Sunday, January 04, 2009

The One Before Microsoft's Showing at CES

Okay, time to take a break from all that rumor craziness. It was an... interesting couple of conversational sparking posts. It certainly boggles me to think, beyond rolling up well designated rumors and speculation from commenters here, that you can even have FUD in your name and still get wide-spread journalistic copy. Oy.

If you want to continue to dive in on the rumors and speculation about any cut-backs at Microsoft, feel free to do so on the last posting on it. And remember that Blogger provides a comment RSS stream if you want to keep track of any comments come in on a particular post (like the last one - and yes, you've probably noticed that my moderation eases up after 100+ comments on a post).

One parting comment from The Field:

I think all of the moaning and finger-pointing on the "layoff" posts is a sign of what ails us; we are so self-absorbed we don't stop to think about how to delight our customers. If there are going to be layoffs, so be it. We would not be the first company to have them and we wouldn't be the last. So don't worry about the layoffs; they might happen, they might not. Keep your focus on the customer and how what you do will make their life better. With that focus, you just might find that your life gets better as well.

On the topic of focus, how do you think 2009 is shaping up for your group at Microsoft? Microsoft writers looking at 2009:

This week kicks off CES and Microsoft is under the microscope. And come this Wednesday Mr. Ballmer is going to be given special attention since he has assumed the kick-off CES keynote mantel from Mr. Gates during a time when the company numbers aren't looking good: Vista deployment, Internet Explorer market share, the Yahoo! gambit, search market share, Zune adoption + leap year issues, Wii sells thrashing Xbox, XP licenses still being very popular, PC gaming and consumer software declining, obscure ad campaigns, confused branding, and who-knows-what Ms. Nellie Kroes is up to (she's been vewwwy quiet - too quiet). Oh, and don't forget the iPhone buggering we're taking. And of course Microsoft stock and the whole global economy.

No where to go but up? Opportunity certainly abounds.

This is our chance to show-off, show some humility and respect for our awesome competition, back our partners, and build confidence in Microsoft 2009.

Windows is the foundation for the company and Win7 is the foundation to our 2009 and 2010. I'm not going to hype it up (because I think we all agree that overselling is a really bad idea) but I feel really good about Win7 as a sane, solid operating system release.

Looking at the 2009 Microsoft links above, I have to disagree with Ms. Foley regarding Microsoft over-investing in the consumer experience vs. keeping the Enterprise and IT departments happy. Sure, we need to have an Enterprise focus so that legacy systems run and deployment + patching isn't a nightmare, but if people don't actually want to use your new software, why in the world is the Enterprise going to install it?

I walk many halls at Microsoft and always stop when I see a poster that a group has put up to tout the current milestone of features. Some of those really need to have a webcam that records facial expressions about 20 seconds into reading, because I've gone through bulleted lists of application software and it is nothing but a laundry list of IT department-driven features with no obvious end-user benefit. I'm sure I have a horrified "baroo?" look on my face.

As a result, you get something like Office 2003 where the end-user feature set was so hard to describe that marketing had to resort to odd ads of people creating dog-piles of ecstasy over the release and ads warning customers that they are dinosaurs if they don't upgrade. We can't really describe what features you'll get, but at least you won't be a dinosaur... heh?

Like that point from The Field above, we need to focus on the customer experience vs. barely wired together technology which typically is redundant and confusing. At home I like watching videos stored on my Ultimate machine, and I've got about six different services running to do it multiplied by three different networked video boxes hooked to my TV. For a given video, I have to know the right hardware plus software combination. We want to own the living room, but our customer experience is mentally and physically scattered between Media Center, Xbox, WMP, Zune, and partner media boxes. I love Media Center and I think it should be present in all SKUs of the OS (excluding good ole N) but with something like the Fuji release I get pretty concerned about where it's going. Around the consumer experience we need coherent focus, not a scattered competitive model.

I've asked before: Where's Ray Ozzie? Now's a good time to ask: Where's J Allard? He's our CXO and the champion for the delight we should be bringing to the customer. Will he be front and center as part of CES representing the Microsoft experience? And if not, why?

What is your take on Microsoft 2009 and on a consumer focused Microsoft?


198 comments:

Anonymous said...

I could care less what Mary JO Foley and other bottom-feeding "journalists" think of our company direction. All they do is get leaked screenshots and leaked schedules, and pass around info from blog posts (like the past couple weeks' layoff rumors). We'd need half the PR people we have if it weren't for them.

Anyway, the way to see a consumer-focused MSFT is to actually have one that derives a majority of its income directly from consumers. We haven't cared about end-user consumers for years b/c our main customers are OEMs (so we get a view of end-users filtered through them) or international Enterprise customers. If every individual end-user stopped buying a copy of our software or hardware off the shelf for a year, that wouldn't make a tenth of the dent it'd make it we lost one of the major OEMs, or the dent that is being made right now by losing SAs with major corporations.

We spend too much damned time being insecure about not being as cool as Apple, and have enough money from Office/Windows that XBox can continue to lose money while it waits for PS and Wii to make a mistake. We don't have the creative team to create an entirely different category of device, service or software, which is how you'd see a true consumer-focused MSFT emerge. As long as we continue to copy, mimic or lag behind others in existing markets, we'll never make a mark.

Anonymous said...

RE: Xbox 360

Focusing purely on console sales is missing the bigger picture. Yes the Wii console outsells the Xbox 360 console. However there is more to this business than the consoles, there are accessories and most importantly the games. In both of those categories the Xbox 360 leads both the Wii and PS3. When you aggregate the total revenue across consoles, accessories, and software the Xbox 360 continues to lead the Wii and PS3, primarily due to higher attach rates for both accessories and software.

Anonymous said...

Who will bring Sexy Back?

The biggest challenge we have is delighting our customers and building a "hip" brand. We have become something like an IBM or a SAP; we need to be more like a Apple and Google.

With browser, desktop and search share slipping what are we to do?

Well, with our deep pockets (perhaps not so deep anymore) and our perennial dominance on key user touch points; we still have a shot to turn things around.

We need to design our desktop story around UX (Apple has built a OS around leveraging existing platforms but innovating in UX. You don’t need to have a cooler thread scheduler, just make my Windows Mail work with Live Mail!). W7 is making headway, but it is still not as intuitive. I would give a B.

Xbox is key in retaining the youth audience and building a relationship with the next generation. We need to keep taking names here. I would give us a solid B+. (We can come from behind guys)

Mobile…sigh…again, we need to focus on UX, UX, UX. Have you used an IPhone? It looks like an artifact of the future when compare to WM6. Sorry, I have to say C.

Server is our success story. SQL and Windows server have turned around the treat of *unix as server platform and Or@cle as db platform. You guys rock!!! A+

Ok, now to something close to my heart….our online business. So while we have to acquire almost every company with an Ad in its name, we still are not able to move the ball. We can have the best dance moves, but if no one is watching…well… We need to stop following Google, and change the game. Give advertiser a better way to spend their ad $ than on Search. It’s almost an easier problem to solve than trying to catch up from 8% query share. (Barring a Y! deal). Many wonder why we are in this business, but in the end of the day, its software that match advertiser with end users, and while this seems like a trivial problem, the scale of it makes it a prevue of the few. We should continue our investment in this space, but do it with more smarts than “monkey see, monkey do”.


Overall, we need a revolution, we need vision, we need to be inspired, we need passion….. we need a HERO.

Anonymous said...

However there is more to this business than the consoles, there are accessories and most importantly the games. In both of those categories the Xbox 360 leads both the Wii and PS3.
-
Dude, where is the money!?

Anonymous said...

RE: Xbox 360

Is the Xbox investment worth it when it has yet to pay off? Will it *ever* pay off?

What about Zune? Will that investment ever pay off?

Perhaps Mary Jo Foley is right, and MS would be far better off focusing on where their products still matter and where they still make MS money: the enterprise.

Anonymous said...

Is the Xbox investment worth it when it has yet to pay off? Will it *ever* pay off?

Is any investment worth it when it has yet to pay off? The point is that Xbox was profitable in FY08 and continues to be profitable in FY09. Clearly with a profit in the $100's of millions vs. an investment in the $10's of billions it has a long way to go to pay off the investment, but at least it has turned the corner and is now headed in that direction.

Anonymous said...

>we need a HERO.

We have many heroes and partners. SteveB, J, Ray Ozzie, Robbie Bach and so on.

Anonymous said...

Have to disagree with your disagreement with MJ over Enterprise customer focus. As someone else noted above, the OEMs and Enterprise customers are where the business is at for most of your software right now (not discounting the fine accomplishments of your console gaming efforts recently). And enterprises, and OEMs, install an awful lot of junk that end users don't want to use already. It doesn't really matter. People, astoundingly, will go to great lengths to use the crap they are given rather than take the time to find, adopt, and learn something better.

I'm not saying you can survive like that forever, but you might note that even some of the worst dreck that Microsoft has dished out over the years has seen pretty impressive adoption rates. It's not for lack of alternatives... it's because people hate change, or at least hate what they can recognize as change. It takes a long time and a lot of effort to peel people away from the familiar.

I share your optimism about Windows 7 and I think that it will go some way toward forestalling a loss of adoption which might otherwise have been engendered by a another stinker release to follow a pretty stinky Vista. If you can sell it to IT departments, users will buy it for home use, too. People tend to adopt what they are familiar with from work; businesses don't buy software because their employees use it at home. So, whether it sounds crass or not, the better business bet is to continue to pursue enterprise and OEM customers.

The real threat to you is the obsolesence of desktop based software. It will never go away entirely, and it may not happen as fast as the pundits would like, but it's coming, and an effective transition to a more services-oriented company should be the biggest thing on the strategic radar at Microsoft right now. I like some of the efforts that are being made, but whether the execution will match the promise is another question, and whether that market will ever rival what the desktop software business achieved at its zenith (also still probably in the future) is of even greater concern.

Anonymous said...

Xbox is key in retaining the youth audience and building a relationship with the next generation.

Because video games are totally like hip dude? While Microsoft has been out in the weeds pursuing its confused XBox strategy, Apple has made its operating system "cool" for kids. That's right, OPERATING SYSTEM. Theoretically Microsoft's core business. What an embarrassment.

Carl Dubler said...

We have become something like an IBM or a SAP; we need to be more like a Apple and Google.

I used to work for Microsoft and now I work for SAP. There's nothing wrong with making plenty of money on the enterprise. After working both places, I'm convinced a single company cannot win in both markets. Apple, Sony, Nintendo, etc have ZERO presence in the enterprise and MSFT, relatively speaking, has no presence in consumer (OK, there are a few small success, but not dominance in any one consumer segment). This is nothing to be ashamed of--it is two completely different markets and models. It is even harder than trying to sell SaaS software in a traditional on-premise company. Microsoft should focus on one or the other or split up the two segments into different companies. When you try to be successful at both, you end up with a room full of hardware and software to play a few videos--just like Mini describes in this post. Or on the flip-side, an underperforming Enterprise software segment (Dynamics, CRM--again, relatively speaking compared to the competition).

Murrquan said...

I really don't want to criticize Microsoft here, since I respect you all and I know you believe in what you do. But the question asked was about what a Microsoft focused on the individual customer would look like, and in asking that I think we all need to face the fact that there has never been such a Microsoft.

There have been scattered bits of happiness. I love Windows Live Writer, and I'm sure you all are working on great projects to delight their users as well! But these projects, as cool as they are, don't make Microsoft money yet. Microsoft's two big cash cows are Windows and Office, and they didn't get to be that way because people chose them over the competition. They got that way because Microsoft's tactics made them both mandatory for most people -- especially in the corporate environment, where IT buying decisions aren't necessarily squared with reality.

I don't think there can be a "consumer-focused Microsoft" until there's been a lot more pressure on the company, sort of like what happened to IBM. I'm not sure what it will look like though, because as I said, none of the "cool" Microsoft products are making much money (if any at all). They're having money thrown at them from the two cash cows, neither of which are chosen in the marketplace based on their merits and both of which are becoming irrelevant.

Maybe Microsoft will break up into smaller companies? I don't know!

Anonymous said...

>"Clearly with a profit in the $100's of millions vs. an investment in the $10's of billions it has a long way to go to pay off the investment, but at least it has turned the corner and is now headed in that direction."

Ah yes, the delusional thinking of E&D partners. Sorry to burst your bubble, but as gaming systems go, Xbox is already past a normal ROI of a year to 18 months by three and a half years, and indeed the box is obsolete by about four and a half years since its processor was already obsolete the day it was introduced.

But I guess your response would be "it depends on what the definition of obsolete is, since the kids like it".

Anonymous said...

>>we need a HERO.

> We have many heroes and >partners. SteveB, J, Ray Ozzie, >Robbie Bach and so on.

we need a HERO to step up. Until then they're not heroes.

Anonymous said...

IMO in order for a HERO (or a GM/VP in consumer division) to be successful she must be very familiar with consumer technology - as in personally, not based on random market research. Honestly, sometimes it looks like folks high in management do not own personal music players, do not build digital music collections, do not use phones for texting, navigation, communicating with friends, do not connect music players to car stereos, do not play games, never use DVRs...

Maybe the problem is that their cars have built in Nav with Bluetooth, they use smartphones primarily for corporate e-mail, have home theaters built by professional HT installers and still use CD changers in cars...

Anonymous said...

Anyone have opinions of thoughts on the progression of MS Store and the commerce space?

Anonymous said...

Question: does CES even matter any more? I mean, to anyone besides bloggers.

Anonymous said...

Sorry if I am going off-track, but I was just wondering if Visual Studio and the developer angle that Microsoft is great at is not as big a cash cow as well as I imagined it would be.

Anonymous said...

I'd like to see Microsoft recover from the Vista debacle and make Windows 7 an enjoyable upgrade from both XP and Vista.

- increased compatibility with applications
- file sharing that works well with Vista, XP, Linux, Cameras, Ipods and USB sticks
- increased troubleshooting visibilty... I can't believe how useless event viewer has become

My fear is these things are too "hard" so PM's prefer to design new flashy solutions that sound great but don't solve any problems.

Anonymous said...

I could care less...

I could not disagree more with the point that we don't create end user related features because end users don't pay us.

The dominating factor that determines a products value is not its feature set, it's the usability of the feature set. And, as a user of our products, we have much "room for improvement".

We also have the creative team to make it happen. Heck, I could hands down improve usability of three of our top selling products tenfold if someone chose to listen to me, or even pay me for such work.

The problem is, as usual, politics.

The organizations that need such help most first have to realize that they have a problem and be open to hiring headcount to take care of it.

Typically, "we don't have the kind of team" or "Joe has done a real good job with creating dialogs and he's in charge of this" are the responses I hear.

jcr said...

Is the Xbox investment worth it when it has yet to pay off? Will it *ever* pay off?

Well, it only takes what, twenty more Halo-sized hits? If you can do one of those a year for two decades, and Sony and Nintendo sit around doing nothing for that time, then sure... Xbox could go profitable.

Of course, the people who can deliver those kinds of hits aren't willing to put up with MSFT's management.

-jcr

productspace said...

>>we need a HERO.

> We have many heroes and partners. SteveB, J, Ray Ozzie, Robbie Bach and so on.

Sadly, those folks are just people who happen to be in charge but end up just sitting on top of an org throwing around buzzwords. The mark of a leader is not that they say "Yes, sounds good" to presentations from below, they are supposed to have vision and accomplish positive change.

jcr said...

Have you used an IPhone? It looks like an artifact of the future when compare to WM6.

If you think its UI is good, you should take a look at its development environment. There's a reason why there are already thousands of apps for the iPhone, and it's not just because there are a lot of customers.

-jcr

jcr said...

We spend too much damned time being insecure about not being as cool as Apple,

I agree. "Cool as Apple" is the wrong goal. MS should be concentrating on "Reliable as Tandem." If you're going to be the enterprise vendor, then your product should remind the old guys of the days when an unscheduled reboot warranted a visit from their IBM field engineer.

-jcr

Anonymous said...

Someone Anonymous said:

The point is that Xbox was profitable in FY08 and continues to be profitable in FY09. Clearly with a profit in the $100's of millions vs. an investment in the $10's of billions it has a long way to go to pay off the investment, but at least it has turned the corner and is now headed in that direction.

If you have yet to recoup your investment costs, then you haven't made a profit.

pc support said...

Xbox will naturally become profitable in th next Q2009 and will try to encroach on the Wii will battling with SOny playstation. There are only a couple of MS products that have failed ans this is not one of them

Anonymous said...

Give advertiser a better way to spend their ad $ than on Search.

What do you think the Aquantive acquisition was about? DrivePM and Atlas do exactly that. They give Publishers, large websites if you don't know the terminology, a marketplace to sell space to Advertisers as well as a third party ad network that allows Advertisers to put ads on lots of different sites and search enginers. Try going to http://advertising.microsoft.com and learn about what MS Advertising does before trying to opine about it.

Anonymous said...

Someone splitting hairs said...

If you have yet to recoup your investment costs, then you haven't made a profit.

You know what I mean, the division had a profitable year, and a profitable Q1 of FY09, with all signs pointing to a profitable Q2 FY09. Xbox has been a multi-year, multi-billion dollar investment. It has now turned the corner and is generating positive returns. Obviously it won't pay back years of investment in one year, but at least it is moving in that direction, unlike Search or even MSN in general. How much longer will we continue to fund those money pits?

Anonymous said...

If you have yet to recoup your investment costs, then you haven't made a profit.

Are you debating the semantics, or trying to say XBox shouldn't exist because it wasn't profitable from day one?

Semantically, yes, XBox wasn't profitable, and compared to what's been invested in it, may not be profitable for a decade.

If you expect every product and every division to be self-sufficient, then yes, it's a bad investment. But if you want to have position, and be a player in a specific space, to be able to take advantage of new technologies, new markets or new brands / titles as they come along (or are created by MSFT itself) then XBox is a very good investment.

Anonymous said...

The point is that Xbox was profitable in FY08 and continues to be profitable in FY09.

I love the fact that people can continue to spout the "Xbox was profitable in FY08" line with (presumably) a straight face.

Yes, we all know "on paper" it was a profitable fiscal year, but simply applying the RROD-fix costs to FY08 would wipe out that profit. And it SHOULD have been applied to FY08 as that's when it was announced and the entirety of FY07 was spent denying there was a significant problem.

Additionally, FY08 saw the release in the first fiscal quarter of Halo 3. That means the entire fiscal year saw nothing but revenue from that project while all the cost (which was considerable) was incurred in FY05, FY06 and FY07. Halo 3 was a one-time event. The 360 will never see another title sell at those levels (and, not coincidentally, that means FY08 didn't have any cost accounting to do for a similar project that was in the works).

FY08 also saw the sale of Bungie, yet another example of robbing Peter to pay Paul. So we got to see the "revenue" from the one-time studio sale, never mind that now we're paying through the nose for future projects from Bungie (which is why, even if Halo 3 Recon did Halo 3 revenue numbers - which it won't - it still wouldn't generate the same amount of profit).

(How much do you want to bet all developement costs for Halo 3 Recon were also held back from FY08?)

FASA Studios was also shut down early in FY08, trimming MGS' overhead, while the revenue for their last title - Shadowrun - was again largely realized in FY08. Hardly the same scale as Bungie and Halo 3, but another example of doing everything possible to make FY08 profitable.

I wouldn't bet on FY09 being profitable. They pretty much went through the bag of tricks for FY08 (although the pending dissolution of Ensemble after Halo Wars is complete shows they're not through trying).

Anonymous said...

The point is that Xbox was profitable in FY08 and continues to be profitable in FY09. Clearly with a profit in the $100's of millions vs. an investment in the $10's of billions it has a long way to go to pay off the investment, but at least it has turned the corner and is now headed in that direction.

No, XBox was not profitable in FY08. It's the Entertainment & Devices Division as a whole that (barely) turned a profit in FY08. And that profit is mainly driven by the PC hardware business, Mac BU, and the 'commission' that E&D receives for selling boxes of Windows and Office into Retail stores. That last piece has been artifically inflating the E&D profit numbers for years, and is the reason the Retail team hasn't been moved over to KT despite his continuing quest to consolidate power

paulsc@exmsft.com said...

Have you used an IPhone? It looks like an artifact of the future when compare to WM6.

If you think its UI is good, you should take a look at its development environment. There's a reason why there are already thousands of apps for the iPhone, and it's not just because there are a lot of customers.


I've used both XCode and Visual Studio extensively, and there is much to like about both environments. Of the two though, I do perfer Visual Studio.

Both XCode and VS are loads better than Eclipse, which was all there for writing Symbian programs until about 2007.

The one thing Microsoft really needs to fix regarding Visual Studio is the Help system. Ever tried to debug a program after you've loaded a new SDK? You'll be spinning your wheels for about 20 minutes waiting for the Help system to re-index itself. This has been broken for a long time and needs to be fixed.

Just goes to show that it's always something. :-)

Anonymous said...

>"Reliable as Tandem."

That had to be dry humor right? Tandem Computer, acquired by Compaq in 1997 which was acquired by HP in 2002, and Compaq at HP is their low end `cheapie' computer line. Only a few of us still remember the company.

Anonymous said...

I think MSFT has gone so out of touch with consumer and their needs. There are many experienced PMs and leads who are so out of touch that they think only way to be innovative is to slap something on consumers. Just because it is from 'MSFT' and that window still have good market penetration; consumers should not be treated like shit.

I know that each and every bug or freeze might have a valid reason but if i pay for it, I don't want to get hit with a blue-screen-of-death or hanged. At least make systems fail gracefully.

You need to make PMs and leads sit with users and understand their needs. It is suppose to happen but it stops with 'partners'. You need to include common people - it is the market that you want to hold on to.

Anonymous said...

MS should be concentrating on "Reliable as Tandem."

Are you kidding me? MSFT has long way to go even in enterprise market.

Anonymous said...

Semantically, yes, XBox wasn't profitable, and compared to what's been invested in it, may not be profitable for a decade.

There's the problem.

No-one seriously expects a product should be profitable on day 1. It'd be wonderful if that happened, but to recoup *all* the project costs on day 1 is almost impossible.

Instead, businesses look at 18-36 months to recoup profit. If you can't manage by then, the project was a failure.

Talking up a *decade* for the X-Box saga to recoup costs is insane. No business would survive that, unless it was being funded by extremely deep pockets.

For Shareholders, the money would have been better invested somehow. Profit in the first year and after a decade that would add up. Far less interesting, but better for shareholders.

Anonymous said...

No, XBox was not profitable in FY08. It's the Entertainment & Devices Division as a whole that (barely) turned a profit in FY08. And that profit is mainly driven by the PC hardware business, Mac BU, and the 'commission' that E&D receives for selling boxes of Windows and Office into Retail stores. That last piece has been artifically inflating the E&D profit numbers for years

---
Amen bro, XBox is not yet profitable.

Anonymous said...

You know what I mean, the division had a profitable year, and a profitable Q1 of FY09, with all signs pointing to a profitable Q2 FY09.

I already addressed the fallacy of the "profitable" FY08 and what the "cost" to get those "profits" really was...

But seriously, if you're pushing a mature console (fourth holiday season on the market) and you actually think there's a question of profitability in Q2, then that simply shows just how bad the Xbox business has been mismanaged. By now, the Xbox division should have a strategy in place where they KNOW they're going to turn a profit every Q2. The only question should be whether they'll have a loss in any quarter except Q2 and what needs to be done to make sure those losses don't threaten the year's overall profitability.

But then, I'm thinking of how I'd manage the business if I were actually accountable for the money I was throwing around (I'm sure Bach and Allard both get plenty of Christmas cards from Epic, but that's another story).

Xbox has been a multi-year, multi-billion dollar investment. It has now turned the corner and is generating positive returns.

Very gently sloped positive returns vs. the very steeply sloped investment suck. Things are going to have to pick up considerably in order for the Xbox unit to recoup its overall investment even within fifteen years. And I see nothing on the horizon to suggest that's even a possibility.

Anonymous said...

"snip" I walk many halls at Microsoft and always stop when I see a poster that a group has put up to tout the current milestone of features. Some of those really need to have a webcam that records facial expressions about 20 seconds into reading, because I've gone through bulleted lists of application software and it is nothing but a laundry list of IT department-driven features with no obvious end-user benefit. I'm sure I have a horrified "baroo?" look on my face."/snip"

At this point in the maturity of the industry, the iron triangle of PM/SDE/SDET is failing us. We no longer have the daring, the courage to step up to big challenges AND deliver. All the while the iron triangle rusts over with risk mitigations and FUD, MSFT is incapable of truly integrating a market/user/customer-focused approach to build software.

Too often have I watched as genuine innovation from Planning, UX, even CP and even Marketing (god forbid) and other stakeholders get Precision Questioned into small tepid and boring chunks of features that fit all to neatly into the Functional Spec template or into TFS. LOB FTW? WTF?!

We assume they will always buy our porridge grey bits, but now they are looking elsewhere. In our arrogance we chalk it up to "externalities" but the truth is we are starting to swing by our short hairs.

So, time to leather up. Time to get real. Embrace the realities and climb that ladder of accountability. Polish the rust off of the iron triangle, and incentivize quality, simplicity and customer focus.

It is not just our financial well-being at stake, it is our very relevance as a "software" company - whatever the hell that means in 2009.

Anonymous said...

XBox is more than profit in and of itself. Sony was threating to create a 10 foot experience in the home, a web ready PC that would replace windows for alot of people.

I heard that if Sony wasn't threatening Windows MS would have never gone there.

Anonymous said...

Talking up a *decade* for the X-Box saga to recoup costs is insane

Sir,
XBox is not profit in twenty years. It loses money.

Anonymous said...

I heard that if Sony wasn't threatening Windows MS would have never gone there.

Exactly xbox is a defensive move to protect our core monopoly from the Japanese. All the divisions that haemorrhage money: winmo,search.. survive for similar reason - and that's why any RIF will fall on other less strategic groups. NOT E&D

Anonymous said...

Today was my first day in office after a 4-week vacation and things are the same as before. Nothing has changed. No layoff reports or people busting their asses.

Anonymous said...

"I've used both XCode and Visual Studio extensively, and there is much to like about both environments."

What could you like about mobile development in VS? The tiny little design canvas that you can't zoom? The crippled controls from .NET CF that we don't even use in our own software for the platform? The complete lack of exciting development around 3rd party tools for Windows Mobile? The crashes and hangs on deployment and execution?

I only write code on this platform because I'm an MS employee, and I feel it is my duty. If I had a free choice I'd write elsewhere.

Anonymous said...

XBox is more than profit in and of itself. Sony was threating to create a 10 foot experience in the home, a web ready PC that would replace windows for alot of people.

Ah, the tired old XBox "living room" schtick.

From what I've read and heard, the XBox web browsing experience (extra Media Center PC required of course) is 10 times worse than awful, whereas the PS3 and Wii both provide serviceable browsing experiences.

If somebody is going to compute from the living room these days, they are likely to use an iPhone, netbook running Linux, PS3/Wii, or low-end PC running instant-on Linux or an old copy of WinXP.

Vista is a pig and has ruined MSFT's chances in the living room more than XBox ever helped.

skc said...

Heh, I just find it hillarious that the very same people that want MS to be "As cool as Apple" are the same people poo-pooing the XBox, a Microsoft product with an increasing number of young rabid fanboys.

In other words, damned if you do, damned if you don't

Anonymous said...

The Xbox fiasco is never going to be profitable. It's never going make back the 7 to 8 billion wasted on the train wreck of a product.

I honestly don't how this basketcase of a product has managed to survive for the past seven years. At year one when everyone saw what a disaster the product turned out to be it was supposed to be canceled but somehow managed to avoid the much needed axe. In 2005 when the plug was pulled on the 3 and a half year long 4 billion dollar waste of resources the clowns in E&D somehow managed to get greenlighted on another one with grand promises of 'this is the one where we get it right'.

And then 1.1 billion Red Ring of Death fiasco. The absolutely lowest quality hardware manufacturing and three years into the console's life it is still losing money.

Just when all the hard work on the core OS had gotten us to the point where BSOD jokes were considered lame and a cheap shot, here come the idiots in E&D giving the corporate image an equally humiliating black eye with the now infamous RRoD three lights image.

And all the crap and hand waving about how the billions in wasted cash on the console was worth it, the 360 can't even manage to secure the outcome of the next gen movie format war. All that cash and Sony was able to easily get their standard adopted by studios and consumers right in what is the Xbox's strongest market.

Years ago when the first few billion in losses started adding up for the Xbox disaster people would talk about how badass we were for being able to just eat gigantic losses like they were nothing. Those days are over.

Back in the days when the stock was going up, up, up it didn't really matter how much cash was wasted or how much dead weight there was in the company. We all just watched our shares keep growing and growing. With the stock flat for so long it is incredibly hard to keep motivated knowing that there are people working at the same company who are negating all of your own and other's work.

It's long past time for hard and serious choices to be made about the future of the company. The culture of failure, Xbox,Zune,MSN,Search, that has taken over for the past eight years needs to end. The throw money at anything and everything hoping to create new revenue streams outside of the core OS and office software and server/tools products was a gigantic failure.

The growth of the company is reliant on massive culling of the garbage accumulated since the days the stock peaked. Take the temporary PR hit and end the Xbox fiasco and devote those resources to things to actually matter to the growth and health of the company.

Anonymous said...

Heh, I just find it hillarious that the very same people that want MS to be "As cool as Apple" are the same people poo-pooing the XBox, a Microsoft product with an increasing number of young rabid fanboys.

In other words, damned if you do, damned if you don't.


You're neglecting to consider the fact that if Xbox truly were as "cool" as those Apple products, it would have been profitable years ago rather than pinning faint hopes on an "increasing number of young rabid fanboys."

In other words, let's compare Apples to Apples.

Anonymous said...

So you want to kill everything except Windows and Office? You think that's the best long-term viability play?

Anonymous said...

>At year one when everyone saw what a disaster the product turned out to be

I don't get the XBox hate. I understand the numbers issues, but this kind of venting doesn't make sense.

I've got a 360, I'm planning to buy two more as extenders. I've got lots of friends that have 360s. I was point man to buy a 360 for my brother-in-law last year because it was all he wanted.

RRoD aside, I've never met anyone who owned a 360 that didn't love it. It's even a cultural norm - I see the white wireless controller on lots of TV shows (not product placement - it's just there).

Nobody questions the 360's place as one of the top three gaming systems, either.

Now maybe it's losing money on the back end, but that's not something that should generate this kind of anger. IMHO considering the brand awareness it's created, it's a knock out of the park.

XBox alone has probably done more to keep the Microsoft brand on consumers' minds than all the other things we've done in the past eight years combined.

Anonymous said...

Take the temporary PR hit and end the Xbox fiasco and devote those resources to things to actually matter to the growth and health of the company.

So you're saying that since Xbox lost a ton of money for many years, MS should ditch it just when it's begun to turn a modest profit (not just the hardware; it was never about the hardware) and gaining cred with the younger generation?

Granted, Xbox may never recoup its start up costs, but ditching it isn't going to refund that money either. That money is gone. Forever. Does that mean a product that is performing relatively well today in a fast-growing market should be given the ax?

Anonymous said...

snip
The dominating factor that determines a products value is not its feature set, it's the usability of the feature set. And, as a user of our products, we have much "room for improvement".

/snip

and

snip
At this point in the maturity of the industry, the iron triangle of PM/SDE/SDET is failing us. We no longer have the daring, the courage to step up to big challenges AND deliver. All the while the iron triangle rusts over with risk mitigations and FUD, MSFT is incapable of truly integrating a market/user/customer-focused approach to build software.

Too often have I watched as genuine innovation from Planning, UX, even CP and even Marketing (god forbid) and other stakeholders get Precision Questioned into small tepid and boring chunks of features that fit all to neatly into the Functional Spec template or into TFS. LOB FTW? WTF?!

/snip

I'd have to agree with both of these posts. Even when we produce a feature that customers have been BEGGING FOR for the last 6-8 YEARS, we implement it in such a horrible way and with no UI that it is almost IMPOSSIBLE for the customers to utilize it. As any Active Directory person you know about Fine Grained Password Policies that were finally implemented in Windows Server 2008 and they'll laugh at you about the complete lack of a UI for configuring this, and then laugh some more when it took an MVP only a few weeks to put together a decent UI. And we continue this insanity with the "let's manage it with PowerShell, and right a UI later (if we get around to it)" mentality (Exchange 2007, AD in W2K8+, etc.). We have people who became Windows Admins because they DID NOT LIKE having to deal with all the scripting and command line stuff on UNIX, but now, we are forgetting the people who influence the purchasing decisions (the admins who tell their boses what to be buying) by telling them that the only way to manage their new stuff is with PowerShell.

Don't get me wrong, PowerShell is great (and long overdue), but it SHOULD NOT be the ONLY WAY to manage the systems. We NEED TO STOP letting the UX lapse until the next release before people stop buying our products. We're finally making inroads in the Enterprise market, but now we're cutting the legs out from under the very people who are adopting our stuff. The beauty of Windows is that I DON'T need to know how to script in order to manage the environment, well, at least, it used to be before W2K8 R2's beta hit the net.

Anonymous said...

Microsoft needs to get serious about net books. It is far and away the fastest growing personal computing category, and Linux has %30, far higher than it has ever had before. What's worse, it looks like next year there are going to be $200 netbooks runing linux on ARM, with 8 hour battery life.

http://news.zdnet.com/2424-9595_22-257347.html

Is Windows 7 even being ported to ARM? If not, a whole new segment of the market is going to be simply given away.

Anonymous said...

Microsoft definitely, definitely, definitely needs a kick in the pants when it comes to "end user experience". (I hate that term. Its typical for engineers to call it that. It conotates something merely to be tacked on, which is utterly wrong.).

I worked at the mothership and, sorry to say, most UI design at MS is completely ad hoc and done by people with extraordinary little training for it. Namely UI Program Managers who in most cases are Computer Science grads with a few years of on the job UI experience which apparently qualifies them to run major UI design projects. Its a bogus process and completely unacceptable.

At the VERY least trained and talented designers, (whether they be interaction or graphic, preferably both) need to be involved at the very beginning of the project when the spec is written. In fact THEY should write the design spec. No PM allowed to do any random photoshopping. Sorry. PMs should do coordinating and conceptual design (think 'producer') not designing.

Right now, UI at MS is designed by a PM who writes a spec within a two week time frame based on god knows what and which outlines their mostly random designs for the new features (something like "hmmm, that would look neat".) . Then, if you are lucky it may get a look from a designer in a spec review and after it gets implemented, thrown to usability (motto: "let them sort it out".)

All this leads to completely disjointed, disconnected and chaotic UI, which is pretty much exactly what the products look and feel like. The only thing preveneting a total downslide is customer complaints about the legendary suckage of MS design. That makes the UI PMs work harder, even though the real problem is it shouldn't even *be* them designing in the first place.

The fix is pretty simple, yet hard. Every team should have an interaction and graphic designer and you probably need a head design honcho for the company. Designers should be on the level of SDE, PM, or test in terms of involvement. However, that's a cultural issue and its exactly where the problem is. Gates, Ballmer & co. just don't really, truly take design seriously or even know how to care for it. They take *engineering* and business seriously, but not design. Hence, no or few dedicated designers and the rather ad hoc UI process done by PMs.

Keeperplanet said...

>"Even when we produce a feature that customers have been BEGGING FOR for the last 6-8 YEARS, we implement it in such a horrible way and with no UI that it is almost IMPOSSIBLE for the customers to utilize it."

Don't forget the Microsoft double customer paradigm (enterprise and home computer users) which Apple uses their advantage and which Microsoft is oblivious to.

You can implement all the customer requested features you want any which way you want, but with Microsoft there is always two sets of customers which throttles any long term quality solutions.

Best example (and there are many like this at Microsoft) is DRM. Microsoft implements it primarily to protect corporate data from being stolen or used by individuals on individual machines, and it just so happens to work well with movies and music and books and as a leveraging tool to force customers into a corner of using Microsoft products. Most individual users are figuring out that it is not to their advantage to buy Microsoft products because of DRM, and since there are more choices now, the choice is not Microsoft.

In fact, the individual has won this battle (against DRM) and Apple is already going 100% DRM free with its media sales, and every time a Microsoft customer has to make a personal choice for a computing device, Microsoft will be losing because of the onerously poor user experience that Microsoft DRM drives home to the individual user.

Anonymous said...

And we continue this insanity with the "let's manage it with PowerShell, and right a UI later (if we get around to it)" mentality (Exchange 2007, AD in W2K8+, etc.). We have people who became Windows Admins because they DID NOT LIKE having to deal with all the scripting and command line stuff on UNIX, but now, we are forgetting the people who influence the purchasing decisions (the admins who tell their boses what to be buying) by telling them that the only way to manage their new stuff is with PowerShell.

At the same time, we had just as many admins begging and pleading for use to give them command line and scripting tools So, what to do? My guess is, our largest enterprise customers with other UNIX systems they also have to manage made the most noise about this. Many of these admins love the ability to create a scripted job rather than sit in front of a screen doing a bunch of point-and-clicks. When it comes to enterprise customers, our "features" follow the money.

Anonymous said...

We are serious about netbooks (one word, not two).

Most netbooks are and will stay Intel, because most consumer software is what? Say it with me, Windows Software.

Anonymous said...

I, for one, love command line, scriptable manageability of server products. A well designed command line interface beats the heck out of poorly designed UI any day. Personally, if I had to give up one or another, I'd give up the UI.

Anonymous said...

More uninformed comments. Yawn.

Microsoft spent a few billion to cause Sony to implode. It was a very good deal and quite successful. You can bet if Microsoft could figure out a way to spend only $10B or $20B and destroy Google, it would happen faster than you can blink.

As for where's J, duh, he's hitting the slopes. I like how Ray set up a whole lab in Boston for his brother. Microsoft has no heroes, everyone's checked out.

Anonymous said...

"MS should ditch it just when it's begun to turn a modest profit (not just the hardware; it was never about the hardware) and gaining cred with the younger generation?"

Stop repeating lies. The Xbox 360 continues to this day to lose money. The losses these days being hidden by other profitable products in E&D.

That is over seven years into the Xbox's life and it is still bleeding money. E&D is still bleeding money on what has been called one of the worst pieces of consumer hardware ever created in the Xbox 360.

The Xbox team went with the absolute cheapest manufacturing and design with the 360 to try to obey the strict orders that the same billions in losses wouldn't be tolerated again. Even igorning the 1.1 billion RRoD fiasco, they still can't manage to create a viable product that isn't being kept alive off the profits from other viable products.

The 360 is now over three years old and it is going to be another couple billion needed to design, manufacture, and reach enough sales to break even on the hardware.

The first Xbox was a bunch of expensive desktop PC parts thrown in a big black box that racked up billions in losses.

The Xbox 360 was the absolute bottom of the bargin bin parts put together by the lowest manufacturing bidders that has generated similar levels of losses.

The 360 was supposed to be the one where E&D 'got it right'. And they once again created a collosul failure.

With morale at the lowest I've ever seen it, continuing to pump billions into fiascos like the Xbox are out of the question. Billions in losses, damage to the overall company brand with the now infamous RRoD image everywhere, and the one test of that inane hand waving BS about 'owning the living room' making the billion in wasted cash worth it being a complete failure with the complete inability of the Xbox to determine a winner in the consumer's next gen movie format medium.

Xbox needs to be killed off immediately.

Anonymous said...

Most netbooks are and will stay Intel, because most consumer software is what? Say it with me, Windows Software.

--

it is also a manufacturing segment issue for AMD ... they really only offer media and extreme segment silicon ... they can't afford to reach too far and still compete effectively with Intel.

Murrquan said...

Most netbooks are and will stay Intel, because most consumer software is what? Say it with me, Windows Software.

You should have been there when I was at Best Buy, and this little kid ran up to the Linux-powered Asus Eee and was like "Daddy, daddy, that's the one I want!"

She had to wait in line to try it behind my 20-something brother, who couldn't get over how cool it was. The thing looked like a Wii, inside and out, with huge, friendly icons and a ton of games pre-loaded. Meanwhile, I was stuck in front of the Windows XP netbook, with the same old menus and solitaire since 2001.

The choice between Windows and Linux on the netbook front isn't a choice between software and no software. It's a choice between a tired, slow user experience and a streamlined and polished one. Sure, they can't run Portal or Photoshop ... but who buys a netbook to use Portal or Photoshop?

Anonymous said...

Well, yesterday my wife was unofficially said that anyone who has not found a job by the end of january would be riff'ed. That's it, brace yourself it's comming!

Joe said...

RE: Netbooks
>Say it with me, Windows Software.

Well... let's think about this for a second:

Projected mid-09 netbook retail cost - $200.

Cost for MSFT XP Windows license - $75-115 (depending on vol agreement)

Profit for Retailer - ??
Profit for OEM - ??

So, you're telling me that MSFT is going to compete on a platform with an OS that costs half the retail price?

No EFFING way. Just not going to happen. MSFT can drop price to the $10-15 range, and it would make sense to produce and buy, but I can't see them implementing this steep discount.

Anonymous said...

It's sad that success is such a foreign concept to Microsoft employees that if a project like XBox has ANY redeeming qualities at all (e.g., some fun games, or a small fanboy following, or better sales than the PS3) then it's considered justifiable and successful.

Wake up! It's possible to make money by selling products!

I wish I could give all the pro-XBox posters here the option of investing their money in it. I think they would realize pretty quickly that they'd rather put their money in an investment that might show some growth, like Apple or Google stock.

Anonymous said...

>"Microsoft spent a few billion to cause Sony to implode."

I think you overestimate the power of E&D and Xbox to cause Sony to 'implode'. Sony's sales are a healthy third place because Nintendo came into the market with a cheaper more innovative and `fun' console. Microsoft had Halo, which was not really a Microsoft product, but a Bunjie product when Bunjie was in Slavery mode.

The primary reason for Sony's third place position was cost. The market wants low cost `toy game consoles'. What is really interesting about all the stats is that online had some effect, but not a game changer.

But I am sure readers are taking note of the cynical arrogance of such a view associated with `Microsoft' if indeed you are really a softie. I think a more accurate description is that it was Microsoft E&D that imploded, at least in terms of continuously reducing value of a continuously reducing Microsoft market cap, and in terms of E&D partner credibility.

James said...

"They take *engineering* and business seriously, but not design. Hence, no or few dedicated designers and the rather ad hoc UI process done by PMs."

This is funny because to the best of my knowledge Microsoft employs more UI designers than any other company. From your comments it seems my suspicions were true in that UI folks are not empowered or respected enough to have the kind of front-to-back UI impact that's necessary for true "good user experience". Too many tech and biz folks think that means shiny, "lickable" graphics and cool animations but it's not. Everywhere I've been successful as a designer [meaning shipped products that customers love] I've been involved in the project from initial requirements gathering all the way through filing bugs on it before it launches. The level and amount of input varies over the course of the product of course but for the most part the UI designer should know as much if not more about how things work than the product manager.

Anonymous said...

Most netbooks are and will stay Intel, because most consumer software is what? Say it with me, Windows Software.

That's true for desktops and laptops, but netbook usage is different. Most people use them for simple things like web surfing and email, and for that linux is just fine. That is why %30 of netbooks run linux.

Beyond that, there is cost. There are many tens of millions of people in the developing world who can't afford an Intel netbook but could buy a $200 ARM-linux one.

And finally note that ARM cpu's use a lot less power than Atom, which translates into longer battery life. That alone is a big sell.

Anonymous said...

"It's long past time for hard and serious choices to be made about the future of the company. The culture of failure, Xbox,Zune,MSN,Search, that has taken over for the past eight years needs to end. The throw money at anything and everything hoping to create new revenue streams outside of the core OS and office software and server/tools products was a gigantic failure."

The best summary I've seen. Unfortunately, neither the Board or Ballmer would acknowledge its accuracy. By the time they're forced to, it's going to be way too late. It probably is already.

Anonymous said...


Most netbooks are and will stay Intel, because most consumer software is what? Say it with me, Windows Software.

I see three reasons for not becoming complacent with the above argument:
1. Loss of market-share. With 30% of netbooks running Linux that is lost revenue for Microsoft.
2. Margin erosion. OEMs are forcing Microsoft to accept lower margins on netbooks, because of a competitive alternative. This erosion was reflected in the last quarterly result.
3. Market awareness of Windows alternatives. As consumers become aware that there are reasonable alternatives to Windows on netbooks, they will consider those alternatives on laptops and desktops. This is likely the biggest concern raised by netbooks.

Anonymous said...

Xbox needs to be killed off immediately.

I'm just curious: What in a nutshell is your vision for what MS should be? And could you phrase that in terms that don't relate to something being "killed"?

Not trying to be politically correct or nasty, I'm just wondering what constructive ideas you have.

Anonymous said...

Stop repeating lies. The Xbox 360 continues to this day to lose money. The losses these days being hidden by other profitable products in E&D.

You've either been misinformed or are just making up nonsense. Which "profitable" product within E&D shielded Xbox? Was it Zune? Windows Mobile? Surface? And you're saying that not only did E&D absorb those losses somehow, but still managed to post $426m Operating Income last year? Sorry, it's difficult to take that sort of conspiracy theory baloney seriously.

Xbox as a product line has turned a corner, and it would be incredibly irresponsible to dump it simply because the investment cost to get it there was so high. I'm not arguing that Xbox was a good idea or that MS will ever recover its cost; I'm telling you that regardless of the poor decisions made in funding Xbox to date, it would be an even worse decision to dump it just as it becomes profitable. To do so would be to manage by emotions, not by sound financial principles.

For your reading pleasure:

http://www.microsoft.com/msft/reports/ar08/10k_fr_dis.html

Anonymous said...

Xbox business has best year ever:

http://blog.seattletimes.nwsource.com/techtracks/2009/01/05/microsoft_says_xbox_business_had_best_holiday_seas.html

- Sales up 58% from last year
- Over 28 million units sold LTD
- Over 17 million Xbox Live subscribers (most are paying)
- Over $1 Billion in sales of downloadable content

Those are just a few reasons why Xbox won't be killed.

Anonymous said...

MSFT ought to spin off E&D as they failed miserably on hardwares including recent Zune fiasco and Xbox 360’s horrific failures costing $1 BILLION to fix. Talk about BAD press not to mention UTTER failure...

http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9026340

One of the best quote I've seen in last few days:

""It's long past time for hard and serious choices to be made about the future of the company. The culture of failure, Xbox,Zune,MSN,Search, that has taken over for the past eight years needs to end. The throw money at anything and everything hoping to create new revenue streams outside of the core OS and office software and server/tools products was a gigantic failure."

Anonymous said...

"You've either been misinformed or are just making up nonsense. Which "profitable" product within E&D shielded Xbox?"

E&D gets revenue from all consumer software and hardware including MacBU and PC hardware products. It's also responsible for all retail sales and marketing for Microsoft Office and the Windows operating systems. So Xbox may still not be profitable on its own. The fact that MS doesn't break it out separately is a pretty good indicator that it isn't.

You're right though that the decision now should be forward-looking, not based on past losses. But it's not clear how Xbox ever becomes something other than a low margin business, generally and especially versus typical software.

Anonymous said...

This is funny because to the best of my knowledge Microsoft employs more UI designers than any other company. From your comments it seems my suspicions were true in that UI folks are not empowered or respected enough to have the kind of front-to-back UI impact that's necessary for true "good user experience".

The problem is that every Microsoft employee is much too "empowered." Everybody is a little dynamo of chaos. There can be no overarching architecture or design of a product because any employee is "empowered" to rewrite a spec or a feature's code as they see fit, and if nobody complains strenuously enough, the change just stays put.

Not only is this behavior allowed, it's required. Being good at your job and doing the work you're assigned is a quick way to get fired (Kimmed). You have to keep increasing your "scope" and "influence" and "impact"--meaning make a bunch of decisions and changes to stuff where you're probably not the best person to be doing so.

Every Microsoft product is a result of everybody on the team just doing "whatever" for a few years, and it shows.

Anonymous said...

There is such a divide regarding XBox, between people who consider it a success based on cool factor/brand awareness and those who hold it as a failure based on lack of profits. I’m of those who believe that Xbox is a tremendous success, but I also find the lack of profits shocking.
If any other company had released XBox they would be making money hand over fist. Microsoft can’t because it’s gotten fat and complacent.
I left MSFT a few years ago. It was my first real job out of college and I didn’t know anything else. I was in for a shock. I discovered that there are companies that can deliver with teams whose headcount wouldn’t be sufficient to fill the PM slots if the same project was being developed by Microsoft. Sincerely, I drive through the main Redmond campus a few times a week and as I look at the dozens of buildings and I picture the thousands of offices they contain I wonder "what do all those people do?" Then I look at 520. By 4:30 PM it’s already backed up. Factor in the late arrival, the long lunch, and how much work do you think those people actually do?
In my time at MSFT I once had a PM whose "trick" was to let the devs design and write the code and only then would he would write the spec (I use "write" loosely, it was mostly a collection of screenshots from the finished product). You’d think a guy like that would be out the door in no time. Under my current employer he definitely wouldn’t last long. Well years later not only is he still there but he’s even risen through the ranks with impressive velocity. In a sense the company might be better served. While he’s managing managers there isn’t a poor team out there left to develop a product without a spec. But that individual’s career speaks volume about what it takes to succeed at Microsoft.
How many people like my former PM do you think there are out there? And if there are RIFs/layoffs/reorgs, who do you think is going to get shown the door? Some lazy PM who’s great at schmoozing with the higher-ups or some poor schmuck who’s doing his best to write a doomed product for which no specifications exist?

Anonymous said...

Something bout Xbox though, it's had two launches, the original and the 360. I can't recall if the original ever went profitable. The 360 looks like it is turning that corner, but it's doing so at a point where the hardware is starting to look dated (not quite there yet, maybe it's in its "golden age" right now).

If a typical console hardware generation lasts five years, you kinda want to be making money before all five have gone by and you get to start over again. Or maybe there is an Xbox 720 in the wings, and at some point we can write off the first two generations as just good market building efforts for that one.

Anonymous said...


The problem is that every Microsoft employee is much too "empowered." Everybody is a little dynamo of chaos. There can be no overarching architecture or design of a product because any employee is "empowered" to rewrite a spec or a feature's code as they see fit, and if nobody complains strenuously enough, the change just stays put.

Not only is this behavior allowed, it's required. Being good at your job and doing the work you're assigned is a quick way to get fired (Kimmed). You have to keep increasing your "scope" and "influence" and "impact"--meaning make a bunch of decisions and changes to stuff where you're probably not the best person to be doing so.

Every Microsoft product is a result of everybody on the team just doing "whatever" for a few years, and it shows.


Excellent! Spot on! Sums it up perfectly!

Anonymous said...

"The 360 looks like it is turning that corner, but it's doing so at a point where the hardware is starting to look dated (not quite there yet, maybe it's in its "golden age" right now)."

Can you expand on what you mean by the hardware looking dated? IMO, PS3 and Xbox 360 are probably at their peaks right now.

Are you comparing to the latest PC hardware? If so, I think that comparison hasn't been valid for a few years, especially since the Wii has been changing the market.

It's not all about graphics and raw power these days... it's a brave new world of online services and social experiences integrating with consoles, and there's an explosion going on in this generation at the moment.

Plenty of forward momentum left in this generation for the next few years IMO.

Anonymous said...

What is the difference between Satyam, Enron and XBox profits? May not be much.

Anonymous said...

But it's not clear how Xbox ever becomes something other than a low margin business, generally and especially versus typical software.

I agree. At some point in the beginning of the next-gen cycle, the business folks stepped out to lunch. How could anyone look at a $20-$50M investment to make a game, that requires over 1-2M units sold through just to turn a profit, and call that a sustainable business model? Especially given the history of less than 10% of games actually shipping anything close to those numbers?

The Xbox business may be reasonably profitable now, but it can't really ever recoup the investment or previous losses. Arguments supporting the building of market mindshare still can't fiscally quantify what value that represents.

So moving forward it's a profitable business... but what's the lifecycle? Xbox 1 built a 20M installed base, and it was erased overnight with the decision to reset the market for Xbox 360. Unlike PS2, we shut down all Xbox 1 development, despite a mature developer base and pipeline. So right there we missed another opportunity to recoup.

In the cold light of day from a pure investor perspective, this has been a poorly run unprofitable business that's been subsidized into existence, and can maybe sustain present levels until the next generation reset. Who signing up for that?

Keeperplanet said...

Just a brief comment to any of you softies barking about shutting down production of Xbox or Zune.

While I am no fan of either product for a lot of reasons, mostly cost, design style, design quality, I would be the last one to suggest Microsoft stop selling either product, so long as they are actually making money.

It would be highly irresponsible to give up existing markets, even with the losses, if in fact Xbox is finally turning a profit over cost to manufacture. The question that remains is what is being done for follow on products and or how is Microsoft going to transition from responding to Sony to actually doing what Gates has suggested a few years ago: `own the living room'?

Anonymous said...

"Something bout Xbox though, it's had two launches, the original and the 360. I can't recall if the original ever went profitable."

The first Xbox was from November 2001 to roughly June 2005 when the parts stopped being manufactured. It was only profitable one quarter and racked up some 4+ billion in losses over the 3.5 years on the market.

The Xbox, just like the Xbox 360, was continually claimed to be 'turning a corner', 'profitable next quarter/year', and so on.

It is absolutely insane that the losses continue with the Xbox 360. Promises were made. Stern warnings were given that billions in losses wouldn't be tolerated. The Xbox 360 was the E&D guys last chance to get it right.

They went with the absolutely cheapest and lowest quality hardware design and manufacturing.

They are charging 50 dollar a year online fees.

And after over three years they still are racking up losses. The outdated 360 hardware isn't going to last a full five years. Another couple billion will be required to create yet another Xbox soon.

If they greenlight another Xbox you can pretty much kiss goodbye any hope that this company will ever turn around. It would be like seeing someone giving an alcoholic a ride to a bar. Time to wash your hands of the situation and move on.

I can't imagine how depressing it must be to be working in the Mac group knowing your entire efforts are being used hide the losses of the Xbox idiots.

Anonymous said...

Not only is this behavior allowed, it's required. Being good at your job and doing the work you're assigned is a quick way to get fired (Kimmed). You have to keep increasing your "scope" and "influence" and "impact"--meaning make a bunch of decisions and changes to stuff where you're probably not the best person to be doing so.

Exactly. This occurs regularly on my team. I work on one part of the product. I go away on my vacation, and my coworker who likes to work 24-7 just went in an changed everything when I came back. Unbelievable. Doesn't matter that we are what 1 month behind schedule. Manager seems to think its great or is actually probably too much a coward to do anything about it. I am looking for another position.

Anonymous said...

I just can't see why a lot of you here see the XBox as a failure. Personally, I see the XBox as one of Microsoft's better successes. Why are we measuring success purely by the financial outcome from a product? What is the motto for the company? If you look at that, you will find that the XBox does in fact play a pivotal role in expanding our presence to the living room, which is where technology is for the most heading to. None of the other MS technologies (not even Windows) has had more success in the living room compared to the XBox.

We may have bled more money than anticipated, we may have made a _few_ bad decisions that led to RRODs, etc, but in the end you cannot ignore the fact that we succeeded in planting our trojan horse in the living room; 28 million installed base, 17 million of which are connected to live, over half of which pay us 50 dollars per year. Not only that, this number continues to grow. Add to that all the micro transactions (arcade games, movie rentals, etc) and you will see how XBox comes more close the "software + services" dream that SteveB talks about. Of course, it's software thats also responsible for revenues in the whole Interactive Entertainment Business. It's not just Halo that makes money. It happens to be the PR that makes it be noticed as the big blip. GTA4 belittled Halo in it's sale breaking records. The good thing though is that it sold more on the 360 than any other platform and that is where the moolah is in the console business.

It's pretty easy for people in the company outside IEB and E&D to point fingers at how we have not recouped the investment. Likewise, it's really easy for someone outside of Windows to point fingers and say the whole Vista team should be canned for making a mockery out of our flagship product. Regardless, here are some facts that I believe make XBox one of the more successful products.

- Came out of nowhere and established a solid brand with the first version of the product (that's never happened in MS before)

- The XBox brand right now reflects connected interactive entertainment. (On the flip side, the brand does also reflect questionable reliability.)

- The XBox has an online audience of 17 million and growing rapidly. That's 17 million viewers to whom we can target ads, movie rentals, micro transaction downloads. Over half of them pay us 50 bucks a year.

- This generation, the 360 brings in more revenue compared to the PS3 and the Wii when you throw in revenue from accessories, 3rd party software and live subscription. Simple example Call of Duty 4 released info that they had 10 million XBox live users play the game. You need to be a gold member paying 50 bucks/year to play the game on live. Of course, we do offer free 90 day memberships, etc to entice people in. Regardless, I would say most of those 10 million actually pay.

- Outside of the RROD fiasco, people actually love their XBoxes. They recommend it to others and come back to buy more even after the RROD. That speaks a lot for the whole entertainment package provided by MS. In general, if people are not talking about the RRODs, it's about all the coolness whether it's the NXE, the avatar system, the Netflix integration, the downloadable movies, the media center extension, streaming media from PCs, hooking up your iPod, the arcade games or just the really awesome graphics in hard core games.

- As of now, the XBox is in a great position of going on to be what PS2 was last generation. That 28 million has the easy potential to becoming 50 million in 2 years. PS2 made a lot of money, some on the hardware after a turning point and a lot in accessories and third party titles. The 360 is in fact following the same path, only better because in the process Live is going to be contributing a lot more as well.

You may talk about how the Wii is thrashing us, but in reality Wii is in a different market. People who bought the PS2 earlier and now have bought a Wii are more likely to come back and buy a 360. Where we lose to the Wii is that we are not the first console these people bought + we don't appeal to the new audience that the Wii appeals to. That said PS2 sold 60 million units and that is our market and I believe we have a lot of it covered. If some of those bought a Wii, they will come back to buy a PS3/360 and we are obviously the better choice.

As for HDDVD vs BluRay. XBox never really pushed HDDVD as the primary format. From day one MS has bet on online streaming services for media delivery and turns out that even after the success of BluRay over HDDVD, online services continue to grow and eclipse BluRay sales. SONY may have won against HDDVD but again would be failing to create a widely accepted format.

Anonymous said...

>>Sorry if I am going off-track, but I was just wondering if Visual Studio and the developer angle that Microsoft is great at is not as big a cash cow as well as I imagined it would be.

No it's not. It's all about getting Windows apps developed, and ultimately, about selling servers. VS is not a cash cow.

Anonymous said...

Exactly. This occurs regularly on my team. I work on one part of the product. I go away on my vacation, and my coworker who likes to work 24-7 just went in an changed everything when I came back. Unbelievable. Doesn't matter that we are what 1 month behind schedule. Manager seems to think its great or is actually probably too much a coward to do anything about it. I am looking for another position

I can see that one of my fellow co-workers reads minimsft!

Your code didn't work, and as you point out, we're behind schedule. So, I rewrote it, such that it now works. That's a bad thing? How else are we going to stop being "1 month behind schedule?" Complaining on the Internet probably isn't all that conducive to getting out from behind our mountain of work!

This is what's wrong with Microsoft. If more people actually did their job and started pulling their weight, we wouldn't be in the situation that we currently find ourselves in as a company. And what exactly is the problem with the fact that I "like to work 24-7?" I happen to love my job, which is why I'm good at what I do. If more people actually looked at their job as something to enjoy and take pride in, rather than as a paycheck, we would be much better off.

Best of luck finding a new position. I actually really enjoyed working with you.

jcr said...

That had to be dry humor right?

No, I meant it quite seriously. Tandem set the standard for reliability.

Tandem was the company that first shipped full redundant-hardware fault-tolerant systems. You could literally take a machete to one of the inter-processor busses, and none of your jobs would be interrupted.

I watched a Tandem technician perform a CPU upgrade once. He pulled a board hot, and plugged in its replacement. He then looked at the console for a notice that the new CPU was up and that all the processes were running on both CPUs again, and then did the same thing to the other CPU cabinet.

IBM didn't do the redundant hardware thing, but under VM, it was damned hard for a user job to crash the system. That's the kind of security and reliability that we left behind when we went from mainframes to desktop machines.

That's what Microsoft should be concentrating on, because if you're going to keep on trying to compete on style, convenience or ease of use, you'll fail. Microsoft is organizationally incapable of delivering a decent user experience.

Anonymous said...

Best of luck finding a new position. I actually really enjoyed working with you.

---

me too, i really valued your anotations they were excellent and always passed prefix.

Anonymous said...

Exactly. This occurs regularly on my team. I work on one part of the product. I go away on my vacation, and my coworker who likes to work 24-7 just went in an changed everything when I came back. Unbelievable. Doesn't matter that we are what 1 month behind schedule. Manager seems to think its great or is actually probably too much a coward to do anything about it. I am looking for another position

I can see that one of my fellow co-workers reads minimsft!

Your code didn't work, and as you point out, we're behind schedule. So, I rewrote it, such that it now works…



Wow, what kind of culture must it be working at MSFT where co-workers can duke it out in public over whose code is better? Do either of you have any common sense? If you must, take it out on each other in a game on Xbox, drink a few beers and have some laughs.

What’s up with you folks at MSFT, you work in the largest software company in the world, but sound like kids that can't play nice in the sandbox. Maybe both of you need a spankin!

Anonymous said...

Term of the Day : It's a "reset"

source: http://news.cnet.com/8301-13860_3-10137414-56.html

Q: Microsoft, in the past, has been able to get through even some, you know, typical economic downturns by kind of trimming at the edges. Is it fair to say that whatever you have to do this time, it'll be more significant than anything you've had to do before?

Ballmer: It's premature to comment. I mean, the fact of the matter is, this is not a downturn, this is a bit of a reset. Those are quite different and we're trying to really suss through what we think that means for us.

Q: Do you think this reset, as you called it, will force Microsoft to get out of some things that you've been doing?

Ballmer: I'd say at the macro level, the same things that we've been doing. At the micro level, I'm sure there will be some things where we have this many people and, you know, we might right size, or maybe we're expecting to go to this many people (moves his hands in to show a smaller level of growth)... I think that's more likely; to stay more flat on some of the projects. You know, there will be things that may not make as much sense. I don't know. We'll have to see how that all comes together.

Anonymous said...

This lunatic just won't give up: http://www.msnbc.msn.com/id/28576090/

So are we, or are we not buying Yahoo AGAIN?

Anonymous said...

I have news for (most of) you. Xbox was not originally about making huge profits. It was about preventing some other gaming company from eating our lunch by sneaking into the living room, then taking over the family's computing needs. Sony was in a great position to do that a few years ago, and now they're not. The battle rages on however.

Do not judge Xbox by its profit alone or you're being foolish. If someone else dominates that space, they'll be in a good position to threaten Windows (and thereby Office).

Anonymous said...

"Why are we measuring success purely by the financial outcome from a product?"

A company is meant to select (from amongst available alternatives) those opportunities which promise the highest risk-adjusted returns over time. So the decision to pump $20 billion into Xbox to generate $5 billion in losses and only marginal current profitability has numerous implications for the company's prospects overall, none of them positive. Pointing out that it hasn't been a total failure doesn't make it a success. Anymore than listing the battles won in Vietnam proves we won the war. Financially, it has been a complete failure. Brand-wise, it has generated as much negative perception as positive. Judgment-wise, it single-handedly sewered Ballmer's reputation (though the subsequent Longhorn, Vista, Zune, and Search all provided corroboration). And on the criteria I began with, best of competing alternatives, it's hard to see how $20 billion invested elsewhere wouldn't have generated a better overall return. Indeed, all any other project had to do by now was just provide a net positive one.

Anonymous said...

Wiki on Halo 3:

"Worldwide, sales exceeded US$300 million the first week, helping to more than double the sales of the Xbox 360 when compared with the weekly average before the Halo 3 launch."

I don't think anyone would disagree with me that Halo 3 is the killer app of the Xbox 360. And easily one of the top ten video games of this generation.

Even better for MSFT, it is Xbox exclusive. Which really gives the Xbox 360 a competitive advantage. And I know that if I had to choose between a PS3 and 360, I'd get the 360 (GoW2, Halo3, and both play the Orange Box and GTA4). And I'd say that sales of the 360 are being driven by the first two titles.

But a question lingers in my mind. How much longer can the Halo series be the killer app? A few years ago, everyone I knew was playing and loving Metal Gear Solid 1 and 2. They were the must-have games of their time. Now, most of the same people have turned their backs on the franchise. And most of that group are now die-hard Halo fans.

But what will happen when Halo loses it's luster? It is bound to happen at some point in the future. What if it were to happen within the next four years? Is MSFT going to have to buy out the next Bungie to ensure the same things happens with Halo's killer app successor?

Now, the 360 has Xbox Live, which is more than enough competitive advantage over the PS3. But where will the Xbox stand without Halo? What if the Xbox hasn't recovered costs before this happens?

Even if you are willing to dismiss previous expenditures as a sunk cost, there are still questions about the future. And since I'm talking about the Xbox 360's successor, I know that the answer to these questions isn't going to be revealed for at least five years.

PS. On the cost/PR fight, I think that the Xbox is endearing the next generation to MSFT. And with Apple-mania in full swing, MSFT needs all the good PR/cool devices it can get.

Anonymous said...

"Ballmer: It's premature to comment. I mean, the fact of the matter is, this is not a downturn, this is a bit of a reset. Those are quite different and we're trying to really suss through what we think that means for us."

A reset sure sounds a lot like "slower top-line growth for a couple of years":

Last quarter's earnings call

Friar: Why shouldn't Microsoft be thinking about margin expansion, just given your size, the fact we're going into a downturn, it really gives companies an ability to go back in and cut not just kind of semi discretionary, but really kind of cut back and think what a new operating model could look like with a slower top-line growth for a couple of years.

How come Friar, an analyst, saw this four months ago, while Ballmer is just now getting his head around what it is and what it means?

Anonymous said...

Come on guys, the Windows group finally needs a toast. MS web site slows down because of Windows 7 Beta downloads. This is quite something. I have not seen this kind of interest for MS products in a long time.
Forget XBox. It is already in the green and it can only go up. No use pulling the plug on a product that has attracted Billion dollar investment and pulling the plug on it now, after it has turned around.

Windows team, job well done!
Hope this doesn't get to your head and you guys bring out the shit again!!!

Anonymous said...

Yahoo! deal is on.

http://www.ft.com/cms/s/0/38fa8cf2-ddef-11dd-87dc-000077b07658.html?nclick_check=1

Anonymous said...

Gosh, you guys like to put a positive spin on *everything*

I personally had a harrowing time and after about 15 minutes of waiting for Regsys to load - so that I could profile myself to get the download, I gave up.

Here is what the world outside looks like:

http://lifehacker.com/5127866/in-2009-microsoft-still-underestimates-the-web

"Case in point: Today's epic failure around the distribution of the Windows 7 public beta download. This morning Microsoft's web servers fell to their knees under the pressure of constant web page refreshes by enthusiasts who want to volunteer their time to test Windows 7 after Steve Ballmer's announcement the download would be available at noon today. (Since noon today, the download was there, then pulled, and back up again only if you know the direct links, and the promised product keys still aren't available. There's "no ETA" when they will be.)"

Anonymous said...

>>So are we, or are we not buying Yahoo AGAIN?

Ah, so that's the reason for the impending cull. We need to make some room for new colleagues. Well, their paychecks at any rate - we have plenty of new buildings.

Certainly explains a baffling assertion that we will be *bigger* at the end of FY09 than in FY08.
Isn't Yahoo's employee count
around the 14,000 mark? No that they'd all relocate or necessarily be included in any deal, I suppose.

skc said...

>>Gosh, you guys like to put a positive spin on *everything*<<

*face palm*

This is the most idiotic comment I've read in a while.

If the general consensus is that nobody gets excited about an MS OS release anymore (after all, Windows doesn't have fanboys or "enthusiasts" as your article calls them, right? And where did these "enthusiasts come from all of a sudden anyway?") Then it stands to reason that it would take MS by surprise that there'd be so much interest in Windows 7, afterall, it's just Vista rebranded and since Vista was a "disaster", nobody should care about whatever the hell Windows 7 is, right?

Please.

The servers crashed because there was more interest than anticipated. That is a GREAT thing to have happen, no matter which way you look at it.

Provided they add capacity in a relatively timely fashion, it turns out to be an unexpected PR bonus point.

Anonymous said...

"I can see that one of my fellow co-workers reads minimsft!

Your code didn't work, and as you point out, we're behind schedule. So, I rewrote it, such that it now works…"


Dude! You have the wrong person here. I am not the coworker whose toes you stepped on. Better take your guilt to HIM/HER directly.

Anonymous said...

Wow, what kind of culture must it be working at MSFT where co-workers can duke it out in public over whose code is better?

I could be wrong but I think that is a very good example of the work culture at Microsoft. In my opinion it was/is a miserable place to work. Good pay, good benefits, but the daily dose of back-stabbing co-workers and oversized egos poisons the experience. Microsoft has become the industry's spoiled brat child that nobody wants to play with anymore. Bill and Steve deserve the blame for this failure just as much as they deserve the credit for the company's successes.

Anonymous said...

"This morning Microsoft's web servers fell to their knees under the pressure of constant web page refreshes by enthusiasts who want to volunteer their time to test Windows 7..."

This, plus the little history lesson on Tandem contained on this page, put me in mind of those great buttons Tandem used to give away at tradeshows. The buttons read: Stop Going down on Your Customers. I still have mine...:-)

Anonymous said...


[One comment]
Wow, what kind of culture must it be working at MSFT where co-workers can duke it out in public over whose code is better?

[Another comment]
I could be wrong but I think that is a very good example of the work culture at Microsoft. In my opinion it was/is a miserable place to work. Good pay, good benefits, but the daily dose of back-stabbing co-workers and oversized egos poisons the experience. Microsoft has become the industry's spoiled brat child that nobody wants to play with anymore. Bill and Steve deserve the blame for this failure just as much as they deserve the credit for the company's successes.


Believe me, this is exactly the type of culture that you encounter at Microsoft. I used to work there and ran into this type of behavior very often. I came to Microsoft from industry and could not get over how juvenile most Microsoft employees behaved and I was glad to leave the place! If they didn't like something their coworkers did, they didn't take it with their coworkers directly like most adults do. Instead, they ran to the co-worker's manager to complain.

If they don't like something, they bitch and moan instead of doing something to effect a change. You see enough of that bitching and moaning in the comments on this blog! It is always someone else that is at fault! Never them!

Anonymous said...

"This is the most idiotic comment I've read in a while."

That's because you don't seem to have a historic perspective.

The exact same thing had happened for Windows Vista Beta 2 download too. Don't believe me?

http://windowsteamblog.com/blogs/windowsvista/archive/2006/06/09/434667.aspx

In fact this blog post had made idiotic hyperboles like:

"In fact, if we were to push out the bits any faster, there could be a considerable impact on the Internet as a whole -- which we of course want to avoid."

Looks like you guys refuse to learn from past experience. Go ahead, keep deluding yourself.

Anonymous said...

The XBOX business (hardware + software + services) is currently profitable. Not sure where the misguided view is coming from that the MacBU and consumer OS divisions are masking an unprofitable XBOX business within E&D.

I continue to be amazed by the pure baloney coming from some of the posters here. It's one thing to be personally misguided, but it's far worse to try to get everyone else to buy-in to one's delusions.

Anonymous said...

>>> But a question lingers in my mind. How much longer can the Halo series be the killer app? A few years ago, everyone I knew was playing and loving Metal Gear Solid 1 and 2. They were the must-have games of their time. Now, most of the same people have turned their backs on the franchise. And most of that group are now die-hard Halo fans.

Thank god - Halo is not the only killer app for XBox. We have others: GoW and GoW2, CoD4, GTA4. Many games are selling also on PS3 but have you seen in what numbers?

No question that XBox 360 is barely profitable today, and we are not sure if/until when/how it will remain profitable, given future price cuts. But this is the nature of the business. We are here for long term: for the next 10,20 maybe 30 years.

BTW - one lesson from Nintendo: it's not that Wii is amazingly successful today, but how they succeeded to rebound after the GameCube disaster.

Anonymous said...


>"Reliable as Tandem."

That had to be dry humor right? Tandem Computer, acquired by Compaq in 1997 which was acquired by HP in 2002, and Compaq at HP is their low end `cheapie' computer line. Only a few of us still remember the company.


Many still remember Tandem as THE company that had the guts to showcase unparalled reliability. I liked their demo when someone got on the stage and shoot a Tandem system in a random point as part of the demo. The system continued to run. That'sbecause they had full redundancy between systems, and almost-instantaneous failover.

Anonymous said...

"Halo is not the only killer app for XBox. We have others: GoW and GoW2, CoD4, GTA4. Many games are selling also on PS3 but have you seen in what numbers?"

A killer app may drive sales of software, but an exclusive killer app is what really brings up the sale of a specific console, and as a consequence, those console owners buy games for their hardware.

If you want to only look at the later part of the cycle, go ahead, fiddle while Rome burns.

Anonymous said...

Thank god - Halo is not the only killer app for XBox. We have others: GoW and GoW2, CoD4, GTA4. Many games are selling also on PS3 but have you seen in what numbers?

1. Is the GoW series actually profitable yet? We might have sold a ton of games and seen a lot of revenue, but we also paid through the nose for it.

2. Again rather than congratulating the Xbox team for having the deepest-penetration current-gen console which naturally results in higher 360 sales for multi-platform titles, you should be thanking Sony for actually supporting a thriving PS2 and not launching the PS3 until 2006, and then at such a high price point that it wasn't a threat to the 360's market share.

Do you truly think the 360 would be in its current position if the PS3 had launched alongside it in 2005 at the same price?

Anonymous said...

Just loaded up on Windows 7, it is simply awesome, the best OS user can have for many years!

Great job, COSD, everyone of you deserve a promotion!

skc said...

>>Do you truly think the 360 would be in its current position if the PS3 had launched alongside it in 2005 at the same price?<<

You're basically saying the XBox team made better business decisions than Sony.

I'm struggling to understand why you see this as a negative.

Anonymous said...

>> 1. Is the GoW series actually profitable yet?

Yes.

>> 2. Do you truly think the 360 would be in its current position if the PS3 had launched alongside it in 2005 at the same price?

No, but what's the point? 2005 is history and we've already succesfully outmaneuvered Sony in terms of both release-timing and pricing in the current console generation.

Again, the xbox business (hardware + software + services) is currently profitable. Think about this in case you're still confused to the contrary... Though hardware is low-margin, game software and LIVE services are not...

Anonymous said...

re declaring victory for the 360 becoming operationally profitable:

If the 360 is going to continue to be sold on a profitable basis for the next 20 years - without a redesign and re-launch, you might have a stronger point.

A possible concern is the onset of a new Xbox generation where the R+D costs are paid for by... what? The total 360 lifetime profits ?

Looked at from another angle, any time you go to ship a new generation of hardware, it might make sense to have a look at just how much profit in total the last generation attained, and how much is burned each quarter on the newest money losing version.

If you un-do all the gains of the last model within one year of introducing the new model, you are doing worse than treading water.

Anonymous said...

>>Do you truly think the 360 would be in its current position if the PS3 had launched alongside it in 2005 at the same price?<<

You're basically saying the XBox team made better business decisions than Sony.

I'm struggling to understand why you see this as a negative


Let me see if I can enlighten you, then:

It's not as simple as better/worse. Sony KILLED us last generation and as a result they were able to continue to promote and enjoy the success of the PS2 (a system two years "out of date" when the Xbox launched) while MS was forced to abandon ship on the Xbox and launch the 360. Thus when you're discussing the current gen, it really behooves you, in the interest of honesty, to allow for the fact that Sony has only been in this gen for two years while the 360's been at it fifty percent longer. Also, Sony continued to support the PS2 with new releases even after the PS3 was launched, something MS didn't do.

So in the interest of fairness, you should really compare the 360 to both the PS3 and the last part of the PS2's lifespan.

And since a huge part of the PS3's problem has been its price point, you also have to factor in what they achieved with that price. Blu-Ray won the war. The 360-backed HD-DVD is dead, despite all this "we're winning the living room" hyperbole.

Oh, and there is the little problem that the 360 is pretty much over the hump now, took way too long to turn a profit (which won't overcome the cost to get the thing launched, to say nothing of addressing the huge gaping chasm in MS' war chest left by the Xbox debacle), and will almost give us another two years or more of negative returns to get the next-gen Xbox into the market.

Two years of barely-positive returns (one achieved only by retroactively tucking the RROD charge into the previous year) surrounded by multiple years of huge losses really is nothing to be proud of.

Did that help?

Anonymous said...

"Again, the xbox business (hardware + software + services) is currently profitable. Think about this in case you're still confused to the contrary... Though hardware is low-margin, game software and LIVE services are not..."

If it is, and you can't confirm that because the company doesn't break it out, it's because of software. Hardware is still losing money and services is low margin. And Bach recently said that attach rates are down 25% due to the recession. So even that software-provided "currently profitable" could revert anytime. But more to the point, the entire division is low margin. Last quarter it generated $178 million profit on sales of $1,814 billion. That's the kind of return you might expect from a semi-conductor manufacturer or maybe a utility. And those are the as reported figures, which apportion some divisional costs to corporate activity. In other words, real profitability would be even less.

Anonymous said...

Desperately trying to explain failure has become a MS art form. The latest: "retooling".

"Microsoft says it is responding to the fierce competition in the phone market by retooling and beefing up its mobile operating system–and by putting it on fewer devices."

I wonder if MCE is about to be retooled too?

Microsoft Loses the Online Content Fight

http://msmvps.com/blogs/chrisl/archive/2009/01/09/1659929.aspx

Or maybe Zune, now that it had a "great year" selling less units than it did in the first eight months after launch?

Anonymous said...

Non-Microsoftie watching from the outside and having a little trouble deciphering titles and levels. There is a linear level set (63 - 64 - etc), and then a set of titles, however these are not necessarily matched.
The lower levels make a lot of sense. It looks like:
62 = Lead
63 = Senior
64 = Senior II
65 = Principal

What level is a Director? Or a General Manager? What about a Product Unit Manager, or Group Product Manager? I'm sure these encompass several levels each. Are the titles interchangeable?
Can somebody clarify what the career progression is at the top?

Yong said...
This comment has been removed by the author.
skc said...

>>And since a huge part of the PS3's problem has been its price point, you also have to factor in what they achieved with that price. Blu-Ray won the war.<<

Could have fooled me. Sony won a war that's left them in dead last place this generation.

I think it's odd how its fine for Sony to make huge losses in order to secure the future of Blu-Ray, yet it's not fine for MS to make huge losses to secure the future of the XBox.

Looking at Sony's financials, it's clear that they don't have the capacity to do this, while MS does.

So I'm kind of tired of people talking through both sides of their mouths on this XBox issue.

I mean we have one guy claiming MS shouldn't be throwing money at the XBox, and another claiming MS needs 360 exclusives (which cost a ton of money to secure)

I think it's too early to say kill the XBox. It's been a hit with consumers, which makes for a nice change wrt MS software these days.

Anonymous said...

It is good to hear Zune is going away. The next step is killing off the Xbox fiasco for Ballmer.

With the lead time needed to design and set in motion something as major as a new piece of console hardware right about now or fairly soon is when another couple billion would need to be spent ramping up a new product over the next couple years.

If Ballmer lets that happen you can pretty much forget about this company ever turning things around.

The Xbox 360 already was the lowest quality and cheapest to manufacture junk ever put out in the console market. And they are still losing money three years into the product's life. And that is not even taking into account all the silly accounting games the division is doing to hide the losses.

When the 360 was given the go ahead to spend the cash on the new hardware after the first Xbox was mercifully killed off, it was with the understanding that this was their last chance to finally get it right. And they blew beyond anyone's worst case scenarios. Not only have they lost billions once again, they even have managed to tarnish the brand name with that stupid RRoD logo now being used everywhere just when the days of BSOD jokes had finally died away. Way to go Xbox team!

Microsoft hasn't magically develop chip design and electronics manufacturing divisions, so there is absolutely nothing to believe that the any money wasted on future Xbox products would ever be profitable. If anything any future Xbox hardware would have to be even more costly to assure that the same hardware failure fiasco that went on with the 360 doesn't happen again.

Hopefully the plan for the Xbox is to just let the platform die off in the market. Continue to milk the playerbase for the 50 dollar a year online charges but stop wasting any more money on the product. Almost all of the first party studios have been shutdown or left. Shut the rest of them down and cut the Xbox staff to nothing but a skeleton crew to keep the online stuff running.

With distractions like Zune and the Xbox mess killed off, we can start to focus on the real problems facing the company.

Anonymous said...

>>And since a huge part of the PS3's problem has been its price point, you also have to factor in what they achieved with that price. Blu-Ray won the war.<<

Could have fooled me. Sony won a war that's left them in dead last place this generation.


One more time: "this generation" for Sony is only two years, while it's three years for the 360. The 360 has already seen its best days. It will never have another game on the scale of Halo3 simply because it no longer has any internal studios capable of delivering such a title and the margin on external titles is nowhere near as big.

The PS3, on the other hand, is just getting started. Considering that the life of the PS2 was almost twice that of the Xbox, you can't simply keep defining "this generation" on your own MGS-sanctioned terms and expect everyone else to just play along.

(You know, sort of like the claim that Nintendo is in another industry altogether so you don't have to acknowledge how they overtook the 360 despite being in the market less than half the time).

I think it's odd how its fine for Sony to make huge losses in order to secure the future of Blu-Ray, yet it's not fine for MS to make huge losses to secure the future of the XBox.

Maybe because "the future of Blu-Ray" is all profit while "the future of Xbox" is another cycle of two or more years of deep losses in R+D, manufacturing, and launch costs followed by a year or two of razor-thin profitability.

Seriously, I know objective thought like this is verboten in the halls of MGS, but step outside the spin cycle once in a while. Then again, I realize it's tough to acknowledge a concept when your paycheck is dependent on not acknowledging it.

Shammi said...

"The Xbox 360 already was the lowest quality and cheapest to manufacture junk ever put out in the console market. And they are still losing money three years into the product's life. And that is not even taking into account all the silly accounting games the division is doing to hide the losses.

When the 360 was given the go ahead to spend the cash on the new hardware after the first Xbox was mercifully killed off, it was with the understanding that this was their last chance to finally get it right. And they blew beyond anyone's worst case scenarios. Not only have they lost billions once again, they even have managed to tarnish the brand name with that stupid RRoD logo now being used everywhere just when the days of BSOD jokes had finally died away. Way to go Xbox team!"


Are you that oblivious to what's going on. Without the XBox, we might as well sit aside and watch as Apple, SONY or someone else sneaks into the living room and take over the huge opportunities that await us. Why is it that people have so much hatred towards the XBox when we as a company poured money into MSN, search and other live services year after year before finally turning a profit. It's pretty clear that technology evolves and the battlegrounds change and sometimes its important to have presence and be in a position to take advantage of conditions in the future.

It may not be public information, but from books, websites and rumors it's pretty clear that the XBox management knowingly took the risk of shipping with the RROD problems. You could say that they didn't anticipate it to be as bad, but the reason that decision was made was clearly to get that 1 year advantage before SONY. The question you ask is whether that 1 year was worth the billion dollar + bad PR that we have had to dig ourselves out of. Given where we are today, I would say we came out okay. Now let's compare this to Windows Vista. We don't have to second guess how bad the Windows brand was tarnished because of that product. You would be lucky to find anything positive written about it. At the end of the day, MacOS made a significant gain in market share last year because of that. Interestingly, the financials show that Vista did make money. I'll let you decide on which is the better product; Vista or the 360...

As for making money, is it that hard for some of you to understand the nature of the business model in the video game industry; you subsidize your hardware and make the profits in software, services and accessories. If you just look at the 360, will we be able to recoup the money we dumped in + come out on top at the end? In my opinion, (not considering last gen) I do believe that. Last gen was the price we paid to get into the market. Given the time constraints, I thought they did a phenomenal job in coming up with a platform that gave us significant credibility with the consumers. However with regards to money, where did we falter in the last generation? It was games. We thought we would make it all back on first party titles. Unfortunately, that led to a lot of quantity but extremely mediocre quality titles coming from Microsoft. So you can argue that our software department failed to deliver the killer apps outside of the Halos, PGRs and a few other exceptions. Furthermore, we didn't build Live overnight on the 360. Live as a service was proven on the first XBox and that alone gave us the a huge jump start in this generation.

In any case, throw the financials aside for a while and will see some crucial points of success.

- Our outmanouvering SONY, has made them weak exactly where they were strong. We have 28 million installed devices connected to TVs at a time when all the tech folks are bring together all the technologies into either portable devices or your living room. That by itself is a very powerful advantage.

- HDDVD made SONY pour their finances into tryign to secure BluRay as the winning format. Nice diversion, while we ramp up or streaming services to movies.

- Zune might not affect Apple, but at the least it was trying to keep Apple focused on the iPod (little wishful hope of keeping their focus away from MacOS which challenges us)

- Whatever you guys might say, the success of XBox Live as a service is merely the tip of the ice berg. I believe we are about to cross the point where media companies approach us to host their content as opposed to us going to them. NetFlix is again only the start. With DRM slowly fading away in music, why would I not want to buy my songs over XBox Live if they worked on my iPod (which by the way works well with the 360). This breaks the iTunes monopoly with iPod.

- 28 million XBoxes connected to TVs is 28 million potential Windows Media Extenders. You can see the trojan horse that this device really is.

- At the end, even if we come in 2nd this generation (losing out to Wii), the next generation will be a lot smoother. Provided we continue the quality and content on Live, we will have an easier time transitioning to the next XBox as the leading living room device of choice.

Anonymous said...

Some comic relief regarding Xbox, HD-DVD (of which I owe one).

http://www.youtube.com/watch?v=frZTf3mX97c

Guys, we need Xbox. Until folks have a single media device, PC=TV, we need the extension, pardon the pun.

Anonymous said...

Are you that oblivious to what's going on. Without the XBox, we might as well sit aside and watch as Apple, SONY or someone else sneaks into the living room and take over the huge opportunities that await us.

I'm not even going to read the rest of this post because this comment is so ludicrous. This is the BS line that Microsoft has been feeding us since before the XBox 1 was even released. Remember the tech talks? About how it was so important to "own the living room", and how the original XBox was going to get us there, so it was definitely worth the big initial R&D (and manufacturing) costs and losses?

So over 8 years later, how did that work out? I guess the original XBox owns the living room now, right? Oh... Then the XBox 360 certainly must? Oh...

Marc said...

I think your axe is sharp now..you sure you need to keep grinding it?

Anonymous said...

All this talk is rubbish. It's like an elephant complaining about a piece of sh!t it stepped in. Microsoft makes BILLIONS of revenue and BILLIONS of net income. It will do this for at least the next 10 years. WHO CARES anymore. This blog is irrelevant; it makes the assumption that fewer people will make better products that will make more money. Sorry Mini - you are flat out wrong. With all the people who do work at MSFT - why does W7 look like OSX? There is a lack of creativity at the top. That's where the layoffs need to happen. Sorry, but until SteveB retires, we'll all be reading your blog. Oy.

Keeperplanet said...

Gaming consoles aside, I am astonished at the effort by Microsoft to destroy a software driven PC-gaming console that would glove into any PC, complete with a myriad of options on the haptic interface that could be sold as peripherals to your OEM hardware manufacturer partners.

Why Microsoft has not concentrated on software to install on any one of tens of thousands of pc's, umpc's, yada yada, phones, which would compile any version of any game to just effing work, is one of those conundrums of paradoxical and missed opportunities that Microsoft routinely misses.

That is what happens when you forget who you are--either that or Microsoft should invest that $40 Billion it was going to spend on Yahoo to instead purchase a few electronics factories in Asia. But, the profitable solution has always been in providing software to run games on hardware one already owns or has built himself.

Anonymous said...

It is good to hear Zune is going away.

Except it's not.

Anonymous said...

This whole concept of "owning the living room" is deeply flawed.

People want content everywhere, not just the living room. Honestly, my house doesn't even have a living room at this stage.

If Microsoft is still concerned about "owning" a single room, perhaps they better just give up, as they've clearly lost touch with the reality of media today.

skc said...

>>The PS3, on the other hand, is just getting started. <<

Laughable. I'm willing to bet anything that had the 360 been the one to introduce Blu-Ray, be the most expensive console and languish in last place after having been the dominant company in console gaming for an eternity...I can guarantee that you would NOT be sitting here praising the XBox team.

Guarantee it.

Seeing as you accuse me of working for MGS, I guess it's only fair that I point out that it's likely you work for Sony.

See how that works?

Anonymous said...

Off-topic, but this amazes me:

"In December, hundreds of these controversial software developers gathered for one week at the Google headquarters in Mountain View, Calif. They came from all over the world, sporting many of the usual signs of software mercenaries: jeans, ponytails, unruly facial hair and bloodshot eyes.

But rather than preparing to code for the highest bidder, the developers were coordinating their largely volunteer effort to try to undermine Microsoft’s Windows operating system for PCs, which generated close to $17 billion in sales last year."

http://www.nytimes.com/2009/01/11/business/11ubuntu.html?_r=1

If MSFT held a meeting of industry players for the express purpose of undermining the businesses of IBM or Oracle, for example, the DOJ would come down on us like a ton of bricks. Also, with Google hosting this and backing Linux financially, that seems dangerously close to illegally trying to maintain their monopoly by hurting the business of one of the only remaining people capable of giving them any competition.

Anonymous said...

>"This whole concept of "owning the living room" is deeply flawed."

It's a euphemism for personal and family entertainment place.. I am pretty sure people in the industry realize `living room' refers to the place or the object in front of which we live. Could refer to anything or place.

Ref Wikipedia: "It [euphemism] also may be a substitution of a description of something or someone rather than the name, to avoid revealing secret, holy, or sacred names to the uninitiated, or to obscure the identity of the subject of a conversation from potential eavesdroppers. Some euphemisms are intended to be funny."

Anonymous said...

Visual Studio as a product actually loses money every year, but it's not our business strategy to make money with Visual Studio, but actually to attract developers to the Windows platform.

The licenses fees are there because we can get away with charging them, but even if we had to give Visual Studio away for free to everybody (we already do to many entities and markets), it would still be actively developed.

Anonymous said...

If MSFT held a meeting of industry players for the express purpose of undermining the businesses of IBM or Oracle, for example, the DOJ would come down on us like a ton of bricks.

Eh? Happens all the time. The XBox that we've been talking about for this entire thread is designed to bring down Sony and Nintendo. I'm sure Microsoft invites game/peripheral developers over all the time with the goal of bringing down the competition.

What do you think the Zune meetings looked like?

And to be fair, Microsoft fired the first shots in Microsoft vs. Google. Microsoft didn't give a rat's a** about internet search before Google started making money at it.

Anonymous said...

>"Eh? Happens all the time."

Not the OP here. Thank god for real competition. Just curious, how would you rate Microsoft's success at the bringing down the targets you mentioned, on a cost per gamer vs profit per gamer basis?

Anonymous said...

>>The PS3, on the other hand, is just getting started. <<

Laughable. I'm willing to bet anything that had the 360 been the one to introduce Blu-Ray, be the most expensive console and languish in last place after having been the dominant company in console gaming for an eternity...I can guarantee that you would NOT be sitting here praising the XBox team.

Guarantee it.


Oh goody, time to dissect another Straw Man...

Honestly, are you incapable of acknowledging the context here? You act as if both Sony and the MGS team started off at the same point in time with the same overriding priority (being #1 in the current gen by the end of 2008).

It's not "praising Sony" to simply attempt to point out to you that this isn't true. While that was certainly A goal of Sony, it wasn't the only one. They had a thriving current-gen system to support rather than cannibalize and they chose to take advantage of the later launch this afforded them to leverage their presence to win the looming HD format war.

If the PS3 and 360 had launched simultaneously and the 360 had included a built-in HD-DVD drive, it would have been the death of the Xbox brand. You're right, I wouldn't be here praising it (just like I'm not praising Sony) because the plug would have been pulled and there'd be no Xbox to talk about.

Sony was in the position where they could afford to have more than one priority. Xbox was not. That's why they launched a system they knew was broken, as they knew launching head-to-head with Sony's new system would be a death sentence.

You are using a single metric of "success" and insisting that it must have meant everything to Sony simply because it meant everything to MGS. And then you ignore the obvious evidence that it didn't mean everything to Sony and what they in fact gained by not making it mean everything.

If that perspective were any more ridiculous, it would have shown up on a slide during Ballmer's keynote.

Seeing as you accuse me of working for MGS, I guess it's only fair that I point out that it's likely you work for Sony.

See how that works?


Right, because the ONLY way anyone could disagree with your myopic worldview is if they're getting paid for it... although how you manage to square that opinion with the positive things I said about Nintendo eludes me.

Oh wait, that's right... they're not really in the "games" business. I guess because everyone in MGS is required to believe that, you figure Sony employees must have a similar group delusion going on.

Anonymous said...

Non-Microsoftie watching from the outside and having a little trouble deciphering titles and levels. There is a linear level set (63 - 64 - etc), and then a set of titles, however these are not necessarily matched.
The lower levels make a lot of sense. It looks like:
62 = Lead
63 = Senior
64 = Senior II
65 = Principal

What level is a Director? Or a General Manager? What about a Product Unit Manager, or Group Product Manager? I'm sure these encompass several levels each. Are the titles interchangeable?
Can somebody clarify what the career progression is at the top?


Not exactly correct:

A 62, for instance is a 'II'. For an SDE, that's an 'SDE II'.

63 & 64 both have 'Sr.' tacked to the front. 'Sr. Program Manager'.

65-67 all are 'Principal'.

>= 68 have 'Partner' preceding anything else. 'Partner Architect'.

70 = 'Distinguished Engineer', perhaps other things.

Everything above 68 is sort of abstract as though there are concrete compensation rules for <68, the rules are different for >= 68. (You're not eligible for things like 'Gold Stars', your bonus potential is tied to company performance, etc.)

'Director', 'General Manager', 'Product Unit Manager' are different levels of organizational management that cover many disciplines.

'Lead' is the first level of management. 'Lead SDET' is the manager who runs a team of Software Development Engineers in Test.

'Manager' alone is the second level of management. They usually have mostly Leads reporting to them. An 'Manager of Software Development' would have 'Lead SDE's reporting to them for the most part.

Some titles make someone's level fairly obvious. If it says 'Sr.' before anything else (and for employees, look in Headtrax, not the address book; address book titles are frequently inaccurate), the person is likely a 63 or 64. If it says 'Lead', you haven't a clue what level they are. A Lead could be nearly any level.

Does that help?

skc said...

>>They had a thriving current-gen system to support rather than cannibalize and they chose to take advantage of the later launch this afforded them to leverage their presence to win the looming HD format war<<

Again, laughable. Rumor has it that Sony'll be posting their first ever operating loss in 14 years.

And yet, somehow, you see this is a great business.

Go BluRay!

keeperplanet said...

Interesting job posting from Microsoft. An example of what is wrong with American corporate job trends.

http://www.coroflot.com/public/job_details.asp?job_id=21901

We all know that US jobs have long been going offshore--should be a glaring indicator of what is wrong today in today's financial loss environment. I remember thirty years ago having to compete with industrial designers from Europe, (Frog design was a big competitor then with its German founder).

As an American educated industrial designer (San Jose State, '77) I have seen a steady erosion of US jobs sent offshore, Europe first, now Asia, China. Nowadays, it is extraordinarily difficult to obtain design contracts and employment (for individual designers), nearly impossible, a)because I am older -56- and b) because I am a US trained industrial designer who would expect a salary commensurate with $90k to $160k.

As Walmart has eliminated US manufacturing for cheaper Chinese production($400 billion to China last year) now the professional skills, (developer, programmer, designer) are being shifted offshore. Trust me when I say it has absolutely no foundation in skill or talent--it is all about cost. Good luck with that Bill, Steve.

I love the analysis of your insidious ignorance of industrial design skills by thinking; that you can translate US cultural mores for those Chinese, by empowering the highly restricted, un-American constraints on freedom that exist in all of China. I can can say this from a place of informed wisdom because I was born in Taiwan as an American (citizen of a DOS diplomat).

Good luck with your offshore industrial design efforts. Bottom line is if in America there is no one who can afford your price, you will indeed not be able to survive yourselves by your implicit elimination of the identity of your corporate selves to somewhere foreign.

Anonymous said...

"Apple CEO taking medical leave
Posted Jan 14 2009, 04:52 PM by Kim Peterson Rating: Steve Jobs, the chief executive of Apple (AAPL), is taking a six-month medical leave to recuperate, the company said Wednesday"

Sad day for Jobs and Apple shareholders. But maybe Ballmer can now win one.

Anonymous said...

The One Before Microsoft's Layoff?

Wall Street Journal:
In Rare Move, Microsoft Is Exploring Job Cuts.

Meh. I can only read the preview, I can't see who the author is, and what I can read seems to be, "Maybe. Maybe not!"

Anonymous said...

>>They had a thriving current-gen system to support rather than cannibalize and they chose to take advantage of the later launch this afforded them to leverage their presence to win the looming HD format war<<

Again, laughable. Rumor has it that Sony'll be posting their first ever operating loss in 14 years.

And yet, somehow, you see this is a great business.

Go BluRay!


I-yi-yi, where to start?

I never said Sony's strategy was "great business." That's yet another straw man you decided to introduce because you couldn't argue with what I actually said. I said they had a different set of priorities and you can't argue with that as evidenced by the bulk of the post you decided to ignore.

In truth, though, it is just a bit premature to look at Blu-Ray and say it's NOT a success.

I mean, if ONE operating loss in 14 years is an indication that the sky is falling, how on Earth can you continue to defend the Xbox sinkhole? Is that yawning chasm acceptable simply because MGS can leech from a company with a larger revenue stream that could absorb its absurd impact year after year for what, SEVEN years?

I'd point out again that at least Blu-Ray has a longer period of payback ahead of it while Xbox will undoubtedly subject us to yet another round of launch costs before this spate of "profitable" years comes close to actually putting a dent in the 360's startup costs, but you'll just ignore that and "respond" to a point I never made in the first place.

Anonymous said...

Layoff announcement will come on 22nd.

http://news.yahoo.com/s/nm/20090115/bs_nm/us_microsoft

Anonymous said...

"Eh? Happens all the time. The XBox that we've been talking about for this entire thread is designed to bring down Sony and Nintendo. I'm sure Microsoft invites game/peripheral developers over all the time with the goal of bringing down the competition."

That's partners meeting not competitors meeting. The former is business as usual, the latter is potential collusion. Think the DOJ would stand still if Nintendo and MS met to jointly determine a strategy for overthrowing Sony in gaming?

"And to be fair, Microsoft fired the first shots in Microsoft vs. Google. Microsoft didn't give a rat's a** about internet search before Google started making money at it."

Yeah, guess that explains why they were investing in Inktomi back in the 90's.

Anonymous said...

To these "American-trained-citizens", please get used to attractive jobs moving overseas. If you think you can run a very profitable, global bussiness here in the US employing only Americans and paying them 100K salaries + attractive benefits, by all means go ahead, get the funds and start an Engineering company with a culture of discrimination and preferrence. It's a free country and you are absolutely free to pursue such an interest.

But good luck actually competing and partnering with modern, global companies with diverse workforces when it comes to actually selling your products, creating a global eco-system and earning a profit. It would be also very interesting to see how much of the top talent you can recruit from the top engineering schools like Berkeley, Stanford, MIT, etc. which have extremely diverse engineering departments. My money is on your company failing miserably. So accept the diversity and embrace it with open arms.

Anonymous said...

AC wrote:
If the PS3 and 360 had launched simultaneously and the 360 had included a built-in HD-DVD drive, it would have been the death of the Xbox brand.

Wrong. Were that the case, PS3 would have been an epic fail. Picture this: comparable gaming device (=), with exciting titles (=), next-gen DVD capable (=) with DVD-compatible technology (adv HD-DVD) at a much lower cost for both consumers (adv Xbox) and producers (adv HD-DVD). So, what makes you say this would have been a killer for Xbox?

BTW, to add a bit of context: PS3 was 1 year late because of BD and Sony could not have afforded to miss that train. We all know that. However, Xbox360 with HD-DVD would have also been 1 year (or slightly less) late, because there were only a few people in MS at the time working on an HD-DVD player prototype; the rest of the knowledgeable ones were banging away on Vista, trying to make the EVR work. (This happened after Xbox360 launched, of course, but it goes to prove an integrated HD-DVD would not have been possible earlier, unless the whole Xbox project management had unfolded differently).

Anonymous said...

That's partners meeting not competitors meeting. The former is business as usual, the latter is potential collusion. Think the DOJ would stand still if Nintendo and MS met to jointly determine a strategy for overthrowing Sony in gaming?

I'm confused. I don't understand how Google competes with Canonical?

"And to be fair, Microsoft fired the first shots in Microsoft vs. Google. Microsoft didn't give a rat's a** about internet search before Google started making money at it."

Yeah, guess that explains why they were investing in Inktomi back in the 90's.


The reason Microsoft was "investing" (using) Inktomi is because they needed something to deliver search results for the MSN home page and didn't think it was of enough consequence to develop themselves.

If you're trying to bring up Inktomi as a way of indicating that Microsoft was behaving with intelligent foresight re: internet search back in 1997 and is therefore just as good as Google at (whatever), remind me again, how did that "investment" work out?

This is getting off topic, but it cracks me up how, when discussing a competitor's successful product, many Softies will declare "Microsoft was doing that YEARS ago, we just didn't productize it." I'm not sure what their point is, maybe that Microsoft is horrible at business? Interactive satellite mapping i.e. Google Maps/Earth is a favorite example but there are many others.

Anonymous said...

"I'm confused. I don't understand how Google competes with Canonical?"

Perhaps you understand how Oracle competes against Redhat, or how Sun competes against IBM? Or perhaps you'd care to answer the proposed question of what would happen if MS and Nintendo met to try and overthrow Sony? Oh right you can't, hence the attempted redirection. Google's concern, or what should be their concern, is that they're a quasi-monopoly. Therefore, they are (or soon will be) held to different requirements than others. One of those is exposure to charges of illegally maintaining that monopoly. You know, like hosting and funding efforts with the stated purpose of hurting one of your only viable competitors?

"If you're trying to bring up Inktomi as a way of indicating that Microsoft was behaving with intelligent foresight re: internet search back in 1997 and is therefore just as good as Google at (whatever), remind me again, how did that "investment" work out?"

I'm bringing it up to show that your point about them not caring about search before Google made money at it is bs. Looks like I succeeded.

Anonymous said...

Can somebody at MS ever take responsibility for anything? Case and point, this excerpt from R Bach's interview to the PI:

"On how 30 gigabyte Zunes managed to freeze simultaneously Dec. 31: You never like having something like that spring up, but when you're in that space -- Sony has things like that, Nintendo has things like that, Apple has things like that, it does happen."

I'd like to know exactly what Apple, Sony and Nintendo "had" that was as bad as an entire line of products rendered unusable for a day. I can't recall anything that has earned them as much bad press as MS got for the Zune.
If you add the RRoD fiasco to the Zune debacle it becomes very hard to deny that MS is in a league of its own... not that it will stop Mr. Bach from trying.

Anonymous said...

To these "American-trained-citizens", please get used to attractive jobs moving overseas. If you think you can run a very profitable, global bussiness here in the US employing only Americans and paying them 100K salaries + attractive benefits, by all means go ahead, get the funds and start an Engineering company with a culture of discrimination and preferrence.

So, essentially, you're saying Americans should just get used to a much lower standard of living.

Well, I'd hate to break it to you, but who exactly is going to be buying those products your global company is manufacturing if no one can afford them because there aren't any decent paying jobs any more?

keeperplanet said...

>"But good luck actually competing and partnering with modern, global companies with diverse workforces when it comes to actually selling your products, creating a global eco-system and earning a profit."

Industrial design defines the soul of a manufacturing company. To offshore it from an American company is to relinquish that soul to foreign control. If that is what Microsoft wants to do, go for it--then perhaps Microsoft would be a truly global company. Maybe it is better, because management at Microsoft has real difficulty understanding what good design is and looking at the ob description for the Chinese design position, it still does not understand what it is, but there are some pretty good design schools in China these days, so may things are changing.

I am pretty sure those products sold in a global ecosystem will not include a healthy industrial base in the US, from looking at trends. This essentially means that at some time, (I believe we have already passed that time because of the current world economic recession), the US will reach a tipping point where the goods being shipped to this country by the boatload are no longer able to be purchased by US citizens because the jobs that purchase those goods no longer exist.

Sure, I can barely afford a crappy $12 coffee grinder at Walmart made in China, but next year, I may not even be able to afford the $12, while ten years ago, I was able to afford $49 for a much higher quality product because I lived in a still economically valid financial ecosystem. As lower labor costs draw off jobs at all levels from US shores, then the number of people who support those jobs is reduced and the quality of goods purchased is also reduced in order to keep feeding the desire to increase sales. You see this everywhere, in all goods sold at every level.

Netbooks will be replacing Notebooks in many places because they do what people do with notebooks do, which is browse the internet, but the general overall speed, diversity, and quality of the experience is also reduced in order that cost to manufacture can still meet the price point people can afford for an `internet experience' appliance.

But the $12 coffee grinder has no brand, the design of the thing is so incompetent that popping the cap to get the ground coffee spills it all over the floor. And every time I make a cup of coffee, I wonder, did a guy in a Chinese labor camp actually make this thing, or how ethical is it to pay someone a few pennies an hour to make it cheaper for me to buy such a non-essential appliance? So he has a job, and I don't? It seems to me the only ones benefiting from this are the people running the company and the store owners willing to sell it--oh yeah, I suppose the consumer is benefiting if you are willing to accept that lower cost equals higher quality user experience, which it does not. But there is no question that the quality of the experience for everybody else is decreased, local neighborhood stores go out of business, manufacturers of those kinds of products are shifted from one country to another. It has been going on so long, no one even notices, until all of a sudden, the DOW drops %50 in two months. Whoops. Oh and what exactly happened to the Chinese economy in those two months? Damned if you do and damned if you don't. How many are being laid off at Microsoft this week? A global eco-system my ass. Sounds more like slavery in the name of `modern global companies with diverse workforces to me.

The philosophy of off-shoring is ok as long as there is an equal effort to maintain some of the manufacturing and design onshore. But to offshore design and the core of a company's `raison d'etre' to foreign control is the same as moving the headquarters to the foreign location, and the company ceases to maintain its original local identity associated with place. Distributing wealth on a global scale cannot be sustained if you move all the jobs away from the place where the goods end up being purchased in the first place.

Anonymous said...

LAYOFFS ARE HERE, NEW POST PLEASE

Anonymous said...

Parakh says his checks indicate the company is going to cut headcount in the near-term by 6,000-8,000 employees, or about 6%-8% of its roughly 95,000-member workforce. He adds that the company has already and will continue reducing its roughly 40,000-member contractor workforce.

http://blogs.barrons.com/techtraderdaily/2009/01/15/microsoft-street-trimming-estimates-on-weak-pc-sector-but-xbox-sales-seen-ahead-of-plan/?mod=yahoobarrons

Anonymous said...

Heard from a neighbor who works in Marketing that his manager told him that they may have 20% cuts.

Anonymous said...

Or perhaps you'd care to answer the proposed question of what would happen if MS and Nintendo met to try and overthrow Sony? Oh right you can't

I don't know the answer, nor is the question or answer of any consequence. In the article we're discussing, Canonical (which "makes" an OS) met up at Google HQ (which doesn't make an OS) to discuss "overthrowing" Microsoft's OS. From the article it's not clear what role Google played in the meeting--maybe they were simply providing a location. Who knows. In any case, if we limit ourselves to the scope of operating systems, this is just Canonical vs. Microsoft which is simply normal competition and should not be considered unfair. Maybe if Google and Canonical were working on some sort of OS-Search mashup it would be more of a concern, but I don't recall anything of the sort mentioned in the article.

I'm bringing it up to show that your point about them not caring about search before Google made money at it is bs. Looks like I succeeded.

The opposite, actually. The point you drove home is that Microsoft cared so little about Internet search that it threw some money at some small vendor to do it for them.

Anonymous said...

Nice example of FUD:

Heard from a neighbor who works in Marketing that his manager told him that they may have 20% cuts.

No first hand knowledge, ambiguous group, and the key word "may". If any manager told an employee that they "may" have 20% cuts that manager should be fired for incompetence.

Anonymous said...

It ain't FUD when it comes true and you're part of that 20%!

Anonymous said...

any one have credible insight/confirmed news on where these lay offs are occuring?

Anonymous said...

"I don't know the answer, nor is the question or answer of any consequence."

Sure you do and the answer is of consequence. It just happens to blow up your response so you want to avoid it. And the direct competitors were Oracle, Sun, Redhat, and others, who all make operating systems. Google's exposure, again for the reading impaired, was the potential exposure to charges of illegally maintaining their monopoly. And I'm sure you're up on all that from when you were bashing MS for doing likewise. Remember?

Anonymous said...

I'm bringing it up to show that your point about them not caring about search before Google made money at it is bs. Looks like I succeeded.

Lemme see if I understand this. Your point is MS has been "focused on search" since 1997 by investing in a third party search engine? In the same year two guys at Stanford manage to figure out how to build a quality search engine and eventually begin to monetize he hell out of it in three short years. What was MS doing all this time if they were indeed "focused on search before anyone else?" We are supposed to have a collection of the biggest brains in the whole world. So how did we manage to screw that up? And continue to screw it up? Hell, even the internet almost passed us by. Bill had to be dragged kicking a screaming by Sinofsky to even acknowledge it. Gates had absolutely no vision regarding the internet, so focused was MS on Win95; their "AOL killer", MSN, and other PC focused science projects. So, enough with the revisionist history. MS has always been one step behind when it comes to the internet.

Anonymous said...

Deja Vu?
Is MS repeating the mistakes Xerox made?

skc said...

NPD numbers just came in. The 360 sales doubled the PS3's sales.

Go BluRay!

Anonymous said...

Should I be telecommuting next week? I'm starting to worry about some laid off - i mean RIF'd - worker going psycho.

Anonymous said...

Layoffs coming in two rounds.

http://blog.seattlepi.nwsource.com/microsoft/archives/159577.asp

"Live Free or Die" said...

>". . .get the funds and start an Engineering company with a culture of discrimination and preferrence."

Give me a break. Sheesh. China, the most ethnocentric nation in the world, so paranoid as to require the internet to be monitored by millions of Chinese censors. China, so whacked on their desire to maintain cultural, social and race purity that they threaten citizens, countries and regions within their control on a regular basis with prison, missiles and war for not being party line followers. Hail to the new fascist state where prison labor resistance ends in your body parts being sold to a Western recipients.

I will forever discriminate against that kind of tyranny.

America, so open that whole cities all over the country are made up of various ethnicity segments from every part of the world, tolerated both legal and illegal. America, where the internet is not a place to fear retribution from the government for wanting to read the news. America, with diversity and technical prowess so deep that millions want to come here to work on the false notion that a job is waiting for them. And most would come anyway if they could just to be free from tyranny.

I am an American jingoist. Damn straight.

Anonymous said...

NPD numbers just came in. The 360 sales doubled the PS3's sales.

Go BluRay!


BluRay is doing pretty well. You might know that if you realized that the PS3 isn't the only BluRay player in existence. Or if you actually possesssed the intellectual honesty to acknowledge that Sony was indeed in a position to risk some market share in return for winning the HD format war... which they did. The 360, for all its "winning the living room" hyperbole, was unable to leverage its early lead to drive people to HD-DVD. And yes, Blu-Ray has some significant startup costs. But you're fine with every iteration of the Xbox having similar costs, even though console lifecycles are much shorter than media format lifecycles.

But you clearly aren't interested in objectivity. If you were, you wouldn't keep snipping the bulk of every post you reply to and snarkily repeating this "Go Bluray" cheer as if simply saying it sarcastically means it must be a failure. Or looking at sales figures for the PS3 alone, which is the highest-priced Blu-Ray player now in existence, is somehow reflective of the format's performance.

Nope, to you and the rest of MGS, having the number one console this gen meant everything. Therefore you continue to insist it MUST have meant everything to Sony (despite all indications to the contrary) and the fact that they killed you in the HD war even with the year's head start you had is a lesson you refuse to learn from.

I also notice you failed to acknowledge the Wii's numbers. Why is that?

(Never mind. We all know already).

Anonymous said...

So when underperformers get RIFed, then the average performers have to fill in for those positions. Then the avg. performers can't scale and suddenly they become the new 10%??

I find it interesting that there has been ZERO comment from SteveB or LisaB to within MSFT itself.

You would think they'd want to alleviate some of the worry that folks have. I've been pinged by folks in numerous groups wondering what I've heard.

Anonymous said...

>"We are supposed to have a collection of the biggest brains in the whole world. So how did we manage to screw that up? And continue to screw it up?"

That's easy to answer. Because Bill Gates and Steve Balmer ran the company then. Now Bill Gates `advises' from the board and Steve actually runs the company now. Same result: aka E&D, Vista. But wait, a new result is coming--
Windows 7 and Chinese designed game boxes. It's a win win any (pun intended) way you look at it. Three cheers for Mini's RIF.

skc said...

>>BluRay is doing pretty well<<

For whom exactly? Sony? Can you prove that at all? Can you?

>>. You might know that if you realized that the PS3 isn't the only BluRay player in existence<<

Yes, in fact, the PS3 isn't even the cheapest BluRay player on the market anymore, so kindly explain to me how this situation in anyway helps Sony. Why do I need to shell out all that money for a PS3 when I can get a dedicated player for much less?

>>Nope, to you and the rest of MGS, having the number one console this gen meant everything. Therefore you continue to insist it MUST have meant everything to Sony<<

I remember Ken Kutaragi saying that people would gladly get two jobs to afford the PS3, and that people would buy it even if it didn't have any games. So stop confusing their arrogance with superior business intellect. They did not expect or want to be dead last this generation, least of all losing to the XBox of all things.

>>I also notice you failed to acknowledge the Wii's numbers<<

Actually, Nintendo has outmaneuvered both Sony and Microsoft. That doesn't take away from the fact that MS has outmaneueverd Sony. I don't see your point. In fact the most interesting thing about Nintendos numbers was that they didn't hit the expected 3 million units this Xmas, which came as a surprise. My assumption is they were supply constrained.

In any case, we've really gone off track. The crux of the matter is MS has succeeded in creating a valuable brand in XBox that they can leverage much the same way that Sony is trying to build a brand around BluRay. One strategy is cleary working, the other is clearly flailing. Thats all I'm saying.

Omega said...

I think the xbox is in a good place for MS. Software-wise, the company has been able to secure the best selection and pace.
The Wii is used as a glorified flash-player and will have a very short (but vibrant) life. No worries there, I returned my Wii because there were no games for it. While I don't own an xbox and would be more likely to get a PS3, the point is that the xbox has the most to show right now - even if they are just brainless 3D FPS titles.

When it comes to Windows, this is where Microsoft falls hard. Marketing can no longer carry this product, it must get by on merits. Vista was propelled solely by persuading customers into accepting the performance deficiencies and peculiarities.
In the end, I think a strong and properly designed Windows will never in a thousand years have to worry about Apple. What Microsoft is fighting now is having Windows become a true legacy platform and outdone by Linux.

If the next Windows does not out perform XP and take a swing at Linux performance, we can likely expect it to be Microsoft's last kick at the can for Windows.
That's another issue MS faces as it expects the mentality that "newer must be slower" to take it's poor performing and high level user-space obsession further.

FOSS Linux distributions are catching pretty quickly and the WINE project chugs along. Propriety and obfuscation will only carry you so far as a strategy.

You can't beat free. Especially when it's faster!

That all said, new things like XNA and Microsoft's focus on developers otherwise almost seems...Hungry! They need to be given as much chain as possible. Microsoft has always wanted to build communities, but has often only succeeded at creating ghost towns.
I bet attracting more developer diversity to the xbox could get it the badly needed variety in titles.

Stop treating everything like a milestone and be so bold as to think you're providing a product or service for once.

As a consumer, that's how I see it, as well as the many people I talk with in my tech-tipi.

Keeperplanet said...

>"To these "American-trained-citizens", please get used to attractive jobs moving overseas."

I continue to be drawn to this discussion on sending jobs off shore. While the quote above and my own previous comments indicate this is absolutely true--jobs are leaving the US in the consumer electronics sectors at all levels, it does not need to so for all jobs. Japan went through a period of taking US automotive jobs on a huge scale when it figured out that it was to their economic benefit to bring design and manufacturing back to the US. And they did and they actually make money doing it. Design of many Japanese cars happens in Southern California studios, and manufacturing happens in many locations throughout the US.

Certainly the logistics of just-in-time manufacturing is hindered when the manufacturing facility is in Asia and the consumer is in Ohio. The cost-plus expenses are not that much lower than if the product were designed and made in the same factory in Ohio, for example. And managing the process of product definition, concept development and production implementation is certainly easier if the customer and the consumer speak the same language and are in the same country.

Efficiencies in manufacturing vs. the cost of labor and shipping can balance themselves to some close proximity if production is highly automated and moved very very close to the design process. This can happen in the US if companies were willing to ignore the statistics for a while and started investing in catching the pendulum swing just as it begins to move back to the US, before and after standards of living begin to increase in China and other manufacturing locations worldwide.

It is important to continue efforts to manufacture in the US as Intel does for example and as many more savvy technical managers of US goods do. I have even worked in a design to production environment located close in to downtown LA, on some of the highest cost real-estate in the world, and the products were competing on a half penny basis for competitive advantage. You have to commit, hire the right people, stand your ground, simplify the conglomerate to small manageable independent companies.

Anonymous said...

"I find it interesting that there has been ZERO comment from SteveB or LisaB to within MSFT itself.

You would think they'd want to alleviate some of the worry that folks have. I've been pinged by folks in numerous groups wondering what I've heard."


Sigh.

It's been so long since I've heard any of my peers express any confidence in our leadership that well... I think the last time was when BillG was still at the helm.

How did we get here? I truly feel nothing but contempt for most of our senior leaders... Lisa has been a *spectacular* failure as SVP of HR -- she has been so completely absorbed by the Mt. Olympus culture that she is unrecognizable from when she was a fearless prod dev VP who regularly bucked the system to stand-up for her employees. She was awesome, and now she's abysmal.

I was never a fan of BillG's style -- he frequently acted like a spoiled 5 year old and treated people like crap... but at least he had a passion for software instead of a passion for sales. It's not that Steve Ballmer is just a jerk and a blowhard -- if he had even a little bit of technical genius in him the rest would be acceptable. But he has no technical genius in him and only cares about the numbers, not the products.

10 years ago I could walk down the hall and have a meaningful conversation about products and technology with my SVP. Today? My SVP wouldn't know who I was from some random schmo on the street -- I doubt I would ever be given the chance to sit down and talk with him in person -- and he's surrounded by MBAs and suit-wearing power players who have no love for technology.

Microsoft is not coming back from this -- when the switch happened from technology leaders to business leaders it changed things irrevocably, and introduced the kind of split between employees who love technology and leaders who love sales that's responsible for the eye rolling and cynicism that pervades modern Microsoft.

Happily I'm not a 10%er, but I do believe it's time to hit the road. I'm tired of working for people I don't respect.

Anonymous said...

Ah all these disdains for Bach's E&D and one bad PR after another like Zune fiasco and RRoD. And ridiculous counter points from Xbox bagholder PR talking heads...

I think most of us would like see E&D get spun off and make their last stand against Apple and Sony.

Back to RIF though. Sure MSFT will push some 10%ers out of Redmond BUT who will make up the 10% in 2009 review? Yep many of those who was spared. Be careful what you wish for 90%ers.

Anonymous said...

I wanted HD-DVD to win too, but I don't think Blu-Ray is the biggest long term threat at the moment. After all, worst case scenario, add it to the next Xbox console.

Networked distribution of HD movies will probably beat out physical means in the long term. Right now, iTunes is a good candidate to do that...

iTunes is especially dangerous for MSFT, because it comes with Quicktime (thus threatens WMP).

But in the worst case, adding iTunes to the Xbox without Apple's blessing, would be a nightmare.

So I say this will all sincerity: HD-DVD is dead! Long live Blu-Ray!

Anonymous said...

I think it's all about next gen consoles now... if nintendo can't pull off another wii and they won't be able to do it unless they can use mind controller games or whatever MS has a real chance of being number one.

Best online service(stupidly expensive but still), no more big game franchises left on the PS(4?)..

Anonymous said...

Off Topic, but I saw this great link about why google employees quit and thought it might interest some of the people here.

http://www.techcrunch.com/2009/01/18/why-google-employees-quit/

Anonymous said...

http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9126299&intsrc=news_ts_head

EU is sick. We should release an OS with just the kernel for Europe. Guess that would open up the competition gates, and make the world a much better place, as Kroes and company believes.

Anonymous said...

Not that anyone cares, but I've been running win 7 beta1 on my laptop for about a week now. It doesn't like the printers in my building or my bluetooth mouse, but the rest of the hardware ran great the first time. Aside from that there's a little snow on the screen from time to time. It definitely seems more responsive than Vista, and some of the new UI stuff is addicting. Great job you guys, keep it up!

Anonymous said...

EU is sick. We should release an OS with just the kernel for Europe.

Economy is not doing well. Need an ATM to get a couple of billion to run their government.

Anonymous said...

It definitely seems more responsive than Vista, and some of the new UI stuff is addicting.

If it's faster and smaller than XP I will rush out and spend $200+ on an upgrade. Until then, I don't see what it gives me that XP doesn't. Does it run different/better programs? No. At least XP gave us multiproc and NTFS.

Anonymous said...

>> the new UI stuff is addicting.

+1

>> Great job you guys, keep it up!

+1000. And I DESPISE Vista. I actually think that Win 7 has the potential to turn things around with respect to our perceived inability to compete with Apple in well thought out UI design. While the UI could still use a lot more polish, the usability is great. Not perfect, but there's no going back from Win7 to XP for me and that's quite an achievement, since I liked XP a lot. The only thing that could throw a wrench into Sinofsky's gear box, and that is Apple with its completely new UI in Snow Leopard (Marble). My biggest fear is that this will make Win7 look old and tired before it even comes out.

So I'd like to ask Windows graphics designers to be principled and relentless and do what they think is right UI wise. Screw the consensus. We need someone with vision and balls there.

So far everything I'm seeing is VERY encouraging.

Anonymous said...

>> Until then, I don't see what it gives me that XP doesn't.

Try it. You will find XP clunky and illogical.

Anonymous said...

"How did we get here? I truly feel nothing but contempt for most of our senior leaders..."

Here's a good overview for the Search area:

Microsoft Bid to Beat Google Builds on a History of Misses

There's a similar story for every other new initiative that failed, which is all of them.

Anonymous said...

>"I think it's all about next gen consoles now..."

If everybody is losing money on consoles, why do you guys do it? You could put the other two vendors out of business by porting all games to a PC platform with specially designed controllers sold especially for each game, with an interim console as a temporary solution for those using consoles.

Brian S said...

>>, in fact, the PS3 isn't even the cheapest BluRay player on the market anymore, so kindly explain to me how this situation in anyway helps Sony.
>>
Sony was a primary developer of and owns many of the Patents associated with Blu-Ray. It was so important to Sony that Blu-Ray win that they put their precious Playstation product line at risk to help further it. A few years ago I read an analysis that said that a Blu-Ray triumph over HD DVD would be $20Billion to the bottom line of Sony...

That was a huge war to Sony-- they bet the company on Blu-Ray.

Anonymous said...

First of all, I'd like to say that if I see the world fiasco used one more time in the comments to this article, I'm going to take a machete and go hunting for your family.

iTunes is especially dangerous for MSFT, because it comes with Quicktime (thus threatens WMP).

Right, because having an application you provide for free that holds absolutely no value to your company besides being a useful feature to your userbase as part of your bundled software threatened by a PoS mac application loaded unwantedly with iTunes (itself an epic fail) is a terribly frightening possibility to Microsoft. Impeccable logic.

Anonymous said...

Try it. You will find XP clunky and illogical.

I'm sure I'll try it eventually but I don't know how it could make XP look clunky and illogical. I spend the vast majority of my time interacting with my programs, not the OS. That's not to say that XP can't be improved. I wonder, does Win7 do the following:

1. Let me reorder stuff in the task bar
2. Connect to wifi networks in a fraction of a second, like OS X
3. Run apps in a "quarantine" mode where they can't screw up my registry, or install stuff in system directories, or add themselves as services or autorun on boot, or add icons to the system tray, etc.

From what I've read about Win7, it doesn't have these features or anything else I would consider useful.

Anonymous said...

---
I'm sure I'll try it eventually but I don't know how it could make XP look clunky and illogical. I spend the vast majority of my time interacting with my programs, not the OS. That's not to say that XP can't be improved. I wonder, does Win7 do the following:

1. Let me reorder stuff in the task bar
2. Connect to wifi networks in a fraction of a second, like OS X
3. Run apps in a "quarantine" mode where they can't screw up my registry, or install stuff in system directories, or add themselves as services or autorun on boot, or add icons to the system tray, etc.

From what I've read about Win7, it doesn't have these features or anything else I would consider useful.
---

1. Yes, you can reorder items on the taskbar.
2. Yes, you can connect to wifi networks in pratically no time now.
3. No, but if an application does change the registry or run as a service, what's the real problem?

The question is, what the hell have you actually read about Win7 if you didn't know it would do the first 2 items?

Anonymous said...

>> Let me reorder stuff in the task bar

Yes. You just drag and it reorders.

>> Connect to wifi networks in a fraction of a second, like OS X

Yes. The UI looks about the same now.

>> Run apps in a "quarantine" mode where they can't screw up my registry, or install stuff in system directories

Yes. That's what UAC is for.

Anonymous said...

iTunes (itself an epic fail)

Did you seriously just use "iTunes" and "epic fail" in the same sentence?

So, if iTunes is an "epic fail", what, pray tell, does that make the Zune software?

Anonymous said...

hey microsofties, you've got mail!

Bilgisayartr said...

It is good to hear Zune is going away.

Except it's not..

Anonymous said...

looks like layoff have started at MSIT India ... I spoke to some of them at Building II … seems around 15-20 people have been asked to go in this week… The communications seems to be performance managed … but its shitty way to do it … Most of them being from RXD ...seems first week of May is the big announcement for layoffs in India... Apparently couples of Hyd HR team members are in gurgaon for 2-3 days to undergo training for managing layoffs ...so expecting the sweet talking HR folks soon ...Any idea if HR is getting impacted... I guess not much ... Why did I even ask ;-) ... I dont know whats the state in other place, but in India, communications team is amazing, they have a team of 2-3 people for each business plus all india comms team ..which would be around 10+ comms team member for MS india ..am not joking just check out the names and tails attached to each name.kingdom of doom..god knows who does what!!!...across the campus we have this lady from communication..who think she runs IDC … but then MS doesn’t see them as drain …i bet their roles are required and in such HUGE number for a 4000 odd employee base... Look at REF in hyd campus ... am not sure if they ever respond to anything ...except for making some changes to paper cups!!! My God what an achievement ... !!!
And the admins that each team has ... its a fiefdom ...we have the ex-hr director of idc who moved to some new business role (rumours are about she retaining her job due to closeness to leadership team) and took her earlier admin along !!! Nobody @ MS looks at all these personal rajah style measures ...
Coming back to HR, I have heard Joji couple of times and I do feel that at times she is genuinely trying to do some good ... recently in mec event she mentioned about giving job visibility ..and guess what, one of the leaders in audience cuts her down and starts asking stupid questions about job levels … who promotes these imbeciles.. but some of our leaders I dont think if they will let her succeed ...Her own team looks happy ...apparently she has got rid of couple of those useless hr folks and huge changes in how HR works (i feel some of those useless folks still remains in msit).... but thats what her team says ... I sincerely request MS leaders to look at support functions … why is this so called logic of business justification not applicable to those people who don’t seem to be doing anything…at least we are creating products to make money..but the support functions!!!..they don’t do anything to hit company topline and yet nothing happens to these folks
Anyways … I guess this is an emotional outburst knowing I don’t know what will happen to me, but good time for me to get that MBA degree ...

Anonymous said...

So the axe fell last Tuesday. Wed the survivors attending All Hands meetings where we were told (I paraphrase) We laid some people off, we can't tell you who or even how many. (the one note of sanity) We are not going to try to do more with less, we are going to focus on the top priorites and do them better.
These changes will probably affect you and your jobs but we can't tell you how. Your managers will inform you individually.

Still waiting for my manager to let me know what changes are in store for me.

Any other experiences that people can share?

Anonymous said...

So... how about the 800 layoffs today. Out of the blue. To be expected - no word yet who exactly got impacted...

zoot suit said...

Focusing purely on console sales is missing the bigger picture. Yes the Wii console outsells the Xbox 360 console.