And You're a Microsoft Shareholder Because...?
Hello. Just a quick check-in for Mini-land. As I start writing this, I should be out soaking up the sun biking down some nice trail, but my knee started making those wet twig-snapping noises so here I am, side-lined and typing.
Quarterly financials are due in a week, and I'll probably skip a post on this one. Other places do a pretty good job of tracking the financial results. I am really curious, though, of all the people either holding or accumulating Microsoft stock: why? Why are you a Microsoft MSFT shareholder? What kind of metrics are you using to deciding to buy and/or hold? Sure, we all set alarms on stock when we buy it, but usually that does not include stagnation. Rick Sherlund gets off the Microsoft beat and the next thing you know we're getting bounced around.
This past week, I was driving home, listening to Marketplace on NPR, and some fellow gets on talking about Microsoft: "Lumbering..." he starts off with. "Dinosaur" he adds. Wow, he ripped into us more than I ever have. And what else shows up today? Lumbering Giants, mentioning Microsoft and other Dogs of the Dow.
This, combined with reports of Microsoft's death (SteveB and BillG in the repository: "Sorry, we're what? We can't hear you over all the ruckus of counting these billions raining down on us."), means we've reached a cultural turning point: Who's afraid of the big Microsoftie bad wolf?
No one.
Thank goodness. Pretty soon, the institutional shareholders might actually rub their eyes really well and look over the data, stumble up to the microphone at FAM, tap it, and say, "Hey! What the hell are you Bozos doing with my money?"
Personally, I'm in the middle of extreme diversification and I've scheduled myself out to aggressively sell-off all the MSFT ESPP and stock awards I've left alone for all these years. I guess that's just another little death in my confidence that Microsoft is actually ever going to turn around stock price-wise. I'm holding on to my options, though, hoping to at least fund an extra shot or two in my occasional mocha.
Other goings on...
InsideMS: "hey, was that a shark I just jumped?"
Collision Domain has a new post - "Bunnies!" - discussing the state of LisaB's internal InsideMS blog. Readers of the comments to a recent post will get the title. InsideMS certainly had a lot of potential at the get-go, along with probably a deep desire of Microsofties to use it as a place to engage and help change Microsoft and knowing that they could safely engage in conversation with peers. Then, it seems, it all went kinda wrong. Chops to LisaB for keeping it running as long as it has but hell, I wouldn't have it on my commitments either at this point. You can't keep posting on HR topics forever. I think it could change with more guest posts and with follow-up posts that summarized the major themes in comments so that the comments can at least be acknowledged, if not acted upon ("order up!").
Or maybe any topics originally started by He Who Must Not Be Named are off-limits.
If LisaB were to be interviewed, what are the hard, unanswered questions you'd want posed to her?
Microsoftie in the Field: hey, my goodness, a new post. Keep it up!
Outlook 2007 Performance: so, as Joel Spolsky notes, an update for Outlook 2007 was released to address performance problems. And, by the way, Outlook PM suggests you trim down your PST / OST size so that it doesn't accumulate email and silly stuff like that. Outlook is a temporal organizer, not a repository! Anyway, my performance is a little better but I still have strange freezes with POP, which I don't even know if it's on the Outlook team's radar. I'd be interested in what SQM said was the percent of non-Exchange Outlook users.
But it has me thinking. Thinking about waterfalled monolithic product wave shipping. Can it go on? Can we keep with the every three year product pipeline burst? One issue with Office proper is that it's half client software and half platform, and some large chunk of each wired up to the server solutions. The corner we've painted ourselves into is the platform part, where it was a strategic advantage but now IT departments are wary of upgrading less all their custom platform-based solutions regress because of new features or deprecation.
What to do? Well, avoid making that mistake again. Can Office be saved? Could you write a feature and stabilize it and just ship it, all within three months? A release of Office becomes constantly updated as new features come out, at least ensuring we can stay competitive fresh.
"Oy!" You start screaming about service packs and QFEs and N minus one and crazy sustainability crap like that. Really? Do we really have that limitation? Is it leading us to the path of reward and success?
And do we have the culture and know-how to be on track to just incrementally ship new features as we finish them? I'd be interested in knowing which groups do this really, really well.
Take This Microsoftie Job and Shove-It: Ms. Mary Jo Foley picks up on a f(Microsoftie) = Googler post: Ouch Goodbye Microsoft; Hello, Google. Ooo, that item got deleted from the blog. Silly delete. Never delete your blog entry. Always update and just plain replace the content with a space or a smiley. Less people track it down in the BlogLines cache by looking for feeds with "David Bennet" or such.
Vizzini! You know I have to give a shout-out to Mr. Joe Wilcox for his Princess Bride reference in DoubleClick and Microsoft's Thrift Culture. DoubleClick. Well, I'm glad it wasn't Microsoft paying $3,100,000,000 for it.
(Oh, and Mr. Wilcox: man, you've got some interesting comment action going on in your posts. Whew.)
229 comments:
«Oldest ‹Older 1 – 200 of 229 Newer› Newest»Dell is going to sell laptops and desktops with factory installed XP. Isn't this a big black mark on Vista. If, more manufacturers started doing this crazy thing then, we will really know how many people are actually moving to Vista without being forced by OEM Sellers.
Mini-I've been divesting for about 6 mos now...even dumping the MSFT shares in my 401k. All options above water were sold as soon as that magical 31 hit. While I know they weren't due to mature for 5 years, I am hoping to fund a MS exit (and year of globetrotting) after this years review. After almost 8 years the kool-aid is starting to taste like it comes from Guyana 1979 style. The beauty is I know I'll be able to come back to the bloated ship if nothing else pans out for me...because if they aren't hiring contractors, they'll surely have another 5k open hc!
One team that does the continuous innovation really well is Search. They've kept up a regular monthly release cycle now for more a coupla years. There have been a couple of cancellations ("don't run for the bus, there'll be anodder..."), but no fatal regressions, and only a few embarrasments(QFE'd within a week). Also little burnout. I think they can keep it up forever.
Sure, you say, it's trival when your release is installed in 5 places in the universe, but different when you're going to spatter the bits onto millions of CDs that you can't change for years. But in these days of Windows Update, I don't think anyone can claim that defense any more. So why don't *you* ship monthly releases?
Is it because you've so lost touch with your users that you have to make a year-long market survey to convince yourself and your management that you know what they didn't like?
"And You're a Microsoft Shareholder Because...?"
I'm not. I thought about buying a share to justify posting here and to justify spewing at the idiot analysts, but that would be disingenuous.
A couple of interesting news links:
Google 1Q Profit Rises 69 Percent
http://biz.yahoo.com/ap/070419/earns_google.html?.v=15
compared to Microsoft's $3.60 software offer:
http://www.smh.com.au/news/laptops--desktops/microsofts-cheap-deal/2007/04/20/1176697051100.html
Great pic of BG looking lost.
On the topic of shareholders...I recently enjoyed reading the book Joy at Work, by Washington native Dennis Bakke. Bakke argues that stockholders are not the sole stakeholders in a company. As adjuncts of the company mission, Bakke lists the following stakeholders: customers, governments and communities, suppliers, financial institutions, employees, and shareholders (p. 156).
Essentially, he's saying that shareholders are one of many, but not the only (nor most important) stakeholder in a public company. Bakke's book covers other interesting themes, but this one seems relevant to the ongoing "what about share price/stockholder value?" conversation. I think I've read comments that suggest, essentially, that a public company's duty is to increase shareholder value, period. After reading Bakke's book I'm wondering if that isn't a short-sighted or oversimplified position.
On the topic of shareholders...I recently enjoyed reading the book Joy at Work, by Washington native Dennis Bakke. Bakke argues that stockholders are not the sole stakeholders in a company. As adjuncts of the company mission, Bakke lists the following stakeholders: customers, governments and communities, suppliers, financial institutions, employees, and shareholders (p. 156).
Essentially, he's saying that shareholders are one of many, but not the only (nor most important) stakeholder in a public company. Bakke's book covers other interesting themes, but this one seems relevant to the ongoing "what about share price/stockholder value?" conversation. I think I've read comments that suggest, essentially, that a public company's duty is to increase shareholder value, period. After reading Bakke's book I'm wondering if that isn't a short-sighted or oversimplified position.
That's hardly a new or unique spin on the meaning of "stakeholder". It's pretty much the Business 101 definition (although that's no guarantee that any of the execs at MS think in those terms. Often as not, it seems they don't even think of the average stockholder as stakeholders, just the partners.)
But in these days of Windows Update, I don't think anyone can claim that defense any more. So why don't *you* ship monthly releases?
Because our customers have told us LOUD AND CLEAR that they don't WANT new things delivered through these channels that frequently.
We moved from weekly patches to monthly patches based on this feedback. Most customers want a very small set of updates published, so they can target their testing.
If we were updating the OS on a monthly basis, the matrix of supported "versions" of the OS that we'd have to test on would be mind blowing.
Also, only a small fraction of the updates we publish ever make it to Windows Update. We need to limit that channel to important updates only.
I think my group (Team Foundation Server) does a great job of delivering value both within and outside the traditional release cycle. Granted, we have a lot of things that work in our favor:
- most of our customers are on enterprise subscriptions of some sort. thus, incremental releases excite them without costing us revenue
- we're a young product, so we have tons of important features that didn't make it into v1
- we have a very "clean" architecture, i.e. each component layer (SQL, web services, client API, client UI) is completely modular
Despite all those advantages, it's not easy. Keeping a medium-sized team simultaneously focused on powertoys, v1 servicing, v1.5, and v2 must be a strain on management. I don't envy them, nor do I have illusions our strategy would scale to Windows / Office size unmodified. [insert Vista joke]
Nevertheless, there's a lot of good practices brewing here that should be examined, and if successful, copied throughout the company. Our PUM writes about many of the same things that come up here: agility in an evolving marketplace, transparency with customers & partners, incorporating feedback into the design process early & often. Check it out.
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I don't have the time or skills to invest in individual stocks. Even if I did,
One of the reasons why Windows Update isn't the solution to "agile software" is that even if the software you release on WU has a .05% failure rate on install, in absolute numbers that is a huge number of customers you just blew up. And then word about those failures shows up in every trade rag in the universe.
With web servers you can still screw things up for a percentage of your customers, but by the time it is picked up in the press, you probably already quick-turned the fix and pushed it back out to your server farm.
PS I'd say the same thing if I worked at Apple or Google.
PPS "less" != "lest"
Mini - I have been reading your column for over 2 years and I enjoy it.
I would like to know what spin MS will be putting on the editorials on them channel stuffing the Xbox 360 for their coveted "10 million" mark.
http://www.informationarbitrage.com/2007/04/microsoft_phili.html
The NPD is showing march numbers (Nintendo is just printing money)... and the XBox 360 is not looking good.
http://www.joystiq.com/2007/04/19/npd-march-belongs-to-ds-ps2/
As a hardcore gamer, I have known for some time that the XBox 360 is not flying off the shelves as MS has advertised. A lot of shareholders are also going to be sad when Halo 3 ships and there is no significant increase in sold units. The majority of people that play Halo 3 already own the system due to Gears of War.
"If LisaB were to be interviewed, what are the hard, unanswered questions you'd want posed to her?"
Lisa - if MSFT is so committed to retention of its senior women, why have so many left Xbox and Windows in the last year? What tangible action has been taken to address their exit interview feedback?
MS shareholder: no, not really. I'm an employee, and so I get stock vesting every now and then, and usually sell it when the price fluctuates up above $28. Honestly, does anyone really anticipate the stock rising significantly? The P/E ratio is currently ~24.5, which is probably too high. What could make it go significantly higher other than a) a market bubble (need that like a hole in the head) or b) a really huge--like billion$--jump in profit. I don't see the massive profit leap coming *ever*, UNLESS--and this is verrry sketchy--there is a big, big new market niche discovered. With Google pulling in some billions I can see the attractiveness of search advertising revenue, but it is fairly pie-in-the-sky to think they (GOOG) will all go on vacation in the Bahamas while we catch up. I can understand--though not agree with--the pursuit of gaming console as a hoped-for breakthrough market.
Put another way: if you want a little less risk and similar performance, buy a utility stock.
To pile on what others have said about feature releases: in Windows Sustained Engineering we have outsourced W2K and XP/W2K3 sustainment to offshore vendors and Microsoft's India dev center. Just properly staffing those whole teams, each like a small company in their own right, has been very tough. Splitting various features into mini-releases essentially creates a multitude of sub-products, each of which we would have to guarantee works properly with all of the other components of (Windows, Office, whatever). You get a huge combinatorial explosion of testing work to verify the different feature versions, different languages, etc. all work. And that is without any consideration for problems with hardware (3rd party drivers, etc).
I bet customers, if asked, would think the quick shipping cycle sounds great. "Microsoft writes a new super-widget, and I add it to Office 2008.Oct.31, cool!"
We see a huge backlash now whenever we release something that breaks our customers, and feature shipping would massively increase the risk.
"The majority of people that play Halo 3 already own the system due to Gears of War."
I don't really think that's the case. GoW sold *only* a million copies in two weeks. But Halo 2 sold *2.4 million copies in its first 24 hours on the shelves*. I think that many of those who are anticipating Halo 3 are waiting for its release to buy an Xbox 360.
I'm not weighing on the Xbox debate here, but make no mistake: Halo 3 *will* be a hit of Herculean proportions.
I'm currently a shareholder. I'm converting all my 401k MSFT to index funds, and soon I'll convert all my ESPP to index funds too (but haven't yet due to tax consequences). It's a logical switch as it reduces investment risk and the 1, 2, and 5 year performance of certain index funds have beat MSFT.
Richard, are you eyeing a PM role?
>> Keeping a medium-sized team simultaneously focused on
>> powertoys, v1 servicing, v1.5, and v2 must be a strain on management.
This is something only a PM could say. Grunts in the trenches get completely hammered by doing four things at the same time and you worry about management! WTF dude?
As an ex-blue badge working in Corporate Finance who left about 2 years ago, I have to ask - what are you people thinking is going to make the stock price go up significantly from here? Every incremental dollar the company earns is less profitable than the previous because the areas that are really growing (relatively speaking) all have lower (or negative) margins than the company average. So how does the stock move significantly from where it is currently? Let me tell you - it doesn't. And Steveb knows this which is why all the cost cutting is going on, but even that can only go so far.
All big market cap companies face this problem at a certain point - a large cap company like MS can't double in market value, let alone grow by any significant percent without something fundamentally changing (significant new Windows/Office like product, large accretive acquisition, etc.). No signs of anything like that happening I'm afraid, mainly because 1) that would require true leadership, 2) they are very rare and 3) the government would never let it happen due to MS's monopoly status.
So for those of you who are holding on to those shares in hope of significant gains, better off to sell now and invest in something with more growth potential. I sold as I vested and did pretty decent compared to everyone else around me who held and watched those paper profits dissappear. Time to stop drinking so much of the cool-aid and face the harsh financial reality of MS - it just ain't a growth company anymore folks.
"One team that does the continuous innovation really well is Search."
Please, the Search team can't be considered a shining example of anything.
With &@^% near unlimited resources over the last 2 years, the Search team has managed to cut market share by 50%.
Then comes partnering with Search. Pain hardly describes what it's like to work with that group. We finally resolved our 'integration' problems with Search by having one dev's assigned to checking the weekly search prop's to find and fix the weekly breakage. They have no idea what 'Partner' means.
And before you call BS on this, explain to me why Search does not provide an INT (partner Test) environment where partners can test Search changes BEFORE they are released.
>> This is something only a PM could say. Grunts in the trenches get completely hammered by doing four things at the same time and you worry about management! WTF dude?
I'm not going to whine about its affect on me directly because (a) that's not my style (b) I'm in a rather unique role that's insulated from a lot of the release churn & context switching. I'm sure it takes a toll on my fellow ICs as much as anyone; they say as much. But my analysis of the hallway conversation leads me to believe it's just your average small-talk, sharing equal time & interest with other perpetual topics (slow network perf, idiot drivers on I-40).
As for management, the statement "I don't envy them" applies generally -- I sure as heck don't want to be one anytime soon. However, this line of thinking was primarily influenced by observing the things piled on my lead and his peers. When it comes to translating the grand visions of divisional / PU management into reality, IMO the leads are where the rubber meets the road. My boss especially does a ton of IC work while trying to mentor 6 directs, many of whom are brand-new to MS (and the USA). Not all leads have that kind of IC responsibility, granted. But they have a solid track record when it comes to shielding us from all the randomizing requests of this large org (schedule complexity chief among them) during milestone crunches. The flip side of my new role is I don't get that shielding anymore, so I get to see how draining it can be.
PS - I have no idea who you are. Dragging my job title out of the GAL and making it a topic of discussion here comes off kinda creepy.
I have to ask - what are you people thinking is going to make the stock price go up significantly from here?
Well, Ballmer said Microsoft would grow by one Procter and Gamble in 5 years (and that was more than a year ago). One PG is like $18-$20 addition to MSFT stock price.
Ha-ha-ha!
Lisa - what action has the BOD taken in response to the widely publicized verbal and physical threats steveb made to markl when he announced he was leaving MS?
This threat was implicitly directed at all MS employees, since all employees being at-will have the right to leave at any time. It is simply unacceptable for the CEO to physically threaten employees wanting to leave.
In terms of incremental upgrades to modular OS components:
Buggy, overly patched operating system = overwhelming compatibility issues = enormous "testing" workforce = no real way to do it.
Put another way: if you want a little less risk and similar performance, buy a utility stock.
Enron was a utility company.
Want diversification, try these:
Vanguard Total International Stock Index Fund (VGTSX)
Vanguard Total Stock Market Index Fund Investor Shares (VTSMX)
I cashed out my remaining shares a couple years ago when I felt that Microsoft had pretty much grown as big as it would ever be and everything else forward was slow decay. The final straw for me was the Xbox fiasco. The fact that the whole mess has not been killed off indicates there is something fundamentally broken in the top levels of the company. I would love to know how this basket-case of a project continues to be allowed to continue.
If Ballmer were to go, disasters like the Xbox stuff were killed, continued cutting of waste leftover from the high growth days, and someone at the top with a realistic and long term plan on how to hold on to the OS,server,office software markets in the increasingly open source/open document format computing world I could see MSFT becoming a good investment again, but never anything like it was back in the 1990s.
"If LisaB were to be interviewed, what are the hard, unanswered questions you'd want posed to her?"
Why doesn't HR fire Ballmer? Thank god the real conversation moved off insidems and back to Mini. LisaB is a shill for the Ballmer Boys Club - if you see how she is bonused vs. the other execs you know her true rank and value in the company. Unfortunate, because I see Ballmer and his lieutenants as a liability. I think people with that much money can shrug off any eventuality - "I'm as rich as croesus. If Microsoft crumbles, I'll walk."
If the industry didn't have a built-in antipathy toward Microsoft, I would rate the stock a buy. As it is, I know that if Google Office picks up steam, or if Apple builds Leopard for the PC, then the market will go roaring onto those platforms. The loss will clearly offset any traction we're able to gain. No new hires. Sell your stock.
Two comments:
1) Outlook--What a joke. GMail can search gigabytes of e-mail in a couple milliseconds but my dedicated PC takes 2 minutes to search 100 MB of e-mail. WTF??
2) Frequent updates--In the Unix world, everything is modular enough that nobody really thinks twice about upgrading their programs to minor new releases. With Microsoft software, everything is so monolithic and interrelated (by design, too) that you make a small change to anything and it could result in years of tracking down small unforeseen side effects. I doubt 3 (or 6, or 12) month release cycles are possible.
One team that does the continuous innovation really well is Search.
There were very interesting questions in Satya's all hands meeting today. One was how do we keep up our investment with google, like money spent on servers and acquisitions. They seemed willing to answer this question. Then the next question came, how about people investment, how we are going to do to retain people. The leadership team looked at each other and nobody wanted to answer this one. Then Satya tried to deflect the question (head count not an issue; quality of new hires not an issue - we are hiring very competitively). In the end he did not answer the question how to retain people - nor do I think he could.
I wrote the "order up" comment in Brummel's blog because I really was sick of the condescending tone that the executives/partners used in addressing comments written by the "regular folks".
I understand that the tone of the blog is conversational, but Brummel's "tone" reveals a lot about her true personality, don't you think?
>"It is simply unacceptable for the CEO to physically threaten employees wanting to leave."
Or to throw chairs across the room or to use the words fucking and pussy in conjunction with the words `I'm gonna kill that [exp del] [ref google CEO].
So, I second the question, 'Why doesn't HR fire Ballmer?' except for the obvious answer which is: Lisa dare go into a cage with a 900 lb insane gorilla, holding only a whip and a chair to prod him out the door.
Snappy H. Hosier
I’m not, I sell my ESPP the day are deposited in my account regardless of the momentum at that time, same for stock grants.
I still have a little in my 401K & options that I plan to sell when the price goes back to 30 or in sept./oct. before quiting.
I've learned my lesson a couple of years ago with MS stock (I didn't loose much $ in absolute terms but an index fund would have been a much better investment for the past ~6 years)
RE: Order Up posting
What can we do as employees against the attitude reflected in that "Order Up" thread? It's obvious that continuing the dialog there is pointless. And while this still isn't the right forum for those discussions, what is? Are we back to water coolers now?
Anybody up for registering the insidems2 or insidemsagain names?
What about OURinsideMS? Personally, if the point of HR is to be an advocate of the employees, we're getting a bum deal. (Yes, I know "Corporate Confidential" and all that. But isn't there an alternative? It doesn't HAVE to be this way, does it?)
Now at quick point to be back on topic...I hold my stock because it's too much effort to sell it. The grants I have are hardly worth the effort of converting anyway and the options are so underwater they needs SCUBA gear. Might as well cross my fingers and hope.
From I'd rather be Microsoft than Yahoo :
"Time will tell, but at this very moment I’d rather be Microsoft than Yahoo.
"Microsoft is still a leader. They rule the OS space, they rule the corporate desktop. They remain influential in many areas. They may not rule the web, but at least they remain leaders in very profitable spaces. And they have $40 billion in the bank."
I was an employee and now a share holder. My cost basis is $4/share and the original price has been paid for by the dividends. I am hoping the ship will turn course.
>Why doesn't HR fire Ballmer? Thank god the real conversation moved off insidems and back to Mini. LisaB is a shill for the Ballmer Boys Club
HR cant fire the CEO. The board has to do that job.
...physical threats steveb made to markl...
Read the statement...
The statement reads in part:
Prior to joining Google, I set up a meeting on or about November 11, 2004 with Microsoft's CEO Steve Ballmer to discuss my planned departure....At some point in the conversation Mr. Ballmer said: "Just tell me it's not Google." I told him it was Google.
At that point, Mr. Ballmer picked up a chair and threw it across the room hitting a table in his office. Mr. Ballmer then said: "Fucking Eric Schmidt is a fucking pussy. I'm going to fucking bury that guy, I have done it before, and I will do it again. I'm going to fucking kill Google." ....
Thereafter, Mr. Ballmer resumed trying to persuade me to stay....Among other things, Mr. Ballmer told me that "Google's not a real company. It's a house of cards."
Steveb never made any physical threats against markl. He lost his temper, called eric a pussy, said he would bury/kill google, threw a chair at his conference table, etc.
Steve lost his temper, simple as that. If you know steve, you know he can get animated at times. Thats all that happened.
Re: ...physical threats steveb made to markl...
I dare you to lose your temper and try throwing a chair while swearing in a meeting. You'll be fired almost immediately. Since when is it okay for the CEO of a company to do that?
Please read Adam Barr's recent post about buying a new PC .
To say the least - the post makes me sad and angry. But as long as straight-shooters like Adam, Raymond etc are still around - its more than an inspiration for me to stick around and fight for the company that I still goddamn believe in.
"Steve lost his temper, simple as that. If you know steve, you know he can get animated at times. Thats all that happened."
This is one of the best minimizations of bad behavior I have ever seen. That is not adult behavior. It's really not even adolescent behavior. The guy has issues-- and if you don't think those issues are translating into steering the SS Minnow, I mean SS Microsoft aground, you're blinded by your rationalizations.
This company is such a mess on so many levels.
Because our customers have told us LOUD AND CLEAR that they don't WANT new things delivered through these channels that frequently.
That's because YOU have screwed your customers many times with patches that cause regression problems due to YOUR products being showcases of brittleness, tight coupling, and complexity. Fewer patches from you means corporate IT departments have a chance to catch your latest goof in time.
We moved from weekly patches to monthly patches based on this feedback. Most customers want a very small set of updates published, so they can target their testing.
See above comment. It's not that we want our MS products updated sometime next year because we don't like to be up-to-date; it's that you can't be trusted - based on your record - to do it right every time.
If we were updating the OS on a monthly basis, the matrix of supported "versions" of the OS that we'd have to test on would be mind blowing.
There's no simple answer, admittedly; but a huge part of this problem is due to your overly bloated, integrated product designs.
Also, only a small fraction of the updates we publish ever make it to Windows Update. We need to limit that channel to important updates only.
One piece of the headache of dealing with MS (never mind practically indecipherable licensing etc.) is multiple channels for info, patches, downloads, you name it. I think Update already differentiates critical vs. optional; don't be so arrogant to think that your customers can't figure it out, esp. if you provide good, SIMPLE filters (critical, optional, hardware are good starts)!
When Update included other products besides Windows (e.g. Office, SQL Server, VS2005) that was a blessing for CUSTOMERS. But, who knows, maybe you'd want to roll that back too, since some people apparently think it's good to waste customers' time by forcing them to hunt down downloads, info, etc. in the myriad disconnected maze-silos of Microsoft since you're apparently not able to come up with simple tools (this is why Google is eating your lunch) or trust your customers.
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I sold all my MS stock a while back. Made a profit, though not as much as with any of my mutual funds. See no reason to buy any at this point, because in all frankness, the great products at MS are far outnumbered by stuff I just don't need in my life, too much expense and pain and complexity for questionable (at best) benefits.
"My cost basis is $4/share"
Good call. The folks who rant here (like me) run a cost basis of closer to $27.
One of the reasons why I am holding on to Microsoft is that it is a great forward looking investment - close to the bottom of its valuation, yet an enterprise with very healthy cash flow and low cost of revenue.
Windows and Office will continue raking in the cash, while the big bets either succeed or fail. I see it as positive that we can execute our bets without having to raise new capital.
I am more bullish on some of those bets (xbox, iptv, home server, office servers) than you guys - MSFT does lousy marketing on the home front, but it's a great way to watch once you figure out how to hook an xbox up to your home media center and home server.
One of these days one of the bets will pay off big time, and that's when stock's going to jump.
Meanwhile, all the ugly litigation is closing down, the base line is sustained, and we could afford to double dividends whenever we feel like it.
So, comparing to the field: we have a healthy valuation for current p/e. We're at the beginning of selling a number of major new products. We have some interesting bets lined up. We have no debt. We could operate on no income for the next five years (full product cycle) if we had to. Makes us stick out from the competition in a positive way, well enough for me to hold.
Steve lost his temper, simple as that. If you know steve, you know he can get animated at times. Thats all that happened.
Well, besides his temper, he also lost a very senior engineer. I don't know MarkL well enough to be 100% positiive, but I'm pretty sure the reason he left had more to do with what Microsoft had become that with what Google was or wasn't.
We're losing people who can actually build products because those people are losing internal battles to brown-nosers and yes-men.
>"Steve lost his temper, simple as that. If you know steve, you know he can get animated at times. Thats all that happened."
So why does Balmer own MS stock? To keep his job.
I lost my last job (i.e., was fired from) because I said "this is fucking bullshit" to my boss (note, not 'you are full of ...') Happens all the time. Words usually get you fired. Throwing stuff always does, unless you are CEO and control a lot of company value in the form of stock.
Balmer is still at Microsoft because he is CEO and owns more stock value in Microsoft than the gross output of most nations, and the board doesn't have the balls or intellectual acumen to do its job.
And yes, it is fucking bullshit and welcome to the real world.
William F. Zanzinger
Steveb never made any physical threats against markl.
Employee walks into the office of his boss. Employee tells boss he is leaving, and joining Company X. Boss responds with violent anger, jumps up, throws a chair across the room, swearing wildly about the company and threatening violence to the company "I'm going to kill Company X, I've done it before, will do it again"
The action of the boss here is by it's very nature both a verbal and physical threat to the employee, and by extension, all employees of Microsoft.
Of course, you can disagree but it's not you that will decide, it's a jury that will. I very much doubt that MS would want the highly public nature of such a trial. Further, I suspect it would not be hard to find a jury that would disagree this is physically threatening to both markl by extension any and all employees of MS.
Of course, until a law firm tests this we will not know the answer...
The BOD has a responsibility here. HR works for Steve, they are not going to act. They probably feel threatened as well. In fact, if the Board does not act, they can be found culpable by their very in-action. Either they act, or the suffer the consequences of a very public and expensive law suit.
Steve lost his temper, simple as that.
In the real world, if you're in a meeting with someone and what you say to him is apparently so incendiary that he is throwing furniture, it's reasonable to feel physically threatened.
In all the office confrontations I've witnessed, heard about, or been involved with, there has never been any physical violence of any kind. If there was, someone would (rightly) scream bloody murder and press charges, because it's not acceptable corporate behavior no matter what special allowance you want to make for someone's famous "temper."
Steve lost his temper, simple as that ...
Don't punish the stock further by apologizing for the "house liability". If Ballmer want to toss chairs he can toss them straight up so when they come down they land on or near the only pussy in the room.
Long-short, Ballmer is a bully. When you have a monopoly, you're in a position to bully. That "comfort zone" is going away for Ballmer. Soon the industry will judge the wisdom of his decisions under competitve pressure. That's when the real entertainment will begin.
At this point, I feel the Ballmer + Chair Throwing discussion is a bit worn out. If MarkL has anything to add, fine, but let's move on.
Anonymous, at Friday, April 20, 2007 1:57:00 PM:
"All big market cap companies face this problem at a certain point - a large cap company like MS can't double in market value, let alone grow by any significant percent without something fundamentally changing (significant new Windows/Office like product, large accretive acquisition, etc.). No signs of anything like that happening I'm afraid, mainly because 1) that would require true leadership, 2) they are very rare and 3) the government would never let it happen due to MS's monopoly status."
You really nailed it. This is why Microsoft keeps jacking up the total number of employees. It is doing dozens of new projects in the desperate hope that one of the will hit the jackpot.
It is also why the recent trend away from drm is such bad news for Microsoft. Locking the media world into Microsoft's brand of drm was the one realistic hope for establishing a massive new monopoly, and one that would protect its old ones.
Back to stock discussion. MSFT PE==24.59??
Just look at these figures from MSFT's financial highlites:
Sales* 46.06 Bil
Income* 11.91 Bil
Sales Growth* +11.30%
Income Growth* -28.10%
Net Profit Margin +25.86%
The BOLD numbers are due to charges from Vista free upgrades from buying XP laptops. This impact won't happen this quarter so I would think the real PE is ~20.
With DOW so close to 13k, it will sure cross the 13k boundary next week and together with it is MSFT testing $30 again. Thursday after hours MS will announce their quarter.
Why do you think MSFT goes from 27.7 to 29 in less than 3 weeks time (Apr 2nd to Apr 20th)?
Growth Potentials?
The fact is that MSFT is still a cash generating factory. You can say that Vista/Office don't grow by much. Growing less than 10% is pretty darn good.
Server & Tools - Windows Server, SQL Server and Exchange are growing profit almost 15-18% year over year. Even Biztalk is approaching 100 million soon.
Xbox 360 - hey, the initial cost of marketing/dev has been charged. Now it's getting closer and closer to profit.
Live/Search - this is a needed investment to keep pace with other guys. Looking at MSN's figure, we lose market share but do you think MSN or YHOO is losing more to GOOG. I frankly think another 2 quarters of bad results YHOO is up for bid.
The thing about investment is never pay anything full price.
AAPL $91???
GOOG $500???
These guys are fully priced in. Look at GOOG, they are not going anywhere for the last 6 months.
MSFT to me is 25% discount right now. Buy at a bargain, not when it's fully hyped out.
"William F. Zanzinger"
The dude who killed poor Hattie Carroll posts here??!?
WhodaThunk it!
Steve lost his temper, simple as that. If you know steve, you know he can get animated at times. Thats all that happened.
Sorry. I should have signed this one -markl. I didn't feel threatened at all. Steve simply lost his temper. That evening, I called Eric to tell him that me joining Google might focus Microsoft a bit on Google and if he didn't want the heat I would bow out.
Any, I wrote the comment to dispell this notion that Steve somehow made physical threats against me. He did not do this. I did not feel threatened in any way.
If Microsoft's BOD wants to let Steve go it should be for mis-managing the company. I don't know if this has happened or not. That has nothing to do with why I left.
I left because I am an engineer and want to write/launch code and wanted to learn services in a real world environment. Google offered this opportunity. Microsoft did not.
And finally. Yes. I am still a shareholder. Not because I think Microsoft will experience an explosive growth spurt. Instead because I am lazy and my ESPP that I purchased over the years is all I have left.
-markl
Xbox 360 - hey, the initial cost of marketing/dev has been charged. Now it's getting closer and closer to profit.
This comment might make sense if Xbox360 was a software product being replicated by disk image copying ontoi OEM hardware. It isn't.
Every Xbox 360 costs some real money to fabricate, assemble, test, and ship. As long as we're pumping hardware into stores at a net loss per unit, the time to recovery on the investment floats further away, unless users start buying a lot more games per machine than they are now.
Common wisdom is that a console generation's lifetime is about five years. Will Xbox 360 and the games sold for it turn anything like a net profit before being retired for the next generation? Xbox-1 didn't..
http://ce.seekingalpha.com/article/32642
I respect MarkL for his work in MS. I don't hold a grudge against him for the mess Hailstorm was and how I wasted 18 months of my life designing my products to use what was a misplaced adventure at that time. We could only whisper our concerns about Hailstorm but someday the din was loud enough and the blank check was withdrawn. The aura that makes some people untouchables in MS sometimes wane, only that it does for the wrong reasons - like not being the beloved son anymore, or pissing off the wrong clique.
I wish the aura cloud surrounding many more Windows heavyweights could meet such fate. Yes they were great in the past but even America is having a tough time leading the world based on her past glory. Now these heavyweights are bent on frustrating SteveSi's efforts because he is gradually dismantling empires block by block with his trio model.
Not that I am counting but MarkL has wrapped up 3 years at GOOG. I am yet to see a shipped GOOG product with his stamp on it. Hey he pointed out the lack of agility in MS - which was true, hence the comparism. I hope all that deep low level expertise of his has not been exchanged for some script kiddie work at GOOG. The dude is way too smart for that kind of stuff.
MSFT is no longer a growth story. It is an established stock-- for conservative investors who are pleased to have dividend payouts. There's nothing wrong with that, unless, of course, you're jones'n for the next explosive thing.
I believe the next big thing is already here-- personal tech like the iPod and perhaps the iPhone. If this is true, MSFT has its work cut out for the foreseeable future. Personal tech buyers ≠ business buyers. This probably means that MSFT ≠ growth stock because, well, business folks already have it the Microsoft way-- good enough.
Consumers, though, don't want good enough, they want amazing, cool, emotionally-resonating, and life-enhancing gizmos. They are an IT department of one. It needs to work and work well from the moment the box opens.
This is not MS's strong suit.
I predict iPhone is going to kick some major butt. Then, as has been mentioned on this blog before, MS can do what it really does do best, be the conscientious follower. There will continue to be piles of cash. Funny to say, but... so what?
>WhodaThunk it!
Beware the troll.
Steve's a great guy and has made us all rich--can't wait to see Africa from space.
Stay on topic.
M. E. Sterbil
Every Xbox 360 costs some real money to fabricate, assemble, test, and ship.
Everybody knows there are no margins in hardware. The Xbox is only intended to be an onramp to all the downloadable goodies that can be charged for. Xbox is the razor. The blades are no doubt on the way.
MSFT is no longer a growth story. It is an established stock-- for conservative investors who are pleased to have dividend payouts.
MSFT dividends aren't big enough to please anyone. We're still running the stock as if it were a growth company. As with so many other things these days, MSFT leadership doesn't know what the company's strengths and weaknesses are.
Xbox is the razor. The blades are no doubt on the way.
That was the (unofficial) idea with Xbox-1 but all it did was lose money and get replaced.
If your business model is razor blades but you sell razors before you even know what the blades are, you're an idiot. You have half a business model. What guarantee do you have that you'll even think of the other half? And if it's so hard to think of, it's probably not going to be simple or very good.
No margin on gaming Hardware? Perhaps you should take a look at Nintendo who make near 50% gross margins on their console and handhelds.
>"Everybody knows there are no margins in hardware."
You forgot to add "when you build me-to products, have it made by someone else, and don't have an original product design concept idea among 70,000 employees, because they make software not hardware."
The 'blade' is original thinking, not leveraging/forcing some poor kid and his parents into buying a piece of junk that is obsolete before it is shipped, conceived to be a computer for the living room in disguise and cannot hope to keep up with what your customers might really want: choice.
http://biz.yahoo.com/rb/070423/advertising_rankings.html?.v=5
>Mini said: ". . .and some fellow gets on talking about Microsoft: "Lumbering..." he starts off with. "Dinosaur" he adds."
Have you ever heard the proverb about the man who looked in the mirror and forgot what he looked like when he turned away?
Another said: >"MSFT to me is 25% discount right now. Buy at a bargain, not when it's fully hyped out."
There is someone who understands the dynamics of what is going on.
A few more notes from the user base:
Where are you going as a company? IBM or Sony? a)seeped in research, commercial services, cutting edge component development and a long term vision of the future or b) making stereos, Walkman players, game consoles, computers and Spiderman, selling directly to consumers.
Trying to do both is making the company implode with a weird kind of corporate schizophrenia.
Here is another thought: Microsoft is about software coming alive in everything those other companies make. It has nothing to do with Google or Apple and is served by no one else on a universal scale. Nor does that self have anything to do with Vista. Once you figure out who you are, MS, the rest will follow.
regarding updates:
don't be so arrogant to think that your customers can't figure it out, esp. if you provide good, SIMPLE filters (critical, optional, hardware are good starts)!
It's not arrogance. I know for sure that customers don't take the time to read the info. I think the idea of optional updates showing up by default is probably a mistake. If people want to opt-in to see that stuff, that's fine. But the masses don't need it.
Content gets pushed out by mistake every now and then. People don't take the time to read the details about what it is, they just go install it. Even if a small percentage install it, it's still hundreds of thousands of people. Our newsgroups and web forums are full of posts from people that have done this.
When Update included other products besides Windows (e.g. Office, SQL Server, VS2005) that was a blessing for CUSTOMERS.
I definitely agree. I don't know why you thought I'd want to see it roll back.
I agree that there are too damn many places where our software is posted, and it's difficult to find the fixes you need.
Quote: "Anyway, my performance is a little better but I still have strange freezes with POP, which I don't even know if it's on the Outlook team's radar."
This is "not a bug but feature". It is present in all versions of Outlook I ever had to work.
This is feature of the same kind as Outlook automagically converting your e-mail into some internal format which can be read only by Outlook. And has about the same age as former.
All people around the world "enjoy" the features of Outlook every day.
[/sarcasm]
Frankly, the frigging bugs persist in all versions of Outlook, so people just got used to them.
Cannot send? Ha! - POP receive hanged - restart Outlook and try to send again. Or try to close the POP receive windows - but generally, killing Outlook is much faster than waiting for Outlook to close the hanged window. Happens every day.
Sent message is empty and has winmail.dat? - Re-open sent message, set formating to plain text, save it, close it, reopen it again and try to send again. Should work now! Happens often when replying to other's messages.
Send message is unreadable/has funky encoding? - Re-open sent message, copy content to e.g. notepad, set in options to default to UTF-8 encoding, create new message, paste content from notepad, ensure that message has UTF-8 encoding, try to send now. Happens often when replying to other's messages.
From an interview with Joel Spolsky at http://www.foundersatwork.com/joelspolsky.html. The last two paragraphs are the most interesting...
Livingston: Who did you learn things from?
Spolsky: Oh, everyone. I can't even begin to list the number of people who taught me things.
I was in the Israeli army, and I learned some strategy there by mistake, by osmosis. In order to avoid spending too much time in uniform, I did this kibbutz army program. It was two years on a kibbutz, which is a communal farm in Israel. They usually have industry, and the kibbutz I was on had a bakery, which was this gigantic factory that made bread. I spent almost 2 years making bread every night in this factory that made hundreds of thousands of loaves of bread. It was not artisan bread by any stretch of the imagination. It was a big, noisy bakery. There are so many things that I learned from that about how people work, how to think about working, how to manage, how an assembly line might be organized, how industrial machinery works.
But my first job at Microsoft is really where I learned the software industry. I got there in 1991. At the time, there were almost—I hesitate to say this, but—no software companies that really knew the basics of how to develop software in the way that Microsoft did. They accomplished what they did because they figured out a ton of things about how to make software, repeatedly and reliably, that people want to buy, that nobody else had figured out. And they were doing things like bug tracking—like having a bug-tracking database—that seem completely obvious, and, when you looked around, 80 percent of commercial software companies did not do bug tracking. Or 80 percent of commercial software companies did not write specifications. Or 99 percent of commercial software companies did not do usability testing.
If you were an alien and you came here in 1991 and you wanted to learn how to develop software, you would learn ten times as much at Microsoft as anywhere else, I think, because I watched these companies kind of flail making mistakes. There were things—really basic things, that companies did not know. Microsoft knew that loading a segment register on the 386 was a very time-consuming operation, and therefore on the 386 architecture you can't use far pointers unless you absolutely have to because it's extremely slow. Borland did not know that. Result: Microsoft Access loaded in 2 or 3 seconds; Borland Paradox for Windows took 90 seconds to get running. Because of something that Microsoft knew that Borland did not know. And that's one of a million examples.
Now Microsoft has forgotten all these things, and they've hired a lot of morons that don't know these things anymore. I think that now Microsoft is kind of a big tar pit where you can barely move forward because there's so much bureaucracy. But I learned a lot.
Livingston: There were only 5,000 people back then, right?
Spolsky: Right, 1,000 of whom were developers. 200 were program managers. I was a program manager. I was working on Excel, which was really at the heart of the company, other than Windows and DOS, so it was really cool.
>"Content gets pushed out by mistake every now and then. People don't take the time to read the details about what it is, they just go install it."
You softies are so out of the loop of what effect your updates, process, and format is having on customers it boggles the mind. Don't you ever talk to customers? (probably you really don't want to know.)
Standard Procedure among my friends and me is: Buy software/and or computer--use system for a while--tweak and it works--think for a moment, update--ok--update--crap begins to happen--can't find the source--uninstall all updates--crap still happens because everything doesn't really uninstall--format hard drive--start over.
And that is what informed users do. Imagine what Joe sixpack and family go through.
I am so so so pissed off right now, I have quite a few options that I did not sell off when they were buying off underwater options. I foolishly expected the stock to rise above $31, but instead it went down after Ballmer's stupid comments on earnings. Now I've got nothing at all to show for my 8+ years at Microsoft. Ballmer should compensate us all out of his billions.
That's hardly a new or unique spin on the meaning of "stakeholder". It's pretty much the Business 101 definition...
I didn't take business 101. I trust you that this isn't new or unique. What it is, however, is relevant.
There's an interesting conversation here that this anonymous comment kind of shut down with a somewhat passive-aggressive "that's nothing new" grumbling comment. It's precisely the kind of comment that's part of the problem, rather than part of a solution. A cleverly tacit message: "I have nothing to learn here--I already know this stuff."
For years I've read of the stock conversation that centers around shareholder value, as if that were all that mattered. What does Microsoft want to do for its community, employees, customers, stockholders, partners (external), partners (internal), community, nation, world? What's the next vision?
Microsoft may be caught in the situation described in Clayton Christianson's book The Innovator's Dilemma. This is when a product that dominates a market is undercut by a new product that takes out the bottem of the market and then works its way up.
According to David Berlind, Google Apps is doing something like that to Office.
http://blogs.zdnet.com/Berlind/?p=437
Underwater again
7 years and the stock hasn't been able to hold even a $0.01 gain.
Sad and telling
When Gates saw that Google had reached critical mass he gave his two year's notice. He will be out of Redmond by the time the big shells hit (Google Apps). Ballmer has taken a different tack. I don't think he's ever sold a share. Perhaps because he sees a bright future and just plain loves this darn company. Or maybe because each share comes with a voting right, and its tough for the board to oust a majority owner. Stay tuned.
I foolishly expected the stock to rise above $31, but instead it went down after Ballmer's stupid comments on earnings. Now I've got nothing at all to show for my 8+ years at Microsoft. Ballmer should compensate us all out of his billions.
Yeah, and at the company meeting sometime around 2000 (may have been 2001) he asked if we thought the stock price would increase over the years, and proceeded to say he sure did.
Buffett was right about technology. Its fun when you get in on the ground floor, but erratic otherwise. There is the excitement of working for a pimply faced kid who clobbers IBM, the launch of Office, the launch of Win95, the ruin of Netscape. It seems like every technology company has its big day followed by an attendant hangover. Right now we're reaching for the aspirin.
Now I've got nothing at all to show for my 8+ years at Microsoft.
Hmmm... You must not be a partner. It's good to be a partner. They have 8m+ to show for their past 8 years here.
>You softies are so out of the loop of what effect your updates, process, and format is having on customers it boggles the mind. Don't you ever talk to customers? (probably you really don't want to know.)
I think you completely missed my point.
Can you please clarify what you're trying to say here?
What is wrong with the update process? What is wrong with the update format? How would you make it better?
Can you please clarify what you're trying to say here?
It's somebody else's comment, not mine, but I think I know exactly what he/she is referring to.
You can't trust incremental Windows upgrades (be they OS or app upgrades) because they routinely screw up your configuration in a way that cannot be easily undone.
It seems like this happens because of the porous nature of Windows, wherein everything is cross-patched and micro-integrated with everything else (including layers and layers of legacy compatability) so that there's absolutely no way to be certain that (for example) upgrading Excel won't destroy your ability to print from Word, or that installing a scanner and the scanner software won't make a game unplayable or ruin the preferences in WMP or something else.
The poster whose ambiguity you're complaining about is talking about this problem. You upgrade something; you break something else; you try to remove the upgrade; the uninstall process misses something; now you're screwed and you have to pave the drive and start over.
The poster suggests that this happens far, far more often than anyone at Microsoft seems to realize, and that, for those of us capable of doing what I described, it's merely an unbearably tedious an