Amid layoffs, Microsofties reveal further turmoil in Redmond
blog.seattlepi.com
blog.seattlepi.com
As more and more talented people are pushed out or leave, as the compensation continues to stagnate, as the corporate culture continues to rot all of this will snow-ball. People will find that they no longer enjoy work because all of the good people on their team have left. They'll no longer be bound by MS's golden handcuffs because their compensation won't be any better than a dozen competing companies in the same city. Etc, etc, etc. Increasingly I get the feeling that the exodus is just beginning from MS.
Jobs also once criticized company leadership in general (someone else can go find this), stating that what happens after a founder leaves is that a marketing person ascends to the top -- and he pointed to Ballmer as an example. It's interesting to note that Palm began to sink also when a marketing person was leading it -- Ed Colligan.
But it might be wise for him to have final approval over product designs, the way Jobs presumably does now.
"Hey virtual Steve, should we add this feature?"
"Get rid of it."
"Should we keep this feature?"
"Get rid of it."
"What do you think about--"
"That's shit."
I just bought virtualsteve.com, but didn't have time to set up hosting for it, so I've just put the page here for the moment.
Eww... I would never want to become Ballmer. ;-)
And to keep with your example, Apple also floundered after Jobs was kicked out. They had decent products, but nothing insanely great.
Hopefully MS will see this as a learning experience, become a better competitor and then we as consumers will benefit.
But the recent, high-profile launch disasters, the clutter that's slowly creeping into the result pages, and stuff like the search page background goofiness...they sure feel like early MS-style mistakes.....
I'd say Microsoft started going downhill after 2002, when they disbanded the IE team and embarked on the disaster that was Vista. But I remember that when I started college in 2001, I hated Microsoft and yet virtually all the software on my computer was by them. It's a sign of market dominance when your customers hate you and yet use your products anyway. ;-)
Eh. We also got WindowsME in 2000, which was arguably the worst version ever. And to be fair, Office has been mostly re-arranging the furniture and re-painting the walls since Office95. And...let's not forget Bob. Bob was Microsoft's Buzz, circa 1995.
That said, sure, it's not like MS got to their current state on January 1, 1996. And there's no way I'd argue that they (or Google) are going away soon. My point is only that Google is starting to show signs of lumbering corporate giant-hood, and that it has happened pretty quickly, in comparison to MS.
And Win7 is miles ahead of XP, although XP is better than Vista.
There's still time for that not to happen, but all the signs are pointing that way.
Apple's products were always highly regarded. Their problem was pricing - they charged too much for boxes Dell sold for much less.
It wasn't until 2000 or so when they got their mojo back.
And, until the arrival of NT4, PC GUIs had little to no advantage over what Apple was offering. Windows was ugly and crash-prone. In retrospect, NT4 was also very crash prone, probably because MS moved graphics drivers onto kernel space. Windows only became more acceptable (some would prefer "less offensive") visually with the NeXT-like visuals of 95.
And even after that, you could see users committed to their 98 installs for a long time.
Microsoft's GUI offerings started to really compete with Apple's with 95 and matured through NT4 and 2000.
Apple had a good product, if you compare it with what the PC market was offering. OS8 and 9 were well-rounded OSs that competed mostly against the 9x family, as XP, which made the NT kernel mainstream, wasn't launched until after OSX.
However, Windows 95 demolished Apple's profit margins, and that's what counts.
With 95, mainstream users got access to long filenames and a reasonably functional GUI.
Still, when you wanted a computer to "just work", you really had no choice.
I'll grab my popcorn and enjoy it thoroughly.
Not at all.
It saved the company in that it stopped the hemorrhaging of cash and gave them an actually profitable business model. Without this, they would've gone out of business entirely sometime in the early-mid 90s.
It killed them as a center of innovation. IBM hasn't invented anything worthwhile since the IBM PC in 1981. (No, I don't count Eclipse: IntelliJ idea came out first and better, and yet was eclipsed because IBM could afford to offer their product for free.)
Maybe that's the dilemma that Microsoft now faces. They can embrace their mediocrity, cater to their existing customer base, and continue to milk billions a year from their Winoffice monopoly. Or they can try to innovate. But most of their recent projects seem like they're trying to innovate and the coming out thoroughly mediocre, which isn't really a good combination.
I'm not so sure. Thinkpad laptops are legendary. They've been spun off to Lenovo but they pretty much set the standard for quality business-grade notebooks. Steve Jobs even used them as inspiration for the updated Powerbook line upon his return to Apple.
They pioneered SOI manufacturing, BlueGene TeraFLOP super-computing, and several other major advances.
Also, their consulting business sort of set the standard for other big players in that market. IME it's not that great, but none of them are great, so kudos for getting there first and not becoming significantly worse! On second thought, lets forget about this one....
There is a problem with your timeline. My memory says that IBM only openly embraced open source in 1998, which means that it saved them later than you indicate.
Lemme look. (Searches, finds http://www.salon.com/technology/fsp/2000/09/12/chapter_7_par..., reads.) I was right. They joined the Apache Project in June. They released Jikes (a Java compiler for Linux) in July. In September it was open sourced. At the same time they ported DB2 to Linux. And, what I hadn't known, all of this happened at a skunkworks level. It was not until Dec. 14, 1998 that open source as an issue landed on Lou Gerstner's desk, and the decision was made that the whole company adopted an official policy on open source.
IBM hasn't invented anything worthwhile since the IBM PC in 1981.
Really? They introduced the AS 400 in 1987. I consider an operating system whose _average_ uptime in the field is better than 99.9% to be pretty worthwhile.
They commercialized gigantic magneto-resistance in 1997. That's in your hard drive right now, and gives it at least an order of magnitude improvement over what previous technology could do. I consider that pretty darned worthwhile as well.
IBM is a big company that does a lot of things. I'm sure they have some other cool stuff.
Other than those points, I agree with what you say.
And the Power7 chips look impressive..
IBM's "problem" is that they don't do consumer stuff.. So they can get slagged off as inventing nothing worthwhile since 1981 - because they don't make shiny toys like the iphone..
Innovation and milking monopolies generally require different skills and attitudes. MS has tons of people good at the latter (starting with Balmer) and that very fact acts against them when it comes to innovation. Any innovation that happens (C# and LINQ come to mind) is limited in scope and is the work of individuals below senior management. These innovators have very little to do with steering the company.
If MS wishes to innovate they should start by firing or sidelining a lot of the entrenched senior hierarchy. Easier said than done.
I have to disagree. The PC was not innovative at all - it was little more than a repackage of existing stuff. It's architecture was hugely successful in the market thanks to IBM's muscle and its poor judgement that allowed Microsoft to sell MS-DOS to clone makers.
But nobody should say the PC is innovative. The Apple ][, the Atari's (both 8-bit and the STs), the Commodores (the VIC 20, the C64, the Amiga) were all innovative, groundbreaking products.
The PC was a kludge. And mostly still is. Recently, playing with hardware detection I found out my Atom-based netbook has an ISA bus somewhere inside it. I wanted to wash my hands.
What IBM doesn't tell you in their PR is that mainframes are still very much the profit engine of the company. Although the money is more in support services and business process outsourcing rather than the actual hardware/software.
if the london-stock-exchange fiasco didn't change anything at microsoft, i doubt that this will have any impact at all.
Are you referring to this? http://blogs.computerworld.com/london_stock_exchange_to_aban...
Despite the ignorant and inflammatory commentary that I linked to, I doubt that Accenture's failure to write a system in C# raised much of a wave inside Microsoft. Accenture could have made the same mistakes in Java or in any other language.
But Fog Creek and Y combinator aren't near big enough for them to collaps like that, so I doubt that they will fall that far.
Remember the bigger they are, they harder they fall. And lets face it - Microsoft is insanely big.
Possibly they could form a partnership with the aim of bringing other products to a platform. They could support Android, build it into there development tools and release mobile versions of their software there, integrate with xbox ect. Would probably be a bigger opportunity than the dead end that is windows mobile.
I think there would be a lot of businesses at Microsoft that could be cut in order to regain some focus. Although the same could be said about Google and they seem to be doing pretty well at the moment.
They can't afford that. Their strength comes from the lack of viable options - each of their product lines reinforces the dependency on other product lines. If you use Exchange, you probably won't be able to use anything other than Outlook, which runs on Windows and is part of Office, which makes using Sharepoint more or less painless, which runs only on top of Windows servers and requires Microsoft's database...
Their value proposition is based on dependency loops. Break the loops and the value disappears (or becomes negative).
But conspiracy theories work too.
But the reason they will stay in the mobile space isn't to keep you from getting any other mobile device. But because there's money to be made in it and it fits into their core competency.
Hell, they even invented the slogan "Embrace, Extend, Extinguish".
But why are they competing in the space? Microsoft could get into the soy bean industry, but the margins there really suck. They are in the mobile space because there's money to be made.
Lets put it this way, if you could prove that this mobile industry is at its peak now and there effectively no profits ever to be made in it, do you think MS would stay in it just so people would have no viable choices? Of course not. They're in it for the money. It's absurd to think otherwise.
For all we can see, not by them ;-)
To be fair, WinMo sells a lot of phones. Must at least make a profit for the division.
It would be a lot more dignified and profitable if Microsoft acted like a mature business rather than unsuccessfully chasing the latest trends.
Me: "I see no evidence mobile phones are in any way even close to Microsoft's core competency"
"in any way" and "even close to" are non-negating modifiers we can remove, so:
Me: "I see no evidence mobile phones are Microsoft's core competency"
You: "You see no evidence that an operating system for a mobile device is not their core competency?"
(pronoun and noun substitution)
Me: "phil sees no evidence that an operating system for a mobile device is Microsoft's core competency"
You: "phil sees no evidence that an operating system for a mobile device is not Microsoft's core competency?"
First, if you think MS has no core competency or that software is not one of them, then we could end the discussion right here.
But otherwise, it seems clear to me that mobile OS software is among their core competencies.
I start with the premise that operating systems are one of their core competencies. They have sold more units of OSes than any other company (or among the top 3). They employ probably the most renowned set of OS experts (David Cutler, of Vax VMS and NT fame. Rick Rashid, who did mach, the kernel that OS X is built on, Butler Lampson and Chuck Thacker, Turing Award winner for their work in operating system. Leslie Lamport, etc...).
Now you may say, "but they have no experience with mobile OSes". Except they were one of the first companies to do a mobile phone operating system. They also do operating systems for kiosks, embedded systems, and of course desktops and servers.
And while Windows Mobile is not a popular OS, the reason is not the OS itself. It's the shell that is problematic. The underlying OS is solid, and is being used in Windows Phone 7. They need a new shell and app deployment model, but they aren't going in and ripping out the kernel. And from people who have used it, they say the OS in WP7 is snappy.
IMO the company has 3 core competencies: OSes, Dev Tools, and Business Productivity sw. They have some secondary ones: Online Services and Video Gaming.
In summary, I think for them to give up in a space where they've actually produced a solid code base over the past decade, just when the space is now showing it can generate profit seems absurd.
The business chops to introduce and push device platforms is iffy--they got XBox through, but against weak competition and with very high expense. Apple and Google are much stouter competition than Sony and Nintendo and have significant advantages over Microsoft, not least among them the fact that Google has completely undercut Microsoft's traditional point of entry in the OS market (the low cost commodity OS).
Since Xbox, Microsoft can't get a decent offering together until well after the real competition and growth stage in the market is over. It's not like IE where they can leverage their desktop monopoly and deliver a compelling product 2-3 years after the competition and clean up--lately they're only really competing 4-8 years too late, in markets where their dominance in other markets gives them no advantage and their competitors have already moved on to newer, higher-growth markets. Maybe if they weren't spread too thin and were focused on Windows Phone 7 as much as Apple was focused on iPhone years ago and it was still 2008 or 2009, but none of these conditions are true. And they're not likely to become true in time to affect this particular project.
Kind of. How many really good OSs they made? DOS 4? Windows classic? Windows 3? Windows NT?
Out of that list, only the VMS-inspired NT could be called cutting edge. It had a microkernel-ish architecture with multiprocessing, multithreading and security wired in from day one. And they hired the NT team out of DEC.
I have great respect for the SQL Server team. Even after diverging from Sybase, it matured nicely and is a very good database server, comparable to MySQL and PostgreSQL. ;-)
It takes a year for Microsoft to release a minor revision to Windows Mobile 6. In a year, Apple releases a major revision to iOS. Google releases multiple revisions to Android.
It also took them 2.5 years to release Windows 7 to essentially fix Vista which should have been way better considering XP came out 5 years before Vista. Meanwhile Apple and Google have been continuously innovating and iterating.
When they did try to rush to market with the Xbox 360, they ended up having to take a $1B charge to repair the shoddy hardware.
You can't please everybody. You mush choose between offering a cutting edge product and a stable one. Windows thrives on stability-staleness. Make updates too frequent and users will learn not to depend on browser specificities, API quirks and specific technologies. If Microsoft teaches its clients to be vendor-independent, they'll be doomed.
It's this sort of statement that is absurd. In some sense it is fundamentally true, but true of virtually all companies.
Apple doesn't want iPhone users to be vendor independent. Otherwise they'll use Android phones.
Google doesn't want users to be search engine independent. They make their money from people clicking ads on their search engine site.
Nike doesn't want you to be shoe-independent.
Starbucks doesn't want you drinking tap water rather than coffee.
Every company wants you using their product. And the more the better.
My issue with the statement is that there seems to be this odd implied notion that MS will go into a space where there is no upside for them, simply to create downside for another company. This is patently false. They go into markets where they think they can make profit, either directly or indirectly. This is not any different than what Google or Apple does. The only difference is that MS has done it longer (Apple has struggled with its core market that it never had the chance, but now they're flourishing, you're seeing Apple doing things just like MS did if not more egregiously). And there's nothing wrong with it. It's business.
Very few companies enjoy the network effects Microsoft depends on. And yes, Microsoft will enter a market, even burn tons of money, so that no other company gains a foothold there that could be used to threaten its dominance in other markets. They did it with the Xbox - they burned tons of money and did not achieve anything close to dominance, but were extremely successful on preventing Nintendo and Sony from doing so.
When you have a network of monopolies (or mutually reinforcing market positions), it's very smart to disrupt every market you can't dominate because, if it doesn't strengthen your position, it will at least weaken your competitor's and prevent giving them a position they could leverage against one of Microsoft's captive markets.
And noting the network effect doesn't mean that companies won't user other means to stop their competition. For example, try to get Lebron James to wear shoes you make. Not going to happen. I don't care how comfortable your shoes are. Also, try getting your shoes into FootLocker. Also, not so easy, and Nike won't lubricate the process for you either.
Try getting Starbucks to open up a kiosk in your building with a Seattle's Best right next to it. Starbucks has enough influence that they can use other means, besides network effect, to push out competition.
Network effects are a beautiful thing to leverage. Actually I think MS is in trouble, because it has very little of it. Compared to Facebook or Apple. Google is trying to strengthen their network effect.
But again, there's a fundamental difference between trying to create and leverage network effects. And what you're saying, which is to simply disrupt any other company.
http://www.thespoke.net/ "Microsoft's digital lifestyle club for students from around the world, with message boards, hubs, blogs and 10 MB of upload space for members"
The problem for them is that their network is losing relevance fast. The value of desktop software lock-in is in sight, server software is coming next.
Microsoft, on the other hand, is just unloading shotguns at the hip.
But both of you have to admit that using SharePoint through Office sucks less.
Personally I see the Android market is on track for much less diversity in the future. HTC and Motorola seem to be the only companies doing a really good job with Android. The big problem with Android is your handset maker can cut corners and give you a terrible product. Google doesn't do a whole lot to support OEMs besides a link to the source code and words of encouragement. Microsoft has lots of experience as an OEM software partner. The license fee may end up being a reasonable price for handset makers to pay to avoid some of the difficulty of developing an Android device.
Isn't there a way to run a big company? Is anything known on how Apple does it? How big are their development teams, even?
Would it make sense to manage internal teams a bit like startups, that is they would have to succeed on their own and pitch for investments?
Not only that. Wrong people in the wrong places.
Maybe MS would do better with 34K than 100K people...
Micro-startups inside MS would be a killer idea. Small teams of 2-5 people, isolated, given time and necessary resources to create idea's. The challenge would be to keep entrepreneurial types tethered to MS, rather than watching them leave to start a company on their own (be their own boss, reap more financial rewards, etc...).
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It looks, from the outside at least, that MS has been dealing with plenty of political turmoil for quite some time now. If you exclude legacy products (Windows/Office), you see a pretty bad track record in terms of financial success over the last 10 years. Zune, Kin, Tablet PC's, Windows Mobile (profitable, but who wants one now?), Xbox (successful as a product, how about paying off its multi-billion dollar investment?), MSN, Pocket PC's, etc...
Most of the tech Apple is creating today, Microsoft had years ago. The thing is, MS didn't refine it well enough. They need to spit and polish the crap out of their products. Not release a product, saturate the market with it, declare victory, and ignore nurturing it.
What are they doing most wrong? Lately they've been in reaction mode. They don't innovate. They copy. And by the time they get their copy out it's too late. They've always copied, but their copies use to be good. Or at least tethered to a commonly-used proprietary OS or file format with high switching costs.
Lately their mantra has been along the lines of this:
1) See an idea that's successful.
2) Decide to compete with it.
3) Form a team to build it. Possibly acquire companies to do so.
4) Build it internally behind closed doors.
5) 1-3 years pass. Competitors gobble up market share. Microsoft spends lots of cash.
6) Launch it! Expect consumers to replace their other gizmo with MS's gizmo, costing them money, and time with switching costs (how do you migrate an iTunes database with 10,000 ACC's, ratings, album artwork, et all, to Windows Media Player in a few minutes?).
And people must like it, right? We spent all this money building it, our focus groups said it was awesome, and it does what our competitors product does too!
They're missing a much-needed feedback loop. Alpha users, and beta users. They don't know if their masterpiece is any good until millions have been spent and they show it off. It's hit or miss.
That's true, but they've learned. Windows 7 is a massive success and Office 2010 is a great product. Both had extensive testing and user feedback.
Windows Phone is getting a lot of traction before it's release as well. Developer tools, getting devices into the hands of developers, releasing information very early long before it's release and getting it out there.
MS in the past few years has started to ramp up it's outreach to developers and the community, and it seems like they are working that way with their consumer oriented products.
And let's not forget that they have gone into markets not #1 and taken the spot. Linux was supposedly going to be the Netbook OS, but then in practically one year, MS took over that market.
It's not like Apple doesn't ever release underperforming products (see Apple TV for a recent example).
MS is struggling, but struggling from a good position.
Since then, Linux or OS X have become the OS' of choice for many techies, and open software has eaten the lunch of MS when it comes to internet development.
MS are on life support (though in a quite comfortable state!) kept alive by a HUGE installed and locked-in base. There are flickers of life in Office and Windows 7, but they may be fighting a losing battle in future markets, likely to be more cost sensitive than the high productivity and high-priced US.
Check what IBM's basic research did and compare it with what Microsoft Research outputs.
http://thehistoryofrome.typepad.com/the_history_of_rome/2010...
If you ask an Apple, Google, old HP, or any employee of an innovative company they will be able to tell you what their company is about. They will be able to define what they are contributing towards at in work. They know what their company's mission is and what that company stands for in respect to their product line and their positioning in the market. This has stopped happening in Microsoft.
An interesting question is whether all failing companies have similar blind spots of vision.
As someone once put it; management is knowing how to cut down trees efficiently, vision is about knowing if you're in the right jungle in the first place.
It makes me wonder about what the world will look like in 15 years. Google's mission statement is "Organize the world's information, and make it universally accessible and useful." Right now, I'd tend to think that Google is safe from many of Microsoft's woes, because I couldn't imagine how they could possibly finish their mission statement. But I would've thought the same thing about Microsoft in the 1970s.
Maybe, the problem over here is that the dreamers have stopped dreaming and they're now concentrating on spreadsheets?
Look at Elon Musk after he exited PayPal he could have coasted in that paradigm. Done incrementally better things, or just continued looking after it. He didn't do that. Instead, he asked himself what's next for me, and put his money where his mind was. In a lot of ways to me that defines a vision.
Or, we could take the perennial example, Steve Jobs, Apple could have coasted after the iPod, or the iPhone but they somehow keep on pushing on and they've started creating an ecosystem where all the other products feed into one another. It is true that his dictatorial style helps him, but someone had to see this possibility to work towards it, and that's where the challenge lies in my opinion.
Aren't they almost there already? Documents, email, maps, news, phone/voice, search, videos online, and soon television.
> "Organize the world's information, and make it universally accessible and useful."
... and to sell ads based on that information. Google is still primarily an ad company that just happens to also do technology that helps them sell more ads.
I think that there's still a long, long way to go. I run into information problems that I can't solve with Google all the time, mostly relating to obscure niche interests. Are there really no people talking about my favorite books on the Internet? Because unless I want to talk about Harry Potter or Twilight, I can't find any. Has nobody run across this error message that I just found in my Haskell/LLVM program and solved it? Of the dozen or two restaurants within a mile of my apartment, only about half of them show up on a Google Local search.
Google does really well for popular stuff, basically anything with a Wikipedia entry. It's still remarkably immature for things that are very niche, when there's just a handful of people around the world interested in that topic.
Udi Manber, Google's search VP, had an interesting interview about that:
http://news.cnet.com/8301-10784_3-9960259-7.html
> ... and to sell ads based on that information. Google is still primarily an ad company that just happens to also do technology that helps them sell more ads.
Honestly, working in search, I don't see that. I'm explicitly told not to worry about revenue or ads. There are other departments that handle that.
I think that the way the founders view it, Google is a technology company where ads give them the wherewithal to build interesting technology. It's the old Drucker view of a corporation: profit is the cost of staying in business. A business exists to fulfill a social function; the profit motive exists to keep the business honest, so that it doesn't consume more resources in pursuit of that fulfillment than it generates.
That's not how business ecology works, though. Microsoft's shareholders are not well served with stock in a company that's half mature, dividend-paying, high-market-share titan and half scrappy innovator. They're probably better off having stock in a Microsoft comfortable with its maturity as well as a separate, younger, scrappier company. The entire economy would be better off with that.
Danger, one of the sample words you mentioned, is the name of a company that Microsoft bought.
That's why I asked the question. My thought is that there is a psychological excuse to have low expectations for a project, product, or company if it has negative connotations (and not 'making fun of' or 'humorous' connotations).
I've seen projects fail with clever negative titles (mostly via acronyms). Not because the developers were bad -- but because, I think, it might give the management or business side an excuse to look for failure. Or it may create other headaches psychologically for the people involved.
That's the only reason I asked the question. I admire people who take those risks. But it may be worth thinking it through. Or maybe not..
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