Microsoft Mission Impossible
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mondaynote.com
Microsoft is still a very healthy company, and now they finally got that healthy competition. Competition is good for the market, it's good for us consumers. Hell, it might even be good for Microsoft in the long run.
I'm admittedly a bit of a Microsoft fanboy, but I doubt that would've been the case if MS had still been the monopolist steam roller it once was.
The current market has forced MS to truly innovate and to be a much more friendly company in general (evidenced by e.g. their broad contributions to open source these days). How can that be bad?
World class, amazing, top of the industry with no true peers.
For example, despite all of the good ideas and theory and philosophy, open source, after 13 years of effort, (while there's definitely been good work done in the area) has yet to produce an office suite that's at least as good as MS-Office is in all areas.
I'm sure the MS-Office codebase is a horrible mess, but the end user bits are good enough for nearly all of the weird edge-cases that 99% of users want and 99% of users can learn to use it to some level of effectiveness in a couple afternoons.
That's amazing.
First of all, "good ideas, theory and philosophy" only go so far when we're talking thousands of more developers and billions of dollars. Excel, is pretty awesome but it's not perfect. I often find myself using Open Office because of some UTF8 issues when importing data into Excel. I own Excel but I use Open Office just as often.
Visio, Access, and PowerPoint were purchased by Microsoft. Sure they continued to develop them, but at one point I used Access for 5-6 years and it hardly got any major features when Microsoft upgraded Office. So, these great innovations didn't originate with Microsoft.
The major reason that you don't see much competition with Office is because of their proprietary formats have basically won. People don't want 99% compatibility, they need 100%, so other vendors have fallen out of the game because they can't make the same level of investment.
As for being easy to learn, I think if you Google "Microsoft Office classes", you'll find that lots of people still require training. Just switching to the Ribbon Bar caused problems for many users.
>First of all, "good ideas, theory and philosophy" only go so far when we're talking thousands of more developers and billions of dollars. Excel, is pretty awesome but it's not perfect. I often find myself using Open Office because of some UTF8 issues when importing data into Excel. I own Excel but I use Open Office just as often.
True, it's not perfect, but it's OO is simply not comparable. I'm not saying OO is bad either, just that Excel really is fantastic as far as software goes. The more important question is why haven't the thousands of developers and billions of development time spent on open source software not only built comparable software, but better software?
> Visio, Access, and PowerPoint were purchased by Microsoft. Sure they continued to develop them, but at one point I used Access for 5-6 years and it hardly got any major features when Microsoft upgraded Office. So, these great innovations didn't originate with Microsoft.
So? When was PowerPoint purchased? 1987? I'd be willing to wager one entire American dollar that there aren't more than 100 lines of original "Presenter" code in today's PowerPoint. More importantly, in all that time they've managed not to drive it into the ground, but keep it at the pinnacle of presentation software. Keynote is probably the closest thing PowerPoint has to a reasonable competitor after almost 3 decades.
>The major reason that you don't see much competition with Office is because of their proprietary formats have basically won. People don't want 99% compatibility, they need 100%, so other vendors have fallen out of the game because they can't make the same level of investment.
Again so? OO has had it's own format for many years now thank you and still isn't as good of a piece of software. The format the tool uses is orthogonal to the quality of the software. And OO simply isn't as good. It's not bad, it's good even, but not as good.
> As for being easy to learn, I think if you Google "Microsoft Office classes", you'll find that lots of people still require training. Just switching to the Ribbon Bar caused problems for many users.
There are <insert topic> classes for just about everything Google "how to use a mouse" and you'll find a few million helpful sites on them. Fact is, a computer illiterate person can learn how to write a reasonable document, or do basic spreadsheety things with a little prompting. To fully invalidate your point, believe it or not, there are actually Open Office classes and even iWorks classes.
No software is so easy to use that somebody who's never seen it before can walk up to it and start using it and it's a delusion that software can be that's a continuous problem with many tech communities. It's an issue that goes back to the late '70s, and if somebody hasn't learned to use a computer decently in the last 40 years I'd submit that no amount of work in software interfaces will ever overcome that barrier.
I've heard anecdotes that the iPad is that easy to use (children and grandparents).
The iWork apps for iOS aren't, they come bundled with tutorial documents to walk you through the various features and gestures. However, I'm still hopeful we can make progress against that barrier.
You are right of course, except that the iPad is an unusual in being a hardware/software solution. Use the same interface and give somebody a mouse instead of a touch screen and they'll have the same old problems as before.
re: Keynote - I think Keynote tends to just produce better looking presentations, but you'd be impressed with some of the ways I've seen Powerpoint pressed in to service that had nothing to do with presentations. A few of them are so useful to me (e.g., Powerpoint is actually a pretty decent easy-to-use graphics and chart maker, vector graphics tool, logo designer, UI mockup tool etc.) that the ability to do those things are so important to me that I won't switch to another presentation tool until they can do them.
edit
for example, I made this entire image out of nothing but powerpoint vectors and a few power point vector effects
I'd argue you could say company with billions of dollars and the prestige to hire world class programmers. Windows Phone is an amazing piece of software, and if we got it 3-4 years earlier, it may have stood a chance.
Microsoft needs to do two things.
1) Give the mobile group vastly more independence to escape the dying desktop business.
2) Make Windows Phone compatible with Android applications. Bribe every major hardware vendor to put out a big new line of Windows Phones to launch with said compatibility. There would no doubt be big tradeoffs in doing this, but it'd be worth it, and would make use of the classic Microsoft strategy of embrace and extend that they seem to have lost an appreciation for after dominating for so long. It's a trojan horse approach superior to their goofy dual booting idea.
I see no reason Microsoft couldn't acquire 20% of the mobile market. Their currently mediocre strategy has delivered some success in Europe, so imagine what a good strategy could deliver. The real question is, can owning 20% of mobile ever be worth the cost if you don't own the hardware (Apple & Samsung)? I don't think so.
I would argue that this "success" is Microsoft's achievement. It happened just because Windows Phone was made by Nokia, which has (had) a good name and market share in Europe. And we know how it turned out for them..
One way to leverage this (and pretty sure MS is doing it) is the opposite of what you suggest: to make their smartphones an effective auxiliary device for PCs, beyond just email and exchange and Office. Something like SmartGlass for productivity. Interestingly, there's already work from MSR along these lines, but it seems some way off.
As for Android compatibility, BlueStacks already goes a long way there. If they want to, they could snap them up anytime, but I'm not sure they'll want to capitulate on that front.
Presumably one of the first discussions would bring up "network effects" and you'd conclude that a frontal assault on these markets would be suicidal. Then you'd find some other project to pursue.
Same goes for Office. It's not "good" any more than a private railroad/electricity/telephone system is "good", it's just sheltered from direct competition by network effects. And without direct competition you really have no basis to judge it on.
actually yes. There's lots of things that I, and many of my friends wish, Facebook did that it doesn't do...and many things it does that we wish it didn't. Enough to build a competitor? Definitely. Would it be popular? Who knows?
If OpenOffice (etc) ever had comparable staffing (quantity and variety, not even questioning quality) that MSOffice has had for 15-20 years, I'd expect more comparable results.
- Remote Desktop is really good. VNC is "ok" but my God I miss Remote Desktop in the Apple world
- Pretty much any MS-Office product, highlights are Excel, Powerpoint, and Outlook. (Much better on Windows machines than Macs BTW, in much the same way iTunes is better on Macs than Windows)
- Visio, not without it's quirks but other competitors are all "ok"
- Project - are there any serious competitors?
- OneNote
- Explorer, I've yet to see a file manager as good. It's lightyears beyond the abomination that is Finder for example. I could go on, but it's probably one of the reasons alternative media organizers are not as common on Windows machines as Macs
- Visual Studio - I can see some arguments one way or the other, but it really is a world-class dev environment.
- Online Office apps are easily the best office web apps by far
- SQL Server is actually very good.
- Flight Simulator
now outdated, but top of the game for many years - Midtown Madness as an open world driving game
- Encarta was awesome
- Halo series
and hardware - the Xbox systems
- really nice mice and keyboards
- Xbox controllers
- Kinect
- the surface pro is actually a pretty amazing full fledged portable PC, I'd put one up against an Air anytime, except it has the slight edge of the much more robust Windows software ecosystem
Let me note that Halo was made by Bungie, a Mac company. It was going to come out for Macs, but it went Xbox after Bungie was bought. Everyone with monopoly money can buy good products late in their development.
My problem with MS is the monopolist strategy. A monopolist need to keep the APIs hard to reimplement on another OS, to lock applications (and their users) to its platform. Complexity is needed for that -- and also to keep the OS API base a moving target with bug compatibility etc.
You see this horror of complexity throughout the whole ecosystem, not only for the suffering heroes working with compatibility with the Office file formats or the virtual file systems.
This extra complexity lowered my personal life quality, when the world was a dinosa... cough, Microsoft world. That makes it personal -- my personal pain.
Windows may be best _desktop_ operating system for enterprise, not _best_ operating system. Subtle difference. OSX and Linux are not bringing desktop OS to tablets and touch laptops, because nobody wants desktop OS there, everybody wants tablet optimized OS. C# may be syntactically best language for enterprise, but it's ecosystem is lacking compared to other languages (for too long, it was use-MS-only-frameworks-and-products-land, so nobody bothers now). It is disputable whether Xbox won the game console war, but even if it did, this is a niche market. Kinect may be very unique, but we are talking niche in the niche. Surface Pro may be the best desktop replacement tablet, but nobody wants to replace desktop with tablets, just like nobody wants to replace truck with sport car.
But Borland/Imprise/Codegear/Embarcadero lost track long time ago and is currently only relevant to a few enterprise customers.
Could you tell me what you are measuring to reach that conclusion? Last I looked, the only category where the Xbox was ahead is US sales, and even there, they were only marginally ahead of the PS3.
PS3 total sales: 75 million units
Wii total sales: 100.04 million units
nintendo ds: 153.93 million units
nintendo 3ds: 32.48 million units
sony psp: 76.3 million units
sony playstation vita: 2.2 million units
sony psp go: not many
There's pretty much always been multiple competing consoles, and I don't think Sony and Nintendo are ready to throw in the towel.
It does not work that way since neither Apple nor Google can beat Microsoft Office with big budgets. Beyond talking about the technical aspects of Office what also matters is the marketing/sales machine. For example, I was present in negotiations between Microsoft and big (non US) state agencies, and you know what? The Microsoft guy was surely at more than 6 degress in the Microsoft organizational chart to Bill Gates but he could negotiate as if he was Bill Gates, he had that freedom.
The agency was pushing open source and the guy said something like: the Office $ XXX price does not work for you? What about $ 5 per license?
Isn't that sort of the point, at least from their perspective?
Windows Media Center was quite good, although it has been allowed to wither on the vine somewhat as market research apparently found it just wasn't used much
Internet Explorer has of course picked up a lot of slack quite quickly. Has not surpassed open source, but they have done a pretty good job with it in recent times. Yes, it's still behind, but they started from behind. They are much less behind now.
The story talks about 2000 report with 19.3 billion from windows and 23 billion total revenue. On the other hand, Microsoft made 19.9 billion in revenue just last quarter, with 5 Billion in net profit. 6 Billion operating income because of the surface writeoff.
Are other companies doing better? Yes. Could Microsoft have done better? Yes. Have they done badly? Not at all. They have grown revenues and profits at huge and absurd levels over several different divisions. They are also not going to die any time soon, and I don't think there are too many options to take a company this big private.
One thing I learned in business school is the measure of a CEO is not whether or not they did a good job, but rather if they did a better job than someone else in the same position. It's hard to look at Microsoft in the last 10 years and think that they have done as well as they could.
Oracle
Salesforce
Mozilla
Sony
Nintendo
Samsung
Blackberry
IBM
Heroku
Rackspace
Sun
Novell
Red Hat
Jetbrains
Not to mention, open source projects like Apache, Linux, Open Office, etc that attempt to commoditize their products.
That is an incredibly huge list by any standard, and many on that list are giants themselves. Now, given that Microsoft has competed, on average, successfully against all these rivals, many of whom give away competing products for free, would you still consider their lack of success against a select few to be a huge shortcoming?
(Edit: typos, fixes, adding more rivals as I think of them)
They were going to do $60 billion in retail revenue (Amazon.com)? Why? They were going to run a social network? Why?
Indeed many of Microsoft's mistakes were to fire off far too many arrows mindlessly (from Slate to Expedia). Even those that produced a return likely diverted attention away from better results at their core. They have no business being in social as one example.
And why would anybody presume that an operating systems and productivity software company would dominate Web search? Or that they could have even if they had wanted to and had seen it all coming.
But they're getting trounced in the consumer market so handily, and by so many other competitors, that it seems impossible they'll see ever see meaningful growth there. A lot of that is because of the legacy freight they're forced to carry wrt their PC and enterprise concerns...and because of the memories of everyone who had to deal with crappy MS systems in the 90's and early 00's.
I've often said it wouldn't be a terrible thing for MS to spin off a consumer division. It could integrate fully into MS's current services, but it would be free of the psychic burden of the "Microsoft" brand, with all of the stodgy uncoolness that that entails. Not to mention a separate company would be free to move more quickly in the face of the rapidly changing consumer market. However, the board would probably consider this to be a "hail mary" play.
I will be very interested in seeing how the new CEO handles the consumer side.
I mean, yes, Apple also handily outmanoeuvred Microsoft in those areas where they do compete, and has beaten back Microsoft's forays into mobile. But Microsoft's problems are much more mundane- office software became a commodity, and they've failed to produce a new OS that's a clear-cut improvement over Windows 95. One could imagine a Microsoft that found a way to meaningfully innovate purely on the good old PC platform and be successful without any of this mobile devices tomfoolery.
The real problem for Microsoft and PC makers is that everyone has a PC and they don't need a new one. Whatever PC almost anyone has is now good enough. People are spending their money on the latest phones and tablets.
And while it's true that the PC market is sort of saturated, the tablet market too will suffer the same fate.
In the end the only thing that will continue to sell is services.
I speak from experience, they will just use whatever PC is laying around or stuffed in a corner.
No, but many people buy tablets to replace their computer and tablets happened, effectively, because the iPhone happened.
For example, look at what Ray Ozzie got built with Azure, or what J Allard did with the Xbox, Xbox 360, Zune, and Courier. Azure was in a prime spot to do what Amazon ended up doing - being the computing platform for the cloud. Instead, nobody at Microsoft wanted to listen to Ray because selling Windows and Office on PC's and servers is the thing that drives MSFT today. Thus, if it competed with either, it's not going to get the kind of respect it deserves.
Look at where Microsoft is now on the consumer side. J Allard and his team were basically paving the way for Microsoft to make great consumer devices. Zune basically gave them Metro UI, Xbox 360 showed them how to do consumer hardware and supply chain management worldwide, and they were working on the Courier about the time the iPad hit. Microsoft did nothing with it and the iPad replaced literally millions of low end Windows laptops and netbooks. It took Microsoft something like 3 or 4 years to have an even competitive touch tablet experience with the Surface, and then it bundled desktop Office on a touch device.
The iPhone debuted in like 2007 and Microsoft is still peddling a desktop mode Word Processor on a touch tablet as a good idea.
The Surface launched without consulting the one team that had shipped tens of millions of hardware devices at Microsoft - the Xbox team and consequently built about 3 million too many Surface RT units which cost the company $900 million in losses.
For as much as Microsoft is trying, and they really are trying, Windows and Office are as much of a curse as they are a blessing in the modern era of devices, services, and the cloud. Where they end up is anyone's guess, but all the people who seemed to "get it" at Microsoft the last 7 years or so basically got ran out of the company and I have no idea if the people who are still there really "get it" enough to compete with the likes of Samsung, Google, Sony, Amazon, and Apple.
Also, remember when Microsoft was so terrified of Google owning search that they tried to buy Yahoo! for $45 billion? Imagine if that had gone through.
Get out of EVERYTHING else including all internet services and everything that is just a money-losing proposition.
Then buy back as many shares as possible, keep buying back shares and if the shares get too expensive start paying billions and billions in dividends.
Not every company is meant to be the next wave of the future, why not be content with how successful they are and be really good at it, continue to be great at it, and get out of everything else, banking as much money as they can in the process.
I know they played commercial hardball with people wanting to offer options other than MS operating systems. Does anyone have any information about them playing legal hardball (lawsuits or threats)?
http://www.justice.gov/atr/cases/f3800/msjudgex.htm
The relevant chapter is III.H.64: "An aspect of Microsoft's pricing behavior that, while not tending to prove monopoly power, is consistent with it is the fact that the firm charges different OEMs different prices for Windows, depending on the degree to which the individual OEMs comply with Microsoft's wishes. "
EDIT: Replaced the link to the final version in stead of a proposal, added the quote
EDIT2: Duh, I totally missed your point. Yes, they have resorted to also that tactics lately. Just a few high-profile cases.
- Microsoft sues Barnes & Noble over patents - http://mashable.com/2011/03/21/microsoft-sues-barnes-noble/
- Microsoft sues Salesforce - http://news.cnet.com/8301-13860_3-20005306-56.html
- Microsoft sues Motorola - http://www.techdirt.com/blog/wireless/articles/20101001/1356...
IMHO especially the B&N case is telling. A very sad story.
Note that I am not a supporter of Microsoft and avoid their products largely because of the commercial hardball they played when they had monopoly power but the original article suggested that they played "legal hardball" with OEMs who wanted to ship devices (I interpreted as PC's) with additional operating systems rather than just MS ones. I had no recollection of this and was looking for a reference before I add it to the list of offences I believe MS to have committed. It is not implausible but it was a new claim and I wanted to understand it.
I'm interested in understanding why you think the B&N case is so sad and telling. I haven't investigated the patents claimed but in principle the idea that MS requests fees for using it's patents isn't actually a problem for me.
Cisco was briefly worth more than Microsoft during the dotcom bubble. They had a $557 billion market cap, which is completely left out of the chart. Intel peaked at $509 billion (August 2000) - also left out of the chart. Nortel was worth $283 billion at their peak. Lucent was worth $285 billion. AOL was worth $222 billion. Oracle and Sun were both worth over $200 billion. Yahoo was worth $140 billion.
So they conveniently left out a cool $2.3 trillion or so in market cap among just a few other tech companies. Not to mention the various crazy valuations for companies worth tens of billions briefly.
MS has so many resources and good people that it is almost impossible with the right vision to fail on delivering.
1) I'd argue that just maintaining the profit level they have now, over the next decade, would be a success given the situation.
2) Breaking the company into pieces, and letting new growth thrive from a smaller base, and letting old pieces die off if that's the way it's going to be (eg Windows consumer desktop). There's a lot of precedence for this sort of maneuver outside of tech, for stodgy old companies with mixtures of slow/no and faster growth businesses. The pieces could be seeded with tremendous amounts of cash to jump start them.
I think #2 is very unlikely given the Microsoft culture, however I think that's exactly what should happen.