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.
Re:Terrible article (Score:5, Interesting)
Lost decade? (Score:5, Interesting)
So doubling your revenues and net income is now considered a "lost decade"?
What the hell is "Microsoft's lost decade"? (Score:3, Interesting)
Among others a reply from Frank Shaw (MSFT):
http://www.neowin.net/news/what-the-hell-is-microsofts-lost-decade [neowin.net]
Re:Terrible article (Score:5, Interesting)
Windows and office are just the extensions of successes that date back to the 90s and before.
Sharepoint? Not much to write home about.
XBox is more interesting but still mainly something that leverages Microsoft's platform dominance with MS-DOS and derivatives.
So all in all you've basically got what boils down to MS-DOS and friends. Microsoft can only coast on that so long.
Re:Terrible article (Score:3, Interesting)
It's not a hit piece. It's just that Microsoft is not 'leader of the pack' anymore.
Microsoft is the new IBM.
And IBM is still profitable isn't it?
Btw, were are those 'outrageous' claims made in the article? It states that Microsoft is still making a reasonable profit, doesn't it?
Re:No MBAs (Score:5, Interesting)
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:New markets (Score:1, Interesting)
Fair point, but then again they came from nowhere and became the number one console manufacturer, and even more incredibly are now cooler than Sony and Nintendo in that area. .NET has been pretty big too, but isn't consumer oriented so doesn't get press. They even managed to make Internet Explorer quite usable and secure!
I'm not a big fan but MS hasn't lost a decade. They got blindsided by phones and tablets, sure, but that battle is far from over.
Re:Terrible article (Score:5, Interesting)
What idiot modded this troll? It was right on point.
Windows and Office are cash cows, yes, but other than Ballmer's incompetence they're the biggest part of the problem-- everyone at Microsoft is afraid of doing something that might threaten Windows or Office. That's why Microsoft spent years trying to stuff bloated desktop Windows into tablets and phones-- and why they were made to like complete asses by Apple.
And XBox? Pfft. They bought their way into the video game market, plain and simple. IIRC they haven't yet reached the break-even point because of the billions they pissed away at the start. XBox is the last time you'll ever see them be able to pull that move, too. No more showing up late with a mediocre product and coming out on top only because they can outspend their competitors.
And Sharepoint is just another product designed to increase corporate IT inertia and maintain Windows' dominance on enterprise desktops.
~Philly
And do not forget... (Score:4, Interesting)
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.
Very true, since Apple's success is much greater (Score:4, Interesting)
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:Terrible article (Score:2, Interesting)
You have to weigh how the main MS cash cows are pulling in the $$$.
The Windows/server division is 80% wholesale margin. Office/automation is 80% margin. A product that is "only" in the black is an abject waste of resources unless it is going to position the company for another 10 years. Xbox is probably a Win! because they gained a good position. But the company can't SURVIVE on Xbox division profits with the way they are burning cash.
In comparison, Apple priced iPhone, and iPad from DAY ONE at price points where they would make their investments back if the product had even mild success. Apple doesn't enter a market unless they can figure out how they will get their money back.
Microsoft is still banging the drum of everything for free, until they can figure out where the money is at and corner those companies into big up front payments.
The whole problem is that Wall Street really doesn't reward companies that cash out that 80% margin to INVESTORS. Investors would rather see the company attempt to corner another market than take the cash in hand. That leads to Microsoft's managemt chasing every shiny car down the street, badly.
Re:The problem is Ballmer (Score:3, Interesting)
Oh - Microsoft will be around for a long time. It won't go "boom" instantly.
But I have the feeling Microsoft is at the place IBM was when Microsoft started growing. By no means IBM was out of business then, and it is still a healthy company today. What DID diminished was their relevance at the forefront of consumer OS technology (notice I left out the market for main servers - IBM is still doing good in that field).
And that's exactly what is happening with Microsoft today. In fact Microsoft is a big Moloch that is using its powers to push its OS on every hardware sale and thus cripple competition - just like IBM did some decades ago. IBM did grow big and lost the place at the forefront by pure inertia. The same thing is happening now at Microsoft.
I think Windows 8 is a clear sign Microsoft is losing touch. It is still too early to say it is the "turning point", because it is still possible to "save" Windows 8 in the same way they "saved" Vista. They can tweak Windows 8 and remove some offending parts and everybody is happy and dancing again the Redmond "cha-cha-cha". But it is also possible Windows 8 is indeed the named "turning point", and Microsoft is going to loose relevance, just like IBM did decades ago.
Only time will tell...
Comment removed (Score:4, Interesting)