Mini-Microsoft

Microsoft FY12Q1 Results

2011-10-20T21:15:00.001-07:00

Here it is, FY12Q1 already: Microsoft Reports Record First-Quarter Results $17.37 billion of revenue driven by solid business and consumer demand.. Wow, is that the longest, braggy release title we've ever had? Read it and you'll also discover that Bing has an organic line. In the Q&A session, Microsoft Management Discusses Q1 2012 Results - Earnings Call Transcript - Seeking Alpha, there was a lot of Qs about Skype and - news to me - we discover that $51 billion of our cash assets are kept offshore, to avoid taxes. Viva la 1%! (I kid).

(I'm out on the road so this will be short.)

My usual suspects:

Mr. Jay Greene: Microsoft sees strong Office and flat Windows in quarter Microsoft - CNET News - "The company continues to generate mountains of cash. Even as it returned $2.7 billion to shareholders in the quarter, its cash hoard grew nearly $5 billion from June 30 to $57.4 billion."
Mr. Joe Wilcox: Microsoft Q1 2012 by the numbers $17.37B revenue, $5.7B profit - on the flat Windows numbers: "Earth to Windows & Windows Live president Steven Sinofksy: You can't ship Windows 8 soon enough."
Mr. Todd Bishop: Microsoft hits profit estimates, lifted by Office and servers - GeekWire and, more intriguing, Microsoft results show how iPad is cutting into Windows PCs - GeekWire
Ms. Mary-Jo Foley: Microsoft earnings insights On-premises Office still has a lot of life left ZDNet

And a bonus view of OSD:

Business Insider - Microsoft Only Lost $500 Million Online This Quarter!

Friday! Friday! Friday! Microsoft Company Meeting 2011!

2011-09-21T20:25:00.000-07:00

(Note: updated below with follow-up comments.)

It's my most favorite time of the year: Friday the 23rd is the annual Microsoft Company Meeting!

That's right: I pull up my sleeves and thrust out my arms out wide and say, "Shove in the Kool-Aid IVs to the left and to the right and keep it flowing!" Man I love it. It is one of my favorite holidays of the year.

Reminder: when it comes to comments, share your internal-only content enthusiasm over on OfficeTalk (especially via the otalk WP7 app) vs. trying to put it here.

A Story of Steve, Steve, and Steven

This year is one of those inflection points: Apple has been soaring with its excellent device results, blowing Microsoft away and cannibalizing our Windows powered device market. The Microsoft stock is horribly flat and there are calls all-around for Ballmer to be replaced. Now, several things are in play: Mr. Jobs has stepped down due to his health reasons, WP Mango is reaching release with Nokia devices to begin their flow, and Windows 8 has demonstrated a reboot to the Windows experience and development platform. With Windows 8, Microsoft has emerged with the talking points that the company is being re-imagined.

All I can say is that SteveB should give SteveSi the CEO Bacon Achievement award: exceptional results that saved the CEO's bacon. Oh, SteveB had to be so happy to have Windows 8 revealed at BUILD right before the Financial Analysts Meeting. "How ya like me n-O-w?!?!" Actually, big chops to SteveSi who not only has done the impossible organizational wrangling between Win7 and Win8 (and wherever it is leading with Win8+) but also did such a smooth job with BUILD that some bloggers dared to pass the Steve Jobs torch to SteveSi. Wow. Didn't see that coming.

(psst. Board. CEO ma-ter-ial. Uh-huh. There you go. Not that I'd probably work in a SteveSi CEO Microsoft, but ya could do a lot worse!)

One thing I'd love to see SteveSi do: give the same level of support to writing Windows8 apps as Microsoft afforded its employees for Windows Phone. I'm not expecting him to, but if he did, I'd relish having my Spock-meets-Spartan view of him rebooted.

The Big Check-in - How Are Things Going

I expect that Mr. Turner will do the big picture for us. I like this comment regarding one point of view of how things are going for Microsoft:

There are certainly some issues at MSFT but some of the people that post in this blog are just over the top in their pessimism and whining. As I see it right now, the good, bad, and ugly of MSFT are: The good:
XBOX Kinect blew it away this past Holiday, over 35M customers now pay for the priviledge of XBox Live
The enterprise business is strong, committed revenue is higher than it's ever been (MSFT has a global enterprise business that is really unmatched by anyone
Office365 and Dynamics both are rapidly growing businesses with a ton of upside
MSFT now has 11 distinct businesses that do over $1B in revenue - I can think of maybe one or two other businesses on the planet (GE, etc) that can say the same
Largely because of this diverse portfolio of businesses, MSFT was able to grow revenue, operating income, and net income in spite of *declining* PC sales (MSFT is not a one-trick pony any longer, if it ever was)
Even with weakness in the PC market the past couple of quarters, it's hard to argue with the success of Windows 7 with over 400M licenses sold
MSFT's Cloud offerings collectively are second to none
Bing has a long ways to go but has actually made some progress in the US search market against Google, which was once thought impossible
As an employee, unless you are a bottom 20% performer, the new comp plan is a win. If you don't think so, then you don't really understand the change
Say what you will about Ballmer, there are some senior execs at MSFT that are truly outstanding. Mattrick, Satya, KT, Qi Lu, PK, Lisa B - you won't find anyone better than these folks anywhere
The Nokia partnership will be instrumental in getting a WP7 device in a lot of people's hands
The bad:
As mentioned, PC sales actually declined in Q4
MSFT still hasn't figured out a way to win in India or China and doesn't seem to have a cohesive strategy for emerging markets
WP7 is a good product but as others have alluded to, MSFT is way late to the party in terms of highly functional / attractive UI / rich app eco-system smartphones. The Nokia deal only allows MSFT some hope at playing catch-up at this point
Employees will soon have to pay a contribution (and deductibles) for health care (thank you very much ObamaCare and the Cadillac Tax for bringing that to us)
Although there are talented people still there, a lot of talented folks have left MSFT senior leadership in the past 18 months or so - Liddell, Elop, Muglia, Bach, etc, etc. Although Elop was instrumental in getting the Nokia deal up and going
The ugly:
AAPL sold 20M iPhones and over 9M iPads in a quarter. In. A. Quarter. Let that sink in a moment
While MSFT has plenty of other viable businesses, none is as profitable nor as core strategically as Windows. Windows was once an impenetrable fortress, but in the past year, AAPL has penetrated it with a single product launch. MSFT is destined to play catch-up in slates, and it sounds like nothing serious is coming out until Windows 8 in another 12 to 15 months (maybe)
MSFT is still very strong in the enterprise but to the consumer, MSFT seems completely dead. MSFT has no consumer mindshare any longer
Yes, there are some interesting possibilities with Skype and Lync and XBox (etc), but it is still not at all clear that shareholders will reap anything close to $8.5B of value
GOOG still dominates search in the US and will for the foreseeable future. And their dominance is even greater internationally
OSD as an org continues to bleed money and will continue to do so for at least another couple of years
There it is, from a high-performing L63 employee in a broad-based business role, trying to lay things out in a truly fair and balanced manner. Take it or leave it.

I'm glad to see The Cloud in the somebody's Win column. When it comes to the Company Meeting, I personally am dreading anything that can be in the least bit tangled up with... sigh... THE CLOUD. Two things lost my respect to this force-fed-bubble-gum-on-my-shoe initiative: first, that using our cloud services is Alpha-Geek hostile: sorry, but there should have been upfront a free tinkering environment to go and write a whole bunch of real fun, heavy computational code. Second, that we started to slap THE CLOUD on crazy crap like home PC image editing.

Really.

So, I don't know, smuggle in a bunch of tequila and limes and whenever THE CLOUD comes up take another hit. That will at least make it palatable... in a numb, doesn't-seem-to-hurt-quite-like-it-did sort of way.

The New Review System and Hiring

Yeah, I think there's zero chance the Senior Leadership Team will go into much depth here. "Cheer if you like the new review system! ... Okay, there's 40% of you. How about the rest? Give me a 'Whoo?'" Want to wade in it? Pour yourself a three fingers of bourbon (and keep the bottle handy) and go through all the comments in the Mini-Microsoft Microsoft Annual Review 2011 post. 1,200 comments at this point. Whew.

Strict stack ranking on a fixed curve is a tool brought in for a purpose that didn't exist in the previous review system. Having LisaB take a break from her sabbatical (and, btw, what happens to most people after their sabbatical?) to tell us it's being done because employees felt that the old review system was too complex is a load of greasy smoke up the keister.

I look at this system and, stepping back, it makes sense if you're preparing to do some major organizational slimming over, say, a three year period. For instance, if SteveB where going to leave, I imagine before he goes he would cut back huge parts of Microsoft versus leaving that task to the new CEO, who might make radically bad cut-back decisions (from the former CEO's point of view). Better to give over to the new leader a starving company ready to grow versus a fat pig you've got to go all Neutron-Jack on. Three more years. Three more years to drive down until today's lower 3s are FY2014's 5s.

Depending on who is being forced out or leaving, too, the new system might help with the Young up Microsoft initiative I hear whispers of.

Whoo-and-Hoo!

Didn't like your review? Ah, come on. You know when Ballmer runs around the field you're going to scream and shout (though, given the last Ballmer memo's authorship, maybe we'll see Frank Shaw run around first to warm things up). You're going to stand up. You're going to put aside all the depressing thoughts of those golden handcuffs never unfolding into a sparkling world of wonderment and retirement. You've got a job, a colorful CEO, perhaps a nice raise, and a company holiday to find out what's going on and to have some free grub with your work buds. Compared to 99% of the rest of the world right now, it's worth swigging the Kool-Aid for at least one day and cheering.

There's always the rest of the year for everything else.

Updated: impressions and follow-up

Overall: a very competent Microsoft Company Meeting. Polite applause. "Pip pip."

Other than the occasional video (heh heh, Inception) and the first one or two Train Dances, it was a low-on-humor meeting, for me. Everyone wondered if we were having a host this year. Hey, it was LisaB. Competent (and probably didn't piss people off like last year).

This year was demo-rama. I think the demos were good, it's just I had seen so much of everything being presented that there weren't too many surprises for me. I loved the fact that SteveSi ran one of his demos and then pointed out that everything he had just done was on an ARM slate. I regret how much money we're pouring into OSD (who pointed out that they are quite frugal - uh-huh) but I agree with a lot of what they are doing: they are not trying to out-Google-Google. They're Bing'ing Google upside the head. Go, Cosmos, go!

As for Mr. Ballmer: it was a surprise that he didn't come running and screaming out but rather had a surrogate fly around like a chimp on crack dusted with meth. Mr. Ballmer seemed more subdued this year. Love for Ballmer? People still stood up and cheered and clapped for him. Now then: someone please tell him, regarding his analogy of himself and Elop and Windows Phone sticking together, how Butch Cassidy and the Sundance Kid ended. Yeah, they were together alright, but the result was a little bit different than jumping off a cliff into a river.

As for people leaving (as some of the tech bloggers have picked up): yeah, people were streaming out. In small numbers. No where near as bad as BillG's last company meeting where Ballmer started screaming at people to sit down. And, well, yes, I was one of those folks who wandered to the upper portion of the seats while Mr. Ballmer passed on his coachie wisdom from Friday Night Lights (BTW, I prefer coach John Wooden). I suppose if Microsoft had been serving beer and snacks after the meeting I would have managed to stay in my seat.

So for me: technically well executed. Pip pip. I feel good about what Microsoft has wrought and how many of the things we're doing are exactly the kind of big, cross-group bets folks used to complain how we never do. The Imagine Cup winners were great to see. Pip pip. As for the meeting... I'd like a little culture, too. Maybe less inspirational videos. And more crazy. Not burping game crazy or Craig Mundie dazed-crazy, but show we have some pizzazz... with less explosive volume. And I'm fine with a box lunch if it means I don't have to stand in an infernal line to get a luke-warm burger melded to its bun.

Microsoft Annual Review 2011

2011-08-20T07:15:00.000-07:00

It has become a tradition for folks to share their review numbers to help get a sense of what's happening and how your numbers stack up. This year we have a new challenge of working through an entirely new review system and (for engineering) a pay-raise for the levels most at risk of departing for greener pastures. I know folks on the edge of leaving who have been willing to hang on to see what happens.

What's a good format? How about something like the following, obfuscated as you wish:

L# (promo'd?)
Bucket (1+, 1, 2, 3, 4, 5)
Merit % (/Promo %) / Engineering?
Bonus $K
Stock $K
Optional comments about Division / Group, discipline, impression of review

If you like the review system, I'd really like to understand why (something better than, "whee, I got a 1+," please) and I'd encourage commenters to not slam the positive perspectives. I'm not too pleased with the new system at all because I feel very good engineers in my org are getting lower results because of a very strict curve. I'm probably breaking the rules in that if an excellent person got a 3 I'm having my folks be truthful in writing review feedback that, yes, they did an excellent job, just when it comes to the 3 realize that more people did even more excellent work and what it is they need to do to step it up (or, you know, start connecting recruiters with all of those competing 1s and 2s). Same thing for 4s who are doing a good job and not really having any performance problem. HR would prefer me to write the text of the review according to the verbiage of the ranking system, but screw that. I did that years ago when people got a trended 3.0 and I'm still scrubbing those dark spots of demoralizing compliance off my soul.

How do you feel, whether you're a manager writing reviews this year and comparing results to last year, or an IC trying to make sense of your compensation and recognition?

Microsoft FY11Q4 Results

2011-07-21T10:19:00.000-07:00

(ring-ring, Mini, ring-ring)

How is this quarter shaping up? First of all, let's review some competitors:

IBM: Bang! Third base!
Google: Boom! Out of the park, home-run!
Apple: Ka-Blam! Out of the city. Game over!

We've already been given a small preview thanks to the Partner conference: good Windows 7 numbers and Windows Phone, as loved as it might be (especially compared to Android) just ain't selling much. And no one is holding out any hopes that current customers will see their Mango update until New Years.

The iPad continues to suck in consumer love and money... money that we'd prefer they send our way but there's nothing comparable for them to buy. Windows 8 ARM tablets? Sometime next year, but what we showed at All Things D is our take of squeezing an elephant into a VW bug. Here's some deep respect and chops to the folks doing all this work, but it's a subtraction game followed by many frustrating conversations about why it's okay not to have certain obvious things work... obviously. And I have to say it's fascinating watching Sinofsky wrangle the Windows organization in this long game of reshaping itself and the consequences it has for the rest of the company.

My one analyst question for today: when the hell is Bing going to stop losing money?!? It appears that the internal hiring spree has finally cooled down so that's good - the piling of warm bodies has stopped (well, only to be replaced by throwing warm bodies on The Cloud because, ah-huck, we're all in). Seriously though, now's the time to start shaking the Bing tree and let the goodness of the search eco-system keep on going and shed the remaining busy work. Come on, if Xbox did it, so can you!

Calibration cacophony: I owe a post about our new review system but I'm not going to put money down about when that's going to happen. In the meantime, I'd love to sit down with each and everyone of you that supposedly told LisaB that the previous review system, with its Exceeded and Achieved and its 20% this and 70% that, was just too durn hard to comprehend. Let's chat. This discuss (*whack* against the side of your head) your results for this year. I'd like to discuss (*whack*) what a peer relative result within a strict percentage based system means. As part of this discussion (*whack* *whack* *whack*) you'll learn that your results are less that what you're used to and the message and your rewards are strictly viewed through your percentile bucket, no matter if you're at the top of your bucket or the bottom. I do seem to have some feedback from your peers to discuss (*whack*) although the majority of it seems to spring from a glowingly content-free "I'll rub your back if you'll rub mine" point of view.

Be careful what you ask for, because the person listening might turn it into one big step backwards. Oh, and for some of you, here's a salary bump.

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

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

2011-05-10T09:02:00.000-07:00

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

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:

Mr. Jay Greene at CNet: Microsoft betting Skype keeps it ahead of Google, Apple Microsoft - CNET News
Ms. Mary Jo Foley: Microsoft buys Skype for $8.5 billion; creates new business division ZDNet
Mr. Todd Bishop: Skype and Kinect could be Microsoft’s new killer combo - GeekWire

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.

Microsoft FY11Q3 Results

2011-04-28T07:52:00.000-07:00

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

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

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

Kinect: what are the post-holiday sells like?

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

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

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

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

The two pressure points I certainly continue to feel:

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

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

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

Microsoft's New Review and Compensation System - Now With More Cash!

2011-04-21T07:58:00.000-07:00

"I am not a number, I am a free man!"

Well, at least we don't have a Six to give out.

Goodbye E/A/U + 20/70/10[I/II] and hello 1 to 5.

Kim, we just don't have a Limited to give to you anymore.

So we have a new review model. And a rework of our compensation. With cash, cash, cash. Forget that Microsoft stock because it's dead in the water and today's Microsoft employee is all about the paycheck. And if you actually work on creating products at Microsoft, you're getting an extra R&D bump.

And with the new 1 to 5 review score we have a new curve, too. 20% of you get a 1 (whoo-hoo!), 20% of you get a 2, 40% of you get a 3, 13% get a 4, and 7% get a 5. And probably fired.

Your review score is now a composite of: your results (where results, not effort, matters), what you did to get your results, and what your proven capability is. With an ideal that teamwork and feedback is now part of the review system, though it's not clear if feedback is mandatory via peer based reviews.

It's too bad that the internal InsideMS blog has been eradicated and wiped out of existence. It could have lived on a little bit longer so that the review system could be discussed there.

So what are your reactions?

Is the InfoPath-based review form dead? Please? Can we go back to a simple little Word form out of respect to our new simplified review score?

The next thing I think of, as a manager, is how is calibration now run. We used to do two stack ranks for the two review scores. Now we either do one or we do three (results, what was done for the results, and proven capability). Three seems crazy.

Next is whether this will indeed help retain employees. We've been losing a lot of good people and the Puget Sound area is ramping up in hiring. Google has always been draining people away. Facebook is now grabbing some great developers and Amazon is hiring like crazy.

So now you have some mystery amount of cash in your future to look forward to. And a simpler review score. But is that what you really want? Is that what you told LisaB during her Listening Tour? Given that Microsoft stock is in the toilet, does the future influx of cash coming in September make you feel better about working at Microsoft and will this make up for having reduced benefits (e.g., a new medical plan with more of that new cash out of your pocket)?

Will you be honestly told during the whole year how well you're doing so that you have frank feedback that helps you be fulfilled with your job? A problem with Stack Ranking is that leadership (once burnt by the review model) holds back praise due to the peer relative Stack Rank pushing a person down and then creating a "surprise" gap between the past praise feedback given and the review result earned. That's not fixed.

Anyway: let's celebrate saying goodbye to the 10% / Limited rating. Since the 10%-ers were not actually fired you ended up keeping people on staff who were designated as now plateaued and limited in there career at Microsoft. They had reached the end of of the ladder. These now demoralized individuals with no hope for future rewards or promotions should have at least been given a Peter Principle plaque or something.

Old school: with respect to the new Scarlet A, I assume that a 4 is the old 3.0 and that a 5 is a 2.5 and that having either a 4 or a 5 now limits other group's interest in your career, which kind of means that we've gone from making 10% of the employees unattractive to making 20% of the employees unattractive. We'll see if that's the case as this plays out of over time.

So, chair-rearranging or just what you were looking for?

Microsoft FY11Q2 Results

2011-01-27T21:39:00.000-08:00

A quick check from the last Quarterly Results leading up to today's Microsoft Quarterly Results:

What's great: Kinect. We sold millions of Kinects and it's full of cool! And we have a 93% customer satisfaction rate with Windows Phone 7. Looking around, I think that's also assuming that 93% of Windows Phone 7 handsets sold are the Samsung Focus.
What's good: our reputation is working through the bothersome-hated-defeated-spurned-ignored-renewed-respected cycle compared to Google.
What's okay: Windows Phone 7: we sold some to non-employees and two-million licenses are in the channel. I have no idea what that means with-respect-to actually sold hardware. But it's no KIN, so... success! Yeah.
What's really, really bad: the iPad is gnawing away our laptop market. And a new version is coming out soon.

Hungry Hungry Cannibals: reading Ms. Friar's last beat-the-hell out of Microsoft Goldman-Sachs report just about made me permanently hungry for human flesh given the repeated fixation on cannibalization. I swear, I'd look up from my print-out occasionally and longingly eye my more fit co-workers.

It's the iPad baby, and - booga booga - it's going to destroy Microsoft. Well, at least destroy Windows.

First all: sure, Microsoft leadership deserves all the head-bashing it gets for both mobile and small form-factor markets. We had the jump on these markets with inelegant, uninspired devices that never had a chance of taking off with consumers and no one was bold enough to reboot the product line without successful leadership from Apple showing us the way.

Next: our iPad-compete strategy is unspoken. For good reason. Just about any application developer at Microsoft can tell you that it's a secret wrapped in red. Most Microsoft-observers have put the pieces together and figured out our strategy could be and realize who could be on point to deliver something exceptionally cool to compete with Apple. This will certainly could be our bet-the-company chance to validate the tortoise-vs-the-hare fable.

How have our past tortoises fared? I can think of three recent late to market responses: Zune HD (iPod - remember those?), Kinect (Wii), and Windows Phone 7 (iPhone / Android). All great devices. In order for our possible iPad compete story to be a success, it has to pull a Kinect and be beyond the competition vs. a me-too or, well, me-kinda-sorta.

CEO Changes: Mr. Ballmer's respect meter in the ephemeral tech-business... news (?) world is still low. Kinect has helped, but questions linger regarding what he's doing with his leadership team given Muglia's upcoming departure. I had always remarked to folks that Bob's a survivor. His time just finally ran out. It will be intriguing to see what leadership steps in or up and what happens to Bob's current team. And who might be next. Bets? Unless HR is about to unleash something huge that's been in the making my first bet is on LisaB. Also, Craig, I'd love to know what successes you've brought to the company as of late.

In the midst of Google and Apple going through leadership changes, you've got to ask: who is on the bench to replace Mr. Ballmer? What is the Board's plan? I have to reject Ms. Foley's point of view that there is no-one that can replace Ballmer. That's a too big to fail leadership jail sentence. Perhaps the decision is that his departure immediately results in a broken up Microsoft and the presidents he is putting in place now would be quite capable of running those sister corporations. Given the convergence and consolidation that is happening internally on a number of fronts for future development, such sister corporations would be much more dependent on each other, so it's not as whacky - or dog-eat-dog cannibalistic - as it might have seemed in the past. Given that the consent decree is considered over, Microsoft self-breaking itself up will certainly help prevent penalties when the inevitable violation occurs.

From another angle: if the Sinofskyfication of the company continues (IEB now with its massive re-org complete, post-Muglia Server & Tools next?) then Mr. Sinofsky ascending over a whole Microsoft will be a moot decision.

Interesting coverage after the results:

Amazon adds thousands more workers; Microsoft still cautious - Mr. Todd Bishop looks at the hiring trend of Microsoft, Amazon, and Google. Want to find a new job? Knock on Amazon or Google's door. Microsoft is pretty much a flat-line.
Microsoft tops estimates; Kinect fuels Xbox; Windows 7 hits 300M - Mr. Todd Bishop again.
Microsoft Sees Business Tech Spending Continuing to Rebound, Benefiting Office and Windows Ina Fried Mobilized AllThingsD - Ms. Ina Fried
Microsoft’s Results Easily Beat Expectations paidContent - Mr. Joseph Tartakoff
Microsoft Q2 2011 by the numbers Record $19.95B revenue, 77 cents EPS Betanews - Mr. Joe Wilcox.
Microsoft Beats The Street, But Not By Enough To Send Stock Soaring - Mr. Matt Rosoff
Why Microsoft Desperately Needs To Become More Acquisitive - Mr. Robin Wauters. Dude. More acquisitions? Really. aQuantive still blows my six billion dollar mind. Can someone help me remember some of the recent good acquisitions that Microsoft has made. Is it better to make none or risk some of these money vaporization deals we've done (stupid billion dollar bat).

In general, no surprise to people that Windows/Live was down and that Entertainment was up on the Kinect. Online (aka Bing aka Partner-Level-Palooza) lost over half-a-billion dollars. And gained a bit of market share.

Pulling out my crystal ball that's covered with dust along with all the other Mini implements used to write this blog (oooo, an unopened bottle of Col Solare! Score!): Microsoft product groups should feel good about WP7 and the influence Metro is having around the company. Like I said, there's a big convergence ahead of us, and it will be good to start aligning a simpler development story, both for Microsoft and its partners. The biggest obvious concern is the development path for the mobile platform compared to the development path for Windows, but even there you can squint and see on the horizon the possibility for that to be successful, too.

IE9 is great technology that yes, has a way to go to score some high compliance number across a bunch of random folk's assessment sites. Still: wow. WP7 is a modern joy to use and is slowly building an app catalog. Kinect. And a whole bunch of developers hunched over and hammering bits to create the next big "Wow." Yeah, "Wow" might be inscribed on the back of a tortoise, but sometimes... the tortoise wins in the end.

The only thing that concerns me right now is (and you're going to love this): hiring. We've got great successes that excite people about working at Microsoft, but really, how many more people are we hiring to work on Kinect? My friends and I have never been so courted by other companies. Not since 2000. And I've got to say, the culture that Ballmer and LisaB have created is really weary. It's enlightened for the mid-1980s. But if crazy stock price jumps are no longer enthusing your employees, you've got to reboot the culture.

Microsoft FY11Q1 Results

2010-10-28T07:41:00.000-07:00

How about some FY11Q1 Microsoft earnings!

My usual suspects for earnings discussion:

Mr. Joe Wilcox over at Beta News
Mr. Todd Bishop over at TechFlash's Microsoft Blog
Mr. Joseph Tartakoff somewhere within paidContent.org.

Once more, with feeling.

I expect that we'll have yet another break-out quarter, a better idea that Kinect is poised to be a great seller for the holidays (sell-out pre-orders and screaming Oprah audiences can't be too wrong), and some glow from reasonable WP7 reviews (oh, and yes, we all realize that it doesn't have copy and paste - and yet the apocalypse will not arrive).

So this seems like a do-over with more good news from the last quarter. Will Wall Street react with the same "Meh?"

An interesting pre-earnings release article: Sleepy in Seattle - Microsoft learns to mature.

Again, not much love for Mr. Ballmer. So, since the last quarterly earnings, Ms. Friar at Goldman Sachs dropped a bomb on Microsoft and there's been serious concern that Mr. Ballmer is clearing the executive bench at Microsoft. Or is it cleaning house? Since we're unable to criticize any mistakes our departed leaders have made, it remains a big unknown.

iPad, iPad, iPad!

Once it was "Google, Google, Google." Now it's Apple's iPad meant to be Microsoft's undoing. First of all, major props to Apple's continued success. It's been a long journey for Steve Jobs and Apple - especially for those of us who read The Journey is the Reward back when it was new. I like my iPad. It's fun. It's also no notebook replacement. I'm not even going to use it for writing tweets on Twitter, let alone writing emails. It's for screwing around, and I like screwing around... so I like my iPad. I'm blessed that I've got the spare cash for such a luxury device and the spare time to play with it.

It's a new, quick consume experience that our Tablet vision failed to realize because our Tablet vision (like all visions of that time) was so firmly shoved up the Enterprise's butt we didn't care for consumers who'd pay good money to have a fun device to facilitate their screwing around.

We continue an expensive lesson in enlightenment. And spanking: Microsoft's consumer brand is dying.

And goodness help us if Apple TV takes off. Our inability to string together a coherent TV strategy (despite having been in the TV realm for over a decade) is yet another dropped pants embarrassment waiting to happen and represents the anxiety that Wall Street has about our future despite having successes in the present.

Bloodletting

Cost cutting's slippery slope continues. I'm sure if we don't talk about continued overhead management (people, benefits, etc) that it will be an analyst question. I still believe we need to chuck about 15,000 positions (and half of our super-ballooned contingent staff) rather than continue the slow squeeze around the company that's making this an ordinary job with some extraordinary wonderful people who just haven't given up on the company. Yet. I hope that the analysts realize that continued, consistent bloodletting because a negative for hiring, and (allow me to be pro-hiring for a moment) if we can't bring in deep-talented new blood to replace the departed dead wood, our future is doomed to mediocrity.

And that doesn't get you a good dividend.

New Talent

And we're losing the battle for hiring new talent. If you review who we're losing to, it's a big surprise. You look at who is ahead of us in preference and you say, "Really? Graduating students think they are a better place to work than us?" It's a cold splash of reality that makes me - they guy who said we've turned things around and things are going great for our major initiatives - wonder if things are worse outside of the Microsoft bubble than I thought.

Frank, you're fighting an epic battle.

Mr. Ray Ozzie and Microsoft's Chief Software Architect - So long, farewell, auf wiedersehen, adieu, adieu, adieu

2010-10-19T07:18:00.000-07:00

A Microsoft position got retired this week: Chief Software Architect.

That used to be - quite unofficially - Mr. Bill Gates by the sheer nature of his intellect. And it led to many entertaining and terrifying BillG Reviews. A good friend of mine at the time, an architect for his team before we got all hung up about titles like that, bragged: "I've never been to a BillG review and I intend to retire without going through one." He did.

But I think he missed out. As have, unfortunately, many intellectually shallow PowerPoint B.S artists who rose up the ranks in the meantime.

When I was a teenager, one book I loved to contemplate over was a series of quotes by Robert Heinlein's character Lazarus Long. One goes like (courtesy the internet vs. hard-copy because the book is lost behind a stack of neglected Col Solare): "[...] Roman matrons used to say to their sons: 'Come back with your shield, or on it.' Later on, this custom declined. So did Rome."

The rigor of a focused, intellectually deep and sturdy software development declined with BillG's departure. No more technical assistants. No gauntlet of the BillG review. On his way out of the company, Bill anointed Ray to serve as Chief Software Architect. I don't think that was Ray's idea. In fact, I can only imagine him tilting his head and saying, "Wha-?" He didn't take a broad view of Microsoft at all, but rather focused on growing the Groove momentum into other areas for the future.

As part of any enduring legacy, it will be interesting to see what happens to Mr. Ozzie's groups over time, Windows Azure especially. And I can only hope to the Good Lord above that the "I'm all in" cloud claptrap takes a retirement, too. We get it. We have The Cloud as a platform. In my mind, it makes as much sense as saying "Compilers! We're all in!" or "Layered Windows! We're all in!"

I feel with Ray Ozzie's departure that Steve Ballmer has finally asserted his complete control over the company. We've had some house cleaning this year, ranging from Mr. Ozzie to Mr. Bach & Mr. Allard to Technical Fellows to continued targeted layoffs. Perhaps this is due to the big, contemplative review Mr. Ballmer had with the Microsoft Board this year. Mr. Ballmer has hit the reset button. Do we have a Hail Mary pass, or is this Ballmer 2.0?

We'll see how that goes. In the meantime, here's hoping that the technical Presidents reporting to Mr. Ballmer can take up the custom of intellectual rigor. Because that is one custom we can't let decline anymore.

Microsoft Health Care Pops a Cap in One Big Week

2010-10-10T09:02:00.000-07:00

Wow, what got in the corporate water for this week? Coming off the glow of last week's Company Meeting Koolaid we first got hit by the Goldman Sachs downgrade hang-over, then, to channel Mr. Ballmer, "Boom-Boom-Boom!"

Health care changes on the way.
Live Labs gets shut down.
Technical Fellow Gary Flake, one of Microsoft few-TED stars, resigns.
Technical Fellow Brad Lovering leaves.
A glassdor.com survey that shows a lowly 50% approval rating for Mr. Ballmer.
IEB gets re-orged.
Massive gets shuttered (like we were all looking forward to billboard ads while blowing crap up in Xbox).
Adobe acquisition rumors.
Matt Rosoff leaves Directions on Microsoft.

All this right on the eve of Windows Phone 7 being launched. Feels like one big... purge.

As for the Microsoft health plan changes: I haven't personally taken a bunch of time to figure it out yet. I had a fully scheduled Friday and I half listened to the Town Hall while working. My attention lapsed and the next thing I know they are talking about a Health Visa card against our Health Savings Plan we can use for paying our share of a visit to the doctor and roll-overs and portability. I realized I just missed some detailed stuff. Microsoft has set-up internal forums to help the employees figure this all out, so I encourage everyone to utilize that. But in the meantime, a commenter on the previous post added this:

OK, I just watched the Health Care Town Hall replay. Hard thing to do early on a Saturday morning.
Let's see if I have this straight. If I go with the Health Savings Plan:
All my preventive care is still free (to me). Annual physicals, dental checkups, immunizations, etc. - no charge. Wellness programs are actually beefed up even more.
For a family of 3+, the most we would have to pay out of pocket annually is $2500.00.
At the beginning of each year, MS will themselves add $3725 or thereabouts to my Health Savings Account...so MS is more than covering my $2500 obligation anyway.
Even if I have a catastrophic illness or injury, I'm still ahead $1225.
I hope more insightful minds will follow up to correct any misunderstandings I have about this, but my takeaways from LisaB's deck are:
Switch to HSP.
Lose both legs in a snowboarding accident.
Profit!

A follow-up to that:

Not quite right on the healthcare costs. Worse case scenario for family of 3 is:
All your preventive care costs are covered 100% by MSFT
You pay 100% of the first $3,750 in non-preventive costs. This is your deductible.
After your deductible is paid, you pay 10% of non-preventive costs. This is your co-pay. You pay a max of $2,500 in co-pays per year.
So your max annual costs are $3,750 + $2,500 = $6,250
MSFT will pay $2,500 into your Health Savings Account each year, so your net out of pocket cost is $3,750. If you sign up for the HSP account in 2011-2013, then MSFT will contribute an additional "early adopter incentive" of $1,250. But after 2013, your max out-of-pocket costs are presumably back to $3,750
You could pay that $3,750 out of tax-free contributions you make to your own HSA account, but then that money is locked away and can only be used for health expenses. If you don't want your money locked away then you have to pay with after-tax dollars.
In order to come up with $3,750 in after-tax dollars, you'll need to earn about $5,000 in pre-tax dollars.
So, in the worse-case scenario this is equivalent to a pay cut of $5,000 per year. Maybe not too bad for someone making $200k, but that would be a 10% pay cut for someone making $50k.

Will increasing health care costs follow Ms. Brummel's charted path? It's interesting that the excise portion of the future ended up being a small little bump. Next: wellness - excellent idea. I love ensuring that we're all well and stay healthy upfront. But that includes affecting the ecosystem in which we live and ensuring people actually put time towards preventative health and making a place like Redmond a healthy place to live.

Sidebar: Just to whine a bit: for self-proclaimed bicycle capital, this is one hell of a scary place to ride a bike. Actually ensuring there's an infrastructure from the suburbs-to-work to safely ride a bike to encourage healthy living is some local influence Microsoft should have.
Sidebar two: Via DareO: The exciting nature of being ordinary - Sorting it all Out - one snippet: "Microsoft now looks ordinary to me."

I'm very supportive of whatever they can do about wellness (though the paranoid side of me hasn't liked the 'Know Your Numbers' campaign - who gets access to my numbers? Curiously, this extra overhead might prevent me from getting my flu shot this year).

Do I think the health changes will affect recruiting? Probably not. Do I think it will affect retention? Yes. See the above "ordinary" link. If other tech companies hold steady on their coverage then they close a big gap to hiring experienced people at Microsoft. Look, once you have a family and one or two big boo-boos (medical term) you realize: "holy crap, we are so fortunate... I love this company for caring for me and my family so well!" It's no golden handcuff, but it still anchors you.

Anchors away.

Given cut-backs like this, whether out of cost-saving necessity or not, the Senior Leadership Team has to realize there's zero tolerance now for major money screw-ups like KIN and Massive. The bumbling flushing away of millions or billions of dollars is going to be compared directly to the reduction in benefits: if this company was actually run by people who knew how to consistently achieve profits, we wouldn't be looking at these losses and saying, "Yep, that could have paid for US health-care for a while..."

All-in-all, though, I think (not having immersed myself in the details) our coverage remains a better-than-average benefit. And as long as we don't have to revert back to the Pacific Care Primary Care / Referrals model (talk about a time-waster during work-hours) I'm personally satisfied.

Regarding Live Labs being shutdown: so what's left that Ray Ozzie is running? FUSE labs? You know, the people who blew their internal reputation by hijacking and hacking the Office Web Apps for http://docs.com/ ? I would not be surprised to see Ray finding a new endeavor sooner than later. First Mesh, now Live Labs.

As for Live Labs going into Bing... what the? I've watched a lot of curious hiring and initiatives at Bing. All the best wishes to you Bingsters, but you're beginning to resemble an organization that has way too many people and now you're just creating work to keep them busy. We've seen this before, and curiously, with some of the same leadership that's in Bing now. Better to put them on a productive profit making endeavor or risk having them cut loose.

From the comments:

Let's see if the latest round of "This will bolster the stock price works." IEB re-org and benefit changes. Doubt it.

Checked with some friends in the Interactive Entertainment Business and they glumly report "We're getting Sinofskied." (Not reporting to Sinofsky, but picking up the same kind of management structure.) Ah. I've always been curious if the Sinofsky model holds up in a creative group. Now we have one big example in the making.

Looping back to Mr. Kaplan's ordinary comment: Mr. Matt Rosoff's parting post on leaving Directions on Microsoft expresses it in a different way:

In Seattle, Microsoft was where the all the best and brightest worked, had worked, or wanted to work. People even pronounced it with a particular tone of voice, hushed but awful, like people back East say "Harvard." All-caps. "Yeah, he owns a coffee shop now. But he used to work at MICROSOFT." [...] it's not MICROSOFT anymore. It's just Microsoft. Even in Seattle.

How do you feel about that? You're not ordinary and you don't live an ordinary life. You don't expect to do ordinary work for an ordinary company, do you? What needs to change?

A Case of the Microsoft Downgrade Blues

2010-10-06T12:48:00.000-07:00

Oh, great, we've hit a case of the downgrades as a sequel to the quarterly results that no-one bought.

Specifically, Ms. Friar at Goldman Sachs downgraded us with a variety of reasons and expectations. From Mr. Todd Bishop: Goldman downgrades Microsoft, makes case for major overhaul. Snippet of some gold Goldman Sachs from there:

They call for three steps to "unlock value" in Microsoft's shares.
(1) A materially increased dividend beyond the recent 23% increase, moving Microsoft into the top 20 dividend-paying companies in the S&P 500 in terms of dividend yield. We believe this would open the door to a larger investor base and keep the company more diligent from a spending perspective. (2) A coherent consumer strategy that could involve paring back investments and/or divesting more peripheral assets such as gaming. (3) Market leadership in Cloud. Microsoft has a strong portfolio of enterprise data center assets and could become a leader in Cloud deployments, but the competitive environment remains highly in flux, with Microsoft still not a clear "winner," in our view.

Flashbacks to MSFTExtremeMakeover's last blog entry: Eight Years of Wrongness. Upgrade the "Eight" to a "Ten".

The more interesting follow-up by Mr. Bishop is adding up the numbers in Goldman Sachs' assessment comes up with a $30 share price vs. Goldman Sachs' downgrade to $28: Numbers How Goldman Sachs values each Microsoft division.

Now then, if this report was dated, say, 2006 I would be remarking at the exceptional smarts and bravery of Goldman Sachs to step forward from the meek institutional investor crowd that have been giving Microsoft a free ride. Instead, now that the farm's barn doors have been wide opened for a while, Ms. Friar is walking around saying "Without preventative re-enforcement and diligence of door utilization, it's possible for the horses to escape from here."

The timing is just peculiar, and is resulting in the resumption of resignation requests for Mr. Ballmer: CNBC's Fast Money Microsoft's Steve Ballmer Needs to Go Analyst. Also, Ms. Victoria Barret follows-up with Goldman to Microsoft Do Something - and reflects on her summer story Time to Break Up Microsoft.

Sorry Mr. Institutional Investor, your voice was needed years ago. You have been complicit and ineffective during the worst of it. What's the agenda here? It would have been better for a coalition of institutional investors to speak with one voice, vs. Goldman Sachs. Because... given how Goldman Sachs has proven itself untrustworthy in attempting to destroy the American economy for its own fortune (cue their extended pinky touching edge of mouth), you have to wonder if they have their own greedy agenda - are they betting against the Microsoft stock and expect to benefit from its near-term decline? Or hope to force in a Neutron-Jack CEO to wipe out half the employees and all non-profitable groups?

Or do they expect within a year for Microsoft to have had a very successful consumer cycle and then reward that with an upgrade, in the meantime having had bought up a good bit of cheap stock? Are they looking for quick short-term gains vs. a thoughtful consideration of long-term growth? I feel a baleful gaze cast on us.

And mainly: it's a very poor matter of timing for a break-up. We're about to have a mobile phone come out that actually binds the companies divisions far closer than ever before: Office, Windows Live, Xbox Live, Bing, and Dev Div: this damn thing is the antidote for break-up talk. WP7 wouldn't be impossible to create with a break-up, but it'd be exceptionally difficult. WP7 is pulling together huge resources that none of our direct competitors have.

Now then: stepping back to Classic-Mini mode. Would I like to spin off parts of Microsoft. Oh yes. Less money wasted and less people? It's a Win-Win two-fer. How about our health solutions group to start with? Other Fools: Online Services Division: Microsoft Time for a Break-Up?

I think it would be healthy to actually encourage spin offs. Give new groups funding for two years and then assess whether this will continue to be a Microsoft endeavor or not. If not, the group can spin off as their own new company, with Microsoft as a stake-holder, and go their own way. So if Midori is not in our future then tip the hat to them and let them take off on their own.

Back to Mr. Ballmer. If you want to end on a high-note, now's the time. Mr. Ballmer can declare victory in the continued success of Windows 7, the innovation of Bing that's rattled Google, the alignment of products around the cloud, Kinect, and Windows Phone 7. It's going to be a while until the stars set themselves up like this again. Better to go out with victory than be chased out of Salmonberg by a bunch of fed-up institutional investors wanting real dividends and stock performance. You know: shareholder value.

Microsoft Company Meeting 2010

2010-09-28T21:33:00.000-07:00

Best. Company Meeting. Ever.*

(*excluding the classic Company Meetings, especially the one where Cheap Trick played afterward.)

Here Comes Microsoft Company Meeting 2010!

2010-09-27T08:10:00.000-07:00

Hello, SafeCo Field! Another year, another Microsoft Company Meeting!

Anyone who has read this blog for a while knows that I'm a big fan of the Company Meeting, though I have to admit this is the first year I've thought of skipping and just go out for some beers instead. Well, instead I'll peruse the past and conjure up some enthusiasm:

2009: Mini-Microsoft Six Hopes for This Year's Microsoft Company Meeting + Mini-Microsoft Quick Thoughts on the Microsoft 2009 Company Meeting
2008: Mini-Microsoft Microsoft Company Meeting 2008
2007: Mini-Microsoft Microsoft Company Meeting Ahoy! + Mini-Microsoft Microsoft Company Meeting 2007
2006: Mini-Microsoft Microsoft Company Meeting 2006
2005: Mini-Microsoft Microsoft Company Meeting... I'm looking for some dates! + Mini-Microsoft Microsoft Company Meeting 2005
2004: Mini-Microsoft Microsoft Company Meeting 2004 (the non-meeting Company Meeting)

Alright, I'm in. So what is there to talk about going into the Company Meeting?

No Elop: yeah! So no repeat of last year's late-night telemarketing demo unintentional-skit. In fact, we might have one big demo cut altogether...

Unique Demos: anyone who repackages a demo from earlier in the year should just get boo'd off-stage. Any demos should be new and quick quick quick.

Dreading Mundie: please spare us. If the Company Meeting had a chatter meter for when the audience stopped paying attention and started talking with their seatmates, this would be the peak.

WP7 Microsoftie Demos: I think it would be sweet and smart to have some of the top-notch Windows Phone 7 apps created by Microsofties - under the application developer program to support employee apps - get up on stage and do 1 minute demos of their apps. Microsoft exists only due to the great work of the geeks who work there - celebrate it.

Financials: a nice review of *profits* from the various groups.

Stealth Layoffs: are we done yet? I'm all for making Microsoft a smaller company, but not at the morale busting cost of layoffs lurking around campus like the Spanish Inquisition. It will eventually take a toll on people considering moving to groups that are in a start-up mode with unclear Senior Leadership Team support.

LisaB: she tried something big, Ballmer didn't go for it, and then she faded and became busy with layoffs. And her basketball team. Ms. Brummel kicked off another Listening Tour this year. Now would be a good tie to roll-up any insights and results. What is my dream result? Team based awards. And it's pretty simple.

Every VP-level person has to stack rank their organizational teams, top to bottom. For Sinofsky-fied product teams, this would be at the Dev Manager / Test Manager / General Program Manager triad level, typically defining a product team such that every product team get a rating. Every team gets ranked just like individuals and the team gets a rating just like you and me: Exceeded / Achieved / Underperformed and 20% / 70% / 10%. This - along with the concise VP-level written evaluations - gets pasted into every team member's annual review and part of the overall bonus / stock compensation now comes out of this result.

The reasoning: strong, well-run and results-producing organizations should be rewarded. And poorly run, low WHI organizations should be disinfected with some mighty strong corporate sunlight. When it comes to informationals with new teams, you can ask: "What was the team's rating last year?" in addition to MSPoll results.

Reviews: as long as we're on LisaB and HR: how about them reviews this year? At least we had merit increases back. If you're feeling a sharp-blow about your results and you're up for an interesting point of view (along with a bunch of other good things), I suggest reading Philip Su's goodbye note for leaving Microsoft and joining Facebook: Goodbye Microsoft, Hello Facebook! « The World As Best As I Remember It. (you might remember Mr. Su from the high-profile post-Vista blog-post Broken Windows Theory). That whole post is worth discussing soon. As is the always popular observation: if you're not happy with Microsoft, there's abundant opportunity around you. Try checking it out.

Ballmer vs. The League of Meh. Maybe because we have a lull with our major product groups either coming in for a landing (WP7, Natal) or just taking off (Office 15, Windows 8) that my circle of friends have hit a patch of corporate ennui like never before. True, some of them work on products way on the fringe but others work on some pretty core products and they are feeling... full of meh.

I still believe that Microsoft has turned the corner. Or, as someone else wrote this week, it has turned the tanker: The Microsoft Tanker Has Turned and You Ignore it at Your Own Peril. Why this meh? First of all, the stock: if you are investing in the success of Microsoft, you cannot underestimate the power of the stock to energize the employees to create break-through results. We had great quarterly earnings and what did the financial market say? "Meh." Maybe they started it. Part of it I'm sure is that even though we've turned the corner, sometimes we screw up and spill the Big Gulp in our lap and skip the curb and take out a mailbox (KIN). That startling inconsistency to deliver focused results I'm sure puts fear and doubt into Wall Street, and if there's one combination that Wall Street underperforms dealing with it's fear and doubt.

After the dismissive reaction to our last quarterly results, we had article after article written about Microsoft's Lost Decade, covering how poorly Mr. Ballmer and The Board have been doing running Microsoft and calls for their dismissal. That's not cool, and if anything, it's draining. Under that context, to see Mr. Ballmer screaming and running around high-fiving a bunch of MBAs riding our two cash cows until the milk's dried up is challenging to your self-motivation.

Going back to my friends: some are very loose in their seat, and others have already left to enjoy unfettered engineering (one in particular happy to realize how much unexpected joy results in the 'make Partner or take the 10%' cloud going away).

I expect a CEO like Mr. Ballmer to revisit his previous Company Meeting talks and discuss where those ideas are now. Some of those ideas were quite exciting, but went... where? Otherwise, without the follow-through I guess this is another throw-away show that's in-between me and my beer.

Microsoft Annual Review 2010

2010-09-17T07:40:00.000-07:00

Just a quick post: some of you enjoy posting information relevant to your review, both looking at numbers and a critical view of the message given to you. It has started to happen a bit in the last post (I'm going through the comments now) so I'm just going to capitulate (again) and put this small post up for the 2010 Annual Review share and compare. Yes, this is a bit late.

Oh, and obviously grab yourself a few grains of salt. Folks seem to like this format:

L# (promo'd?)
(Exceeded|Achieved|Underperformed) / (20|70|10)
Bonus $K
Stock $K
Merit % (/Promo %)
Optional comments about Division / Group, discipline, impression of review

Administrivia: yeah, that was another long pause moderating and posting and all that. I was on an extended vacation that continued as an extended vacation of the mind. My apologies. I've got at least one short post in mind before our Company Meeting 2010.

Microsoft FY10Q4 Results

2010-07-22T07:40:00.000-07:00

FY10Q4 Microsoft earnings are upon us. So, what's been going on since last we met over the quarterly results?

The KIN phone collapse put WP7's future in doubt. Would WP7 meet the same fate? Is it under the same level of mismanagement? Fortunately, some fairly positive takes on pre-release WP7 have been coming out ahead of earnings to shore up confidence and excitement.
Market Cap - yes, Apple passed us by and there was an abundance of articles and postings questioning just how much longer Microsoft would have to endure Mr. Ballmer as CEO (hint: a long loooooong time).
Itsy-bitsy-layoff-committees: targeted small layoffs to kick of FY11 team budgets. If they are that low key and only disclosed on some random bit of the blogosphere, do they really amount to much accountability on Microsoft's sake? Again, our contingency hiring is out of this world so it's not like we're saving a bunch of money - we just have folks on the payroll we can easily cut loose as needed.

What kind of questions might be / should be posed during the earnings call?

Dates: firm dates for WP7 devices and Kinect and associated Kinect titles beyond the kind-of-interesting launch titles.
Win7 + Office 2010: are the cash cows still, err, bringing home the bacon?
Bing / Ad-center: is Bing on the upswing? Is Bing / Ad-Center doing anything more than eating the bacon that our cash cows bring home?
Legal: it's been very quiet on the European Union front. Office 2010 was released without a single investigatory squeak, as far as I know. Is this all behind us for now? That would be great.
WP7: application developers in the queue? We need to re-enforce the cool apps that we'll have ready when WP7 is launched. In a move that has totally delighted me, Microsoft is giving every employee the ability to write and deploy WP7 applications (and, what, ability to get a device at launch, too?) - wow! Now's the time to truly show off your stuff and write for WP7 and get your app out the door.

The glow of Windows 7 has dimmed and Office 2010 and the VS2010 eco-system need to pick up the steam as we head to WP7 and Kinect launch. Apple is rolling in the moolah being a content delivery channel and our story, other than some Xbox features, is still pretty fuzzy. For instance: Windows Media Center is one of those crown jewels we've let plop out of the crown and get kicked around the court. I love WMC but it seems to be a neglected feature, caught in the chop between E&D / Zune and Windows. After a phone, it's the next experience we should bring out some reference hardware for to easily DVR HD channels off the air and plug right into your HDMI system and watch it go.

My usual suspects for earnings discussion:

Mr. Joe Wilcox over at Beta News
Mr. Todd Bishop over at TechFlash's Microsoft Blog
Mr. Joseph Tartakoff somewhere within paidContent.org.

(I'll update the post later if there are interesting developments from the earnings release.)

The KIN-fusing KIN-clusion to KIN, and FY11 Microsoft Layoff Rumors

2010-07-06T20:07:00.000-07:00

Get out of the way Microsoft Bob, you have a replacement that Microsoft's Gen-Y employees can claim for their own! It's spelled K-I-N.

KIN's demise can't surprise anyone. When I looked at the phone's features, I thought: alright, an incomplete Facebook experience that I cannot improve by installing new applications... and I pay $$$ through the nose for a plan. But I've got a green dot and KIN Studio... maybe that will be enough to sell enough units to justify the Danger acquisition and the person-years of work behind getting KIN out. What the hell where all those people doing? I couldn't imagine anyone wanting the resulting iffy feature-phone at a smartphone cost, but KIN wasn't made for me. I was willing to let the market be the judge of KIN.

Verdict? Guilty, guilty, guilty.

The original Zune/Pink phone had interesting momentum but it all got squandered. What's the one ThinkWeek paper I want to read this year? Lessons Learned from Microsoft KIN and How Microsoft Must Change Product Development. You can't have a failure like this without examining it and then sharing what went wrong, all with respect to vision, execution, and leadership. How big was the original iPhone team? How big was the KIN team? Why did one result in a lineage of amazingly successful devices in the marketplace, and the other become a textbook extended definition for "dud" ?

Interesting comments:

All I can say as a former Windows Mobile employee who is now working for a competitor in the phone space is that this is good news for the rest of us. [...] Personally I quit because of the frustrating management and autocratic decision style of Terry Myerson and Andrew Lees. The only exec in the team myself and other folks respcted was Tom Gibbons who is now sidelined. Lees and Myerson don't know consumer products or phones. Gibbons at least knows consumer product development. We often talk about how Andrew Lees still has a job but Microsoft's loss is a gain for the rest of us.

And

And now Kin is killed *after* it has shipped in June 2010. You can bet Andy was involved in the development of Kin, the partnership agreements with the OEM, Verizon and most importantly the "ship it" approvals all along the way. And Microsoft discovers its a bad idea after it blows up in the broad market. Absolutely no thanks to any pro-active decision making on Andy's part.
Now there is spin that Andy killed kin to put all the wood behind Windows Phone 7. Er, the guy was in charge for two years of Kin development. He could have made this decision far earlier.
Similarly Windows Phone 7 has two years of development under his watch. Based on his past performance, 99% chance this is also going to be a total catastrophe. It further doesn't help that much of the Windows Phone 7 leadership team was kicked out of Windows when they screwed up Vista.

And finally, one Danger-employee's point of view of why they became demotivated:

To the person who talked about the unprofessional behavior of the Palo Alto Kin (former Danger team), I need to respond because I was one of them.
You are correct, the remaining Danger team was not professional nor did we show off the amazing stuff we had that made Danger such a great place. But the reason for that was our collective disbelief that we were working in such a screwed up place. Yes, we took long lunches and we sat in conference rooms and went on coffee breaks and the conversations always went something like this..."Can you believe that want us to do this?" Or "Did you hear that IM was cut, YouTube was cut? The App store was cut?" "Can you believe how mismanaged this place is?" "Why is this place to dysfunctional??"
Please understand that we went from being a high functioning, extremely passionate and driven organization to a dysfunctional organization where decisions were made by politics rather than logic.
Consider this, in less than 10 years with 1/10 of the budget Microsoft had for PMX, we created a fully multitasking operating system, a powerful service to support it, 12 different device models, and obsessed and supportive fans of our product. While I will grant that we did not shake up the entire wireless world (ala iPhone) we made a really good product and were rewarded by the incredible support of our userbase and our own feelings of accomplishment. If we had had more time and resources, we would of come out with newer versions, supporting touch screens and revamping our UI. But we ran out of time and were acquired and look at the results. A phone that was a complete and total failure. We all knew (Microsoft employees included) that is was a lackluster device, lacked the features the market wanted and was buggy with performance problems on top of it all.
When we were first acquired, we were not taking long lunches and coffee breaks. We were committed to help this Pink project out and show our stuff. But when our best ideas were knocked down over and over and it began to dawn on us that we were not going to have any real affect on the product, we gave up. We began counting down to the 2 year point so we could get our retention bonuses and get out.
I am sorry you had to witness that amazing group behave so poorly. Trust me, they were (and still are) the best group of people ever assembled to fight the cellular battle. But when the leaders are all incompetent, we just wanted out.

I guess we need another ThinkWeek paper on how to successfully acquire companies, too. Between this and aQuantive, we only excel at taking the financial boon of Windows and Office and giving it over to leadership that totally blows it down the drain like an odds-challenged drunk in Vegas. And the shareholders continue to suffer in silence. And the drunks are looking for their next cash infusion.

Dude, Where's Ray? You see more and more yearning for the days of BillG at the helm, perhaps because at least he was an uber geek that could drill your team's presentation like nobody's business and understand what your team was doing. And occasionally get enthralled by technology choices that would confound your average user (WinFS). Ray was supposed to serve as a replacement architect at Microsoft's technical helm, yet his impact seems to be superficial (and pretty disparaged if you chat with any leader in the company). Here's a snippet of a great comment about Ray and his impact at Microsoft:

The problem is, Ray doesn't see himself as the "Chief Software Architect" of the company. He sees himself as the "Chief Visionary Officer" (to borrow someone's phrase from early comments). He sees his job as being the person who regularly kicks "old" Microsoft in the butt to wake them up to whats going on in the world.
All of his behavior lines up with this: His correcting of Ballmer (in public!); His team's building Mesh, an expensive, buzz-generating, science-project app beloved by those who know about it, but irrelevant to those who don't (which is 99+% of the planet); More recently, his team's building of Docs.com -- another expensive, buzz-generating app that has no business model and no path to ever having one (if you need an indication of how pointless an exercise docs.com is, just look at the visitor trends for it since launch: http://trends.google.com/websites?q=docs.com).
Meanwhile, Ozzie has made enemies of most of the leaders of the actual products that pay for his "Labs". He's made no secret of the fact that he thinks that Windows is run terribly, or that Office is dead technology. Behind closed doors, he is openly dispariging of Microsoft development practices and Microsoft technology. His efforts to build product display a stunning lack of a caring about how much things cost to run, or whether they will ever make money. To my knowledge, he doesn't care in the slightest about the enterprise businesses at the company.

Dude, Where's My Job? Folks have been talking about ongoing stealth layoffs and the impending July FY11 layoffs reacting to teams with reduced budgets. I've scanned some various HR calendars and found some interesting appointments more around next week vs. this week, but the layoff rumors have spilled over beyond here and into TechFlash: Microsoft pruning more jobs. A follow-up by Ms. Mary-Jo Foley: More Microsoft job cuts coming ZDNet. So I'd expect more news next week than this week, but one commenter has noted:

Layoffs confirmed for tomorrow. I see long meetings booked by HR-types in Lincoln Square and RedWest-C. Didn't go through all the calendars for you main-campus types.

If Microsoft is doing this to appear fiscally responsible, they really can't tell just this half of the story. The other half of the story is the number of contingent staff positions, which if you open up Headtrax for yourself to investigate be prepared to tell Elizabeth you're coming to join her, because it about gave me a mild heart-attack.

If you learn anything, please comment regarding the group and the size of the hit and any impression about the folks impacted (e.g., 10%'ers, long-term employees, etc).

Thoughts on Wrapping Up Microsoft's FY10

2010-05-30T16:05:00.000-07:00

Well, here's to wrapping up FY10. The kick-off of the Annual Review Season is our long, long, sloppy kiss goodnight to the fiscal year that was.

How are various things wrapping up?

Entertainment and Devices: with Bach and Allard out of the picture the E&D snow globe got a shaking where it's not clear how things are going to change. I was surprised at the number of pro-Bach comments in the last post, and a number of commenters believed that Mr. Bach had what it took to be the next Microsoft CEO. I respect your opinion, but I have to admit I did my best "ba-roo?" reading that.

Regarding Mr. Bach's departure: you can't call it accountability. Accountability would have been right after the red-ring o' death $1,000,000,000USD write-off. Come on, when senior leaders get together to consider what kind of emergent opportunities to get into, it's all about the billion dollar market. Perhaps they wrongly assumed that it exclusively meant income. It's pleasant that we have an entertainment presence like the Xbox and that Sony took a hard one on the chin, but did it really need to take that much money away from the shareholders and tarnish our reputation so much? And leave so much more unfulfilled around TV media entertainment that is getting rapidly covered by competitors?

Given the swirling flakes in the E&D snow globe, does E&D need to be Sinofsky'd? Discipline can be a good thing. You don't want every project to be like Forza. Willy-nilly feature development without stringent peer reviews and pre-checkin testing: dumb. Agile? So is using two hands instead of one to smear poo all over a wall. You've got twice the mess to clean-up. Those days should be behind us. More than anything, E&D needs leadership that oozes passion for everyday joys and who show up late Friday afternoon to play with what's new this past week and give praise and feedback. It needs joy and delight and laughter. And while running the trains on time is good for everyone, it doesn't need the stoic, passionless, data-driven rectilinear styling of a Sinofsky org's Switzerland.

No, rather than Switzerland E&D needs Italy. It needs curves and "oooo's!" and non-linear surprises. Sinofsky, I'd say, is on a three-release effort with Windows so he's busy anyways. I can't imagine if he was brought in to help pull things around, though, that it would go very well... I imagine his lieutenants first job would be to put the ribbon into the Zune client app and Media Center and then try to figure how to wedge it into the Xbox dashboard. Nanites would start flowing through everyone's bloodstream, and their skin would turn sickly pale... the trains would run ontime, just to dull destinations.

Kin: we put a lot of time + effort around Danger and producing the Kin (well, maybe more effort could have been spent on keeping the services running). Kin is not made for me or my social circle, so I can't judge it as a device. Sales will be the deciding factor here. And I'm sure when the first quarter numbers are released, we'll just say, "Well, we have an update to the Kin feature phone that we are sure will increase uptake significantly." Like fully supporting Facebook and Twitter features. I love the green dot, though.

And I do like Kin Studio, which I think pushes Kin over the top for some Millennials. If Kin Studio could be adapted soon to be a feature available for every WP7 phone user then we'd really surprise and delight potential phone users.

WP7: As for the WP7 phone: goodness. I'm hoping it's great and I like what I see. I like that a number of 3rd parties are already in the tube to deliver apps. I have sore glutes, though, from all the WP7 demos I see: every time a WP7 PM says, "Let me try this" my buns seize up hoping that it goes smoothly this time vs. the PM mumbling something about regressions in the latest build. There's still plenty of runway to go and time to fix all the various bugs and oddities, but it makes me apprehensive regarding the overall quality bar and wondering, "How did this go in so busted to begin with?" Several someones being agile, no doubt.

While we've been chasing the iPhone hockey puck (of what, two releases ago?) we risk that the real puck of today is Android. Maybe. The Android ecosystem is still too chaotic, but its potential is showing (thank you, Vic). We have to not only have great 3rd party apps on release but also show commitment in having our own series of Microsoft applications constantly going out of the door. For important as the mobile platform is, it's surprising how little we're invested in developing our own series of applications for it, hoping that developers will meander over to our party.

And as the mobile application platform grows up into more interesting devices, the Windows hardware platform is growing downwards to meet it. There's a collision of development philosophy dead ahead and it needs to be solved this summer, not within years. Microsoft seriously needs to woo developers, and if you're giving them an ever-changing flowchart of constantly updated development platforms when the competitors have straight lines, you've lost a big campaign and potentially the war. Windows, E&D, and DevDiv must be forced to reconcile the future of application development and distribution from mobile to client to cloud by Microsoft's CEO, or start FY11 with leadership that can.

Natal: I'll get a Natal device when it comes out, though I don't know how much I'll use it in the cozy space I have our Xbox in. I'm not redecorating for Natal, which means every time I boot it up I will look around at all the various potential ankle and knee injuries. It might be worth it, though, if I can swing a light-saber, force-push, and even wave my hand for a Jedi mind-trick. But not for playing paint kick-ball.

A big Windows opportunity for Natal: some smarty plugs it into his desktop and a driver installs and Win7 magically lights up for Natal interaction. Word spreads. Win7 works with Natal and you can go all Minority Report now with your laptop and desktop! That's a Jobs-worthy show-off moment: "Oh, yes, an iPad. How nostalgically quaint to have a device you have to actually smear your fingers around the surface to do something with. Now, watch my Cheetos plastered fingers bring up Media Center to play some recorded World Cup! And after that, I'll navigate the universe with Worldwide Telescope!"

Pop a cap in your ass: which by cap, I mean Market Cap and the reflections and abundant free advice issued forth when Apple passed Microsoft with-respect-to Market Capitalization this past week. A lot of focus came down on Mr. Ballmer, who shrugged it off as much as he shrugs off the lost decade of MSFT stock price. A nice case study of attitude begets results. While Microsoft has its three-screened head in The Cloud (can't wait to see that marketing campaign [eye-roll]) Apple continues a consumer-love affair of joyous design and content delivery. One bit of free advice I naturally loved: What Will It Take to Save Microsoft (MSFT) - a snippet from the end:

And I see no end to the misery. Microsoft should learn from longtime brother-in-arms Intel (Nasdaq: INTC), whose CEO Paul Otellini has cut a complicated beast down to the operations that really matter. That's the kind of sugar-free medicine it would take to save Microsoft from itself, and of course, something that drastic will never happen.
What a shame.

Yes, we need our Neutron Jack at this point. We have our supposedly endangered cash cows and then a lot of products and operations clinging on. Many of which that would never exist in a sane company. Spin-off those groups to live or die on their own, with Microsoft owning appropriate stock such that if their survival instinct kicks in and they flourish, it will be a nice hefty return. You also have to realize that product groups are way overstaffed and just need engineers, in this day and age, that can do it all vs. being silo'd into their coding, testing, or spec'ing narrow band. Specialization is not sustainable. And the Partner system needs to be nuked away: more and more it's leading to bad short-term shiny decisions meant to make Partner. Well, this list goes on. I think our next CEO comes from the outside, because only an outsider at this point can scrub the company clean and ensure that the corporate DNA is rewritten.

Stealth Layoffs: comments here for a while have been saying don't expect anymore large layoffs but do expect ongoing stealth layoffs, the kind that don't trigger the WARN act, let alone publicity. If you see your leadership meeting with HR far more frequently than usual, should you be nervous? Well, first step, ask what's up. If the answer is unsatisfying and doesn't ring true: yep, be nervous, especially as FY10 wraps up and new FY11 reduced budgets kick in.

If you or your group has indeed been affected, please, if you will, share as much as you can.

Microsoft's Robbie Bach Retires... Whoo-Hoo! (And J is gone, too.)

2010-05-25T08:48:00.000-07:00

Just a quick celebration of this morning's news: Robbie Bach is retiring from Microsoft.

I'm so happy for him. And for Entertainment and Devices. And Microsoft.

This is a great opportunity for E&D to evolve and restructure. And, of course, a great opportunity to really screw up who to put in charge and such.

And yes, J Allard is out of here as well. Don Mattrick and Andy Lees step up. Also: David Treadwell side steps. And Office shuffles up a little bit.

What would you do with the various groups, products and who else would you put in charge?

Microsoft FY10Q3 Results

2010-04-22T07:58:00.000-07:00

Time for another quarterly update - all indicators point to a great quarter. With Win7's results and upcoming releases of Office 2010, Natal, and Windows Phone, things are on the upswing. Like I wrote back in July 2009, I believe that Microsoft has turned the corner and is headed in the right direction, though by no means is the corporation out of the scary neighborhood a lot of bad turns sent it into.

But we have hit the bottom with Vista and have emerged as the can-do underdog. If Microsoft knows anything, it knows how to do underdog. We really need to learn how to be the gracious competitive top-dog, too, but for now, underdog works.

Plus, given time, the context of the competitive marketplace has changed a lot. First: thank goodness for competition. Even pureblood Google and Apple fans should be thankful for competition from Microsoft, even if they deign its presence with faint of disdain and use air-quotes when saying the word competition (and for some reason, I can't get a vision of the Seattle Weekly's Uptight Seattlelite out my mind while writing that). Second: there's enough growing concern with Apple and Google's success that folks naturally want balance and by no means do they see Microsoft as dominating. Rather: underdog, fighting for balance.

Things have gotten interesting again. Let's check-in on some of the original reasons this random blog started up:

Improved:

Microsoft needs to reduce employee size. It’s too big. It doesn’t need a quicky Atkins-equivalent. No, it needs to get itself on a corporate exercise program that will shed itself of unwanted groups and employees. And stay on that.
- Wellll, we added a lot of jobs in the five years after that point, but when the cold harsh reality of over-hiring became obvious, it was handled (poorly) through layoffs.
Microsoft needs to stop hiring. It’s hard enough finding the scarcest of treasured corporate resources: the talented individual suitable for working at Microsoft. Stop hiring, trim down, and rebalance those precious scare employees inside to where they can be more productive and make products that delight our customers.
- There have been freezes and slow-downs so that's good. But some hiring continues. What we really need is an efficient defrag to allow load balancing in the company.
Unleash employee driven innovation with a Microsoft Labs community area.
- We have various labs now and other efforts that have come and gone.
Re-energize the home market. The home market is pretty tepid with-respect-to Microsoft-branded software. It can’t take that much effort to invigorate Microsoft for the home user and make it cool.
- Yes, we realize now that the consumer market is worth pursuing vs. making the IT department happy with limiting features. People find cool technology now outside of work and bring it into the workplace (e.g., the iPhone). This is much improved and has a long way to go before we're great at it. Actually leveraging the power of the individual PC is still barely tapped, and probably groups are confused given Azure and three-screens about pushing more onto the desktop than we are.
Start working vigorously on Internet Explorer again. Winning the browser wars, dusting off our hands, and running away screaming from IE to the Next Cool Thing represents the very worst in less-than-competitive behavior.
- Yep, we are working on IE with great passion. How we participate and influence HTML5 will be an interesting process to watch. I have no faith in the W3C (what was the last useful thing they helped create... XML namespaces?). HTML5 is the Next Big Thing if you listen to some folks who have large impact regarding Microsoft's future direction, so something is going to happen here. Have fun, IE-team!
Less research, more application.
- Goodness knows most of the researches I know or occasionally work with are motivated to find out what product teams need and get inline with producing interesting features that the product team just doesn't have the background to create, so kudos there.
Continue the community effort and make it so if you’re not leading cool innovation, your butt is dedicated to some time per week helping out in the community, sharing all that wonderful knowledge between your ears. Reward that!
- I did have this under the next section of "Not-addressed" until I realized that employee blogging covers this and has become so rampant that it has faded to a point that it's not acknowledged ("blogging is dead" and everyone now of course communicates in spurts of 140 characters. Uh-huh.). I'd like to see this turn into engineering employees writing more code that ships outside of our product line rhythm.

Not-improved:

Re-interviewing: all employees below a certain life-time review average need to re-interview. Those that don’t make the cut the second time around get to look for new opportunities elsewhere.
- Just an idea regarding what to do for people who do not have career momentum. Over the years, the question has been: "Will this person make Level 63?" - if not, they should find a new company.
Back to Basics. Win32 and C++. Bread and butter. Not everything can run in the freaking CLR.
- Our development story is a complete mess. And I don't see it getting any better. I'd say we're on a collision course of Bach vs. Sinofsky given development options for the Windows Phone vs. Windows. In the middle of this is a meandering DevDiv organization. If we have a gap in our underdog armor, it is our development story.

Back to quarterly results: the analysis I look forward to:

Mr. Joe Wilcox over at Beta News
Mr. Todd Bishop over at TechFlash's Microsoft Blog
Mr. Joseph Tartakoff somewhere within paidContent.org.

Friday we have a Town Hall. I'm sure there will be questions about going forward competing with the iPhone and iPad and Google. And maybe questions / comments like:

Are the layoffs over?
Wow, what a great quarter. I'm really looking forward to my raise this year...

Administrivia time...

This old blog: hey slacker blog-writer, what's going on here? Well, obviously not much. Mainly, unlike many of you talented people, I don't do multitasking well. Writing especially. Back, going on six years now, this was my spare time focus for writing and reading & responding to all the great comments. It was a unique place that arose organically as a lone voice to ask, "Aren't other people concerned about where Microsoft is going?"

Well, this lone voice has other writing passions right now (not involving Microsoft) and that's where I'm putting the occasional spare time I squeeze out of my life. I'm sure you can understand. It also happens at a time where things are fairly good with-respect-to Microsoft's future and direction. Yes, there are problems but there have been more successes than failures and the success of our competitors have provided clarity regarding direction and what success looks like.

If there are interesting constructive topics you'd like to discuss, please let me know.

Microsoft FY10Q2 Results

2010-01-28T07:35:00.000-08:00

Time for another Microsoft earning announcement. I'm going to be missing you, Mr. Liddell, and your New Zealand accent. With so many tech companies reporting good numbers and with Windows 7's success, I dare say that we're expecting a rosy quarterly earning report. And, if that's the case and knowing Mr. Ballmer's past record, he'll say something financially scary soon to rain on the parade.

Places I track for news on earnings include:

Mr. Joe Wilcox over at Beta News (Joe has been on fire lately with all of his postings - one reason I've been quiet here is that when I think of something to write about, Mr. Wilcox already has it written up and posted)
Mr. Todd Bishop over at TechFlash's Microsoft Blog
Mr. Joseph Tartakoff somewhere within paidContent.org.

What questions do you expect or would you like to come up during the call? And if they don't come up during the conversation with the analysts, what Q&A do you want to send Mr. Ballmer's way during our upcoming Town Hall meeting?

Windows 7 continued success: how does that turn into profits and what kind of projections are we looking at?
Entertainment and Devices re-org: how does that align for future success and avoidance of being one big huge money pit?
Windows Mobile 7: we so dropped the ball in our early phone OS presence that now it seems like it's a losing battle to have a dog in this fight. But WinMo7 is out there. To me, I can imagine this becoming like the Zune HD: well praised and all, but not making a dent in the market because everyone has already moved on to the iPhone platform.
Bing: % of market share on track?
Efficiency: are back to our "we always fire the bottom 10% every review cycle" line of B.S. or are RIFs and layoffs still in effect? Given that the tech market at least seems to be turning around with-respect-to hiring (at least looking at the internal openings in Microsoft and how often I get pinged by recruiters), does Microsoft need to close down on the layoffs loudly and publically for both morale and recruitment's sake?
iPad iPad iPad! So what, the techie echo-chamber screams for the iPad? I'll be quiet happy with my Kindle for now, just because I do need it for lots of book reading vs. momentary goofing around with apps and browsing. Still, it does extend Apple's reach into the Windows market. What 'cha gonna do about that, Microsoft? How come you never thought of something like this? Or a book reader? You had what and what? Wow...
Ballmer: seems as though people are questioning Mr. Ballmer's continued CEO-ship. How much longer did he say he's in for being CEO?

Going back to the layoffs: first of all, this round does need to wrap up by end of FY10. The stress of possible layoffs will continue to have a negative effects on Microsoft, let alone recruiting. We should have one last big flush and then call ourselves done. I'm tired of the layoff rumors as much as anyone else. Probably more so, given the comment fear-mongering. To paraphrase a commenter here: Mini-Microsoft has correctly predicted 12 of the last 3 layoffs.

One commenter made a good point in that it is going to take a while to work through the fat, though, because Microsoft dug itself into such a deep, undisciplined hole that when layoffs were needed, no one knew how or where to start and certainly didn't realize how bad it had become.

(later...)

Thanks to the deferral $s, it was a break-out quarter. Some follow-ups:

Joe Wilcox: Microsoft reports $19 billion quarter, lifted by $1.71 billion deferral Betanews
Todd Bishop: Windows 7 sales lift Microsoft to record revenue, strong profits and PC Windows sales strong, but other Microsoft units struggle
Joseph Tartakoff: Microsoft Blows Past Analyst Estimates paidContent
Mary Jo Foley: Earnings take-away Microsoft is still powered by Windows All about Microsoft ZDNet.com
Brier Dudley: Brier Dudley's blog Microsoft earnings report includes CFO's hush deal Seattle Times Newspaper
Nick Eaton: With Windows 7, Microsoft kills Wall Street with record quarter and Breaking down Microsoft's Q2 earnings

Microsoft Layoff 2009 Completes Last Milestone and Ships!

2009-11-04T20:33:00.000-08:00

With today's 800 Microsoft layoffs, Microsoft Layoff 2009 has reached its final milestone and shipped, exceeded expectations of 5,000 with 5,800 reduced positions.

Err... yay?

Last week during the Town Hall Mr. Ballmer confirmed there would be one more iteration on the layoffs. And after that? Who knows. More to come? Maybe. Booga booga!

You know, we have people working for Microsoft (or, at least did, I don't know, maybe no longer) responsible for driving executive leadership education and growth at Microsoft. This is their friggin' job. Develop Microsoft Leadership at the executive and L68+ levels. So, has anyone hemmed and hawed in-front of Mr. Ballmer and mentioned that this nickel and diming layoff approach is at the worst case end of the layoff management scale?

The looming threat of continuing RIFs and layoffs indicates that Microsoft is just too big for its leadership. It is beyond their capabilities to wrap their minds around everything Microsoft is doing. It has gotten away from them. What needs to go? Hell, I don't know even what all these people do, and you want to decide who stays and goes?

Yes.

Cut deep. Cut once. Get on with it and say, "We're done. We have aligned our company to be efficient and effective within this new global economic climate and are ready to focus on returning to profits and market share growth."

Done.

Coverage I've noticed today on the outside:

Mr. Brier Dudley's blog Microsoft cuts 800 more jobs, including 200 in Puget Sound Seattle Times Newspaper
Mr. Joe Wilcox: Is there any sense to Microsoft's 800 layoffs Betanews and Former Microsofties, Can I Tell Your Story « Oddly Together
Mr. Nick Eaton Microsoft laying off 800 more
Ms. Mary Jo Foley Are the Microsoft layoffs over now All about Microsoft ZDNet.com
Mr. Joseph Tartakoff Microsoft Cuts 800 More Positions paidContent

On Don Dodge:

Mr. Michael Arrington: Microsoft Loses Don Dodge. This Is A Huge Mistake
Nick Eaton Startup guru Don Dodge among Microsoft layoffs
John Cook Startup guru Don Dodge among those let go in Microsoft cuts

And, bummers for me given that she interviewed me for Microspotting, Ms. Ariel Stallings tweet about being caught up in this layoff round.

Coverage from the inside? No email. Quiet. Quite dysfunctional. There was something linked off of the MSW site and it also had a FAQ document that had to be one of the worse FAQs I've ever read. There is an "A" portion to an FAQ and in this case some of the questions were great but the answers looked like they were generated from some sort of English obfuscation Perl script 3rd place prize winner.

So, I'm going through about sixty comments now on the older post. I think it was necessary for Microsoft to have layoffs due to the mismanaged growth and lack of focus and direction our Senior Leadership Team has given us. But it should have been twice as much, done all at once. Now we dither.

Were you affected by the layoff or know someone who was? I'd be interested in knowing which groups and organizations are affected.

Windows 7 and a Grab Bag of Microsoftness Before FY10Q1 Results

2009-10-20T22:18:00.000-07:00

October 22nd 2009. Windows 7. The circle is now complete.

What is Windows 7? There's a lot that Windows 7 is (oh, it's faster, it has an improved task bar, peeking, snapping, homegroupin', stable drivers and some pretty freaky desktop pictures) but the big thing that it isn't is that Windows 7 is not Vista. It didn't suffer Vista's raging dysfunctional mismanagement and broken windows. It didn't require a reset. Sure, it wasn't perfect and there's a lot of improvements yet to be made in focus and team productivity, but the Windows team delivered. So toot that damn horn, because this here train is arriving on time.

With FY10Q1 announcements coming this week and along with Windows 7, I hope we have a lot of good things to talk about with the analysts. Google and Apple and Yahoo! certainly did. Usually we release our quarterly earnings on the appropriate Thursday afternoon, after closing. It is unfortunately disturbing that we've decided to release our FY10Q1 earning results instead on this Friday morning before trading. I say disturbing only because the last time we did this, a whole bunch of Microsofties were pulled into a layoff. Now... hopefully this earnings report is delayed so that we can have this Thursday the 22nd be all about Windows 7 and not our financials. And I can not imagine that we (and by "we" I mean the Microsoft Senior Leadership Team) would be so dumb as to release our flagship product on a Thursday and turn around and fire a bunch of people the next day.

So, anyway, what's in the mix as the financials come up this week?

Windows 7: check. Thank goodness for SteveSi. I certainly hope he gets paid a lot more than Robbie Bach this year.

Within the Windows 7 reviews, there's going to be a point-of-view that the operating system is dead, which is, ah, kinda dumb. Your web browser isn't going to bootstrap that Intel CPU on its own. What might be dead is rich applications, which is a fair argument and Microsoft is failing to provide much in the way of new rich applications. In fact, we are cutting them one by one (Money, Encarta... Streets, you best watch your back). Sure, there's a transformation to online replicated services and all, but we really need to convince our consumers that there is a strong worth in having a Windows 7 on your laptop so that it's not a fancy glowy brick when the internet is down.

Kindle? Wouldn't it be sweet if we had a nice ebook reader application? We could call it... mmm, Reader?

Windows Live is supposed to help with building value via rich applications. Live has been broken out of Windows to free it from the consent decree and all ('cept for sneaking a Win7 component out early, wink-wink). Messenger, Mail, Photos, Movies, and an awkward online service. And Live Writer (though rumored a dead-man walking per comments).

It's a fair start, and if I had my druthers OneNote would move out of Office and into Windows Live to be the essential authoring companion to the Windows experience. Windows Live Essentials is a good start, but to add some joy into owning a Windows machine, what we need just as urgently is Windows Live Non-Essentials.

Joy. There's a concept just asking for a planning pillar. How strangely would your coworkers look at you during spec reviews if you asked how joyful the feature happened to be?

Windows 8: speaking of planning! The Sinofskyfication of Windows continues, along with alignment around his good lieutenants.

Office: hey, hey, hey, there's a Beta on the way. The Office train lost its conductor but it mostly seems to be still on track. Though trust me: Office wants its Steven back. Bad.

Mobile: Holy. Crap. I don't think we have any unbruised skin left on our body to take any more lumps regarding our mobile strategy. The Microsoft Mismanagement theory is in full force as we throw any willing body into the Mobile effort. Something good has to come out of those typing monkeys, rights? Windows Mobile Phone 6.5 or whatever the hell it's called didn't win any "Wows" and I discovered 1:1 the worst question to ask is, "So, can I upgrade it to Windows Phone 7?"

Look. Let's talk about device loyalty. I first started with owning PocketPCs. An HP Jornada. I loved it. When upgrade time came, HP had bought Compaq and abandoned the Jornada for the iPAQ (what, they had the iThing first?). So, unable to upgrade to the next CE, I cursed a little and bought one of those iPAQs. But HP decided not to allow it to be upgraded. So I switched to Dell to get their latest Axim PocketPC. Dell would be a safe bet, right? And Dell gave up on the line. My latest act of company loyalty: getting a powerful HTC WinMo 6 device. It was cut-off the 6.5 train, and soon, I'm going to be buying a new phone.

And I'm going to buy an iPhone.

I hate it. I hate to think that I'll be installing Apple software on one of my computers because their PC software is so inelegant and buggy (check Watson). I hate that I've been so loyal to the PocketPC platform and Windows Mobile but I've finally had my chain yanked for the last time. I'm not buying a 6.5 device only to have it abandoned when 7 comes out. Microsoft is doing nothing to convince me that it's going to get any better. We suffer through rumors that Pink is imploding and issues with Sidekick data doing disappearing acts while our CEO has conniption fits over Microsofties sporting iPhones. Dude, this is why.

In this case, Microsoft is going to have to earn me back and convince that not only do they have a better experience and better quality phone but that they also won't kick me off to the side of the road when a new release comes along, spinning a sad tale that the carriers make all the decisions.

Dev Div: If I had to sit down tomorrow and write a casual application for the PC, my mind would fork itself in about five different directions. Native with ATL? WPF? Silverlight? An HTA? And what's up with XNA? If I want to write an app for the Zune (which Zune?) what do I do? And can it run on some future mobile device? And the PC? And Xbox?

And how do I share it? How do I sell it? And, ah, crap, you mean you just released a whole new version of C# / Silverlight / XNA that I have to go and relearn? Maybe those free Starbucks coffee dispensers wasn't a good idea...

If anything, I'd probably be pretty damn tempted to invest time learning Adobe AIR. And I'm thinking that while smack dab in the middle of the Microsoft bubble. There are a lot of Partners in Dev Div, and I'm not seeing any benefit from their concentration. The Windows client should be the premiere development platform. It's not. What am I missing?

Are We There Yet? Are the layoffs over? Has Microsoft stabilized? Of course, I'd be satisfied with another 10,000 or more positions being eliminated. But I want it done in one fell swoop, like all the conventional wisdom out there dictates, so that the remaining work force can align itself and get to work and not constantly worry if their group is next. If we're going to continue this quarterly rhythm of maybe-layoffs, maybe-not then morale is going to get seriously poisoned. Let's finish this round and call it done.

Ballmer: well, Mr. Ballmer, if you ever wanted to leave on a high-note, this is it. I'm frustrated because when you hear Steve 1:1 you know that he gets it. He knows some key strategies and things that need to get done. But then Yahoo! happens. Vista happens. Over-exuberant hiring happens. Layoffs happen to shed off the over-hiring. And a flat stock price happens. So something is seriously not connecting between (a) when you hear Steve talking and (b) when he makes major decisions. Hmm. Maybe it's something about guys named Steve having localized reality distortion fields.

This week, as we celebrate Windows 7, you do see an undercurrent of knife-sharpening while examining Mr. Ballmer.

Ballmer takes center stage with Windows 7 by Bill Rigby at Reuters. This week's award for damning praise: "He hasn't destroyed the company, but it clearly is not at the top of its game." Yikes. Is that on Mr. Ballmer's commitments? "FY10: do not destroy the company..." I should have added that to mine.
Forecast for Microsoft: Partly Cloudy by Ashlee Vance at the New York Times. It almost wants me to say, "Hey, no, we are the Evil Empire here! Not Google! I. AM. THE. EMPIRE. Don't you put us in that corner!"
NY Times all but says it: Ballmer must go by Fake Steve. This is the highlight reel of the NYT story above, with scary graphs charting Microsoft stock performance compared to Apple and Google. Two follow-ups: Why the Borg's copycat business model no longer works and Why won't the Times just come out and say what they mean about Fester?

The biggest question still out there: just who would you replace Ballmer with? If a shareholder revolt was to actually happen (shyeah, right) who would be the right choice to lead Microsoft? There is no heir apparent. And no obvious motivation to find one. But wait. Maybe, just maybe... you know, we'll have to wait and see and discover if Steven Sinofsky's upcoming book One Strategy! has a chapter on 'How To Become the CEO of a 100,000 Employee Company' (hopefully followed by the chapter 'More With Less - How To Transform a 100,000 Employee Company Into a 70,000 Employee Company').

Any fireworks you're expecting this week of Windows 7 and Quarterly results?

Quick Thoughts on the Microsoft 2009 Company Meeting

2009-09-10T22:05:00.000-07:00

Some quick comments on this year's Microsoft 2009 Company Meeting.

First, how did my six hopes for the Company Meeting hold up?

Steve Ballmer comes out first to set the context for the meeting in light of a pretty awful FY09 Q3 and Q4: Zilch.
Practical vision: well, Craig and Ray did seem to focus on the practical aspects of product groups, research, and inbetween the technology transferring power of the labs groups. Seemed practical. But then there was that whole Avatar assistant thing that no one around me felt like was real: one-half.
Demos are short, sweet, powerful... sorry, but Elop's demos sucked the life out of entire stadium. Some were good, and some were really really short. So: one-half.
Show us the new stuff. Hey, we did get to see some new stuff. Bing. Zune HD. Map goodness. No Halo. New ad cuteness. But it was still conservative. Hmm. How about: three-quarters realized.
New simple review system? Phffft. Not unless thwacking balls w/ your avatar is our new review system. 160 for that. Zero for this.
Serious wrap-up by Ballmer. Zero.

Add that up and we get 1.75/6.00 - hey, almost one-third realized.

Now, I'm not going to go into revealing anything all that interesting that happened in the meeting. Just my general impressions of the day.

Kevin Turner was first and, well, I'm kind of tired of the "ThankYou"s by now. He did take on the job of addressing the tough year and I believe he said some things that really surprised me. Growth hides mediocrity being one of them. That we over hired. Sure we all thought it, too, but to now go and put on the 20/20 glasses and speak it in front of the company gives me hope (hmm, need a new word) that it won't happen again. Same with the realization that you shouldn't start up doing work in good-times that you know you'd drop and cut during bad times.

Dr. Qi Lu might be my favorite techie right now. I was impressed with what he's brought together for Bing and what's coming and how he has focused the team and adopted some of the new technology that Satya was showing. Who the hell thought we'd be feeling so good about our ~~search~~ decision engine? Ever?

Elop. Steven. Baby. Dynamics. XRM. Really? What did I do to you to have that forced down my eyeballs? I'm pouring another glass of wine right now hoping I can kill whatever brain cells are still connecting this demo memory together. Geez. Did anyone give you advice that this was a bad idea? If so, keep listening to them. If not, you're seriously lacking good reports willing to give you honest feedback.

Robbie Bach did okay, but I can't say the demos blew me away. The table-top demos were full of slick sparkly presentation but... it was all stuff I've seen one way or another so nothing new there. He missed a golden opportunity for Microsoft-Fan-Boy love to go and have someone play Halo:ODST on stage or show some great Zune HD apps.

Bob Muglia. What did he talk about? I remember the real cool tech for traces and then WinDiff. Did he talk about how we're losing the edge on client development for Windows and how it's all a confused multi-SDK technology mess centered around everything being .NET based?

Sinofsky went pretty fast - when in doubt, load up the stage with a bunch of new, cool technology and play with it. I loved the reveal on the Mac Air case ("It's aluminum!"). And I think Steven gets the best line for when the train let loose its blaring whistle he said something along, "This is where someone mentions about the trains running on time."

Craig and Ray: it was nice that they switched up their presentations - that added some energy. But not enough. It seemed a lot more practical this year, other than what I mentioned previously about the whole very well staged Starfire demo. I hadn't seen that in like... over ten years.

And then Steve Ballmer. I've got say, at this point in the day I was pretty much in a "Where's mai KoolAid" funk until Mr. Ballmer came on stage and started presenting. I feel this is a big transitional year for Microsoft. I've said we've turned the corner, but that doesn't mean we're out of the bad neighborhood yet, nor are we incapable of making bad decisions all over again. The second half of FY09, and what we are still enduring as part of the economic crisis, has provided a certain level of alarmingly crisp clarity to refocus, and I believe Ballmer's presentation served for about as much focus we're going to see in the near term.

And I like how he ended his presentation. How do we feel? He reflected on how Microsoft is not a normal company and that its employees have an unnatural emotional attachment to it (yep, that's true - it can cause them to have all sorts of crazy reactions and do crazy, passionate things). How do you feel? Steve, well, he wants you to feel good about where we are, what we're doing, and where we're going.

I must feel good, because I have hope.

(Oh, by-the-way, if you see Mr. Ballmer walking your way: hide you iPhone. Trust me on that one.)

Additional links:

Six Hopes for This Year's Microsoft Company Meeting

2009-09-02T22:50:00.000-07:00

(Updated below for the Extra-Long-Labor-Day-Vacation-Layoff of September 3rd 2009)

I'm one of the biggest Microsoft Company Meeting fanboys *evah*, but even I'm surprised that we're having a full-blown Company Meeting this year at Safeco Field in Seattle. I thought it and MGX were going to be cut without a second thought given the economic reset we are all enduring. I'm wrong. Given that it is happening, it's my opinion that this year's Company Meeting sure can't be a clone of last year's. I mean, last year's was great and everything... but now our everything is different.

I think about the context around this year's Company Meeting. There is what the crowd brings, what the crowd expects to see, and what the Senior Leadership Team (SLT) wants to accomplish with this meeting. Look, against this current economic tide the Microsoft SLT is putting on the Company Meeting. There has to be a pretty big goal they are shooting for, not just rah-rah party-demo time.

Because there are two very large elephants sitting down front and center with the hand-picked floor crowd. Two grumpy elephants with very good memories, one of January 22nd 2009 with 1,400 Microsoftie layoffs and the other with May 5th, 2009 and 3,600 further Microsoftie layoffs. Folks are going to come into Safeco, grab their box lunch, sit down with their co-workers and friends and as they fold their pink paper airplane, they are going to remark, "I can't believe they are spending all this money for today. <<Fill name in the blank>> and more could have kept their job if they just cancelled this horse and pony show."

These folks might have on their Proudly Serving My Corporate Masters buttons, but they've scratched out the Proudly part. They are staring at the grumpy elephants, and are looking to the SLT for some serious L.

I'm just imagining what corporate baggage people are bringing in during the Company Meeting. Maybe they were part of the original 1,400 and had to scramble through interview loops to find a new Microsoft position. To be clear: I wanted cut-backs when we were in the 50,000 range of employees, let alone approaching 100,000. 100,000, man. That's crack-pipe craziness. Had we been more prudent and efficient over the years, we wouldn't have reached the stage where the light bulb went off over Ballmer's head and he said, "I know... layoffs!" We got bloated and we cut, and we should cut more. But our leadership shouldn't have gone down that crack-pipe path to begin with.

Anyway, looping back to the 2009 Microsoft Company Meeting, some of my hopes and expectations:

One: I expect Steve Ballmer to come out front first, before any other Microsoft leadership, to speak the truth about the last year and where we are now. He must acknowledge it starkly. We had layoffs. We had inefficiencies. Positions had to go due to the economy being unable to sustain those parts of the business. There are people missing this year that, last year, were some of the biggest Microsoftie fans.

And, there are people here this year that will not be in the audience next year.

Take that in.

With success in the middle of hardship, this is a rare opportunity to enact change in Microsoft culture and recalibrate to being efficient and streamlined. I want Ballmer to get out front and say, "Today, we're celebrating our success of Windows 7. From this success we are learning and we are acting. We're learning why it was a success, how to do even better, and then taking those lessons and putting them into practice. In Windows. In Office. In Dev Div. In all of Microsoft. The rest of today we will not only tell you where we are and where we are going, but we're also going to discuss honestly how we're changing to be an efficient, streamlined company that smartly uses its successes to leverage good change. For the benefit of the company, our customers, our shareholders, and our employees."

Two: Any vision this year has to be practical and realized with one, two, or at most, three years. And, closing the loop on accountability, there's a discussion and a review of how the vision of the past has brought us to practical results. The pie has come down from the sky and now it's time to eat.

Three: demos are short, sweet, powerful, and made especially for a crowd of some of the smartest (plus good looking) people on earth.

Four: if it's new and hot, we get to see it now. That new Halo game. Zune HD. Stuff that even Beta testers haven't seen yet. Give us some reward for actually working for Microsoft and being excited about seeing things that are new and known by very few. Hell yes we'll tweet and blog about the coolness. And to assuage any anxiety over that: happy, enthused Microsofties sharing their enthusiasm for Microsoft with the world == a good thing in this day and age.

Five: a short introduction by LisaB of the new, efficient, streamlined review system: a simple Word document that let's you cover what you were responsible for, how you did, and your manager's assessment. Hey, I can dream.

Six: wrap-up by a serious Steve Ballmer. No running around high-fiving people or shaking his fists in the air to get a "YeAAAH!" from the crowd. But rather a serious Ballmer who covers what we've been through, how we're going to change, and a re-enforcement for the success at Microsoft being something that has to spread through-out the teams.

After the Company Meeting, I intend to sit down at Pike Brewing and ponder over: what did the SLT intend to accomplish this year at the Company Meeting? How are the Microsofties attending better for having been there?

My concern is that the template for the meeting this year is the same as it ever has been, with some comedic hijinks, Kevin Turner covering all the "gooood" results that we should be fired up about, music, Liddell's financial review, an opaque speech by Ozzie, very late arriving busses full of people wondering why we can't figure out traffic control, rambling demos of misbehaving and barely competitive technology, paper airplanes smacking the back of my head, and a big cheerleader Ballmer at the end, all screaming and full of gusto... and totally passing over the hardships of this year.

I hope that all doesn't happen, but if it does, later I'll just sit at the bar between the grumpy elephants and drop some tears into my beer while still musing over what the SLT's intentions and goals might be.

What goals and expectations do you have for the Company Meeting?

Addendum: as of September 3rd 2009 it looks like it might be two large grumpy elephants and a little baby elephant:

Ms. Sharon Pian Chan "Microsoft laying off 27 employees in Redmond and Bellevue" Seattle-Times
Mr. Nick Eaton "Microsoft to lay off 27 from Redmond, Bellevue" Seattle-PI

Weird. How much more than 27? And just who is affected? I don't see it on the WARN site yet. Snippet from Ms. Chan's post:

Microsoft spokesman Lou Gellos said the company is making cuts across the country, but he did not elaborate on how many more jobs in the U.S. were affected.
"I can confirm that part of our effort to reduce costs and increase efficiencies involved 27 job eliminations here and in other regions across the country. While job eliminations are always difficult, we are taking these necessary actions to realign our resources against our top priorities."

Microsoft Annual Review 2009

2009-08-23T21:48:00.000-07:00

Just a quick post: some of you enjoy posting information relevant to your review, both looking at numbers and a critical view of the message given to you. It has started to happen a bit in the last post so I'm just going to capitulate and put this small post up for the 2009 Annual Review share and compare.

Oh, and obviously grab yourself a few grains of salt. Folks seem to like this format:

L# (promo'd?)
(Exceeded|Achieved|Underperformed) / (20|70|10)
Bonus $K
Stock $K
(Promo $K)
Optional comments about Division / Group, discipline, impression of review

The promotion budget is significantly less this year meaning that if you got promoted you're really at the top of the heap. If you didn't, well, you're going into a long line.

And as we know: no merit raises this year (though you will get a raise if you're promoted). But bonus and stock awards are the same, ensuring we have the flexibility to reward our top performers.

I would expect that the Underperformed Microsofties have already been managed out. If you are an Achieved/10% then I'd expect you're given a very short term idea of what success looks like and can expect to be closely managed. Great time to update that resume and see what else is going on.

I found a bunch of old reviews of mine recently. Flipping through the review forms started with refreshing simplicity from over a decade ago, rapidly turning into confusing churn (company value ratings and all that crap), to now a fragmented collection of task-driven thoughts. While it's nice that the review form has pretty much stuck to the current form now and we don't have new components coming and going (yeah schema?) it really doesn't compare to the first couple of reviews I did at Microsoft.

Of course, I had great managers who knew how to give concise feedback, both daily and as part of my review. Where you don't have demonstrated collective excellence, you have process.

Microsoft FY09Q4 Results

2009-07-21T22:12:00.000-07:00

This is it. The wrap up of FY09, coming fresh to us Thursday July 23rd. I'll put this up a bit early in case there are any initial questions, thoughts, or insights regarding how FY09 is closing.

Some of my favorite places to track insights and opinions on MSFT quarterly results:

Mr. Joe Wilcox over at Betanews.
Mr. Todd Bishop's Microsoft Blog at TechFlash.
Mr. Joseph Tartakoff somewhere within paidContent.org

Topics I'm interested in:

Description of efficiency so far and an enumeration of which groups are going to get Sinofsky'd.
Assessment of further financial risk at the hands of the EU Commission.
Oh, any more layoffs? If not, it would be wise for the SLT - for the sake of employee morale - to close the door on this now.

Given how negative Ballmer has been about the economic reset, I can't imagine any rosy picture painting just yet, even if Intel looks like it has bottomed out and Apple is frantically trying to create as many iPhones as it possibly can.

Microsoft Has Turned The Corner

2009-07-12T16:32:00.000-07:00

I've got to say: in my opinion, Microsoft has turned The Corner.

You know The Corner.

The one that gets us off of pothole ridden Vista Avenue (one street over from Lincoln in Blue Velvet). The Corner that requires Microsoft to shed some of the fat it has layered on recently just to make the turn without flipping. The one that requires a bit of humility for past failings (the aforementioned Vista, Xbox losses & red-ring, Zune's market performance so far, WinMo asleep at the wheel, no coherent brand strategy, search lagging behind for so long, the abandonment of IE after IE6, a confused developer story, a bungled Yahoo! acquisition attempt, etc etc etc).

The Corner that perhaps doesn't get us out of the bad neighborhood, but is at least pointing us in the right direction. What has helped make the turn?

Windows 7
Bing
Silverlight
IE EU chutzpah
...and award worthy, coherent ads that aren't a demonstration of how best to destroy millions of dollars quickly.

Redemption takes a while. Time is needed to allow perception to change and to re-earn trust and respect. Once Microsoft was the scrappy underdog playing catch-up against many competitors. Later Microsoft was the dominating OS and application suite, so drunk and arrogant on its own power (pre-monopoly designation) that it made some truly dumb, strong-armed moves (and even worse, did sloppy "nuh-uh!" cover-up maneuvers). After that, Microsoft went from getting beat-up by the US government to the dot-com bust to the development of Vista, reset after the huge effort of XP SP2. The Evil Empire became The Bungler, hatred turning to scorn and frowning distaste. And the EU hurried over to slip in a few kicks to the wallet.

While all of that could have been avoided with competent senior leadership, it at least served as a hard enough whack to the side of the head that even our mediocre leadership took action to aright the ship.

Now we have the potential to start shaking this off and achieving solid, if not stellar, results.

This is happening, too, while the shine on Google is dulling. Rather than pulling an Apple on us anymore, Google has picked up the nasty habit of pre-announcing technology. Guys, you stole the wrong playbook. And, uh, we don't want it back. Plus the government's gaze has moved from the fallen-working-on-redemption of Microsoft to the obvious domination of Google in search and information strong-arming. A dose of the medicine Google's now getting:

Why Google Is Stealing Apple's Ideas (Googlers, you do not want the Apple fan boys mad at you. Trust me on this.)
Google's Microsoft Moment
Google OS: TechCrunch dubs Linux a 'big ol’ bag of drivers' If you add an OS to Chrome, it's an OS
Google OS: Let's all take a deep breath and get some perspective (truly a landmark in the Return of Fake Steve Jobs).

Anyway. Let us enjoy this success of Microsoft turning The Corner, all while being a wee bit smaller and more efficient. 5,000 jobs eliminated so far and a declaration from Ballmer that efficiency is his key focus right now. Wall Street likes how that blood in the water tastes so far.

I'm going to start my whole "and we can cut a whole lot more positions" screed in a second. But first a moment to reflect on the flesh and blood people caught up in the layoff mess we've gone through so far. There is certainly a sobering perspective on this within the abundant comment stream of the last post.

It's not their fault they were part of the layoff. It's not their fault that their position was considered part of the inefficient part of the company that was eliminated. I certainly don't blame anyone for wanting to work for Microsoft. Large parts of Microsoft are magical, exhilarating places to be. In its bones, Microsoft is a great company with amazing potential. It's just turning The Corner and directing itself to where it can focus on efficient, lean-mean, profit making products that engage and delight Microsoft customers.

At Microsoft a lot more positions still need to go to achieve efficiency and focus. 15,000 more is my magic number. It's not personal. But to achieve efficiency and resolution of what to focus on with determination, we need a whole lot less people and to publicly admit there are opportunities we will focus on and others we are okay walking away from. ("That's right, Adobe: you can charge as much as you flipping want for your Photoshop line of software.")

For efficient product development: Yahoo!'s Carol Bartz has a good point when she swears like a sailor over having way too many program managers vs. actual developers (overloaded with one program manager for every three developers). <<edit edit edit - this went quickly into the weeds - let me sum up some quick thoughts>> Looking across groups, I still see exceptionally inefficient use of broad, front-loaded thinking and design locked into a 1970s waterfall model that leads to reality and focus coming way too late and a bunch of frantic, mediocre consensus driven crap floating like chunks into an end product. Kaizen. Kaizen. Kaizen. Efficiency is not going to happen as long as we continue rewarding people for this status quo. Shedding a respectable chunk of the company would bring an exceptional amount of upfront focus to our teams and result in high-quality features end-to-end, vs. what we see in misshapen compromise that we can fit in.

Microsoft has turned The Corner. But our car's suspension is still wobbling from the load we're carrying, and while some fine spots of leadership has gotten us around this bend, it doesn't take much for the remaining mediocre leadership to assume that the pressure is off and to get their grubby hands on the wheel and start turning us back towards Vista Avenue. The job isn't done. It's just beginning. We iterate again.

(Oh, and hey, here's a question for you: if you could create a new Microsoft leader based on the best attributes of our current leaders, what would you create? For instance, I'd start by combining the efficient layer-busting profit focused philosophy of new President Steven Sinofsky with the campus design skills of President Robbie Bach. Ideas?)

Administrivia: to subscribe to all comments here, use the following: http://minimsft.blogspot.com/feeds/comments/default . While I enjoy providing the freedom of unmoderated comments over in The Cutting Room Floor, I had to turn off anonymous comments for the time being. You can still post unmoderated comments, you'll just need to provide a Blogger ID / OpenID.

CRF: unmoderated comment thread: Microsoft Has Turned The Corner (plus a snippet of what I deleted from this post).

Microsoft Layoffs - Cinco de Fire-O

2009-05-05T08:05:00.000-07:00

Well, if ever you wanted to console yourself with some tequila, today might be your day. Phase Two of the big Microsoft 2009 layoff engages today.

Is this it? Will there be more? From Mr. Ballmer's email:

With this announcement, we are mostly but not all done with the planned 5,000 job eliminations by June 2010.

Strangely, Ms. Brummel have asked folks to avoid emailing each other today because the last layoff's email volume was so distracting. Gee, sorry to be a bother while people are trying to figure out what the hell is going on. Let's see... how to avoid that... I know, tell people what the hell is going on and which people / groups are affected. Oy.

Please, if affected by today's events, note which group you're in and any messaging about things going forward (as appropriate and proper).

(And please, Ms. Brummel, if you talk to the troops about this, don't share how people affected by the layoff are thanking you - that just seems creepy.)

Dropping moderation for today, but as usual: be responsible. I will delete comments later that are off-topic, along with any other comments that react to the deleted comments. If in doubt, go visit the CRF parallel thread: http://minimsftcrf.blogspot.com/2009/05/comment-stream-microsoft-layoffs-cinco.html

Microsoft FY09Q3 Results

2009-04-22T19:47:00.000-07:00

Last time we did quarterly results, it was a doooozy. Immediate layoffs for 1,400 Microsofties and sometime-in-the-next-18-months layoffs for 3,600 more. Of course, the layoffs were offset somewhat by continued crazy hiring for Live Search (should we expect a work of Shakespeare to pop out of there sometime soon, too?).

What kind of questions do you want to be asked during the conference call? Some off of the top of my head:

So... how's that, ah, layoff... thingy.. going?
Which groups and products are specifically being affected by layoffs?
What other cost-cutting measures are in effect?
What are the causes in drop of revenue and what are the expectations going forward (will Microsoft give guidance this time)?
What bright spots are there in profits?
How is gaining share going?
The EU seems to be pulling its leg way back for a full-on kick to Microsoft's financial groin. How does the defense against EU charges look to protect shareholder money for additional EU fines?
What does a financial geek have to do to get a beer at The Commons?

And you know, speaking of The Commons: I trekked over there today (meh, not the sunniest day) and I have to say it's an impressive space. I walked around admiring the scope of the project, thinking "This is what Windows built. This is what Office built." I then reflected on the irony that it's Mr. Robbie Bach's Entertainment and Devices moving into the new campus with The Commons. Windows and Office funded this extravagant place for the folks who managed to burn through $8,000,000,000USD+ on the Xbox, be shown how it's done right from Nintendo with the Wii, dash the Zune against the juggernaut iPod, and have the iPhone drop-kick WinMobile to Mars.

Microsoft Senior Leadership Team is rewarding something here moving these people into such a great place, but it's not anything that I could make sense of while I wandered the new campus...

I'll update this post later with commentary about the quarterly results. In the meantime, some of my favorite places to track insights and opinions on MSFT quarterly results:

Mr. Joe Wilcox over at Microsoft Watch.
Mr. Todd Bishop's Microsoft Blog at TechFlash.
Mr. Joseph Tartakoff somewhere within paidContent.org

Update: closing the loop here a little bit later than I wanted (sorry, I was bounced off the grid for a while):

Wow: have a plunge in profits and get rewarded by your stock shooting up 10%+ in one day! Sweet! And by "Sweet" I mean none of this makes a lick of sense except to look at an article like Cost-cutting saves Microsoft stock after rough 3Q and realize that the market is supposedly rewarding the stock price and recognizing appreciation for the reduction in overhead and expenditures.

So now, we must have a plan to have constant announcements about reduction of expenditures.

Announcement #1: No more Company Picnic. Ever. Next?

What would be on your short list of things to cut back on? MGX? The Company Meeting? Beer at morale events? Soda? The Company Store? Whole product groups? Your group? Yeah, I don't know how often that last one makes the list. Though I have friends who have sniffed the way the FY10 wind is blowing and are getting the hell out of groups that have spent more time talking about what they are going to do than actually doing anything or - get this - shipping something to actual customers. You know, the type of groups that make Yahoo's Carol Bartz slip in the F-bomb.

I'm surprised to learn from Ms. Fried's Company Picnic article above that The Company Meeting is still on. As much as I love the Company Meeting, it was totally dead and gone to me in my mind. Talk about the most challenging Company Meeting ever. Yes, we'll have Win7 and coming in close Office 14, along with other emerging products. But how in the world to you manage to pull off a great Company Meeting within our current environment? You have to take the big issues head-on, and part of that will be looking at the upcoming MSPoll numbers and actually sharing with Microsofties who they hell were let go as part of the layoff. And why.

The Company Picnic boggled my mind just looking at the logistical nightmare it had turned into. Tell you what: if we reduce the company size back down to something reasonable, we should bring it back. But for now, I'll be happy with my group renting space for a family morale team event at Vasa Park.

CRF: unmoderated comment thread: Microsoft FY09Q3 Results.

Spitfire Backfire, Live Labs, and Not My 1,400

2009-04-15T19:28:00.000-07:00

Here's a quick post before next Thursday's quarterly results. Given the layoffs in the last quarterly results I know there is some increased anxiety about any additional cost cutting Mr. Ballmer might be ready to unleash, like more staff reductions or, you know, "Hey congratulations on entering RC and all. Now... about that next release and, well, you specifically..."

Mr. Joseph Tartakoff over at paidContent has a post around further reductions: Microsoft Still On Track To Cut Another 3,600 Jobs.

Contrition time for me: last post I shared how amazed I was that everyone in the 1,400 that I knew or that were in my extended network got rehired. Pretty much the feedback I heard here and on Twitter was, "Wow, you're one lousy sample set," because a number of you are either in the non-presently-Microsoftie 1,400 or know plenty of people in that pool.

I wish I could blame it on drinking too much at Spitfire but, (1) it wasn't opened yet, and (2) it will never be opened thanks to the brazenly stupid idea to have it planned and ready to go for what seems like the better part of a year and then three days before it was to open, Microsoft yanks the rug out from under Spitfire and thirsty Microsoftie patrons.

You know, if upfront the Senior Leadership Team had decided that a bar was an interesting idea but didn't make sense for Microsoft I would have just shrugged and scooted over to a Mustard Seed, had I even heard of the idea. But to have this set up for so long with curious expectations building in Redmond and then to have a last minute revelation and cancelling Spitfire really calls into question basic judgment and execution abilities.

So-- what, what's that? Hmm, checking in over at the Bring Spitfire back to Microsoft Facebook group (http://www.facebook.com/group.php?gid=70887074034) it appears Spitfire is on track to open at the end of the month? From Jonathan Sposato:

thx for everyone's support! OK there's GOOD NEWS today; the spitfire has reached an agreement in principal with msft to open on the west commons campus later this month : ) over the last few days, both parties re-engaged and worked creatively to find a way to deliver on a great spitfire experience on campus.

('scuse me while I tweet that.) Great! Allow me to raise a glass. Now I'm vaguely curious to know about all the soap-opera court-intrigue going on behind the scenes here. And I can cancel my idea for a BYOB + Towel Commons protest.

Update: well, not so fast, you twittering fool. Looks like the compromise is pretty extreme, in that drinks will only be served for scheduled special events. Hmm. More by Mr. Todd Bishop here: Microsoft revives Spitfire pub under compromise arrangement.

One last thing: Live Labs recently restructured, with some projects going forward and others getting the axe and the researchers being repurposed into groups like Mobile and Search. I've only had superficial dealings with Live Labs folks and I found them very refreshing compared to other teams in research I had planned with: a sort of practicality that was uncommon. To add a few more words here, we'll end with a special guest writer reflection on the recent Live Labs happenings:

Microsoft (NSDQ: MSFT) is downsizing its high-profile Live Labs group, which was created three years ago to speed up innovation in the company’s online business, paidContent.org has learned. -- Joseph Tartakoff, Microsoft breaks up its Live Labs group, 2009

Microsoft describes it as a "restructuring". About half of the team will be moved to various product groups. The remaining half, still run by former Overture/Yahoo star Gary Flake, will focus on search, data organization and user experience aspects. There's more information in articles by Mary Jo Foley on ZD Net, Ina Fried on CNET, and Gavin Clarke in The Register.

Contrary to recent whispers and tweets, we are not shutting down, disbanding, dismantling, or anything of the sort. In the coming weeks and months we'll bring you updated developer tools, new ways to use Seadragon, and much more. Going forward, we intend to focus on a smaller number of projects relative to what we've done in the past, but invest in them at a much bigger scale. -- What's next for Live Labs, on the Live Labs blog

Mary Jo comments that "Microsoft execs often touted Live Labs as proof that Microsoft is an innovator, not just a follower," and there's no question that the acquisition of Seadragon and merging it with Microsoft Research technologies has a chance to be transformational. Photosynth is an encouraging start, and there's a lot more to build on. A tighter focus and bigger bets could be a good thing here. On the other hand, Live Labs was also supposed to be a company-wide (or at least Windows Live/MSN-wide) innovation center. Gary's 2006 Live Labs Manifesto and coverage at the time like Ina Fried's captures the original vision: bridging the gap between research and the product groups and revitalizing how software is developed. This was always going to be a tough sell, with senior executives like Steven Sinfosky firmly against the idea of a separate innovation group outside of their control. The restructuring seems to throw in the towel on this front. And Microsoft spokeswoman's Stacy Drake McCredy's comments in paidcontent.org are somewhat alarming:

Economic conditions are imposing constraints that challenge the original Live Labs model by diminishing the group’s ability to transfer innovations to business groups who’re understandably giving priority to “needs” vs. “opportunities.”

Well yeah, it is understandable. But what this is saying that Microsoft product groups aren't in a situation where they can take advantage of opportunities. It's really hard to see that as a recipe for long-term success.

Administrivia: The Cutting Room Floor is unmoderated and folks have been pleading for me to shut down the red-hot discussions over there. I moderate here - when I can manage - to keep things on track. If the CRF can be the crazy diatribe magnet and that makes moderation here all that more easy: fan-damn-tastic.

CRF: Unmoderated thread for "Spitfire Backfire, Live Labs, and Not My 1,400"

CRF: Unmoderated comment stream for "Shared Sacrifice and Microsoft Free Radicals"

Shared Sacrifice and Microsoft Free Radicals

2009-03-29T22:09:00.000-07:00

How have you been doing? Me, I've been doing some kind of wonderful.

Since I pressed the pause button (a button I'm going to be enjoying quite often) a lot has happened yet not happened. Sort of like those layoffs. Just like you and your fellow Microsofties, I talked to a lot of people who where either affected by the 1,400 cut or who had a friend affected. From just my perspective, everyone I know or know-of through someone in Redmond was... rehired.

When's a layoff not a layoff?

I mean, even the folks I muttered, "Whew, thank goodness they took their badge and finally got rid of 'em" got rehired. Sheesh. We can't even do layoffs right. For at least the slice of people I know of, this was more a rebalancing than a layoff. Sorry, Ms. Bick, I guess I don't know the folks you wrote about.

Also during this time, both Toyota and HP made interesting moves to deal with the impact of the crisis on their business. I pay attention to Toyota thanks to writings like those of Mary Poppendieck's that look at Toyota's approach to empowering its engineering employees to make direct front-line team decisions, sort of like the feature teams various product groups at Microsoft have. And of course, HP is a big Microsoft partner. Both went down the path of avoiding layoffs. Both cut salaries vs. having layoffs, a "shared sacrifice" in Toyota's word (more on Toyota: Japan's management approaches offer lessons for U.S. corporations).

Mark Hurd's memo about the HP salary cuts should have been the memo that Ballmer wrote. Why? Because in it Mr. Hurd reviewed how they already had done due diligence to become a lean and mean company, and that further cut-backs didn't make sense. Also - call it a token gesture if you will - he and the executives took the biggest salary cut. Yet he re-emphasized that HP will pay for performance. None of our executives had said anything about taking a cut back, but rather just re-iterating that their SPSA payout will be less because the company's bottom line is suffering just like everyone else in this crisis. But zero details other than "significantly less."

Winking while we stuff our pockets AIG-style.

So yes, HP will have restructuring, but they don't have 3,600 additional cuts hanging over people's heads.

Do you think that the concept of shared sacrifice would work at Microsoft? If it still felt like a company driven by the employees, probably so. That's my perspective. I think if we still felt like the drive and ambition of the front-line employees shaped the company and defined it, then helping one another would make sense. But the huge growth shattered that sense of employee ownership, abetted by the abysmal Microsoft stock performance we've had since, yes, Mr. Ballmer became CEO. With that all these layers and organizational obstacles spread about and it went from a different, special place for crazy-happy geeks to a jay-oh-bee.

Mr. Mundie recently reflected on a number of topics. One idea was the desire for Microsofties to move around in the company more effectively. I love it. If someone, like, oh, our Senior VP of HR, was to take a moment and muse, "Now's a great time to go back to basics and focus on what it is to be a Microsoftie" one of the keystones should be job movement through the company as part of following your passion and ambition. Maybe it was easier to take risks, be bold, and honestly do what the hell you really wanted to back in the mythic days of FYIFV. And gee, guess what? What do you get when you have people doing what they want to do? Great results.

Obviously we've got about zero job movement right now, so that has to be fixed first. Microsoft gorged itself at the buffet bar of mediocre hires. And now we're bursting at the seams and deadlocked. We are stagnant right when we have two major product releases coming in for landing - Windows and Office - and you'd like those people to be ready to move around Microsoft and cross-pollinate good engineering. Especially those responsible for the obvious success of Win7. Maybe some movement will happen within Windows and Office themselves, but not across the company and probably not into their groups from other parts of the company. Hell, you have people in Windows worried that the Senior Leadership Team is waiting for them to get to a safe RTM harbor so that the 3,600 quota can start getting taken care of. Do you expect people to look around - to take risks - in that environment?

FMIWIWFV!

Zero attrition. Stagnation. Organizational constipation. Nothing good comes out of that but corporate sepsis. Given that our leadership team has had their cage rattled by the global crisis, has examined all sorts of horrible past economic situations, and has locked down on the hiring and gotten on-board with some odd variant of firing, you'd expect they are playing out the forward-looking implications for the product groups and other Microsoft divisions, right?

I'd hope so. But it's not based in any sort confidence based on past results. And it's certainly not based on our leadership engaging with us as we work and live through this crisis. Things are certainly uncomfortably quiet. It's the worst side of "best of times, worst of times" but one hell of an opportunity for re-birth and re-engagement and truly building a stronger Microsoft. A few challenges and opportunities I'm thinking of ahead of Microsoft:

EU: you say "ee-you", I say, "ewwww!" As long as the Microsoft ATM continues shooting out cash fines the EU is going to keep mashing our buttons. Kudos to the folks in Office for demonstrating foresight to jump on documenting their file formats and protocols, even enduring the inevitable attrition such onerous work forced upon the team and the delays to O14 it caused. I'd say, at the end of the day, this saved a large chunk of a billion dollars in fines that the EU would have gone after. You talk about people who deserve to be in The Circle of Excellence? If they head off another EU money-hunt, it's the O14 crew. And good job, Win7, in making IE8 removable. Now, what's the next EU target?

Review Reset: as organizations look to clear out the recent mediocre hires to make room to hire excellent people suddenly really interested in working at Microsoft, middle management is discovering that the review tools have really screwed them over. Told you. To keep everything clear and accounted for, I spend four times the amount of energy dealing with the new review tools through the entire year to get the same results before with the Word form. The current system is wasteful. If it can't be modified to spit out some fixed commitments based on your level, it should be replaced with the old simple Word form.

Free Radical Career: I'm pondering ideas about making employees more mobile within Microsoft. The one I've come up recently is to let anyone who has reached a certain career achievement (Exceeded/20, or just in the top 20%) to be free to move to another part of the company and to have their headcount and associated budget go with them. E.g., the destination team doesn't even have to have open headcount, they just have to be willing to have this new (great) employee come over and join. Okay, they do have to have office space. Sucks for the former team, great for the new team. I know, my first worry there is that you get one crazy charismatic leader and suddenly everyone is working on BoonDoggle '12. But my goal is that if you're great, you can literally write your own ticket to be where you want to be in Microsoft. We need something to break the career stagnation because I know of folks already dorking with their organization is small, petty ways, and remarking, "Well, where are they going to go?"

Press Play

2009-03-29T22:04:00.000-07:00

Click: play.

Hoo-boy, things get dusty in the blogosphere pretty quickly. This is a pre-amble post to a regular post to kick things off again here. But in a different way.

While I will start moderating comments again, for most regular posts I'm going to create a shadow unmoderated comment stream post over at the Mini-Microsoft Cutting Room Floor blog (aka, the CRF). Given the comment freeze I put here, some regular commenters found that place pretty quickly. And, well, new readers over at the CRF naturally discovered the entropy that happens rather quickly within an unmoderated comment stream. Yeah, welcome to what I had to read everyday and discard.

Around moderation here:

I'm going to boost up moderation. If you think your comment is the least bit iffy, you'd best post at least a copy over at the CRF, too, unless you want to see those bits disappear into the grand bit-bucket in the sky.
I'm not going to be particularly predictable about when I get around to moderating.

For those that care, let me share where I am with respect to this small corner of cyberspace.

Soon to be five years ago, I started this blog up because I felt Microsoft was a train not only off-track but also heading straight for a cliff. We were massively expanding and incapable of dealing with the exponential complexity that a fast growing Microsoft required of us. It appeared as though we were growing for growth's sake and without a particular elegant plan in mind. So I spoke up within the public wilderness of the blogosphere to ask, "Err, isn't this crazy?"

And. We. Just. Kept. Growing.

Microsoft dramatically changed. The stock price remained flat, with the occasional plunge downwards when our CEO said something that spooked investors or when a surprise $2,000,000,000 investment popped up. We burned billions upon billions of dollars into a game console, to which people say, "At least it has improved Microsoft's image." Okay, step one: don't have a bad image.

Early 2009, we publically reached that cliff and went flying off. There were way too many people on the train to let it brake in time and we had to boot a bunch of them out, old-school layoff style. Folks asked me, "Well, aren't you happy now, Mini? Microsoft is finally cutting back on people!" and I just have to say, "Excuse me, I'm too busy screaming my fool head off as we fly off this cliff."

Now leadership can say, "You know, that multi-billion dollar budget growth year-over-year just wasn't sustainable. We all knew that." D'oh'pe slap for that. After this, I had a stark realization that for all the publicity this blog has garnered and the awkward questions it forced to be asked, none of it helped to avoid that cliff we've been steaming towards the last five years. My reality check has been cashed.

<<edit: cutting out a bunch of blah-blah-blah-me-me-me stuff>>

In what seems quite appropriate for now, I'm stepping back in medium-sized way and letting this be an occasional hobby vs. an initiative. For what it's worth, I'll pick up the Twitter-ing over at http://twitter.com/whodapunk (fingers crossed they are more enlightened than Facebook and don't get stealing what could be my new bucket). See you here and there.

MSA - MSPoll Closing Soon

2009-03-11T08:25:00.000-07:00

Microsoftie Service Announcement - the MS Poll is closing soon so put some time on your calendar to go through and share your opinions and insight.

Some advice:

In all the groups I've been in, the Poll results are poured over all the way down to the front-line manager level. This stuff matters.
Don't punish your local team for decisions out of their scope of influence. For 99.9% of you, your manager didn't have any say in the recent layoffs. Judge them and your team and your VP based on what they are actually responsible for, not for the company as a whole. There's an area for that later.
Happy with your team? It is just as important that your participate so that your happiness is reflected in your group's numbers so that they can keep doing what they are doing right vs. being told they need to change.
Yes, people do read the text comments at the end. But you can easily erase any good feedback and have the bit flipped on your comments with one small snark.
No manager feedback this year? Well, here's your chance to bubble up that feedback.

Unmoderated comment post to go along with this quick reminder: Mini-Microsoft Cutting Room Floor Pause Place to be Refresh - MSPoll etc

Time To Take a Mini-Microsoft Pause

2009-02-04T19:34:00.000-08:00

It's time again for me to press the Big Blog Pause button.

I've put up a post over on the Cutting Room Floor for you to share any comments and ideas you have in the meantime.

Right now, I'm going through a long building change in perspective and simply reconsidering where I want to focus my energy and spare time (hint: writing, but not here). Also, you can only bang your head on the wall for so long without something getting knocked loose that probably needs to be put back in place.

(Is this pause layoff related? Sorry to disappoint the Just Deserves club out there, but, no, I'm not in the 1,400 and I can't imagine my group being touched by the remaining 3,600.)

Getting back to focus, I have lots of forward looking thoughts and it's interesting to me in how few of them I imagine myself at Microsoft for the long-term, let alone mid-term. Four years ago that would be unimaginable heresy. Now: well, in my opinion, the company has fumbled and tumbled into an awkward future with little sense of rigor and spoiled by the abundant cash of Windows and Office. Windows survived Vista and it looks like Sinofsky/DeVaan have a Winning 7 to make amends. Hope. Enough?

I love my team. And I like Microsoft, but I can't say I love it anymore. And that makes me channel Arsenio Hall and go... "Hmmmmmm."

BillG is long gone. Within our leadership, there's no one left who wants to read your ThinkWeek paper, so they're killing that off. In our future, employee-led innovation, I guess, starts at Level 68.

Microsoft needs a back-to-basics ground shaking rebalancing. And that's not going to happen with the current Senior Leadership Team.

I'll certainly be back in time for the next quarterly results, along with any major Microsoft events. You're welcome to send me email in the meantime, but note that I'll be pretty intermittent in checking it (and even worse at replying). During the pause, I intend to go through some of the recent gems within the comments here and ensure they get proper attention.

Over time. Cheers.

Click.

3,600 Microsoft Shoes Waiting to Drop

2009-01-25T18:12:00.000-08:00

A profound thanks to all the people who spent time writing heart-felt and high-quality comments over the past few posts. When big events like this layoff happen at Microsoft, it shakes loose collective thoughts that have been building for a while, many of which exceed anything I've written here. There are some gems within the most recent 1,200+ comments. If you're not a typical Mini-Microsoft comment reader, you should spend some time reading over the last three posts' comments, the last two especially:

Now you'll see some random and non-high-quality comments are in there, too. I had to flip moderation back on when the conversation about Microsoft H1Bs got downright nasty. I acknowledge there is concern about citizens losing their jobs at a company that has historically been on the forefront pushing for H1B visas. Going forward, I expect that Microsoft U.S. H1B hiring comes to a near halt.

OHAI: The elephant. There's a rather terse looking elephant in the room staring at me right now and pointing at its laptop screen. What's it got here... let's see. Ah. Blast off for Mini-Microsoft! And some text is highlighted...

Microsoft needs to reduce employee size. It’s too big. It doesn’t need a quicky Atkins-equivalent. No, it needs to get itself on a corporate exercise program that will shed itself of unwanted groups and employees. And stay on that.
Microsoft needs to stop hiring. It’s hard enough finding the scarcest of treasured corporate resources: the talented individual suitable for working at Microsoft. Stop hiring, trim down, and rebalance those precious scare employees inside to where they can be more productive and make products that delight our customers.

So before I get all thankful that this blog has provided a community-style water-cooler for discussing and ruminating over these layoffs together, I have to acknowledge that yes, I support reducing the company size. Big time. Back when I wrote the above in 2004 I felt we were already too big and encumbered with mismanagement due to our size. Over the years, rather than it being a blast off for a mini-Microsoft it became a blast off for a MAXI-Microsoft. When I wrote the above, I wanted a common sense realignment of our people and groups to focus deeply on the products we needed to be involved with. I also wanted the under-achievers moved on.

Instead: now we get the achievement-ignorant crash diet of this past week and we'll try to keep on that diet for the next 18 months, with the occasional binge. Yeah, good luck with your corporate ketosis level. I believe we need to smartly right-size downwards at least another 10,000 globally and lock down hiring. Emphasis on smartly. Going forward, we risk going through spurts of layoffs now given that we over-reached and will continue to over-reach.

Getting back to community: looks like there are Facebook groups for people affected by the recent events to get together and network with each other and with possible local recruiters (good for the recruiters since talented people got the pink slip). Here's what I've found so far:

Help Microsoft Friends Find a Job
Microsoft January 2009 Alumni
The Microsoft 1400
2009 Microsoft Laid Off Workers

Employee Town Hall: if you watched this Town Hall to get some comfort, Mr. Ballmer's opening remarks certainly popped your balloon of hope. As already reported elsewhere, Mr. Ballmer thinks it's another year or two until hitting bottom in the current economic crisis, and when it does bottom out, the subsequent level of spending reached will be well below the glory spend days.

Tip of the hat to the two questioners: bad hires + accountability and seeking that corporate "I'm sorry."

My biggest issue is that Mr. Ballmer reiterated that his unabated ambition drives what we do and that we're going to continue to go big and broad. "Forward down the field! Faster down the field! Move! Forward forward forward forward!" (slap my forehead as some of his front-row half-backs chuckle for their man) Oy! Going big and broad and trying to enter and dominate every possible software market is exactly what resulted in Microsoft having reactive and broad, shallow features that are rushed out lacking polish and usually lead to user frustration as the shallow experience putters out.

We should not go broad. We must rebalance and go deep, without redundant teams and teams working on products with no chance to see a release. Now is the perfect time to drop compete in some markets where the teams in place just are not going to succeed and drop those groups. I'm not happy with our portfolio. And I'm surprised that the Microsoft Board of Directors can't smell the rotting fish in the portfolio. Well, then again, given our Board's results, maybe I'm not surprised.

I've been revisiting Good to Great lately. Some joke that Mr. Ballmer read it backwards. Now more than ever it is so incredibly frustrating to read about the Level 5 CEO leader and think about the gap we have between where we are and a leader like that. I'm also disappointed that the potential LisaB started out with in her Listening Tours and the early InsideMS employee participation has been squandered and lost. I know... she proposed changes to Ballmer and Ballmer said "No way!" Well, keep driving at it. Keep having the conversation and leverage the employees to make it happen. Creating a new way to be an employee in an IQ-driven 21st century corporation is still possible. In the meantime, we've slapped on superficial ideas that might have scaled and been manageable with a 1990s 20,000 employee company, but in this age those ideas no longer work, let alone apply to our huge employee base.

So we'll continue with our divisive stack ranking and celebrating the individual over the group. I realize that none of this is going to change while Mr. Ballmer is in charge. And when do you expect that to change? Unless the Board sees the ~~villagers~~ shareholders running at them with pitchforks and can feel the heat of the torches on their neck, that is not going to happen any time soon.

Random links:

Microsoft Q2 2009 by the Numbers - Mr. Wilcox's analysis is always a good read.
Microsoft Bill For 'Vista Capable' Put At $8.52 Billion - wow, that matches the entire Xbox + Xbox 360 investment loss. Take that, Robbie!
Zune to Be Forgotten - Zune sales, already dismal, plunge.
Who will be the 4,999th laid off?
Bob the Impaler
Microsoft Layoff Bumper Stickers - hmm.

Microsoft Layoff 2009 - Day 2

2009-01-23T07:12:00.000-08:00

Okay, not a real post put more of a page break given the incredible number of comments from the first post on the 5,000 layoff cut-back (which is really 2,000 if you listen to Ballmer since we're hiring 3,000 people in the near-term, especially to help out with Search - take comfort in that you first 1,400 and you remaining 3,600).

Feel free to post comments on any Day 2 experiences and safe feedback about the Town Hall after you've had a chance to watch it.

If you're creating any Facebook groups because of this that you'd like highlighted please let me know in the comments and I'll roll them together. I'm especially interested in any networking groups for Microsofties + local tech companies given that some excellent contributors are affected by this, so some real talent is available.

Personally, I feel like we've taken the Sword of Damocles and rammed it through a bunch of pink slips and now we intend to dangle that above the head of Microsoft for the next year and a half. All the way through the end of FY10, folks. "Cut once, cut deep." Or, you know, don't. If you have insight to this counter-intuitive plan, please share.

Microsoft Layoff 2009 - Now What?

2009-01-22T07:38:00.000-08:00

22 January 2009: here we are at Microsoft: realigning resources and reducing costs. And laying people off. The day that has been rumored for a month now has come. And the staff reductions I've been wanting since starting this blog back in 2004 are here, though within an economic context I certainly Do Not Want. I wanted intelligent, well-thought-out leadership to have seen long ago that we've doubled our ranks far too fast and exceeded our ranks beyond what we can sustain (let alone need). Yet here we are now, in the choppy waters of the global economic crisis, being reactive rather than opportunistic.

Microsoft should be better than this.

This will start as a short post to kick off the biggest event at Microsoft that I can remember: severe cut-backs and staff reductions.

Initial coverage:

Some quick, shallow impressions:

Not much is getting done today and tomorrow.
1,400 gone today (Who? It's a drop in the bucket) and now we have the remaining 3,600 hanging over our head during the next 18 months - what does that mean? I assume at this point that it means aggressive performance management is the rule over, and over again for each MYCD and annual review from here on.
No raises as part of the annual review this year.
No SPSA payout? No details there.
Travel and contingent staff cuts. Very sensible and already in progress.
Building expansion cut backs that Mr. Tartakoff at the Seattle P-I has already taken an early preview of.
An outplacement center will be established. And hey, "some of you" may find jobs internally (good luck with the rush - I do hope over this past month you're already ahead of the game if affected) and there will be a severance package for the rest.
The conference call this afternoon will include Steve Ballmer. And we have our Town Hall Friday morning. What questions do you hope get asked to Mr. Ballmer as part of this staffing reduction?
Don't go asking your manager many questions today: this is news to 99% of us.
Dang, sometimes anonymous comments can be truthful in what they share.

Administrivia: moderation turned off in the near term - note that I will delete:

Comments I wouldn't have approved in the first place.
Comments that quote comments I wouldn't have approved - so don't have a great comment that goes and spends a little time quoting an offensive comment because I'll have to blow the whole thing away.

FY09Q2 Results + Town Hall

2009-01-19T20:54:00.000-08:00

FY09Q2: last time I speculated that the growing global economic crisis was going to be on the mind of the analysts. This time? Rumor resolution. God almighty, are you there? It's me Mini... along with all of Microsoft and every region in the world that benefits from Microsoft's employees. Please put this rumor about cutbacks to rest once and for all.

Because, you know, when you have a couple of check-ups during the week and all the staff wants to do is dish on all the Microsoft layoff news and news they have heard from other Microsofties, things have just gone too far.

What kind of interesting topics do you imagine might be covered during the day on this Thursday? Some items on my list include:

Cost-efficiencies: what does Microsoft plan to do with respect to cost efficiencies within the current economic climate? Personally, I think they'll be veiled references to our continuous review system to ensure we move on the bottom 10% and that will have to serve as a wink-wink-nudge-nudge to Wall Street. I also hope that we point out we're able to great deals on some of our previous plans and expect to save money as part of our competitive infrastructure build-out.
EU: (I can dream - it seems that the analysts never bring the EU up) Looks like the Ghost of Christmas Past has decided to pop up and start harassing the reformed Ebenezer Scrooge. What? The? Hell? Yes, Microsoft screwed up big-time by making the boned headed pronouncement that the web browser was an essential part of the operating system (smack to the forehead). Now Microsoft is getting their butt handed to them by Firefox and other browsers. So what, EU, you're saying: "Excuse me, might I kick that butt before you hand-it over to them?" The investigation is a dark cloud over the European market, has potential to randomize the Win7 release, will result in another billion-esque $USD fine, and I hope will give the US Administration a good reason to rattle the cage with-respect-to trade with Europe to stop this kind of shake-down.
Win7 + Office 14 Release: I imagine that there will be some probing over the final release of the next gen cash cows. And we'll say they are on track.

(Putting this up early for anyone to share what details they want to hear. Moderation-wise: sorry, no more rumors or FUD or misspelled Liddell comments. If it seems fishy, I'll CRF it for now. If you're right, well, I'll bring it back into a post and vindicate you.

More details post quarterly results, along with any interesting postings...)

Town Hall Friday: lots of rumors flying around, quarterly results Thursday, and then a Town Hall Friday morning. Let's hope that all spells resolution to the fear, uncertainty, and doubt stirred up to a crescendo as of late. The good-ending scenario is that Steve Ballmer gets out there and finally rips the rumors to shreds and proclaims that Microsoft is a one-of-a-kind juggernaut of a company that is going to be in the position to take advantage of the downturn to re-invest and surge past its competition while they are mired in the mud of the recession.

The not-so-good-ending scenario is that there's some kind of tough-love re-org truth to all the rumors as the leadership balances out and we get to hear how everything is expected to shake out.

Whatever happens, I expect that we'll see continued decline in contractors, headcount flat for the rest of the year, and a vigorous push to either get rid of the bottom 10% or get them back on track into the 70% bucket. Which probably ends up meaning a 5% reduction, in the long run.

(What do you want to hear during the Town Hall? Detail free follow-up impressions after Friday's Town Hall...)

The One Before Microsoft's Showing at CES

2009-01-04T15:45:00.000-08:00

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

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

One parting comment from The Field:

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

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

Ms. Mary Jo Foley: What will — and won’t — Microsoft do in 2009 All about Microsoft ZDNet.com
Mr. Todd Bishop: What to watch at Microsoft in '09 - TechFlash Seattle's Technology News Source
Mr. Joe Wilcox: Microsoft Watch - Corporate - 2009 Definitive, Unsolicited Advice for Microsoft

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

No where to go but up? Opportunity certainly abounds.

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

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

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

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

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

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

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

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

No Layoffs at Microsoft, and a Round-up of other Recent Comments

2008-12-29T19:40:00.000-08:00

NO LAYOFFS: first, I think it's fair to give some time to comments in the last post that wanted to absolutely dismiss any sort of Microsoft layoff rumor, starting off from one from 12/28/2008 (various comments edited to be condensed a bit):

NO LAYOFFS @microsoft
Yes, Executives are looking for measures to cut cost. And that can be done without any layoffs. Current hiring rate is slow at MS and considering the natural attrition, we will have lesser workforce at the end of FY09.
We are not immune to recession and our bottom line will see a hit for few quarters. We expect a full recovery by FY10 Q3. We are very optimistic that this recession is an opportunity for us and we will play our cards well. Urge all Microsoft employees to stay focus and keep doing the great work. You will hear more from SteveB soon on his plans. Thank you !!

and another from 12/27/2008:

For the last time folks -- THERE ARE NO LAYOFFS HAPPENINGS IN JANUARY..[...] beyond Jan...well we dont have a crystal ball -- but if the economy doesnt improve and the company misses targets -- it would get uglier for everyone -- from no raises/no bonuses to {maybe}cutbacks/layoffs... but then, those are the rules of the game in corporate America..
so for now -- enjoy your holidays, have a new year blast and then get back and work your ass off in the coming months --- for the overwhleming majority of you there -- things would be just fine!!!! PLEASE DONT PANIC!

From 12/23/2008, a more likely scenario that feels like a layoff but gives corporate cover:

MS will not do straight layoff. It will re-org, and cut groups/projects. Say 2000 FTE are given 4 weeks to land a new job within MS, I bet 1500 will find nothing and will be forced to leave. So no layoff, let's call it "reorg-off" and MS can even save layoff package.

In-line with that, from 12/21/2008, bringing up an interesting point about H1Bs:

[T]his company simply could not go through a round of layoff (mind you I did not say a RIF, as we've all seen those) but the H1-B rules would force all of the cheap labor to be shown the door first, regardless of ranking. And Microsoft lives for ranking. Microsoft wakes up in the morning and get an enormous boner over rankings. So don't suggest for a second that there is some dismal, far reaching lay off coming down the river. Microsoft would never give up the chance to use selecting RIF'ing to demote the lowly ranked. If anything there will be selective investments, as has been stated time and time again. But no, Microsoft will not be showing the H1-B employees the door. Never going to happen, in my opinion.

When is a layoff not a layoff: which teams are at risk to re-orgs / cut-backs / RIF'ing? This comment from 12/29/2008 talks about Entertainment and Devices:

We (E&D management) had a meeting with Ballmer around eight-weeks ago. Ballmer discussed the GE approach to laying off the bottom 10% every year. When asked how Wall Street would respond to our layoffs, he said they would be happy.
We will be handing out a list of names to teams within E&D. This list will contain the 20% / Exceeded from the last review period. Teams will cherry pick who they want.
The original plan was to announce the layoff prior to Christmas. When we notified the [governor], we were asked to hold off until after the holidays.

Other things going on (from 12/27/2008):

Several big customers have not renewed SAs. This isn't just Vista, but also Exchange and other major revenue-generating products. Several contracts are going from being in the top-5 to zero. 2009 Q1 and Q2 are going to be horrific.
The whole worldwide economy is in a major slump. Toyota is losing money, for crying out loud. Microsoft leadership is working very hard to avoid mass layoffs -- unlike many other software companies that are cutting even if they don't have to. There's lots of creative thinking going into finding ways to cut costs without harming employees.
One of the more likely solutions to be employed is no bonuses in 2009 reviews. What are you going to do, quit?
Hiring is way, way down. Except for a scattered few positions here and there (SQL Server, Live Services, Search, etc.), Microsoft has almost no openings for external hires.

From 12/24/2008:

One of the "rumors" I've heard around the watercooler is that we are looking at a 10% layoff, and part of those heads will come from the open headcount that is out there.
I'm on one of the teams that are still caught in the middle of a re-org that keeps getting postponed and our Director has told his direct reports to start looking for other positions. Outside of that, nothing has funneled down to the individual teams.

Contractors are being dropped (from 12/22/2008):

I have been asked to let go of two of my contractors end of the month even though they have a month remaining in their contracts. Funny because on Dec 1 we were talking of renewing their contracts. Something big seems to have happened in the past couple of weeks, I suppose. However I still see our Director of Development hanging on in the team despite having no work. He was removed from the team about 6 weeks back and has no one reporting to him or no say in the product.

Regarding what's going on the the Field (12/22/2008):

Thanks to the wonderful mergers in the financial world…Technical Account Managers at Merrill Lynch, Wachovia, and Morgan Stanley were kicked out of those accounts. In central region the automakers basically kicked every Microsoft rep/engineer/consulting out till Mid 2009. And let’s talk about the rest of the field…ya know the people who support our customers and our products….people in Premier/Consulting/DPE. As our customers are cutting back our PFEs and consulting FTE’s have been forced to fight with each other on getting meager engagements with customers. Services management was talking as recently as August about hiring upwards of 2000 in FY08. Now with so many people sitting on the bench and not engaged at customers…is it the fault of the services employees or Corp’s fault for over hiring? There have been several internal calls within the last week where RIF planning was discussed.

Comment from 12/22/2008 regarding Microsoft Advertising:

Rumor confirmed from Microsoft Advertising. There are several areas within the organization that I can confirm an upcoming "reorg." Leaders of undisclosed groups have been asked to represent materials around their groups' long term plans and feasibility. I think this one is going to be big, hopefully they just cut the fat. There is plenty of it from my experience.

On cost-cutting:

Groups everywhere are being forced to cut costs - but good thing the Zune guys had a nice holiday party. At least they're profitable so they can cover the costs... oh wait. Probably cost as much as the annual salary of a couple L60-61s
And to the commenter about Robbie's group being on a hiring freeze for awhile - true, but the only reason they got there is because of "crazy hiring"... 800+ people in Zune alone?

Teams not at risk? Office seems to be at the top of that pile. OfficeGuy writes on 12/29/2008:

Layoffs: Office and Windows are unlikely to reorg/lay people off in the near future and are [relatively] safe - we need to ship a high quality product soon (and we will this time, no doubt), so losing even the bottom 10% or whatever could have a negative effect on these two cash cows (and it is too late to replace the fat with new blood this late in the cycle). Having spent a few years in Office I can say that this org is huge but I haven't seen real slackers or dumb useless people (maybe I'm just lucky). By looking at my team that has a lot of junior developers/college hires, I'd hate to lose even the bottom 10% - all these folks do try hard and the team is really respectable in Office.

Office again (from 12/22/2008):

College recruiting (at least in Office) is still firing on all cylinders - managers are being told that there will be a seat ready for every great college candidate we want to hire. The pool of highly qualified grads desperate for a job is as deep as it's ever been in recent years.
So if that is true, I'm skeptical that MSFT will announce anything that even remotely sounds like layoffs. Can you imagine the lawsuits if people are ushered out one door with a pink slip while fresh college grads walk in the other door?
Instead we'll see tightening of performance standards and aggressive managing-out of the low performers. The last thing anyone is going to call it is "layoffs"...

One commenter from 12/22/2008 warns:

Don't assume that firing 10%'ers == 10% cost cutting - it doesn't. To reduce salary costs approx 10% requires cuts into the bottom of the 70% bucket too.

January 15th: so do I think anything is going to happen January 15th? Well, it is after CES (we certainly don't want any bad news before that - though look carefully at the groups there and not there) and before quarterly results (no bad surprises delivered with results - check). But after the rather alarming attention the previous rumor-driven post got, even if something was going to happen January 15th I'd completely expect that's off the table now. Sorry, Oppenheimer & Co.

Gossip Grrrls: did I hear any solid facts during all the snow parties I slushed around at during the Christmas holidays? Nope. Just still a bunch of second hand rumors, probably filtered through people's own agendas and likes and dislikes. Stuff like:

Pffft, layoffs, come on! That jerk-ass blogger. Don't-worry-about-it, it's just the loss of open headcount and no backfill for attrition.
It's not just the bottom 10% being moved on but also folks in the lower Achieved/70% range (like people who worked themselves up from 10% or are on the way down to 10%). A commenter above had the same observation.
Some products and some teams are just gone.
Note that we've read a lot of comments about Entertainment and Devices and Server and Tools. All the gossip I hear swirls around them.
Prototype, redundant, and pie-in-the-sky teams are going to be re-org'd into everyday meat-and-potato teams. We're going to have a bunch of spare code names soon.
It's a layoff masked as rhythm-of-business reorganization plus performance management plus Not To Exceed staffing budgets being strictly enforced.

That last point is interesting around labor laws that I don't begin to know anything about, laws like when a layoff comes that the H1B hires are supposed to be the first to be let go and the Working Adjustment and Retraining Act one commenter brought up. If this is a stealth layoff due to a lot of RIF'ing and those people leave because there are no matching open positions, does Microsoft have legal cover against this being an honest to goodness "layoff?"

I think a requirement like having to shed all the H1B hires absolutely nullifies Microsoft doing a classic layoff. We just wouldn't let go of those people.

Oh, and in closing, the following question came in with a comment from 12/27/2008:

Mini - the entire premise of your blog is that MSFT needs to reduce in size, be more efficient, be more cost-effective. While the reason is not the ideal one (forced upon MSFT by outside economy, rather than developed as part of smart strategy), the end result will be the same. If MSFT is a capable company at its core at all, it will survive, evolve and thrive.
If there truly is a round of layoffs, and MSFT ends up becoming the leaner, meaner, smarter, more innovative company you wanted... shouldn't you be ecstatic?

It's a pretty tempered ecstasy. Yes, I want a smaller Microsoft because I believe that Microsoft has exploded in size for no good reason. Going back to 2004. Even with the continued hiring binge since I started this blog, I had a small glimmer of hope that reason would be seen and discipline enacted to hire a limited set of high caliber contributors - and flush out the employees who are better suited working elsewhere. That never happened. And now we're in a, "golly-gee-wilikers the cash ain't coming in like it was and we've done gone and hired all these people! Yeep! How'd that happen?!?" mode.

In a year, when this all passes, we'll be back to hiring like crazy, learning nothing. Unless the leaders at Microsoft that run tight, well managed organizations can step up during this time and flush out the binge-hirers. There's my little glimmer.

(Edit: put in links to the appropriate sources for the comments I quoted above.)

Rumors of Upcoming Microsoft Cut-Backs

2008-12-21T17:23:00.000-08:00

Rumors. Microsoft layoff and cut-backs and Reduction In Force rumors. That's all I have for you. Rumors and second-hand speculation and the comments left by the fine, good-looking folks who participate in the conversation here. So pour yourself some holiday cheer and dive in.

What have those fine folks been sharing over the past couple of posts here? Bad news on the rise and with perhaps January 15th 2009 as an interesting day for Microsoft news. Bad news. 15 Jan is a week before FY09Q2 quarterly results and it's better to share as much news, good and bad, before the results are released vs. surprising Wall Street (something I think we've learned).

It all starts with...

Just heard on the finance grapevine. MSFT layoffs are coming on January 15th.
They are substantial.

And then some curious meetings:

they lost 12 people in STB [...] looks like "feedback" reviews are underway to get the a-10's out of the picture as well.

What kind of meeting? Perhaps like:

I got invited into one of those special "manager" meetings on thursday which resolved to absolutely zero activity other than asking opaque questions for which the answer was already known.
"fact" finding in order to dismiss an argument OR dismiss me :)
shall find out 1/15

In Live Meeting:

Live Meeting is one of the worst places to be right now - and it has gotten downright hostile and strange in recent times. People are pulled into meetings with management where they get interrogated about what they are working on ("We want to hear what you think you know about XYZ, this is not a knowledge-sharing session..."), people are given impossible tasks like coding things not yet designed, automating things not get coded, documenting unfinished ideas (all subject to being cut next week too). On top of that they must account for their time by the hour. Live Meeting is in its death throes.

Breaking-up when you have no budget is another tactic (in STB):

Our 120+ person org has just been broken up due to lack of budget. About 1/2 the team is staying, the other half is going to a number of different teams within the larger org. So far, we all appear to have jobs, but man, what a shocker, I thought ours was one of the more stable teams.
Not sure what happens to our Director, he seemed a bit shocked himself when he delivered the news today. I also don't know if this is the first step towards a lay-off, but for now, it seems we'll have jobs for a few more months.
Ugh, not good, not good at all.

STB again:

I got pulled into a lunch 2:1 today and got given good news on "you have 4 weeks left"
STB - > Server

Rumors! Like the following that I've heard wandering around chatting with folks before the holidays:

I've been hearing some stealth layoffs around the SQL and BOSG groups, around 70+ people were given 6(?) weeks to find another position within the company, otherwise they are laid off.
Anyone know others?

Is the following a list of head-count cuts or expected percent cuts?

3 in omps
9 in stb
12 in msd
7 in devdiv
18 in UA
5 in MSX

Beyond product groups:

Finance is cutting 10% of work force.

I will agree that we'll be casting a hard eye at consistent 10%-ers during MYCD:

If you have to 10% an employee who was in this bucket last review you may well find yourself showing them the door. This means that we can meet VP goals of no lay-offs (we are pruning poor performers) yet be seen to be reducing OE

But who is taking the cut?

The news is in. All the money making groups cut 10% of the work force. The money losing groups hires.

Vendors get it, too:

Vendors are also having it bad. The funding for our project stopped and our vendor team of 28 people have been asked to leave immediately. All of us have been asked to move to India by our parent company. [...]

Who should be taking a cut? One commenter points to GFS:

Do you know who was killing Microsoft economically from past several years- think think think? Being one of the 65 level in this organization and spending most of my career here - I can tell you that this group was living lavish life from past many years (thank god – we have some economic crisis now and people are asking some tough questions from the managers here). I know many of you have already guessed and you are right - this group is called "GFS - Global Foundation Service" and DebraC is leading this group. (Did I use the word leading?) If you want to know how capable she is to lead this group, I encourage you to watch her latest all hands streaming that you can find on MSW. [...] There are billions of dollars hardware purchased every year across this group without any planning and I can assure you that 50% of them are not even used or required at first place. Most of the hiring in this group is not for getting things done or being innovative in datacenter world but each manager here trying to build their own empire by just hiring whether they really need it or not.

Local impact? One commenter muses:

As someone whose product was recently whacked, I sure hope there are some RIFs before there are out-and-out layouts (at least in my area!) Scary... 'cause in this climate, it's going to be darn tough on the economy to dump a bunch of talented folks to the curb and have them competing for slim pickings out in the rest of the world. The ripple effect on the Puget Sound economy alone (assuming the layoffs are substantially here) would be staggering. :-(

Okay. So first I'd love to hear what you have heard or know as well, though I realize some of you might want to stir the pot with made-up fluff sprinkled with schaedenfruede - please don't.

Second: you have to realize that the upcoming 2009 Mid Year Career Discussion review process is one of the most important career inflection-points for you that we've had in a long, long time. Already my team is being asked to review people on the HR Watch List deeply and especially look at any two-time-plus 10%'s, no matter whether they are Situation I (eh, should be fired) or Situation II (effective but have reached their career maximum - again, a horrible, horrible concept). The upcoming Stack Rank for Mid-Year is going to be super-important for determining who has to go first if your team is given an n-percent budget to cut-back on. And yes, if we fire the current 10%'ers we drop down the lower 70%'ers into the 10% bucket. So just because you don't end up in the 10% bucket don't get all happy about yourself unless you're well into a high Achieved / high 70% bucket.

My suggestion to you: know when your team's Stack Rank (aka Calibration) meeting is and be very aggressive about enumerating your accomplishments this past year with your manager and asking your boss where they believe you rank within the team. Hey, I hate this system too, folks, and by me giving you advice I'm trying to prescribe some preventative medicine, not endorse the lifeboat drill that is Stack Ranking. And if you have Skip Level meetings with your upper management, you'd better figure a way that you walk out of that room with them loving you.

And if you get your six weeks, you're going to have to depend on your existing Microsoft networks. Folks I know with open positions have really ratcheted up their choosiness about who they want to bring into their group and are exceptionally uninterested in unknown RIF'ed people wanting informationals, assuming that they are 10%-ers.

Third: let's say we are having intensive cutbacks and/or RIFs and layoffs. It is absolutely essential that Microsoft steps back and asks, "Whoa, how did we get here and who was leading us?" How did we go on a drunken hiring binge and continue it even though a year ago most of us realized we were dropping into a recession? It's irresponsible leadership. It's especially irresponsible to the people we've hired and to the people incoming with recent offers. If you don't think too deeply, it's easy to be sipping on your Starbucks in Crossroads Mall typing away at how Microsoft needs to mass fire people so that it can refocus on essential business. But when you do it at a time when the economy is in the crapper and job openings at Microsoft is near nil is unforgivable.

An important consequence is to ensure we never do this again. The first step is to cut out the people who got us here, especially by making weak hires. Everytime someone who you said "Hire" to on an interview loop gets a 10% review your ranking on hiring goes down. If they become good attrition you get dropped from interviewing. You obviously aren't a very good judge when it comes to hiring for Microsoft. Likewise, if you said "No" to someone with a bad review or "Yes" to a star performer, your ranking goes up. And all of this is made very clear to you, versus you wondering one day, "Hey, how come I haven't been on an interview loop in a while?"

Next, if you've been in the way of quickly load balancing within your division according to needs vs. empire building: *poof* you're either gone or demoted.

Come 22 Jan 2009 Microsoft will be asked by the analysts what it is doing to contain costs. And I believe Microsoft will have an answer. I think this is one solution that you don't want to be a part of. I'm all for cutting back, but it should have been done long ago, responsibly, vs. forced upon us. Because I believe when things turn around, groups will be lighting the sparklers and cracking open the Kristal and hiring madly again.

(Edit #2: added links to all the comments I quoted so that readers - especially first time visitors - understand the source material. Edit #1: fixed a double paste.)

Achieving Senior Level 63 at Microsoft

2008-11-15T19:18:00.000-08:00

I want to share some of my thoughts about succeeding at Microsoft and reaching Level 63, the Senior contributor level at Microsoft. Given that quite a few Microsofties are going to find themselves locked into their current group for a while, the ability to succeed by swinging on the vines to a new group is going to be rare. Within the comments, I hope to elicit advice that follows up on what I start here, and maybe even contradicts it. I'm interested in hearing your stories of success, mentorship, and turning a career that was off-path back on-track. For the folks on the path to L63, I want you to first understand your boss's opinion of you, your opinion of yourself, what it takes to succeed in your team, and then ways you can step up and be on the right path.

Let's Hear it for the Boy! Let's Hear it for the Girl! If you reach L63 during your time at Microsoft, especially if you started at L60 or below, you should celebrate. Here's to you! What an achievement! You have the right stuff to succeed and Microsoft is very happy with you.

L63 is very much an important milestone, and in tough-hiring times like these the following question has never been more important: "Will <<fill in the blank>> reach Level 63 during their career?"

If you're not there yet and your boss was asked that question by your skip-level-boss, what is your boss's answer?

Unless you know for sure that your boss's answer is an immediate "Absolutely!" you need to hit the pause button for one big time-out regarding where you are, where you're going, and what needs to change. And I'm going to tell you right now, I'm 99.9% sure what needs to change is you. Because, except on the rare occasion, Microsoft and your team isn't going to change.

Up until L63, you can pretty continue to be promoted based on raw talent to get things done smartly and efficiently. Things get thrown your way and you knock each and everyone of the challenges out of the park. Then perhaps you're stuck at L62. What got you here ain't gonna get you there. What now?

Think Locally: remember three years back when we talked about the book Corporate Confidential? It's a good time to flip back through that. One of the key lessons is to know who is the gate keeper for your career. Pop quiz: who is it? Think about it. Ready? Let's compare answers... answer is: your boss. Your lead. The person who puts you up for promotion and has promotion conversations with your skip level. It's a question your boss gets asked so it's not a surprise to them. Your boss should already have about a year-long plan about who on the team is getting promoted when - it's essential for team promotion budget planning. And when the time comes, putting you up for a promotion to L63 is the first time your boss will be challenged by your skip-level and by your Aunt and Uncles (your boss's peers) about one of your promotions. It's hard for L63. Harder for L64. And a knife-fight for L65 (some other day). They will have thought this out.

If you're saying "Ah, dude, my boss is in the way of my promotion" then all I have to say is "Duuuude, your boss is the way to your promotion." Perhaps someone can explain to me how you get successfully promoted without your boss's support.

So honestly, what is your boss's answer about if you'll reach L63? If it is "Absolutely!" then the follow-up is: after what accomplishments and around when?

Your Recently Promoted L63 Peers: let's say you have at least one peer that in the past year or so has been promoted to L63. Why? Do you know why? Specifically, what did they accomplish, and what contributions do you see them doing to justify their promotion? Write it down in a team-culture career section you keep in OneNote (start that section now if you don't have it).

Now read over your answer. If you're going into that comfort zone of complaining about politics and butt-kissing and favorites, do me this favor: hold your right palm up, nice and flat like you're about to be sworn in to testify in a trial, and now extend your right arm out nice and wide, and then quickly swing your right arm around the front of you in a nice arc that ends with the flat of your right hand quickly connecting to the left side of your face for a hard, resounding slap. Repeat. Alternate to your left hand appropriately when tired. Continue to do so until you've slapped yourself silly to the point that you're not complaining about how other folks must just be connected or political or adept at the finer art of buttock tongue massage. Excuses and griping and bemoaning aren't the stuff that L63 contributors are made of. So either keep slapping yourself or choose to wake up. Until you can be honest with yourself (and it's not fun, trust me) you will be stuck doing what you're doing and your complaining will be the glue keeping you there.

Turn (it) Around, Bright Eyes: every now and then I get a little bit thrilled when someone joins the team straight out of school (or with a little industry experience) and after a few months it's obvious that Microsoft is the best company for them. They just plain resonate. They are 100% star material. Will they reach L63? Absolutely. And on one total-eclipse-rare occasion, I've been able to be answer the follow-up question: will they reach L65 and say with confidence: Absolutely. Well, what about everyone else? Sometimes the answer is, "well, we'll see..." and other times the answer is, "if they'd only stop doing X and start doing Y on a sustained basis, I could see it..."

If you're not an Absolutely! then do you know what more you need to do? And in your answer, there's a kicker follow-up: not only what you need to do to justify being promoted to L63, but to succeed in comparison to your L63 + L64 peers. For some teams - especially those like Office with few departures release-to-release resulting in level compression - that's a rough bunch.

I have seen people turn it around. If you're off-path, you can turn it around. You first have to be truthful with what direction you're going in and where you actually are trying to head. Get yourself a formal or informal mentor who is already doing what you want to be doing. Successful people looooove to expound upon the secret to their success. Some can even challenge you and give you the tough love and direction you need. Buy a Principal a coffee. There is no better investment at Microsoft for tuning your career. When someone gives you the hard advice to succeed, it's quite the gift. Don't waste it. It's a lot better than folks being ambivalent about your success or failure, right?

Your Team: you have to be able to understand why the L63s and L64s are where they are. You might have the Microsoft Senior Career Stage Profile in front of you all marked up and broken into more sections in OneNote, but which ones matter most to your team? And to your boss. And to your skip level. If your boss is saying "Yes, ready for promo now" and your skip is saying "No, not now" well, why?

Aspects of an L63 Contributor: some random aspects that come to my mind beyond our CSPs:

They can own a room: they aren't warming a seat but rather can take charge of a conversation and represent such a deep level of knowledge that they gain respect for what they say and earn a good reputation. Their focus stays on accountable results and this person can bring resolution and closure together.
Expert: They are sought after to be in meetings, for instance, so that good decisions can be made.
Results-focused: they are focused on getting great results and don't entwine their ego to particular solutions. They don't get defensive if their ideas are revealed to have flaws but rather delight in being able to move to a better solution.
Leadership: pro-active leadership that convinces team members of the future direction and even helps to implement it. This is a big difference between those who can complain about the way things should be and those you can actually bring it about.
Solutions, not problems: following up on the above, they aren't complaining about problems on the team but rather implementing and driving solutions.
Makes other great: the team benefits and grows from the person's contributions. Answers questions from the team, from support, from customers. Knows what the team delivers backwards and forwards. They are a good mentor.
Influence when they can, scare when they must: they have fundamental skills in influencing people, but if they need to flip into junk-yard dog mode, they can. They don't give up and walk away but rather fight when they need to fight, escalating only when needed and with lots of justification.
Makes the boss great: if the team and your boss are succeeding because of you, of course you'll be succeeding too.
Not doing it for the promotion: if you're out for a promotion, don't do work specifically chose to get the promotion. This is like meeting the Buddha on the road. If you come up with a pretty plan to justify your promotion, you've already lost it. Such plotting is obvious and actually detrimental to your career. If, however, you've determined what it takes to have a successful career in your group at Microsoft and have started what you need to start and stopped what you need to stop, then you're on the right path.

When I write all of this, I think back to an older piece by Joel Spolsky talking about Rosh Gadol contributors. Be the Rosh Gadol Microsoftie.

Also, go mine some of Dr. Brechner's Hard Code columns.

No, never: now, going back to that <<fill in the blank>> question above: if your boss is answering "No, never" then this is a red-alert moment for you. Flip on the klaxons! Why? Because when it comes time to roll people out of the team (as teams do from time to time) this "No, never" a marker that is used to help figure out who - at I and II CSP levels - is either on-track or out. If the answer for you is "No" and you don't like that, well, what are you going to do? I suggest understanding why it is "No" first, truthfully accepting the point-of-view as pissed off as it may make you, and then having a self-directed action-plan to get on track.

Discussion: First off, I'm going to be hard-core about comments here. I want them productive and about career success at Microsoft, especially your thoughts about achieving L63. What advice do you have to pass on? What advice do you need? What worked well and what really horked things up for you? If you're a manager, what's your L63 promotion philosophy? I'm not looking for any off-topic comments let alone woe-be-me comments - remember that slap thing?

If you have an itching to talk about something else, please go here: But Mini, I Want To Talk About...

But Mini, I Want To Talk About...

2008-11-15T19:14:00.000-08:00

Don't want to talk about reaching L63 at Microsoft and bummed that I've locked down the comment stream on that post to be my way or the cutting-room-floor?

Tell you what I'll do: I'll put this post up to have a post to riff within, but still stay within my commenting guidelines.

What's on your mind?

Who's still hiring at Microsoft? How teams are locking down and freaked out about the risk of losing positions if people try to leave? Ideas to move groups?
Wondering if the mobile team can be possibly slapped enough to compete against the iPhone and Android momentum?
What's up with Arik Hesseldahl calling Microsoft big and bloated? Is that passé now?
I still love my Media Center PC, even though lately it's started hating all of us... is this how SkyNet starts?
Azure. (shakes head) It makes me want to sing to the Talking Heads about how this is not my beautiful house. It's a solution. It will solve problems. Are they really the right problems, and therefore, is it really the right solution?
Kudos for a great PDC / Win7 debut. I'm drawing hearts around my sketch of SteveSi... and littles x's and o's... ahem.
On that theme: since the Company Meeting 2008, I've felt that we've turned a corner. A good corner. Do you agree, and if not, what do you believe has to happen for Microsoft to have turned the corner onto the freeway of success?
What topics would you like to see discussed in future posts? Ooo, I knows! Something about the new Microsoft Store on the internets!

Microsoft FY09Q1 Results

2008-10-22T22:47:00.000-07:00

FY09Q1: wow, I wonder what's going to be on everyone's mind during this quarter's webcast with the analysts?

"How has the global economic crisis affected Microsoft?"
"What product groups are the most affected? The least?"
"How has your forward looking assessment changed for FY09?"
"What kind of efficiency measures are you putting into place?"
"According to reliable sources (ahem) the Microsoft hiring freeze through major parts of the corporation is real. How does this hamper Microsoft's ability to hire the best talent and to retain the best talent?"
"Are you going to buy Yahoo! since it's so much cheaper?" (Please keep Mr. Ballmer away from any recording device during this question.)

etc. etc. Any big questions you're looking to be answered?

Pre-announcement portion: my suggested post-analysis sites for quarterly results:

Mr. Joe Wilcox,
Mr. Todd Bishop's new Microsoft hang-out over at TechFlash.com
Mr. Joe Tartakoff's Microsoft Blog at the Seattle-PI. In fact, Mr. Tartakoff has an early look at earnings: What to watch in Microsoft's earnings report.

Interesting angle Microsoft has come with during the global economic crisis: when money is tight, drop those custom solutions and go with Microsoft to save money and be more cost effective. Nice. Post-analysis postings of note (to me):

Mr. Joe Wilcox:

Microsoft Q1 2009 by the Numbers

Mr. Todd Bishop:

Mr. Joe Tartakoff:

Mr. Brier Dudley:

It will be interesting to see the $500,000,000USD savings in action. There was some probing by the analysts on that but just a broad answer in response.

An excellent manifesto on hiring freeze for talented contributors:

Is Microsoft Recession Proof?

2008-10-19T12:44:00.000-07:00

Is Microsoft recession proof? No, of course not. While it can be buffeted back in forth in a mild recession and get through without group parties here and there, it's pretty unclear what kind of Microsoft will emerge at the other end of a deep global recession. Just a quick post about the immediate staffing impact as we head towards quarterly results.

First: thank whatever deity you hold dear that we didn't go forward with that Yahoo! acquisition. How crazy would that look now?

At this point, organizations are being told to eliminate inefficiencies. For different organizations this means some pretty radically different action items. For some parts of Microsoft, this means hiring freezes. While hiring freezes aren't any fun (more below) you probably prefer them to full-blown Reduction in workForce (RIFs... though I guess that would be called RIWs or RIWFs).

What we need, though, is one big RIF.

There is an unfortunate consequence to hiring freezes for Microsofties: those ready to move on to a new position are stuck because there is no where to go and, even worse, those who have already gone through an interview loop are having their offers frozen out. Also, any attrition is not going to be backfilled and the org loses that headcount. Let's talk about this.

Now first of all, I'm all for reducing Microsoft's headcount. I was for that, what, 40,000 hires ago? Microsoft's key asset and key overhead are the Microsoft employees. You reduce that right, you save a bunch of money. And it is not just a one time saving.

I'm all for good and bad attrition. But I'm concerned about implementing unhealthy policies vs. just a one big 10% or 20% reduction all-around (we've identified 10%-ers already right - at least 10% Situation I-ers). If you do this big and once and you can still backfill future attrition and let people move around the company into new positions.

It's unhealthy for Microsoft to lock people into their jobs, which might be the reality for the next half-year to a year. I want the most talented Microsofties to - as their current commitments come to a close - look around the company and find new challenges to move to. It makes for stronger careers building our future leaders and creates stronger results. It also makes bad teams fail sooner by loosing key contributors. What's even worse, perhaps for planning, is that people will be locked and not moving on during a natural product cycle rhythm coming up (major product groups, for instance, going into stability), and these same people, once headcount reopens in the future, will be abandoning their commitments mid-way. Uncool. Unsurprising.

As for being told "Hey, we're not going to let you fill your attrition." Well, what group, let alone empire builders, is going to move on bad contributors now? Better to limp along than have reduced capacity. Not even that alluring, "Wouldn't you want to move-on that plateau'd L61 person with a hot college new-hire?" works now.

Some comments on this. First a common hit on most teams:

time to talk about layoffs. Hiring is frozen and teams are being told to reduce head-count through attrition. Sounds like layoffs to me.

What happens when you want to move internally and have already interviewed (oy!):

Any updates on the hiring freeze anyone? I desperately want to get out of my current team but teams I have interviewed with are withholding offers because of this damn freeze...

What the Hiring Freeze Means to Me - An Open Letter to HR
I am high performer, a gold star winner, have a relatively high level and I have a problem.
In an all too common scenario, my group was re-orged and I was given a new manager. As is many times the case, this manager is well regarded for his technical skills but is absolutely an abysmal manager. He has little aptitude or interest in actually managing his people and still operates like he's an IC.
Multiple members on the team have gone to the new manager, as well as the skip level manager to discuss the situation.
The skip level manager now has a dilemma - does he support the manager, and help him grow into the role?
If he does, it will clearly take 6+ months, and this is on top of the 3 months it took the team to muster the courage to escalate to the skip level manager to begin with. If the manager stays and doesn't improve, myself and the people on his team will surely take a hit at review time at the end of the year.
In our case, the manager doesn't know what to do. He's thinking about it, and in fairness we recognize he's in a tough spot.
All the while, though, the clock is ticking, and the high performers on the team are looking for the exits. We're demotivated, demoralized, and are placed in a position where we cant realize our potential.
Most people reading this are likely nodding their heads. This happens here. Alot.
Typically when this happens, employees see this as an opportunity to explore another part of the company, and round out our experience.
But not today. There's a hiring freeze, no internal transfers are allowed, and we're stuck.
We've done the appropriate thing, we've talked with our manager and our skip level manager. We're now in a weird limbo.
Of course this comes at a time when we're in a down economy, and in many respects lucky to have our jobs. We're sure as heck not going to rock the boat any more than we already have.
This seems to leave to options. The first is to suffer in silence, the second is to leave the company.
Neither of these options are good for us or for Microsoft.
Our group is not alone.
I'd ask you to consider four things:
(1) New rule - anyone new to people management is on a trial basis for the first year, to be reviewed and renewed quarterly.
(2) New rule - anyone new to people management shouldn't be given a team of more than two people. If they do a good job with two, go to five, and so on.
(3) Make managers of managers responsible for their appointments.
If you put a bad manager in place, and you don't resolve the issue after 1-2 quarters, you take a percentage hit on bonus and stock.
This will result in people spending more time in the decision making process for this.
(4) Allow for internal transfers, atleast for higher level positions. When you take high leveled, high performers and you put them in a position where they can't be high performers due to poor management, they either leave or grow demoralized and become less productive to accomodate a bad manager.
Eventually, this second group also leaves, with the ones that don't downgrading to average performers.

A snippet to re-enforce that:

Internal is frozen, too, for the most part. I see Live and MSN technical openings, and various business-oriented ones. I had just seen a couple positions for which I wanted to do informationals. Before the hiring managers and I met, they both called me and said that they had just been told that couldn't hire anyone for the time being.
It's really my time to leave my team, because the three year timer is ticking and I'm topped out in my org given the kind of work management wants it to do. I'm capable of more, but the level of work isn't there. When I've tried to just go get it, I've caught flack from management - because I was taking on actual business risk that scared them, instead of the safe work our team usually does. I don't like the online services biz, so I hope the powers that be finish evaluating the business climate and open up a few more product heads in profitable divisions sometime soon. My preference is PM or dev in Exchange, as I'd like to contribute to that. But at this point, any core product would be interesting.

I think that this is an opportunity for major change vs. aloof delegated inefficiency hunting, but major change has to come from SteveB. If need be, the global climate gives Microsoft cover to make big revamps. E.g., "...the economy made us do these big cut-backs vs. us doing what we should have been doing all-along." It is too soon to expect this during this week's quarterly results, but within the next quarter, as the impact to reduced global PC sales becomes apparent, we should be ready to announce some major overhead reduction (e.g., not towels but rather less butts for said towels to dry - win-win). And remember: you cut once and you cut deep. Incremental pain is unhealthy and all that you're doing is poisoning your teams and setting up a huge round of bad attrition once things turn around.

I imagine each one of you wants to make your team better and more productive and streamlined, and have ideas for your team and beyond. This is an excellent time for our HR leadership to re-engage Microsofties plus finally join the 21st century and implement team-focused awards. Yes, we would still offer differentiated awards, but team achievements must be recognized with the same level of attention that our super-star hero culture is given. Who doesn't want an excellent team to be rewarded, let alone dysfunctional underperforming teams torn apart?

So, if your team had to get by with 10% less budget, how do you think it would be best addressed?

Compensatory Arrangements of Certain (Microsoft) Officers

2008-09-25T19:32:00.000-07:00

I saw today that Microsoft filed a Form 8-K. The initial financial news blurb really didn't get my attention and it put in my mental queue to read later.

Then Brier Dudley went and read it and blogged this post: Brier Dudley's blog Microsoft's new bonus plan for Steve Ballmer, et al Up to $20 mil apiece. Snippet: Instead of the current mix of cash bonuses and stock awards, executive bonuses will come from a pool - for fiscal 2009, that pool is the equivalent to 0.35 percent of the company's annual operating income during the year. [...] Payouts are capped at $20 million per individual. Oh well, I guess everyone's got to face the new economic reality.

Suddenly I was very motivated to read the 8-K, in a pissed-off sort of way.

From the filing:

Item 5.02 Compensatory Arrangements of Certain Officers
The Compensation Committee of the Microsoft Corporation (“Company”) Board of Directors has approved a new executive officer incentive plan (“Plan”) for the Company’s executive officers. The Plan replaces the existing annual cash bonus and equity award programs for the Company’s executive officers beginning with fiscal year 2009.
The Plan allows the Compensation Committee to establish award programs for specified performance periods (e.g., one or more fiscal years). The maximum amount payable to a participating executive officer is a percentage of an incentive pool for a performance period. For fiscal year 2009, awards will be granted from an incentive pool with maximum funding of 0.35% of Microsoft’s fiscal year 2009 corporate operating income. The awards granted to each participating executive officer will be limited to a fixed share of the incentive pool, and these awards may be further reduced or eliminated in the discretion of the Compensation Committee (or in the discretion of the Board of directors, for awards to the Company’s chief executive officer, Steven A. Ballmer). The Plan specifies a maximum amount of $20,000,000 that may be paid under the Plan to a participating executive officer for one or more performance periods that end during a fiscal year. Award amounts under the Plan may be made in either or both stock awards issued under the Microsoft Corporation 2001 Stock Plan and cash. Vesting of stock awards will be determined by the Compensation Committee. The 2001 Stock Plan generally requires that stock awards vest over at least a three-year period.

If I could shove my pockets full of cash would I flip off shareholders and employees worried about the stock price, too? No, not even I could do that, for (like this) all the money on the world. I guess the insider-trading gravy train must have started running out of steam and goodness knows we don't want our executive leadership looking for employment elsewhere, so what else could we do to retain them?

Given the feckless vote of confidence that a bunch of screw-ups like Yahoo! got at their recent shareholder's meeting, I don't have much confidence in our shareholders challenging our leadership. Stock price? Don't care, got mine. What kind of performance targets must the company reach to achieve the rewards? Not gonna tell you.

First SPSA. Now this. Microsoft is dying from the inside, and the folks sucking it dry have zero motivation to change things. It's working out pretty damn well for them.

And Microsoft shareholders say?

<<Crickets chirping>>

Microsoft Company Meeting 2008

2008-09-17T23:31:00.000-07:00

Alright, here we go! Company Meeting 2008! A chance to forget everything that went wrong last year?

Speaking of yesteryear, I've touched on The Company Meeting in 2004, 2005, 2006, and 2007. 2004 was fairly light because that was the special limited seating event that let everyone forget that it was actually the Company Meeting day and go-about their day as usual. 2005 was fun. 2006 was weird with the coordinated post-commenting frenzy here. And 2007 started with great potential and melted down with each mind-numbing demo.

Plus the burping game.

My main wish this year is that Ballmer's speech meets last year's quality, that he shows last year scorecard and where we are now, and that more than 1,000 people are around to hear the speech when it actually happens. Let's hear more about the idea of Many Microsofts. Or... was last year all throw away?

Okay, I'm off to pack some warm clothes and a few extra cups for all of the Microsoft Kool-aid I intend to guzzle. Sorry, all you folks who think it's a waste of money and effort. This is my opportunity to re-energize myself and see my peers and team re-energized. Oh, and do me a favor on Thursday: join me in letting out a joyful "Boo!" for any hiring statistics that show us throwing on more and more bodies we don't need in the ranks.

Post Company Meeting - some thoughts.

Well, it's days later but I still have that tangy fresh taste of Microsoft Kool-aid running around my mouth. I felt that the Company Meeting was really enjoyable. I appreciate it took a tremendous amount of effort into coordinating it and making amends for last year. Rainn Wilson I thought was a great host and, c'mon, who couldn't have loved his big finale before SteveB's entrance?!? A band, shooting flames, fireworks, exploding streamers, break dancers, and beach balls tumbling down on the crowd! Whoo! Why did it have to end?

And kudos to the planners for an innovative solution to the constant paper airplane harassment of year's past. I don't know if we broke a world record or not. Hopefully not. Hopefully every year we just miss it by that much and we try again the next year.

And the crowd held together. I always look around and see how people are doing and keep an ear out for distracted chatter. The crowd pretty much was engaged most of the time, except for Craig Mundie. It was a big crowd and everyone stayed put until the end, vs. the large-scale abandonment we had last year up to and through Mr. Ballmer's presentation.

Random notes from me:

It was nice that it started off with a big-reveal. Will Halo-fanboys be upset to know that Master Chief's face was revealed only to Microsofties? Keep the secret.

Our mission statement: "Create experiences that combine the magic of software with the power of Internet services across a world of devices." Ba-roo? Everytime I think of it, all I see is a grinning Doug Henning tossing a handful of confetti sparkles into the air, gasping, "...the magic of software!" and conjuring up a glittering world full of devices. Mr. Adam Barr works over the mission statement and comes up with something far more direct.

Demos: better than last year, if that's saying anything. There was a lot of stable-candy that could have been shown but that wasn't. I'm glad they went through Office 14 and Windows 7 scenarios, along with some of our other apps out there. The geek in me was indeed wow'd by the Excel demo and I felt proud that we had implemented something as geekily-groovy as that. I want to meet the people who did this and listen to their story of how it actually all works. I think I would learn something great. I can't say that the customer reaction will be as enthusiastic.

I'm disappointed that the teams that could have shown something really rah-rah cool didn't. I'm looking at you, Xbox. Oh, wait, there was the whole bust-a-move part...

You: over and over again it was pointed out that Microsoft employees are its biggest assets. And? I guess admission is the first step. I'm not looking for bread and circuses perks like dry cleaning and grocery drop-off but rather deep meaningful career development and a meritocracy in our compensation for people and teams. And, you know, having less assets around.

Speakers: better than last year, and no random Slick Willies from the country club. Yeah! Elop is a really good presenter. Ray was okay, as was most everyone. Sinofsky was a bit bumpy in getting the words out (he makes up for it in typing, trust me). Craig Mundie was a wall: a cold-stop wall that everyone used as a mental- and bio-break. Most folks in my section were asking, "Hey, who is this guy?"

And then there was Steve.

Last year's SteveB speech was much better and deeper and challenging. This year: not bad and not challenging at all. Yes, we had the five points to go over so I guess that replaces the scorecard from last year (too bad... what's the worth of having a scorecard if you're not keeping score?). No mention of the becoming many Microsofts. But, we have a discussion of The Stock.

Microsoft Stock: (SteveB slowly waves his a hand infront of the audience) These are not the droids you're looking for. You don't care about the Microsoft stock price. Move along. Move along. I'd like to say "Nice try." But it wasn't even that. Does anyone remember that brief moment of Microsoft stock flirting around $37? I don't know about you, but I started to see a new old-energy kick on around my team and the teams I worked with. Last year, Mr. Ballmer asked what had happened to our boldness. I know where it is, and it starts at around $37. You want to see super-boldness? That starts at $45.

Oh, and it also starts in NOT doing dumb knee-capping moves like the muddled acquisition attempt of Yahoo! The responsibility for causing that stock plunge and its aftermath was not even mentioned. Un-bold. Yahoo! was totally that terribly embarrassing family event - like a wedding that melted down at the altar - that no one brought up.

A lot of us have been at this company - and participating in the stock compensation program - already for the long-term. And have stock bupkis, along with our shareholders. So it was bold to bring up the stock issue, but the discussion was unsatisfying and lacked any sort of boldness explaining mistakes that have got us here (Yahoo!, surprising Wall Street with multi-billion dollar investments, etc).

At least we know a bargain when we see it: Microsoft Announces Share Repurchase Program and Increases Quarterly Dividend $40 billion authorized for share repurchase; Dividend increased 18 percent. That's good, and lord help us all if that doesn't put the final nail into the Yahoo! acquisition coffin. A curious development as part of this:

Microsoft also announced that its board of directors has authorized debt financings from time to time of up to $6 billion. Pursuant to the authorization, the company has established a $2 billion commercial paper program. Microsoft intends to use the net proceeds from any debt financings for general corporate purposes, which may include funding for working capital and repurchases of stock.

Curious to me given that Microsoft and Debt have never been two words I've put together in my mind.

Your Say: after the meeting, what are your impressions? You know, safe to share impressions.

(tap tap tap) Is This Thing On?

2008-09-03T21:43:00.000-07:00

(tap tap tap... is this thing on?)

Review Season: well, just about everyone should have their reviews and numbers by now or very very soon - at least by the time you get your next automatic deposit! Given that address book updates went out the beginning of this week (for titles that are no longer opaque thanks to the CSPs) I've barged into more than one conversation of "Can you believe that <fill in the blank> was promoted to- oh! Hi."

Personally, while I still deeply appreciate not having to fork over sacrificial 3.0 reviews, I am still seeing, for all of my organization, okay compensation numbers for great work. And freaking-fantastic numbers for super-star work (salary schmalary for those people). That is how our system is set up and for those individual super-stars, it works out very very well. But by necessity, it requires great workers to get okay compensation in order to put the super in super-rewards.

And if it makes you angry, put that energy into networking around Microsoft for a new position or spiffing up that resume and seeing what other opportunities there are.

Company Meeting ahoy: not too long until the 2008 Microsoft Company Meeting. For any new readers: I absolutely love the Company Meeting, though last year's Company Meeting certainly tried my patience... like that Sweetheart that starts being a a real dick to make you break up with them. Things on my wish list for this year's Meeting, kind of echoing that old post:

Very few demos: at least, any demos there are should be short, fast, new vs. repackaged, and presented as if you were doing a power demo to the smartest people in the world. Cos you sorta are. And goodness, no calls for helps if your demo goes belly up.
Ballmer early: Ballmer gave a fantastic and interesting speech last year. Which most people didn't hear because their endurance gave out long before. I'd still expect him to be the end-of-day blood-rushing presenter. But I hope he can show up early to either kick things off or serve as a punch to keep things going.
Shaking Money Makers: time to show off Win7 and Office 14. Well, if you're like me you get to see them a lot everyday, but there needs to be a highly condensed so fast you miss half of what you see demo spurt of Win7 and O14, along with teasers of other emerging properties. They are our financial foundation and while most of the development work is done for them and we have at least a year before they surf through DCRs and stabilization, the employees deserve a peep show here.
New Blood: thanks to our great Town Halls, I kinda don't need to hear from our executive leadership team. I'd like to see some new, up-and-coming blood on stage vs. the same-old-same-old. And please, we're geeks, so make sure the new blood is geek-o-riffic like the rest of us vs. those country club shiny people that popped up so much last year. <<Shudder>> How about some Microspotting interludes?
Surprises: we come to this to be surprised and see things before (most) anyone else. Get CliffyB on stage to demo Gears of Wars 2 or something. Show us the new Halo stuff. The new 120GB Zune and interesting new Zune software features. Something. I won't blog about it. Cross my heart. Just please don't make the Xbox or Zune seem as lame and empty as they did last year. Here's Apple popping out another special event soon. Pop 'em back.
The Great Seinfield Reconciliation Paradox: or, time to show us the new ad campaign and how we have a coherent brand strategy that makes sense. There are a lot of fronts of our business with aggressive competitors that we're slipping in (mobile, gaming, television, OS, browsing, consumer). Time to see that not only do we realize this, we have a plan to meet and exceed. And goodness help you if your advertising solution to this involves some guy stuck in a big vat of orange goo in a barren landscape bragging how he can still check his Outlook email on his Windows Mobile Device. What?
Logistics: man, be on the first bus out of Redmond if you want to enjoy the Company Meeting. I usually leave as soon as I can but I'm still there after things have started. And I feel bad being into the third or fourth presentation and seeing a line of charter buses still making their way to Safeco Field. I do hope our buses figure different routes to get to the same point. And non-Microsofties: stay the heck away from Safeco field on 9/18/08.
No Paper: how about you sit down on the floor / first level and get pelted with poorly made paper airplanes for the whole meeting? That should be your penalty if you are involved in the least in distributing any paper to the Microsofties as they come in to Safeco.

Am I right in that they've dropped the whole best manager competition? Hmm. Guess after that one winner we exhausted all the candidates. What do you want to see at the Company Meeting or have the leadership talk about?

Old Business: it has been a while. The next thing I planned to write about was the Word from Wall Street with Charles Di Bona and Dylan Yolles from back near the end of July. Colleen, you crack me up, asking if Mr. DiBona was Mini-Microsoft. I wish! And Charlie, you could never disappoint me. Dividends. Buy back. Whatever.

Anyway, one interesting impression I got out of the vibe from the analysts: Microsoft leadership, time is up. Time is up to have us trust that you have a super secret plan that will really, truly work any year now. You went and convinced us that you have a huge vulnerability with respect to the online world by that totally confused and befuddled attempt to acquire Yahoo! and now you give us no specifics about what you're doing. Other than spending a whole hell of a lot of money (nice: You're telling us that there's a pot of gold at the end of the rainbow. Only, that rainbow is going to cost a lot of money to build to get us to that pot). Time's up.

I disagree with Mr. Yolles about the consumer market.vs. the enterprise market. If anything, we've suffered in doing so much for the enterprise market that most of the features are either user hostile (look, I can shut you out of using a USB drive) or just non-interesting. I think you can have both. There's a bunch of money walking around in the pockets of everyday people.

As for our huge cash reserve: now that we're not buying Yahoo! (right, right?) what to do? Not a dividend! But a big buyback of our stock. There was a rumor a couple of weeks ago that a buyback was under consideration, but nothing's come of it since.

An interesting observation was made that Google's Android has been created with 30 people at Google. That makes analysts look at how many people are responsible for Windows Mobile and ask, "Why? Why so many people? Why so much overhead? How do the results match up?" This feeds a desire now for some picking around in our overhead of our groups. Not a place our leadership wants to be, but a hard question that goes unanswered: what the hell do you need all these people for, anyway? Can you get by with less?

Yes. Of course we can. If you had to lose 10% of your group, not only would you get by, you'd receive a new sort of clarity about what was truly important vs. distracting. Our over abundance of people allows us to overwhelm our work with marginal, half-thought-out features to keep the mediocre C contributors busy and lets us go into the weeds pursuing edge cases. Ah, well, tired of listening to this same broken record?

Final take-away: Microsoft has to demonstrate that it is efficient and effective. What does that look like?

Administrivia: apologies for being away for an extended duration. It was a necessary departure and absence to be elsewhere with a situation that required my full attention. Best wishes to you to avoid such experiences for a long, long time. I'm about to go through... fifty pending comments. Whew. Where's that wine bottle?

Exit One Kevin Johnson

2008-07-23T19:23:00.000-07:00

So this email comes in from Ballmer this afternoon and, after appreciating Mr. Ballmer's picture thanks to ShowSenderPhoto, I'm scanning through it, "Yep, yep, sounds like a bunch of the stuff covered this morning at the Town H-what-the-hell-Kevin Johnson is leaving?"

That was a surprise.

A... pleasant surprise.

I'm really surprised. There was Mr. Johnson up on stage this morning during the Town Hall causing me to roll my eyes with his fake enthusiasm and now he's leaving Dodge. On the horse he rode in on 16 years back. I know he did a lot to pick up the pieces after the Vista-debacle and is probably due a good amount of praise for letting Win7 align itself to be on the winning trajectory, but I just never bonded with Mr. Johnson's leadership. And some of the projects he's interested in and driving just leave me cold (e.g., the upcoming MSN UI revamp. It puts the F in WTF).

Is he taking the opportunity to be CEO of Juniper? Is he the fall guy for Yahoo! being such a bumbling mess? Is his departure meant to make way for a big acquisition / merger?

As we consider the long race to succeed Ballmer, I was certainly worried that Mr. Johnson was at the top of the stack rank. No reason to worry anymore! And three of my favorite technical leaders, Mr. Sinofsky, Mr. DeVaan, and Mr. Veghte, all move up a notch. Hey, one less layer in the company. Throw all three of them in the running, eh?

If this had only happened before Ms. Foley's chat in Redmond about Microsoft's future: Audio Mary Jo Foley on 'Microsoft 2.0'.

Anyway, it's one hell of a way to kick off our Financial Analysts Meeting (psst, here's a hint: surprises? Analysts no like). Any interesting takes on the departure, and the future hire that's TBD? First comment I've seen:

Wow, I just heard that Kevin Johnson resigned. So much for trying to rid the product group of the cancer left by Allchin! This is not a good day for future quarterly results....

(Updated: fixed rather embarrassingly wrong honorific - sorry!)

Microsoft FY08Q4 Results

2008-07-17T07:58:00.000-07:00

FY08Q4: sorry, Microsoft, folks are saying your lipstick just doesn't help that pig much: Microsoft’s Annual Revenue Reaches $60 Billion Fastest annual revenue growth since 1999 fuels 32% increase in earnings per share.

Pre-announcement portion: my favorite post-analysis sites for the end-of-FY08-results:

Mr. Joe Wilcox, and
Mr. Todd Bishop.

Leaving the list is the departed MSFTExtremeMakeover, though the final post is a good read.

Most analysts are expecting a solid quarter:

Microsoft Tests Its Might - TheStreet.com: "Analysts expect 17% year-over-year revenue growth to $15.65 billion and earnings growth of 20.5% for earnings per share of 47 cents, according to Thomson Reuters."
Microsoft expected to post gains amid Yahoo turmoil - MarketWatch: "Sanford Bernstein analyst Charles Di Bona wrote in a note to clients Tuesday that he expects Microsoft to post a 39% gain in online services revenue to $960 million for the recently-ended quarter, though he noted a spate of recent reports showing a decline in its online search presence."

I'd expect solid numbers, too, especially with Office and SQL Server, and some shine being put on Vista numbers, especially with the departure of XP. It will be interesting to see the write-ups today, given that Google is announcing their quarterly results today, too, so some compare and contrast might arise.

With the Yahoo! foolishness going on the Online business will get extra scrutiny on the call, along with any sort of probing around the edges concerning Yahoo! plans and how it affects Live Search scale-out. Next week is the Microsoft Financial Analysts Meeting on campus, followed by a Friday morning "Word from Wall Street" meeting that I highly recommend (prediction: for at least the 3rd year running, Mr. Charles Di Bona will insist that Microsoft increases its dividend to something of significance to make up for the total lack of stock performance).

If you're in a good mood, avoid looking at the one-year chart for the MSFT stock. Yes, we did hit up in the $37 range. Yes, just a short time ago, we dead cat bounced onto $25. Mr. Ballmer insists he doesn't pay attention to the Microsoft stock price, but all this hammering on Yahoo!, and the dissatisfaction around Yahoo! stock price we're leveraging, has to come back to stick on Ballmer one of these days.

Jack Welch got the nickname Neutron Jack. Mr. Ballmer's gonna be due a financial nickname soon, whether due to his Ahab pursuit over Yahoo! or finally investors giving up on his inability to channel solid profits into a worthy stock price but rather kneecapping the stock quite often. Flatline Steve? Ballmer the Embalmer? I think I need some Wall Street wit to help out here.

Later, after the announcement...

Once again, our stock is kneecapped, this time it would appear thanks to the ongoing Yahoo! foolishness.

Microsoft Watch - Corporate - Microsoft Q4 2008 by the Numbers by Mr. Joe Wilcox. As always, if you only read one write-up, read Joe's. Nice take on the conference call, too. Snippet, with my disgruntled bolding: "While Microsoft posted strong year-over-year growth in revenue and earnings, earnings per share came in at the low end of guidance. During a conference call this afternoon, Microsoft CFO Chris Liddell expressed disappointment about earnings per share, which he partly attributed to weak economic conditions and uncertainty about the failed Yahoo acquisition."
Microsoft profits miss Wall Street estimates
Microsoft’s Online Services Business posts $0.5bn loss in Q4 2008 - LiveSide - News blog by Chris over at LiveSide.net. Okay, let's not judge our losses by Xbox multiples: "...posting a $0.5bn loss in one quarter is bad, no matter how you try to paint it, and makes the need for acquiring Yahoo look all the more greater. Admittedly its still not as bad as the $1.2bn loss posted by E&D, the Xbox and Zune division, in Q4 2007 - the entire OSB loss for 2008 is only $1.3bn."
Brier Dudley's blog Microsoft earnings tidbits Danger costs, plus MSFT's mortgage issue Seattle Times Newspaper Blog - Brier digs around some of the R&D cost ramping up in Zune land.

I wasn't too happy with the Shinola that has crept into the reading of our numbers. I like enthusiasm, but even I was a bit put-off. I also didn't like how useless most of Mr. Liddell's answers were on the conference call. Of course, folks were trying to ask oh-so-hard questions like "When will Online Services turn a profit?" Not 2009. 2010? If you were to pull the plug on MSN and Spaces tomorrow, who would notice? Or, should I say, who would not be able to find a similar (perhaps even profit-making) service to immediately start using? Inconvenient? Yes. Essential? No.

The Tumbling Tumbleweeds of Summer

2008-07-14T21:05:00.000-07:00

(Rocking back and forth in the rocking chair after a nice fine sunny NW day - pity they have WiFi in so many places nowadays...)

Oh, hi.

Looks like it's going to be tumbling tumbleweeds here for a while, at least until the weather turns rainy again (bizarre pre-4th thunderstorms excluded).

Perhaps as a sign of resignation here, I'm far more interested in enjoying some concerts and great hiking than sharing any perspectives about my take on Microsoft. I look back four years ago from when I started sharing my conversation, and it's sort of a wash. Yes, we've had some flattening that Jack Welch even might grunt a tacit approval to. Internet Explorer reformed. There was a revamping of the 4.0/3.5/3.0 scale. Towels. But JHC, we continue to balloon and expand with no rhyme and reason, and cutting back in employee size is the tune I came here to sing. So, enjoying a breeze off of Puget Sound is a lot more pleasurable than thinking about our constricting bloat.

First thing: for those in Redmond / Seattle who read this post right while it's fresh, Ms. Mary Jo Foley, author of the book Microsoft 2.0, will be in Redmond to discuss all things Redmond on July 22nd: Bringing Microsoft 2.0 to Microsoft. 6pm. Malt & Vine. 16851 Redmond Way.

BillG put in his goodbye since my last post. Pick up Ms. Foley's book and read the Mini-Microsoft foreword for some of my feelings around that. Look, BillG is not replaceable. No one is going to take his place at Microsoft. I mostly enjoyed his goodbye presentation, though I had to shake my head when Ballmer reflected that Bill's greatest parting gift to us was the culture of Microsoft. No, that's messy. You can impart a culture and expect it to continue in your daily absence. Bill's culture fades day to day, unless the emerging leadership truly pushes forward with it as their own. But can they even live up to him? No. Time for a new culture, one that makes sense for our current challenges and that shows the level of quality of our leadership.

As a small example of culture: I'm back to reading some business books. It's pretty sad that I have to read Jack Welch to get an understanding of the basis of our differentiated rewards review system, vitality curve and all. I may not agree with it, but at least Mr. Welch takes time to explain its application, end-to-end, to the huge organization that GE is. Which is more than Microsoft leadership does. We just sort of assimilated it, bolted it on, and said "it is what it is."

As BillG heads out, Ballmer's in the middle of leading this classic Pacific Northwest passive aggressive can't make a clear decision to save our lives play for Yahoo! Well, as of today, less passive, more agressive. I feel like we are Yahoo!'s creepy and inappropriate neighbor, peeking through the slates in the fence, asking for a date whenever given a chance. And, oooo!, the Yahoo!s have a new boarder moving in, Carl! Carl's not exactly our friend, but he will invite us over to hang. We're gonna get a date with that cute Yahoo! chick yet! She has an awesome car we've been dying to drive around town.

For Yahoo! we stumbled over our own feet and had to put away the hostile takeover knife we pulled, and in the immediate aftermath was folks wondering: "Gee, this Ballmer guys needs to be replaced. But with who? There's no obvious replacement. Dude. Looks like Microsoft better just keep him."

That's scary in two ways: one, the lack of confidence and respect the community has for Mr. Ballmer's leadership and results (though, a large part of this is riding on Kevin Johnson's shoulders). Then, two: not to wish bad things, but if Mr. Ballmer was run over by a truck (American made, thank you): then what? Who'd take his place?

In short order, Mr. Ballmer has to start a race, running from President down to Corporate VP, to identify his successor. My money was always riding on Jeff Raikes, but BillG has Mr. Raikes now. I'm concerned about who Mr. Ballmer and the board would choose. Some golf-club flim-flam smooth-talker, someone who thinks another Microsoft-branded web browser would be a swell idea? Someone who has never written a piece of software in their lives, let alone shipped and supported it?

No, not to run Microsoft.

I guess I'll spend some time lingering over the VP biographies (trying not to sigh and swoon [remember: inappropriate]). Who would you follow? Who do you respect? I don't care if you hate their guts, who would you want to step up and lead Microsoft in the years ahead?

As part of the challenge of discovering a worthy CEO.next, I hope this year's Company Meeting returns and builds out the theme of Many Microsofts. I'm a fool for thinking of one leader to run it all, perhaps. But we need some obvious folks to step up. Cos we're not there.

Oy, an Extreme Bummer!

2008-06-18T19:19:00.000-07:00

Another blogging light has gone out: MSFTextrememakeover has put up one last post, Eight Years of Wrongness.

Now that's how to go out in style! So take a moment to grab your favorite drink and put some time aside and give it one, long slow read. The kick-off:

It's sobering to realize that during Ballmer's term as CEO, MSFT has underperformed almost all of its top tech peers (including AAPL, IBM, HPQ, SAP, INTC, CSCO, SYMC, NOK, ORCL, ADBE, RIMM, QCOM, Ebay, and AMZN), and badly lagged the major averages. We may even see our third plunge to test the 2000 lows during his watch. Unbelievable.

...wait for it...

So it's time for me to listen to the fat lady who has been singing for years now, and finally pull the plug. I can't keep waiting another 11 years for MSFT's leadership to deliver the returns that say AAPL's have in just the past 12 months, despite struggling (and that's on top of 2000+% this decade).

...leading to the send-off:

So with that, I announce the end of my MSFTextrememakeover blogging career. The timing seems right as this is my 100th post. Good luck to all those who continue to hold MSFT.

...

Damn. Well, all good things, right? I'll certainly miss the analysis that went beyond anything I ever pulled together. Cheers to you, Extreme, and thanks for the posts.

Administrivia - Hardware Induced Mini Break

2008-06-05T18:52:00.000-07:00

Looks like it's an early summer break here. The wonderful Mini-Laptop, my bud the four years of Mini-Microsoft writing and planning, has given up what I think is its last ghost. It's my isolated, centralized hub of posting and comment approval, and while I weigh repair vs. replacement, things are going to have to go dark here for a bit.

Which is fine. I think a number of folks didn't much care for the three fingered nature of the comments in the last post. While there was some discussion of how to fix the problems, it got overwhelmed by grinded axes swinging wildly against certain personalities in Microsoft India leadership.

While I take a hardware induced break here, I'll be thinking about future topics. Please take a moment to consider what sounds like good, interesting paths of productive discussion. Drop me a line, if you like. Sorry if it takes a bit to respond. I thought about opening up comments while I'm cut-off (sorry, I'm just not comfortable lurking in the library on public computers to approve comments), but decided that without engaging news open comments just lead to noise and comment spam.

So, I'm off to light a candle for the Mini-Laptop. See you soon. Mini.

What's up with Microsoft India?

2008-05-28T21:11:00.000-07:00

(The following post about Microsoft India is a long read and is admittedly one big long comment stream paste job. But I've gone through about two months worth of comments on a theme that emerged on its own and kept going and going, post to post, even amidst all the Yahoo!-acquisition foolishness. I promised a follow-up post on the specific topic - here you go. I find great irony that while these comments were brewing here, InsideMS wrote up an internal story: "Is Hyderabad the New Redmond?" Hmmmmm.)

A long time ago, in a blog post weeks ago, a commenter made the following small post:

How bad is things in Microsoft India? The GM Neelam Dhawan is fired and going back to HP. She is taking Rajiv Srivastava with her.

Well, this was first met with an anti-India "why should I care" comment response that grew a thread about racial-preference and other grudges folks hold towards their Indian peers. Which in turn was countered with enthusiastic backlash-backlash, and grumbles about racism. In the meantime, comment after comment started a far more interesting series of insight that spanned all the recent posts that came up during our ill-conceived stock-busting Yahoo! gambit:

Since there is no India blog for Microsoft I am forced to write here.
My friends and fellow Microsoft people, let me tell you that the situation in SMSG India is horrible. People are leaving and the leadership never meets the employees. We have box manufacturers trying to sell software. We have Chairman who I have not seen in 6 months in person. I have seen him on TV and the newspaper a few times. We have MD Neelam Dhawan who interviewed at Cisco 2 times and did not get a job there and is now going back to HP. The Country Manager for Xbox has left. BMO has almost 100% churn.
We now spend so much time reporting and having conference calls that I cannot meet my customer.
Does the Redmond people care about what is happening in MS India? Who can I complain to if I have a problem? Will Kevin Turner and Jean Philipe Courtois have an all hands meeting with the staff but without the India management present? You know we cannot speak the truth with our management because we will lose our jobs. And I want to keep my job till I get another offer. Like all the employees around me.

..and...

India Dev Center (IDC) is a pure empire building exercise. It is all about creating more partners as the VP mentioned in his Redmond recruitment visits. It is a good tour for a few Redmond folks who find a "sugar daddy", go to India for 2-3 years, get two promotions and come back to a different job in Redmond.
Meanwhile, a few exceptions aside, the quality of the work is abysmal. Components that came back to Redmond had to be completely rewritten.

Or, maybe not:

I work for WinSE in IDC (India Development Center). The situation is much better there.
We work in tandem with our counter parts in Redmond/China and have been making on-time and good-quality deliverables. The GDRs/Hotfixes/Service Packs which get shipped periodically are a result of good team work between the three huge teams.
However, our org, does not report to the India DC VP (we report to the Redmond VP), which probably is why we have a better coordination with the Redmond and ATC teams.

A tick for your tock, perhaps pointing an organizational leadership problem:

[...] the so called innovative ideas emerging out of IDC are so stale that they just don't get qualified to be called as innovative product ideas. The VP heading IDC is under tremendous pressure to show that there is some great innovation happening here. But, unfortunately his team is just not capable of delivering anything that will be worth talking about.
IDC is still not capable of standing on its feet. It is completely remote controlled by Redmond. The teams here are just puppets that play into the whims of the Redmond GMs. The senior dev/test managers here lack depth and confidence to deliver independently.

Interestingly enough, engagement started to happen within the Mini-Microsoft comment stream. A comment signed by Sudeep Bharati engages discussion around mobile app development at IDC:

There are few comments & assertions that have been made in this thread about “Mobile Developer” team at IDC. As the PUM for this org, I would like to make sure that the readers have the perspective from the other side too. IDC team has owned the Visual Studio for Devices charter for around 2 years now and has delivered a full release of this product with VS 2008. In this release, we added significant value to the product enabling test driven development for device projects with unit testing, programmable security configuration, managed API model to access and manipulate devices from the desktop as well as numerous enhancements to device emulator. Each one of these features are high value components for mobile developers and have been widely appreciated.

Following up on that:

We mastered the art of writing specs, converting that to code and testing it. But where is the innovation?
There is a serious lack of thought leadership in this group. Show me one senior member of the team who understands the big picture of the mobile developer story. We now have a lot of responsibility to deliver the complete platform and I do not see the maturity to do that.
Our focus is too narrow and we wear the colored glasses that only show us what we want to see! The mobile innovation is happening else where. Is there someone in the team who can confidently articulate what the competition is up to? Do we know anything about J2ME Midlet story? Do we know how Symbian stacks against us? Are we clear about Adobe's Flash story on mobile? Do we have a strategy for mobile web authoring? How do we counter the iPhone SDK? What will Google do with Android? What will IBM do with Eclipse in this space?
No! We have no time to figure this out.

A comment signed by David D'Souza responds:

The Mobile Developer Group intends to make products customers will love. We know the mobile field is broad and difficult. The strategies of the past won’t work again; as they say, people have seen that movie. Dynamics change and competitors are just as likely partners of the future - Windows Mobile includes Adobe Flash and Silverlight is porting to Nokia. [...]
As a partner at Microsoft, I’m engaged and passionate about the mobility area and equally passionate about ensuring IDC is a great place to work. If you are inside MSFT, you can browse my/site and watch our IDC Mobility Days presentations. As much as Windows 3 changed the PC experience, we need to achieve similar transformations in the mobile experience. We have breadth for multiple partner level people in this organization and we’re continually growing and enhancing our engineering capacity to deal with the challenges we face. Our products will be second to none. We will have fun, innovate, and work in new ways.

A demonstration of the As hiring Bs that end up with Cs and Ds:

The other huge concern is about quality of hires at IDC. I see pathetic hires walking into the product teams. The PUM/GM put a lot of pressure on HR and they end up fast tracking the hiring process. On top of that, you always have internal poaching which is very unhealthy.

...additionally...

While quality of hiring at Microsoft India IDC may be bad, the new hires in MS SMSG India is even worse. The interview process does not even exist, exit interviews dont exist, people get into jobs that are way above their abilities or interest and we have Neelam Dhawan to inspire people to join Microsoft.

On leadership:

I have been with EPG at MS India (SMSG) for a long time. I have seen the ups and downs and saw many leaders come and go. But, let me tell you that the current HP imports are horrible leaders to work with. Someone said it right - They raped the Microsoft culture.
My request to the CVP is to spend more time with the employees and hear their version.

...and leadership choosing the wrong carrot:

Everything is wrong at Microsoft India. There is now a reward of some cheap notebook if we get to the revenue target. Does Neelam (GM) not realise that we work for pride and challenge and whether or not she offers us a Rs,13000 HCL notebook we will do our best. I am insulted by this offer of a gift if the subsidiary meets the revenue goal. Last year, everyone got xbox and Neelam thought that people worked harder for the chance at winning xbox. Her cheap thinking about what motivates people at Microsoft is one of the reasons we are suffering in India today.
Go back to HP Neelam. You have no idea about Microsoft culture and how to motivate people.

...the gloves slip off:

[T]he underlying fact is that 70% of MS India is stinking with corrupt leaders. EPG has no moral values and ethics in selling. No one even understands why DPE should be paid in the first place. Public Sector has a new country lead for every 12 months and no one has a clue on handling the government accounts. HR is non existent and has the maximum attrition than any group. PR is busy bribing the media and publications to print positive stories.
:
The DPE lead is great at dancing at internal events and no one knows what else he is good at. Even if everyone in DPE are fired right away, it wouldn't make any difference to us. It's a well known fact that they will be the first to go out if there is a lay off at MS. This team is more of a liability than an asset. The earlier we fire them, the better for us.

An outside perspective starts with:

Well, let me share my view from outside. MS India has completely forgotten the community initiative. They are too busy impressing their hierarchy. There were times when the MVP/RD community was really valued and we were respected for what we are! Things are very different now. The MVP lead is in a deep slumber and does nothing for the community. I haven't met anyone from DPE India for ages. We only hear sugar coated statements from the GMs or senior executives when we bump into them.

Sending out an S O S:

An open letter to Mr. Jean-Philippe Courtois & Mr. Kevin Turner -
Can you please visit India once and listen to the feedback from the field?
The CVP, MD and all her direct reports made this company a miserable place to work for! They created a feudal fiefdom for themselves.
Please don't fall for things like the 'Best Place to Work For' recognition by a reputed publication. These can be bought in India for a price. It is a well known fact that the One India PR head spent a fraction of her budget to buy this! It's an irony that we got that award when we are experiencing the opposite of that - 'worst place to work for!'
You might be rewriting the corporate history and also doing something like this for the first time at Microsoft- Can you please fire the CVP and everyone who is two levels below him? Only that can save the Indian subsidiary.

Don't let the door knob hit you where the dog should have bit you:

With 4 key departures in SMSG in Microsoft India in the past 2 days, it looks like the attrition rate is worse than that of a call center. The only problem is that the CVP and the country GM are not leaving. Ravi is in denial that he is singularly responsible for the fuck up that is called Microsoft India SMSG. And Neelam is unable to find a job anywhere else.

Wrapping back to the very first comment:

Breaking News From MS India - The MD, Neelam Dhawan has put up her papers and will be leaving anytime now! Few of her direct reports would be following her.
So, Good things started to happen for Microsoft India.

...plus...

The really breaking news from Microsoft India is that the MD has been fired for the same transaction that various Microsoft people in Delhi have already been fired. She will not be a Microsoft employee by the time this fiscal year ends. Finally the good news is here. I hope she takes all her HP people with her with the EPG head being the first one.
Moorthy Uppaluri is also the new DPE head.

Final comment:

Mini - can you please reopen a seperate thread on Microsoft India SMSG and R&D? There are lots of stories of nepotism, poor OHI, bad quality work and a possible financial impropriety doing the rounds in India.

Well, okay. To quote a farm boy, "As you wish." Not... that... you're my Buttercup or anything. But here's an open door and open area to discuss Microsoft India: what the problems are, how to get management to accept that there are problems, where the right place to be is, and how to get there.

Microsoft + Yahoo! - Desperately in Need of Fat Lady to Sing "It's Over!"

2008-05-19T07:59:00.000-07:00

Oy, what we desperately need here is a Fat Lady to sing the end of the 2008 Microsoft-Yahoo! saga. She's obviously in hiding because over the weekend news came out of Microsoft looking to get a bit of Yahoo!. Or a merger. And the rumor of Microsoft looking to acquire Facebook has started again, all associated with obscene prices that make no sense, except in the obscene-cash-cow Microsoft world where billions of dollars come easily and are blown easily.

(Just a quick "page break" post given the new Yahoo! news)

Microsoft Issues Statement Regarding Yahoo! Microsoft announced that it is continuing to explore and pursue its alternatives to improve and expand its online services and advertising business. - the wordsmith genius response for "your passion inspires us to create great software to help you reach it" obviously put this one together.

Yahoo! Remains Open to Value Maximizing Transactions - your money inspires us to play hard-to-get to get more of it. Oh, craps, here comes Icahn!

Scobleizer — Tech geek blogger » Blog Archive Why Microsoft will buy Facebook and keep it closed - transitions into the scary possibility of Microsoft laying down a bunch more cash for an unworthy company. The only benefit (that I can see) of Microsoft acquiring Facebook is that Microsoft would fix a bunch of crap wrong with the way Facebook is run ("Users? Hate 'em."). Scoble on Facebook: "This is a scary company and if it gets in the hands of Microsoft will create a scary monopoly."

I guess this could be a heck of a week, and suddenly Microsoft doesn't look so evil to Yahoo! in comparison to Icahn. So freshen up that resume, pop some popcorn, and if you see that Fat Lady, please send her this way.

Microsoft Walks On By - Yahoo!

2008-05-03T17:43:00.000-07:00

Well slap my ass and call me Judy! Microsoft is walking away from acquiring Yahoo!

Hot Damn and Yahoo!

(I have never, ever been so happy to trash a pending Mini-Microsoft post. Ah, yeah, it had a nice lemon analogy and everything but, well, forget it!)

While sanity did not prevail in making this crazy offer, sanity prevailed in not doing whatever it took to make the Yahoo! acquisition happen. Initial coverage:

(Pardon me while I crack open a bottle of Col Solare.)

With this strategic inflection point, the era of post-BillG Microsoft 2.0 has begun.

(Sip. Savor. Yum.)

The only not-so-good thing out of not blowing all of our cash at once is that we'll continue to live in an era of cash-cow abundance, preventing us from making profit-minded decisions. The lack of the money cushion would have, I presume, actually caused new projects to expect to bring in cash vs. becoming strategic money pits.

Out of this had best come a new reorganization of our online properties. Out with the old already. We had reached a bet-the-company point in going after Yahoo! to make up for the lack of performance out of MSN / Search / AdCenter in an attempt to leap-frog forward. I think we need to hang-up on the good-enough consensus culture for a while and put in a strategy czar to get things done vs. expecting something to arise out of the dysfunctional ecosystem we currently have.

And speaking of Microsoft 2.0: Ms. Mary Jo Foley's book is out now. Once you get past the foreword, it's a good read. I hope she comes to campus - well, Redmond probably - soon so that folks can have a discussion of the book and ponder the future in a face-to-face forum.

Soon, we can get back to the usual program of talking about the recent Town Hall and looping back to cover the recent comments about Microsoft India. For now, I'm going to ease back and enjoy this strange feeling I have: being happy regarding a wise decision our leadership finally came around to.

Microsoft FY08Q3 Results

2008-04-24T07:57:00.000-07:00

FY08Q3: favorite post-analysis sites for the results:

The last report was a knock-out and the stock responded accordingly and shot up.

Ends up Microsoft leadership had a plan to address that issue: attempt to acquire Yahoo. Amidst a world of puzzled financial faces mumbling "wtf?" we started our ill advised adventure to consume Yahoo, whether they wanted it or not. The stock responded accordingly and tanked.

I expect today will be another solid quarter, but the Ill Advised Adventure Monkey is riding our back and I expect a good bit of the analyst probing will be around Yahoo (wondering if we'd be dumb enough to raise our bid), and perhaps reviewing the upcoming money-making product stream, plus what a non-Microsoft + Yahoo future looks like (one word: shiny).

Mr. Ballmer engaged in some good bluster Wednesday, saying that Microsoft could just walk away from the deal. Please, please, walk on by. I haven't talked to every employee at Microsoft, of course, but everyone that I've talked to believes this is a bad idea. And that's not hand wringing.

Overall: the results are in and... ouch. Various reactions:

(1) MSFTExtremeMakeover: MSFTextrememakeover Q3 FY08 Earnings - which firsts starts off w/ MSFTExtremeMakeover considering packing the whole blogging gig up - go over and have productive participation if you want to express your encouragement for the blog to continue. A snippet on the initial analysis:

Again looking quickly, Client sucked. And it seems to be not just the technology guarantee impact but also anemic OEM growth. The .ppt brags about the same 140M Vista licenses sold that we've been hearing about for a while now. So clearly there's been no acceleration wrt installed base upgrades either. Surprise! Not. MBD was also weak. I haven't delved further to figure out why. Servers put in a strong showing as per usual. Kudos to that group at least. And finally E&D managed to eke out a paper profit (as long as you ignore intra-group transfers and the convenient "Corporate-level activity" bucket).

(2) Mr. Joe Wilcox: Microsoft Watch - Corporate - Microsoft Q3 2008 by the Numbers - as always a nice breakdown.

(3) Mr. Todd Bishop:

Microsoft Strategy solid even without Yahoo, which roles up a response from Mr. Liddell that you can only hope allows us to walk on by Yahoo (or at least not raise the offer price):

As outlined in our recent letter to the Yahoo board, unless we make progress with Yahoo towards an agreement by this weekend, we will reconsider our alternatives. We will provide updates as appropriate next week. These alternatives clearly include taking an offer to Yahoo shareholders or to withdraw our proposal and focus on other opportunities, both organic and inorganic.

Notes Microsoft's profits exceed estimates - snippet regarding Xbox / Entertainment and Devices making money instead of being one huge money sink:

Does the operating profit mean that the company is no longer losing money on the Xbox 360 hardware?
Colleen Healy, Microsoft's general manager of investor relations, didn't answer that question directly when I asked this afternoon. However, she said, "What I can confirm for you is we're making really good progress on that cost curve."

(4) WSJ: Business Technology Vista Drags on Microsoft - snippet:

If we dig a little deeper there’s evidence to suggest that Microsoft has a Vista problem.

(5) Scotch it! Two to close on, including best use of the word "scotch" I've seen in a while:

Microsoft, Just Walk on By

2008-04-05T17:01:00.000-07:00

Walk on By: so, sure, we can get a little hissy and prissy with Yahoo not wanting to come to the table, but if even Microsoft's executive leadership is noting how the bloom and most of the petals are off of the Yahoo blossom, wouldn't that be a good idea to just walk away? Why are we out to buy a wilted arrangement? What does Mr. Kevin Johnson - the presumed architect behind the Yahoo acquisition - seem to know that most of the educated financial world doesn't?

I appreciate that we're at least threatening to lower the bid rather than pump it up.

I hope that this harsh strategic move can also be appreciated as an elegant way to walk on by, noting with disgust Yahoo's ability to deliver and be relevant.

Blabby McBlabster: SteveSi, "Pardon me, Mr. Gates, might you step in here for a moment of translucency re-education?" *Smack* Somehow the message to not talk about release dates didn't make it up to Bill Gates, all talking about Win7 rolling out next year rather than in 2010. You know, if that can be pulled off, it would be a lot better to start talking about it once the team has reached the light at the end of the tunnel. Throw this BillG comment in there along with the one of the Sony PS3 release walking head-on into Halo 3 (how'd that go? Oh, yeah, those guys seceded after they succeeded, having released when they were done).

Poor Me: yeah, I miss that DareO has adjusted his priorities and that blogging doesn't fit into them. I understand, but I'm sad for me and Dare's readers. This blog is indebted to Mr. Obasanjo because without his linkage to the early months Mini-Microsoft there's no way I would have built up that initial high quality readership and participation. Thanks for the links, Dare. One day, when this gig is up, I certainly owe you a lunch out.

Goodness knows I've thrown in the towel here, too. And I constantly wonder whether it's worth continuing, given that I'm not putting the deep research and reading into this that I did during those first two years. And the oodles of people we keep hiring is another reason to start fingering the towel: Mini-what? I don't know how many sharks we've jumped here already, and I always see fins in the water ahead.

MSFTExtremeMakeover: Is the Sleeping Giant Finally Waking Up, or Just Rolling Over? Snippet:

Like Nero fiddling while Rome burned, Ballmer seems to be preoccupied with GOOG while MSFT melts down - or at least while the first embers, which had already been apparent for years, now threaten to turn into something much more serious. Hence the recent ill-advised and fiscally irresponsible YHOO bid.

OO! OO! OOXML! What's interesting to me is to read the post-reactions to the approval of OOXML and how many respected people are appalled at the behavior of the anti-OOXML / pro-ODF fanatics. Now these people get to enjoy the experience of Slashdot-commenter-level idiocy crapping all over them and impugning their reputations. Thanks guys! You just opened a lot of doors to OOXML.

At least take some solace in: competition is good. Even for you.

MSPoll 08: a collection of interesting points made in the last post about the recent MSPoll 08: first, around actually implementing change for issues that come up in the poll:

I have been manager at Microsoft for several years. In each of the teams that I have been, the management team takes time to interpret the results of the surveys and try to find solutions.
However, it has always been extremely difficult to deal with the huge bureaucracy that have to be addressed in order to make any change (minor or major). [...] We have too much bureaucracy that prevents us from responding quickly, clearly and effectively to our employees and our customers.

Some hope to pass on that the MSPoll can help get 'er done:

Last year our PUM was wrecking our group, and the poll results showed it. Our fast-talking PUM convinced his management that this was a result of transient events outside the org, and a few months later we were actually asked to repeat the poll. By this time things were even worse and and the PUM had been publicly taking his frustrations out on his directs, so the 2nd time he really got slaughtered. He lost his team (it went to his GPM) and soon after left MSFT.
Viva the poll!

And another:

I've seen that the poll are almost magical to get rid of your lower performing managers up to GM level. You can't say it doesn't have effect although I don't think it changes any thing beyond that level. I've never heard a VP getting hurt by poll. Certainly won't change Ballmer's mind.

One disturbing theme did pop-up, though: happiness manipulation right before the poll. Beer, pizza, Xbox partying, espresso carts, and even saying that bonuses are directly tied to the team getting stellar poll results.

What's Going on in India? Okay, the last post also has a bit of a keg of gun powder in the comments, discussing the engineering quality of Microsoft India. Feel free to continue that conversation there, because the effective management of Microsoft India and Microsoft China is worthy of its own (tricky) post. Starting that off for now, some comments like the following have popped up:

I used to work in Microsoft India SMSG. In the past week, 10% of BMO quit. We've had people in EPG bail out in a hurry because the management does not care and is totally intellectually corrupt. Hiring is the exclusive domain of the GM who calls her cronies from HP to rape the company culture. I am done with MS India. DPE has a leader who is not a leader.
When people talk about MS Poll and how OHI has improved they forget that the the problem is that 50% of the hires in India are about a year old and they're still drinking the kool ade. To them, the mere act of joining Microsoft is something to be proud of. They're still giddy with delight at getting the MS offer letter because for years they have been shat upon by the Indian SIs they come from during their tenure there.
We've got a CVP who is preoccupied with seeing his face in the newspaper and magazines. To him, success is the number of publication impressions and not the well being of the employees.
Stock price?? It's important, but with grade levels sucking in India, the grants are miniscule. Unless of course you are a partner or VP in which case you are laughing all the way to the bank while the employees drive revenue and sweat in the mines.
This is the Microsoft India I left. I'm glad I am no longer part of it.

And:

I have heard the same about India Dev Center also. Lot of people at lower levels (dev/dev-II) seem to be leaving the company and salary seems to be the primary motivation. In some cases, even the entry-level salaries at these "rival" companies is more than these people's (with 3-5 years experience) current salary.

And:

How bad is things in Microsoft India? The GM Neelam Dhawan is fired and going back to HP. She is taking Rajiv Srivastava with her.

Lastly:

My friends and fellow Microsoft people, let me tell you that the situation in SMSG India is horrible. People are leaving and the leadership never meets the employees. We have box manufacturers trying to sell software. We have Chairman who I have not seen in 6 months in person. I have seen him on TV and the newspaper a few times. We have MD Neelam Dhawan who interviewed at Cisco 2 times and did not get a job there and is now going back to HP. The Country Manager for Xbox has left. BMO has almost 100% churn.

Forecast is... Suckage. Pure Suckage. Finally, from the Thank God for Monster, Dice, and HotJobs department:

Weekly reporting !!!
The Walmartization of Microsoft is now complete. I am in EPG and am now expected to give a weekly sales forecast. What crack is he smoking?

Plus:

We are tired of scorecards and metrics and now Weekly Fucking forecasts????
Will Kevin-the-used-car-salesman please leave the building?
SteveB - what WILL wake you up?

MS Poll 08

2008-03-18T18:26:00.000-07:00

MS Poll 2008: what parts of the employee poll do you see as critical in communicating any changes that need to happen at Microsoft?

Act Local: first of all, usually when I review poll results, my team looks at the questions and comments directly relevant to things that we can change. So if you want change in your day-to-day group, look hard at those questions that managers who report to a VP are accountable for. I can't count the number of times that we've looked through poll spreadsheets and some of the harshest numbers might be around "Microsoft is headed in the right direction" or something, and nothing but shrugs result from those number since the reaction is usually, "What can we do about that?"

I've also been in meetings where we sit down and look at every comment, and figure out ownership and actions. Again, for things beyond our scope of impact we have to move on. But for serious comments that are relevant to the team a lot of attention is given. Strongly disagree about something? Note it and put in a fix for it in the comments later.

What I'm saying: act locally first and honestly assess your workgroup and put some effort into comments relevant to your group, probably noting the group's / VP's name specifically in the comment for any roll-up your comment goes into, should you have a senior VP (or heaven forbid, a president) that actually glances through any of this.

Next, Think Globally for the Company: then there's the broader company wide feedback.

Do I think we're headed in the right direction? No, not with our explosive employee growth and our highly questionable acquisition pursuit of Yahoo (oof, sorry, I just had a mental image of a smirking Kevin Johnson wearing a black top-hat + cape and stroking his long, skinny waxed mustache). And I fear with all these new people and buildings, Redmond and Bellevue are about to turn into a constant parking lot (especially when that monstrosity opens near Highway 520).
Our systems and processes have exploded - and I'm not just talking about the pain in the butt magical commitment tool (magical in that it can make comments *poof* disappear).
Our rank and yank employee calibration doesn't align with valuing contributing to other people's success, so why even ask a question about being rewarded and recognized for that? Bring in some sort of team-based recognition and rewards and this will change.
- Follow-up: hell yes your success is assessed relative to your peers. Duh.
This is the first time I've pulled in and shorted the number of years I expect to continue working at Microsoft. Usually I'm all "Here till I drop!" highly enthused, but now I'm concerned about the recent business decisions and the potential for that to make Microsoft go south, let alone the long-term impacts being felt now by the accrual of so many unneeded hires. Microsoft has the unfortunate potential to change so much that it will no longer be Microsoft to me.
As for a message to send upwards loud an clear about what motivates people to put in the extra effort, I think I can sum it up as: stock.

The stock has to start performing well. Our executive leadership doesn't believe that the stock performance matters, especially to employees. Does Microsoft stock price matter to you? I imagine you just said, "Hell yeah it does, Mini!" Let them know. If our stock started shooting up (like it did oh so briefly) would you be more highly motivated and engaged in your job? If we hit $40? $50? If you started seeing the rewards of working at Microsoft around the stock you own and it actually being a benefit vs. a woeful joke going on over a half-a-decade, how would things change for you?

Employees have to say loud and clear, whether through the poll or other communications with leadership, that the Microsoft stock price does matter and it does make a difference. Want us to be bold? Re-invigorate the stock. Want us to take risks? Re-invigorate the stock. Want us to work above and beyond what's required of us? Re-invigorate the stock.

And do other things like have a better 401k match and bring back the old ESPP. There it is, stock again.

I encourage you to put in any positive remarks about things going well so that they don't change for the worst. And if something needs to change, it's always best to put in the positive business-based solution vs. just asking the problem being addressed. Otherwise, you might not like the solution.

I do think the poll is worth the effort, especially for provoking useful change in your group. As for a broader message, there's a potential that if key numbers radically change this year that it will be a wake up call. You might as well ring that bell.

That Whistling Sound

2008-03-02T17:55:00.000-08:00

Some weeks you just feel like Wile E. Coyote, beat up and dazed at the bottom of a canyon you just crash landed onto, wavering back and forth in the swirling dust while new knots grow out of your head and little concussion spirals spin above your black and blue eyes. And there's a shadow. A shadow that's growing bigger and bigger around you, and you wonder, where did that new Acme anvil get to, anyway, and what's that whistling sound?

Time to pop up the little umbrella.

That's what last week sort of felt like to me. Fines. Stock beat to hell and back. Incriminating emails showing up in the Vista incapable lawsuit. The Yahoo acquisition stumbling forward against the better judgment of the world. Friggin' bugs in the review tool that causes feedback to disappear in the HR IT bit-bucket (hello, we have this neato homegrown technology called Word which tends not to lose things). OOXML on the ropes. Live-ID sign-in offline. Crap.

Fine, just fine: Shortly after the Steve / Brad / Ray show of all the new documentation we're unleashing on the world, the EU found that wallet they'd been feeling for as they groped us and slapped Microsoft with another big huge fine.

Dolores Umbrid- err, Neelie Kroes on this: "Talk, as you know, is cheap; flouting the rules is expensive, so to say. We don't want talk and promises, we want compliance. If you flout the rules you will be caught, and it will cost you dear."

To which she added, her eyes blazing in Steve Ballmer's direction, "I drink your milkshake!" Quickly followed by an email to SteveB of a photo of her cat sitting on a wad of euros, captioned "I'm in ur profitz, stealin' ur cash."

Intel certainly should be worried, too, having had an EU raid on a European office recently. And Google shouldn't be too smug either: Microsoft Is The EU's ATM Machine - And Google Is Next - Seeking Alpha. If you're #1 in something and not entwined around the success of an European partner / partner ecosystem, your butt is next to be hoisted upside down and shook until a few billion pop out.

And while I'm not going to go all Hank Reardon here and get upset about documenting how our particular kind of industrial steel works, I am having negative tit-for-tat protectionist reactions. I'm human: my company is bleeding fines - fines we'll pay especially given the Yahoo in-play factor - and nary a word from the US government saying, "Hey, whoa, we'd like some of that cash to stay local here." And don't get me started about fairness. This is international economic political reality, which is about as far from fair as you can get, although all sides can certainly enshroud themselves in the mien fairness as they speak their piece.

My expectation is, just like Windows XP N, a lot of this will just go unused. I mean, I guess if I go to Hell one of the first punishments will be "Here's the Exchange protocol documentation. Please write a server that works against this protocol." Probably followed by something much, much worse, "Here's the Sharepoint protocol doc-" "No! Just gut me or do something with fire ants and a poker already!"

I can only hope that the cash goes to something useful at the end of the day. You know, something better than ill-advised acquisitions, SPSA pay-outs, and hiring lots and lots of more Microsofties to do less and less. Hmm. Perhaps I could warm up to these fines.

Who said what? And they're still employed? Ah, email discovery. What's the point in having an ass if it you can't do something that comes around and gets your squarely bit in said ass? Some of those email exchanges I already kind of expected, but the one about possible collusion with Intel to support their chipset? Double d'oh with an oy-vey on top.

Mr. Todd Bishop: Full text Microsoft execs on Vista problems and Vista How cozy were Microsoft and Intel.
Mr. Joe Wilcox: Microsoft Watch - Corporate - Intel-Microsoft Vistagate, Part 1 and Microsoft Watch - Corporate - Intel-Microsoft Vistagate, Part 2.
MSFTExtremeMakeover: Breaking News CVP Will Poole Certifies Another Laptop as Vista Capable.

Busted. This is where you reach for the wallet (if you can evade Ms. Kroes sticky fingers on an interception route) and just pay-up. In my opinion, we screwed up here, badly. God forbid if any of those friggin' Vista Capable stickers showed up in the EU...

Rewarding: so how was the Microsoft Technical Recognition Awards in La Quinta, CA this year? I still don't know why they need to go all the way the hell down to California for the technical semi-Partner achievement getaway. Oh, wait, getaway. And hey, didn't the Watson guys win last year, too? Sorry, but with everything going on and the stock down on the low end of $27, more weenies and less shrimp for the SPSA crowd would be mighty nice.

Silverlight lining: I can only hope that some good will and interesting results come out of Mix08 and our own Tech Fest. The last two Tech Fest have been really interesting for me. This one I don't have as high hopes for, having gone through the initial list, but that leaves the door for me to be pleasantly surprised.

Anyway, after this week, you've got to wonder: can it get any worse?

What's that whistling sound?

Because the Last Aquisition Went So Well...

2008-02-25T22:15:00.000-08:00

Check-in on Yahoo: BusinessWeek has a small take on Kevin Johnson's message to Microsoft and Yahoo employees. A number of articles have been posted putting this email in the light of "we're not going to be firing anybody! Please, don't leave, we luv you all and we have someplace to squeeze you in!" After our own CEO basically lied to his own senior leadership regarding the Yahoo acquisition, I'm not buying anything they are selling because their agenda, whatever it is, is built on misrepresentation. Or shooting from the hip.

Besides, of course, I want folks fired due to my original agenda; plus, the Yahoo Peanut Butter Manifesto probably pointed to more than just 1,000 Yahoo folks needing to find a better place to work.

Reading Mr. Johnson's email, I have an image in my head of John Wayne from McLintock, reassuringly saying in this case, "Somebody needs to fire ya, kid. But I'm not gonna fire ya. I'm not gonna fire ya. ... The HELL I'M NOT!" *biff* Or, in this case, *RIF*

A Couple More Perspectives:

Mr. Jon Pincus: Yahoo!!!! (was Yahoo!?!?!): Why, after further reflection, I think Microsoft’s offer for Yahoo! is a brilliant strategic move
MSFTExtremeMakeover: Awooga, Awooga... Abandon Ship!

From the Field: a welcome message from the field in this comment:

Working in the field and not in the US, I sometimes cannot relate to the comments that are heavily oriented at the minority of peopele working in MS which is dev. And maybe this is part of the MS problem? SMSG is swarming with people and due to the "Keep your scorecard green" culture that came with Kevin "thank you for all that you do" Turner, managers are not managing and coaching people anymore. Every day I see people that should be empowered to do business staring into their spreadsheets in order manipulate Siebel (yes we use that utter crap CRM system still) to keep the scorecard green instead of going out to meet the customers. Many MS people in (i think especially in services) miss the "techy" culture where we doing good things for customers, making them successful. Now all we get "Why is your scorecard yellow, just fix it".

Dirty aQuantive laundry: a very revealing comment worth reading in full starts with:

I'm no longer with aQuantive, I now work for a great team in MS. I was threatened not to talk, but my story needs to be told, to some people higher up who believe that they can integrate Yahoo, I believe that they can, but they have to hear what is happening to Microsoft's ad serving business, which will save the company years to find out, it will be too late once they realize. The engineers at aQuantive are great, some of the best, but the central nervous system doesn't exist, this is Microsoft's managements responsibility, and it could cost us the leadership in the ad business. [...]

Classy, real classy: I'm sure anyone who had ran Vista at work looked at the Vista Capable stickers on machines they wouldn't buy for their Mom and felt bad regarding the misrepresentation of those machines' capabilities. Even some of our VPs expressed their strong dislike (d'oh, [shake fist] damn you email discovery!). Now we're up for a class action lawsuit and I'm really interested to see what kind of leg we have to stand on here. Fighting to justify this poor decision doesn't rank up as high on the Bozo Meter as trying to defend browsing technology as being a core OS component, but it's close.

Rory Blyth channels Mini: Windows Live Writer Team and Microsoft - where Rory is put over the edge when Live Writer - a delightful blogging application I adore (and makes me wonder if my hatred of .NET apps is misplaced) - gets ruined by being wedged into a Live Suite installer infrastructure. Rory is no longer with Microsoft and he doesn't hesitate to load up both barrels and let loose. A little later in the comment stream:

What happened to me is I worked for Microsoft for three years. You didn't read the post in its entirety, so you may have missed it, but I wrote that this isn't just about Live Writer - it's about Microsoft's approach to user experience in general.
I saw - and was subject to - so many dirty tricks on the inside. There's a constant battle between the stupid people and the smart people, and the stupid people do quite well. Probably because stupid people are scared of the smart people and do whatever they can to get more stupid people to work at Microsoft. A good way to retain your power and position is to ensure you aren't being challenged by other employees.
The sad thing is that I'm not exaggerating.
The company is bloated. I said myself that firing tens of thousands is cruel, but when you have managers for managers for managers for managers for managers for managers and managers for them, you have something ridiculous.

Firing tens of thousands of Microsofties? Allow me to raise my hands in the air, wave them about, and yell out, "Hallelujah brother, praise the RIF!!!"

Mid-year career discussion is upon us and now is an ideal time for you to update your resume and assess where you are and where you are going. Want a raise? Secret to Success, rule #1: the best way to get a raise is to change companies. Bar none. So update that resume and see what kind of follow-ups you get. Perhaps you're an eagle trying to soar with the turkeys... if so, some parting advice from one of our commenters:

I left months ago and am so glad I did. MSFT has a bunch of great achievers drowning amongst a gaggle of whiners who want top pay and work-life balance but don't want to work hard to achieve anything. Until you get rid of the latter, you wont' get top performance out of the former. The people who want challenges in life and to achieve something will just continue to get fed up and leave. It's sad. If you are there and frustrated there are many alternative lives you could be leading happily elsewhere. Go, it ain't that scary and you'll never regret it. Stay and you'll wake up at 45 yrs old (how many 45+ people do you see around you, eh?) sad and feeling empty. Go, leave, it's okay and you'll stop feeling so angry and abused.

Some Quick Quips - Yahoo, #86, and MSPoll

2008-02-17T21:59:00.000-08:00

Just some quick quips:

yahoo... Sorry, I can't get up the enthusiasm to put the exclamation point into Yahoo anymore. So this past week had a number of voluntary and involuntary exits from Yahoo. Mr. Yang calls out, "White Knight? Anyone? Anyone?" and the Yahoo board gets restless.

An interesting bit comes from Joe Rosenberg in Barron's. The summary? Microsoft bid for Yahoo makes no sense. Some interesting snippets:

"It's a bad refection on Ballmer that he's willing to pay a ridiculous price for Yahoo. Microsoft is not going to earn anything like a reasonable rate of return in Yahoo," Rosenberg was quoted as saying.
:
Asked if it wasn't a strategic necessity for Microsoft to buy Yahoo, Rosenberg said: "I don't buy that. Yahoo would significantly dilute Microsoft's returns.
"Ballmer is a great operating man but he lacks financial acumen. He ought to be thinking more of Microsoft employees who own a lot of Microsoft stock and have nothing to show for it in many years. If the stock doesn't start doing better, Microsoft will lose good people."

Thank goodness someone is actually thinking that employees would react to the stock price, because it seems to be a foreign concept to our leadership. I can't make jokes about Golden Handcuffs anymore because most people at Microsoft don't know what the hell I'm talking about. I have not seen Microsofties so loose in their sockets since I joined years upon years ago.

Agent 86: Would you believe... that Microsoft has dropped down to #86 within the Fortune Best Places to Work survey? That's down from #50 in 2007 and #42 in 2006. Like a rock. In a bad way. And who is #1 for two years in a row? Grab that chair and give it a big effen toss in the air to Google! Toot! They get bigger and they're still #1.

(Oh, and Yahoo is attached to our hip at #87. I guess we're more alike than we knew.)

LisaB tackled the #86 issue this past week. Kinda. But I've got to wonder: if you sat down a bunch of hard-working, valued Microsofties in one room, and executive leadership in the other, and put down some simple questions like, "What would make employees value working at Microsoft even more?" I'm pretty sure the answers would have a wide gap between them.

The return of the towels was a symbolic admission to stupidity. The Bread and Circuses of various subsequent benefits doesn't align with what Microsofties need to be obviously valued and to have a great career at Microsoft that is satisfying. What would you want to see Microsoft do about addressing being a great place to work?

My #1 request has got to be to make Microsofties mobile. Intent to interview was a great first step. Now, just let people interview. If they get the job, their management learns they need to start a transition plan. Leaders might actually start managing their teams as if retention matters.

Right now, given Mid-Year Career Discussions, my #2 request is to boot all the friggin' tools and go back to the Microsoft Word form, all a part of streamlining career management at Microsoft. We're about to spend a couple of months in tool hell, have a big CSP codified discussion that may or may not align with the reality of your group, and then in three months do it all over again for the major review cycle. I seem to spend my life in calibration meetings and managing tools and asking HR-IT to fix bungled work-flow and whacked-out permissions. I need a "I'd rather be shipping features that make money" license plate holder. As do many of my team members.

My #3 is too intangible to tackle here, but it's more around gearing Microsoft to be a team-focused company culture, not the lone-rock-star-wolf. Yes, still reward the rock-star contributors, but also reward the teams that produce great results that they've committed to, and punish and don't reward dysfunctional teams that don't deliver.

Oh, and return the old ESPP and up the 401k match to be something stellar. Worried about cost? Headcount reduction works wonders.

MSPoll: Oh, and if you have ideas but don't feel like sharing them here, you can at least achieve some catharsis in writing your thoughts up in the upcoming poll. Maybe when it goes online we can find a few questions to hammer on to make a (useless?) point. I can tell you, with the Yahoo acquisition still in play and the impact that it's had to the stock and the reputation of Microsoft, I've got to say the question addressing "this company is headed in the right direction" should take a nosedive.

P.S. I'm going to mention Steven Sinofsky here (which I've avoided a lot, although I'm a great fan, because every time I think of typing something about him I hear in my mind batteries clattering down a wooden staircase and then imagine his angry, disappointed face appearing out of the shadows at the top of the stairs... scary stuff): so does this mean that Sinofsky is destined to be Mini-ized? Hmm.

P.P.S. Some executives moved around last week. One surprise departure, otherwise everything else seemed to have been whispered about for a while. Mr. Ballmer's email was interesting in that it seemed to imply that there was a whiff of accountability in the air with what was going on. Just a whiff.