Comment by thesethings | Hacker News Reader

Comment by thesethings | Hacker News Reader

The OP is both right and wrong.

Ballmer may not be the best visionary, product person, or have a good nose for the market.

But I really don't think MS could do anything to compete with the Internet era, and its results would likely be extremely similar with Gates in charge.

Also... let's not be revisionist. Gates was there long enough into the Internet era for us to know what he thought/how he responded. His attitude and approach was quite similar, and in some ways worse.

He was much less complicit to web standards on both the client and server sides.

These days, MS's intranet products retain this approach (Sharepoint), but its Internet ones are really good citizens and saying all the right things (Azure, PHP friendliness. Silverlight is old-school, but still less borg-y than stuff released in Gates-era). It's only that we have absolutely no reason to use the MS web-stack, and (rightfully)have trust issues that explains their lack of popularity.

So yeah... Ballmer is a dork. But MS's gradual demise is a natural effect of the Innovator's Dilemma and the Internet.

And I think a lot of people misunderstand the Innovator's Dilemma, even Clayton to some extent. I've heard people say things like, "We should eat our lunch before someone else does". The problem is that starting lunch too early can result in you losing your core business too quickly.

For example, if MS is making $15B a year in client products right now. And over time, against Google and such, that number will drop $1B/year until it hits $3B. Or they could accelerate that drop, such that it drops $3B per year, but they can generate $1B dollars per year by eating their lunch.

While it may be "fashionable" to be the cutting edge company generate $1B/year on some cool technology. It's actually prudent to fight against the new technology as the incumbent for as long as you can. And try to find totally new markets, rather than eating your own lunch.

The problem is that starting lunch too early can result in you losing your core business too quickly

That's exactly why it is a "dilemma," and not a "lack of vision."

What does eating lunch mean in this context?

Undercutting your own existing, successful business with a new business better prepared to go into the future.

Specifically, think about Office. MS could have released a web-version of these at a price-point that competed with other web office stacks. Doing so would have put them in position to succeed in the Internet world, but it would have gutted their Office profits in the process.

Given their cost structures are set up around those profits, no sane business person will make that decision. Hense, the dilema: you can see you are going to die to companies who change the rules, you know what you would need to do solve that, but the economics of doing that would mean anybody who really tried would be out on their ear.

The problem is that when you fight against the new technology, you mis-educate your own people. Ideally, Gates would have liked to denigrate the web and promote desktop apps to the outside world while pounding a completely opposite pro-web message into his own stuck-on-the-desktop developers. Unfortunately, with a company as big as Microsoft, it's impossible to keep the two messages separate.

I agree completely. Speaking of Clayton christensen I wonder what his thoughts are on Internet related businesses.

I am a firm believer in his be patient for growth not for profit. Yet most really big online companies went for growth before profit yet manages at least partly to still be in business.

I have my own theories but wonder if anyone knows where he stands on companies like FB, YouTube, google (who didn't really make money before later in the game. Is there a need to revise his theories?

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