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Microsoft Businesses Technology

Microsoft's Lost Decade 407

Kurt Eichenwald has written a lengthy article about Microsoft's slow decline over the past 10 years, cataloging their missteps and showing how consistent, poor decision-making from management crippled the tech titan in several important industries. "By the dawn of the millennium, the hallways at Microsoft were no longer home to barefoot programmers in Hawaiian shirts working through nights and weekends toward a common goal of excellence; instead, life behind the thick corporate walls had become staid and brutish. Fiefdoms had taken root, and a mastery of internal politics emerged as key to career success. In those years Microsoft had stepped up its efforts to cripple competitors, but—because of a series of astonishingly foolish management decisions—the competitors being crippled were often co-workers at Microsoft, instead of other companies. Staffers were rewarded not just for doing well but for making sure that their colleagues failed. As a result, the company was consumed by an endless series of internal knife fights. Potential market-busting businesses—such as e-book and smartphone technology—were killed, derailed, or delayed amid bickering and power plays. That is the portrait of Microsoft depicted in interviews with dozens of current and former executives, as well as in thousands of pages of internal documents and legal records." We discussed a teaser for this piece earlier in the month — the full article has all the unpleasant details.
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Microsoft's Lost Decade

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  • by Anonymous Coward on Saturday July 28, 2012 @07:35AM (#40800621)

    The problem is Ballmer. Always has been.

    • Are you sure? Given the timing it sounds like these policies were put in place by Bill Gates when he was still CEO.

      • Comment removed (Score:5, Informative)

        by account_deleted ( 4530225 ) on Saturday July 28, 2012 @10:39AM (#40801589)
        Comment removed based on user account deletion
      • Given that Ballmer became CEO in 2000, and prior to that he had been a division head for many different divisions, I think he had a lot to do with this cannibalistic culture that seems to be at the core of MS these days.

  • lost? (Score:3, Insightful)

    by AmiMoJo ( 196126 ) on Saturday July 28, 2012 @07:36AM (#40800627) Homepage Journal

    Seems like XP and 7 did quite well.

    • New markets (Score:5, Insightful)

      by betterunixthanunix ( 980855 ) on Saturday July 28, 2012 @07:53AM (#40800701)
      Microsoft failed to conquer a number of new markets over that past decade. Social networking, tablets/smart phones, etc. -- Microsoft is just not winning, and their old strategies of monopoly abuse are not going to help them.
      • Bigger is better? (Score:5, Insightful)

        by MtHuurne ( 602934 ) on Saturday July 28, 2012 @10:02AM (#40801349) Homepage

        The article's author seems to think that Microsoft should have conquered those new markets. But what about the opposite approach: don't even try to enter those markets. Why should a company always try to become bigger even in areas that are not its strength?

        In particular, why should Microsoft be in the smart phone business? It's not like smart phones will replace PCs. They are behind Apple and Google in terms of features, mind share and available 3rd party applications; to succeed they must either do the same thing much better (like Apple with the iPod) or do something different to make their platform stand out. If they don't have the ideas for that, it's better in my opinion to stay out of the market altogether rather than make a "me too" product.

        • by betterunixthanunix ( 980855 ) on Saturday July 28, 2012 @10:13AM (#40801417)

          why should Microsoft be in the smart phone business? It's not like smart phones will replace PCs

          I would not be so sure about that one. Smartphone OSes seem to work pretty well on tablets, and I suspect that within 5 years we'll be seeing them on low-end laptops or in some sort of laptop/tablet hybrids (not rotating screen, but perhaps removable/easy to hide keyboard). It is also the case that a large number of common computing tasks can now be done using only a tablet or smartphone.

          The point here is that Microsoft's relevance in personal computing is fading somewhat.

        • by Kergan ( 780543 )

          Except that you're completely missing out on the ongoing disruption in IT. In a few years, Joe six-pack and your mom will be on a tablet or a smart phone as their primary (personal) devise. Not to mention developing countries, which are currently being introduced to IT through tablets and smart phones. Most households, in that context, will not have a PC. And I'd bet the horse on the fact that many business uses of PCs will have been replaced by the smart phones and tablets too -- eg doctors, machine tool p

    • Re:lost? (Score:5, Insightful)

      by jedidiah ( 1196 ) on Saturday July 28, 2012 @08:12AM (#40800793) Homepage

      XP and 7 exploited the same OEM channels that forced MS-DOS down everyone's throats.

      "Continuing to coast" is not quite the standard the author was looking for.

      • Re:lost? (Score:5, Insightful)

        by cpu6502 ( 1960974 ) on Saturday July 28, 2012 @10:35AM (#40801563)

        There seems to be this mythology about Microsoft "used to be innovative". I think back and don't recall ANY time where that was the case.

        The first computers to have music-quality sound were Atari (1979) and Commodore (1982) and Apple Lisa (1983). Not Microsoft which didn't get sound blaster ability until years later.

        The first computers to have enough GPU power to playback fullscreen videos were Atari and Commodore (1985) and Apple (1988). Not Microsoft.

        The first computers to have true preemptive multitasking were Commodore (1985). Not Microsoft which took ten years to get, and it didn't work with the then-standard 16-bit apps. Only new 32-bit programs. (Apple didn't get it until 2001 with OS 10.1.)

        The MS business model started by selling software to larger companies (Atari, Apple, Commodore, IBM, and the PC clone makers). Those same large companies did the innovating while Microsoft just followed along and copied what others had already done 5-10 years earlier. They were never innovative. Never.

  • No MBAs (Score:5, Insightful)

    by shawnhcorey ( 1315781 ) on Saturday July 28, 2012 @07:42AM (#40800655) Homepage
    MBAs can't run businesses. It's that simple. When Bill ran it, everything was great. When Steve took over, everything went downhill. The same happened in Apple: When Steve was in charge, Apple grew. When Steve was fired, downhill. When Steve was brought back, more growth. The same with HP. Moral: don't let MBAs run your company, it'll tank.
    • Re:No MBAs (Score:5, Insightful)

      by Anonymous Coward on Saturday July 28, 2012 @08:01AM (#40800745)

      I'm not sure the degree alone is the problem.

      I think it's more likely to be about "Skin in the game" and familiarity with the landscape.

      Too many MBA CEOs brought in thinks that they're selling widgets. They can sell computers just like they can sell soda pop, it's all the same to them.

      Jobs was on a(n) (un)holy mission to remake the galaxy. Sculley was selling widgets.

      • Re:No MBAs (Score:5, Insightful)

        by fnj ( 64210 ) on Saturday July 28, 2012 @08:11AM (#40800787)

        I'll buy that familiarity with the technology is a factor, but it's also about the thrill of technology as a motivator. Business types don't have it. Everybody knows what their SOLE motivation in life is, only it's self defeating in this particular sector.

        I have a picture of the MBA at bed time. After the obligatory five minutes, he and his wife are lighting up smokes. She is stroking his shoulder, murmuring sweetly. "It's all right, sweetie. You're just wound up." His brow is furrowed in thought and he is thinking silently "How can we leverage sex in the business? How can we rake in the bucks and rip off the people?"

        • I'll buy that familiarity with the technology is a factor, but it's also about the thrill of technology as a motivator. Business types don't have it. Everybody knows what their SOLE motivation in life is ... How can we rake in the bucks and rip off the people?

          Few engineers know the reality of business and MBAs - been there, done that, I am guilty - just as few business types understand the reality of engineering and other technical disciplines. When I eventually attended business school I thoroughly enjoyed it for two reasons. (1) Learning new and different things. (2) Laughing at myself, laughing at how ignorant and misinformed I had been about business, marketing, etc. Here's a clue: the professors in business school love Dilbert as much as any geek.

          To avoi

    • Re:No MBAs (Score:5, Interesting)

      by M1FCJ ( 586251 ) on Saturday July 28, 2012 @08:27AM (#40800859) Homepage

      Ah the rosy spectacles of the past. When Bill ran it, everything was not great. They almost completely missed the Internet revolution because Bill Gates never understood it. Also Bill's reign got them investigated and found guilty of corporate shenanigans. He didn't leave because he wanted to, he left because he was the most hated guy in the industry.

    • Re:No MBAs (Score:5, Insightful)

      by Yvanhoe ( 564877 ) on Saturday July 28, 2012 @08:31AM (#40800881) Journal
      I agree. The CEO of a software companies needs to know how software works. The CEO of an airplane company needs to understand how airplane work. It doesn't need to be a guru-lvel of understanding but it needs to be more than superficial. It must be enough to have an enlightened opinion on technical questions.

      The boss of Boeing needs to know if it makes sense to invest in electrical planes, to understand the weight constraints of batteries, the trends and how it can impact the airplane industry in 20 years.

      The boss of Microsoft must understand how software works, to understand what are the costs and advantage to port to ARM, the necessity of having a specialized version for embedded software vs having a completely different product, deciding if tablet are more like a big smartphone, a small laptop or a totally new platform, etc...
    • Apple wasn't doing all that great when Jobs left it, and later on many people (including many MBA-haters as well as Jobs himself) realized that some MBA-type skills were missing at Apple's helm. The problem with MBA schools is that they teach you only one aspect of management: management / economic theory, in other words the science part, which is good and necessary. But they do not provide much equally essential experience, and do little to teach actual leadership. And that's why MBAs often do such a p
    • by Junta ( 36770 )

      I think it's more fair to say that MBAs tend not to deliver mind-blowingly overwhelming sucess. MBAs are the vast majority of anomymous, boring leaders in the business world. On the whole they lead mostly obscure companies in relatively subtle and unexciting rate of growth, but still on the whole mostly growth.

      Meanwhile, the Zuckerberg, Gates and Jobs of the worlds are effectively the lottery winners amongst non-MBAs playing corporate leadership game. Through a combination of persistent vision, acumen, a

    • An MBA degree program is not what you think. An MBA is not like other Master's Degrees where you become more of an expert in a particular field. An MBA makes you generally knowledgeable of all the parts of an organization, not just the one you are currently experienced in. An MBA is an add-on to whatever degree you already have. An MBA does not make you an accountant, it does not make you a manager, it does not make you an executive. It helps one become a better manager or executive because you now have an
  • Lost decade? (Score:5, Interesting)

    by dnaumov ( 453672 ) on Saturday July 28, 2012 @07:42AM (#40800657)

    So doubling your revenues and net income is now considered a "lost decade"?

    • If you look at the share price then yes. It wasn't until recently that the price per share started to rise and even then it isn't that much.
    • Re:Lost decade? (Score:5, Insightful)

      by fnj ( 64210 ) on Saturday July 28, 2012 @08:15AM (#40800807)

      During the period that Microsoft's market cap got lopped in half, Apple's multiplied by over ONE HUNDRED TIMES. So yes, I'd say that qualifies for a lost decade. Market cap is the world's picture of how much you are worth as a company.

      • by dnaumov ( 453672 )

        During the period that Microsoft's market cap got lopped in half, Apple's multiplied by over ONE HUNDRED TIMES. So yes, I'd say that qualifies for a lost decade. Market cap is the world's picture of how much you are worth as a company.

        Yes and at times that world's picture gets completely separated from reality. See Facebook and Zynga IPOs.

      • Re:Lost decade? (Score:5, Insightful)

        by gomiam ( 587421 ) on Saturday July 28, 2012 @08:58AM (#40801013)
        Market cap is to company's real worth as photoshopped magazine covers are to original models' beauty: a somewhat good reference but not really that reliable. Otherwise, analysts wouldn't ever care about reading the company balance to make their decisions... and they do (HFT aside, of course).
        • by SuperKendall ( 25149 ) on Saturday July 28, 2012 @10:43AM (#40801619)

          Market cap is to company's real worth as photoshopped magazine covers are to original models' beauty: a somewhat good reference but not really that reliable.

          That is very true, Apple's market cap remains substantially depressed compared to other companies.

          In the decade that Microsoft simply continued to sell the same thing they always had, Apple herded the music market unwillingly to digital sales, totally took over portable music players, forced a massive shift in the smartphone market, and then to top it off proceeded to be the company that led the inevitable shift in the computing market to tablets despite Microsoft trying and failing to do sofor almost ten years.

          I'd say the "lost decade" description for Microsoft is utterly apt, for all sorts of reasons... the way that Microsoft killed off better technologies as they rose against Microsoft for many years was a loss of around a decade of computer advancements for real people as Microsoft kept the status quo.

          But just like keeping the lid shut on a pressure cooker, eventually something much blow - and Apple was the company that forced the issue.

    • Re:Lost decade? (Score:5, Insightful)

      by confused one ( 671304 ) on Saturday July 28, 2012 @08:50AM (#40800985)
      If, during that time, several companies that didn't effectively didn't exist in your market appear and then exceed your revenue, while your company misses opportunities time and time again... Then yes, it was their decade to lose and they lost it.
  • by gestalt_n_pepper ( 991155 ) on Saturday July 28, 2012 @07:43AM (#40800663)

    In any organization I've ever seen or worked for.

  • You know right away the article is BS.

    Because during the last 10 years many MS products have finally become as usable as they should have been 10 years ago.

    • by Trepidity ( 597 ) <delirium-slashdotNO@SPAMhackish.org> on Saturday July 28, 2012 @08:28AM (#40800861)

      Hah, indeed. Microsoft has lots of problems now, but it had a lot of problems before too! It's kind of funny that in 2012 the "old Microsoft" has become some kind of utopia looked back on as if it were driven by technologists in pursuit of technical excellence. In the 1990s, Slashdotters would surely not have thought that. Microsoft in, say, 1997 was not working towards "a common goal of excellence", but some very corporate-strategy driven ideas about where the PC market should go. Arguably that's true of much of what they did in the 1980s, as well.

    • Re: (Score:3, Funny)

      by Anonymous Coward

      Because during the last 10 years many MS products have finally become as usable as they should have been 10 years ago.

      We are very sorry about this and will fix it with the upcoming Windows 8.

      Regards,
      Microsoft

  • by cdrnet ( 1582149 ) on Saturday July 28, 2012 @07:57AM (#40800719)

    Among others a reply from Frank Shaw (MSFT):

    http://www.neowin.net/news/what-the-hell-is-microsofts-lost-decade [neowin.net]

    • by fnj ( 64210 ) on Saturday July 28, 2012 @08:23AM (#40800837)

      What in that reply goes the SLIGHTEST WAY toward disproving or effectively countering ANY of the article's points? Mindless denial is of course to be expected inside the floundering giant.

    • Frank Shaw had me until he mentioned the Xbox; Microsoft's entertainment division has lost them billions. You can tell he's mad, bro, because he wrote "Widows Azure"... little red squiggle not working in internet exploder?

      Billions of customers, but they're not coming, they're going. They're going to Android, they're going to iOS, they're even going to OSX for some reason.

  • by dbIII ( 701233 ) on Saturday July 28, 2012 @08:00AM (#40800739)
    Microsoft have always been about coming late to a party someone else started and then trying to steal the limelight. That's not always a bad thing (eg. cheap and nasty workstations and servers that were just good enough made a lot of things possible) and it has worked for them on many occasions, however recently they don't seem to have been able to dominate a niche that they've come into late.
    Note that Apple have been doing that as well, mp3 players, smartphones and tablets were mature before they got involved but they managed to get up to speed quickly enough to dominate those markets
    To sum up, I don't see the last decade as anything different with Microsoft in that area, and I recall articles about toxic office politics at Microsoft (and moreso Apple) well over a decade ago anyway.
  • by giorgist ( 1208992 ) on Saturday July 28, 2012 @08:14AM (#40800801)

    Group think has set in such that slowly politics has created an environment where the top management do not hear dissenting voices, so somehow they can do no wrong.

    It is natures great recycler.

  • Monopoly (Score:5, Insightful)

    by markdavis ( 642305 ) on Saturday July 28, 2012 @08:37AM (#40800903)

    >"Fiefdoms had taken root, and a mastery of internal politics emerged as key to career success. In those years Microsoft had stepped up its efforts to cripple competitors"

    Welcome to life at a huge, fat monopoly. At least it seems like they hit an ace with UEFI, further stifling competition and removing consumer freedom and choice.

    Looks like Apple is falling into the same trap in their niche markets where they were also a near monopoly (tablets/phones).... instead of opening up, offering product choices, lowering prices, they are spending all their effort trying to sue everyone into submission.

  • And do not forget... (Score:4, Interesting)

    by nerdyalien ( 1182659 ) on Saturday July 28, 2012 @09:36AM (#40801205)

    I RTFA the whole article... but IMO, it has forgot one or two things....

    M$ vs DOJ: If you have read daily technology news back in 90s, you might remember how narrowly M$ escaped from a major anti-trust case. Since then, M$ had to play nice with DOJ to avoid getting the worm can re-opened. So it is somewhat obvious M$ didn't work aggressively in taking over other markets in last decade. All the new players, they do not have to answer DOJ for any anti-trust violations. So... new players are very lucky when it comes to approaching new markets.. be it search, consumer media, social networking etc.

    At the very heart of the DOJ case...M$ was accused of "locking-in" customers for their products. And now, fast forward to 2012... Apple is literally locking in consumers behind their gardened walls with a plethora of their own hardware and software, Google & FB literally collecting private details from its consumers. Playing the devil's advocate here, I wonder how come they are not scrutinised intensely ?

    M$ massive hiring spree: Though I can't exactly remember the figures and fact, I believe M$'s staff count has gone up by few folds since the turn of the century. Though I am not sure what's the reason behind this; but I am pretty sure this is the real reason why wheels started getting off. More staff means more HR to handle them. My best guess for this 'staff head count inflation' is, having lot of cash in bank.

    But my overall conclusion is... markets are wide open only for a brief period of time. One can concur that market only during that brief moment. Late comers will always have to play "do or die" battle before totally convert the market to their camp, or die an early shameful death. M$'s biggest issue it seems, not discovering wide open markets to concur like the rest.

    Having said all that, during last decade, M$ consumer products have become more stable and secure than in 90s. That's something worth noting.

    Also, I would like to see Steven Sinofsky to head the Redmond camp after Ballmer... looking at his track record, I believe he can stop this plunging boat from drowning.

    p.s
    I have to agree that 'management style' in M$ is somewhat deleterious. My software house has this ghastly 6-month review cycle despite being a SMB. In the most recent review, I was accused of not having any initiatives during work by the reviewing HR boss. My sad situation is, my technical boss disagrees with my initiatives. To avoid annoying him too much, and get the team working on one direction; I have learnt to suspend my ideas and just to be a "yes-boss" guy. But would the HR boss understand my situation fully? Personally, I put lot of hours in writing well-polished reliable code. In return, both my bosses are nit-picking on me. IMO, these reviews are good for "failing" employees.. but the rest, why bother.. just throw them free candy or coffee.

    • by michael_cain ( 66650 ) on Saturday July 28, 2012 @10:14AM (#40801427) Journal

      At the very heart of the DOJ case...M$ was accused of "locking-in" customers for their products. And now, fast forward to 2012... Apple is literally locking in consumers behind their gardened walls with a plethora of their own hardware and software, Google & FB literally collecting private details from its consumers. Playing the devil's advocate here, I wonder how come they are not scrutinised intensely?

      Such behavior is illegal only if you have a sufficiently large share of a properly defined product market. MS apparently got terrible legal advice in the 1990s (or ignored good advice); someone should have been telling them that they were dominant enough in their principle market space (personal computer operating systems) that the rules were different. Apple holds less than 20% of the global market for smartphones, a distant second behind Samsung for the most recently finished quarter. That's not enough market share to get you in trouble. Google appears ready to settle their antitrust case in the EU, and the FTC announced several months ago an investigation of Google's business practices in the US. And it's difficult to define an applicable "market" where Facebook dominates, since they don't charge their users.

      • by Swampash ( 1131503 ) on Saturday July 28, 2012 @11:47AM (#40802119)

        Apple doesn't care about market share. Apple cares about making products.

      • There are two kinds of lawyers. MOST lawyers are there to mitigate disputes. Courts and precedent are fairly clear for 80% of cases. So lawyers advise you to follow the rules. About 20% are the M&A guys, the ambulance chasers, divorces, etc. the "we'll make it legal" lawyers. Gates father was partner in such a firm, with a stake in Microsoft doing well, so you can see how they gave the advice the client wanted to here and not based on the law.

        I always find it interesting how when I explain to my compan

  • by RudyHartmann ( 1032120 ) on Saturday July 28, 2012 @09:43AM (#40801237)

    In times past Microsoft would find a nice add-in product for their software and then bundle a cloned version of it for free. Remember Stac Electronics? The disk compression Microsoft put in the next version of MSDOS was not better than Stac's, but it was free. Stac only won some money in a lawsuit, but was essentially destroyed. I think to this day developers are still mindful of this predilection. Now this same thing is happening to the cash cows of Microsoft: Windows and Office. Linux and LibreOffice are the nemesis of Microsoft's flagship products. Another product for the server world is Exchange. Exchange virtually forces the use of Outlook. No other Windows or Linux client can properly work with it. This is a strategy MS uses to delay the inevitable. Don't you think /. is read by MS employees? They can read the signs of the times. They just can't show their strategy to carry them through this. This lost decade is the decade of dealing with free alternatives. Microsoft is reaping what they have sown. You can't perpetuate the monopoly on Windows and Office alone anymore. I'll say it again:

    It's hard to argue with free.

  • by davydagger ( 2566757 ) on Saturday July 28, 2012 @11:30AM (#40802005)
    it makes it sound like microsoft was ever a company that made great innovate products.

    in the 1990s it flourished becuase of a demand for computers and NO competition. They were probably more hated then than now. Their software was far less reliable then, than now.

    They were far more overreaching in their rhetoric and legal prowess to cover up their inability to make good products then, than now. They were far more evil then than now.

    They have competition now, and if they tried what they did then, now, they would be sink.

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