Tuesday, May 10, 2011

Skype? Steve Ballmer Discovers a Way to Obliterate Eight and a Half Billion Microsoft Shareholder Dollars!

That's $8,500,000,000USD for the Skype brand.

Microsoft to Acquire Skype Combined companies will benefit consumers, businesses and increase market opportunity.

Also, because, you know, the aQuantive acquisition didn't destroy enough shareholder money.

We're bringing Skype to the Windows Phone. Just like how it's on the iPhone and Android and appears it will continue to be.

Okay, so we're bringing Skype to the Xbox. Because, you know, we don't already have video chat on the Xbox. Oh, wait... crap. Why do we need this? Other than the brand and the user base, and that's not worth 8.5 billion dollars.

Some early stories:

What I'd like to hear is each Microsoft board member share their reasoning why this is an excellent idea and worth 8.5 billion dollars. And I'd keep a really, really close eye on their nose.

Geez.


-- Comments

574 comments:

«Oldest   ‹Older   201 – 400 of 574   Newer›   Newest»
Anonymous said...

I went back in the archives. Since 2005/6, you (and others you've linked to) have been correctly warning about MS's leadership, strategy, and execution problems. Six years later, even with concrete proof of that in the form or slowing growth, declining relevance, poor competitive positioning, and Apple now larger by every measure (value, revenue, profit), Ballmer is still being allowed to destroy the company. It's just disgusting. MS's board is an embarrassment. Nothing can even begin to change until they and Ballmer have been thrown out, assuming there's enough left at that point to salvage.

Anonymous said...

"The real story at CES wasn't Ballmer's lack of any tablet response despite another year elapsing, itself unconscionable and sufficiently important that it would have terminated any other CEO. It was the universal defection of OEMs from the Windows camp. Five years ago 99% of them would have been promoting Windows. Even three years ago the number would have been 80%+ and included all the major players. But now no OEM is exclusively promoting Windows and almost all have embraced Android as their go to solution for tablets. The exception being HP, who of course is going with WebOS. Again, an unbelievable reversal."

Anonymous said...

Executive scorecard ... here is my take on the new rating system:

Ballmer - 5
Brummel - 4 trending down
Courtois - no idea what he does, manage out
Delbene - 1
Klein - 2
Lees - 5, terminate with extreme prejudice
Lu - 4
Matthews - Had the decency to resign
Mattrick - 1
Mundie - see Courtois
Nadella - 2
Rashid - 5
Rudder - See Courtois
Sinofsky - 1
Smith - see comment below
Turner - 4
Vigil - See Courtois

SO wrt the venerable shyster, Brad Smith: A tiger is walking thru the jungle. Suddenly another tiger rushes past, picks up an elephant turd and starts eating it. The first tiger says "What IS the matter with you man, are you crazy?". And the second tiger says "No, just ate a lawyer and I'm trying to get the taste out of my mouth"

Bing Bing Bing
Developers Developers Developers
Skype Skype Skype
Blah blah blah

What a crew.

Anonymous said...

BPOS and its unholy progeny Office 365 are both doomed. The upgrade to Wave 14 products has slipped months and months. Multiple outages occurred last week and were finally grudgingly acknowledged by Dave Thompson.

Let's face it, the whole idiot idea was hatched by Ron Marketich, who like all the swoop-and-poop execs is now in EPG. MSIT can't run the internal network, how on earth does anyone expect them to run a complex hosted service, where most of the support is outsourced to vendor-peons? Having had the misfortune to deal with BPOS "Tier-3" support, I would not let these people valet my car.

No wonder OSD is losing billions. Still it will take them over three years to waste as much money as Ballmer did on Skype ...

Anonymous said...

Mini, isn't it time for you to retire this blog? You're not doing a service to Microsoft, the employees or the industry by making an inflammatory post and then disappearing in the middle of the conversation for a week.

Why not find someone who has the energy and desire to do the right thing to take over for you? It seems like you're burned out and largely over it.

You could also change the format to remove the comment feature, which is probably the right thing to do if you insist on moderating but won't commit to a regular schedule of approvals.

Anonymous said...

"make Bing competitive (if completely unprofitable), but $8.5 Billion seems to be a little high"

Cell phone networks are selling dataplans, with Skype pre-loaded and phone companies already made peace with VOIP... add to this the growing popularity of smart phones & tablets and the fact that Skype is used a lot for messenging.. (synergy with Live) and meetings.. (netmeeting), it'll be business on the go anytime, anywhere... I can see the convergence and synergies clearly... Skype makes a lot more sense inside MS than Ebay.. And it puts MS in a way better position to make deals with phone companies than before... As far as tablets go, if a one time purchase of $500 allows me to spend 0.5 more hours per day with my family, it was a very worth while investment.

Anonymous said...

Phone companies love traffic, traffic = money... who knows? Maybe they'll be paying Steve now, mobility for people sitting in an office is maybe confined to tapping the phone in the car etc, but many economies consist of countless small business owners on the go..

Anonymous said...

I think this acquisition could be a good thing. Sure it's expensive, but this could be our Facetime competitor but open to everyone on any platform. If integrated well, this could help us starting winning back share on the Microsoft platform(s)

And exactly here's the problem:
When did Microsoft a good integration of different technologies or plattforms?
Answer: NEVER!
They don't know how to integrate technology with such a good and user friendly interface, so that everyone - and not only the Tech-Geeks - can use it.

Anonymous said...

this is to keep google and fb from acquiring them. defensive move.

Unfortunately it's a defensive move of the indefensible variety.

Anonymous said...

IBM is now $2B shy of MSFT market cap. I don't think Ballmer "Loves this Company" ... I think secretly he hates it. Otherwise why would he be so hell-bent on its destruction?

Anonymous said...

Microsoft will enter negotiations to buy Nokia's mobile division next week

Oh good, the Zunification of Windows Phone 7. Time to screw all the other Windows Phone 7 manufacturers just like Zune did.

http://www.engadget.com/2011/05/16/eldar-murtazin-microsoft-will-enter-negotiations-to-buy-nokias/

Anonymous said...

Rumor is that Microsoft will be buying Nokia's handset division. Microsoft management and culture is absolutely guaranteed to kill any value Nokia might still have. Remember Danger? WP7 is setting itself up to be a bigger failure than XBox and Bing combined.

Anonymous said...

Look Who's About To Pass Microsoft In Market Cap (MSFT, IBM, GOOG)

I wonder how Steve and the board plan on explaining this one? More "it's a long game" references like when Apple passed MS?

I think IBM passing MS is going to be seen as a lot more damning indictment of Ballmer than even Apple was. This isn't some fast grower who he can argue is temporarily in favor. This is another mature slow grower than has simply executed better and generated more investor confidence.

Who will pass MS next? Oracle or Google? How many more will pass MS before Ballmer is finally flushed?

Anonymous said...

Microsoft and the Antitrust Myth

"Antitrust action didn't curtail Microsoft's behavior in any meaningful way. Instead, it was its own internal failure to deliver a next generation OS and change the world that killed Microsoft. This wasn't a killing. It was a suicide."

Good thing that CEO got fired. Oh wait...nevermind.

Anonymous said...

anyone heard rumors of a pm RIF at msn?

Anonymous said...

From a MS shareholder:

The Ballmer Days Are Over

"Microsoft isn’t dead yet, nor will it be soon. It is however in the early stages of death and Ballmer isn’t going to the hospital — he’s running to go party some more.

Microsoft needs a swift kick in the ass."

Amen.

Anonymous said...

"One thing is clear: Microsoft's senior management doesn't have much confidence in Messenger and Lync. To buy a competitor with so much overlap and to claim that the purchase is some great enabler for new levels of cross-device messaging and audio/video integration, shows that the managers at Redmond place no value at all on Messenger, and little value on Lync. If these products are so bad—and you certainly don't go out and spend $8.5 billion to replace your in-house effort if you think your in-house effort is any good—one has to ask, why has Microsoft been developing them and why didn't it replace them sooner?"

http://arstechnica.com/microsoft/news/2011/05/microsoft-confirms-85-bn-skype-purchase-clarifies-nothing.ars?utm_source=rss&utm_medium=rss&utm_campaign=rss

Anonymous said...

HP warning tonight. IBM becomes more valuable than MS tomorrow. Fifteen years of being ahead wiped out. Well played, Steve and MS board. Well played.

Anonymous said...

Steve's desperate. The PC industry has become mature and slow growing, and a decade of his other investments have amounted to jack squat. So now MS has no real growth and no real prospects for future growth. Indeed, MS's overall competitive position is now worse than Apple, Google, Oracle, and even IBM (which will overtake MS's valuation in the next few days).

The Skype bid is all about diverting your attention from failure. Failure of Ballmer's strategy. Failure of MS's $9B yearly R&D budget. Failure of the board to make a change five years ago (at least) when it was obvious Ballmer wasn't capable of winning against Apple or Google.

Anonymous said...

"I think this acquisition could be a good thing. Sure it's expensive, but this could be our Facetime competitor but open to everyone on any platform."

So what you're saying is that we spent 8.5 BILLION dollars to compete with a b-list value-added novelty feature of iPhone that's available for free to all users.

Sweet.

Anonymous said...

Time for Skype employees to start working out who's going to be at the bottom of the curve. Take a deep breath of that toxic corporate culture.


As it happens, I had just done a round of interviews with Skype and was waiting on my offer letter when the buyout was announced. I called the recruiter back and told him that I was no longer interested in becoming an employee, but would consider taking them on as a consulting client.

The developers I talked to there were a good team, and I hate to think what's going to happen to them when that GE grade-on-a-curve nonsense gets imposed on them. Maybe it's time for someone else to start up a VOIP company.

Anonymous said...

SteveB use to chalk up slow growth to the "law of big numbers"....I guess that progressive maverick of a company known as IBM doesn't believe in that law....and they're a services company primarily....

Posted with my new iPad 2

Anonymous said...

If these products are so bad—and you certainly don't go out and spend $8.5 billion to replace your in-house effort if you think your in-house effort is any good—one has to ask, why has Microsoft been developing them and why didn't it replace them sooner?"

What, 90,000 employees ? and who knows how many "temps" (you know they're not really temps) and the company has to spend gobs of money this way? Just what exactly are all those workers producing? Is this what happens when you staff yourself with the best and brightest from highly rated programs at all the top schools? How are those big throbbing brains working out for you Microsoft?

Anonymous said...

If however you 'leave voluntarily because your other choice is to be fired' and are granted a severance package in exchange for a 'but you'll never work for Microsoft again, or any contractor with Microsoft' - how does MSFT enforce this? Do they have some kind of black list database, against which the names of all hires at their contracting companies are compared? How exactly do they legally enforce it? In Seattle, that's not quite "you'll never work in this town again" but it's awfully close.

To clear up some misconceptions, Microsoft is perfectly entitled to maintain a no-rehire list of ex-employees. It is true that there is a flag for no-vendor-rehire but that only means that you cannot get a v-badge, not that you cannot work for an MS vendor in a capacity that does not require you to have an orange badge. To get on the list that denies orange badge would require a criminal act, say theft or other malfeasance. I speak from experience as I am on the no-fly FTE list but have an orange badge ...

Anonymous said...

1) MS paid cash that was stuck overseas, not debt. They avoided US taxes on the $8.5B too, that's an immediate discount to the sale price.

Cash + assumption of Skype’s debt (and liabilities). The US tax had already been avoided by leaving the cash where it was. The price paid is the price paid. There are any number of non-US companies they could have bought with those funds instead.

2) It adds a break-even brand that fills a gap.

The break-even part has yet to be determined. Skype currently loses money and if MS does what they’re suggesting they’re going to do, that will require a substantial engineering investment. What gap got filled that MS didn’t have covered already or could have for far less?

3) Margin drop on those revenues isn't material.

But it’s still a margin drop. And if you buy management’s logic that this was a smart investment worth $8.5B and its own division, then you also have to buy into the belief that revenue will accelerate tremendously. In which case, the margin drop will become increasingly material.

4) Brand and tech have future possibilities.

For $8.5B, let’s hope so. The question is do those justify the price paid? Not using any conventional analysis.

5) Mobile requires video chat, just forget that Live Win SpamBot toy.

MS has various existing and overlapping VOIP applications and more than a decade of experience in this area. How did Apple with none of that manage to build something more competitive on an R&D budget that is 1/6th of MS’s? Oh, I’m sorry, we’re not meant to ask embarrassing questions like that.

6) NoSoft integration wouldn't require much effort from Ballmer personally.

You’re kidding, right? Who does Andy Lees report to directly? Who negotiated the Nokia deal personally? Are you saying Ballmer is going to be hands off on the largest acquisition deal MS has ever done? With MS’s track record and his own job security on the line? Would a competent CEO like Steve Jobs be?

7) MS stock will flatline faster than almost anyone imagines if the NoSoft partnership swirls down the toilet in 2012.

It has already flat lined for nearly a decade. Maybe you mean nosedive? It’s already nose-diving.

If the directors and management are not total fools, then they must be privy to specific plans to use the Skype brand and technology in a product that will be fairly easy to implement; mostly likely by NoSoft.

This is Ballmer and MS’s board we’re talking about. Specific plans? A strategy? Why do you think most of MS’s acquisitions have failed, including recently aQuantive and Danger? There’s never a plan. It’s always a reaction: “Oh shit, we can’t let Skype fall into Google’s hands. Think how much farther behind we’d be then. Okay, let’s buy ‘em. But Steve, how will we justify it to our shareholders? Don’t worry about that, we’ll just give them the usual bullshit about synergies. What are they going to do, fire me? And by the time they find out otherwise it’ll be too late.

Anonymous said...

Ballmer -- v. To squander every advantage and lose endlessly. Usage: Whatever happened to MS? They got Ballmered into oblivion.

Anonymous said...

Nice. Outlook/Hotmail gives me notice today that I need to install the latest version of "Outlook Connector" to keep accessing Hotmail from Outlook. I go to install the new version and get a dialog that reads.

********

Title Bar: Microsoft Office Outlook Connector Setup

Files in Use
Some files that need to be updated are currently in use.

The following applications are using files that need to be updated by this setup. Close these applications and then click &Retry to continue the installation or Exit to exit it.

[List box that shows offending application(s)]

Microsoft Office Outlook Connector Setup

********

So, the Outlook Connector Setup is blocked by the Outlook Connector Setup?

What's with you guys? How's that "fire all the testers" thing working for you Microsoft? Jesus.

Anonymous said...

Look Who's About To Pass Microsoft In Market Cap (MSFT, IBM, GOOG)

http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/05/16/businessinsider-look-whos-about-to-pass-microsoft-in-market-cap-2011-5.DTL

Anonymous said...

More praise for Ballmer's leadership. This time courtesy of the WSJ:

"ExxonMobil and Microsoft have at least one thing in common: A fall from grace in investors' eyes. Microsoft's stock began the last decade valued at 25 times forward earnings; Exxon's at 21 times. Today, both command a multiple of a little more than nine times. Even accounting for the entire market's de-rating since the heady days of the tech bubble, Exxon's and Microsoft's falls have been sharper. Both are now valued at a discount to the Standard & Poor's 500 stock index of almost 30%.

There is a nagging concern that the two giants' best years are behind them, exemplified by skeptical reactions to big recent acquisitions. Microsoft's purchase of Skype for $8.5 billion, announced last week, is its biggest ever. While many see strategic benefits in the deal, few celebrate a price tag north of 30 times earnings before interest, tax, depreciation and amortization.

Similarly, Exxon's stock has been a laggard since December 2009's announcement of the $41 billion takeover of XTO Energy, the oil company's biggest deal in a decade.

Both Exxon and Microsoft have had to pay up to try and catch up. Microsoft no longer is synonymous with tech's tomorrow; Google, Facebook and Apple are. Flops like the Zune music player add to the sense that, for all its strengths, Microsoft is a dinosaur. The vast majority of its profit comes from Windows and Office. While neither attained dominance by being shoddy, they are cash cows rather than bywords for growth and innovation. For that, see cloud computing—which is a more competitive environment—and smartphones or tablet devices, where Microsoft is a follower."

Anonymous said...

"Mini, isn't it time for you to retire this blog? You're not doing a service to Microsoft, the employees or the industry by making an inflammatory post and then disappearing in the middle of the conversation for a week."

Apparently you didn't read most of the press coverage or even most of the articles others have linked to here. His view isn't inflammatory, it's actually in line with consensus.

I agree that long absences without approving comments makes it difficult to have a conversation. But it's his blog. If you don't like it, start your own.

Anonymous said...

"The Ballmer Days Are Over"

Wishful thinking. When the fiscal ends, Steve will still be CEO. The BOD will find some way to say he made progress in mobile and tablets, even though the WP7 launch was a $400M failure (as evidenced by sell through) and eighteen months after iPad we still have no competitive response. They’ll point to the pending Nokia partnership and Mango for mobile and whatever we’re showing on the tablet side in September (even though it won’t ship for another year). They have to, otherwise they have to explain why their reprimand of last year, coupled with no (or almost no) improvement, isn’t leading to his removal. The resulting collapse of the stock will be explained away as macro conditions affecting PC demand. In other words, nothing poor Steve could do. The fact that a decade of his ultra expensive diversification efforts haven’t made the company any less dependent on PC sales (even as Apple has reinvented their overall business three times for a fraction of the investment) will be ignored, as will the now 30% discount to the S&P average that MS is trading at.

Nothing will change until overall growth goes negative (a year or two at the outside) or one of MS’s large shareholders finally locates his balls. Then the shit will hit the fan. The BOD will suddenly admit they've had longstanding concerns about Ballmer and throw him under the bus, or else shareholders will dispatch both of them. After that, look out. Because the new CEO is going to have to cut wide and deep. Steve has created a bloated slow growing mess. And the new CEO won't have the luxury of time, money, and generally less well positioned and funded competitors that Steve enjoyed but somehow managed to bork anyway.

Anonymous said...

"Antitrust action didn't curtail Microsoft's behavior in any meaningful way. Instead, it was its own internal failure to deliver a next generation OS and change the world that killed Microsoft. This wasn't a killing. It was a suicide."

And the two are not related, eh? Most any senior engineer around the Windows Division in 2006 and 2007 can tell the same story: Anti-trust significantly impacted the focus and time availability of many of Microsoft's senior engineering resources in and around Windows for a couple years. It was a huge distraction during the Vista era, with two urgent projects both competing for the time of the same individuals.

Does it excuse going down the wrong path at the start of the Vista project and having to do a big step back from unachievable goals? No, that had to have been due to some "new talent" in the org who'd gotten out of school in the past few years that didn't realize interpreted code and pretty object pictures do not an OS' underpinnings make regardless of their current popularity in the industry. But once they got back on the right track, their ability to deliver was significantly reduced due to the anti-trust work.

Anonymous said...

The roughnecks and rigs of Big Oil couldn't seem further away from Big Tech's world of lattes and laptops. But the stock market doesn't agree.

ExxonMobil and Microsoft have at least one thing in common: A fall from grace in investors' eyes. Microsoft's stock began the last decade valued at 25 times forward earnings; Exxon's at 21 times. Today, both command a multiple of a little more than nine times. Even accounting for the entire market's de-rating since the heady days of the tech bubble, Exxon's and Microsoft's falls have been sharper. Both are now valued at a discount to ...


http://online.wsj.com/article/SB10001424052748704281504576329371097519268.html?ru=yahoo&mod=yahoo_hs

Anonymous said...

What would be your caption to this photo? Mine is "Haha, we fooled them all"

http://www.engadget.com/2011/05/16/eldar-murtazin-microsoft-will-enter-negotiations-to-buy-nokias/

Anonymous said...

It really makes no sense, other than to keep it away from Google or Facebook. But even then, Windows Live Messenger has a larger active user base and better brand recognition. I don't get it. I really don't.


@Cecil. You don't get it because there is nothing to 'get'. Ballmer is like a 3 year old who bends over to watch the poop come out of his butt. Ooohh ahhh. Bing Bing. Developers Developers. Skype Skype. Blah blah. By the time this idiot is thru there will be no Microsoft.

Problem is, SteveB really is a spoiled toddler looking for the next shiny toy. As a multi-billionaire who is there to challenge him? BillG? The Board :)?

Steve's only answer to promising challengers is to knock over the chessboard, or accuse the other guy of cheating.

MS is doomed under his 'leadership'

Anonymous said...

Microsoft will have four versions of Windows 8 for ARM processors, according to an Intel executive. But none of them will run older applications.

So why would anyone buy a Windows tablet again? Not enought apps to run. Will it be Windows Phone 7 all over again?

http://finance.yahoo.com/news/Intel-Exec-Spills-The-Beans-siliconalley-1060224444.html?x=0&.v=2

Anonymous said...

"The Skype bid is all about diverting your attention from failure. Failure of Ballmer's strategy. Failure of MS's $9B yearly R&D budget. Failure of the board to make a change five years ago (at least) when it was obvious Ballmer wasn't capable of winning against Apple or Google."

+1

Anonymous said...

"But none of them will run older applications."

The fact that ARM isn't binary compatible with x86 is news to you?

Anonymous said...

"So why would anyone buy a Windows tablet again? Not enought apps to run. Will it be Windows Phone 7 all over again?"

So why would anyone get their competitive assessment of Windows on ARM from Intel again? Give the team some credit. Do you think any of them read your comment and said "OMG, I completely forgot about that and we have no app story"?

Maybe you should wait for the product to be announced and the app roadmap shown before reaching conclusions.

Anonymous said...

Mystery solved. Steve knew the BOD would have a hard time approving Skype given his other recent M&A failures and the nosebleed premium involved. So he called Bill and got Gates to strongarm the BOD into going along:

Microsoft's Bill Gates says he advocated Skype takeover

And for those looking for the strategic plan behind this, here it is:

"The idea of video conferencing is going to get so much better than it is today. Skype actually does get a fair bit of revenue," said Mr Gates.

"It'll be fascinating to see how the brilliant ideas out of Microsoft research, coming together with Skype, what they can make of that."

Who needs an exhaustive buy/build analysis when you have a business case that compelling and specific?

Anonymous said...

There are several news services reporting that Bill Gates has claimed credit/responsibility for encouraging the board to buy Skype. (WSJ, BBC, engadget etc).
So Ballmer is off the hook.
Isn't that nice? A friend who will take a bullet for you.

Anonymous said...

Re: Executive scorecard ... here is my take on the new rating system:
- Sinofsky: 1
- Turner: 4
----

You seem to be working at Corp :)
Being from the field I agree on the CEO, but SteveSi doesn’t deserve a 1 until he delivers a kick-ass Windows 8 consumer experience. Until then he has only fulfilled half of his Job which is Windows & Windows Live and Windows Live is a terrible disaster. Some technically impressive stuff but the consumer experience is awful and integration is even worse. 2 for SteveSi must suffice, yet.

Regarding Kevin Turner: He leads our Field Sales & Marketing operations, i.e. he is the one who brought in all the money who paid for *everything* for the last five years. And he actually is a pretty good SMS&G leader. Turner deserves 1 or 2.

The problem now is that we have a great Tech Guy in SteveSi, and a great Sales Guy in Kevin Turner. But who will lead marketing and consumer marketing in particular? We need someone with a vision and credibility...

KeithX said...

I'm about to do something that Ballmer can't: admit I was wrong. After reading the Gates interview it's clear that there are no immediate new product plans for this acquisition, all Gates could talk about was how great it will be to have this tech for future R&D. In other words, Skype = TBC (Total Ballmer Clusterfuck)

-The break-even part has yet to be determined.

Seriously? Net margin was very close to zero, as a matter of record. What MS does with it is pure speculation about future projections.

MS has various existing and overlapping VOIP applications and more than a decade of experience in this area. How did Apple with none of that manage to build something more competitive on an R&D budget that is 1/6th of MS’s?

Here you implicitly admit that MS needs Skype because the in-house VOIP tech is pure crap. In which case ...

What gap got filled that MS didn’t have covered already

You answered your own question ; )

"NoSoft integration wouldn't require much effort from Ballmer personally"

You’re kidding, right? Who does Andy Lees report to directly? Who negotiated the Nokia deal personally? Are you saying Ballmer is going to be hands off on the largest acquisition deal MS has ever done? With MS’s track record and his own job security on the line? Would a competent CEO like Steve Jobs be?


He *could* dive in as you say, but Ballmer's like a Crow Girl, he'll jump up and go running after the next sparkly thing soon enough. If, as I had thought, there was a NoSoft tie-in for Skype tech, then the Nokia side would have been in the driver's seat. However it appears that won't be the case. My bad.

It has already flat lined for nearly a decade.

The stock been unchanged. I used the term "flat-line" in the sense that a doctor would, meaning "dead" ie. acquisition fodder for any tech company with solid financials. Something as absurd as Compaq buying DEC becomes possible if NoSoft fails completely.

There’s never a plan. It’s always a reaction

Once again, I have to acknowledge I was wrong. In spite of all his prior failures Ballmer still has the board's permission to jagoff all over the investors who hold MS stock.

It's pretty fukkity sad. All of the board members and the executive officers should expect to face civil suits from shareholders from here on out.

Anonymous said...

Maybe you should wait for the product to be announced and the app roadmap shown before reaching conclusions.

Maybe you should understand many base their conclusions on historical success (or lack thereof).

Anonymous said...

anyone heard rumors of a pm RIF at msn?

Looks to be today and it looks like I am one of the lucky ones. I have a high priority 1:1 with my skip-skip manager. Backing up my personal data now...

Anonymous said...

It would actually be interesting if there were an x86 emulator for ARM, along the lines of what Apple did for PowerPC (in the 2000s) and M68K (in the 90s). Not sure how well it would perform, but it would be a stopgap for people who really need it.

Anonymous said...

The fact that ARM isn't binary compatible with x86 is news to you?

The fact that you miss the entire point of the article reflects just what is wrong with Microsoft. Microsoft is 2 years behind the tablets and falling fast behind. And not including support to run legacy apps will make any Microsoft tablet effort 'game over'. It would have been much better and wiser to have made Windows Phone 7 the tablet OS instead!

Anonymous said...

""Mini, isn't it time for you to retire this blog? You're not doing a service to Microsoft, the employees or the industry by making an inflammatory post and then disappearing in the middle of the conversation for a week."

Apparently you didn't read most of the press coverage or even most of the articles others have linked to here. His view isn't inflammatory, it's actually in line with consensus.

I agree that long absences without approving comments makes it difficult to have a conversation. But it's his blog. If you don't like it, start your own."


OP here.

Firstly, don't interpret "inflammatory" as a negative: I fully agree with the consensus around Skype -- it's an unpardonable mistake. "Inflammatory" means something that sparks heated debate, as this post does.

As for starting my own blog: I don't want the responsibility. What I'm suggesting is that Mini appears to no longer want the responsibility either, and that longer and longer absences suggest s/he's not really into it any more... so I'm suggesting s/he search for a successor who's fresher and more willing to put in the hours. It's a serious suggestion, not a idle nattering.

Everyone needs to know when it's time for them to move-on, and Mini has been at this game for many years. Sometimes you keep doing something just because it's habit and not because you really want to do it any more.

Anonymous said...

Take heart! At least this isn't HP in the last year where the stock has fallen off a cliff multiple times. At least Microsoft is doing better than HP!

Anonymous said...

I tell you. All you Redmond people do is complain. Are you all too depressed because you hardly get to see the sun? Most of you have never been out of your offices to realize that there are more important and more revenue producing markets outside the US. The Skype acquisition WAS a good one. Obviosuly Redmond has not produced any relevant software other thant the 2 cash cows (Windows and Office) - so the only way is to buy them.

Anonymous said...

"But none of them will run older applications."

The fact that ARM isn't binary compatible with x86 is news to you?


When Apple transitioned from 68k to PPC, they included an emulator with the OS so the transition was seamless to users. When they transitioned from PPC to Intel they included a binary translator with the OS so the transition was seamless to users.

If Microsoft doesn't include an x86->ARM binary translator with ARM Windows (and every report indicates it won't) then it will be yet another in a long list of glaring embarrassments.

Anonymous said...

After 5 years of trying I am no longer a virgin... I finally sold several hundred MSFT shares.

According to Aerosmith they wrote about selling MSFT a few decades ago...

You ain't see nuthin til you're down on a muffin and you're sure to be changing your ways...

:)

Anonymous said...

May be the old news but still:
Bill Gates says he pushed for Microsoft to buy Skype

Anonymous said...

Why not find someone who has the energy and desire to do the right thing to take over for you? It seems like you're burned out and largely over it.


STFU. Start your own blog, whiny-boy, if you are so concerned about timeliness. I personally could care less if Mini takes a month or a year to moderate.

Anonymous said...

The problem is that, as soon as a company becomes successful, it gets infested with this huge "fat layer" of MBA's, lawyers, etc. who think they should be in charge of anything (as opposed to the techies).

That happened to Apple, and it nearly killed them. Funny how a near-death experience can clear out the deadwood.

Anonymous said...

To get on the list that denies orange badge would require a criminal act, say theft or other malfeasance. I speak from experience as I am on the no-fly FTE list but have an orange badge

Not really. I was a v- and got laid off with a bunch of other people in a flyover state office and was annoyed to later see a couple of the positions we forcibly vacated advertised a few months later. I asked my HR person flat out if I had a shot at getting back on with the old office because I had a had a good rep, etc. and that HR person told me explicitly that MS had an unwritten policy of not rehiring folks who had been laid off.

I know there are clearly some people who do get back in, I assume mainly in Redmond, but you don't have to do anything close to a "criminal act" to not get back on with an orange badge because there is a policy in place.

Anonymous said...

After that, look out. Because the new CEO is going to have to cut wide and deep. Steve has created a bloated slow growing mess. And the new CEO won't have the luxury of time, money, and generally less well positioned and funded competitors that Steve enjoyed but somehow managed to bork anyway.

Quite correct; when the bubble finally bursts there will be a corporate bloodbath of unimaginable proportions. Those who are set on riding the beast of Redmond all the way down would be well advised to keep a keen eye on the job market, and to have their resume up to date and handy.

Anonymous said...

"I think this acquisition could be a good thing. Sure it's expensive [...]"

In the corporate world "good" and "expensive" are more often than not mutually exclusive. Of course, this acquisition would be less of a worry if Microsoft didn't have such a record of abject failure when they go shopping.

Time will tell.

Anonymous said...

We don't have a good track record for acquisitions lately. We bought Danger, and did nothing with it.

Nothing? Nothing?!?! You trashed it, you absolutely, positively *obliterated* it. When Steve Ballmer has finished with a company you won't even find fragments; don't ever insult his considerable prowess by suggesting otherwise.

Anonymous said...

In order to gain the consumer again we are losing the enterprise. The end? Neither consuming nor enterprises

Anonymous said...

http://www.dailytech.com/EXCLUSIVE+Gates+May+Have+Owned+a+Stake+in+Skype+Pressured+MSFT+to+Buy/article21662.htm

Hmmm....

Separately... *four* versions of Windows on ARM (or any platform)?? Good grief, can't Microsoft finally simplify things? Is this SKU madness really necessary? Home Basic, Home Premium, Enterprise, Professional, Ultimate, then K and N variants... arrggg!!!! Why can't you limit it to one SKU like MacOS? Why??

Chris said...

They're going to combine Skype and Lync and call it Stync.

Anonymous said...

so, Windows Phone 7 shipped 1.6m units last quarter... compared to 2.1m WinMo6 devices (and 3.4m for WebOS+Linux)
http://www.reghardware.com/2011/05/19/microsoft_windows_phone_7_q1_2011/
and Mango and a Nokia based device - the two saviours of that story - are a long way off.

The HD7 and Focus are actually great phones - I much prefer the HD7 to my G2 for almost everything, but the reason I keep putting my SIM back in the G2 is the apps. There are some Phone7 don't have yet and there are some Phone7 can't have because of the OS limits

Of course if we rolled out a slate running the Phone7 OS there would be a bigger market and incentive to make more apps and we'd have an answer to the iPad/Xoom etc but no...

we're going to wait for a new, untried, unseen version of an OS running on a new hardware stack that would also appear to have no apps... and betting the bank on that while blowing $8.5bn so Steve can buy a verb (what is this? Countdown?!)

I understand why the share price drops even when we do well... no-one has a clue about the future on the board, in the SLT or the market.

God help us.

I guess all we have to look for is a declining share price (not even proped up with a decent dividend) and more layoffs

Anonymous said...

“Well, it [Microsoft] has to [tailor], and right now that market clearly doesn’t believe Microsoft is in the best position to do that. I mean, look at valuations, you know, to relative, since you walked away from day to day management – [the] valuation of Apple, compared to Microsoft, you know, the graph goes like this [makes crossing gesture]. I mean, Apple now dwarfs Microsoft in terms of market valuation.”

To this, Mr. Gates laughed, and then said:

“I wouldn’t say dwarf. [back and forth] Yeah, I think stock prices aren’t really the best gauge. Uh, you know, stock prices can go up and down, so I wouldn’t use that as a gauge. But I would be the first to say, uh, there’s several tech companies including Microsoft, including Apple, including Google, who are doing fascinating work. And the importance of software I think is more evident to people today than it’s ever been.”

Any wonder why Ballmer is able to get away with serial failures when Bill himself refuses to acknowledge reality? Anybody still clinging to the belief that Bill returning as CEO is the answer?

I wonder how long the management of Cascade, Bill's personal investment company, would last if they performed below the market for even one year, far less a decade?

$2B to go and then IBM is next to pass MS in valuation.

Anonymous said...

"Microsoft shares of course have had a difficult year, but Koefoed believes there are plenty of catalysts for the stock in 2011."

Yeah, how's that working out so far Bill?

Anonymous said...

Give the team some credit.

Why? It ain't rocket science to just recompile for ARM. You guys have been doing it for over 15+ years starting with PocketPC.

Oh, I forgot, Windows is so ancient, it's still has DOS in it! And stolen code from DR-DOS too! I bet there's still some code in there that BillG wrote himself!

Anonymous said...

Regarding Kevin Turner: He leads our Field Sales & Marketing operations, i.e. he is the one who brought in all the money who paid for *everything* for the last five years. And he actually is a pretty good SMS&G leader. Turner deserves 1 or 2.

Well, they say opinions are like arseholes - everybody's got one.

Turner did not 'bring in all the money that paid for everything'. Turner is an ex-retailer who adds massive bureaucracy where it isn't needed; cuts corners, not costs; lacks any technical savvy; and like SteveB cannot seem to shake free of the errors of the past, which is strange as he has been with the company a relatively short time.

Turner's folksey-jokesy pseudo-Southern charm is lost on me, and all the fake thank-you-for-all-you-do displays all the honesty of the TV quiz-show host. All that said, he makes squillions off the back of peons like you, and the more he fucks you over, the better you like it.

Anonymous said...

Can anyone explain why BillG, having been silent as the tomb for years, suddenly erupts from the woodwork commenting on MSFT? Talking about share price and claiming to be Skype purchase advocate. SteveB a little short on friends?

Bill, get back to battling malaria and your foundation tax-dodge/billionaire club. The rest of us do not give a fuck what you think.

Anonymous said...

I just read through my local Best Buy flyer. Almost all the phones and tablets were running Android, except for a couple running Blackberry OS and one lone Windows slate that cost a grand and was buried near the back (there wasn't a single WP7 phone). And while every phone and tablet running Android had that fact highlighted in the description, none of the PCs running W7 did.

How can Bill maintain that we don't have a problem? What's going to happen when all those people getting used to Android on phones and tablets start being offered that OS on a PC that's cheaper than the Windows version? I also heard the CEO of Lenovo being interviewed tonight. He said he's excited about the "proprietary grip" on processors and operating systems relaxing. Is that something that should be comforting coming from one of the fastest growing and largest PC partners?

We are being disrupted and our incompetent CEO, board, and out of touch Chairman are saying "Problem? What problem?".

Anonymous said...

Off topic - hopefully will generate a post and discussion.

I am getting review feedback requests every day lately. I work with a lot of people outside of my group and am also getting requests from within my group.

So far, the feedback has been positive, so it has been easy, but, today I got a feedback request for a peer in my workgroup who sucks. That got me to thinking about the "game" around peer feedback.

I'm sure this person didn't ask for my feedback, so who decides?

I only asked for feedback from people that I have a good working relationship with, so I guess that is kind of gaming the system? (or common sense)

What happens when this person gets a bad review and goes postal on her peers?

When you are in the same band, you are in competition for the 1s and 2s. Invariably, some people are going to lie and rate the strong performers low so they have a better shot at the high ratings. Some people will probably rate everyone low. Some will probably rate everyone high. I'm sure there will be a lot of "you scratch my back, I'll scratch your's" feedback. Is there really any value in the feedback?

Maybe I'm too cynical, but I don't see the Microsoft culture and this review process working well together. Plus, it is a lot of extra work for the managers. I imagine the stack ranks will take a lot longer even though there is only one score now.

What are your experiences so far?

Is this yet another LisaB brain fart?

What kind of games will people play?

I was really pretty happy about the new system until I started to think about this today. Now I'm kind of ... "sigh"

Anonymous said...

MS has been going in the wrong direction for a very long time. But with the mobile and tablet failures it seems like there's finally blood in the water and everyone senses it. Competitors who have beaten MS in every new area are now circling back and going after the cash cows directly. Investors are abandoning ship in droves. Outflows are at multi-year highs and still rising, and this is in spite of the recent QQQ re-balance which requires more MS to be held. Even partners are starting to hedge their bets. Almost every PC OEM now supports Android as well, and the rumor is that Intel is desperately trying to secure Apple's phone chip business. Guess they didn't like the Windows/ARM announcement.

Tough times ahead. Even tougher if there's no change at the top and just more denial.

Anonymous said...

"SteveSi doesn’t deserve a 1 until he delivers a kick-ass Windows 8 consumer experience."

I think he deserves a 1 just for W7. He did a great job under a lot of time pressure. But I agree it's only half the test. The second part was seeing whether he could truly innovate and pull ahead of OS X with W8. The problem is that in the interim tablets took off, and now he has to pull ahead of OS X, iOS, Android, and maybe throw in WebOS too. And do it all while arriving to market several years late. Daunting. If he succeeds, he deserves more than a 1. He deserves a shot at CEO.

Anonymous said...

"When they transitioned from PPC to Intel they included a binary translator with the OS so the transition was seamless to users."

Seamless to users? LOL, try again mactard.

Anonymous said...

"They're going to combine Skype and Lync and call it Stync."

What an impressive contribution to the overall discussion.

Anonymous said...

"After 5 years of trying I am no longer a virgin... I finally sold several hundred MSFT shares."

Sell the rest. It'll be under $23 shortly and below $20 before year end when the market tanks after QE2 stops.

Anonymous said...

"When Apple transitioned from 68k to PPC, they included an emulator with the OS so the transition was seamless to users. When they transitioned from PPC to Intel they included a binary translator with the OS so the transition was seamless to users."

Neither was seamless. But yeah, they served a purpose and were a good thing overall. I don't know if MS plans something similar. But the situation is also somewhat different. Apple was moving from one capable machine to another, just using a different processor. Performance, capacity, and primary input method for apps were similar (mouse and keyboard). That's not the case with PC > tablet. Many of those legacy applications simply aren't well suited to native processing on a tablet. Perhaps MS will make a cloud-based service available to handle that. We'll have to wait and see.

Anonymous said...

Seriously? Net margin was very close to zero, as a matter of record. What MS does with it is pure speculation about future projections.

Seriously. I explained why. Even MS is saying it won’t break even. If you look at the public statement, they said accretive in the first year not counting certain costs like legal. In other words, what the rest of the business world calls not accretive. And that’s without counting the added investments they plan. Those plans aren’t pure speculation. The company has specified several of them.

Here you implicitly admit that MS needs Skype because the in-house VOIP tech is pure crap. In which case ...

No. Facetime !=Lync or Live’s VOIP. In fact my question was really why having all that, and given their large R&D budget, they couldn’t come up with FaceTime or better in-house.

You answered your own question ; )

Not really. See above.

He *could* dive in as you say, but Ballmer's like a Crow Girl, he'll jump up and go running after the next sparkly thing soon enough. If, as I had thought, there was a NoSoft tie-in for Skype tech, then the Nokia side would have been in the driver's seat. However it appears that won't be the case. My bad.

He has no choice but to dive in. Another massive M&A failure following Danger and aQuantive would seal his fate. MS *will* try to tie Skype into WP7 (some more of those added costs I was talking about) and therefore Nokia by default. They’ll also try and sign up Facebook. That helps makes it a less bad deal financially, but doesn’t turn it into a good one. It will also require a lot of Ballmer’s time. It already has.

The stock been unchanged. I used the term "flat-line" in the sense that a doctor would, meaning "dead" ie. acquisition fodder for any tech company with solid financials. Something as absurd as Compaq buying DEC becomes possible if NoSoft fails completely.

Check the chart again. It’s -30% over the last ten years and -60% since Ballmer became CEO. If the Nokia deal fails completely, it might fuel a further decline. But at 9x forward earnings the stock is already discounted 30% compared to the S&P and near the basement for technology stock multiples. Or it might serve to rally the stock if investors saw a company that was finally prepared to stop being “ambitious” as Steve calls it, or wasting billions for no return as Wall St. sees it. Sure, if (when?) it continues for another decade and MS is worth $100B or less, then a buyout becomes possible. But at $200B it’s not really feasible, especially with Gates and Ballmer still holding almost 10% despite selling a lot already.

Once again, I have to acknowledge I was wrong. In spite of all his prior failures Ballmer still has the board's permission to jagoff all over the investors who hold MS stock.

The board is Bill, as he proved again by ramming this deal through. Steve still has Bill's permission and that's all he needs. And yes, other shareholders aren’t a priority. Obviously. What company would go a decade of negative stock returns (the worst of the peer group) without making massive leadership changes? Bill has already taken half his money out and Steve about 40% of his. Neither of them bought their shares, so their effective cost is $0. For them, unlike most MS shareholders, any price above $.01 is still a gain.

It's pretty fukkity sad. All of the board members and the executive officers should expect to face civil suits from shareholders from here on out.

Agreed. They should have already faced civil suits. No board and executive team has lost more shareholder value in the history of the market. But they’ve gotten away with it for more than a decade so far, so I wouldn’t hold my breath.

Anonymous said...

IBM 206.44B and increasing

MSFT 207.87B and decreasing

Later today or early next week? Watch MS drop another $2 when the "IBM passes MS" stories start up like they did when Apple accomplished it.

Anonymous said...

From a technology standpoint I fully understand why Ballmer bought Skype: It *always* works great. Video & Audio. In the office, @home, traveling, 3G, Wifi, no matter what.
Live Messenger, just frustrating. Audio and video often just can't connect for a call. Works only sometimes.
Lync is better, works mostly for audio calls but video is also a matter of luck.

So we pay 8.5b to learn from Skype how to punch holes in firewalls. Great deal.

Anonymous said...

"So why would anyone buy a Windows tablet again? Not enought apps to run. Will it be Windows Phone 7 all over again?"

Steve Sinofsky made a big mistake. He first refused to invest on Tablets while J incubated it using a phone OS. He killed that project and drove both J Allard and his boss out. His argument was the tablet must be Win7. After years work, his team can't make that happen. Now Microsoft is really in big trouble. Sinofsky has been of the root problems driving Microsoft's lack of innovation. Unlike JimAll, he is against Innovation but he is repeating the history of Vista all over again...

His days will be numbered in a way like JimAll.

Anonymous said...

Why? It ain't rocket science to just recompile for ARM.

I can tell you've not worked on a kernel.

Anonymous said...

I agree 100%. As far as expertise and infrastructure, Skype doesn't give Microsoft anything it doesn't have. The brand and the user base is all they get.

I wonder what a $1 billion advertising campaign could do.

Probably save at least $7.5 billion.

Anonymous said...

Keep in mind peer feedback is not anonymous and therefore worthless.

Anonymous said...

"When they transitioned from PPC to Intel they included a binary translator with the OS so the transition was seamless to users."

Seamless to users? LOL, try again mactard.


Well, I can tell you that when I moved to Snow Leopard several apps that I had been using for years stopped working because Rosetta isn't installed by default. I had been using them for that long without realizing that they were PPC apps. So while you might have some specific examples of things not working 100% (?), they sure did for me.

Anonymous said...

Why? It ain't rocket science to just recompile for ARM.

I can tell you've not worked on a kernel.


It doesn't seem to be a big deal to recompile other OS kernels (e.g. Linux) for different ISAs.

Anonymous said...

To the guy commenting on peer feedback:

Maybe I'm too cynical, but I don't see the Microsoft culture and this review process working well together............

You actually might be the least cynical person I've met at MS if you are just asking this question now. This review process has CREATED MS culture.

Your competitors are your peers. I bet less than 1 in 20 employees has an external competitor.

Anonymous said...

I have no idea what it takes to fire a worthless CEO. Especially in a company full of "good old boys" like Microsoft. My shares of MS have sucked ever since he's been at the helm, and just exactly what is a CEO's primary job but to drive the share price up for the "owners". Abject failure. Nothing but a loud voice and a red face making claim after claim about kicking Google's ass, or kicking Apple's ass, or some other worthless bluster.

What the hell do we need to do to get rid of him?!

I'm really tempted to dump all my stock, take the loss, and not look back.

Stevie is a good example of what's wrong with business in this country. Let's pay someone huge bucks to play CEO. They don't really need to do anything productive for the company and once in a while will be allowed to do something destructive. Then when they've totally f'd it up we'll give them millions in a severance agreement so they can go screw someone else up.

If the stock keeps going down the way it has recently, someone like HP might decide to buy it and add it to their collection.....

Anonymous said...

Tough times ahead. Even tougher if there's no change at the top and just more denial.

As another contributor mentioned, Ballmer doesn't believe in major organization change.

So today we have layers of entrenched dead-wood managers that are looking to the engineers to rescue them from a decade of complacency and ignorance. I just assumed see them all go tits up.

.. From my desk at my new job at Apple.

Anonymous said...

So it occurred to me today with stock at 24.5 that maybe the periodic cries to break up MS into baby bills are actually overcomplicating it.

Could we actually be worth more dissolving the company over a 4-5 year period and going 'poof' into the ether than keeping it intact?

If someone bought us lock stock and barrel - then decided to shut down every product both not making a profit, or not releasing in the next 18 months, then basically winding down MS and just collecting royalties until people didn't want/need us any longer could the purchaser come out ahead?

Cost = -200 billion

Cash/short term assets - +50 billion

Year one of more or less current cash build rate at +20 billion

Year 1 killing off non profitable businesses and layoffs of 20k (fte + vendor) = +15 bill

Year two = combine the above 2 = +35 bill

Year two really wind down the employment as you'll never release anything again - start moving toward a bare bones sign/invoice/collect model = layoffs of 80-100k (fte + vendor) = ~+15 bill

Year 3 - sales really start to slip, but it's a cheap boiler room workforce so it's all profits and another 10k employees gone = ~+40 bill

Year 4 - sales dying, but also sales of the assets, another 10k employees gone etc - +25 bill

Year 5 - Headed to oblivion - accountants and lawyers only folks left to collect $$ - +15 bill

I recognize there's lots of wild assed assumptions here, and it avoids lots of complexity - but is my premise possible? Could we be worth more to NOT to exist in the longer term than to keep doing what we're doing?

Anonymous said...

Steve has trashed the company. It has been going on for years. It is time for him to be shown the door.

Like come on, 8.5B for Skype - how much more can we take here?

Our group admin demonstrates more business savvy.

Anonymous said...

"SteveSi doesn’t deserve a 1 until he delivers a kick-ass Windows 8 consumer experience."

The people that deserve a 1 are the dev/test/pm's on the ground that put in the time to make it happen.

...

(ok... leaving fairy tale land and coming back to reality now)

Anonymous said...

Are you all too depressed because you hardly get to see the sun? Most of you have never been out of your offices

You think maybe you can talk to my manager about that? Because I am sure I am more pissed than you are concerned about whatever point you are trying to make here.

Anonymous said...

It has already flat lined for nearly a decade. Maybe you mean nosedive? It’s already nose-diving.


401K question here..

With the PC era ending, is there some derivative I can buy to bet against my employer?

Maybe sign of the times but it seems like the right thing to do..

Anonymous said...

Another missed opportunity.

http://www.komonews.com/news/tech/122364449.html

KeithX said...

Whoever you are, I appreciate the exchange on this topic. Even though anonymous I get that you have a more granular view of the day-to-day on this than I do. I tend to think in tree terms and as a product manager / marketer rather than as an engineer / finance guy. One of those communication style things.


Even MS is saying it won’t break even.
I pointed out that my comment was purely in relation to historical results. I have no info that would allow me to make any statement at all about future revenues.

Here you implicitly admit that MS needs Skype because the in-house VOIP tech is pure crap. In which case ...

No. Facetime !=Lync or Live’s VOIP. In fact my question was really why having all that, and given their large R&D budget, they couldn’t come up with FaceTime or better in-house.


When I look at the product field for VOIP tech, and MS has nothing viable against current competition, I tend to point a finger at the tech people who did't get it out of the lab. But in this case the *lack* of a solid product manager is perhaps what's killing them.

This person wouldn't a project or program manager type, they're not a process manager. A product owner calls the shots from design thru test and ship, from outside the technologist loop. From a org chart perspective they're a golden veto holder who can't be messed with by engineers. Not as the end-all be-all but simply as one important aspect of the R&D and product delivery process.

Nestle USA / World would be the best model I know of if MS wanted to rebuild a product-centric focus. They sell water to people who have better water on tap. They sell water that tastes something like coffee with lots of sugar at outrageous gross margins. My NDA with them expired long ago and I'm very clear on how they still achieve consistent growth rates. They do it because product managers drive the process, and nobody in the "food engineering" groups can touch them. Every technology has a sugar-water shard of Steve Jobs kicking butts from design thru test for each new product. They multi-task, and none of them are geniuses, but they have track records in marketing and solid respect from the tech side. Understanding that for them of course, tech means how much salt, how much fat, and how much sugar and which flavorings.

He *could* dive in as you say, but Ballmer's like a Crow Girl, he'll jump up and go running after the next sparkly thing soon enough. If, as I had thought, there was a NoSoft tie-in for Skype tech, then the Nokia side would have been in the driver's seat. However it appears that won't be the case. My bad.

He has no choice but to dive in. Another massive M&A failure following Danger and aQuantive would seal his fate. MS *will* try to tie Skype into WP7 (some more of those added costs I was talking about) and therefore Nokia by default. They’ll also try and sign up Facebook. That helps makes it a less bad deal financially, but doesn’t turn it into a good one. It will also require a lot of Ballmer’s time. It already has.


Good points on the stock, I don't paid enough attention to the details anymore because I don't own any. My bad. You posit another ten years for the stock price to be cut in half. I'm thinking three years. It will be interesting to watch what NoSoft, Apple and Google deliver in 2012.

The board is Bill, as he proved again by ramming this deal through. Steve still has Bill's permission ... For them, unlike most MS shareholders, any price above $.01 is still a gain. ... They should have already faced civil suits. No board and executive team has lost more shareholder value in the history of the market.

Yes.

KeithX said...

Many Typos. Ninja commenting: no proofing or edits on Saturday morning. Left out one important par.

Ballmer as Crow Girl vs. Ballmer being on the hook with Bill for results this time, finally, after previous M&A failures.

By all reports Bill hasn't said anything remotely like that to anyone. No board member's staff is leaking about it and I tend to think it would slip out somewhere downstream if Bill had given anything other than the usual. So perhaps Steve does have some other choice besides diving in.


Pure fantasy:
I can just hear the pitch: "Let's buy Twitter for a Trillion & build a Terrific New World!" Instead of yelling out BING they'll have to yell out TWEET whenever Stevie gives them the eye. Sparkly Sparkly Sparkly. And who's to say Bill won't giggle all the while in his own private playroom listening to Nero on the fiddle.

Pardon the digression. I'll bet you a buck Steve gets away with another total fail on the Skype acquisition.

Anonymous said...

"Steve Sinofsky made a big mistake. He first refused to invest on Tablets while J incubated it using a phone OS. He killed that project and drove both J Allard and his boss out. His argument was the tablet must be Win7. After years work, his team can't make that happen. Now Microsoft is really in big trouble. Sinofsky has been of the root problems driving Microsoft's lack of innovation. Unlike JimAll, he is against Innovation but he is repeating the history of Vista all over again...

His days will be numbered in a way like JimAll."

+1 on this one . Internal politics
at all levels hurt Microsoft so badly over the last 10 years.

Anonymous said...

"I wonder what a $1 billion advertising campaign could do."

For most other companies, quite a bit. For MS? Well, $400M sold less than 2M WP7 phones.

Anonymous said...

Thurrott pulls an Xtreme:

How Microsoft Can Fix Microsoft

Anonymous said...

As far as tablets go, if a one time purchase of $500 allows me to spend 0.5 more hours per day with my family, it was a very worth while investment.
What a pitiful way of living.

Anonymous said...


I don't think you're completely wrong here. Similarly, executive pay in corporate America is way overinflated. In most cases of a highly compensated CEO, I bet if said CEO dropped dead today the company would hardly notice the slight dip in the road.


It is not just the CEO. Today MS has a thick fat layer of low-skilled lower and middle managers that are being paid one and half to twice as much as the creative and talented people that do the work.

Microsoft execs needs to get serious about getting their house in order.

Anonymous said...

Microsoft and the Antitrust Myth

"Antitrust action didn't curtail Microsoft's behavior in any meaningful way. Instead, it was its own internal failure to deliver a next generation OS and change the world that killed Microsoft. This wasn't a killing. It was a suicide."

So true. What I remember is a distracted employee pool.

The case was in the press everyday. All the employees talked about it in the cafes. Management was circulating MSPAC propaganda to employees encouraging them to get involved.

The result? You can fill in the rest of the story yourselves.

But had we gotten the baby bills everyone (customers, employees, shareholders alike) would have all been a whole lot better off.

Anonymous said...

that HR person told me explicitly that MS had an unwritten policy of not rehiring folks who had been laid off.

-

Microsoft doesn't even rehire folks that haven't been laid off.

One of Microsoft's major problems is that the only employees that have any internal mobility are the managers.

They ship crappy features on a release in one division or fly under-the-radar, and on the next re-org do it all over again in the next. The teams left behind get to clean up their mess.

Meanwhile the engineers are stuck, because most teams would rather hire an intern with no real experience than hire an employee with years of experience.

Many of our employees that are in a team that is a bad fit are afraid to even request an interview because they risk a bad review cycle in their current group if things don't work out.

Anonymous said...

Watch the birdie ... and pay no attention to the man behind the curtain.

BillG is sure making the rounds all of a sudden. Microsoft overpays for Skype without external advice, and there's Bill, defending the purchase. IBM passes MSFT in market cap, and there's Bill, babbling on about alternative energy. And then has the hide to say the stock price (in the tank and sinking) is just up to the vagaries of the market. Why the hell should he care? He's close to exiting his position.

BTW the funny thing is that the CFO and CEO crowed about saving $25mill in external advisor fees in the Skype deal. *WITH* external advice they would have saved $8.5 billion.

I think BillG is running interference for Ballmer, because the stock is taking yet another hiding, and I hear there is considerable grumbling from major institutional shareholders. Also Bill and Steve's shareholdings continue to shrink, so their ability to block change is diminishing daily.

Just wait for Steve's next desperate act - a play for NOK. And then Yahoo. Talk about ugly sisters!

And what revenue has the Yahoo deal produced exactly? I would love jerks like Ballmer to be forced to track each and every investment above a certain threshold, and report out the results in a transparent and auditable way. Only at Microsoft could the execs and Board get away with wasting tens of billions of dollars on stupid, commercially unjustifiable 'investments'. Mind you, BillG wasted billions on stupid investments as well, mostly on telcos (remember the $5B in AT&T that returned $2.5B) - so he is no better IMO.

Anonymous said...

Ballmer for GOP presidential candidate. We'll all contribute to his campaign and vote for him. Just dont come back. the country needs leader like him.

Anonymous said...

"Regarding Kevin Turner: He leads our Field Sales & Marketing operations, i.e. he is the one who brought in all the money who paid for *everything* for the last five years. And he actually is a pretty good SMS&G leader. Turner deserves 1 or 2."

OMG! Seriously!! Clearly you've never had a meeting wtih KT and a partner or been in one of his field tour meetings. I've never seen an exec act more geenerally offensive from his McD required diet to his fake compliments to his general lack of understanding of world cultures let alone the tech space that he supposedly works in.

Turner has literally sucked all the life out of sales and marketing. He has squeezed headcount, chopped budget, ticked off partners and been far more rude to customers than any exec should ever be allowed to be.

We can sink all we want in to R&D but as long as KT is in charge of sales and marketing the stock price will go absolutely nowhere.

Rankings:
SteveB = 5 He should be fired Dec 31 (space this out a bit)
Sinofsky (sp) = 3 He did a good job with Win7, willing to give him a chance, but he's a 3 from what I know now. If he screws up 8 then give him a 5 and can him asap.
Turner = 5 He should be fired July 1

Anonymous said...

I can tell you've not worked on a kernel.

And I can tell you haven't worked on a rocket!

Anonymous said...

Windows is so ancient, it's still has DOS in it

So many factual errors in such a short post. You obviously don't work for MSFT; or any other software vendor, given your poor understanding of computer architecture on any platform. Just a useless, noisy troll in fact.

Anonymous said...

Sell your stock. Buy gold and/or silver. I did and I am a happy camper.

The company is dying. Take what you can. Will it survive? Maybe, but not in its present form.

Anonymous said...

Inspired by Anonymous #201 at the top of this page, May 15 12:35PM, I did some research into the mini archives. The raw data I gathered became input into some number crunching.

I wanted to know how I was doing, trend-wise, compared to my peers, in terms of percentage increases in annual compensation across the years. 2007 through 2010 Reviewapaloozas, and posts immediately before and after, for the eager beavers and latecomers to the annual revelation party, were mined for relevant data. Samples were limited to L62 and 63 in the interests of minimizing data entry. L59-61 has plenty of data for a similar analysis if anyone has more time for this than I.

Being an engineer, sometimes I think too much about data. Take the following analysis with a grain of salt because the sample size is very small and the population self-selected.

Here are the findings.

Reported percentage increases in salary for L62 and L63 were lower in 2010 than in 2007 or 2008, by 1-1.5%.

Bonuses in 2009 for L62 and L63 were 1-2% higher than in 2007, 2008 OR 2010.

In other words, in September, 2009, you got a nice chunk of change that you could put into the bank and earn interest on for a year, if you didn't spend it. In September, 2010, you got a smaller chunk of change, with the rest of it paid to you on the corporate installment plan. Microsoft got to earn interest on it until they handed it over to you.

It seems that for most people, given the time value of money, you were better off in 2009-2010, than in 2010-2011.

No wonder they're fiddling around with the compensation plan. I'm guessing someone saw the same thing I did in their historical data and realized it is cheaper to fix it on the salary side than to give huge lump-sum bonuses on the front end like certain other employers have done.

Anonymous said...

And there it is: IBM has passed Microsoft in market cap, many years after the time when Microsoft was worth 3x IBM.

http://www.businessinsider.com/once-it-seemed-impossible-ibm-is-now-worth-more-than-microsoft-2011-5

Anonymous said...

Wow, that Paul Thurrott article was idiotic. Take the last paragraph for instance:

Microsoft needs to go on a buying spree, spend its cash assets until there's nothing left, and then integrate the hell out of what they bought. If you can't build it in-house, go get it. I'm talking about Twitter for starters. Then Adobe. Then, when it's fallen hard enough, RIM and/or Nokia.


But more seriously, I don't know that there is a problem with MS not getting outside advice on the Skype acquisition. The acquisition is a questionable decision of course, but I think anyone that thinks that outside investment bankers would have helped make MS make a better decision are deluding themselves. 'Advisors' will always, always try and get companies to make a deal so they can get their fee. Whether or not the deal is actually a good idea for the client will never even enter the advisors heads, and if it somehow did, they would NEVER tell their 'client' (actually 'mark') that. So the $25 mil wouldn't have saved the $8.5 bil, it would just be another $25 mil down the toilet.

Anonymous said...

Most of the posts on this blog seem to be from people who seem to be very emotionally unstable… So, it's really pathetic to hear all these posts throwing Ballmer down the drain…It's kinda hard to add shareholder value when you become CEO of a company that has a market cap in excess of $500B and at the time you earn $10B, with anti-trust lawyers in your face. All you can really do is attempt to make more profits, which he has done.

I don’t consider myself “emotionally unstable”, I’m worried about my company’s future for good, logical reasons. If your only defense is to say, “We’re profitable so shut up”, then you clearly don’t understand the technology marketplace. Sure MS has increased its profits over Steve’s tenure, but it’s all relative, mostly because we haven’t had any serious competitors in the OEM desktop marketplace that we couldn’t minimize or stamp out. I still remember those company meetings where Steve said Linux was our greatest threat in the marketplace. I doubt he could comprehend that the traditional desktop might actually be on its way to the endangered species list. Apple and Google are capitalizing on new trends while we’ve been betting on our old staple – Windows – to solve any problem and to keep us going, to our detriment. That’s not to say the desktop platform will go away altogether, but whenever a non-core business makes innovation that starts becoming profitable, the underperforming execs who failed elsewhere swoop in looking for their chance to ride the wave and get that next promotion up the corporate ladder. They quickly shuffle out the people who made that business successful and turn it into another corporate product factory. Add to that a top-heavy corporate structure and a non-visionary CEO who looks like he’s trying to buy innovation (at a premium price) while at the same time letting, even encouraging, the company’s culture stifle it in-house, and we’ve got a company teetering over irrelevancy.

I’m concerned that once technology catches up with the ambitions of innovators out there it’s going to punch a giant hole in MS’s profitability, and it seems our profitability, like you said, is the only thing keeping us attractive as an investment. Then what would we do? Stake our future viability as a major competitor on the enterprise market? On Office? On developers? On Xbox? We’re so top-heavy that one hit to our core business and it might be all we can do is watch as the empire crumbles.

What you see as “emotionally unstable” I see as frustration with executives making decisions that either make little sense or look more like they are competing with each other rather than in the marketplace. I’m also frustrated that any attempts I’ve seen by people challenging the decisions of execs appear to have been ruthlessly quashed. That’s why this blog is so popular in my opinion – There is a lot of frustration and angst in the rank-and-file and no other outlet to express it, at least not by people who don’t want to throw their jobs away in a vain attempt to be heard.

Anonymous said...

Is it not bizarre that MSFT now has gone from zero debt to $13.6billion in debt. I am sure some HiPo EXPO MBA with a rocket jutting out of his butt came up with this brillian scheme. No doubt this is driven in part by the elaborate tax evasion that is practiced by Klein et al, but it still seems ridiculous. Presumably the Skype buy will be debt financed as well, so make that debt $22B.

Is anyone actually in charge anymore? I am not talking about the self-indulgent delusional rogue billionaire aka SteveB, but actual leadership and management savvy. Wait, I know the answer {sigh}

Anonymous said...

It doesn't seem to be a big deal to recompile other OS kernels (e.g. Linux) for different ISAs.

Wow, that is a dense comment. Yes, it's easy today because people worked to port the thing. But Linux didn't run on anything non-x86 until years into its existence, with the Alpha port in around '96. You don't get these things for free, they happen because people are writing code. Next time you're "trivially" re-compiling that kernel take a look at the massive amount of code inside linux/arch/* if you don't believe me.

For a high-level application or even a large part of a kernel maybe it's just a simple recompile, but a kernel has to among other things bootstrap itself, manipulate page tables, route interrupts, have a meaningful set of drivers, and these are definitely not the same on all architectures. For ARM it's not even the same chip to chip and board to board, since there hasn't been the level of hardware standardization that the x86 PC has benefitted from.

Anonymous said...

"When they transitioned from PPC to Intel they included a binary translator with the OS so the transition was seamless to users."

Seamless to users? LOL, try again mactard.


No, for the great majority of apps it was seamless. Rosetta was much better than anyone expected. You can find specific cases where it fell down, but the fact remains that it performs extremely well.

Hell, Microsoft's own Office suite ran fine under Rosetta *and still does* (for those of us who haven't updated). You should think before hitting the 'nuke post with insults' button.

But an x86 on ARM transalator? Does that even make sense for anything but the least powerful legacy apps? Anything requiring a recent model PC to run won't run well on ARM under a translation layer. I'd much rather see a Windows tablet make a clean break from the past, requiring new apps, or at least newly recompiled apps. Trying to shoehorn the desktop onto a tablet is a recipe for failure - the use cases are totally different. Better to make developers think about the device than pretend to go for a 'write once, run anywhere' goal that won't work anyway.

Anonymous said...

Bill's statement is incredible. The loss in mobile couldn't have been more one sided. MS failed to press its ten year advantage. It then completely misjudged the competitive threat posed by iPhone (Ballmer especially). As if that wasn’t bad enough, it took so long to respond that Google was able to enter the market as well and achieve what MS didn't in ten years: leadership in smartphones. Today, Google enjoys more than 50% market share and all the momentum. Apple is more than 50% of both revenue share and profit share. MS is nowhere. You simply can't spin that any other way than as one of the biggest fups in recent history.

His stock statement is also stupid. There is nothing random in the recent decline. If you pull up a two year chart, you can clearly see the first drop following Ballmer's disappointing CES keynote of 2010, when many were hoping for a Courier like device to preempt the coming iPad. Then another drop when iPad was announced. A further one when iPad's sales figures started to pour in. And finally a permanent drop from CES 2011, when everyone thought MS would finally have an iPad/Android answer but again none was forthcoming.

It isn’t rocket science; the mobile failure has destroyed remaining confidence in MS’s leadership and indeed the company’s future prospects.

Another big drop again today. IBM and MS now effectively tied on valuation. Just the ebb and flow of the market? Bullshit.

Anonymous said...

What excuse will Steve give this time?

IBM overtakes Microsoft's market cap

On Monday May 23, 2011, 12:50 pm
NEW YORK (Reuters) - International Business Machines (NYSE:IBM - News) surpassed the market capitalization of Microsoft Corp (NasdaqGS:MSFT - News) on Monday and for the first time since April 1996, according to Reuters data.

IBM shares were down 1.2 percent at $168.24 while Microsoft fell 1.6 percent at $24.10.

Anonymous said...

Q:

If two years of Windows development doesn't yield a better tablet experience than iPad, Android, or whatever HP delivers with WebOS, will any heads roll?

Anonymous said...

"The stock price doesn't matter"
Steve Ballmer


IBM: 203.54B
MS: 203.31B

Anonymous said...

Get ready for the wave of similar stories.

UPDATE 1-IBM overtakes Microsoft's market cap

"NEW YORK, May 23 (Reuters) - International Business Machines (IBM.N) surged past old rival Microsoft Corp (MSFT.O) in market value for the first time since April 1996, marking the latest twist in the fluctuating fortunes of two of the world's most important technology companies.

IBM ruled the computer industry for decades until it hired the tiny, unknown Microsoft to provide an operating system for its new range of personal computers in the early 1980s.

Bill Gates parlayed that breakthrough into industry dominance, proving his theory that software would be more valuable than hardware, so that by the end of 1999 Microsoft's market value was three times that of IBM's.

Throughout Microsoft's rise, IBM was pilloried as an old-fashioned, immobile Goliath that could not keep up with the computing revolution.

Since the Internet technology bubble burst in 2000, the tables have been reversed, and Microsoft's stock has been stagnant, as investors doubt its ability to move beyond its Windows operating system and Office suite of software, while younger rivals such as Google Inc (GOOG.O) and Facebook steal the limelight.

Resurgent Apple Inc (AAPL.O) moved past Microsoft in terms of market value last year, and is now by far the world's biggest tech company."

Anonymous said...

IBM passes Microsoft's market cap after 15 years

Still upbeat on MS stocks? I've got a rapture to sell you!

Anonymous said...

"How Microsoft Can Fix Microsoft"

Some good points and suggestions there.

The board's ability to keep pretending everything is okay is waning. The failures in mobile and tablets, ongoing losses in search, disruption occurring in Windows, stock’s continued decline, and now IBM joining Apple in passing MS on valuation, are just too significant to hide.

The BOD made a big mistake letting Bill browbeat them into agreeing to this Skype deal. That was a golden opportunity to finally demonstrate their independence and prove they’re not just Bill and Steve's pawns. Instead, they folded. Their personal credibility and reputations are now inextricably tied to Steve and Bill’s collective failures.

If shareholders don’t throw them all out come September, then it’s not for lack of proof that this board continues to blatantly disregard its mandate, as it has for nearly a decade. MS is a sad example of where corporate America has come to. You have a CEO who systematically over a decade has destroyed the company's competitive position and shareholder value, and a board that has actually protected him and the status quo instead of demanding accountability and change on behalf of the stakeholders they’re meant to represent. Sadder still is that new leadership, when it finally comes, will take years to show results. Failure to act now just pushes that date back and makes a successful outcome increasingly less likely.

Anonymous said...

Nothing is going to change guys. simply pack your bag. bye bye MS.

Anonymous said...

"In the meantime, "Big Blue" has refashioned itself as a specialist in business software, servers and consulting, jettisoning its PC business along the way.

An investor putting $100,000 into both stocks 10 years ago would now have about $143,000 in IBM stock and about $69,000 in Microsoft stock."

Go Steve!

Anonymous said...

LOL. On the *day* that IBM surpasses MS in market value, we get Ballmer making promises about all the features coming in Mango, whenever that really is, and word that Sinofsky will preview W8 next week. Like both haven't been known internally for weeks or even months?

How embarassingly obvious. What other stops is he going to pull out to try and distract attention away from firing him?

Anonymous said...

"Ballmer for GOP presidential candidate."

HaHaHaHaHa! That'll guarantee a Donald Trump victory!

Anonymous said...

To the poster asking about peer reviews.

I was one of the statistics of 2009. But even before that, I was confused by the review system. My managers (all three that I had within my 3 years in Redmond) would ask me for names of people to get comments from. Of course, I am going to list the people who will give me th best feedback. What, did they think I am going to list the guy I just pissed off?

But what was really puzzling to me is why those managers have NO IDEA who I worked with over the last year. Are they really just so fixated on the butt that they were kissing that they really have no clue how their employees worked day in day out? Wasn't that their job?

But in the end, I guess the joke was on me. I guess doing my job and making a buck for the company was not enough to keep a blue badge. How stupid of me to think that my commitment list were actually, well, my commitments.

Anonymous said...

"What has been happening is a rather simple concept. IBM recently hit new all-time highs, and Microsoft has continued to remain a dead-money stock...

Microsoft continues to lag and continues to offer little reward. The company’s lack of vision, the decline in the importance of PCs as the rise of mobile computing leaves Microsoft behind, and a strategy of “sticking by your guns” without a shareholder-friendly option, and several other key issues have been keeping Microsoft in the dead-money category for too long.

Amazingly, there are two more companies that could br challenging Microsoft shares in the months or the year ahead if they can keep growth alive and if Microsoft shares continue to flounder. Oracle Corporation (NASDAQ: ORCL) has a market cap of $167.8 billion and Google Inc. (NASDAQ: GOOG) has a market cap of $167.05 billion. With acquisitions or with new models providing above-peer growth, either of those companies could be jockeying for That #3 spot or even that #2 spot for technology’s most valuable companies."

Anonymous said...

What, no snappy tweet from Frank Shaw on IBM becoming more valuable than MS? LOL.

Anonymous said...

IBM's decision to exit the PC business is finally vindicated.

Anonymous said...

I don't get Bill. The company's declining relevance and weakening competitive position has been obvious to many for half a decade. Not only has he let that continue, he's still trying to deny it when it's no longer even remotely credible to do so.

Is he really prepared to sacrifice the company's future and his still substantial ownership position out of loyalty to Steve?

Anonymous said...

"Microsoft "fixes" faulty Xbox 360 update by giving away a free console"

So how much is it going to cost this time?

KristoferA said...

"When Apple transitioned from 68k to PPC, they included an emulator with the OS so the transition was seamless to users. When they transitioned from PPC to Intel they included a binary translator with the OS so the transition was seamless to users."

Win7 already has Windows Virtual PC / Win7 XP Mode. I doubt they will remove that in Win8, so if anyone wants to run legacy native x86 apps on WinARM it will probably be possible through VPC.

Anonymous said...

They will have to come up with some way of emulating x86 command list with ARM command list, then write hypervisor, the forget the idea of small memory footprint OS cause WinXP under XP mode still would need about 512 megs of RAM. Not gonna happen IMHO.

Anonymous said...

Does anyone know whether MSFT's 'Do Not Rehire' list is used by Expedia also? I know MS and Expedia are or used to be connected.

Anonymous said...

Wow, that is a dense comment. Yes, it's easy today because people worked to port the thing. But Linux didn't run on anything non-x86 until years into its existence, with the Alpha port in around '96. You don't get these things for free, they happen because people are writing code.

Didn't NT run on x86, Alpha, MIPS, and PPC out of the gate? Why all the bitching all of a sudden about recompiling for ARM?

Anonymous said...

But what was really puzzling to me is why those managers have NO IDEA who I worked with over the last year. Are they really just so fixated on the butt that they were kissing that they really have no clue how their employees worked day in day out? Wasn't that their job?

Introduction to management at Microsoft:

- Never tell your reports what to do. That's PM's job.

- If you ever have to make a decision, assign it to one of your reports so you have someone to blame if things go wrong.

- Make arbitrary, poorly-informed decisions about how your reports should do their jobs, against any and all objections (e.g., "leverage" some other team's crappy unfinished code, etc.)

- Pretend you're technically competent by being able to build your team's code, but don't have any idea how to write new code or go through the check in process.

- If you disagree with something one of your reports is doing, under no circumstances tell him. Instead, complain about it behind his back for months.

- Tell all your reports that they have to "manage up" for you to know what they've been doing, who they've been working with, etc. (You're a manager, you shouldn't have to keep track of this s*** yourself.)

Anonymous said...

"Ballmer for GOP presidential candidate."

HaHaHaHaHa! That'll guarantee a Donald Trump victory!


And just imagine how hilarious the presidential debate between these two would be!

Anonymous said...

The NT kernel's almost always been portable. It was developed on MIPS, and I've used it on DEC Alpha hardware. (Which would run x86 binaries faster than native hardware back in the mid 90s.) IIRC, the current OS will still run on Itanium, so just porting to get the OS to run on ARM shouldn't be that difficult. The OS people have plenty of experience doing that. The difficulty will be getting it to run well on hardware designed for portable devices.
As for there being "4 different version," the bits installed on AMD hardware are different from those installed on Intel hardware. Switching CPU architectures in a VM environment can do bad things.

Anonymous said...

With 14 years at Microsoft, and now a year outside, it's hard not be reminded of Jim Collins' "How the Mighty Fall" when reading this blog. Collins identifies a 5 stage process in the decline of once great companies:

1. Hubris born of success
2. Undisciplined pursuit of more
3. Denial of risk and peril
4. Grasping for salvation
5. Capitulation to irrelevance or death


There's no doubt in my mind that Ballmer's Microsoft is already well into stage 3, with the Skype acquistion and the Yahoo dalliance examples of Stage 4.

http://www.businessweek.com/magazine/content/09_21/b4132026786379.htm


As companies move into Stage 3, internal warning signs begin to mount, yet external results remain strong enough to "explain away" disturbing data or to suggest that the difficulties are "temporary" or "cyclic" or "not that bad," and "nothing is fundamentally wrong." In Stage 3, leaders discount negative data, amplify positive data, and put a positive spin on ambiguous data. Those in power start to blame external factors for setbacks rather than accept responsibility. The vigorous, fact-based dialogue that characterizes high-performance teams dwindles or disappears altogether. When those in power begin to imperil the enterprise by taking outsize risks and acting in a way that denies the consequences of those risks, they are headed straight for Stage 4.

The good news is that decline isn't inevitable, but its patently time for real change.

Anonymous said...

One of the things Microsoft "Directors" are unable to do: Pick up the phone and ask a question of their directs. A good question might have been:
"Hey what is happening with the iPAD?" Nope, they depend on not talking to the workers and only managing up. Hopefully Skype can show the "management" how to communicate.

Anonymous said...

"HV: (Reasons) aplenty. First, it never felt they were making good use of my skills and potential. Instead, I had to develop skills to traverse a sea of politics. It’s a very inefficient company, with very little or nothing being done to make it better. MS has small windows of actual product development (new code being written) followed by long period of stabilization. It’s waterfall as its best. For PMs, like me, some manager pushes idiot time consuming exercises like scenario validation.. two months to produce collateral that is bound to be useless in six months, since everything is likely to change.

Secondly, the “toxic environment” and its impact on MS’ products. Since MS has a performance review system that values “individual” contributions over team work, everybody want to make impact on everything. Another way to read it is that everybody wants to voice opinions and suggestions and drive them to execution, which commonly lead to mutually exclusive ideas, and you, as a PM, will have to figure out a way to make everyone happy if you want to make progress. That leads to dysfunctional products. As a matter of fact, I remember the template I *had* to use to set my commitments/deliverables had something like “you go to spec review meetings and make valuable comments”

One thing that really frustrated me was that those random suggestions come from intuition, instead of actual scenarios/facts/data, and commonly show how disconnected MS employees are from the real world. In my case, as I worked in the developer division, it demonstrated how people there were disconnected from how developers work, and what they value. I had to constantly remind them that we should strive for simplicity since developers don’t have the time to become expert on our product, since it would be another tool in their toolbox.

Finally, there are the managers. I don’t know how much time people spend reading Mini Microsoft, and specially the comments there. It was actually therapeutic to me. Finding out that what was happening (via Mini) is quite common."

More evidence of dysfunction for the board to overlook.

Anonymous said...

"Wow, that Paul Thurrott article was idiotic. Take the last paragraph for instance:"

The current strategy has resulted in slowing growth, declining relevance, and erosion of both competitive position and market valuation. How is trying to change that using money that isn't making much in interest idiotic? Better yet, what's *your* solution? Or are you hoping the status quo that hasn't worked very well for a decade suddenly becomes more effective? If so, that strikes me as idiotic.

Anonymous said...

"So, it's really pathetic to hear all these posts throwing Ballmer down the drain…It's kinda hard to add shareholder value when you become CEO of a company that has a market cap in excess of $500B and at the time you earn $10B, with anti-trust lawyers in your face. All you can really do is attempt to make more profits, which he has done."

If MS:

- Weren’t trading at a discount to peers and now the S&P average ever since
- Wasn’t way behind and still losing billions in search
- Didn’t let a book reseller in its own back yard become the leader in cloud-based infrastructure as a service
- Hadn’t ceded a ten year head start in mobile and tablets to Apple and now Google through arrogance and competitive misjudgment of epic proportions (led by none other than Ballmer himself) followed by three year response times
- Didn’t allow Apple and Google to become synonymous with the future and MS the past
- Hadn’t lost relevance and overall competitive position so profoundly that the market now has more confidence in even IBM’s future

I might agree with you.

There's more to being a CEO than just milking the existing cows. Ballmer has failed on most of them.

Anonymous said...

Props to mini and the folks here:

http://www.zdnet.com/blog/microsoft/can-an-open-source-backer-thrive-inside-microsoft-this-one-says-no/9545

Anonymous said...

Check this out: http://news.yahoo.com/s/nm/20110525/bs_nm/us_microsoft

Anonymous said...

http://news.yahoo.com/s/nm/20110525/bs_nm/us_microsoft;_ylt=AgRQ6d3X04KBveRZlsRVHMqs0NUE;_ylu=X3oDMTNnOW11Y2QxBGFzc2V0A25tLzIwMTEwNTI1L3VzX21pY3Jvc29mdARjY29kZQNtb3N0cG9wdWxhcgRjcG9zAzQEcG9zAzEEcHQDaG9tZV9jb2tlBHNlYwN5bl9oZWFkbGluZV9saXN0BHNsawNoZWRnZWZ1bmRzdGE-

Influential hedge fund calling for Ballmer to step aside

Anonymous said...

I don’t consider myself “emotionally unstable”, I’m worried about my company’s future for good, logical reasons. If your only defense is to say, “We’re profitable so shut up”, then you clearly don’t understand the technology marketplace.

OP:
In sum you made a good post. It is true, Microsoft makes immense profits, but, is becoming irrelevant. Even just tonight, David Einhorn, an investor, said the Board should replace Ballmer. Let's ignore Ballmer and just focus on the business, technology, and facts.

The scale we are on is unparalleled. i.e. It took the Coca Cola Company 130 years to reach the point where it earns $10 billion pre-tax. Microsoft added that to itself in just the last 5 years, with no real breakthroughs.

We all know the Courier is the type of device that would win the world over, and win back Microsoft's reputation and relevance. That is part of the end game. A gadget that does everything. It would relegate the IPad to nothing but a cute toy.

Creating a gadget like that is not easy, and battery technology has to evolve. Some things just take time. But, we all know it's coming. And we all know Microsoft is working on it.

Because of the immense scale needed to create the software, technology, and applications to create and sell these gadgets to the world, as Paul Allen recently said, this could be a 3 horse race. Meaning Microsoft, Google, and Apple.

So, let's be conservative and say that in 20 years, there are 5 players. Microsoft, Google, Apple, and 2 "others". And let's say they each have 20% global market share, because the world in the year 2031 won't tolerate monopolies.

And to make it easier on the eyes, let's use the term gadget to refer to a phone, tablet, PC, Courier, laptop, etc.

Let's say in 20 years, each person on the planet, on average, has 2 gadgets. That seems reasonable. The rest of the world is catching up fast, and people love gadgets that make their lives easier.

So, if in 20 years there are 8 billion people on the planet, and each person has two gadgets, on average, that equates to 16 billion gadgets worldwide. And if Microsoft has 20% market share, that equates to 3.2 billion gadgets. So, if Microsoft is able to charge just $25/month for its services, that equates to roughly $1 trillion in revenue.

So, all we have to do is stay on this amazing global technology wave that the world is on. And if we create one kick-ass product like the Courier, this company is set.

Anonymous said...

Most of the posts on this blog seem to be from people who seem to be very emotionally unstable.

The following was taken from a PCWorld article:

I think it finally happened. We'd all been expecting it for a while now, but not quite so suddenly or emphatically: Steve Ballmer has gone completely insane.

It happened at Microsoft's Professional Developers Conference. Somebody must have asked him why Microsoft waited three years before attempting to take on the iPhone and Android with Windows Phone 7. According to CNN, Ballmer replied: "We're early; there's no question we're early.... I think we kind of nailed it. When you see it, you just go 'ooooh'."

Ooooh, indeed.

I suppose if we're talking geological time, then Ballmer's right, Microsoft is on the cusp of the smartphone epoch, and the dinosaurs just went for a dip in the tar pits. But in a market where a three-month-old device needs to be checked for liver spots and signs of dementia, spotting the competition three-plus years and then coming up with something that almost meets the smartphone standards set in 2007 is not exactly being early. It's certainly not "nailing" it -- unless we're talking about a coffin.

Also, quoth Ballmer:

"Make no mistake about it, we're all in," Ballmer declared. "I get all kinds of questions about 'what if you don't do this or that,' or blah, blah, blah. BOOM, baby, that's what we're going to do!"


So if you're looking for "instability" you don't need to read the comments on this blog; simply pay some attention to your glorious leader. Perhaps he'll even dance for you, if you ask him nicely.

Oh, and you better get yourself off the Kool Aid drip before you overdose.

Anonymous said...

interesting article talking about microsoft culture:

http://www.zdnet.com/blog/microsoft/can-an-open-source-backer-thrive-inside-microsoft-this-one-says-no/9545

Anonymous said...

Hi Mini,

Can you post this: http://blogs.wsj.com/deals/2011/05/25/david-einhorn-buy-delta-lloyd-group-microsoft/

Anonymous said...

"All you can really do is attempt to make more profits, which he has done"

So you think the stock is too simplistic a measure but want to replace it with another simplistic measure, profit? A CEO needs to be evaluated across a number of dimensions. Stock is one; Steve gets an F. Profit is another; Steve gets a C+. If he hadn't blown so many billions on failed causes, you could up that to a B-. Moving on to less quantifiable items: Vision? B. Strategy and execution? F. Selecting the right executives for important tasks? D. Growing employees? F. Establishing clear processes and accountability to move the business forward? F. Competitive analysis? F. Success in positioning MS to win in the future? D-. Ability to inspire confidence in MS externally? D. Willingness and ability to quickly reverse course when wrong? F. Aptitude for putting foot in mouth? A+.

Anonymous said...

Warning to all creative, talented types:

Microsoft is zombieland. We all know what the undead need and want, namely, YOUR brains. And if you make the fatal mistake of working for this company, you can be assured that most of them (the ones that aren't living) will spend every minute of their workday sucking the living breath out of you. Okay, maybe not zombies. Spiritual vampires? Seriously, what do starving people do when they have no resources and only each other? Cannabilize, right? Well, same goes with a group of power hungry people with no talent, except weaving big words and pretty powerpoint graphics: they eat anyone who still has even an iota of real creative juice. So beware before you step into this horror show. Years ago, Microsoft was called the Evil Empire. Employees used to joke about it and we were kind of proud of our golden handcuffs (the stock) at the time. But that was because we were all little up and coming BillGs and nothing was impossible. Great times. Now it is the wasteland and the evil empire is no longer a joke.

Anonymous said...

"Influential hedge fund calling for Ballmer to step aside"

Einhorn must be "emotionally unstable" too, since he's voicing many of the same concerns listed here.

Guess we know why Gates was trying to take some of the heat for the Skype deal. Einhorn and others had probably already been voicing their displeasure behind closed doors.

Congrats to Einhorn for going public. If one or more of MS's larger shareholders join him, this could get interesting very quickly.

Anonymous said...

Einhorn: Ballmer must go!

http://www.appleinsider.com/articles/11/05/26/prominent_hedge_fund_manager_calls_for_microsofts_ballmer_to_step_down.html

Anonymous said...

So, if in 20 years there are 8 billion people on the planet, and each person has two gadgets, on average, that equates to 16 billion gadgets worldwide. And if Microsoft has 20% market share, that equates to 3.2 billion gadgets. So, if Microsoft is able to charge just $25/month for its services, that equates to roughly $1 trillion in revenue.

So, all we have to do is stay on this amazing global technology wave that the world is on. And if we create one kick-ass product like the Courier, this company is set.


OP2:
I see your logic but your conclusions are based on some huge categorical assumptions. Even if all things remain equal and grow proportionately over the next 20 years, our strategy and trajectory wouldn’t make us an equal player with the market leaders but more like a <1% market share curiosity. In 20 years our devices might be more akin to the cheap phones you see hanging in the grocery store checkout line today, not serious challengers.

The problem with Courier isn’t its ability to be great, it’s the time to market and the apps and services behind the device which capture and hold consumers for product generations to come. We have such an uphill battle just to (re)capture positive brand recognition in the device market, much less being able to compete in the app spaces with companies who are up gobbling up most of today’s consumers. Granted 20 years is an eternity in the technology marketplace and anything can happen, but even just to ride the wave means we first have to get above water.

If we’re to follow your logic it would make more sense to get out of the device market altogether. If anything we’ve proven that we just can’t compete in markets where key drivers are agility and being sexy. Instead of sexy we’re the blind date set up by a mutual friend who said we’re “nice”. If we’re going to ride any wave perhaps we should take our cue from IBM and quit while we’re behind. Focus on cloud and become the infrastructure partner of choice, and let the consumer market trendsetters forge the path for us – Their success becomes our success.

Anonymous said...

Re: Mango announcement…Is it just me or do all the “key differentiators” sound like features I had on my Android phone starting maybe 2 years ago?

I’m liking my WP7 phone but the hardest thing about making the switch was accepting less. Now it seems I’ll be getting those Android features back. Um, yay, I guess.

Anonymous said...

Introduction to management at Microsoft:

- Never tell your reports what to do

- Tell all your reports that they have to "manage up" for you to know what they've been doing, who they've been working with, etc. (You're a manager, you shouldn't have to keep track of this s*** yourself.)


You forgot this one:
- Tell all your reports that it’s their jobs to manage their own careers. If you have to do any work to promote your people then they haven’t done their jobs and don’t deserve to be promoted anyway.

Anonymous said...

We all know the Courier is the type of device that would win the world over, and win back Microsoft's reputation and relevance. That is part of the end game. A gadget that does everything. It would relegate the IPad to nothing but a cute toy.

Which "we" would that be, then? Those of you who are wearing the magic Microsoft glasses? No one in the real world cares about you any more; you are beyond irrelevant. Oscar Wilde once observed "the only thing worse than being talked about is not being talked about", and no one is talking about Microsoft anymore.

You no longer command respect (whether merited or not), you no longer inspire fear, you no longer engender loathing. You have piled failure upon failure, and have become a rather sad joke in the real world. Your "woulda-coulda-gonna" doesn't cut any ice; your days of ruling the roost through FUD and vaporware are long gone. Are you incapable of understanding that?

Creating a gadget like that is not easy, and battery technology has to evolve. Some things just take time. But, we all know it's coming. And we all know Microsoft is working on it.

Yeah, it takes time doesn't it? Just wait till next week, or next month, or next year, or the next update, or the next version. Microsoft is a broken record in a world of MP3s.

Because of the immense scale needed to create the software, technology, and applications to create and sell these gadgets to the world, as Paul Allen recently said, this could be a 3 horse race. Meaning Microsoft, Google, and Apple.

So, let's be conservative and say that in 20 years, there are 5 players. Microsoft, Google, Apple, and 2 "others". And let's say they each have 20% global market share, because the world in the year 2031 won't tolerate monopolies.

And to make it easier on the eyes, let's use the term gadget to refer to a phone, tablet, PC, Courier, laptop, etc.

Let's say in 20 years, each person on the planet, on average, has 2 gadgets. That seems reasonable. The rest of the world is catching up fast, and people love gadgets that make their lives easier.

So, if in 20 years there are 8 billion people on the planet, and each person has two gadgets, on average, that equates to 16 billion gadgets worldwide. And if Microsoft has 20% market share, that equates to 3.2 billion gadgets. So, if Microsoft is able to charge just $25/month for its services, that equates to roughly $1 trillion in revenue.


No, no, no. Let's assume there is a planet of eighty trillion people that we can hop in a car and drive to in twenty minutes. And let's assume that they haven't got computers, but they are all desperate to purchase a PC running Windows. Now lets see what that equates to in license fees...

So, all we have to do is stay on this amazing global technology wave that the world is on. And if we create one kick-ass product like the Courier, this company is set.

Look around you. You are are not on any wave. However if you peer into the distance very intently, you will see a wave, and it's rapidly moving away from you. That's the wave, and you missed it a fair while ago.

You are a seriously deluded individual. Perhaps that's you Mr Ballmer, but, if not, you are certainly someone who should have a crack at running the company. You clearly have the requisite degree of intelligence to slot nicely into the role.

Anonymous said...

Unfortunately the more people call for Ballmer to quit, the more entrenched he seems to make himself. The more he's the last pick for the kickball team, the more defiant he gets, the more he thinks he's going to get the clutch home run, and he's the only one who believes in him.

He's not going to listen to David Einhorn, he's not going to listen to his employees. He's going to keep ruining us. Einhorn's opinion will only embolden him.

You think he's going to quit now? Don't get your hopes up. We're stuck with his miscues and hilariously bad fortune-telling for as long as I can see.

I kind of wish Einhorn didn't say anything. When Ballmer hears stuff like that, it's like his cue to profess his pride about his being tone-deaf. And we're therefore guaranteed at least another two years of grousing.

Anonymous said...

ComputerWorld - Hello, Microsoft? Fire Steve Ballmer!

"A "star" hedge-fund is calling for the Microsoft (MSFT) board to give CEO Steve Ballmer the old heave-ho. Greenlight Capital president David Einhorn thinks Ballmer's replacement would rally the company's snoozing stock price."

Anonymous said...

Would really love to hear any feedback on this:

http://www.youtube.com/watch?v=u6XAPnuFjJc

Anonymous said...

So, if in 20 years there are 8 billion people on the planet, and each person has two gadgets, on average, that equates to 16 billion gadgets worldwide. And if Microsoft has 20% market share, that equates to 3.2 billion gadgets. So, if Microsoft is able to charge just $25/month for its services, that equates to roughly $1 trillion in revenue.


Why don't you just pop that in the PowerPoint wish compiler?

As I understand your argument, you claim it will be possible to find 2 billion MS customers willing to pay $600/year for something. Keep in mind in large parts of emerging markets that is 50% of per capita GDP. The consumer PC refresh cycle is 5 years, we get $50/license, or ten bucks a year. Throw in a Windows phone very 3 years and that gets you $15 license or $5/year. So your $600/year is nonsensical. But go ahead, MS internally loves crackpot schemes. You'll probably make partner

Anonymous said...

Ouch... front page of CNBC calling for Ballmer to leave

http://www.cnbc.com/id/43175658

Anonymous said...

Microsoft Stock Lifted by Call For CEO Ballmer to Resign

When Wall-St votes with their pockets, it's time to go Charlie Ballmer!

Anonymous said...

HEADLINE
"Ballmer is stuck in the past..."

Hedge fund manager David Einhorn of Greenlight Capital believes Microsoft is a strong buy -- but he thinks the board should fire Steve Ballmer. Speaking at the Ira Sohn Conference this afternoon, Einhorn criticized Ballmer's "Charlie Brown" style of management and said "His continued presence is the biggest overhang on Microsoft stock." Other comments: Ballmer is stuck in the past, and at best a caretaker, and he is responsible for Microsoft wasting billions in R&D money. Despite Ballmer's presence, he thinks Microsoft is a good bargain right now, as the company has been "much stronger" than the average company in the S&P 500, but hasn't gotten credit for some of its achievements. At the end of the first quarter, Greenlight held more than 9 million shares of Microsoft worth nearly $230 million, making it the fund's 8th largest holding, according to Wall Street Cheat Sheet. Einhorn gained fame at the 2008 Sohn event by describing how he was shorting the housing market and slamming Lehman Brothers -- several months before the housing market drove Lehman out of business.

Anonymous said...

Silicon Valley Guru, Steve Blank, says:

Microsoft will start to fail within six quarters. Blank put a timeline on Microsoft suffering the kind of huge loss that drove IBM to restructure itself back in 1993: six quarters from now. He thinks Steve Ballmer is a "miserable failure" and that the board should be blamed for not replacing him. He also suggests that buying Nokia and installing Stephen Elop as CEO might be a solution.

SB: Christensen [author of "The Innovator's Dilemma"] 15 years ago nailed it. In the lifecycle of a company, why companies go out of business is that customers change, technology changes, competition changes. Even the most dominant player doing wonderful sustaining innovation can be blindsided by changes outside their control.

Google is a great case. They own search. They owned the Web. One day they wake up and a company with an idea that never even existed before -- Facebook -- has disrupted their business.

There are two major strategies. You either build, or you buy. What do you buy? You can buy IP, you buy teams and people, product lines, companies, P&Ls, bottom line. I think Google has tended to focus on teams and products. If you look at their most innovative counter to disruption, Android, it had nothing to do with the company, they bought it. Not only did they buy the technology, they bought the individual who's the driving force between what might keep them in business. The one thing they haven't figured out how to either build or buy is to counter Facebook.

You look at Microsoft going through this -- Microsoft is the living dead. Microsoft is a standing joke now in the technology business.

The one game you could see playing out is they buy Skype, they buy Nokia, Steve Elop finally injects some life into the company and replaces Ballmer and Microsoft reinvents itself. Elop is a great politician and a great IT guy, and maybe they could reinvent themselves along that axis. But it wil never happen as long as Steve Ballmer is Bill Gates's best friend.

Microsoft is the new Wang. Remember Wang? It was a dedicated piece of word processing hardware. Or they're the new Data General or the new DEC. The wings fell off but their trajectory kept them going for a couple years until they plummeted to earth because there was nothing underneath them anymore.

BI: What about IBM? IBM was able to turn around and they're about to pass Microsoft in market cap. (Update: They just did.)

SB: But remember how they did that? They brought somebody in from the outside that said "fuck everything you know, I'm going to fire a shitload of people."

The problem with Microsoft is not Ballmer, it's the board. Microsoft has failed any fiduciary test by any rational means and it's simply because Bill Gates has refused to acknowledge that his friend has been a miserable failure in replacing him. This isn't very complicated. Microsoft needs to be reinvented. Your analogy of Lou Gerstner who came in and said "fuck your 100 years of history, you're going out of business unless we do this shit, and here's who we're going to become." I can see somebody doing that to Microsoft, otherwise they're going to become some kind of asterisk. And who would have thought that?

BI: Microsoft hasn't had that big loss like IBM did in '92 and '93. That's what really made them wake up.

I predict six quarters from now. Tablets are going to change their business. The Wintel duopoly is over. Intel is scrambling not to be replaced by ARM. Microsoft has kicked the apple cart over and I give it six more quarters.

Steve Ballamer said...

No, I won't step down, you Punk..

http://www.reuters.com/article/2011/05/25/us-microsoft-idUSTRE74O8BQ20110525

Anonymous said...

We all know the Courier is the type of device that would win the world over, and win back Microsoft's reputation and relevance. That is part of the end game. A gadget that does everything. It would relegate the IPad to nothing but a cute toy.

Nonsense. Courier was an embarrassment. Pure demoware. Arbitrary gestures doing arbitrary things based on a demo script. It would be impossible to make and impossible to use. It's a shame the video got out and excited the commentards on the gadget blogs because now we'll be hearing about this bogus "missed opportunity" for the next 10 years.

Anonymous said...

LOL. The stock has its best day all year because of the Einhorn-inspired hope that Ballmer might finally get dumped.

Pretty hard for the board to ignore that or argue that Ballmer hasn't completely lost the street's confidence. But you know they're going to try anyway...

Anonymous said...

"The problem with Microsoft is not Ballmer, it's the board. Microsoft has failed any fiduciary test by any rational means and it's simply because Bill Gates has refused to acknowledge that his friend has been a miserable failure in replacing him. This isn't very complicated. Microsoft needs to be reinvented."

+1

Replacing Steve isn't sufficient. Bill and the rest of the board need to go too.

Anonymous said...

While MS is spending $8.5B on Skype, they quietly executed a bloodbath on 5/25/11 based on Ballmer's edict to "cut contractors."

On May 25th, MS Store, the money losing black hole with anemic sales at all 8 brick and mortar locations plus their awful website, laid off numerous contractors with no notice, whatsoever. Called in at 9AM, paycheck stops the next day along with email (and health benefits in many cases). Some of these people had been there for years and never saw it coming.

It's a cold world out there and MS is colder.

Anonymous said...

You forgot this one:
- Tell all your reports that it’s their jobs to manage their own careers.


+1

That's a great one. Every other job on earth, your boss tells you what to do and ranks you based on how well you do it. At Microsoft you have to find something to do and report it to your boss come review time. And the management chain isn't embarrassed about this at all--it doesn't bother them one iota that they have zero responsibility and zero accountability. As long as they attend meetings all day and get a paycheck, they must be doing something useful, right?

Anonymous said...

Rest assured folks, Ballmer is not a complete id10t. A bulldog maybe but not an id10t. I'm quite sure he has insight to this deal the the public does not have and hence makes sense. Give this a couple of years and you'll all be eating your words. :)

Anonymous said...

Look around you. You are are not on any wave. However if you peer into the distance very intently, you will see a wave, and it's rapidly moving away from you. That's the wave, and you missed it a fair while ago.

You are a seriously deluded individual.

OP:

Well, clearly you have your emotional opinions. In addition, Charlie Munger would probably strongly disagree with you about Microsoft's wave.

You seem to think Microsoft has failed. Even in the face of record profits. No technological progress in the last 5 years. No new innovations. Nothing but heightened competition "whipping us".

Yet, Microsoft added another Coca Cola Company to itself in the last 5 years, in terms of profits. An extra $10B Pre-Tax with "no progress". How else can you explain this?

Clearly Microsoft is on a wave with enormous scale and momentum. No other logical conclusion makes sense.

Perhaps you are right that eventually our lack of innovation will catch up with us and that we are doomed.

Perhaps we are like a ball that has been dropped out of a rocket ship that is accelerating upwards rapidly. The momentum is still taking us up to record profits, but, how long will it last before gravity takes hold?

You can't envision a future where the technology develops to a point whereby a rich company like MSFT decides to spend, say, $25B on high-tech equipment or satellites that can wirelessly deliver tremendous amounts of video, data, and internet traffic seamlessly? MSFT could become the provider itself. Isn't that why AT&T is so worried about the Skype purchase?

The Courier then goes on sale with unlimited Skype video calling, unlimited data and internet access at super speeds, Office, XBbox, etc.

If 10% of humanity can own a car, which costs over $10K, surely 5% of humanity would desire a device like this. Look how people are willing to pay up for hot mobile gadgets.

5% of a population of 8 billion is 400MM people. That sounds reasonable. Perhaps 100MM Americans, 100MM Europeans, 150MM Asians/Indians and 50MM South Americans would buy this. And if they pay $25/Month to Microsoft, less than a dollar a day, for these unlimited services, that equates to $120B in revenue. And, with inflation, in the year 2030, surely we could pay $80/Month. Most people pay that to AT&T in 2011. i.e. $80/Month * 400MM users equates to roughly $400B in annual revenue.
That's a pretty sweet business, no?

Anonymous said...

Warning to all creative, talented types:

Microsoft is zombieland. We all know what the undead need and want, namely, YOUR brains. And if you make the fatal mistake of working for this company, you can be assured that most of them (the ones that aren't living) will spend every minute of their workday sucking the living breath out of you...


I would like to +1 you until you can't handle being +1'ed and beg me to stop.

Thank you for articulating our pain.

Anonymous said...

Thanks, Einhorn. You've guaranteed that Ballmer will not step down until he proves his point, which the rest of us MS'ers know will be never. We're stuck with him now.

We're captive to his garish, embarrassing, deluded self-regard. We are screwed in the public eye. We're in limbo for as long as he pleases.

We have to be content to be the declining, increasingly irrelevant laughingstock of the tech industry.

I wish we could all go on parental leave until Ballmer grows up.

Anonymous said...

BTW, does anybody think, as I do, that Ballmer's going to seize upon the "loveable" part of the phrase "loveable loser Charlie Brown" and ride that sucker ad nauseum?

Fire him, Bill. I know he's your best friend. Sorry about that. But we're kind of tired of him making us look like idiots. Get past your John Hughes loyalty and do what's right for your company.

Anonymous said...

I'll tell you exactly what's going to come out of this whole Einhorn business. Follow me closely:

First off, Microsoft will never have any comment. Nobody will say anything.

The deafening silence from PR will resound with industry pundits, who will continue to accurately declaim MS's relevance in the tech sector, by virtue of our past statements that Apple's rapid developments won't amount to anything. They will continue to point towards our remarkable tonedeafness. Headlines will be louder. The obviousness of our being out of step will be front-page news. Expect a Letterman barb or two.

In the meantime, Ballmer will not quit.

Another forward-thinking project like the Tablet will get outrailed. Another great idea will get squashed underneath bureaucracy. We'll have a chance at something, and we will lose our nerve to pursue it. We will then blame market factors after somebody else takes our idea and makes it successful.

In the meantime, Ballmer will not quit.

We will squander the goodwill we've received through our humanitarianism - such as it may be - with our resistance to change, with the lazy, don't-bother-me-it's-Saturday obliviousness of our board combined with the blind, stupid arrogance of our leadership. And Bill won't come back. We won't have our future visionary anymore. We'll only have blind, anti-social, completely tasteless automatons to guide us through to our retirement plans with the least amount of fuss possible. And that means no visionary ideas, no game-changers, no brazenly open thinking, no creativity, no shockwaves to the industry, no nothing -- we'll all be expected to be as quiet as a mouse and let our most creative ideas get squashed like a rancid tomato.

In the meantime, Ballmer will not quit.

Get used to our future, MS'ers. This is it. I guarantee it.

Oh, we could try to change it. Certainly. But that would take a complete change of our culture and our leadership, and our complacency.

If you're up for that latter part, I am too. That's our main enemy.

Ballmer has proven that he is a friend of complacency, time and again. Proudly. Defiantly. With relish. With disdain for those who made progress. With hatred for those who wound up beating us. With childish, ugly, stupid petulance.

So we know who Ballmer is. The question is, who are yoU?

Anonymous said...

It's interesting how people talk about Microsoft like it's the Titanic. And how Ballmer is "insane".

Lets look at the worst case scenario:

Ballmer realizes that he is "wrong" on strategy like many here think.

He realizes that rather than plow billions into fighting it, he is just going to close up shop and fire nearly everyone, cancel R&D, and just take in the money that comes in over the next 6-7 years from software sales until it finally ends. We cede our current business to all our competitors.

Since analysts expect MSFT to earn $31B Pre-Tax next year.

+$3B with the cancellation of Bing
+$10B R&D Expense no longer needed
+$15B All employees fired except those that take in sales revenue and who box the software.

So, in F2012, MSFT would earn $59B Pre-Tax.

Let's assume it's a slow death at first that speeds up over a 7 year span. Microsoft is so entrenched in in the world, it would take a while to kill it off.

F2013, MSFT could earn $57B Pre-Tax
F2014, MSFT could earn $52B Pre-Tax
F2015, MSFT could earn $45B Pre-Tax
F2016, MSFT could earn $35B Pre-Tax
F2017, MSFT could earn $25B Pre-Tax
F2018, MSFT could earn $10B Pre-Tax
F2019, MSFT would earn $0B Pre-Tax

So, look at the type of Hudsucker Proxy type action Ballmer could implement. Even though profits went higher, investors are upset that MSFT is closing up shop. They pull their money to invest in Google, IBM, Apple, etc. Firms with an actual future.

MSFT stock falls to $10.

In June of 2015, Ballmer notices that after taxes, in the last 3 years, $120B had poured in. He also notices that the stock is trading at $10 with no movement in months. MSFT currently has 8.5B shares outstanding. He decides to spend all $120B to buyback 8 billion shares at $15. Of course, he is laughed at.

So, now it's June 2019 and MSFT has nothing but the net cash, after paying off debt, it originally had on its balance sheet of $20B plus the extra $80B that came in after-tax in the last 4 years.

So, now we have 500 million shares outstanding, $100B Cash, No debt, no other assets to speak of, and a stock price of $200/share.

i.e. $100B/500MM = $200/share. It's just all in cash.

In 7 years, Ballmer would have increased the stock price from $25 to $200. One of the greatest CEO performances of all-time for shareholders who stuck around and trusted him.

Anonymous said...

Is it not bizarre that MSFT now has gone from zero debt to $13.6billion in debt. I am sure some HiPo EXPO MBA with a rocket jutting out of his butt came up with this brillian scheme

MSFT has a AAA credit rating and borrows money at 90-120 basis points over treasury. Almost any half-ass ROI presents an arbitrage opportunity at that discount rate.

I still would have liked to have seen an SAP buy vs. Skype, but am guessing the EU socialist regime would have blocked the purchase. The comment re:money parked off-shore was spot on; we've got loads of cash that we can't get back into the US without paying heavy taxes on it. Buying a != US company has an assumed discount rate = tax rate on repatriation of profits.

Anonymous quote guy - feel free to rejoin the rest of the A-10 (soon to be 5) rated propeller-heads and trolls in the corner.

Anonymous said...

"So if we add them up, aside from Ballmer and Gates, Microsoft’s board has:

1) Two bankers (Noski and Dublon)
2) Two consumer-products people (Panke and Hastings).
3) One venture capitalist (Marquardt)
4) One tech-focused academic (Klawe)
5) One drug-company guy (Gilmartin)

No matter how you look at it, this is a pretty accomplished group of folks. But outside of Netflix’ Hastings and BMW’s Panke, they don’t look right for a tech company that’s perpetually behind the times and generally-disliked by consumers.

For example, I’d like to know exactly how two Wall Street CFO’s and one venture capitalist came to the conclusion that Microsoft should bid $45 billion for Yahoo! back in 2008. Shouldn’t CFO’s think more carefully about throwing money around like that?

And are we really supposed to believe that a prominent venture capitalist couldn’t come up with better ideas for acquisition targets -- especially ones with footholds in key emerging areas like mobile Internet and social networking?

Even from a bigger-picture perspective, it’s not as if JP Morgan or Bank of America are even interesting as banks. They’re just really, really big. They’ve certainly never trailblazed like Commerce Bank, now owned by TD (TD).

The point is, Ballmer isn’t the only person to blame for Microsoft’s inability to innovate. Strategy comes from the top down, and the proof is in the pudding. Microsoft has missed nearly every important computing and consumer-electronics trend in the past decade.

Yes, Ballmer stepping down would probably be a good thing, but the board also needs some new, and preferably very young, blood.


I’m thinking people like Facebook’s Mark Zuckerberg and Groupon’s Andrew Mason -- the very people who are changing the way we work and live.

I mean, if you wanted counsel on how to catch up with Apple, who would you ask?

The very young guns that are changing the way we work and live?

Or the guy best known for the Vioxx mess?"

Anonymous said...

WOWZERS! 8.5 billion dollars! I sure could have used a cut of that. What is Skype going to do for MS? Nothing..a big fat zero just like Ballmer. Do any of you remember when Ballmer made comments about how tech stocks were overpriced, how they needed to be re-evaluated? That's when MS stock took a plunge and haven't recovered since. BALLMER needs to GO! He is a boil on the butt of MS, useless and hurts like hell! BTW, I hope this weeks paycheck doesn't bounce.

Anonymous said...

"Microsoft board supports Ballmer after calls for him to quit"

Well of course they do. They've supported him through every successive failure and stock collapse, even as the pace and severity of those have increased.

Anonymous said...

While I'm not against the call for Ballmer to leave, do you really think he's the only problem?

there are so many layers of entrenched politicians waving their egos, MBAs and cronies around while protecting their fortunes that just beheading the chicken isn't going to make any real difference.

Sure, a new CEO (from the outside) will announce some sweeping changes, makes some brave decisions and lay off a few 10s of thousands of us so their first year results look like a turn-around and a success. A new CEO from the inside would be worse - can you imagine the bloodletting Sinofski would initiate to cleanse the company of his detractors (bye-bye IEB, Embedded, most of STB... basically anyone who doesn't support Windows and Office on Windows). Elevating KT would be even more of a disaster... the Walmartification of roles would continue with SDEs becoming interchangable shelf stackers and clueless MBA weilding PMs allowed to champion features that make no sense and just add bloat.

At least when IBM went through their culls there were voluntary options and packages that reflected IBMs respect for their employees (I went through that process and am very pleased to see that it worked for them) - with MS's toxic corporate culture I fear that things would be very different despite the massive war chest we have to support such an undertaking.

Stock price is one thing, lives and futures of a lot of the employees who would get hurt by the axe is a consideration we all seem to foget here

Wil Campbell said...

Hi Mini,

I'm Wil Campbell, and I work at Microsoft. I have worked at Microsoft, I still work at Microsoft, and I intend to continue. That being said the following is my own opinion and should not be construed as the official opinion of any other entity, corporate or human.

Over the last few years I have looked at this blog a few times, and I always have the same reaction. The reaction is this; if all of you anonymous worms want to work for another company, please go do so. I hope you publish this rather than censoring it. I challenge any of you roaches hiding in the dark corners to gut up and take charge of yourself and your own life. If you are having a hard time in your job, try to work harder, or get better at understanding the feedback you are getting. Things will not always go your way in any endevor. Stop bitching around the watercooler (or blog, et. al.) and make the change you feel you need to make.

If you disagree, that is fine. If you have feedback about this personal view I am expressing, you are welcome to go to my website, wilcamp.com and express it.

Thanks and goodbye,
Wil

Anonymous said...

http://www.guardian.co.uk/business/2011/may/27/microsoft-board-backs-steve-ballmer

Anonymous said...

@Most of the posts on this blog seem to be from people who seem to be very emotionally unstable.

This statement predicts the Microsoft culture.

Anonymous said...

We all know the Courier is the type of device that would win the world over, and win back Microsoft's reputation and relevance. That is part of the end game. A gadget that does everything. It would relegate the IPad to nothing but a cute toy.


Uh... did I miss an announcement that Microsoft is spinning up a Courier project? You know, the one that was cancelled? And when did all of this expertise to build hardware and industrial design come from? Or is the strategy to convince HP and Dell to build something sexy based on our drawings?

Anonymous said...

@Wil Campbell, that is what precisely the problem with capitalism is.

Investor who do not like the way Microsoft works, they sell one at a time. Outcome, the Microsoft could continue to behave badly. The idea behind the capitalism is that the right actions get encouraged so that the overall economy grows. The quit culture should somehow be discouraged. Well, it is as short-term capital gains taxes is higher than long-term. It should even be true for a loss, i.e., short-term loss should not even be deductible.

That way a set of investors who see how the shop is run can do something.

Likewise, the idea that all the well intended employees should leave one by one is so anti-progress. The culture has deteriorated and the deterioration is accelerating. The voices here and there are quite important. Something must change. If each individual changes one by one by leaving, and now think about it, if the people in the early days of capitalism have done the same instead of grouping together, we will not have so much progress by now.

Anonymous said...

Hey wilcamp,

I dont need to quit because I can game the system and get paid for 35 hrs of work each week! Keep drinking your koolaid! Too bad the health benefit cut will make that diabetes more expensive to manage :)

I love making fun of you guys that pretend win phone 7 is awesome and your 10 lb tablet is better than my iPad!

Anonymous said...

Pretty hard for the board to ignore that or argue that Ballmer hasn't completely lost the street's confidence. But you know they're going to try anyway...

And they did. The board's like our own Flat Earth Society.

Good call. Well, I mean accurate call.

Anonymous said...

In the meantime, Ballmer will not quit.

I think Steve has overplayed his hand rather badly by paying so far over the odds for Skype. He wanted to look like he was doing something, but instead he has made a colossal blunder that is obvious to all and sundry, and in so doing has drawn a whole lot of negative attention at a particularly inopportune time.

The board may well be backing Steve, but the fact that Mr Einhorn has publicly called for him to go is the beginning of the end. If the Skype deal yields as much as is expected (somewhere between very little and nothing), the pressure on Steve will really start to mount, and further cracks will begin to appear. The board may well sacrifice Steve in an attempt to save themselves, or, if they are determined to continue supporting him, they may find themselves on the wrong end of a nasty shareholder revolt.

Honestly, you couldn't pay for entertainment better than this.

Anonymous said...

@Wil,

I think you're drawing false equivalences. What you seem to fail to understand is that people can have negative opinions of Ballmer or Brummel or whoever at the top, and still want to stay. Your attitude reminds me of people in political discourse who say things that amount to "if you don't like that we torture people and tap everybody's phone, well, you can just go to some other country." It's ridiculous right on the face of it.

Anonymous said...

"Perhaps you are right that eventually our lack of innovation will catch up with us and that we are doomed."

Perhaps? Can you name a single successful technology survivor that still has almost all of their revenue and profits coming from products that won their respective market positions in the 90's?

Sure, there are all sorts of other businesses and opportunities out there, and MS still has a lot of money. But it's running out of time. Those new businesses should already be established, showing strong profit potential and rapidly accelerating growth. But they're not. And it's not for lack of trying. Steve has invested more in new ventures than any other technology company. So at what point do you admit it's just not working under his leadership and give someone else a chance? As Steve himself said when cutting loose Muglia, the best time to make a change is when things are still going okay and before you're forced to.

Anonymous said...

"Microsoft board supports Ballmer after calls for him to quit"

No. Public support would have required bad judgment and balls. They have the former in abundance but none of the latter, as should be obvious from the last ten years. Instead, they had some minion leak their support (note the "source close to the board" qualifier). That way if Einhorn's position gains a strong following they can still throw Steve under a bus and pretend they'd been considering it all along. But they're hoping this will influence other entity's willingness to join up, thereby allowing the BOD to keep doing what they do best: nothing, while Steve destroys the company.

Anonymous said...

While I'm not against the call for Ballmer to leave, do you really think he's the only problem?

there are so many layers of entrenched politicians waving their egos, MBAs and cronies around while protecting their fortunes that just beheading the chicken isn't going to make any real difference.


If you put Jobs in charge of Microsoft, all the business cronies would be gone in the first 10 minutes.

Anonymous said...

"I'm Wil Campbell, and I work at Microsoft. I have worked at Microsoft, I still work at Microsoft, and I intend to continue. That being said the following is my own opinion and should not be construed as the official opinion of any other entity, corporate or human.

Over the last few years I have looked at this blog a few times, and I always have the same reaction. The reaction is this; if all of you anonymous worms want to work for another company, please go do so. I hope you publish this rather than censoring it. I challenge any of you roaches hiding in the dark corners to gut up and take charge of yourself and your own life. If you are having a hard time in your job, try to work harder, or get better at understanding the feedback you are getting. Things will not always go your way in any endevor. Stop bitching around the watercooler (or blog, et. al.) and make the change you feel you need to make."


Wil, I'm forwarding this entry to your management team -- hopefully they can help you better understand appropriate external communication when speaking as a Microsoft employee. There are only 2 Wil Campbells in the GAL, so it will be easy to find them.

We don't refer to our coworkers as "roaches" in a public forum. You need to be muzzled.

Jonquil said...

"You can't envision a future where ... MSFT decides to spend $25B on high-tech equipment or satellites that can wirelessly deliver ... video, data, and internet traffic seamlessly? MSFT could become the provider itself. Isn't that why AT&T is so worried about the Skype purchase?"

Skype is not a bandwidth provider. Skype is a bandwidth consumer. Providing worldwide bandwidth, which is what your vision requires, means you're going to have to reach all of Africa. All of South America. Ground-based infrastructure costs will kill that $25B before you blink. Going satellite? Latency. Power. Won't work indoors.

It cost $6B to put up the original set of Iridium satellites. Microsoft just spent $8B on ... Skype.

If we're imagining, I'd rather imagine all the people living for today. You may say I'm a dreamer, but I'm not the only one.

«Oldest ‹Older   201 – 400 of 574   Newer› Newest»