Worries That Microsoft Is Too Tricky to Manage

I think things will become much much worse for Microsoft before they get better. I'm afraid they will lose small and medium size enterprises and ISVs because their licensing structure has become so complex, overpriced and antiquated that a new generation of customers will refuse to deal with them.

In the past there was piracy as a way to lower the barriers to entry. Today, piracy has become dangerous for small companies in developed countries. All of a sudden SMEs and ISVs are confronted with scores of product feature matrices, weird dependencies and restrictions, kafkaesque partnership programs and long-term committments.

Sometimes they are just plain stupid. For instance, I recently came across this page that explains developer account types: http://msdn.microsoft.com/library/windows/apps/jj863494.aspx

It seems harmless if convoluted at first sight. But look at the dependencies they have created. In order to sell Windows desktop apps in the Windows store and use all device capabilities you need a company account, and to get a company account you need to be recognized as a company in your own country.

That's effectively a wholesale import of tax, social security and incorporation laws of countless countries into Microsoft's own terms of service. Microsoft operates in many countries so they have to know how onerous this rule can be. They are erecting a huge barrier to entry for individual software developers and early stage startups around the world.

I'm sure they will claim it's for their users' safety. But this must be the most uncreative, idiotic safety measure ever invented, particularly if you know how easy it is for real criminals to game this system.

Now, I'm not saying that developer relations is Microsoft's most serious problem. Not at all. But it goes to show how incapable this company is of putting themselves into the shoes of those who have to deal with them in any capacity.

One thing that doesn't seem to come through in all these pundit articles and internet discussions is how fantastically successful MS are.

They've survived several paradigms over decades in a business where most didn't. Most years (including the last few) they make more money than the year before. They have a bunch of very big businesses that make big money. Compare that to Google. Google do lots of cool things: self driving cars, webmail. glass, android. Cool stuff. Still, almost all their money comes from search/adwords/adsense.

They have lots of faults. I really dislike Windows. But, they have a lot of good traits too that others should emulate. A big one is stubborn survivey-ness. Just because an MS thing is still lame 2 years after it was launched doesn't mean it won't make it. They can stick at lame products until they make them decent.

Bottom line I guess is that MS are survivors. I expect them to survive.

It is tricky to manage any large company. The more tricky problem for Microsoft is that it heavily depends on old business models. A significant portion of Microsoft profit comes from Windows and Office. Other companies, like Google, can offer competitive products almost for free. That could happen eventually. It won't take Google too much efforts to provide a desktop version of Android and Office-like product. Even at several billion dollars R&D cost, it is still much cheaper than Motorola purchase.

Microsoft enterprise business is hugely competitive. But other than that, it is hard to achieve meaningful profit margin (xbox may earn couple of billions, internet services always lose money, Nokia probably break even for next few years). So the problem is more about innovate than manage Microsoft.

> An oft-cited example of this is the reluctance of the Office applications group to release complete versions of Word, Excel and other software for iPads and Android devices. That decision, in theory, could help Microsoft tablets that run Windows, though it hasn’t yet...An even broader conglomerate is Samsung, which is in areas as varied as electronics, life insurance and petrochemicals. But each of those businesses is run with a high degree of independence from the others. The company supplies screens and semiconductors for Apple, even though Apple is the main rival to Samsung’s mobile phone business.

The Samsung software layer on their Android phones was so awful, so devoid of inspiration, that even as an Android user, I hoped that Apple would continue to spank them in the phone industry. But I highly respect whosever management decision it was to keep Samsung's units as independent as possible, even so that one hand of the company may be helping to spank the other. Perhaps it's because Apple's business is too good to lose, but hopefully there's some "a rising tide lifts all ships" mentality in there.

Meanwhile, Microsoft could've ported Office and given it a good foothold as the productivity software of mobile and the cloud..but by the time they've waited for the Surface to become a success, Google and Apple may both eat its lunch

Why is this a worry for Microsoft, but not Google and Apple? This isn't really tackled until the last sentence of the article, and even then, they say that Google and Apple are more focused.

Is that correct? or do Google and Apple just have one larger profit maker with many smaller profit-makers or loss-leaders?

Ever since Ballmer took over, Microsoft is just scoring 'Own Goals'. Microsoft used to think that Apple was their enemy, that IBM was their enemy, that Sun was their enemy, that Oracle was their enemy, that Google was their enemy? Well Microsoft is their own worst enemy! In fact we have entered a Post-PC, Post-Microsoft era.

Apple knew it was Post-PC and invested in smartphone and tablets and knew the desktop GUI would not work in mobile devices. So iOS got a different GUI/UI than Mac OSX has. Microsoft does not get that, a Desktop GUI for all products! Hey why'd we lose $900M in Surface sales? Oh well better buy out Nokia who failed to turn profits selling Windows Mobile 8 phones named Lumina, and rebrand them as 'Surface' phone so they will sell better.

Microsoft has to fix their broken business model, they tried to steal Apple's model and it backfired on them because they aren't Apple (Duh!) and they don't manage things the same way Apple does. Steve Ballmer is no Steve Jobs or Tim Cook, and he should understand why.

Instead of fixing what is wrong with their products and services, they just 'rebrand' them under a different name. Lumina becomes Surface phone, Zune Music Player becomes XBox Music. Windows 8 gets updated to Windows 8.1 and adds the Windows logo where the Start Menu used to be and it takes you to the Start Page in the Metro UI. But where are the visual clues on how to find the Charms Bar? Where are any visual clues at all in the Metro UI? Why is Windows 8.X the first version of Windows not to have visual clues to the user in some form? Of course the desktop part has them, minimize, maximize, close buttons on Windows. But Metro UI does not.

If I were Tim Cook I would not worry about Microsoft taking away anything Apple has done. I would just develop a less expensive version of the iPhone and iPad series, perhaps the iPhone Lite or iPad Lite that can compete with Surface phones and tablets in price. Then let customers decide when the iOS versions have the visual clues and a UI that works for mobile devices and Surface does not.

If I were King of Microsoft I would break it into two companies:

1. Take ex-Nokia handsets, XBOX, and all the miscellaneous hardware and consumer software and cloud services and call that Microsoft Devices and Services.

2. Take Windows 8 for PCs and servers, Office, everything enterprise and call it Azure, Inc.

Spin the two entities out to shareholders and reap the gains from letting investors own the thing they want to own, and from managers managing the thing they want to manage in the direction they want to go.

Azure would end up licensing a good deal of stuff to MD&S, but both entities could end up with a strong licensing business to third parties, too.

That would be nice, but I agree with fauigerzigerk: "...things will become much much worse for Microsoft before they get better"

Props to the illustrator who came up with the graphic at the top... a broken window... brilliant!

Wow, the "Mini-Microsoft" blog is now nearly a decade old! Interesting that it doesn't get called out in the Times article, except implicitly by name in the paragraph at "A list of missed opportunities and disappointing investments at the company in the past decade in areas like smartphones, tablets and Internet search have led to the belief that a more focused, nimble collection of mini-Microsofts could respond more effectively to the never-ending flow of disruptive technologies nibbling at its foundations." (http://en.wikipedia.org/wiki/Mini-Microsoft)

It's worrying for MS that for all the major divisions shown in that image, I've never once thought of or used them in relation to each other. MS has no unifying experience to build on in consumer consciousness.

It is mu h a worry as a factor that makes the company much stable as compared to some others it competes with. Look at BlackBerry or Nokia. Their fall from grace was precipitous. Google and to some extent Apple are one trick ponies. Although its a damn good trick, its risky to only know how to make money doing only one thing.