Q305 - Sugar Daddies Going Sour

A cautionary note from Joe Wilcox at the Microsoft Monitor in yesterday's post about the latest quarterly results (Microsoft Fiscal 2005 Q3 Results):

Important highlights: While server and mobile sales demonstrated healthy year-over-year growth, core Office and Windows division revenues grew just slightly, along with Business Solutions products. MSN year-over-year revenue declined, fed in part by declining Internet access revenues. I am somewhat disturbed by the slow growth or declines in three of Microsoft's four profitable business divisions.

When the divisional Sugar Daddies start running out of sugar, you can damn well better bet that things will go sour in other divisions first.

If you're in MBS, I'd really really get that resume polished and out and look for something interesting as soon as possible. You exist for the singular purpose of transitioning your customer base over to Office System based solutions. And as Mr. Wilcox notes about MBS:

I see no signs this division will achieve profitability in the near future.

Cut.

A Voice of Reason / Plausibility

Now then, this is one hell of a great, thought out comment: Voice of Reason . It's well worth a read.

Also, it seems I just plain can't type clearly:

Your entire posting seems to assume that it would be extreme and implausible for a Microsoft employee to quit over this. That would only be true for straight people. This is a big deal for queer people.

No, I think it extremely plausible for folks to quit over this. Thanks for making that clearer than I could manage. If they do leave / quit Microsoft, I do hope they publicly explain what changes they'd expect to see in the Microsoft workplace environment to consider coming back.

Well, if we haven't hired everyone from India and China by then.

Microsoftie Reality Check

A recent comment about the front-page worthy political bunglings as of late:

How many employees who would consider leaving Microsoft because we pulled support for the bill? Now how many would have considered leaving if we had supported it and the bill had passed? Which number do you think is greater? I'm just guessing, but I'd wager that pulling support for the bill tipped more employees toward leaving. If not convincing them to quit on its own, maybe coupled with whatever other reasons they might have (oooh - the towels!) they'll leave. I thought that was what you wanted.

First: less people working for Microsoft? Bing-bing-bing! Yes. That's exactly what I think is in the best interest for a healthy Microsoft and is key to Microsoft building an efficient product-creating whiz-bang future.

Next: I don't know how many people would be up to leaving based just on this issue in and of itself. However, I agree it's one of those tipping point events as each employee gets to do a reality check:

• Do I still have faith in this company, its leadership, and my position here?
• Do I want to stay here?
• Could I get a great position elsewhere more inline with my beliefs and values?
• Damn, why isn't anyone excited about Longhorn?

Alright, I had to slip that last one in there. An interesting snippet from this AP story, Microso ft Criticized for Gay Rights Stancee:

The Boeing Co., Nike, Inc., Hewlett-Packard Co., Molson Coors Brewing Co., and Levi Strauss & Co., are among businesses that supported the Washington state bill, which would have banned discrimination against homosexuals in housing, employment and insurance.

Asked why Hewlett-Packard supported it, John Hassell, the computer maker's director of federal and state governmental affairs said: "One word: competitiveness."

HP started offering domestic partner benefits to gay employees in 1996 -- three years after Microsoft did -- and, like Microsoft, has an anti-discrimination policy that protects gays.

"It's not just a nice-to-do thing. It's a requirement to be successful in the private sector," Hassell said.

So it's an employee recruitment and retention business focused decision. It is very unlikely that someone is going to pass on your Microsoft job offer because you provide such benefits and support legislation like HB 1515 - it's just not relevant to their day-to-day need, irregardless if it totally violates their own personal code of ethics and politics. It is very likely that they will come work for Microsoft if those publicly defended benefits are directly relevant to them and is something that is relevant to their day-to-day needs.

If you're a Microsoftie, do your own reality check-check-check and decide if this is the company for you. If you're at Microsoft, there's a good chance that you're talented, smart, and motivated and can find a rewarding career elsewhere (and if you're a Microsoftie and not talented, smart, or motivated: oooo, your time is coming, Spanky). You can fill out all the SharePoint protest lists and send email directly to Bill and Steve, but it's not going to truly be heard by them and affect them in a relevant manner until people start leaving, noting this bungling as a defining moment in their decision.

We the Microsoft Shareholders

So, Scoble not only got permission to post Mr. Ballmer's Friday Memo on the HB 1515 broohaha but almost posted a fine bit of blistering commentary (Sco-Balls, indeed). Again, I'm trying not to step in the red/blue state splattered opinion on the anti-discrimination bill and affixed agendas. Rather, just at the associated screw-up.

The good:

• Ballmer came out and said something within a reasonably quick amount of time of things blowing up in Microsoft's face. Quick damage control is smart and this will no doubt help quell what could have blown up even more (a divisive story like this, ignoring the players, is always great for filling up the spaces during slow news days).

The bad:

• That this public controversy ever happened. This is just poor forward thinking and poor leadership that leads to d oubt and suspicion. We don't lavish rich compensation like this on the executive leadership decision makers just so that they can embarrass our company. It shows a total lack of savvy, a degree of clumsiness, and a growing doubt in their ability to make good decisions.
• A demonstration that executive leadership doesn't think they are accountable to the key shareholders in Microsoft.

The second point above is where I'm going to have to momentarily dial the foul-language meter up to "R" (fair warning - I do usually endeavor to keep the language clean here to not obscure any vestiges of a meaningful message). A bit of the memo that was innocuous at first later had my teeth-grinding as I did yard-work all day Saturday:

It's appropriate to invoke the company's name on issues of public policy that directly affect our business and our shareholders, but it's much less clear when it's appropriate to invoke the company's name on broader issues that go far beyond the software industry -- and on which our employees and shareholders hold widely divergent opinions. We are a public corporation with a duty first and foremost to a broad group of shareholders.

Mr. Ballmer, who the fuck do you think is on the other side of this god-damn email? The most fucking important shareholders that the company has! Don't lecture me about doing what's best for shareholders when I and just about everyone in the company are just that. You're doing what's best for me. You're accountable to me.

So as I swept and snipped and scrubbed, my little brain started connecting the dots over the past realizing that executive leadership doesn't think that employees are engaged shareholders let alone shareholders interested in the direct impact of executive leadership's decision making. Last year, describing the changes in compensation, Mr. Ballmer said that most employee's just flip their stock as soon as possible vs. holding on to it. And Mr. Ballmer has said multiple times how important things are guided by our responsibility to the shareholders. And to Mr. Ballmer, it seems, the intersection between the set of shareholders and the set of Microsoft employees is the null set.

So I could watch The Corporation again and meditate on Microsoft doing what it thinks is best for the shareholders, but I could flip that around and wonder if the shareholders are actually speaking up and demanding Microsoft actually perform and be held accountable for doing the best job possible. I don't see that currently happening. And until the shareholders (especially the most important shareholders) start making their voice increasingly heard about what they expect, the less likely the leadership is going to feel accountable for more results than well-spoken lip-service.

Points of view of Microsoft's Health

Points of views from all sides to round up right quick:

Vic Gundotra - taking up the space left behind by Lenn? Anyway, Vic has an optimistic post In defense of the company I love where he calls out why things are great and only going to get greater. A snippet:

I'm working on software that is going to touch virtually everything I can see out the window of this plane. Almost every home, police station, hospital, store, school and church is running our software today - and Longhorn is going to make things a lot better in a lots of ways.

The challenge I see, Vic, is explaining all the great things in Longhorn to those people in the police station, hospital, store, school, and church so that they can get behind adopting Longhorn vs. feeling that it's something to be foisted upon them. I will tip my hat to the requisite hat-trick needed to conjure up the tangible benefits of Longhorn that isn't built in a comparison of what's wrong in XP and right in Longhorn. Show us how it directly saves us time and makes out life better. Folks are happy enough with the Jenga tower that is XP. Why go and switch that for a new set of blocks?

One place to start: how about making Jeremy Wright less disappointed: My Disappointment With Microsoft

A deeper view of Microsoft from Rick Segal that's a very nice read: MSFT: They're playing taps again (wasn't me - I don't even know how to play a kazoo) (short follow-up). Snippets:

The point I'm making is that Microsoft has to change or die and they know it.

:

In my view, Microsoft is not the walking dead, nor a wounded animal, nor in any kind of trouble today.  In my view Redmond is struggling to take the company and the millions of existing customers into the next era of computing.  That is a fairly tall order.  It's easy to just say, new product X leaves the old one behind. That isn't cool to the customers of today.

And a big point: Microsoft must change. I agree, change is coming. Change is either going to be something that happens due to deep intellectual insight by our executive leadership or something that will be forced upon us due to desperation and paranoia about survival.

From my point of view, we need a big huge disruptive reorganizational change that blow apart the executive fiefdoms that have allowed so many people to work on so many cancelled projects and never-ever ship profit making software products. And easily identify 10% of the employee base that we can move on to let them contribute to companies that are a better fit for them. Due to goofs, a reorganization of some-sort will no doubt happen, if only to relevel the playing field and obscure any comparison between past performance and current performance of product groups.

A good use of "shareholder" money? Bribe, er, entice these ineffective contributors with a goodbye compensation package. Summer's coming up and who wouldn't want six months pay to let them look for that next job?

Finally, Microsophist kicks in with another point of view from a Microsoftie and what's going on within Microsoft. Atom feed is here: http://microsophist.blogspo t.com/atom.xml . It takes a while to build up a series of posts to define a point of view and best of luck to Microsophist to contribute a defining voice. A snippet:

Things are amiss at Microsoft. Some of the problems are new. Many have been around since the beginning but no one noticed or cared because they were too distracted by the piles of money they were making and that rapidly approaching retirement date.

If you work at Microsoft, you should know what I'm talking about. If not, well, you must be pretty easily distracted. Or you're a VP. Or a kid we just hired out of college.

Now you. Yes, you... you incredibly good looking smart devil you. What ever point of view you have, pro, con, whatever, please take a moment to contribute. Contribute, whether between commenting or posting in your blog or posting within an anonymous blog (for a good reference, go to the EFF guide to safe blogging). Or beyond blogs and communicate your point of view to editorials or fund-investors in Microsoft. It would be a delightful short-term result, for me, if some of our hard questions and issues actually start bubbling up into the common discourse and begin being directly asked of the executive leadership. And they gave thoughtful answers. And even better, began thoughtful change.

Comment round-up for April 21st

The past week had a good flow of comments (for this tiny nook in the blogosphere). A good meaty comment disagreeing that mediocrity is our woe at Microsoft but rather several other issues:

In my opinion, the problem is a combination of the following:

1) Too many cooks. You can't get anything done without buy-in from 183 people, including the 6 layers of execs above you and the 12 teams scattered across the company that you have dependencies on. Getting everyone aligned requires rigid process, countless meetings, and "consensus", none of which fosters creativity, initiative, or accountability.

2) The money is gone. People will happily put in 80 hours a week if it means becoming a millionaire in 5 years. What's the motivation now - so that you can get promoted into the ranks of middle management?

3) Creativity is not a part of its corporate culture, and it never has been. Microsoft made its money doing a better job of executing other people's good ideas. I can't think of anything revolutionary that Microsoft has produced. The next big thing and every other big thing after that will not come out of Redmond.

4) Microsoft leadership lacks vision. Bill Gates is where he is because he is a tenacious and fierce competitor. Neither he nor any of his henchmen have the imagination or social instincts to catch or generate the next big wave. We missed the incredibly high margin business that Google and Yahoo created around search. We missed the music business Apple created around ITunes and IPod. We missed the [freaking] Internet!

Greatness is all about potential, and you need the right environment to bring it out. Most of the "mediocrity" you see at Microsoft these days is the result of systemic paralysis.

Next up: I better type with caution if I appear to impugn Any Rand's Atlas Shrugged:

Why would you say that we should forgot about the literary worth of Atlas Shrugged? I like your blog, and enjoyed seeing the reference to John Galt, but this dismissal of the literary worth of one of the greatest novels ever written really rubs me the wrong way.

I just wanted to focus more on the story here. From my point-of-view (at this point, perhaps I should be visualized as aiming my foot for my mouth), Ayn could have done with a good dose of editing for the tome she wrote. She had a vast bit of ideology to share with the world via her story and did so with such verbosity that even Fidel Castro would be prone to say, "Whoa, could be shorter!" I enjoyed it, it made a lasting change within my psyche, I just wish I could get some of those days back from the summer when I was sixteen and should have been doing far more foolish things. I guess that's a grudge I'll always hold.

Next...

When are you going to quit Mini? Your entries are getting more and more strident and "reckless". Are you hoping to get fired and save yourself from making the decision to move on? Are you hoping to use the news that MS fired a blogger to get your next job? If so, it's a dishonest thing to do to yourself and your colleagues.

No, I truly love Microsoft and the people I work with and all their damn potential to create great software to change the world (while, um, making a boatload of new money from new markets). I'm in for the long-haul and that's why I'm putting down as many different angles as possible to pull the rug out from underneath inefficient and bloated leadership and systems. Yes, it might blow up in my face. I can't imagine that being something that ends up in my favor.

Lastly, one of the comments was more or less: "Stop yer bitchin' and play yer guitar!" or such. Point taken. Another comment, though,:

Some of my friends told me they are even ashamed to say they work at MS when mingling at some party.

I bitch because I work my ass off to help customers when they are in trouble but at the end of the day - the ONLY thing that my management cares about is how accurately I track my time spent at the office, so a beancounter somewhere can be happy.

The last point is pretty important and something I'll try to pull together once I'm done reading Bob Herbold's book. But in the meantime: folks are smart and they realize what it is they are going to be rewarded for. They will gravitate to the work that achieves recognition and compensation. If you're being rewarded for process excellence and it doesn't matter whether your product ships or that your customers are delighted, you're going to Six Sigma your butt up and achieve process excellence. We need to hold people accountable for shipping great software that our customers want to use and delight in using. We don't get paid for shipping status reports to our customers (but if we did, I'm pretty sure our bottom line would double overnight right now).

Oh, and administrivia: some comments have been deleted. These are pretty much blog spam (plus one duplicate post) which I can't get around to cleaning up as often as I'd like. Only a few to delete, thankfully (and I got to exercise my ability to blush when I decided to look-up what the heck "milf" meant).

Adversity to Diversity?

I know there's been a lot of Microsoftie effort to try and shed public light on the internal outrage regarding Microsoft backing out of supporting gay-friendly legislation (as noted by Scoble and at The Newest Industry). It really hasn't been able to catch fire in the press until today. Microsoft will hopefully come forth and explain itself publicly (especially now given that HB 1515 died in the state senate today). I certainly don't know all the details and I think it's too early to deal judgement.

Let's just take a business look at this issue, putting aside personal beliefs and such, if it does turn out to be true.

If true, this appears to be a short-sighted, dumb move (the type in chess that leads to the exchange "Checkmate!" followed by "D'oh!").

Decisions like this are indicative of the increased layers between the decision makers and those affected by the decisions. If the burning outrage was any closer to the soles of the decision maker's feet, there would be a bit of hesitation. The voice of the everyday contributor is just muffled with all the fat we have in personnel and bureaucracy.

How does the impact to Microsoft of an apparent faux-pas like this become real? When it becomes publicly more difficult to hire and retain quality folks who are offended by such clumsiness.

• For those folks who feel passionate about such an issue.
• For those folks who just don't want to work for a company that blows holes in its own feet with such thoughtless abandon, antagonizing its own workforce in the process.

So:

1. If you are being courted by Microsoft and decide not to come work at Microsoft because of a decision like this, publicly spread your choice and build some buzz around it. I'd be happy to link to it in one of my occasional potpourri postings.
2. If you are at Microsoft and decide this is the tipping point that has put you over the edge to go and GLEAM someone else's cube, note it as a significant event in your "Moving On" email / blog-posting or such (and I trust you to word it in a way not to burn bridges). It's just part of living your values and what matters most to you (deeds, not creeds). If you're super-talented, you can find a new job in your locale without very much pavement pounding at all.

 

Who ain't John Galt

Who ain't John Galt? Perhaps that's a better question as our senior brain drain continues (I still don't have a snazzy name for the blogging trend re: "ex-Microsofties now workin' here" kind of posts).

Okay, who ain't John Galt? Sure is looking like the answer to that is Bill Gates and Microsoft.

As noted today, Mr. Lenn Pryor has moved on:

• Goodbye Microsoft, Hello Skype - Lenn's blog entry on the transition.
• Robert Scoble's Guardian Angel Leaving Microsoft - Dare's take (Dare is of course always a good read).
• Ch. 9 founder leaving - Todd Bishop @ the Seattle Post-Intelligencer.
• Pryor a Microsoft prior - C|Net.

While Microsoft might have cast the net wide to hire all the bright computer people in the world over the years, somewhere along the way some crap and chum got snagged in the net and crap begets crap and crap hires crap. And as the effects of that oozes across campus in a dulling miasma, you've got to expect the brightest to pull their heads up and say, "You mean there is a place where I can write great software that actually gets shipped and makes money! Sign me up!"

There are no golden handcuffs anymore so it truly comes down to enjoying your job and getting fairly compensated for it. For those of you who kept your options in hopes that the stock would go up, traipse on over to http://stock/ sometime and see how far below water some of your glorious options are still.

Still sticking to my guns: I'd rather see fewer folks working at Microsoft, even if it's the best and brightest leaving first and we have to deal with shambled remains of Microsoft for a while as the effects kick in.

That leads to John Galt. Okay, let's forget about the literary worth of A tlas Shrugged, but take a moment to reflect on some parallels here. Ayn Rand wrote about an America where the true achievers were hampered by mediocre people with mediocre goals. John Galt came along and snatched all these great people away to achieve unhampered greatness. Today, the market and competitors are likewise serving as an alluring John Galt as Microsoft drifts to this mediocre environment propelled only by past achievements and truckloads of cash coming in uncoupled with anything we do right or do wrong.

Back to Lenn's blog posting:

I decided to swap problem sets from one that I am not passionate about any more to one that I AM deeply passionate about. I just couldn't go on being an evangelist for a gospel that I don't believe I can sing. I am returning to focus on what I enjoy most, building amazing things that make people happy, change lives, and make money. In this case Skype was a better place for me to do this and one that shares my core values and beliefs in how the future of both software and business will unfold.

What's the tipping point? Who needs to be the last straw? When does senior management snap-to and start to wonder about what the problem is such that so many talented people are leaving and the bad attrition numbers are going up? Sure, we had a reason for talented folks leaving in droves during the internet boom: money. As folks left for start-ups, Microsofties would give them a cheery goodbye and (if they were good) say (once they were out of earshot), "They'll be back."

Now folks are leaving to relish the passion of creating and shipping great software. And I haven't heard anyone mutter, "They'll be back." I've seen far more moments of wistful envy. You can't compete with that John Galt.

Longhorn end-user features.

Even Joe Wilcox is saying we'd better start talking about features and less about the geeky improvements in Longhorn: "Been There, Done That" Isn't Good Enough. Specifically, Mr. Wilcox is evaluating Jim Allchin's initial Longhorn buzz-tour and what Allchin is talking about. Snippet:

Jim is telling a well-read story and one emphasizing too many negatives, what I see as code words for fixing what's wrong or what people believe is wrong with Windows: perceived security problems, protected files if notebook lost, troublesome patching processes or painfully difficult networking. I can't see how going on the road to tout perceived problems with Windows is the best way to promote Longhorn. What about the positive user benefits? Surely Microsoft has something to say about Longhorn's positive user benefits.

The more I talk to people when I'm out and about outside the Geekosphere, the more I do hear that they are incredibly happy with Windows XP. It's not just good-enough, it's super-incredibly good-enough.

When Longhorn comes out and if the economy is anything like it is today, folks are not going to be plunking down $100 for that upgrade. They'd rather refuel their car a few times, most likely. And if Allchin's message is forming the foundation for Longhorn's goodness, you damn well better believe they aren't buying a slice of that cheese.

If we as Microsofties (and those vested in the success of the Microsoft platform) want to ensure Longhorn's success we're going to have to take it on ourselves to build the viral buzz of ooh-I-gotta-have-me-some-of-that. To hell with the money drain of folks that can produce commercials of people flying around to Madonna's music. We have to pull Longhorn by the bit-straps now and conjure up the compelling end-user features and energize our customers from the ground up.

Oh sure, I get the giggles when I realize an XML tag can in fact instantiate a .NET class or that I have some super cool vector rendering going on. I'm still a geek at heart and stuff like that makes my heart go pidder-dang-padder. But so what? So what to the folks who have reached a critical mass with iPod deployments such that it is now an entrenched market point, let alone having a halo effect around MacOS deployments? You can poo-poo Apple all day long, but they have a working long-term strategy and seemingly a great ability to ship OS.

Tiger OS vs. Windows XP vs. Longhorn. Who wins?

Eviscerating Microsoft Business Solutions

The award for best repeated use of the word eviscerate goes

to... Stewart McKie for his post "Green" is a Smokescreen. Snippet:

The portfolio of software assets that Microsoft acquired and assembled into Microsoft Business Solutions (including Axapta, FRx, Great Plains, MS CRM, Navision, and Solomon) are experiencing a slow evisceration. It's the kind of process that only Microsoft, with its deep cash reserves and 'long game' approach to the market, could stomach. In order to understand why Microsoft would disembowel these assets, it helps to understand the dynamics of today's ERP market.

(damn creepy writing, man.)

The main point I take out of this article is that Microsoft's business solutions (curious acquisitions that haven't paid off except for buying a

customer base) are going to be slowly eviscerated (and served with fava beans and a nice Chianti, I guess) in favor of moving all of those solutions over to an Office System platform.

Making Office a platform is a done deal and seems to be the chosen evolutionary path of the group, end-user features be damned. I hope there's a level of platform indirection here because otherwise customers and partners are going to find themselves so incredibly tightly coupled with a particular release of Office System (along with its quirks and bugs) that there is absolutely positively no way they'll ever upgrade either the Office or the OS.

Dodo?

BillG on Dinosaurs

In a BusinessWeek online interview with BillG (Gates: "IBM Isn't Doing That Much"), Gates talks about that wonderful Office 2003 dinosaur marketing campaign:

We have to convince people, to have any revenue at all, that the new version is exciting to them. You don't rent Office, you license it, and then you can just sit on it. We've done a series of ads with these guys with these dinosaur heads on saying, "Hey, we've got Office 97. What's wrong with us? We're so inefficient. Jeez." So that's a fairly helpful message to let people know they should get the latest and greatest.

Geez indeedz. Thanks there, chairman, for summing up the great powerful features of Office 2003 (now with such innovation we just plain can't explain it to you).

Think Week, the WSJ, and those Ten Crazy Ideas

In the Wall Street Journal article In Secret Hideaway, Bill Gates Ponders Microsoft's Future we read a bit about Bill Gates most recent Think Week. First, this Think Week a great idea for everyone. Before I had a life (well, a very nice bike) I actually took vacation time to read up on wild and deep ideas I had piled up (tragically lacking my own dreamy Alex Gounares).

Here's an interesting bit:

Four days into this Think Week, Mr. Gates had read 56 papers, working 18 hours straight some days. His record is 112 papers. "I don't know if I'll catch my record, but I'll certainly do 100," he said. Among the unread papers: "10 Crazy Ideas to Shake Up Microsoft."

Figures.

About a month ago, a friend emailed me the "10 Crazy Ideas" paper off of Think Week. For those in Microsoft, you can go and read it yourself by navigating through the http://thinkweek/ web site and finding the Winter 2005 papers.

I don't think they are crazy ideas at all and it's unfortunate, and very telling, if the paper went unread and not commented upon. Perhaps they should have chosen a more subtle title. I wish that Kentaro and Sean would go ahead and share their ideas broadly, posting either their own edited versions in a blog or emailing me text they'd like to share. I'd even serialize it!

The ten crazy ideas? Okay, I'll share that part:

1. Schedule Unscheduled Time into Performance Reviews
2. "Break Up" the Company
3. Encourage Loose but Prominent Couplings
4. Exile and Empower Incubation Projects
5. Offer Super-exponential Rewards
6. Offer Different Risk-Reward Compensation Profiles
7. Cut Back on Bureaucracy
8. Review Cost Cutting
9. Reduce Headcount on Large Dev Projects
10. Eliminate Exec Reviews

Mostly, more common-sense than craziness (ooo, cut back on Bureaucracy! Craaaaaazy...).