similar to Live on Xbox we'll need a high level of security, which most likely means a similar licensing process.

Anonymous said...

"which other groups are similar that I should avoid? suggestions would be helpful."

this is true for all test groups, no? Take a close look at dev and pm if you want faster growth.

Anonymous said...

SQL is indeed a tough place but many other divisions are pretty much the same. It ultimately depends on your manager and gd-manager and how they like you and want you to succeed (vs. other people on your team).

I have seen people who thrive in sql, and others no less smart who died a slow and agonizing death.

The rule of thumb at MS is that you want to be a big fish in a small pond. Sql is a BIG pond with several very smart sharks. Even if you are very smart, you are likely to be considered average, which is a death sentence career wise.

I know people who moved from SQL to MSN who seem to be very happy with their decision. I also moved on and do not miss that org for a second.

I could theoretically give you names of managers to avoid, but won't because of anonymity.

Good luck!