Steve Ballmer's Big-Time Error: Not Resigning Years Ago 357
Nerval's Lobster writes "Any number of executives could take Ballmer's place, including a few he unceremoniously kicked to the curb over the years. Whoever steps into that CEO role, however, faces a much greater challenge than if Ballmer had quietly resigned several years ago. Ballmer famously missed the boat on tablets and smartphones; Windows 8 isn't selling as well as Microsoft expected; and on Websites and blogs such as Mini-Microsoft (which had a brilliant posting about Ballmer's departure), employees complain bitterly about the company's much-maligned stack-ranking system, its layers of bureaucracy, and its inability to innovate. Had Ballmer left years ago, replaced by someone with the ability to more keenly anticipate markets, the company would probably be in much better shape to face its coming challenges. In its current form, Microsoft often feels like it's struggling in the wake of Amazon, Google, Apple, and Facebook."
In an interview with ZDNet, Ballmer said his biggest regret as CEO was in how Windows Vista was developed. Opinions are divided on both the nature of his resignation and what it will mean for Microsoft. While the stock price is up, BusinessWeek and others suggest the purpose of the transition is to find somebody better able to anticipate future trends. That would certainly lead to more organizational changes within Microsoft, something employees suffered through just last month. Ben Kuchera at the Penny Arcade Report points out that this could mean Microsoft will try to re-enter markets it has abandoned. He asks the company to "stay the hell away from PC gaming."
Former MS employee here (Score:5, Interesting)
I use to work there and can relate to much of what the article says. It's a good place for a well paying stable developer job but definitely not for innovation. There is a group think there that has saturated the company, and if you are not with the prevailing group think people are dismissive of you and you stop getting invited to the meetings where strategy is discussed. I'm not bitter... The wife and I just started having kids at the time, so I certainly didn't make an effort to rock the boat--I just quietly did what I was told and took the paycheck because I had more important things going on in my life than trying to fight company politics and business tactics.
A while back, a slashdot commenter made the observation that Microsoft has a generation of leadership now that has never experienced the realities of running a business that faces the risk of failing and going under. I think this is true and it has negatively affected the company. I don't claim to be a rock star developer, but I saw a lot of smart and visionary developers at Microsoft. Unfortunately, however, being a leader and visionary wasn't rewarded--being a fun guy to have scotch and cigars with was the way to climb the ladder.
Re:Vista (Score:4, Interesting)
Not so much how it was developed, but that it was released before it was really ready and a log of people were conned into buying Vista Ready PCs which had a crappy inferior Intel chipset unable to fully support. Microsoft knew and still proceeded. I still have the PDF with all the emails.
Re:Struggling with a near monopoly. (Score:4, Interesting)
Microsoft's problem is that a great many of those desktops are XP. They haven't made any money on them for a while now. What matters to MS today is how many people are upgrading or buying new today. Their problem is nobody wants Windows 8 or Windows phones. That and their customers are starting to wonder if with all of the interface changes it wouldn't be any more disruptive to go with Mac or Linux when they have to upgrade.
Microsoft needs to be loved again (Score:5, Interesting)
Okay, so I'm a clearly-labelled "Microsoft Hater." I haven't always been this way. I got really comfortable with Win3.11 and then Win95 came out I experienced a level of computer excitement I haven't had since I started using OS-9 level two. (I am still quite fond of OS-9 though... just been a very long time.) I loved what Microsoft did. The advancements were terrific and long-awaited and all the precious knowledge I had acquired and accumulated over the various versions of DOS and Windows still applied so I was still relevant and loyal.
But then Microsoft started souring things. They tried to take over Java... tried and failed. They started pulling some extremely dirty stunts with their "partners" and such to the point it harmed so many other out there. I couldn't see those immoral acts without my opinion changing about the company behind the products. Some people just saw money and work. I have always seen more and I can't unsee it. When I see an OS user interface or go over source code or anything that goes into the design and engineering of such systems, I don't just see objects, I see ideas and what people were thinking when they put it all together which invariably results in a sense of knowing something about the people behind the creation of all of these things. For me, it was pretty easy to tell when something was a cludge or if real planning and design work went into things or how much respect one party had for another when parties worked together on a project. To me all of those things were the human element of what came together in creating these things. I may be pretty unaffected by fine art, but when I saw what when into computing back in the earlier days, I found myself quite moved by some of the things I saw. It was my world.
Microsoft slowly destroyed my world and all the things I loved about it. Microsoft started out making really cool things but when they really started getting big, they were increasingly about destroying others and less about creating cool things. If you want to understand why a Microsoft hater hates, I think my case is pretty clear by now.
And a new Microsoft could also rekindle all the new and cool things all over again. Sure, it may not be a "wise business decision." Most cool things aren't. But I think we're all ready for something really new and cool. We aren't going to get it from Apple. Google and Android is pretty much levelled off already as far as I can tell. A new Microsoft holds an opportunity within itself to recapture the love and awe it once had. So why haven't they done it already?
We know why... I just wish they would.
Peter principle meets innovators dilemma (Score:5, Interesting)
Microsoft often feels like it's struggling in the wake of Amazon, Google, Apple, and Facebook.
That's because Microsoft has basically been a monopoly for so long they lost whatever entrepreneurial spirit they once had. For two decades now Microsoft has been about protecting Windows and Office which to this day remain their big money makers. It's really hard to blow everything up when you are making billions in profit every year. Balmer is a classic example of the and the company seems to be a case study in the [wikipedia.org]innovator's dilemma [wikipedia.org].
Worse the company has to fight against the law of big numbers as well. There simply aren't that many projects available to you that are going to move the needle for a company like Microsoft. Microsoft brought in around $77 billion in sales last year with a profit of $21 billion. That means for them to grow just 5% a year they will have to essentially build a company that sells nearly $4 billion each year and next year the hurdle is even higher. To do that while maintaining a 27% net profit margin is absurdly difficult.
They have the bankroll to survive but it is not at all clear how they will find another opportunity remotely as profitable as Windows/Office. It's also not clear if Windows/Office has a long term future. Short term, nothing is going to hurt them but long term things are quite unclear. There are some serious competitive threats to Windows/Office out there. I think Microsoft management is aware of the problem and I think they are equally mystified about what to do about it. The fact that they offered over $30 billion for Yahoo speaks volumes about how empty of ideas they have become. (It speaks bigger volumes about how stupid Yahoo management was that they didn't take the deal) Even when they get the direction right (Surface Pro is a sound concept - integrating tablets and PCs) they tend to screw up the execution. They even tend to screw up when they try to buy their way into a market. It's taken them so much money to make Xbox competitive that I doubt they'll ever actually recoup the investment. Microsoft might be able to grow through acquisitions though I'm not sure they have the culture for it. I really don't see most of their acquisitions thriving. Anyone think Microsoft is going to do anything amazing with Skype? Didn't think so.
Frankly I think whoever takes over the reigns next is not going to have an easy time of it. I'm not ready to say Microsoft is doomed but turning that ship around is going to be a herculean task.
Amazon is more than generic cloud computing (Score:5, Interesting)
They have a much richer set of offerings and ecosystem for end-users as well.
Despite years of trying, Amazon has done what Microsoft STILL could not: make solid inroads into the music market dominated by iTunes [geekwire.com]. And every item you purchase on their site (electronic or not) ends up in your cloud player collection, making it a very attractive deal.
And Amazon has the entire e-book market locked-up, an impressive competitively-priced competitor to Netflix (Microsoft has no such offerings), and don't forget the successful Kindle/Kindle Fire tablets to enjoy all that content on!
Even though it's not the standard on Android, I have a feeling more people make use of the Amazon App Store than Microsoft's Windows Phone Store. Microsoft can only wish they had made all these right moves years back, instead of letting everyone gallop ahead of Win Mobile.
Re:The sad thing is that... (Score:3, Interesting)
On the Deprecate lots of API's, MS really needs to do the same thing Apple did with OS X - include a nice VM that handles the NT/XP apps while completely killing compatibility in the core OS.
They've started on this path with the XP Mode in Win7 Pro for corporate use, so why in hell not simply take it to the next level and offer it to everyone with Win9?
Another element they'd better address is not allowing Intel to push anything like the god damn Vista Ready crap. Set the hardware specs to require 4GB or better memory, dual core or better CPU and forget about netbooks. Decent hardware is out there for pretty fucking cheap and if they'd simply stick with some mid/upper range specs, companies would know it'll cost em to upgrade but Acer/Dell/HP and all the other OEM's would be happy as it means increased hardware sales with better margins then the current race to the bottom. This is why OEM's are abandoning MS in droves right now. The OS is not pushing Hardware as much as it did a decade ago. Hell anything with a 2.4Ghz HT P4 is good enough to run Win7 yet that same chip makes one hell of an improvement over the 800 Mhz P3 requirement for XP.
Re:Vista (Score:4, Interesting)
* This conversation was about PAST tech. Not today.
*Your DVRs don't just have Celerons, they ALSO have support chips and GPUs, which are likely doing almost all of the work.
"You would do better by mandating SSDs for Win 8 than forcing an i5."
True enough as far as it goes. But you'd do FAR better by just mandating Linux instead.
Re:Former MS employee here (Score:4, Interesting)
I suspect that it isn't that they haven't faced the risk of going under, it's that they are too worried about going under and losing what they have and therefore unwilling to do anything that risks their current holdings.
I don't know if anyone has written it, but I suspect there's a great PhD thesis to be written studying the relationship between employee stock ownership, stock options and company innovation and risk taking.
I would wager that as more of the leadership has stock and options in otherwise successful companies, the more risk averse they are and the more willing they are to resist innovation because it threatens what they have (or may soon get).
For unsuccessful companies or those not successful it probably has the reverse motivation -- the stock isn't worth anything until they are successful, so the risk is not innovating.
Comment removed (Score:5, Interesting)