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> For whatever reason, the industry press never liked Ballmer, and I guess they like Satya

Ballmer made several missteps:

1. Fruitless foray into mobile with acquisition of Nokia and Windows Mobile and Windows Phone strategies.

2. Billion+ dollar acquisition of Skype that basically went no where.

3. Remember a company called aQuantive? Don't worry, neither does anyone else. Ballmer's MS purchased them for $6 billion.

That's off the top of my head, but I'm sure there are more examples.

"Ballmer made several missteps:"

Growing an already massive company company by 3x in revenue is the important thing, which is the 'bottom line' in which missteps have to be contextualized.

Any company in tech is going to make mistakes, this should be happening, so listing them off doesn't so much help - what matters is how all of this works out in the mix.

I worked in mobile during that time, it was vicious. Surely MS could have done better, but I view it more as lost opportunity than failure.

Remember that 80% of acquisitions fail. Google spent $3B on Nest. Apple spent $3 Billion on Beats, it remains to be seen if they'll make that up in profit.

> Growing an already massive company company by 3x in revenue is the important thing, which is the 'bottom line' in which missteps have to be contextualized.

Yes, he managed to creatively squeeze revenue out of existing markets. This is what he was known for.

But as far as finding new markets or growing existing markets, he failed and that's all Wall Street cares about.

> Surely MS could have done better, but I view it more as lost opportunity than failure.

Non other than Bill Gates himself refers to MS Mobile strategy as a failure: http://fortune.com/2013/02/19/today-in-tech-why-bill-gates-c...

> Remember that 80% of acquisitions fail. Google spent $3B on Nest. Apple spent $3 Billion on Beats, it remains to be seen if they'll make that up in profit

Ballmer's failure rate on major acquisitions may have been 100%. (I'm not even kidding)

Where's that 80% figure?

As far as I am aware, the Beats acquisition was successful. They bought their streaming music model and put that into Apple Music.

I'd count Minecraft as a success story. (Not sure if the deal closed under Nadella, but it was certainly started during Ballmer's reign.)

Beats was already profitable when they bought it.

https://www.forbes.com/sites/zackomalleygreenburg/2018/03/08...

Beats Music was also the foundation of Apple Music which is also gaining subscribers like crazy.

https://www.forbes.com/sites/careypurcell/2018/05/15/with-50...

Trying to compete in mobile and failing is a misstep. Microsoft missed out on smartphones, one of the fastest growing and most lucrative market segments in tech industry history.

Trying to compete in search and failing is also a misstep. Bing is just not as good as Google.

It's arguable that Azure would not have been successful under Ballmer either, because it's unlikely he would have embraced Linux to the extent that Nadella has.

The bottom line is that Ballmer was good at growing existing business but Microsoft was late to the game on a lot of industry trends under his watch, and when they did try to catch up they did not do a very good job -- Windows Phone is a perfect example.

It's impressive to grow existing business, but companies that do not successfully innovate eventually stagnate and that's not what investors want to see.

I agree that mobile and search were missteps, specifically putting themselves into a position of competing so poorly in those areas overall. It's also unrealistic to think that one company could own desktop, mobile, search, office, etc.

Microsoft was going to own desktop, mobile, search? $300-$400 billion in revenue? $130+ billion in profit?

No. That's absurd. Holding Ballmer to account for not conquering planet Earth is not a fair premise. Of course there were lots of 'missteps,' what's described is impossible. Their biggest mistake was attempting all of it in the first place.

> Microsoft was going to own desktop, mobile, search? $300-$400 billion in revenue? $130+ billion in profit?

> No. That's absurd. Holding Ballmer to account for not conquering planet Earth is not a fair premise.

I didn't say Microsoft needed to "own" mobile and search. They just needed to be competitive, instead of trying and failing which is what they did.

Online search is a natural monopoly - being simply "competitive" probably isn't possible, you either win (Google) or you don't (everybody else).

Mobile was obviously a big failure on their part, though I think their only misstep was being late to market.

On the other hand bing has been good for them (and it's great for consumers). Hard to call a multi-million dollar business unit a failure.

Microsoft had mobile in its pocket - original win mobile that competed with Palm had the dominant market share, and it would've had more if they didn't nuke it with revamped win mobile.

> Apple spent $3 Billion on Beats, it remains to be seen if they'll make that up in profit.

Apple made $17.5B in revenue in FY18 in "Other Products". A sizable chunk of that is bound to be headphone revenue (and homepod may also have profited from the Beats acquisition).

Given the healthy margins that Apple tends to have across all its products, it seems plausible that even under quite conservative assumptions Apple easily made a billion or so in profit from that segment. And that's not even counting Apple Music.

https://s22.q4cdn.com/396847794/files/doc_financials/quarter...

Disclaimer: Working for Apple in a non-fiscal, non-Beats related role.

Regarding Skype, it's acquisition has been argued to have been more in order to allow for NSA interception of VoIP traffic than it making business sense, though the truth behind that statement is highly debatable.

Could you elaborate on this? Why would Microsoft want to lose money for the NSA to benefit?

> For whatever reason, the industry press never liked Ballmer, and I guess they like Satya.

Bad business acquisitions and management decisions notwithstanding...

Developers, developers, developers.

Chair throwing.

Bad dancing.

Many other crazy antics.

Being an archetypal business man and probably the defining image of MSFT in the 2000s - you literally couldn’t make it less cool.

Lots for industry media to troll.

... the great quote about the iPhone, and Fred Mertz physique/style.

Yeah, it basically boils down to the above. He was just the quintessential suit. Regardless, I think his antics were/are hilarious.

Ballmer signed off on the Azure investment over 10 years ago.

Today I believe that's their biggest revenue stream alongside Office perhaps.

Big picture, Ballmer was a huge success.

It's arguable that Ballmer would not have run Azure the way Nadella has, e.g. embracing Linux and open source, and it would not have been as successful.

The problem with Microsoft under Ballmer was execution. For example, they saw the potential of the iPod (eventually), but all they came up with was the Zune. They saw the potential of smartphones (eventually) but did not execute well on the OS, the app store, the hardware, and the marketing.

Microsoft was in the smart phone market years before the iPhone was introduced. It was a failure of execution not vision.

By the time the Zune came out, the iPhone/iPod Touch were right around the corner.

Embracing OSS also started under Ballmer.

But also especially with Scott Guthrie, and his role as a leader for the future Micrsoosoft developer platform .

I don't know if Guthrie hired the likes of Scott Hanselman, Phil Haack, Mads Kristensen etc. But they have IMO made a huge impact, but internally and externally for the OSS push.

It's a big corporation and internally the fights had been big, becasue a lot of people don't understand how to sell free software.

Just to give an example.

They are small things, but they could also be good signals- a bit like canaries in the mine.

To say that differently, every story about Google or Facebook is usually some horrible thing. I would not touch their product with a 10 foot pole. A few years go, I uninstalled all facebook stuff and even whatsapps. Now I do not buy anything even remotely connected to google (such as android phones) because it gives me the creeps.

When I buy Microsoft hardware or software, I do not get this bad feeling. So I buy more of it.

You should not underestimate the power of a narrative or even impressions.

"You should not underestimate the power of a narrative or even impressions."

I'm not. I'm saying (from Shiller, world leading economist) - that narratives are usually wrong, and the MS case is evidence.

VS Code and 'open source' Chakra are very, small, things.

They are not even canaries.

(Caveat: Azure allowing linux is important strategically though)

I personally fall victim to this myself a lot, making undue correlations between some tech move or announcement, and actual business robustness. We vastly over estimate these things because we think and care about these issues all day. Most technology customers, and most Enterprises do not. If you have a look at where MSFT derives it's revenue and how consistent it is, that gives a clearer picture.

Second, that MS may appear to be more 'open' in these areas in no way implies any kind of success or revenue growth.

Apple is considerably more 'closed' and they do just fine, for example.

Satya in no way deserves a massive P/E ratio bump from analysts, there is no real basis for it.

MSFT stock price over the last 20 years should have been ballpark commensurate with it's revenues, fluctuating here and there. The 'big lift' after Satya had nothing to do with fundamentals really.

Ballmer took an already great company and massively grew it, launched XBox, moved into the cloud, grew enterprise services substantially, it's one of the most successful and robust evolutions of a company ever.

The 'misperceptions' that lead to 'false narratives' in this case are analyst's readings of pop culture tech trends, and we HN'ers overvaluing the importance of things like VS Code.

I fully agree with your analysis -- the whole of it, including our wrong focus as hackers.

And you're right about Ballmer: he made risky moves that are now paying quite well.

You do not get the creeps from all the windows bloat?

Tons of blinking apps I never wanted all connected to whereever to the internet?

All those nice things like cortana you can only get rid of by messing with registry?

Agressively pushing you to except all kinds of phoning home?

Not saying that google is the nice guy, but thinking MS is nicer ... I don't know

It's because the industry perspective and the business/wsj perspective are different.

I think the industry perspective tends to be ahead of the business/wsj perspective but sometimes incorrect. Tech people are the folks who build this stuff. It takes a long time for upfront investment to filter down through sales and into tangible business results. And then even longer for anyone to notice those results. Whereas the devs / product managers / salespeople are on the front lines seeing all of this firsthand.

A good, concrete example of how this has played out for me personally was that I bought stock in new relic a few years ago. In a nutshell, they were making a product it was obvious people needed, I worked at their competitor and realized they were kicking our asses product-wise, just totally out-executing us and it wasn't even close. I bought a bunch of stock on the theory that the product was getting great adoption and people loved it. Fast forward a few years and now it's tripled/quadrupled. I would've done the same thing with Stripe and lots of others, except they aren't public companies.

Stripe is sort of out of the bag at this point but you'd be surprised how few traditional "business" folks have even heard of it. There are tons of great developer tools, stuff like Sendgrid, Lob, Easypost, etc. that are going to be huge that are still mostly under-the-radar.