Mr. Ballmer on the Defense - Links
Quick collection of various links discussing Mr. Ballmer's presentation today (Sanford C. Bernstein & Co. Strategic Decisions Conference):
Microsoft:
- Microsoft Investor Relations Home Page - has the link to the webcast.
- View the PowerPoint - PowerPoint presentation for Ballmer.
- Read the transcript - for what was said, plus the Q&A.
Other:
- Bloomberg.com Microsoft's Ballmer Defends Spending, No Big Buyback (Update1) - Good read and rolls-up the unsatisfied nature of the crowd.
- Ballmer Defends Microsoft Spending Plan - Bill Synder @ TheStreet.com
- Ballmer defends Microsoft's cash problem - Reuters
- Ballmer Defends Need to Invest, Innovate - AP
- Ballmer Further Investment At M'soft Needed - Forbes.com
- Liveblogging Microsoft's Steve Ballmer at Strategic Decisions Conference - Blogging Stocks - running commentary (nice reaction to my excerpt below).
- » Penetrating Ballmervision Rational rants ZDNet.com
Note a whole lot of commentary for me - well, other than observing that I'd sum it up as Mr. Ballmer's telling us to hold on-tight to the handbasket we're sitting in, it's going to get a whole lot hotter - but one issue that I love that's being asked still gets a whole lotta buzzword-bingo-nothing when it comes to a sustentative answer (from the transcript):
CHARLES DI BONA: A couple of questions on the organization of the company. How are you looking at the organizational structure going forward, in particular a number of questions about how do you sort of avoid the big company problem of becoming sort of too diffuse, too defocused, and bureaucratic, both from a motivational point of view, but also from a results point of view? STEVE BALLMER: That's a good question, and probably one that I spend more of my time on than anything. I made a comment about nurturing multiple forms of innovation, and that actually, in a sense, ties to this exactly. How do we give people enough autonomy, but get enough synergy? How do you make sure we have high enough quality people to actually run with and move and drive the businesses that we're getting in? I mean, I tell the guys literally, you've got to think about guys like Kevin Johnson, Robbie Bach, Jeff Raikes as CEOs. They've got to be able to be as good as the CEO of any one of their competitors. We're entering the unified communications business this year with Live Communications Server, with VOIP capabilities, the acquisition we did of a little Swiss company last summer, Media-streams. We've got to have people who are absolutely top-notch, first rate. We've got to be willing to incent those people, reward those people, motivate those people. And there are issues, you've got to work, and I'm probably part of the problem sometimes, part of the solution sometimes, but it's something that as long as you keep it on your radar screen, and think about it a lot, I think you can make progress. One thing, we are evolving. Twelve months ago, we would have talked to you about integrated innovation. Today, I think what we've talked to you about is innovate and integrate. That is, I think for example in our first Longhorn Vista conceptualization, we had too much technology, too new, trying to be integrated at one time. So, we're trying to get a little bit better balance in innovation, then integration, as opposed to integrating so much new stuff at one time, and that helps a lot with agility.
Finally: I know, lots of folks are going to scream for Ballmer's resignation and replacement. But even I don't see that happening anytime soon (unless the stock falls into the lower teens). How well does it all work going forward as is?
75 comments:
[Steveb] "I think for example in our first Longhorn Vista conceptualization, we had too much technology, too new, trying to be integrated at one time."
Let's see, who was the VP who a decade ago brought us Cairo - a project which collapsed under the weight of too much, too new, too integrated all at one time. Jim Allchin. Ten years on he's still here making the same mistake?
Steve - wakeup. Allchin may be finally heading out, but what about the rest of the dinosaurs? I'm sure your top priority right now is to be able to retire honorably in the next few years. You want people to say you left the company in great shape with the right leadership to move ahead. Not the folks we have now who are just steps behind you on the way to retirement. I won't list them - you know who they are.
We've got to be willing to incent those people
"Incent"?!!! That's probably the worst of the PHB-speak in that little piece. I'm afraid it shows that he has clearly jumped the shark in terms of credibility. It suddenly makes it very clear to the rest of us what you have been arguing for on this site.
buzz-word soup:
Twelve months ago, we would have talked to you about integrated innovation. Today, I think what we've talked to you about is innovate and integrate.
Yeah, right. One plus one equal two, equals one plus one equals two, equals ...
He doesn't ever slow down, does he?
Mjinga Wawa
I'm not at MS, but I feel bad for you guys, seriously.
Seriously. I put myself in an employee's position and say, "He's my leader." I cringe.
I hadn't seen the "Penetrating Ballmervision" article but in reading it now, his reaction to the meeting echos mine exactly. There's no way to put a positive spin on Ballmer's performance - it was a disaster from both a content and delivery POV. In fact, if your goal was to worry investors vs calm them, you couldn't have crafted a more effective speech or delivered it more glibly. Given that Ballmer volunteered to go to Manhattan and restablish confidence, it seems incredible that the BOD can ignore his TOTAL FAILURE in that mission and more importantly the DIRECT vote of non-confidence in his leadership that the resulting further $5B selloff represents.
I agree that Ballmer will likely weather any storm from investors and you know the BOD will find some way to stick their heads in the sand. So I guess it's going to play itself out to the end and someone will eventually be proved right - either Ballmer et al that MSFT is still a growth play and can afford these investments or the street that MSFT is a value play and should have been cutting costs and optimizing for maximum cash flow. Hard to call a winner at this point, but clearly the market had it right for the past 3 years while Ballmer et al were making promises they couldn't deliver. So not a good omen. Under either scenario, it's likely that the stock will continue to badly underperform for 12-18 mths until earnings either finally accelerate and Ballmer is redeemed, or don't - in which case Ballmer et al are probably forced to step down. In the short term, with seemingly no positive catalysts, a totally destroyed technical chart, and a shaky market backdrop, there's a good chance that if we don't rally asap we could see a new 5 year low between now and the Fall. And the hits keep coming...
Can someone explain what your so called 'presidents' do that your senior vice presidents don't already do?
Do Kevin Johnson,Robbie Bach,or Jeff Raikes make any real decisions without being interfered with by Gates and Ballmer?
Am I the only guy who actually buys that we're in the infancy of computing technology?
I don't see how we can't be a growth company with the tech changes we'll see over the next ten years or so.
Microsoft will hit it's third wave, but only if we invest now and build out the infrastructure we need to move beyond the old shrink-wrap software model.
I can't believe how many people are advocating we waste our money on a massive stock buyback. I for one am happy to take the hit on the stock now if it means that ten years from now we'll have rocketed forward on a number of fascinating fronts.
Sorry if you can't deal with the fact that the stock is getting hammered, but have some long term vision for crying out loud.
Now if we can clean out the middle managers, cancel the projects that aren't showing promise, and RIF the cruft that has accumulated, we'll be in great shape for the future.
"...unless the stock falls into the lower teens."
Unless? What are the odds that Steve doesn't open his mouth 16 more times between now and EOY? At .50/share lost every time he opens his yap, that's all it will take. And of course he might get some help from another Vista delay which ought to be good for a further $1-2/share drop alone. It's getting to be like that Monty Python skit "it's only a flesh wound" as they proceed to bleed out...
"Let’s face it. If Microsoft made cars and waited five years (and by 2007, six years) between model years, its senior management would all be fired, and its business bankrupt. And while its huge profits and cash hoards currently spare it from these consequences, at some point both consumers and investors will realize that Microsoft is in the same position that American car companies were in the 1970s: bloated, arrogant, and out of touch with what consumers want. And events like those in the last week will only make that day come sooner."
http://software.seekingalpha.com/article/8193
I guess that over the next 12 - 18 months that Microsoft will become a "smaller" company by default. I was at a local video store over the weekend and I overheard a soon-to-be former Microsoft employee tell another customer that he was leaving for another local small firm.
Since Microsoft is underpaying folks the really smart one will be start to bail as they find better opportunities. Since the stock isn't going anywhere the sharp folks might as well see if they can get into a start up and see if they can make their fortures elsewhere.
As a former Microsoft employee who departed three years ago, I'm earning about 40% more contracting and even pondering a full time offer with stock options at a young firm.
So mini may get his wish of a smaller Microsoft -- via attrition.
very sad. here we have a CEO that don't really care about what investors think. why? because he's rich enough for life 1000x.
however, what we lost 12-15% for the year could be big $$$ for employees who rely on the stock price to hope maybe one day able to pay off their mortgage.
total disconnect from the real world. he should at least look at from an employees perspective.
Mini aint done 'till Ballmer won't run
Nobody ever loves their jobs; most people work for the money.
Nobody likes their bosses especially if they are arseholes - that's the truth.
Make enough money, save some and start your own - that's what I think.
Still, pretty interesting insight into one of the great companies in US.
Mini - I know you are on a break but can you start a thread on how Managers in MS screw careers by preventing them from taking even informationals? Sometimes they pay lip-service to the whole informational process but delay the approval to take the interview till the headcount gets filled or the deadline for application expires.
All this from a company who believes in realizing potential......
``People do look at the stock price some but it's not a big issue,'' Ballmer said.
I am tired of Steve assuming that we are all motivated in the same way he is. We are living on borrowed time: analysts and employees will one day wake up and realize he doesn't care about the share price. Hell, MSFT could drop to a penny and Steve would still be worth several million. And where is Mr Chris Liddel in all this?? With leaders like this, who needs competitors?!
The diction is terrible, but the content is there.
"Innovate then integrate": Offering selfcontained modules is a successful way of shipping OS innovation to customers (as demonstrated by Apple).
"incent people": pay innovators sufficiently so they can focus on improving the product.
Gives me hope.
This article on cnn has a list of 12 questions related to job satisfaction.
How do you rate?
(And by-the-way, for those scratching your heads wondering, "WTF? I thought the Mini-dude said he was done?": I'm not writing specific posts currently. For instance, I'm not going to write a follow-up post on SPSA or that Dev-vs-Test-vs-PM post anytime soon. But to keep the comments going, I will put up a post with interesting links, and yesterday, timing aside, was a very interesting link day. Much like a quarterly results kind of day. Just stirring the pot.)
It's not every CEO who will go to the lion's den and basically say "I've heard your concerns but think they're laughable. We will not only continue doing what we're doing, but do more of what you hate the most. In short, FO and sell the stock if you want."
What leadership.
"Microsoft will hit it's third wave, but only if we invest now and build out the infrastructure we need to move beyond the old shrink-wrap software model."
MSFT has been investing MASSIVELY for 5+ years with not one profitable new business to show for it. Steve likes to conveniently forget that track record of failure when pointing to the new investments that must be made now. Where he highlights Windows and the 10 year investment made 20 years ago, he avoids recent history like the largely failed 10 year investment in MSN or the totally failed $10B investment in cable companies to drive set top box sales. WRT software as a service, the question to ask is why MSFT once again is late to the party and having to play catch up? It's not just missing Google and search. MSFT saw the service model in action up close when competing against Salesforce.com. But as per usual, rather than embracing it, it tried for several years to discount it as a niche offering and repeated said publically that it wasn't the way most customers would want to go. Net net, the market's problem isn't just with the level of investment. The main issue is MSFT's horrible overall record of turning that investment into returns within reasonable (5 yr) or even unreasonable (10 yr) timeframes.
I never thought I would say it, but I think the time has come for SteveB to move on. I was really excited when he moved in the CEO role and thought it was going to be the start of a great new chapter here at Mr. Softie. How wrong was I. The stock performance has just been brutal, and despite his comments about not worrying about the price, that is fundamentally his job: shareholder return. I'm tired of the excuses, I'm tired of the stagnant growth, I'm tired of being slower than the competition, I'm tired of the lack of accountability, I'm just plain tired. SteveB, thanks for everything, but it's time to go.
At a minimum, Ballmer is guilty of having badly underestimated the $ required for his "investments", the resulting timeline required for their payback, and allowing the various core operational fuckups including the Vista delay, MBS's growing pains, etc. Because of that, he's also guilty of having poorly communicated expectations to shareholders and analysts alike with massive resulting damage to the stock. At a maximum, he's guilty of having sewn the seeds of MSFT's eventual irrelevance. So sounds like it's a choice between a PIP or an outright fire. But instead, he'll get a pat on the back from Bill and Board.
It is scary to see how badly Steve is out of touch with the rank and file. Most employees consider stock as part of their compensation package and declining share price translates cleanly into reduced comp.
With regard to the idealist that is willing to see his package decrease or stagnate if it grows 10 years later:
1. Do some simple math. A reasonable portfolio is currently pulling 7% growth in the market. 10 years at 7% equates to...? And what is the likelihood of MSFT growing to that degree in a year? 2? 5?
2. In ten years any of your previous options would have expired.
3. Your stock awards would have vested, with little to show.
I would very much like to see a push by employees and investors to have Ballmer removed from the Board of Directors. Investors cannot control, apparently, whether or not the dancing monkey can keep his job. They can control whether or not he continues to get perks as a Board member.
Best headline yet:
Microsoft's Spending Forecast May Not Affect Shares
Ummm..didn't it already to the tune of some $40B? Interesting read nevertheless. Note that despite her bullish outlook, the analyst took down her estimates all the same. For those who don't follow the market including apparently Ballmer, estimates taken down = bad.
The truth is (and yes, it hurts), is that Microsoft hasn't had a truly original idea since it created Expedia ten years ago (which it sold). As an organization it has totally misunderstood the Internet and therefore missed all the best business opportunities.
Internet Browers - Netscape
Auctions - EBay
Online payments - PayPal
Online Shopping - Amazon
Search - Yahoo and Google
Audio and video streaming - Real Networks
CRM software - Oracle
Email - Hotmail (bought by Microsoft but not invented there)
Video Games - Nintendo and Sony
Online Music - Apple
Mapping - Yahoo, Google, Zillow
The elephant in the closet which nobody seems to want to acknowledge is that the company's business model is broken. Right now it has two components, both of them uninspiring.
The first is to play catchup in markets such as those listed above where someone else came up with the revolutionary idea or product and Microsoft is second or third into the market.
The second is to continually reinvent mediocre software (i.e. the OS) to add features that nobody really wants and to make it slightly less mediocre. Let's face it....do you know anybody out there who is breathlessly waiting to upgrade from XP to Vista or who can't wait to see the new Office suite?? Didn't think so! The fact is that for a majority of its customers, new versions of Microsoft software add nothing of value and are a pain in the butt.
Until I bought a new computer with XP pre-installed on it last year, I got along just fine using Windows 95 on a Dell which I bought in 1997.
Unlike other companies, Microsoft has never been truly interested in finding out what it's customers really want, the result of which is that its products are mediocre and its business model is approaching irrelevance.
Unless Microsoft starts coming up with some revolutionary new ideas and/or starts listening to its customers and making products they actually want, the company could hit the wall very very soon. All it would take is for hardware sellers to start preinstalling Linux instead of Windows, and open-source office suites instead of Microsoft Office and suddenly Microsoft's two largest revenue streams will dry up rather quickly.
Topic for a separate blog post by Mini: have we lost our ways to writing great software? I mean the software people will go and buy voluntarily, not something bundled with a piece of Dell crap? Something that is really useful, does not hang and does not require 17 other Windows components + Vista upgrade installed?
While I don't know the best path for the company overall, what I do know is that steveb's comments/performace over the past month or so wiped out the (small) stock gains for the past several years. It was at ~22 late in 2002 and is there today. Growth company...yea right, Steve. No wonder Wall Street is PO'd.
Also, just gotta love a comment from steve: (from Seattle Times)"People do look at the stock price some, but it's not a big issue," Ballmer said [about employee morale and stock price].
Really, everyone in my group is very concerned about the stock price...not just for themselves, but as a measure of the health of the company and our overall performance.
What BS from a billionaire.
that's a huge noise to signal ratio with all the corporate buzzwords...i've never respected someone who uses corporate buzzwords.
"The diction is terrible, but the content is there."
No, the diction is terrible, and the "concepts" are all tautologies, not something a company should have to pay big bucks for. The WSJ just let Ballmer's remarks flap in the breeze...
*WSJ Article*
"If you believe in the opportunity we believe in, you've got to invest behind it," Mr. Ballmer said at an investor conference sponsored by Sanford C. Bernstein. "Being a little more generous in research and development than a little less is a smart thing to do."
It must have been like watching a showing of the movie "Being There". Next thing you know he will be talking about the right time to water the garden!
A little more CEO insight thanks to Todd Bishop, Seattle PI. (this was picked up by the financial newswires today ...)
Ballmer on Google's Dell deal
One question asked of Microsoft CEO Steve Ballmer during yesterday's Sanford C. Bernstein investment conference was his reaction to Google's big pact to pre-install its toolbar and other software on Dell PCs. This might be what you would expect an executive to say after a rival lands a deal, but Ballmer said the cost was more than Microsoft thought it was worth.
Here's his response, from the transcript:
"The cost of online customer acquisition is going up. I think I had a little footnote there. And everybody has got to decide at what level they want to pay--play, pay to play. So that was--bravo. We know very well that people will change their defaults, people will change their search. They will go look, if they think something is worth looking for, and our job is to create that value.
"This is a case where you could say we decided that the return to our shareholders was not there in the business deal that could be done."
Posted by Todd Bishop at June 1, 2006 9:04 a.m.
Holy crap! From the morning daily Microsoft news email I clicked on a Wall Street Journal article and got the living crap scared out of me from the rendition of Steve Ballmer. The poor fella is getting it from all angles, even the lady that draws CEOs for WSJ.
Valley Wag also picked it up:
WSJ makes Ballmer an Orc
All I can say is that artist must have had a lot of retirement savings in Microsoft...
What do you expect Steveb to do? or say? that morale is down because of the stock price...that we are going to stop making the capex investments in order to satisfy wall street in the short term and kill any chances we have of running down Google...
Guys - think about what you are asking for - if steveb did leave we dont have anyone in the bench that could herd our bunch of cats...
Ballmer says:
The stock price, I would say people watch, no doubt about that. I don't think it's a huge morale thing, but it's an issue. It's not a huge morale thing, but it's an issue.
On the contrary, I would say its the single most important thing affecting morale. I doubt we would have all the morale problems if the stock price were flying.
What worries me is how he can make a statement like this. Either he's blind/misinformed, or he's lying/misleading. Either way, that's not something you want in a CEO.
Ha ha, it is raining "shoot SteveB" on Minimsft. I may be in the minority among the squeaky wheels on Minimsft but I know I am in the overwhelming majority of real msfties when I say that SteveB will lead us to the promised land, Insha Allah. He delivered us from the evil hands of the DOJ and he will do his magic again.
Microsoft will hit it's third wave...... Now if we can clean out the middle managers, cancel the projects that aren't showing promise, and RIF the cruft that has accumulated , we'll be in great shape for the future....
Well said. RIF'ing that crusty crud is really at the top of my wishlist. C'mon SteveB, press the RIF button.
I've said it in other posts before and I'll say it again. I'll take SteveB's job for a quarter the price. We may not have anyone on the bench, but I firmly believe that we have someone at the company, we just need to find them. Maybe that would make a great internal reality show..."Microsoft's next Top Monkey"
Google fumbles Offline
Talk about a one trick pony
"All it would take is for hardware sellers to start preinstalling Linux instead of Windows, and open-source office suites instead of Microsoft Office and suddenly Microsoft's two largest revenue streams will dry up rather quickly."
I guess if people keep saying it, maybe someday it will come true. Seven years and counting on this one. And you were complaining that Microsoft is 2nd or 3rd into markets--so according to you people should switch to products that are 106th or 229th into the market instead.
C'mon SteveB, press the RIF button.
How is steveb going to RIF a reporter for the Seattle P-I? I don't get it.
Matt Warburg,
Besides the fact that most of your list is wrong (Microsoft has been innovating in mapping longer than Google or Zillow, etc) you commit the first sin of technology revisionists. You confuse fast followers with innovators. Google isn't the first search engine, Paypal wasn't the first online payment service and Amazon wasn't the first eCommerce website. However they have been the most successful in their class.
Similarly Microsoft didn't build the first operating system, the first word processor or the first presentation application but it has built the most successful in its class. Innovation is an empty buzzword because at the end most successful companies aren't simply innovative but also execute well and build products that satisfy customer needs better than the competition. In some cases, this is simply by having an integrated solution (e.g. iTunes/iPod or Microsoft Office).
Microsoft doesn't have any more of a problem with innovation than competitors like Google, Yahoo!, IBM or Apple. We could be better at getting our ideas out to market and some of the fit & finish but that's a story for another day.
-- Dare
"Also, just gotta love a comment from steve: (from Seattle Times)"People do look at the stock price some, but it's not a big issue," Ballmer said [about employee morale and stock price]."
Yeah, I loved this one. First, he's saying that employees aren't really focused on the stock which, since he says he's not either, suggests that no one in the company is focused on it. Investors might have already figured that out from the piss poor performance, but I'm sure they didn't appreciate having it underscored. Second, he went on to say that morale might have been a big deal if they hadn't switched from options to grants. Just one problem with that: he sold the move to grants and the multi-billion dollar charges asscociated with the option trade-in by telling investors it was to "better align employees with shareholders". Now he's saying what anyone with a brain already figured out, that it does the exact opposite? Again, another great message to deliver to long-suffering investors. What a jackass.
"Regarding SteveB. Remember that Steve, as CEO, executes the broad strategy set by the Board of Directors. His main difficulty right now seems to be one of articulation."
The reason the articulation is required is because the bottom line results aren't there. Steve seems to forget that. When you've been completely unable to provide a return on 5+ years of massive investments, you'd better be able to articulate how that's going to change asap before you start telling everyone you need to make more massive investments - kinda like a bank loan. Case in point is Xbox. As one article said, his argument that this investment had given MS a superior position for a lot less than say buying Nintendo, was the start of a decent argument. Unfortunately, while he went on to say it was the best creation of shareholder value ever, there were no details. Given that Xbox is some $4B in the hole (more by my reckoning but apparently not by Steve's), currently unprofitable and detracting something like .10 earnings/share or almost $2 of stock price at a 20 multiple (let's pretend MS still commanded that), the need to articulate exactly why it's been a smart move is self-evident. So why does he avoid detailing it? After all, it's not like the management credo of MS is to underpromise and overdeliver - quite the opposite. I'm left to conclude that either he doesn't know the answer (really scary), or he knows the answer isn't sufficient to satisfy most investors that the investment was worth it (likely). Not good.
"Guys - think about what you are asking for - if steveb did leave we dont have anyone in the bench that could herd our bunch of cats... - Anonymous
And if steveb stays? From where I sit, it looks like you still don't have anyone who can herd your bunch of cats.
MSS
To make the approach of innovation first and integration later a reality rather than simply lip service, the obvious answer is to offer some of the products that are currently bundled with Windows on other platforms or support third party platforms that run on Windows.
For example many modern applications have been built as ASP (not Microsoft's ASP but ASP in general) applications - e.g Salesforce.com, Jobster, SugarCRM.
However to build these types of applications using ASP.Net, you need IIS and Windows for officially supported configurations. Yet Apache runs the majority of web servers out there (not sure on Windows platform numbers). So why not offer a supported version of ASP.Net on Apache, at least when running on a Windows server platform. Microsoft still makes server revenue when a Apache / Windows server combination is used.
Similarly Sharepoint is popular among technology companies, even those who are predominantly non Microsoft companies, so why not support integration with Apache or offer it as standalone product on non Windows platforms.
IBM have successfully managed to both support open source platforms such as Apache and TomCat in conjunction with offering their Webshere line for corporate users.
To take this further, offering these technologies on non Windows platforms for a fee would mean that losing a platform to Linux would not mean a shutout on other potential sales.
Offering Office on unix platforms would open up some areas currently being lost to Open Office such as government department mandated use of the Open Office document formats. Office is already running on MAC OSX, a BSD based platform, so the technology aspects would not be difficult.
There would be admittedly some loss of sales of the Windows platform due to this but on the other hand, all of these offerings could be revenue generating products and reverse some of the attitude towards Microsoft technology among the IT and investment communities.
Ultimately this approach could regain some of the respect that Microsoft has lost in recent years resulting in increased adoption of Microsoft products.
Innovation is an empty buzzword because at the end most successful companies aren't simply innovative but also execute well and build products that satisfy customer needs better than the competition.
This comment is spot on.
Look at a product like Exchange Server if you want the shining example of this.
Innovation is almost never a matter of coming up with something new: probably 99% of the "innovative" ideas never pan out because trying to dream up something new is approaching the problem backwards.
The real way innovation happens, and this applies to the sciences as well as technology, is by trying to solve some hard problem in an existing space.
Think of public key encryption and Whit Diffie's breakthrough moment in his kitchen.
That's why all the "futurists" who make their yearly predictions are batting .010.
To point the finger at someone and say: "oh yeah, well you didn't come up with that idea, so you're not innovative" is just missing the point.
Read Thomas Kuhn if you want a highly developed theory on innovation.
I'd like to see Microsoft prdouct teams cancel the "blue sky 10 year plan" incubation teams and apply that brain power to making existing products better. But we should keep MS Reasearch around for these kinds of deeper dives into hard CS problems.
Am I the only guy who actually buys that we're in the infancy of computing technology?
...
Microsoft will hit it's third wave, but only if we invest now and build out the infrastructure we need to move beyond the old shrink-wrap software model.
Talk about drinking the Kool Aid. Name one example in the history of software where an investment of billions of dollars resulted in a revolutionary change in technology. You can't. Revolutions are started by a small number of people and not a lot of money. Why do you think this is going to chage? Because some charismatic executive (who wants billions to fund his empire) told you so?
Looks like Vista might be delayed until March 2007. This is from a summary of the conversation Rick Sherlund of Goldman Sachs had with SteveB and ChrisL.
Scroll to the bottom or do a search and you can see the 3 part summary.
http://blogs.barrons.com/techtraderdaily/
Dare...
The point I was trying to make is not that Microsoft can't come up with new ideas. They do that all the time. It's that because of MSFT's huge bureaucracy and lousy management the company does a horrible job of monetizing these new ideas; i.e. taking them from the brilliant new idea stage to viable product or service stage.
MSFT may have all of these ideas before other companies did. But Amazon, EBay, PayPal, Yahoo, Google, etc. have all out- executed Microsoft, the result of which is that they made all the money from these ideas and Microsft didn't earn diddly-squat.
Microsoft's problem is that not only is its business model breaking down, as open-source software slowly erodes revenues from Windows and Office, but that even when it does come up with a revolutionary new idea, it does such a horrible job executing that someone else ends up taking that idea and not only makes a better product, but it also gets it to market faster.
Microsoft sucks at execution, and that's why it's getting it's butt kicked.
All the above comments will not matter one whit of stock price valuation unless someone somewhere up there in Redmond actually sends a herd of employees out to listen to your customers to help save your cash cows.
Perfect example on www.microsoft.com today. The communities link was removed as a customer resource. WTF is this?
How many employees are dedicated to "customer support" and what is there competency level?
Customer
RE: Microsoft's poor execution of ideas...Exactly!
How about this whole AJAX/Atlas thing? Maybe MS will get that right? But wait, now there's Script#? What's that? Why is there so much overlap between projects/products?
Looks like Vista might be delayed until March 2007...bleh bleh, bleh
As someone who is neck deep in Vista development, let me say this as "MS arrogance"-free as I can. We don't give a @#%* about when Vista ships. We will ship it when we are ready. Until then keep using your XP which is made by .... you guessed right.
Microsoft's problem is that not only is its business model breaking down, as open-source software slowly erodes revenues from Windows and Office
You have been having this dream/nightmare of open source making an inroad for over 10 years. When are you going to wake up and realize it is just a wet dream (and wipe yourself down)?
"People do look at the stock price some, but it's not a big issue," Ballmer said [about employee morale and stock price]."
Call me crazy but this is true for me and several of the friends I have accumulated in 8 years at MS. The few times we discuss MS stock price, there is no "woe is me" slant to the discussion.
Don't know if it matters but most of us belong to the top 20% performance category. Maybe we are too busy with other hyper-interesting software challenges to bother with the 24x7 lamentations I see on this blog.
Some of you might try achieving that level of excellence to see if it helps. Of course, YMMV
Perfect example on www.microsoft.com today. The communities link was removed as a customer resource. WTF is this?
http://www.microsoft.com/communities/default.mspx
How many employees are dedicated to "customer support" and what is there competency level?
Actual MS employees? I don't know... What's your point? You can count me as a PSS vetern. Someone who actually delivers support and I can assure you my competency (and customer satisfaction) is High.
At the very least, Microsoft executives should take a $1 salary like Apple or Yahoo CEOs...That way they their financial rewards (not that they need it, if you ask me) will be tied to stock performance. Of course, they should take stock options instead of stock awards for this to work.
I have the opportunity for two positions:
1) SDET
2) SDE (doing only bug fixes)
Which is the better position? Does being an SDET limit you from going to SDE or PM inside Microsoft?
Ok SteveB - Terry Semel just solved your problem for you.
He just dropped his salary from 600,000 to $1. For the next three years, he gets paid $1, and is instead incented on company performance.
You want to shut us all up? Do the same thing. We have enough products coming out, of high quality, with great standards support, that revenue should be stupendous (even if people can't figure out why to upgrade to Vista, we know Office, LiveCommunication Server and WinFX are going to drive alot of revenue on both the desktop and server)
Hell, you're a billionaire, it's not like you're living pay check to pay check. This should be a no brainer.
Do it, Stevey Boy, shut up all the winers.
Since Microsoft is underpaying folks the really smart one will be start to bail as they find better opportunities. Since the stock isn't going anywhere the sharp folks might as well see if they can get into a start up and see if they can make their fortures elsewhere.
The sad thing is that this is true.
How can you hope to retain people who innovate, when you have tens of billion in the bank, and you refuse to pay competitive wages?
How can you hope to retain people who innovate, when you saddle them with dependencies on people who don't perform. People who everyone knows isn't performing in Q1, but let him/her muddle on for an entire year, carrying them until review time, thus forcing the people dependent on them to not spend their time innovating, but instead end up doing the underperformers job on top of their own to meet their basic commitments?
With the stock in the toilet, we really need to be focusing on competitive pay, and more aggressively dealing with underperformers.
If someone is not performing in a role in Q1, you aggressively mentor in Q2. If at the end of Q2 they're not hitting the mark, it's time to start shifting their responsibilities to other folks officially and start to look for a new home for the underperformer. This doesn't necessarily mean move the guy/gal out of the company, they just might not be right for that particular role. But by officially assigning their duties to someone else, these folks can atleast get some recognition for the added burden they take on *anyways* when folks underperform.
You have 4.0 and 4.5 people moving on to greener pastures, and I know personally there are more folks packing their bags, waiting for this years stock grant and partner payouts (if only for the sense that this is earned, deferred income, not because they're a windfall).
And as a company we let these people leave and don't bat an eyelash. Why? Because we're sitting on a large pile of cash that lets us cover up the mediocracy, mis-steps, and lack of cost efficacy. We can get someone who'll come in and do a pretty good job vs. an outstanding job, and we can still muddle through.
Anyone who's not spent their entire career at Microsoft. The one's customers call the "New Microsoft" and love so damn much are now looking at the exits. Not because they want to, the folks I know love the company, heck, they love their job. They're just fed up with having to carry underperformers, limiting their ability to innovate - and doing so for tens of thousands less than their value on the open market.
If management listened to the people they should be focused on keeping, they'd hear that we don't give a damn about towels, wolfgang puck restaurants or the like.
If anyone listened to the people you want to stay, you'd do three very simple things -
Pay people what they're worth. If we made competitive salaries, I could buy our own damn coffee and towels.
And if we made competitive salaries, people wouldn't bank nearly as much on the stock price. At present, stock grants are seen as deferred compensation vs. a bonus. This is a natural occurence with the receipt of something of actual value vs. an option.
The second thing? Make sure the managers across the board need to understand they need to make their employees feel valued. And this doesn't just apply to direct reports, but people who support you from other teams. Recognize the people who are making contributions with more than a form letter 'Atta boy/girl'. Actually spend more than 10 seconds on an email, stop by their office and say "Thank you." You'd be surprised, it works wonders when people feel appreciated.
As any *good* manager can tell you, valuing someones contributions and recognizing their achievements sincerely will make people feel like they're making a difference. It's amazing how something this simple is missed or worse, done insincerely (which has an exact value in the negative).
Third. Deal with underperformers. Mentor them early, move them on after two bad quarters.
I'm an outsider looking in, but here's my two cents. I always thought this: as long as Gates was actively involved in leading the company, Microsoft would be an innovative and aggressive competitor with good growth. I have not been impressed at all with Ballmer. I've also watched Microsoft's share price drop and market dominance dwindle over the last few years. When you say "innovative" you think Apple and Google, not Microsoft. The company does indeed (again, outsider's view) seem bloated and slow, and largely resting on past laurels. Kinda sad really, but then again it's hard to feel much pity for all those rich dudes in Redmond.
The point is, it is not just we in Microsoft that are embarrassed by the inconsistencies of our CEO. The press has picked up on it as well. Since we are interested in our jobs, they (the local press) might be more interested in Microsoft's long-term sustainability as an employer. They (some of them) have no doubt have read books about ancient Rome and seen that when strong-willed yet brutish leaders take the yoke that societies suffer (ie, when your leader advocates 10% turnover of employees per year, but his own merits are in question) then it affects not just the company but the environment in which it operates. We toil mightily expecting any day now that our efforts will be redeemed. From an outsider's perspective, however, Microsoft may appear to be an organism on the brink, at odds with itself, and one in jeopardy of taking a fall. We do have other alternatives as leaders. Bill can take the reins. Ray Ozzie can be put in charge. As Albert Einstein said: 'you can't solve a problem with the same thinking that created it.' It could be time to make one of those big bold bets we keep hearing about.
"Since Microsoft is underpaying folks the really smart one will be start to bail as they find better opportunities. Since the stock isn't going anywhere the sharp folks might as well see if they can get into a start up and see if they can make their fortures elsewhere".
I just left as a level 63 for the equivalent of a level 68+ base pay and bonus. I was a LRA of 3.73 (5+ years), with 2 gold star bonus’s. I did not want to leave, but with all the options/stock drowning, Balmer’s ongoing competency of driving the stock price backwards, and the future not looking so bright for MS, it was time to finally give in to the fact that staying to 'change the world' had little meaning anymore. Also, given the layers of red tape and incompetence stopping people really wanting to take risks and make a difference the decision was ultimately made for me.
TTFN MS and good luck as you will need it as more people like me bleed from the organization in the next year. I am with Mini, either break the company up into smaller chunks of cut the fat off this obese, borderline heart failure company before it really does flatline.
"I have the opportunity for two positions:
1) SDET
2) SDE (doing only bug fixes)
Which is the better position? Does being an SDET limit you from going to SDE or PM inside Microsoft?"
SDE
1. Better pay.
2. Easy to switch to SDET possibly SDET Lead if SDE does not work out. Very hard the other way round.
How much of that $87 billion went to senior Microsoft management? Having been given stock grants making them shareholders, I imagine Ballmer would include them and other employees when stating how much money has been returned to shareholders.
Microsoft CEO Backs Decision to Boost Spending
"The company’s chief executive also reminded conference attendees that Microsoft’s dividends and stock buybacks in recent days have returned $87 billion to the pockets of shareholders in the past half-decade, according to the Journal."
"What's your point?"
Point is competency in communicating with your customers from Mr. Ballmer on down inside your company.
From an outsider point of view the disconnect is how you interact with all of us. You know the 90 something percent of Microsoft software users.
We have an investment in your company as well. You know the average consumer, purchasing your box software and now online services.
With all the new products in your pipeline non public and public can't you guy's do a better job in marketing your company?
Dynamics, great but unless we have 400 employees and an it staff what good is it?
Dinosaurs, what a waste of money...
Where is the ad campaign for how your new products are going to make the average consumer, business owner, etc... be more productive?
Yes there is a disconnect. You guy's cannot market your own products effectively. As well, not many employees there have an actual connection with consumers beyond real world testers.
I know where to access communities as I do this everyday to provide answers to other users and to learn how other people use OUR software so I can be more productive in my business.
Damn shame that most of the replies to topics on this blog are more concerned with "whats in it for me" or "It's this Teams fault" "it's Ballmers fault", etc, etc... instead of what can I personally do to improve company performance.
Forest for the trees...
Customer
As someone who is neck deep in Vista development, let me say this as "MS arrogance"-free as I can. We don't give a @#%* about when Vista ships. We will ship it when we are ready. Until then keep using your XP which is made by .... you guessed right.
Go ahead and take another 5 years to get it right.
"I have over 12 years professional experience in the I.T. industry."
You have 12 years professional experience and you have no money to take exams?
I call BS.
If Microsoft wants to stay ahead of the competition I urge them to contact me for further details on Divine Logic (the software) and the PriZm (the hardware).
This is great. There's this good friend, Andy, I would like to introduce you to that I am sure can help slip a note to Bill. Andy is a very nice and intelligent guy who likes to help people with great ideas like you. He is very smart too, he has a doctorate degree in psychiatry.
Contact me at 555-1271, let's chat.
James
My friends & I were just talking about this today over lunch. I'm a LAR of 4.3 (5 years). The only reason I've stayed at MS this long was b/c I really enjoy what I do (not who I do it with, etc). The actual technology, innovation, etc that I am helping to design & build keeps me going. But, time is running out - I've been looking at jobs the past two weeks in my hometown (NYC) and it's incredible. I could be making 2.5 times what I make now (w/ a not as great medical plan of course). Why should I stay? What should keep me here? Compensation is pitiful (esp in terms of market/industry), I work with a few amazing people and a ton of useless people. Going to work is becoming a strain w/ each passing week.
My friends all agree that I should leave, go back home (sometimes I almost regret coming here..) and be happier.
MS biggest problem isn't steveb (altho I seriously think he needs to go..) - the biggest problem are the managers who couldn't manage their way out of a box and the bottom feeders that these managers keep in the company. There are folks in my group that have no business working here and if any of them had worked w/ me at companies I had back in Manhattan before coming here, they wouldn't have lasted 6 months, let alone 5 - 8 years. One of the few things more demoralizing than being paid under market value is knowing that people who aren't even on the same plane as you are making the same, and in a lot of cases MORE, than you are...
Oh, and I don't work in the Windows org, but I sincerely hope that they do not release in Jan - from what I've been seeing in my installs of beta2, it's not even close to good enough to ship. The only thing worse than being several years late, is being several years late & sucking. Fix the perf (absolutely horrible), fix the UI issues, fix the ridiculous popups asking 'allow?' (asking to allow an operation is fine for security, but when you ask 4 times in a single task it is unusable; realize I'm going into the control panel or device manager for a reason, if I say yes to that than most likely I'll want to say yes to my actions in there!), and fix IE (no reason it hsould be so slow, so prone to hangs as it is now). Once you've fixed these, then release. Who cares if it is March or Oct of '07?? You're already so late, you might as well do it right since time wasn't a factor until now anyway...
~A frustrated soul who's soon to be an ex-softie..
You have been having this dream/nightmare of open source making an inroad for over 10 years. When are you going to wake up and realize it is just a wet dream (and wipe yourself down)?
You a fan of SteveB's, right? Actually, Microsoft's problems with Open Source can be broken down into several components -
1: the market is saturated. SteveB's actually made the statement that we're now competing against earlier versions. For once he's got it right.
2: Open Source is nimbler. Consider the speed at which Longhorn aka Vista progresses, compared with the speed at which FreeBSD progresses - and FreeBSD's secondary compared with Linux.
3: There isn't any central authority in Open Source to stuff things up. Whatever Novell does, won't necessarily propagate on to Red Hat, let alone Sun or Ubuntu. So they're spared SteveB's and BillG's styles of leadership ... lucky them!
Microsoft's problem's with Open Source, did I say? No, we're just competitors. The real problem's more insidious.
In relation to that, I remembered as I was sitting down to read this, about some Kiwi fella writing some spoof of Microsoft's name a few years ago, that got on The Inquirer. Luckily I remembered the name and after searching, I came up with
http://homepages.paradise.net.nz/wes.parish/matapihi.html
So I go to http://www.learningmedia.co.nz/ngata/
and check it out. It's a spoof alright. But "wairangi" - it's spot on for SteveB. Couldn't have said it better myself.
Yours Eponymously
Epon
Eponymously Epon,
What kind of convoluted rambling is this? I hope this is not Paula Abdul or Anna Nicole Smith behind the Epon moniker.
Please take your meds before posting.
the biggest problem are the managers who couldn't manage their way out of a box and the bottom feeders that these managers keep in the company...A frustrated soul who's soon to be an ex-softie..
Best of luck at your new job, and good riddance. With your attitude, your team, our company and our customers will be better off without your strong contributions.
If you are smart, if you have a lifetime average above 4.0, then you have been doing something right. If you are convinced crumby managers and individual contributors, in effect your team, are holding Microsoft back from reaching its goals...if all that is the case, and if you craved success for yourself, your team and Microsoft, you would lose the "I'm great, it's everyone around me that's the problem" attitude, and realize the greatest thing you could do for this company is help your team to do better. Not everyone can be you, and not everyone should be you. Figure out what these people you value less can bring to the table. I bet they have something to contribute, but it sounds like you've written them off.
Ever heard of the bozo bit? How about a book called Leadership and Self Deception? If not, look them up.
I'm going to vote with my MSFT shares very soon. And Mr. Ballmer will be a decline on the voting docket. Who else is with me?
Best of luck at your new job, and good riddance. With your attitude, your team, our company and our customers will be better off without your strong contributions.
Good riddance, I don't think so.
If this guy/gal is anything like me, they've tried to make the team better, have tried to work with management and the efforts have fallen on deaf ears (or worse - you get singled out as "difficult".
No matter how much you love your job, every solid achiever has a point they reach where they say "I know what my value has been in a better environment, people aren't listening to good suggestions and wasting time/money as a result, and I know what my value is on the open market. I've made my best effort and it's time to move on."
I should know, I'm another >4.0 achiever that's at that point now. I'm on year two at corp (transferred from the field), and while I'm not throwing in the towel (free or otherwise) *just* yet, I'm near the breaking point.
I think we'll see a RIF, some re-orgs, and *something* from the new review model. We'll see Kevin Johnson a few steps closer to the seat at the head of the table.
And hopefully we'll see people be able to have open conversations about issues without these 'bottom feeders' or 'good riddance' comments.
if you craved success for yourself, your team and Microsoft, you would lose the "I'm great, it's everyone around me that's the problem" attitude, and realize the greatest thing you could do for this company is help your team to do better.
But what if the 'it's everyone around me attitude' came about after being generous with time, mentoring, and suggestions to the surrounding team?
You act as if these items are mutually exclusive.
Are there people who just bitch? Yes. I agree with you, coming with problems but without a solution is not productive and good riddance to people who just whine.
However, when you raise the issues, provide the solutions, and your repeatedly ignored... you start saying "Screw you guys.. I'm going home."
The real deal is that alot of people have grown up in the Microsoft Biosphere on the Redmond side of the reality warp. It's become their high school, complete with all the cliques.
While customers may love the 'new kids' - the guys from outside the company who do novel things like I don't know.. listen to customers.. the MS High kids typically fear them for being different.
Sigh.
"Please feel free to read my blogs at http://appealingindustries.blogspot.com/"
--
put down the pipe ... there is nothing of value you uttered here. please stop self promotion especially when there is nothing there.
also stop quoting "how stuff works" on your blog and lose the pink floyd prism icons
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