Thursday, April 28, 2011

Microsoft FY11Q3 Results

What's on your mind as the Microsoft FY11Q3 results get released? Some things I'm thinking of:

Win7 Business being eaten alive by iPads? Oh, those hungry hungry cannibals eating away the post-PCs for your PC dependent iPad slates. Probably no good news in the Win7 OS business could please people seeing Apple having to buy everyone working at Apple pants with ten pockets so that they can continue stuffing money into them.

Office 14 / SharePoint: continued strength? Leveled? Dip?

Kinect: what are the post-holiday sells like?

Xbox Live security: not that we want to be cocky, but if Xbox Live was broken into like Sony's Playstation Network Microsoft would have a big-black eye. Probably two. How confident is Microsoft in the network's security?

WP7 numbers: how has the trend been in activated phones? How is the Nokia deal shaping up? How will Microsoft not be the weepy little toy of the phone carriers crying over a release chart when the Mango update goes out?

Share price: talk about one dead share. It's a dead fish. That a bunch of hippy dock-workers played hacky-sack with and left to rot out in the sun. So dead that we're shifting budgets around to not award stock but give out crisp, sweet-smelling Benjamins instead to the employees we value most. Microsoft millionaire days? A long, long distant memory. I think of that book Microsoft In The Mirror where a number of interviewees were reluctant to share with outside folks that they work at Microsoft because folks would light up, assuming they were rich beyond words. Today's response? "You work at Microsoft? Well bless your heart."

Keeping employees: seems as though we'll need to justify the extra bucks and effort the company is putting into spreading cash to the section of employees most likely to be recruited (aka poached) or give up on Microsoft. I'm sure that the investors could care less about our performance review system, but it's sad we stuck with a 20th-centry industrial review system for a 21st century Gen.Next workforce. Like many opportunities: buh-lown.

The two pressure points I certainly continue to feel:

WP7: the NoDo update was just a Class-A Cluster-Fuck. And I don't use language like that very often. And the fact that the pre-update bricked phones was inexcusable. The WinMo team has to realize that everything they have to do must be perfect and ahead of schedule (wrt running in customer's hands). Any sort of focus other than that is a recipe for disaster. Mr. Ballmer is a fan of Coach John Wooden. WWJWD? Pound excellence into the team such that releasing an update was the easiest thing they had to do. If you're the kind of person looking for a challenge to fix Microsoft and prop-up its future, look for opportunities to join that team. Less Pink, more you.

iPad: it's pretty. It's slick. It comes from a company where design is realized. It doesn't do as much as a PC, but it does enough. And by now everyone has been able to put together the pieces (e.g., Windows 8 demonstrated running on ARM) to figure out when Microsoft might release something that has similar form factor. But will it have the elegance and cohesiveness of the iPad 2, let alone the iPad 3? Will it be too late?

Should Microsoft release an iPad competitor, it will be THE defining moment for Microsoft's future: back in the game or game over.


-- Comments

174 comments:

חץ בן חמו said...

Great post!
However, regarding iPad/Tablets, I don't agree with you.

Microsoft is doing something which IMHO really really silly! take a full OS like win7 and recompile to ARM and adding tons of things that MS is adding to win8 X86-64. That thing will require an expensive processor and the batteries will have a new world record of the shortest time till they drain. Great idea! it's just like what happened with WinMO 5.x and 6.X all over again. Will someone at MS will ever learn from the past ?!

Google is working on Android 4 right now (Ice Cream will be out in Google I/O next month). iOS 5 will be out around Q3 11, and Microsoft won't have anything ready until Google will release Version 6 (or 7) and Apple would release iOS 6. Apple & Google are moving really fast. Remember Android 1.x how horrible it was? compare it to Gingerbread, same thing about Apple old iOS vs the current version. Microsoft will learn from their mistakes only in 2013-2014, by the time they'll have market share like today with WP7.

Bobbo said...

I love my iPad 2! Beautifully engineered.

James said...
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symbolset said...
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symbolset said...

I'll just leave this here. http://j.mp/gl6Fom

Jonas Ekström said...

"Should Microsoft release an iPad competitor, it will be THE defining moment for Microsoft's future: back in the game or game over."

We're so near the end - you can smell it. Who could believe it 2 years ago? Going to apple store - over and out

Brett Nordquist said...
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Brett Nordquist said...

I've given up on Microsoft in the consumer space. With Ballmer in charge, they are heading into IBM territory, only interested in serving big business. Xbox is the lone exception where they nailed the consumer experience. I spent several thousand dollars on Apple products last year. I also spent less than $100 on MSFT products. I don't believe that worries Ballmer though because he isn't interested in consumers. I'm not sure Google is either but Apple is. When is the last time someone told you about a cool, must-have Windows application?

symbolset said...

Apple beats Microsoft in first quarter profits: macrumors.com

Ian Huff said...
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symbolset said...

OSD must be the pride of the fleet. Lost another $726M on $648M revenues, giving this nice graph. That's a lot of red ink, for what it bought.

Kent Sharkey said...
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MiddleClassMan said...

While Peter Klein says "I am pleased with our overall performance this quarter" ...Rah Rah Microsoft

Thompson Reuters says "Microsoft Windows sales slip, shares slide"

'cmon people - keep drinking the kool aid...

No wonder our team has an offsite party this afternoon.

NovoEgo said...
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NovoEgo said...
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Jonquil said...

I, too, have gone from "Wow, you work for NiftyCo! That's so COOL!" to "Wow, you work for NiftyCo! You must be RICH!" to "Oh, you work for NiftyCo? Don't steal the DVD player when you leave." It's the Circle of IPO.

That said, Microsoft really needs an "I have to own this or I will DIE" product soon. "This is pretty good" won't cut it; pretty good is already available from many different companies. And "pretty okay, and we promise it will get better soon" isn't going to fly. There are some geniuses over in Microsoft Research; somebody needs to set them free to productize.

David J. Liszewski said...

@symbolset .. Interesting data, especially the >20x abandonment rates of WP7. Does that mean people (a) hate WP7, (b) WP7 users hate the Facebook app, or (c) WP7 users hate FB?

RP said...
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symbolset said...

@David J. Liszewski : It doesn't mean what you think it means. Read the formula.

Anonymous said...

let's unionize, and get rid of the Indian politics, waht are those ragheads doing here managing US anyway? fuck Bangalore!

Anonymous said...

What no comment on Bing - come on Mini don't be shy!

Anonymous said...

>>There are some geniuses over in Microsoft Research; somebody needs to set them free to productize.

It isn't a lack of IC talent. Although that is rapidly changing. it's the decline of technical talent and integrity at almost all levels of management.

With "trios", no individual is charged with cross-discipline technical oversight until GM or VP level. This is no the job of a GM or VP. It *was* the job of the now-extinct Product Unit Manager. Doubtless trios was sold as a way to commoditize skills by narrowing the remit of individuals along discipline lines. Unfortuately, those with broad skill sets that can envision how to actually make a prodcut (rather than a document or a nice report) have been pushed out. It is the age of the bureaucrat.

With trios, the notion of "product team" ha vanished. A product team comprised all disciplines, and (usually) et weekly, with their PUM. This has been replaced by layers of tripartite committees based around the arbitrary notion of Dev, Test, PM. The meetings required have grown exponentially. A product team may only get together at a divisional all-hands.

BY GM/VP level, reporting on product state has been so sanitized that the majority of issues are never even surfaced. Yes, there is of course a category of issues that should never require a VPs intervention, but this goes way beyond that. "No bad news, ever", is the rule. Anyone who rocks the boat is one of those negative, non-team-player 10%ers who will shortly be gone.

More senior ICs are, by definition, supposed to raise broad issues by dint of their level and years of experience. The existing culture makes this a very dangerous thing to do. That's why I left in January after 10+ years.

The various disasters/missed opportunities over the last 10 years were well known to engineers at the front line... but due to a viciously-enforced policy of "no bad news, ever", those who might have taken corrective action don't find out until its too late.

There is a clear pattern of failure to execute... and it is not the doing of engineers. It's a culture that rewards the suppression of "bad news". It's the lack of spine in the management chain to unpromise things that were promised, and blame their "underperforming" ICs when the crap hits the fan. Those with a spine soon find their prospects blighted.

Changing VPs won't help much. They rely on their generals amd below to garner a picture of the situation. If those generals don't provide truthful reporting, it simply isn't possible to execute effectively. It'll take an IBM/GE/HP/Honeywell (etc) sttyle intervention to fix this problem - it won't get fixed by those who benefit (hugely) from it.

Anonymous said...

With trios, the notion of "product team" has vanished. A product team comprised all disciplines, and (usually) et weekly, with their PUM. This has been replaced by layers of tripartite committees based around the arbitrary notion of Dev, Test, PM. The meetings required have grown exponentially.

+1

Windows will never be an agile, mean & lean customer pleasing machine until they do away with the trios. Way too much redundancy and ineffective top-down management. The people you work for aren't the people you report to.

The worker bees on the floor have known it for years. The only thing all the extra process justifies - a thick layer of unskilled, posh, middle management positions.

Anonymous said...

"let's unionize, and get rid of the Indian politics, waht are those ragheads doing here managing US anyway? fuck Bangalore!"

I'm pretty sure that anyone who uses the word "raghead" should be flipping burgers somewhere and not making software at Microsoft.

In any case, your opinion isn't interesting.

Anonymous said...

The WinMo team has to realize that everything they have to do must be perfect and ahead of schedule

Perfect, ahead of schedule, and -- here's the tall order -- bracingly innovative, before anyone else has thought of it. WP7 still feels like a reactive product. Bing only slightly less so. We need to define the future, not try to deliver a bright shiny replica of somebody else's definition of the future. Isn't there someone here who can imagine a groundbreaking product that doesn't require as much physical displacement as Surface?

Anonymous said...

let's unionize, and get rid of the Indian politics, waht are those ragheads doing here managing US anyway? fuck Bangalore!

Indian "ragheads"? You don't get out much, do you?

Sorry for feeding the troll, but seriously, if this kind of basic cultural ignorance is pretending to work for MS, or worse, actually working for MS, we're in much deeper trouble than we thought.

I bet you're a birther who's depressed that your dreams were shot down yesterday, aren't you?

Anonymous said...

Not one word about Windows Phone 7 and its sales. I had expected atleast some nice number but it was totally off the table alltogether. Must be a real dog on the market if you cant even spin one single statistic figure. Only stats i can find on gs.statcounter.com point at 0.3% marketshare but that cant be right can it?

philip said...

"Should Microsoft release an iPad competitor, it will be THE defining moment for Microsoft's future: back in the game or game over."

i don't understand why you folks always act as if the future of windows is the future of microsoft. Why would the folks at ms office need to have an ipad killer? They could just as well release ipad Office apps and gather a nice revenue from there. the ipad killer wouldn't help at all the folks in ms office.

as a consumer and "watcher" i fail to understand this absurd notion that microsoft must compete in every single market, always running along trying to protect eroding windows market share, while simultanously allowing other good products or ideias being failed by ineffective mamagement/lack of resources.

also wrote something about this here: http://www.maccouch.com/2011/04/speechless/
i guess most of you already know it but maybe you can explain to me why something similar is not beeing done?

MS has great products. Office is top notch (apart from interface and "regular" user experience) but windows needed a retirement. Xbox is probably ok too but the online division should be taken behind the shed. Why are they bundled together?

Anonymous said...

More senior ICs are, by definition, supposed to raise broad issues by dint of their level and years of experience. The existing culture makes this a very dangerous thing to do. That's why I left in January after 10+ years.

+1. The kool-aid culture is why I left in December after 13 years and am ecstatic that my Redmond house just sold. I still have around 5,000 shares and was holding on in hopes the price would get back to $30; it's time to start divesting regardless of the price.

Anonymous said...

mmmm

Anonymous said...

"I am pleased with our overall performance this quarter"

MSFT: $25.63 1.08 (4.04%) 11:54AM EDT

Now you know why they announced the comp change early. They knew what was coming.

Anonymous said...

I believe today's response to our earnings call relative to Apple is directly reflected in the fact that we've shed more than a buck.

We're yesterday's news, folks. Mini might think the titanic has turned, but considering we're turning on the bottom of the ocean floor it doesn't really matter... this ship sunk a decade ago.

Anonymous said...

"MS has great products. Office is top notch (apart from interface and "regular" user experience) but windows needed a retirement. Xbox is probably ok too but the online division should be taken behind the shed. Why are they bundled together?"

Are you talking about Xbox LIVE as the "online division"? If so, that division is practically printing mmoney and should definitely not be killed.

If you're talking about the web-based MSN/Windows Live online division, that's not connected to Xbox at all.

Anonymous said...

http://www.businessinsider.com/microsoft-bing-losing-billions-2011-4

Anonymous said...

Apple now more valuable, more revenue, and more profitable.

Good job, Steve. You rock.

Anonymous said...

I bet you're a birther who's depressed that your dreams were shot down yesterday, aren't you?

The person who says this to criticize someone else's broadbrushed, prejudiced opinion, evidently hasn't a mirror in the house with which to see himself.

Sniping at a behavior by engaging in the same is generally NOT considered honest, effective debate.

Anonymous said...

Here's the worrying details about Bing.

http://www.businessinsider.com/microsoft-bing-losing-billions-2011-4

Anonymous said...

Mini,
People who care about Microsoft read this blog. You should start a petition. How many people would sign up to get rid of Ballmer? Maybe it should be a separate website. The board has been derelict in its duty and something must be done.

The wrong people are running the company. There is no reason for Microsoft to be locked out of the future. The company is being run by a brand manager rather than a technology manager. Brands are supposed to be constants whereas technology rapidly changes. Ballmer slaps 'Windows' on everything and kills everything that isn't Windows. But Windows isn't everything. It has nothing to do with phones, tablets, clouds or the future.

Some of the stuff this company does is maddening and idiotic. What a huge waste.

Anonymous said...

Steve Ballmer, back when Apple market cap has passed Microsoft's:



Mr. Ballmer said he remains unfazed despite Apple assuming the position of the technology king. “I will make more profits and certainly there is no technology company in the planet which is as profitable as we are,” he said. “Stock markets will take care of the rest,” he added.

Anonymous said...

Worth reading...

http://www.maccouch.com/2011/04/speechless/

An outsider said...

Microsoft is going through the same cycle of life as most companies goes through. But since Microsoft is built on strong foundations and has a lot of (other than Windows and Office) leading products such as Sharepoint, SQL, Exchange, Visual Studio it will bounce back, especially when it will take the leadership in the cloud (aka Azure).

Anonymous said...

But will it have the elegance and cohesiveness of the iPad 2, let alone the iPad 3? Will it be too late?
Should Microsoft release an iPad competitor, it will be THE defining moment for Microsoft's future: back in the game or game over.


It's far too late for Microsoft and a tablet. And even if Microsoft released one today and it slowly overtook the iPad, it'd hardly be a defining moment.

The only defining moment for Microsoft will be when new leadership comes in and releases the next strategic tagline after the immortal "A computer on every desk and in every home" call to action. I've always thought Microsoft has missed the boat wrt a tagline that would take advantage of their breadth of offerings and appeal to the masses. Something like, "Integrating software for consistent use and availability across platforms, anytime, anywhere, any device" while a mouthful would serve them better for the future. Microsoft needs to stop trying to design hardware, it clearly can't. Leverage OS and Office and put everywhere, e.g. Office/SharePoint on iPad, Linux, Win7 in autos, everything in the cloud and extensible. Let others design the platforms, Microsoft should be right behind them with a consistent OS and Office design immediately.

Anonymous said...

Can We Please Stop Pretending That Microsoft's Bing Is Doing Well?

Read more: http://www.businessinsider.com/microsoft-bing-losing-billions-2011-4#ixzz1KwFSDM9O

Anonymous said...

Is Win8 going to a full port to ARM? I hope not.

Win8 is the last shot at ipad. It better light weight and not draining on the batteries.

Just remember that Office or Server can't run on ipad or honeycomb.

Anonymous said...

Apple's obsession with design (and having implementation flow directly from a design-focused culture) is why they've done so well this past decade.

Think about it: they delayed a white iPhone for nearly a year because they weren't happy with the aesthetic results of the June 2010 version.

Until MSFT starts to adopt a design-centric model, and lose itself of its silos and committees, the current trajectory will not be broken.

Anonymous said...

I assume the biggest reason the iPad is successful is because it has an OS that's simple, straightforward, and requires no maintenance.

The fact is that average computer users fear and loathe Windows. They only use it because it came with their computer and they don't know any better. If they don't have to use Windows it's a breath of fresh air. "Windows on your phone" or "Windows on a tablet" was NEVER a selling point so Microsoft is completely wasting its time with this ARM stuff.

Anonymous said...

According to Reuters, the stock is down 18% in the past 12 months, while Nasdaq has gained 16.

Ballmer's lack of leadership, missing grasp of technology trends, inability to admit fault and be accountable are all factors in this decline.

In 10 years, maybe Attachmate will be buying Microsoft like they did Novell ... a seedless husk of its former glory, with a babbling idiot at the help screaming about loving the company. If he really did he would quit. Now.

Anonymous said...

Conventional wisdom says hardware has a lower margin than software. So Apple reports $24.67B for the quarter with net profit of $5.99B. Microsoft reports $16.43B for the quarter, a 13% increase from the same period of the prior year. Net Income, $5.23B.

Maybe it's time for the senior leadership team to stop the senior and middle management turf grab political maneuvering and figure out how to stop the company from being irrelevant.

Oh, and by the way, screwing the employees with life threatening diseases so you can save a few dimes on insurance is not going to help the company win either. I am not sure that LisaB and her minions have figured that out. It took a lawsuit to bring about change. Why does it always take the courts to get Microsoft to see its faults?

Anonymous said...

One of these quarters I'm actually going to have the guts to play the inevitable post-earnings report decline in MSFT stock price. I keep thinking it's going to be different this time. Ha!

Anonymous said...

With trios, the notion of "product team" has vanished. A product team comprised all disciplines, and (usually) et weekly, with their PUM. This has been replaced by layers of tripartite committees based around the arbitrary notion of Dev, Test, PM. The meetings required have grown exponentially.


Same in OSD. Sometimes it seems that nobody has the ownership of the features all the decisions are made at VP level (and worse, you can have a VP for each discipline).
You can't run a group of few thousand people where almost everything has to be decided/approved by the VPs.

Anonymous said...

Microsoft stock in biggest one-day fall since 2009

Anonymous said...

i don't understand why you folks always act as if the future of windows is the future of microsoft. Why would the folks at ms office need to have an ipad killer? They could just as well release ipad Office apps and gather a nice revenue from there.

Precisely! Hopefully pride will not prevent MS from seeing the trend and reinvent itself to produce Apple and Google apps and save what little is possible of the company. Windows is a dead man walking.

Anonymous said...

The mobile tidal wave is going to decimate Windows. Once the windows monopoly crumbles It's all over but the shouting. The 5-10 outlook for MS is very dire.

Steve: It's NOT the economy stupid!

Anonymous said...

Bill Gates can get SO MUCH more money for his foundation by firing Ballmer. That would certainly make the stock rise.

Anonymous said...

waiting for an internal blog post with an essay about how windows is actually much better than mac or ipad and the users and the blog echo chamber just does not get it, to go with the posts on how IE is more agile than chrome and hotmail is better than gmail or bing is better than google and windows phone better than iphone or android.

users are voting with their feet and it will be good if we realize soon that they are not stupid to do so.

Anonymous said...

Another Steve of our Windows divsion engineered to introduce his process-heavy triad models for the whole company and in the meantime killed several incubations on Tablets till he realized he should develop one. Why is he still around?

Anonymous said...

Left last October, could not be happier at my new place. Looking back, the green card dangle was the reason I stayed, but then PERM all got denied, so I guess I got lucky.

Anonymous said...

STB reorg to be announced on Monday.

Anonymous said...

If you were given the opportunity to give up your job at Microsoft to work at Twitter, would you take it?

Pros: culture, stock potential
Cons: much less pay (5 digits), 12+ hour workday

Anonymous said...

This blog becomes pointless and irrelevant for the past year or so. Maybe just like msft itself, going sunset.

Mini, please find another job. You cannot fix a damn thing as proven for the past few years. Let's not pretend anymore.

For the current employees, if you can milk the company good for you. Just make sure you understand the milk might not last forever. Please milk the company with some integrity. You can not call the company unfair while your own latest contribution margin is 0 or negative. At Apple, you will be fired.

If you can find greener pasture, by all means vote with your feet.

Get on with life, sign off.

Anonymous said...

"Most senior IC's are..."

You hit it on the head. If you have an idea or think for yourself, keep it to yourself because this is a listen up the chain ONLY culture. Let the people who have no grasp of reality and who haven't talked to a real customer in years make the decisions and send them down the chain, that will work. Check the scorecard and just grind it out.

BG's just keep doing what they want to do and only ask questions when their stuff doesn't sell. They keep delivering on 18 month product cycles when the rest of the industry has moved to quick incremental updates. Broken product development model.

Look at the compensation changes and how little they value "future potential". What have you done for me lately!

Anonymous said...

LOSERS PARTNERSHIP. QUOTE:

Apple's ascendancy has produced many losers and a few winners, as underscored over the past two weeks:

— Microsoft Corp.: loser.

Apple dethroned Microsoft as the world's most valuable technology company a year ago. In its mid-fall report, it surpassed Microsoft in quarterly revenue. In the January-March period this year, it surpassed Microsoft in net income, too.

On Thursday, Microsoft reported that revenue from the Windows operating system declined for the second straight quarter because people are buying fewer Windows computers.

Some prospective buyers are going to Macs instead — Apple reported that it sold 28 percent more units. Others are going to iPads. Goldman Sachs now believes that more than 30 percent of iPads sold may be replacing PC sales. In the 90s, the trend was the opposite, as Windows PCs were crowding out Macs.

— Nokia Corp.: loser.

Nokia said this week that it will slash 7,000 jobs through layoffs and outsourcing. It still sells more phones than anyone else, but it's losing share to Apple, especially when it comes to smartphones.

Research firm Strategy Analytics also said revenue from Apple's iPhone sales surpassed that of Nokia's phones in the January-to-March period, as iPhones are much more expensive than the average Nokia phone. That makes Apple the world's largest phone maker by revenue.

To better compete with the iPhone, Nokia is ditching its old Symbian software and adopting Microsoft's Windows Phone 7. But the transition will take time; the first Windows-powered Nokia phones aren't expected until late 2011 or early 2012.

Anonymous said...

"Should Microsoft release an iPad competitor, it will be THE defining moment for Microsoft's future: back in the game or game over."

Umm.. HELLOOOO?

Microsoft has been in the tablet business for over a decade, and it took Apple to show the world how to do it. Scoble's job at MS was pretending that the windows tablet was cool.

Anonymous said...

WP7 is a lost cause. The best people in the mobile OS business have been at Apple for the last five years at least. Google has most of the second-raters. WP7 is staffed with the dregs.

Ever since MS's stock flat-lined, and the "work here and get rich in a couple of years" scenario became a distant memory, the end of MS as we knew it was a foregone conclusion. The only guy who could turn that company around is Steve Jobs, and there isn't anything that MS could offer him that would make him jump ship.

Anonymous said...

Dead stock
Dying company
Incompetent management
Paycheck employees
Useless Board
Docile shareholders

Thank Steve Jobs for delivering the coup de grace with iPad. Otherwise your Ballmer-led suicide might have dragged out for another decade. Maybe a better, though smaller, MS will emerge out of the rubble. Or maybe MS will be another footnote in tech history. Either way, the misery of watching this company's decade-long decline will be over.

Anonymous said...

"Should Microsoft release an iPad competitor, it will be THE defining moment for Microsoft's future: back in the game or game over."

It's already far too late. The only person with the platform momentum to challenge them is Google/Android. MS's response, assuming it ever arrives, will be an OS not a platform. And platforms are what consumers buy. THE defining moment for MS's future was back in the late 90's when it decided to try and defend the past instead of embracing and leading the future. Everything else has just been an opportunity to get off the fail train. But everyone of those has been ignored.

Anonymous said...

It appears Microsoft will fall behind IBM by end of this year.

Anonymous said...

The WinMo team has to realize that everything they have to do must be perfect and ahead of schedule (wrt running in customer's hands).

There's two significant barriers in the way of that: the idiots who make the phones and the idiots who run the carriers. And, unlike Apple, Microsoft is not in a position to strongarm either of these parties.

And, yes, I know the consumer doesn't care, nor should they.

Anonymous said...

with HTML5 and java scripts framework evolving, do you need full blown windows OS? Unless you are a developer who needs VS or a designer who needs photo shop.

My company has invested a lot in over the years with smart client application, but slowly they are moving to web based apps.

Also I am seeing the shift in server side, people are more willing to try the LAMP stack,for the less costly horizontal scaling.

Anonymous said...

MS will never be cool, if it acts like a dog chasing cats and mice. Windows is a flagship product and everyone in the company needs to be concerned when MS reports Windows sales is down, and Intel reports sales up in the same quarter. Something wrong.

Mini is obviously infatuated with iPad and everything that's not MS. Fuck it. This company has smarts and more talent - we are not a one trick pony like fucking google.

MS will come out with an iPad version and will take the 3rd place in the year 2015, along with WP7. I really think MS should could with an iPad version at least to keep the Android fckers out at bay.

Anonymous said...

When Stepehen Elop said that Nokia was on a burning platform and then promptly decided to adopt WinMo7, I wonder if he realised that execution and timely delivery is a problem for Microsoft as well?
If we keep doing what we did with NoDo, I'll be serioursly scarred about our prospects for the future. We need to win the Mobile race, if we have any decent hope of leading in the software battle of the future

Anonymous said...

What's amazing to me is that the talent drain hasn't had a bigger impact. I was at Microsoft for almost 8 years, and remember how you'd often see the newer employees with great promise leave after a year or two. I also remember the quality of candidates plummeting in 2003/4.

While the pay was always poor, it was the culture that I saw drive people out, and it seems as toxic as ever. Many of the devs and PMs I know are simply really bored. The anxiety on the business side is acute, where almost everyone I know is wondering if they'll survive the next round of layoffs that they all feel certain is coming.

Yet revenue keeps going up. I know tons of people who are looking and interviewing, but the number that actually leave seems lower. It seems like the problems have been coming for a decade. But there's certainly no big implosion; more like a steady gradual decline.

I think culture is at the heart it, but Microsoft seems really far away from even recognizing they might have issues.

Anonymous said...

As some already cited, the salary isn’t the main Microsoft problem, but I wouldn’t agree that people are leaving due to the "coolness factor" of other companies. They are leaving because they are being given more responsibilities and opportunities in other companies, and hope to make something useful. Those are all smart people that could as well sit and wait for retirement playing politics, which unhappily is what many who are staying are doing.

Those that leave will have a chance to ship some of their ideas, whereas it is hard to push innovation through the many layers of management. I've heard from a good friend that people within Microsoft Research got a system to exchange SMS messages and MMS messages ready a few years before Twitter (indeed, he pointed me out to wayve.com). Nobody in the product groups considered that people would be interested in exchanging status using "only 140 chars"! And for those that today consider social networking the coolest thing in the universe: Microsoft had one, almost 10 years ago, and then it was killed by some GM that didn’t consider that a priority!

The real problem is that Microsoft is no longer a single company, and yet it refuses to allow the breakup to happen in its own terms. Too bad. There is duplication of effort everywhere, because Team A doesn’t want to take a dependency on Team B. Meanwhile Team C thinks “it got things right”, and it shouldn’t change 10 lines of code in a 100K LOC tool because that would allow it to be reused by Team D (“Why give them our work for free”?!). This lack of cross team collaboration creates products with absurd inconsistencies, like 10 different icons across the company to represent “follow a web link”. You cannot claim to be customer-focused having a company that is really “team-centric”. Even the DLLs in our products exist because “a team wants to work independently”, and not because someone really considered memory optimization or reuse. Things only get worse within services, where nobody wants to take a dependency on anyone else, and so Azure continues as a toy cloud computing system without any hard problems to solve except those coming from the imagination of its own engineers.

Microsoft refuses to let engineers run the show. When you see an engineer leading a team it is not due to his or her technical skills, but because of his connections 20 years back in the company. If Mark Zuckerberg came to Microsoft, he would be managed by a “Distinguished Engineer” that is “distinguished” because he contributed to COM. He would then have to convince that “authority” of the need of every single button within any page. Until the DE was satisfied (as wells as probably 10 of his old friends kept around for “helping with hard problems”), nothing would ship.

There is just one easy solution: break the company. Everything else is a band-aid on the wrist of a patient with repetitive strain injury: it may have some psychological effect for a while, but won’t solve the problem.

Anonymous said...

For so many years we (MS) fought against Linux/Lotus Notes/Oracle/Novell etc. and we become mostly successful but during that time lost Consumers. 20 years ago what a techie consumer meant was Office and Windows user (and maybe some geeky pc hardware buyer as well), the game was changed completely while we were trying to beat the bad guys in the enterprise. We did, so what! One can say increased revenue on the Server and Tools protected at the least sinking the ship faster. All the other platforms we've tried to get in, failed or will fail eventually.

Windows Phone sucked from the very first release.forget about all the h/w issues, not sure if you guys can remember but if you did received an SMS, the OS could not even match the incoming number to a real person using Contacts data. So the phone displayed a number only for an incoming SMS. Phew! WP7 seven/eight would be only cope against iPhone & Android few years more and it will have it's place on the shelf next to Zune.

We all love Kinect for sure and it was developed by an Israeli small shop. Tried to sell to Apple first but steered to MS - lucky us. I would expect the technology to be integrated into notebooks and simpler pc cameras sooner or later. But getting close to a mouse or touch resolution /precision? I doubt it. Unless Sony and Nintendo had billions of dollars to throw into waste to come up with something better. That's the only place we will lead the game for the next 5-7 years.

How many of softies are there with IE9's and Bing as your default search provider at work but never actually use bing in your "real life" ?

We're in complete denial and just plugged in to the cool-aid network, waiting for Neo to get rescued. I'm afraid all potential Neo's already left the building...

AngryR said...

I don't think that Apple it a real competitor that innovates, making machines pretty is not innovation of technology, it's innovation on design and social marketing, however Google is that competitor...

Also what is wrong with running Windows Phone 7 OS in a tablet? Oh… the name...

Anonymous said...

I was in the Windows Phone team for a while (but am not anymore). I strongly suspect the reason the update bricked phones had to do with the device partners (both the operators and the manufacturers).

I'm sure Samsung, AT&T, etc. weren't excited to put resources against shipping an update that would result in exactly zero dollars for them.

It's not a question of the quality of the Microsoft engineering team as much as it is about control of the device and access to all the software that goes on it for testing and debugging.

Anonymous said...

"It appears Microsoft will fall behind IBM by end of this year."

Much earlier. Summer, latest, and as early as the next week or two.

While the weak Windows results and shocking OSD loss were widely reported, the fact that management also pushed back the financial analysts meeting to September (from the usual July) got less coverage. But that means there's literally nothing between now and then that's going to increase interest in MS. So worries will continue to pile up and the stock will add to its already impressive YTD decline.

By year end Google should get there as well. Oracle could make it too.

2011 is the year investors finally throw in the towel on MS. Should be interesting to see the Board's review of Steve this year. Maybe they'll only give him 80% of his bonus to show they're really serious this time. Tragic.

Anonymous said...

"waiting for an internal blog post with an essay about how windows is actually much better than mac or ipad and the users and the blog echo chamber just does not get it, to go with the posts on how IE is more agile than chrome and hotmail is better than gmail or bing is better than google and windows phone better than iphone or android.

users are voting with their feet and it will be good if we realize soon that they are not stupid to do so."

The problem is that people are spending too much time energy on each other within the company instead of the end users. Mini is right, there are too many people.

Anonymous said...

The windows team has three coding cycles of six weeks each in a three plus year release cycle. That means most of the time is spent in planning and process, rather than making the product.

Anonymous said...

I was in the Windows Phone team for a while (but am not anymore). I strongly suspect the reason the update bricked phones had to do with the device partners (both the operators and the manufacturers). ... It's not a question of the quality of the Microsoft engineering team as much as it is about control of the device and access to all the software that goes on it for testing and debugging.

Boo hoo. Windows doesn't test every update on every single off-brand "PC compatible" computer and home-build ever made, yet they still manage to release updates that don't brick a large percentage of computers.

There are only, what, half a dozen WP7 phones and yet one update manages to fail on a large percentage of devices? WTF?

To add insult to injury, Android runs on hundreds of different phones and most of them can be rooted and updated to different versions of Android without risk of catastrophic failure. There is no possible way to argue that Google's engineering task is easier, yet they seem to be succeeding at it way more.

All of this rah-rah about WP7 at Microsoft basically amounts to "it's actually not extremely bad," which is starting to wear thin.

Anonymous said...

Microsoft will turn around once someone finally realizes Scott Gu should be promoted to Chief Software Architect.

Anonymous said...

"I don't think that Apple it a real competitor that innovates, making machines pretty is not innovation of technology, it's innovation on design and social marketing, however Google is that competitor..."

Attitudes like that are why Apple continues to eat MS's lunch in total revenue, total profit, growth rate, general perception, and market value.

Anonymous said...

"Windows is a flagship product and everyone in the company needs to be concerned when MS reports Windows sales is down, and Intel reports sales up in the same quarter. Something wrong."

Surely you're not suggesting that MS is being disrupted by iPad? Because you'll recall Frank Shaw and Ballmer formally denying this a year ago when Dick Brass made that very assertion?

Sarcasm aside, while the Intel and MS numbers initially look very different, on a unit basis both pegged it at a 3-4% overall decline. So they effectively saw the same thing at a macro level. And yes, it's a huge problem for both companies.

Anonymous said...

@symbolset

Hey dynamite, still trolling huh?

Anonymous said...

We need to define the future, not try to deliver a bright shiny replica of somebody else's definition of the future

That would be ideal. It's also at odds with MS's DNA. A more realistic goal would be to work on once again being a fast follower. Taking 3-4 years to respond to iPhone and what will be at least 2 to respond to iPad isn't compatible with remaining a leader in technology or even viable.

Anonymous said...

"It appears Microsoft will fall behind IBM by end of this year."

Days. Only $5 billion apart now...

Anonymous said...

"When is the last time someone told you about a cool, must-have Windows application?"

Can't remember exactly, but I believe the Backstreet boys were still popular.

Anonymous said...

"i don't understand why you folks always act as if the future of windows is the future of microsoft. Why would the folks at ms office need to have an ipad killer? They could just as well release ipad Office apps and gather a nice revenue from there. the ipad killer wouldn't help at all the folks in ms office."

1) Windows is THE cash cow. Both Office and S&T are dependent on it to different degrees. And profits from that fund almost everything else MS does. If you want an analogy, think about driving your car with two tires losing air.

2) iPad apps cost a fraction of traditional s/w apps. Example: iWork for iPad = $30. MS probably has no choice but to come out with native Office support for iPad given its enormous success. I don't see Office 365 with a browser UI being sufficient. But that's going to put pressure on prices charged elsewhere.

Anonymous said...

The stock is a great bargain, according to all the 'experts' - most have 12 month targets of $32+.

If that is really true, why is it that all insider transactions in the past 6 months have been sales? 117,307,000 shares sold by insiders. Not a single purchase. I think that speaks volumes for the real aspirations the senior leadership has - milk it, baby milk it for all it's worth! And who can blame them?

The provision of these massive shareholder-funded tranches of shares must stop. Give awards up to L67, the higher-ups get options only. If that is insufficient to 'retain our executive talent' who cares? This would be the same executive talent that needs to grow a third hand just to find their own ass, as evidenced by the inability to foresee, much less compete in Mobile, Search and Tablets. The same brilliant team that laid off 5000 people which BTW had no impact on the share price. Just more 'me too' thinking.

Anonymous said...

This says it all - http://www.microsoft.com/presspass/exec/leadership/. Only outsider (and oh so smart, yet so meek!) is Qi Lu. Look at the rest of the clowns starting with the bald, fat, sweaty tub. How can you have any perspective when you live in 98052 and have people with no external experience? All you 98052 Kool Aid drinkers, come down to the Bay Area or head to NY and you will know what innovation is. All of you L65+...and yes all of you...admit that all you want is your fat bonus, salary and benefits....DO YOU CARE ANYMORE????

NowOnTheOutside said...

"There's two significant barriers in the way of that: the idiots who make the phones and the idiots who run the carriers. And, unlike Apple, Microsoft is not in a position to strongarm either of these parties.

And, yes, I know the consumer doesn't care, nor should they."

I'm tired of Microsofties blaming OEMs and carrier for the lack of success of Windows Mobile/Widnows Phone. I worked in that group for over 5 years in a partner facing role. If you understand their business model and the intricacies of the industry, then everything they do makes sense.

At the end of the day, the OEMs will build devices based on whichever operating system sells the most devices. Whether its iOS, Windows, Android, WebOS, whatever. If consumers buy it then OEMs will build it.

From an operator perspective, an operator could CARE LESS what kind of phone they are selling since they are, at the end of the day, not in the business of selling hardware. They are selling a service. Voice, data, etc. So whether you buy an iPhone, an Android phone or a Windows Phone, it really doesn't matter to them.

Yes, both OEMs and carriers could make things a little bit easier for Microsoft. But at the end of the day, it's Microsoft that is designing the OS. Microsoft creates the look and feel of the UI. Microsft chooses which features to include and which features to pass over. Microsoft is the one doing the coding and the ones who are the real drivers of whether the OS ships on time or not.

Stop blaming everyone else and take a good, hard look at the MCB group. Take a look at who is in charge and leading the group. How are features being developed? How realistic is the market research process (and the results) that are being used to drive the business. Is Microsoft making an effort to REALLY understand the business and what motivates its partners?

Do this, and it becomes clear why Microsoft continues to fail at making headway in the mobile space.

Anonymous said...

Ive been reading this blog for 3+ years. Its been a gradual decline but I cant ever remember the tone and content being so negative. As an employee, its depressing.

Its depressing because so many of the observations ring so true.

Microsoft is in a long, slow decline. A decline that may be hard to see in Redmond but is painfully obvious to everyone else.

As an enterprise software business we are the top, bar none. We make a ton of money and serve those customers well.

But Microsoft has several totally different businesses and those are not served well by the enterprise model or that approach to software. Those businesses dont need triumvirates or enterprise software agreements.

They need to build products that consumers want, they need quick responses, and the enterprise model cannot do that.

Could we make Office run on other platforms? Sure but until now we have not conceived of office as a service - it was a product that was sold with Windows. Another artifact of keeping all the different businesses together in a single software conglomerate.

Our companies rebirth wont happen until we split up into separate businesses and that probably wont happen until we get a new CEO.

Right now, there is no incentive to turn around a money losing business. Whether your division losses billions or makes billions, you are paid the same. Seniority is the main incentive here not creation. Find a comfy hole and keep your head down. Its almost impossible to move the org anyway so why bother? Splitting the company into smaller, more manageable and reactive units would go along way towards unlocking incentives and aligning them with value creation.

But things are changing quickly. Who knows what could happen over the next three years if our leadership continues to falter. Three years ago iPhones were fad and ipads didnt exist.

Anonymous said...

Think about it: they delayed a white iPhone for nearly a year because they weren't happy with the aesthetic results of the June 2010 version.

Actually, no. They delayed the white iPhone because they needed to debug the IR proximity sensor. An IR diode/phototransistor pair doesn't behave the same way when the material around it is white. Phil Schiller mentioned this.

Anonymous said...

I wouldn’t agree that people are leaving due to the "coolness factor" of other companies. They are leaving because they are being given more responsibilities and opportunities in other companies, and hope to make something useful.

I'd say that makes the job in the other company far cooler, wouldn't you?

Anonymous said...

Mini - I don't think you get why the iPad is successful, which is concerning as you seem to get most things that MS needs to fix, at least from my perspective. You mention it doesn't do as much as a PC, but it does enough. You're completely missing the point.

The iPad does things a PC can't. I can install apps in 10 seconds that are pre-configured. The battery life is incredibly long and it doesn't weigh even 50% as much as our lightest slate. The touch screen is great for consumption, I'm not going to create documents on it, but I can edit them and make minor changes. I can take it everywhere with me and easily use it, for both personal and business use.

It scares me as an MS employee that we still don't see the value of an iPad and are trying to make Windows do everything including be a slate. People don't want that, they want an alternative computing experience and are willing to trade the lack of functionality for simplicity.

Even more scary is our head of R&D wondering aloud if the Tablet may be a fad. The Tablet + a bluetooth keyboard will replace the laptop in 3-5 years IMO. That's the future and we better figure out a way to lead if we want our Windows business to remain relevant.

Anonymous said...

How Ballmer's Windows-dependency has helped kill Microsoft's chance at tablet success"

Good article. And includes this accurate insight in the comments:


"Unless the non-Ballmer-buddy shareholders start a revolt, Ballmer will be allowed to continue on with managing Microsoft down the toilet. The board consists of yesmen, buddies, and desinterested folks who are only showing up because they get paid for it. Yea, they cut Ballmer's bonus, but so what?
Even Gates has no confidence, why would he otherwise dump Microsoft stock by the truckload? Even Microsoft's top talent has enough from the lost cause and rather works somewhere else or retires.
Microsoft's problem is not tablets, mobile, or Windows. Microsoft's problem is the unwillingness of its board of directors to fire Ballmer."

Anonymous said...

Speechless

"Microsoft should join Sony and some other infamous companies into a case study compilation of companies so poorly managed that you are amazed why they are still afloat. It should be mandatory study at management courses worldwide.

Advice to Microsoft stockholders:
1.Fire Ballmer.
2.Get rid of money burning divisions.
3.
Break Microsoft into several isolated Divisions (example):
◦Windows/Desktop and Server OS;
◦Office and Business software;
◦Computer related Hardware{1};
◦Entertainment and Consumer devices;

4.
Make them run unbounded by other Microsoft divisions, and keep a trimming eye to those that continuously lose money or market-share.


MS Office has the potential to be the “perpetual” monopoly office suite for decades to come. If, and only if, it can cover all of the computer/OS bases that exist and may exist. And that means, have Office for Linux, have Office for Mac, have Office apps for iOS, ANdroid, WebOS, have a Office suite everywhere! Of equal quality and fully compatible."

Anonymous said...

What would Ballmer have to do in order to get fired?

Seriously think about that for a moment before responding.

- Cut the stock price in half over a decade? Nope.
- Be completely wrong on iPhone, thereby losing a ten year headstart in mobile? Nope.
- Turn around and repeat that mistake with iPad, sending Windows revenue into decline and collapsing the stock? Nope.
- Lose $8 billion to create a 10% margin Xbox business? Nope.
- Wait too late to respond to Google in search? Nope.
- Lose the multi-decade revenue, profit, and marketcap lead over Apple? Nope.
- About to lose the marketcap lead to IBM as well? Nope.
- MS off the list of top 10 admired companies completely? Nope.
- Kin? Nope.
- The failed WP7 launch and update mess that continues FIVE months later? Nope.
- Vista? Nope.
- IE's ongoing share declines? Nope.
- $8 billion of losses so far in Online with annual losses in excess of $2 billion? Nope.
- Four years to respond to iPhone and at least two and maybe three before MS's first response to iPad? Nope.

That's not even close to a full list. How can anybody have made this many serious mistakes and still be CEO?

Anonymous said...

I wonder if the changes in STB and DPE, giving Soma more power and moving ScottGu over to Azure to try and fix the mess is going to be a change for the better and help those teams focus.

Still need to do something to make Azure more palatable with performance, cost and capability; and they need to sort out the HTML5 and Silverlight co-existence story so it rings true rather than sounds like two businesses fighting but ... all up I think it's positive

Anonymous said...

Good reading:

http://www.gurufocus.com/news/130523/microsoft-q3-2011-priced-for-failure

Hope that the statements explaining the reason for the current status are not true.

Hope that the statements regarding the future will not come true.

We need crisis management leaders.

There is one +VP pretending he can make it, very good in mastering the internal politics and leading like a master of the disaster.

Not that one, please !!!!

Anonymous said...

There's two significant barriers in the way of that: the idiots who make the phones and the idiots who run the carriers.

Same thing applies to PC's/laptops/tablets. I recently had the displeasure of trying to buy a Windows PC from Dell. Talk about horrible customer service. I gave up on Dell and was left thinking it's no wonder people are buying Apple products.

Anonymous said...

674,000 Windows Phone devices sold to date, analyst suggests

http://www.bgr.com/2011/05/03/674000-windows-phone-devices-sold-to-date-analyst-suggests/

That would imply Microsoft only made ~$7m on $500+m marketing costs. Certainly a bum deal.

Anonymous said...

MS will come out with an iPad version and will take the 3rd place in the year 2015

Uh, it's only 2011! You've obviously been at MS too long if you think having a 3rd place product be 2015 is success. Your comment succinctly epitomizes the state of affairs at MS.

Anonymous said...

I don't think that Apple it a real competitor that innovates

OMG, this has to be the dumbest statement I have ever seen. Apple (more specifically Jobs) is clearly the most innovative company in the history of the computer industry. Twice now Apple has ushered in entirely new eras of computing with the Mac and more recently the iPhone/Ipad. No other company has done that in the history of the industry. And I'm a long time Softie. It used to be that other companies would come up with groundbreaking innovative ideas and we would out execute them. But MS has completely lost it's execution excellence and doesn't have an ounce of innovation in the entire company. Maybe that's why you can't recognize it.

Anonymous said...

This post has been removed by the author

Anonymous said...

Bing will be “deeply integrated” into the devices, creating “unique experiences for millions of BlackBerry customers,” Microsoft Chief Executive Officer Steve Ballmer said today in an unbilled appearance at the annual BlackBerry World trade show in Orlando, Florida. He said the partnership will be ready in time for the holiday shopping season later this year.

Great work Steve! Woo-hoo! Let's spend some more money on another turkey losing market share to Android & iPhone ... thank goodness HP bought Palm or Steve would be shoveling the cash there as well.

Anonymous said...

Just taking a look at results in Online. The following shows annual operating losses for past 5 years, from April 2006-2011:

4/11 $2.5Bill
4/10 $2.3Bill
4/09 $1.5Bill
4/08 $1.0Bill
4/07 $0.6Bill

Am I the only one who sees a trend here? And it's not as though MS was in a market any different to Google, which BTW made $25bill in online profits in 2008-2010, during which MS LOST $6.3billion.

Enough's enough. Quit while you're behind, or spin it off.

Also a question: how much of the WIndows/Windows Live results were affected by losses in Live that are not shown separately?

Anonymous said...

I don't think that Apple it a real competitor that innovates, making machines pretty is not innovation of technology, it's innovation on design and social marketing, however Google is that competitor...

Sure, that's why everyone is excited about Zune, Windows on tablets and Windows Mobile. That's why they're selling in droves. It's all that innovation that Microsoft does but Apple doesn't.

People who believe Apple are all about marketing are Apple's best allies. They push competitors to aim at the wrong target, and so we see plenty of catch-up products that fail in the market. They're like secret weapons inside Apple's competitors, unknowingly sabotaging their own products.

Anonymous said...

"And the fact that the pre-update bricked phones was inexcusable"

Steve made a big deal about personally taking charge of mobile, with Lees reporting directly to him. This was that critical for the company. The result? A $400M launch that failed due to widespread hardware availability issues. Perhaps the worst bungling of an update process in tech history, thereby killing any excitement that had been built. Zero proactive communication followed too late by half truths and even outright lies. And leadership that hid during all the problems and sent underlings out to face unhappy users and skeptical media. If it weren't for the Nokia deal, WP7 would now be dead. This is what we get with Steve directly overseeing one of the company's most important comeback products.

Is it any wonder why the company is in this much trouble after 11 years of him as CEO?

symbolset said...

@AC: Richard, I gotta be me.

symbolset said...

@Anonymous Friday, April 29, 2011 9:51:00 PM

Reorg STB Monday? Why? They're one of the few parts of the company that's doing well.

Oh, and that's sarcasm in case you didn't get it. Of course the parts doing well will be reorged when the goal is to fail.

symbolset said...

About the Wall St. Real-Time 500 ranking guessing: If Intel announces that they're fabbing Apple chips tomorrow IBM will knock MSFT out of the top 5 before the end of the day, and both Oracle and Google will have their way with MSFT by the end of the summer. After that you guys aren't scaring anybody anymore, and life gets really difficult.

Anonymous said...

Also a question: how much of the WIndows/Windows Live results were affected by losses in Live that are not shown separately?

I work in Windows Live. I love Microsoft; however, Windows Live is the most bloated, slow, technically inept organization I have ever had the displeasure of working in.

A bunch of terrible engineers at L65 who pride themselves on yearly releases, complexity for complexity's sake, and "infinitely" configurable designs. All this, while they complain about "oh, I have sooo many meetings." It actually upsets me enough to not want to discuss it here any further...

Anonymous said...

I know most posters here are employees, hence the anger and ccynisism. But I have apple products and i dont think they miles ahead, its mostly media hype.
For eg: Itunes on windows is a memory hogger n dead slow, IPad uses the same OS as the IPhone (no innovation), same goes for Ipod touch, Windows 7 kicks OSX a** any day.

All apple has is media hype and overpriced products that become wishlist of people who want to shed money.

Now i am not a blind optimist, i have tried most apple products n have to say ipod nano is a hardware marvel.

But hey what about msft cool products like kinect, Sharepoint, VS and .net framework is the coollest thing to program in ?

Why just blow with the wind (markets, stocks, biased media reviews) and why not keep a open mind and see msft strengths.

Anonymous said...

Maybe I'm the only one old enough to remember this: "Microsoft is a desktop company - they don't get the enterprise".

Fast forward 15-20 years and now Microsoft pretty much gets the enterprise. We have a healthy enterprise business - a business that most would be envious of.

But now, we've lost the consumer, so what does KT do? He creates a COIT sales team (consumerization of IT). These poor saps have to sell WP7 and Win8 on ARM against iDroid (iPhone, iPad, and Android). Sucks to be them.

The irony is that Windows did to IBM what iDroid is doing to us today. WP7 and Win8 on ARM are the OS/2 of the 21st century.

Would a sane person expect a different outcome?

Would a sane person doubt that the IBM of the 90s thought that they could defeat the little upstart Microsoft using the same tactics they had used against everyone else? Didn't work for IBM, but this is "different".

Is Ballmer's quote that the iPhone won't catch on any different than IBM's thoughts around the PC?

Isn't Ballmer's attempt to protect Windows against iDroid the same as IBM's attempt to protect the mainframe against Windows?

The real tragedy is that Ballmer won't unhook anything from Windows because "Windows is the air we breathe". Office for iDroid would fly off the shelves. XBOX Live on the iDroid - cha ching.

In the late 1990s we merged the consumer Windows with the business Windows in response to enterprise pressure. Maybe it's time to unmerge them? Maybe it's too late?

The more I think about it, the more ironicly deja vu it gets.

Anonymous said...

Hi I am am doing an interview at windows live. Is this group a good one to be part of. How are they in terms of offers and is a good place grow my career.

Anonymous said...

Changing VPs won't help much. They rely on their generals amd below to garner a picture of the situation. If those generals don't provide truthful reporting, it simply isn't possible to execute effectively. It'll take an IBM/GE/HP/Honeywell (etc) sttyle intervention to fix this problem - it won't get fixed by those who benefit (hugely) from it.

Excellent post, and not just this portion.

Anonymous said...

The problem is that people are spending too much time energy on each other within the company instead of the end users. Mini is right, there are too many people.

I agree with the first statement, but I'm not sure that your conclusion is the cause.

The way I see it, people are too focused on each other due to the corporate culture that pits employees against each other, rather than against the competition (and that doesn't mean the person sitting 10 feet away from you).

Anonymous said...

"As an enterprise software business we are the top, bar none. We make a ton of money and serve those customers well."

And this out of touch softie is one of the more realistic ones.

Many many times I have seen the CEO of my company shaking his head in resignation about how poorly his MS systems run,and how unreliable they were. At the same time they were expensive to purchase (keep those forced upgrades in mind), and devastatingly expensive to maintain and operate.
Very very very far from serving the customer well. But these are monopoly products, he doesn't get a choice. He sure wishes he had one.

Anonymous said...

Our entire iPhone compete strategy has been a clusterfuck. First Robbie et al wasted a year denying that Apple, with their first product, had redefined the market and effectively obsoleted not only WinMo6, but also our next two planned upgrades: 6.5 and the fabled 7.0. But of course he had to since he’d claimed in advance that iPhone wouldn’t affect our mobile business “at all”. Then another year was lost pretending that the people stupid enough to waste the first year were still smart enough to lead our response.
By year three we finally put the right people, sort of, on the job and they got busy coding. But of course there was no way they could finish a new OS in less than twelve months. So what happened? We decided to release it anyway even though it was half finished. In the collective intelligence of Lees and Ballmer, it was better to release a half complete product than wait another year to get it right. Why? Because by then THREE YEARS had passed without an iPhone (1.0) response. Since we do this routinely, the strategy was the normal one: throw a bunch of money at the launch and hope people don’t notice the product isn’t complete. Meanwhile we’ll update it over the next year until we finally get it to where RC status should have been.

Of course, a couple of predictable things happened. First, OEMs by this point had lost confidence in MS. I mean, can you blame them? We’d given them nothing with which to compete against iPhone for three years except a for-cost and obsolete Winmo, whereas Google had provided something competitive within two and for “free”. So while they assured us of their commitment, in fact most were focused by then on Android. As a result, the first Wp7 phones were mediocre and in short supply. Second, customers and the media noticed the product deficiencies and lack of services coverage, especially outide the US where we first launched the product. Third, carriers held up the updates (which Paul Thurrott had warned the team about in real time but was assured everything would be OK). And then we bungled them and failed to communicate until the damage had been done.

What will we do now? We’ll wait for Mango and Nokia later this year or early next, and then throw a bunch of money at effectively a relaunch of Wp7, only we'll now call it Wp7.5. Rinse, repeat.

Anonymous said...

"All of you L65+...and yes all of you...admit that all you want is your fat bonus, salary and benefits....DO YOU CARE ANYMORE????"

Nope, haven't cared since 2004 to be specific.

I'm a 65, have been a 65 for 5 years, not going any higher by my own desire.

Why? I'll tell you. :)

I'm really good at what I do, and a few years ago I left the management track (which is a heaping pile of pain here if you actually care about the people who work for you, which I did) and took an individual contributor role. Because I'm good at what I do and most people I work with aren't, I can do my entire job in about 10 hours a week. I have flexible skills and can find opportunities in a variety of divisions.

When I started in 1996 there's no way you could get away with this -- the caliber of people here was too high and there was too much work. That is certainly not the case now, as many of the people I work with would never have even been invited to interview 15 years ago. Now we hire them as Directors and GMs.

All-up with bonuses and stock I make about 200k a year for doing virtually nothing, which allows me oceans of time to pursue other interests and spend time with my family. I consistently get great reviews because I've learned how to game the system, and I suspect most people at my level and higher have also learned these lessons. You become very skilled at efficiency so you can get everything done quickly, and then you just make yourself look super-busy all the time.

There are still people here who work themselves into the ground until they're burned out -- I feel sorry for these folks, because Microsoft doesn't deserve this from you. Our leaders don't deserve it and neither do many of the people you work with (myself included).

Anonymous said...

No wonder Microsoft is failing. If the attitudes of the employees posting here are anything to go by, the company motto must be "if at first you don't succeed, GIVE UP!"

Anonymous said...

"It appears Microsoft will fall behind IBM by end of this year."

Much earlier. Summer, latest, and as early as the next week or two.


source?

Anonymous said...

I'm pretty sure that Ballmer has presided over the greatest loss of shareholders' equity in the entire history of joint-stock corporations. Can anyone think of a more egregious example of incompetence?

Anonymous said...

674,000 Windows Phone devices sold to date, analyst suggests

http://www.bgr.com/2011/05/03/674000-windows-phone-devices-sold-to-date-analyst-suggests/

That would imply Microsoft only made ~$7m on $500+m marketing costs. Certainly a bum deal.


You *are* kidding, right? Microsoft gets $15/device for OS licensing. So 674k licenses is $10.1 million in license revenue, meaning MS is $490 million in the hole on marketing alone + product development. To break even on marketing alone will require 33.3 million units to ship. Which at the current rate of sales - 60,000 per month - will take 46 years.

Good thing SteveB is personally in charge of mobile to ensure sound business decisions like these are executed ...

Anonymous said...

Analyst: Microsoft has sold only 674,000 Windows Phones

Anonymous said...

"If it weren't for the Nokia deal, WP7 would now be dead. "
- Dont count on that one. Microsoft is not known to execute on big deals - look at Ericsson, Qwest and now Yahoo with their CEO complaining about the search partnership. Nokia deal is like trying to get onto a sinking boat since Nokia is fast losing market share and becoming a non-event in smartphones given iPhone and Android momentum. By the time WP7 is launched with them they will be down to single digit share in smartphones and with usual Microsoft's large partnership screw ups we will make sure that happens.

Anonymous said...

Many of these ideas have been discussed here over the years...

http://www.businessinsider.com/10-crazy-ideas-to-send-microsofts-stock-price-soaring-and-why-they-wont-happen-2011-5

Anonymous said...

The result? A $400M launch that failed due to widespread hardware availability issues.

If the product is good enough, hardware availability is secondary. I was just in a store yesterday and the customers ahead of me were looking for iPad 2s (sold out) because apparently there's STILL a shortage of them even though they've been on sale for 2 months and Apple is selling millions of them.

IIRC the WP7 marketing campaign consisted mostly of commercials making fun of people who use their smartphones (WTF?!) and a few commercials about tiles which allow you to see how many missed messages you have from the home screen--as if that hasn't been a feature of every cell phone (including dumbphones) sold in the last 10 years.

The focus on "tiles" is basically admitting that WP7 does not have even one compelling feature.

Anonymous said...

Listen, I'm a 10 year vet and unlike 90% of the folks posting here, I like my job AND I have been in a few different customer-facing roles in Support, Premier, and Consulting. We actually have a cult following of IT folks out there that appreciate the products we release. We have an ecosystem of MVP's and highly technical professionals who believe in the progress we make in our products and feel like they owe us more as our products have enabled them to have successful careers. You can make the argument that some of those folks make a living troubleshooting issues caused by complexities or bugs in our products, but regardless of that, they appreciate what we do and provide for them. We have a cult following from some IT Professionals in the field who actually stand in line for Windows phones on their release date, they won't buy Playstations or iPods and they don't use Google. I am not saying all IT Professionals, but a select few.

You can say what you want, but that is the type of following Apple used to have. It was a dedicated following, almost a cult-like following. As someone who actually visits customers and doesn't try to shove product down their throats, these folks are one thing that keeps my pride where it is.

When I was hired, Windows XP and the original XBox were about to be released. You can say what you want about the full range of products we release; from Windows to Office, or from Mice and Cameras, there are a few things that we kick a lot of ass in. We just don't kick it in areas that make a lot of money or get a lot of press.

All of that being said, I think the biggest gorilla in the room is not necessarily Apple or Google. The intangibles keep me (as well as others, I imagine) here. The biggest gorilla in the room is the Benefits change in 2013. How many people are going to stick around and how many are going to bail? Are the people who stick around going to benefit from sticking around?

Mini has talked about making deep cuts and trimming down. What's the difference between a job in PSS for $100K and a job at a Fortune 100 IT Staff for $100K? Most of the people in PSS are orders of magnitude better technically than the Fortune 100 IT Staff, but most of the Fortune 100 helpdesks don't provide Zero-CoPay insurance. When the benefits package changes in 2013, Microsoft will have a benefits package that is on par with everyone else, and the one thing that keeps a lot of smart people from going elsewhere will be the same as everyone else. How many people are going to think "I can do easier work for the same compensation and benefits?" and how many people are going to stay loyal? Stay tuned.

Anonymous said...

Big reorg in STB.Lee Nackman has been kicked out. Rajat Taneja moves into STB following his old buddy Satya

Anonymous said...

Koolaide culture. Partners know best. Microsoft has been shipping shit for years locking customers into viscous upgrade cycles and endless updates. People are sick of it.

Anonymous said...

Windows management is overflowing with dead wood at all levels. Endless office politics and BS.

Time to clean house and separate the real contributors from the posers, or risk a future of mediocrity.

Anonymous said...

There are some geniuses over in Microsoft Research; somebody needs to set them free to productize.

Many of the "geniuses" in Microsoft Research wouldn't lower themselves to "productize". That's dirty & vulgar, only fit for the lower classes that exist to generate money to support Microsoft Research in the style to which they're entitled.

Anonymous said...

Meet the SLT:

Ballmer 1980
Brummell 1989
Courtois 1984
Delbene 1992
Klein '02
Lees 1990
Lu '09
Matthews (RIP) 1989
Mattrick '07
Mundie 1992
Nadella 1992
Rashid 1991
Rudder 1988
Sinofsky who knows - but he ain't Dave Cutler
Smith - 1993
Turner '05
Vigil - who knows

Not sure about you, but I can recognize an old fart when I smell one ... and the are plenty in the above to sniff. No wonder MS is behind the curve with this lot.

Not wanting to appear ageist, but this group should be pooping their pants in a care facility.

Anonymous said...

Sad to see the company (and in particular Windows) in a long, steady, decline.

What do you expect? Most of the real tech talent saw the writing on the wall and left long ago. Who is left running the show now are a lot of piss poor managers and 9-5ers whose talent ends at knowing how to book a conference room.

Its not their fault. When you have a CEO that has screwed up everything and escaped unscathed- it is monkey see monkey do.

Anonymous said...

Microsoft's problem is not tablets, mobile, or Windows. Microsoft's problem is the unwillingness of its board of directors to fire Ballmer."

People will look back and remember Ballmer as a fool. Maybe history will be nicer and just leave it as "presided over Microsoft's dark years"

Anonymous said...

I know there are lot of comments here and I am not sure what exposure an individual comment from a 11 year veteran of MSFT can garner but simply put, what saddens me most is the lack of humbleness at MSFT today. There was a time when modesty was not needed and MSFT out-innovated everyone but today we are playing catch up and the arrogance is mind boggling. It is Sat morning in Redmond (early) as I post this comment and have just finished typing my resignation letter. I am a E/20 performer and was told at MYCD I am a '1' on the new scale but it is time to go to a place where people are willing to admit their mistakes, acknowledge the changes in the market and competition and be excellent again! I will be resigning on Monday and I wish everyone at MSFT the best. No hard feelings and the company has been good to me but an attitude adjustment is needed....

Anonymous said...

If I just look back for the last decade or so, and list things that moved people, made them exicted - and mostly transformed them into real fans:

1) Google
2) PS2
3) iPod
4) Xbox
5) Twitter
6) Wii
7) iPhone
8) Facebook
9) iPad
10) XBOX w/Kinect

You can add few more stuff based on your preferences but I only see XBox/Kinect from MS, and that's merely 1-2 out of ten big movers all time. While the world was changing, what were you doing Microsoft? And a final word to the idots who are constantly rating msft 9 or 10 in the stock market for the last ten years. Get lost, market does not eat that deadwood anymore morons. Get a real job!

Anonymous said...

A moment of levity for all you developers out there...

http://soundcloud.com/smixx/smixx-developers-feat-steve

Anonymous said...

I gave up on Dell and was left thinking it's no wonder people are buying Apple products.

If you need a decent machine to run Windows on, do what the engineers at Intel and Google do: buy a Mac and install a Windows partition.

Anonymous said...

Microsoft refuses to let engineers run the show.

That's basically what killed the American auto industry. The last CEO of any of the big three who was a "car guy" was Lee Iacocca. The endless stream of salesmen and bean counters destroyed some great companies.

Anonymous said...

At this point, Ballmer has set the all-time record for the greatest amount of shareholders' equity pissed away in the entire history of joint-stock corporations.

Ten years from now, he will be known as the idiot who ran MS into the ground, and BG will be remembered as the guy who built a monopoly and then made a fatal mistake in choosing his successor.

Anonymous said...

It's very frustrating to see how long it takes MS to respond to competition in general and the iPad in particular. When the first iPad came out Balmer, or someone high up, should have created a team of design and OS talent and given them 6 months to create a competitive tablet with no input from management, marketing or other people trying to get their name attached to the project for rewards down the line. Heck, this could even have been a stealth project within the OS group itself. Instead they wait to see Apple dominate the market and then start the 2-3 year journey to be last into a market.

Has there ever been a case where MS responded quickly to the competition? Even MS' much hyped quick embrace of the internet took forever, with Gates responding only after Netscapes IPO.

Anonymous said...

Don't you just love 'analysts' as much as I do? These are people who make predictions for which they are completely unaccountable and I have yet to see a report card from any of them to assess actual results with their prognostications.

The latest bonehead opinion is from Pyramid Research (Who?) but I am pretty sure similar research results were announced by IDC. In this case these predictions suggest Windows Phone 7 will overtake IOS by 2015. Well 4 years is far enough out to provide any ludicrous estimate with enough aircover.

At the core of these claims is that Nokia's entering the smartphone market combining their hardware with WP7 will yield massive sales increases. Nice theory, however:

- NOK has almost zero footprint in US smartphone market
- MS has been unsuccessful in mobile for years
- The WP 7 launch was a flop
- Nokia's highly unionized workforce, particularly in Finland will do their level best to sabotage Elop
- Same NOK workforce will be demoralized by layoffs and an effective rejection of the work they have done for years
- Speaking of demoralized resentful workforces, there is the MS side of the equation

By the time this disaster unfolds fully, Elop will have cashed in his sign-on bonus and stock, probably in late 2012. He has a history of leaving jobs after 2 years, and is the very poster child of the swoop-and-poop executive. Of course we are lucky enough to have SteveB in personal charge of mobile, and he is lucky enough to have Andy Lees to blame for the fiasco. Polish up that resume, Andy!

Anonymous said...

I predict that within 10 years, IBM will buy Microsoft.

Anonymous said...

Is Win8 going to a full port to ARM? I hope not.

Win8 is the last shot at ipad. It better light weight and not draining on the batteries.


The executive in charge of creating a new operating system for Microsoft's tablet got fired, resigned, "wanted to spend more time with his family", etc.

Microsoft did some work a few years ago with Microsoft Research to untangle Windows code base. Whether they did enough to replace a desktop window manager with one for tablets remains to be seen.

A new version of a Microsoft product eventually gets cut back to something a lot less ambitious to what was originally planned - whatever is enough to get to the next level in the performance review system; nothing more.

Anonymous said...

Microsoft Near Deal to Acquire Skype
Software Giant Could Pay Nearly $8 Billion for Company

http://online.wsj.com/article/SB10001424052748703730804576313932659388852.html?ru=yahoo&mod=yahoo_hs

Anonymous said...

Microsoft to acquire Skype for $8B?? Say it ain't so. We don't need another aQuantive or Danger acquisition.

WSJ Article

Anonymous said...

Fuck. Now Skype will cease to exist.

I know I left a while ago, but stop fucking up tech that some of us like to use.

Microsoft - where good ideas go to die.

Anonymous said...

Skype buys Microsoft.

Anonymous said...

It's official: Ballmer is out of control and the Board is derelict. Skype worth $8.5 billion? Please!

E-Bay paid $3.1B to acquire Skype in 2005, and sold it for $1.9B 4 years later. According to the trade press there were no other serious bidders, and no other offers. Skype had been trying to get $5-6B. And in walks SteveB like some drunken cowboy out for a good time, pockets filled with cash. How on earth could Skype be worth 4x what it was 2 years ago? And it has NEVER made money. Then again investing in money-losing business is Steve's only forte. Remember $6B for aQuantive? People like Andreesen and Eric Schmidt know a rube when they see one, and they rolled Steve but good.

Mini, please start a pool on how long it takes Ballmer to run this one into the ground. And what % of "key employees" stay longer than it takes their MSFT stock to vest.

Anonymous said...

Again we seem to have overpaid in an acquisition thats a loss making company. what says you on the wisdom of such decision and the quality of leadership at helm in microsoft.

Anonymous said...

Skype...
So in IP teleconferencing we're moving on to part 2 of our typical 3-part strategy:
1. Fail to execute on or completely miss a technology cycle.

2. Grossly overpay for a some other company to fill the gap.

3. Drive said company into the ground through mismanagement and alienatation of their employees and management.

How many times have we done this?

Anonymous said...

The Skype deal confirms my long-held belief that Ballmer's theme song should be "If I Only Had A Brain" from the Wizard of Oz.

Anonymous said...

OMFG. $8.5 billion for Skype? Are you kidding me? That's more than 8x sales for a company that loses money. What the f was the board thinking when it agreed to this? This was our best possible use of $8.5 billion? Seriously?

Ballmer and the board need to be fired. Stock is falling on the news, which should be expected since there's little synergy there.

Within one year MS will have screwed up Skype, like we have most other large buys. Can you say aQuantive II?

Anonymous said...

I am past being disappointed.

Skype=FAIL.

Jonquil said...

What does everybody think about the Skype purchase? Skype themselves never figured out how to make a profit; how will this be synergistic with other Msoft products to make money or marketshare for Msoft?

Anonymous said...

OMG, this has to be the dumbest statement I have ever seen. Apple (more specifically Jobs) is clearly the most innovative company in the history of the computer industry. Twice now Apple has ushered in entirely new eras of computing with the Mac and more recently the iPhone/Ipad.

What Apple does extremely well is combine existing technologies with fantastic industrial design (usually by ripping off Dieter Rams of Braun fame but that's neither here nor there) with extremely good UI/UX and usability testing and then markets extremely effectively. So yes, technically, they innovate, but they innovate off of the inventions of others.

Pretty brilliant, actually.

Anonymous said...

Mini-Microsoft: OK - WTF! I agree with everyone that was against this acquistion. "Monkey Boy" has lost his mind. As a MSFT shareholder, all I can say is (WTF!!!)2 Pray for our stock value, Amigos. This is a real BOHICA for those whoo are unaware of the concept! There's a Green Witch overhead and she's spelling out something. Wait, it says, "WTF!!! Surrender, Monkey Boy!!!" SteveB, call me on SKYPE. I'm LisaB on Skype...

Anonymous said...

The message is clear- our CEO is a sucker. Take him for all he is worth.

I'll have to drop by Steve's office. I have a great deal on an underwater house for him.

Anonymous said...

Nodo is an interesting topic. As with most issues encountered with software releases they are usually found, debuged and loged by someone before the release. Many bugs just don't meet the bar. I guess the connectivity issues were not thought as important enough or too expensive to fix. oh well...

Anonymous said...

Even if we ship the purported like-iPad-but-look-it-runs-Windows product tomorrow, it won't do much for us. You don't need to be as good to compete, you need to be better.

Now riddle me this. Here's a product that beats iPad on both price and features, made by Asus (one of our best partners, right? right?) of all things:

http://www.asus.com/Eee/Eee_Pad/Eee_Pad_Transformer_TF101/

Why the hell is this not an our product? This idea does not take a genius to come up with. Why is it running Android?

That's why we're going to fail. Not because Apple or Google are all that awesome. But because we've relegated ourselves to play perpetual catch-up.

Anonymous said...

If you need a decent machine to run Windows on, do what the engineers at Intel and Google do: buy a Mac and install a Windows partition.

Or use Parallels for the Mac. No need to reboot, virtualization FTW!

Anonymous said...

Ten years from now, he will be known as the idiot who ran MS into the ground, and BG will be remembered as the guy who built a monopoly and then made a fatal mistake in choosing his successor.

Why can't we get Ballmer a job that is out of the way, where he can't do damage?

Maybe he can be the company's Museum Curator? The guy obviously likes to spend obscene amounts of money on useless stuff. Maybe he can procure us some new art?

Anonymous said...

More senior ICs are, by definition, supposed to raise broad issues by dint of their level and years of experience. The existing culture makes this a very dangerous thing to do. That's why I left in January after 10+ years.

On my skip level 1:1's I tell the guy whatever I think he wants to hear. Ship a non-competitive piss poor buggy feature late? Talk about how great things were in 1995? That all sounds great to me.

When it finally all goes tits up I hope you lose everything you didn't deserve.

Anonymous said...

As an outsider new to MS I have seen closely how we screw up innovation, e.g. Surface, Courier.

We have SLT that does not know anything about what it takes to develop HW. We also have GM's with their buddies screwing up products, projects without any consequences. Then there are the new kids on the block having no experience running the show just because they are buddies with GMs.

If any of our senior management had any iota of vision they would have used the courier development to be our launch pad for the tablet. Now playing catch will be like Windows phone, too late, too irrelevant and no one giving a hoot about it. I am not even going to piss about the $8B R&D without anything to show for.

Funny thing is I am the most experienced HW developer (with a number of innovative product launches in other companies) in our org but being marginalized by guys whose idea of product development is getting a Prototype and launching e2e development cycle without any margin for refining design.

God bless MS or maybe he is pissed off too :-).

Anonymous said...

Review time. Ok, let's review our middle managers:
What do they do?
I love trying tell customers what the purpose of a manager at Microsoft is.
Why do the VP level folks put up with the middle managers?
Just asking
Review system
Ok, it's new, it's better, but can our middle managers deal with it?

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windows mobile said...

I was in the Windows Phone team for a while (but am not anymore). I strongly suspect the reason the update bricked phones had to do with the device partners (both the operators and the manufacturers).

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