If Steve Ballmer Ran Apple
stratechery.com
stratechery.com
In fact, one thing that's unusual about Google is how much R&D actually makes it into products (unlike, say, Microsoft, whose research group turns out great stuff but rarely does anything with it). In that sense, it's less pure blue-sky, but more applied. I think it's more akin to the Manhattan Project, Apollo program, etc - scientists and engineers working closely together to redefine what's possible. (We even internally refer to the ambitious projects as moon shots). SpaceX and Tesla are doing work in a similar vein - an virtuous cycle of innovations and research.
Google differs from MSR in that almost all of their researchers work in product teams on products. Their contributions are highly visible as a result, but they don't really get to take the risks that we get to in a research lab setting. Much of the work that Google capitalizes on comes out of universities: Google then hires the researchers and allows them to continue working on the research as a product. For example, Google did not take the big initial risks on self driving cars (DARPA funded that), but they've bought into it and think its product ready (which is a risk in itself, but a different kind). And if your researchers are working on products (emitting their experience), they don't exactly have time to do new research (collecting new experiences for later emission). Google's 20% time was supposed to help fix that, but its not clear that this works.
I (and many of my colleagues I think) have a lot of respect for the Google way. At the same time, it is quite clear that the results of both systems are very different.
It's interesting to contrast Google's and Microsoft's approach with ours at Wolfram Research (at 0.3% their size, of course [1]).
We've come to see that it is very fruitful to live in a murky space somewhere between "commercial product" and "research project".
I'm thinking specifically about Wolfram|Alpha.
It's an enormous and daunting project. We've tackled a lot of very hard problems, and obviously have a long way still to go.
It has the weird property of being a thing that ships every week, but not one that the parent company depends on financially.
And so we kind of do our own thing, encoding domain knowledge, adding content, curating data, and designing frameworks, even if some if it won't ever make us any money (e.g. who will ever pay for dog vision [2]). We mostly just do things because they're cool or fun.
But it's been incredibly useful to drive innovation elsewhere in the company.
For example:
1. Alpha's unit system (the best in the world, the authors claim) is already in Mathematica 9.
2. Alpha is inspiring us to bring high-level semantic data and reasoning to Mathematica 10.
3. The automatic analysis in Pro is being souped up and will form part of Mathematica's predictive interface (automatic suggestions to "perform logistic regression", and so on).
4. We're working on taking the natural language understanding frameworks we've built for Alpha and using them to translate natural language queries into structured SQL or hierarchical document queries.
5. The domain specific languages we've invented to represent things in the real world are going to be exposed in a soon-to-be open format we're calling the Wolfram Data Format (which I hope will succeed where RDF is failing).
We wouldn't have though of any of this stuff without Alpha. And it wasn't explicitly driven by either commercial or basic research, but rather some kind of eccentric blend of the two.
[0] http://www.youtube.com/watch?v=Nu-nlQqFCKg [1] http://www.wolframalpha.com/input/?i=600+people+%2F+%28numbe... [2] http://www.wolframalpha.com/input/?i=apply+dog+vision+to+ima...
As an aside, I don't think the mostly constructed knowledge representation approach taken by Alpha will scale in the long run. You guys might want to look at playing around more with machine learning. On the other hand, there are gaps in machine learning that are best filled by DSLs and explicit construction.
We _are_ taking machine learning more seriously (I claim some credit here). My team is integrating ML into Mathematica 10 as we speak. And we've experimented with deep learning. I think some interesting things will come out of that in the future.
I think a hybrid approach is pragmatic. There is much computational knowledge that can't be assembled from web scrapes, as Google's purchase of Metaweb indicates (anyone remember Google Squared?).
On the other hand, Microsoft has for a long time made a serious investment in basic research, both on the programming language side and on algorithms, but that hasn't stopped them from misfiring in multiple product categories.
If you look at the battles that were won by archery (Crecy, Agincourt, Mongol domination of Chinese, Moslem & European armies) it was the volume of arrows that won them, not the weight of the arrows.
There were some battles where arrow weight was mildly important (eg, at Agincourt where the French armour had advanced enough since Crecy that it gave some reasonable protection against arrows). But even in these battles the archers used heavier heads on the arrows (which were also shaped differently) - not more wood.
Anyway - totally off topic, and like I said I think Google's strategy is good. But their analogy breaks down when we actually look at history.
http://research.microsoft.com/apps/catalog/default.aspx?t=pu...
However, this work rarely seems to make it into their consumer products. I suspect it's mostly an issue of the organisational structure of Microsoft, rather than the type of research, which makes it difficult to jump the gap from research to products.
Even in front-end web (the area I'm most familiar with) they are doing lots of exciting and experimental stuff with R&D driven frameworks like AngularJS and Polymer.
Open up a google doc spreadsheet, type the words in a column, then use the little pull-down at the bottom right. Lists of languages, ponies, whatever will autocomplete.
Say Amazon goes bankrupt tomorrow. All of their products stop working over night. Many people are upset because you can't get things as cheap, but for the most part they go to other online retailers, of which there are many. The Kindle is pretty easy to imagine life without, as are most of the other services. AWS going black would frustrate much of the web, but most of that could be taken up by the litany of providers in that space.
Apple is a little trickier, but to my knowledge (take with a whole shaker of salt) they don't have a huge ongoing set of services, and most Apple skills are pretty transferable to other *nix style services. If anything, I could imagine that Linux might get a whole lot of extra designers. The iPhone would be missed, and there would be some havoc as people rush to alternatives, but it doesn't do anything truly special that an S4 or equivalent doesn't do. The iPad would be missed also, but it's the same story.
Microsoft though has its fingers in so many pies that if it disappears over night it would basically stop much of the planet. There are a lot of devices running Windows Mobile still. There are loads of applications in use that simply won't run on anything but Windows. Millions of people that don't have the skills to use anything but Office/Windows. Earth without Microsoft would be drastically different. Outlook/Exchange is huge also. There are masses of IT staff that would simply not know how to use anything else.
Now, that's not to say that they haven't done a lot of work to take themselves out of that position. Windows 8 was, as I think everyone here would know, a train wreck. There are developers developing for the web, Android and iPhone that 5-10 years ago would have been developing applications that would only have run on Windows. I just don't think either Apple or Amazon have the irreplaceability in so many fields that MS does.
They are deployed software. Sure, they would stop being updated, but I reckon that for most organizations they would become legacy software over the years.
Amazon is even worse in that respect - the store is exactly that, and anyone can sell "stuff". AWS is the same, even if the barriers to entry are a little higher.
Honestly, the only big tech company that I can't imagine life without is Google, simply because my Google account is so pervasive now. Perhaps Facebook, too. Even then, when you break both of those companies down, you find that none of the products are overly unique to the company. Other people do social, other people do search, other people do maps, etc.
It's easy to imagine other companies making any of these things, but when you think about it "other companies" in that thought experiment start to just become another black box with a different logo slapped over the top.
(The example of the above he does mention - Xbox - he dismisses because it's not that profitable! So when something is profitable it's a sign of narrow short-term profit focus, but if it's not it's irrelevant because profit is what matters. Huh?)
Microsoft does seem to have trouble turning its R&D activity into breakthrough products, but his attempt at a narrative explaining why just doesn't fit the facts and doesn't make sense.
The reason Bill Gates gave him the reigns as CEO is that besides Gates he's the person most singly responsible for Microsoft success. Circa 1998 they were the most valuable company in the world with a market cap of $500+ billion. Early in Ballmer's CEO tenure, they returned one of the largest dividends in history. It was an economic event so large that the Federal Reserve cited it as affecting the macro economy.
The author ignores that people price in their view of the future of a company, and Ballmer's Microsoft isn't viewed as having a great future. Very possibly not even a good future.
In fact, if this parody of how Microsoft was being managed was correct, all these billion dollar new market effort flubs wouldn't be happening and the stock just might be doing better. At the very least the unprofitably invested money could have been returned to the stockholders.
As technology people, we look at companies through a different lens than investors, shareholders and the like. We want to be impressed, we want to be given a new toy that disrupts existing markets and allows us to develop software in some new way, but that isn't the only way to make money and create value.
Time to revisit this piece now that Samsung (and therefore Android) profit share has caught up with market share enough to overtake Apple:
http://daringfireball.net/2011/09/winning
"The iPhone, on the other hand, currently accounts for two-thirds of the mobile phone industry’s total profit. Mobile carriers need the iPhone today. Computer stores did not need the Mac.
It’s easy to pick and choose the numbers you want to back up the theory you prefer. So if you’re rooting for Android to dominate the industry, it is tempting to focus on unit sale market share, and to attribute Windows’s historical dominance to its massive unit sale market share. But you can flip that around, and argue that because I am rooting for the iPhone, I cherry pick the data to fit the story I want to see unfold — and so I say profit share is what matters, not unit sales, only because that’s the figure that puts Apple’s position in the best light.
But I like the odds that I’ll be proven right. Money is how you keep score, because it’s the one thing whose value everyone agrees upon. That’s what money is."
The reason carriers need the iPhone has nothing to do with Android's market share or Apple's profits. It's about carrier's profits. And the fact that much of it comes from users who call a lot, text a lot and use a tonne of data. Which just happens to correlate with the iPhone demographics.
http://appleinsider.com/articles/13/07/27/samsung-has-not-de...
http://appleinsider.com/articles/13/07/27/samsung-has-not-de...
Looks like you've been taken in by misinformation.
http://appleinsider.com/articles/13/07/31/apple-takes-53-of-...
They've been publishing that data for years and never once questioned it before. I wonder what happened that got one of their staff so riled up about the issue? Oh yes, probably Samsung overtaking Apple in smartphone profit share.
Samsung PCs tablets, dumbphones, and smartphones all combined are about the same size as the iPhone alone.
Feel free to continue basing your position on wrong information though.
http://www.asymco.com/2013/08/21/amp-index-update/
His estimate puts it at 57% to 43%, but with the same trend. Could easily crossover by his method this quarter too, may have already happened.
It really all hinges on what kind of jump 10 days of sales of the new devices (in limited countries) can achieve.
The AMP is an average of several metrics including units shipped, both smart and non-smart, and revenue where we know Samsung surpasses apple.
edit: look at the dots, the line is a trailing average over the last 12 months.
http://allthingsd.com/20130607/fears-of-slowing-galaxy-s4-sa...
I guess I wish the HN response to a Gruberish article would be people analyzing it for what it is, not people gloating about how they think their team is, uh, winning or whatever, then arguing about the numbers that they think proves it. Maybe the post I was responding to was some sort of pro-Android Gruber parody or something. If that's the case, then it was awesome, because it really captured some very subtle nuances about how that brand of commentary operates.
How could anyone read an Apple pundit claim that profit is the only metric that matters and not nearly die of cognitive dissonance after so many years of excuses/reasons why beleaguered Apple's Mac OS 9 and X was better. And yet it's par for the course.
And now here's an article which claims to be about Ballmer (a figure of fun for the Apple crowd) but is really about how Apple is morally superior for not being capitalist!?
It's hilarious, fascinating and a bit sad. And strange to be at the inflexion point where they go back to all the stories from the Windows vs Mac OS days e.g. they've already cast both Google and Samsung, to play Microsoft's role as the evil villain who copied all their good ideas and didn't deserve success.
And have you read the Appleinsider piece that gets trotted out to defend Apple's profit share lead? It's a very, very odd read. But you mention that Apple have not got the profit lead anymore and you get several links to it, and several repetitions of the "Samsung numbers are dodgy" talking point. It's a very organised media bubble.
There's no way in hell the first Android phone could have been released 5 quarters after the iPhone without it being long in gestation.
And in 2007 before the iPhone was released Android looked like a blackberry clone: http://blog.steventroughtonsmith.com/2012/05/2007s-pre-m3-ve...
The linked article is not claiming apple is morally superior. It is claiming that Apple is strategically different, and highlighting Ballmers's focus on short term profitability as a mistake.
Amazon is another example of the same thing.
You seem to be obsessed with bashing Apple and some putative 'apple crowd'. If you calm down and read what has been written you'll see that nobody else here is bashing anyone or making derisive assertions about other groups of people.
Why are you doing this?
I'm not sure I get this point. Are Apple and Amazon not also running successfully under a Capitalist Marketplace?
Their stock holds up because they increase their revenue, and market share, at a huge speed. This is reasonable. In fact, that's what most startup companies do after raising Series A, B, C, etc. funding - they usually spend a lot more than they make (i.e. "burn" cash) with the goal to grow the market share as quickly as possible. Amazon is a public company with significant cashflows, so they use internal funds to grow.
Here're the latest approximate revenue/profits number from Amazon (all in billion):
2007: $14 / $0.5
2008: $19 / $0.6
2009: $24 / $0.9
2010: $34 / $1.1
2011: $48 / $0.6
2012: $61 / $(0.04) (loss of $40 million)
This is a very impressive growth (in revenue) for a large company. Having said that, one day it will stop, so by then Amazon will need to show impressive earnings, or its stock may get punished.
So it's clear they're not buying "traction" by grossly under pricing their offerings. So given that so many of us know for an absolute fact it's a well run company, and the obvious potential, if not likelyhood of becoming the next Sears and Roebuck (that was a good thing in my lifetime :-), well, they have a way above average story.
Deleted comment
Anyone who's noticed that they didn't lose their old sales data like so many others will recognize yet another bit of their excellence.
This would imply that doing what's best for shareholders in the short term looks very different from the long term.
The only reason Xbox even happened is that Microsoft management was terrified that the PS2 was effectively a computer being sold by the millions - a real threat to Windows and Microsoft. If the Xbox team didn't stick to their guns, the original Xbox would have been a monstrosity.
You could say the Surface was a poorly executed version of the same idea. iPad is killing PC sales, so try and jump in and take market share. Too bad Microsoft doesn't have people who really "get" the iPad building and selling the Surface. They eliminated the Courier team.
A company that's totally focused on breaking into (or creating) new markets can get so wrapped up in chasing the next big thing that they neglect their existing customers, or they don't know what to do when a couple of years go by without some big huge new innovation.
On the other hand, a company that's totally focused on maximizing profits from its existing products can eventually become a dead end too. It becomes very risk averse, and unwilling to cannibalize any of its existing products with newer, more innovative products. It becomes obsessed with the idea of using every product to sell every other product, such as the ubiquitous Windows branding that has pretty much killed every Microsoft product that wasn't Windows.
Maybe there's a middle ground, but I fear there isn't. I think there's just a natural boom and bust cycle for tech companies, and the best they can hope for is to survive the next bust and get to the next boom.
At the heart of a lot of this is are the forces that drive the stock market- in the tech industry at least, you can't just carve out a niche for yourself and constantly improve in that one area. You may make a ton of money, but tech investors only care about growth. It's like publicly owned companies have forces acting on them that make them grow and grow and grow until it kills them. It's not sustainable and it kind of sucks that it has to be that way.
you can make anything happen in your imaginary 'if' world in this imaginary world, steve ballmer changed apple in my imaginary world, apple will change steve ballmer and ... well, you know how the rest of the story goes
"Ballmer did exactly what our capitalist system dictate he do: he maximized profits to the benefit of Microsoft’s shareholders. The implications of suggesting he was a failure are far more profound than most of his many critics likely realize."
Actually not at all. The best way to serve shareholders is to not focus on profits more than you absolutely must, and instead to focus on doing things insanely great.
And there is a personal lesson as well. I like money as much as the next guy, maybe more. But I know from experience that my best work is when I don't think about money at all, when I think about pleasing clients, and creating great stuff, and changing the world.
And to the point of maximizing profits as the goal of capitalism... well if you care about only having rich shareholders and think investors should be the only meaningful winners in the equation, well then short term capitalism will continue to wreak havoc every few years.
Fuck Ballmer.