Wednesday, July 23, 2008

Exit One Kevin Johnson

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!)

Thursday, July 17, 2008

Microsoft FY08Q4 Results

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:

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.

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.


Monday, July 14, 2008

The Tumbling Tumbleweeds of Summer

(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.


Wednesday, June 18, 2008

Oy, an Extreme Bummer!

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.


Thursday, June 05, 2008

Administrivia - Hardware Induced Mini Break

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.

Wednesday, May 28, 2008

What's up with Microsoft India?

(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.


Monday, May 19, 2008

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

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.


Saturday, May 03, 2008

Microsoft Walks On By - Yahoo!

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.


Thursday, April 24, 2008

Microsoft FY08Q3 Results

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:

  1. Microsoft results disappoint Financial News - Yahoo! Finance
  2. Microsoft issues final threat to scotch Yahoo deal Financial News - Yahoo! Finance

Saturday, April 05, 2008

Microsoft, Just Walk on By

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?


Tuesday, March 18, 2008

MS Poll 08

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.