Microsoft Is Dead (2007)
paulgraham.com
paulgraham.com
With 17 years of hindsight to our benefit, my reaction is both of these things at the same time.
Dunno what the lesson is, and obviously you can move the goalposts to make 'dead' mean something else. Maybe we'll see this again with all the companies that aren't quite AI enough today. Sure is nice having enormous amounts of cash on hand, though.
In any case, the article is definitely hyperbolic. The overall statement that Microsoft is no longer an IBM-tier titanic bully is correct, "dead" is an aggressive overstatement.
IBM is 20x smaller by market cap, 4x smaller by revenue, they are shrinking organically because they forgot how to make anything and no one starting any business from scratch would use any of their products.
He got it completely wrong. It is what it is. If you comment on enough things you are going to be very wrong sometimes.
PG was referencing pre Nadella Era.
IBM doesn't move like this, even if those are acquisitions.
Microsoft is very focused on where the money flows, and they have adapted to the change of times.
While Ballmer built a solid cash foundation - he would never have done a move like Linkedin or Github acquisition. And I would not be surprised if Github acquisition was a part of the plan about AI.
Microsoft was never this far gone. PG was proclaiming their death because startups no longer feared them. But they no longer fear Google either, not the way they used to. Google's last truly disruptive and unexpected projects - Android, Chrome, Maps, Docs, etc - happened 15+ years ago. Now, the company sticks to established niches instead of trying to constantly reinvent themselves (or when they try, they almost always fail).
There's a spectrum between "dead" and "taking on the world".
Sure he couldn't beat the iPhone, but the iPhone is the most successful consumer electronics product of all time.
I suspect it’s the same as the well-known “social lubricant” effect of alcohol, where it eases anxiety and uninhibits nervous people.
However, while I’ve noticed it gets me going it has the same deleterious effects as in social contexts: the code I end up writing is not as clever as I thought it was the night before.
No matter, had sex! I mean… got an MVP working that can be nurtured into a relationship… I mean product.
Somehow I can't replicate it for the years and I have a couple of projects in a dire need of that spirit insight.
sigh
Nadella built new product categories for the company.
I think two more years with Ballmer would have made the the prophecy valid.
> Ballmer is a good used car salesman.
Ballmer was a very very good salesman. The reason Azure or all these new shiny MSFT products (e.g. teams) have a leg is because Ballmer already sold AD to almost every corp out there. Microsoft went from being 0 in enterprise to bigger than anyone else and that is now the main money printer and also the future of the company.
One thing everyone forgets is Nadella was nowhere to be found few years before becoming CEO. Ballmer made a very very good successor choice elevating Nadella quickly in few years.
On the other hand, Balmer would never allowed Windows development experience to be as bad nowadays.
These are all nice things for developers, but I don't think they are actually good for Microsoft in the long-term or their bottom line in the short term. At least not the way they've been executed.
If anything, the treatment of Microsoft's older cash cows under Nadella has been disastrous, essentially throwing goodwill and money away - e.g., the quality of and feature development in Windows.
See the Blazor amd Aspire push, WSL and XBox tooling on VS variants, versus anything desktop.
DevDiv is now under Azure as well, and is more than just .NET.
The rest of the office-for-iOS suite took heavy inspiration from that, and didn't take a decent shape until 2016-2017.
He may look and sound like a used car salesman but was anything but.
Yes, Nadella did end up removing Windows Phone but you had to give it to Ballmer for standing behind that thing even when it was, at times, very silly!
As an aside, that was something I think that is one idea Ballmer did ok on. The focus on developers as an admittance that Microsoft cannot do everything and that you need to help others work with them. Developers (x 3), may have been silly but it sure is a good stance to get behind.
By contrast, as much as Apple talks about the App store, they seem to be becoming more inward focused on a lot of things. For better or worse, we are yet to know.
Off the top of my head, since Jobs death Apple has launched AirPods, Apple Watch, Vision Pro, Car Play, Home Play, M-series MacBooks, and they’ve greatly expanded their services business.
In contrast, we can all install Lotus 1-2-3 on today's machines, via emulation.
Writing webapps is writing something that will never exist in the future. At some point in time the server will be turned off, and nobody will see your work.
What they have now - office 365, linkedin and azure + a dose of minecraft and Marina Linux are nothing like those days.
Days when to succeed in software you had to be 10x better than microsft or they would release a half arsed competitor and destroy your business just because they were microsoft.
When Paul wrote this, the industry was witnessing a technological revolution across the board (smartphones, AWS, Google docs, etc) while Microsoft was drugged and lacking behind on all fronts. At the time, their latest product launch was probably Windows Vista.
It was a different company back then and it's such an amazing feat of Satya to manage to steer a ship of Microsoft's size.
So they successfully pivot to co-opting the dev stack used in the open source world. That's their play with Azure, WSL, Visual Studio Code, and the GitHub and npm acquisitions: to make it impossible to do webdev on an open source stack without MSFT involvement, and hey, why not try out these other great MSFT products and services while you're at it?
It's a clever play. But they're not dead, irrelevant, or your friend.
The two most extreme examples of this are RIM (now BlackBerry) of the mid-2010s when it was clear the smartphone market was no longer viable for them, and Apple of the 1990s before the return of Steve Jobs and acquisition of NeXT. When asked what he'd do with Apple in 1997, Michael Dell famously said "I'd shut it down and give the money back to the shareholders."
But both companies are still alive today (Apple more than BlackBerry) because they were large enough before they had to pivot.
Other big tech companies like Microsoft were never close to death at any time. Sure, they had periods of stagnation where they had to pivot (as mentioned in this blog post), but it was more like a cold than a life threatening illness.
I always find Windows Mobile/Phone as like Sega's console-making endeavors, by the way.
That was the first thought that came into my mind when he said
“It now seems inevitable that applications will live on the web—not just email, but everything, right up to Photoshop. Even Microsoft sees that now.”
Sometimes a new technology makes the inevitable quite evitable.
The leaked memo of between Bill Gates and his C-level executive(s) is an iota of the level of nightmare at MSFT.
https://www.syracuse.com/technofile/2008/06/bill_gates_someo...
We have the excellent advantage of hindsight but definitely in 2007 the general agreement was Microsoft was losing to Google and Apple, which were the darlings of the stock market while Microsoft remained stagnant.
In 2007, [1]
MS had market cap 274B (#4), revenue rank 49.
Apple had market cap 80B(#33), revenue rank 121.
Google had market cap 143B (#17), revenue rank 241.
I think only pop media sold the story that Microsoft was "losing," and maybe only that in areas MS didn't historically compete in or make much money in. Google had almost all revenue from ads (and still do, a very one trick pony), and Apple had a few lines (iPhones, iTunes, not much else), while MS had Client, Server and Tools, Online Services, Business Division, Entertainment and Devices, each with many billions in revenue (and many of them containing yet more billion+ subdivisions). Even Visual Studio had over a billion in revenue annually.
Apple and Google had very little effect on any of these revenue streams in 2007. At best, Microsoft was late to the areas Apple and Google were in, yet took markets anyways in some areas (Azure vs google?).
[1] https://money.cnn.com/magazines/fortune/fortune500/2007/perf...
just like yc likes and other accelerators like to bet on founders - they too should look at company structures / incentives etc to evaluate the future of certain companies.
from afar you can tell microsoft environment breeds killers, unlike google and other tech companies besides facebook i.e zuck & oracle.
which is why is you can never count microsoft n the likes of intel or even in terms of other industries ford out.
look at how microsoft came and knocked down the tools in terms of developer tools. look at slack. the rest of the world uses teams - it comes free.
look at how they did in the cloud. look at so called 'AI' satya or not -- microsoft has the industry by the balls and they know it. fear of gvt is what keeps them at bay.
it's very correct.
Microsoft windows and office only make money with kickbacks to govt buyers. see the documentary on Microsoft and EU. lots of money is moving under tables.
azure is a joke that mostly gets sales based on price for people who need to buy a cloud just because. in this regard they are a walking corpse like ibm was in the 90s.
then the money came from xbox, which they tried to kill several times and only got market share because they sold at loss early just because that's what they do without even thinking. Salesforce, and LinkedIn, which they bought after they were monopolies already (and owners only sold exactly because of the fear of saying no, which the article paints very well) and couldn't run to the ground no matter how bad and abusive it got. and lately openai related stock memes despite being the least protected player (as in no hand in chip design).
what exactly paints the article as wrong? they just got a few luck hits on the way down.
Microsoft didn't buy Salesforce.
They're 10x bigger by market cap than they were when the essay was written. If that's failure, what counts as success?
Wake me up when that speculation translates to profit that is not just fraud of funneling investor money from AI companies they are on the board back into azure profit center.
see this https://www.detectx.com.au/wp-content/uploads/2022/11/image-... (ignore the site, i don't know it, just random image result) that whole yellow block of revenue for microsoft is what i'm talking about.
It takes massive ego to proclaim dead a huge, well diversified business that has strong net revenue, product demand and well defined moats.
"Buy all the good "Web 2.0" startups. [...] Put them all in a building in Silicon Valley"
"Microsoft's biggest weakness is that they still don't realize how much they suck. They still think they can write software in house."
People here idolize him and associates because they think it increases the chances of selling their company for billions of dollars one day.
MS has $3.5 Trillion market cap. Same as Apple.
Azure is catching up with AWS and could take the lead.
Nothing like IBM 20 years ago.
Windows is a small fraction of their business. Azure is bigger than the Windows, Office, and Xbox/Gaming divisions combined.
Diaclaimer: I use both, and everyday I pray my Google account is not baned due to an error in their system.
There might be sponsored apps installed or something, but I don't care. I open the start menu, search for the application I want and run that. They're not getting in my way, if they are there.
That said, I prefer late-Windows 10 to current-Windows 11. But I hated Windows 10 when it launched and they fixed the key annoyances, so there's a chance they'll do it with Windows 11 as well. They've already fixed some, like the centered task bar.
The only ads I see are when I mistype in the start menu, and get some web search results including ads, just like when I google something.
Inline web search results is a crappy feature to me, but it didn’t bother me enough to go regedit mode and disable it. It only appears when the computer search can’t find anything, it kinds of fall back on web search.
It seems the most outraged people are those who never use Windows and rage at the fact that it’s still a popular desktop OS.
Or maybe I’m just lucky and I don’t get the horrible in your face ads everywhere, for some reason.
Now that sucka.
It’s a crappy feature anyway, I never use it. It doesn’t get in my way so it’s not a big deal to me. In any case if that’s all there is to this ad thing, the drama around it is surprising to me.
Oh you sweet summer child...
https://discussions.apple.com/thread/252412228?sortBy=best
https://discussions.apple.com/thread/7655683?sortBy=best
https://discussions.apple.com/thread/251442866?sortBy=best
https://discussions.apple.com/thread/251628859?sortBy=best
I pretty much stopped using MacOS because they put so many fucking ads in the OS by default and smugly expected you to just accept that they were there. It's not as bad as Windows yet, but honestly it's just as annoying.
Regardless, it's rather rude to call people names here when we're just having a discussion. Your tone is offensive.
I correct people when they make this mistake because Hacker News has a habit of giving corporations undue lip-service. You can be mad at me if it makes you feel better, but the problem is that Apple doesn't respect your attention. MacOS today literally violates it's own Human Interface Guidelines to serve you advertisements; think on that for a moment.
It appears you have missed the point. I'm not upset with you for referencing reports; my frustration lies with your condescending tone and name-calling, which contribute nothing to the discussion. Your approach is frankly very off-putting.
While I'm not a Windows user much anymore, my understanding is that there are at least unofficial hacks/tweaks you can apply to remove many of the ads in Windows. In contrast, certain ads in macOS (e.g. the one nagging you to upgrade your iCloud plan when you're near your storage limit) cannot be disabled through any mechanism that I've been able to find.
Money that lands on Rust Foundation, Python, Go, Linux, FreeBSD, Java, VSCode.
That money goes elsewhere: pivoting MS Office to the cloud and pushing MS Azure - both by improving Azure and by improving developer tools like VSCode or languages like C# and the rest of the .Net ecosystem. And on the side they have minor projects like Github and LinkedIn.
~ the_plague, Hackers
Paul Graham is great at saying non boring things. That's all.
"And I happen to have some Web 2.0 startups for sale, what a coincidence!"
I think there's an uncomparable difference between between being wrong in your thoughts, vs openly lecturing others about what you're wrong about.
Takes a long time for tech zombies to stop moving though, *eyes Yahoo email addresses registered in the late 90s nervously*.
I personally appreciate the reality check that not everything these famous people think is worth writing down nor sharing.
The CFPB, a federal regulatory body, came down on them (and the founder in particular) a few weeks ago [0]
See e.g. the narrative and related discussion at https://news.ycombinator.com/item?id=40729501
[0] https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes...
I'm not sure what to make of this. What is ISA? Isn't this like 20% hire rate from taking Lambda course?
Or was it that they attracted a lot of people who simply can't make that leap from student to developer because they never had the aptitude for that job?
Not saying Lambda School wasn't a fraud but seems like they started out with some good intention but halfway got greedy and dishonest because Paul likes "edgy founders"
Just a ton of broken dreams, financial ruin not unlike some of YC's backed companies.
The way Lambda School worked was, you didn't pay for the instruction up front. Rather, when you got a job, Lambda School was entitled to take a chunk of your income.
It had the whiff of scam to me, as it reminded me of the payment arrangements for another outfit, variously called Unbounded Solutions, BrighterBrain, and EnhanceIT: you go to Atlanta for two months of "free" training, after which you were bound to indentured servitude to them for a period of two years. Attempt to break the contract and you would be billed a minimum of $20,000 for the "free" training they offered you.
It also demonstrates how disconnected from the average person he was if he almost only saw OSX, when the market was 95%+ Windows.
This is like saying your evaluation of my property, back when it was in bad shape was wrong... because after renovating the entire thing and fixing its issues, I got a different price.
From the linked article:
> Is there some way Microsoft could come back? In principle, yes
So, of course if you manage to change the input, you'll get a different output.
Today's Microsoft (WSL, Edge, Bing, Azure, VSCode, copilot, etc) is so different from 2007 you wouldn't even recognize it as the same company. Just like what Paul Graham has said they needed to change if they were to survive.
> Microsoft's Windows was the dominant desktop operating system (OS) worldwide as of February 2024, with a market share of around 72 percent.
https://www.statista.com/statistics/218089/global-market-sha...
Microsoft changed. And for the better. The death was short lived, but in many ways, especially in the cultural zeitgeist of software engineers and tech folk, Microsoft did die there for a bit. Satya did a great job of resurrecting it. He has been masterful in his role (I worked at a company that was acquired by Microsoft).
Companies who were once the 900 pound gorilla can die, despite making a lot of money. Oracle still prints money, but how many people under 50 use Oracle on a day to day basis when they are building a company? I would venture to say approaching zero. Google is still printing money, but in many ways it is dead (or dying).
I just don't believe this. It's like saying that Apple "did die there for a bit" when they were selling shitty Intel Macs; it's not true. They were still alive, well, and had a significant market share of incredibly enthusiastic customers.
Microsoft had been a Department of Defense contractor for more than 20 years at the time PG published this. His conclusion was narrow-minded then, and it's narrow-minded today.
> I'm now surprised when I come across a computer running Windows.
Funny how PG didn't have enough perspective to realize that he himself could be the one in a different world. A bright guy, but like you say - narrow-minded.
It’s purely a cultural thing, but from where I’ve worked and what I’ve seen, companies who choose Microsoft stacks and services (azure, C#, windows server, etc) are very management heavy and most are hostile towards their engineers, whom they see as cost centers.
I think that stigma still clings to Microsoft today
Witness how C# has a toehold in games development (via Unity) and that isn't seen as incogruous at all.
And then look at the prevalence of VS Code, and the market penetration of GitHub...
Microsoft’s XNA framework was quite good early on.
But unity alone really popularized c# in gamedev.
Also Xamarin allowing a single codebase for android and iOS was a driving factor as well.
So c# is a must, but teams, office, and exchange, and windows server are not.
Don't forget GitHub, NPM, and VSCode. Microsoft has entrenched themselves deeper than it first appears.
And yes npm and github as well, but both of those were fairly recent acquisitions.
how many people are using relational databases in their companies?
or even how many accounting systems are using RDBMSs behind the scenes?
I would venture every single last one of them
I don’t think he did. They are not the innovative company they were under Satya. Sure the stock price is up by what are they actually doing? Office isn’t the force it was, teams and azure are just copying others and they utterly enshitified Windows. Xbox has also gone backwards.
Oracle is having something of a resurrection moment lately, with Oracle Cloud becoming a surprisingly popular option for startups.
https://www.theinformation.com/articles/ai-startups-find-an-...
"At least six venture-backed AI startups, including Character.ai and Adept AI Labs, primarily rely on Oracle for cloud computing, according to the companies. Two founders of AI startups who have used various cloud providers told The Information that Oracle can run complex machine-learning models more economically than Amazon Web Services or Google Cloud."
But better for whom?
Sometime after 2007, Microsoft:
(1) rolled out unstoppable, inscrutable "telemetry" in Windows,
(2) decided that "opt-out" was appropriate for privacy-invading features, and
(3) decided it was okay to silently reset such opt-outs.
(4) most recently, decided it's okay to violate copyright for any material they can scrape off the web, except for victims who can afford to fight Microsoft in court.
I don't know any of their actual reasons for those policies, but as an end-user their reasons are indistinguishable from "because we can".
IIRC, in the MS-DOS / Windows 2 up through ~early Windows 10 days, Microsoft's sleazy behavior was mostly limited to their interactions with other software companies.
A wooden desk with a PC, a keyboard, mouse and monitor is likely to run Windows: until it's replaced by someone who isn't at a desk.