A new CEO was hired to replace an outgoing CEO. The outgoing CEO met with the incoming CEO for an exit interview. During the discussion, the departing CEO stated he had placed 3 very important letters in his drawer just as his predecessor had done for him. He explained that the new CEO would find opening the letters in order most useful when a serious event took place. He also stated the letters left for him had really helped him over his tenure.
Several months passed before a major event came up. The new CEO now remembered the letters and noticed they were numbered 1, 2, and 3. The former CEO had instructed they be opened in order for maximal benefit. The new CEO opened letter #1 and the paper inside had the words “blame it on your predecessor.” The new CEO did as the letter stated and amazingly he was able to avert serious problems and keep his job.
Several months passed before the next serious event took place. This one was growing in magnitude and things were starting to get ugly at the company. There were even calls for the CEO to step down. In desperation, the CEO opened the drawer and pulled out letter #2. With great fear he, opened it carefully to read the word “reorganize.” He followed the instructions and just as before he was saved. The whole company quieted down and went back to business as usual.
After about a year, a third serious event took place and it was much worse than the rest. The CEO knew how to get out of the mess because he had a third letter left to open. With a smile he reached for the letter #3 and opened it to read “write 3 letters.”
I actually did this when I was leaving as the only division systems admin, half-jokingly since my replacement was a friend. Except in the case where I read it was "Blame your predecessor", "Blame the old technology", "Write 3 Letters."
I almost choked when I read Microsoft's new mission statement: "our strategy will focus on creating a family of devices and services for individuals and businesses that empower people around the globe at home, at work and on the go, for the activities they value most."
In other words, Ballmer wants the company to "focus" on being everything to everyone!
Not a good sign for the business.
--
PS. Compare Ballmer's long, complicated memo to Google's mission statement: "to organize the world’s information and make it universally accessible and useful." (Source: http://www.google.com/about/company/ )
Huh? A strategy is not the same thing as a mission statement. Microsoft's mission statement is "to help people and businesses throughout the world realize their full potential."
Google's statement, "to organize the world’s information and make it universally accessible and useful," doesn't describe any of their plans to achieve that goal either.
The stack of OS upgrades? Or the stack of critical software updates? Or the stack of windows on the unmanageable, broken-metaphor 'powered' desktop? Or the stack of useless Microsoft 'powered' devices now in landfill? So many stacks. So little time.
Microsoft has always had big ambitions. Its original mission statement, first articulated all the way back in the late '70s, was "a computer in every desk and in every home, running Microsoft software." (http://www.achievement.org/autodoc/page/gat0int-1) Which was pretty audacious when the state of the art in personal computing was machines like the MITS Altair (http://en.wikipedia.org/wiki/Altair_8800).
Bill Gates:
It's very hard to recall how crazy and wild that was, you know, "on every desk and in every home." At the time, you have people who are very smart saying, "Why would somebody need a computer?"
Not saying this new statement is audacious (it feels kind of anodyne to me), just that "hidebound behemoth" isn't the only gene in their DNA.
The original statement was pretty clear and short. This new one takes a lot of words and it's not at all clear to me what they are aiming for. What, exactly, does "empower" look like when it's implemented? Exactly which are the activities that people value the most? (Actually, has anyone thought about whether those activities even require a computer?)
This isn't ambitious, it's meaningless. Not a good sign for corporate excellence.
Presumably this email was meant to help change behavior within Microsoft. To give people a guide for how to do their job better. If I were a Microsoft employee I wouldn't know what to make of that quote. It doesn't speak to anything you would deal with directly in the day to day.
We will allocate resources and build devices and services that provide compelling, integrated experiences across the many screens in our lives, with maximum return to shareholders.
One could play some serious buzzword bingo with the line, and it's not the most elegantly written statement I've ever seen. Still, I take it to mean "we're trying to integrate our devices and our experiences."
In other words, Ballmer realizes MS is a heavily siloed company, and that developing in silos is proving counterproductive to any serious attempt at cross-screen UX and platform integration.
How much of that is true, and how much of that is the spin being given to a cost-cutting reorg, is up for debate.
To elaborate further, the point of this memo isn't to alert the shareholders of Microsoft's organizational changes, it's about easing this transition with a motivational message about innovation and what not.
Even if the corporation's main aim is to benefit its shareholders, that unnecessary line is going to come across as alienating to employees, who probably care very little about how these changes will affect wealthy shareholders.
Ah yes, I see now. I definitely agree with you then. That line will most likely not sit well with employees that don't give a damn about the shareholders and would rather just create amazing products.
I wouldn't say stupid things like this. I work in Windows Phone and I have a lot of faith in our product (and judging by reactions to the 1020 and our customer sat ratings, it looks like I'm not alone). The Xbox One is exciting, and Windows 8+ has definitely opened a new chapter for the company.
If you have something stupid to say, keep it to yourself.
After the NSA revelations, the absolute last thing I plan to do is install a high-resolution, always online camera from Microsoft (or any major US corporation for that matter) in my living room.
No doubt. I am, however, interested in using depth-sensing technology for less nefarious, non-cloud-based means (see my profile). I like the technology, but I strongly dislike what Microsoft might do and is doing with it.
I dunno, I work in the cloud space, largely with fortune 500 companies, and I don't know of any off the top of my head that are investing in Azure.
That doesn't mean the article isn't technically accurate, of course, but I'd suspect that MSFT is being very generous with their definition of "using" and counting any pilot project in some engineering team as "using" - in which case I'm sure that most of the fortune 500 have someone somewhere playing with Azure.
But that's not the same as using from the standpoint that we typically think about it.
It's a very odd phrase to stick at the end there. To make sense of it I think you have to link the end to the start:
We will allocate resources ... with maximum return to shareholders
You have to imagine the meeting where they discussed this and someone thought that this sentence was going to sound to investors like a giant money pit. So in true committee style, they voted for a camel and stuck this odd phrase on the end to satisfy that person.
I think the important thing is what's missing: "software".
Apparently, Microsoft, the world's biggest software company, is no longer interested in software.
I wouldn't call this a great idea, considering "core competencies" and how well their products in the "devices and services" divisions are faring, but it is, at least, forward-looking.
Microsoft has always wanted to become its competitors. The reference to devices sounds to me like they would rather be Apple or Sony. Services probably signifies their wish to be Amazon or some other company that makes its entire living on the internet. Just because there is no real competition in the PC OS and productivity software markets doesn't mean there's nothing there worth hanging on to. They don't sound very interested in the industry they created and still dominate. Whoever they would rather be, there's a good chance their fate is tied up with software, for better or worse, so it benefits them nothing to prematurely write it off for dead. Expending so much energy in coveting what Apple and Google have leads to missteps like Metro.
I think there's a universal shift from 'software' to 'services.'
Microsoft doesn't want to sell you Word: they want to sell you the best method of composition. Microsoft doesn't want to sell you Powerpoint: they want to sell you the ability to make the best presentations. And so on.
I don't think they care about that. The reason they're shifting is that they don't want to sell you Word once, then fail to persuade you to upgrade to the next version; they want to sell it over and over which brings a more stable and guaranteed revenue stream.
Interesting. More specifically, the company built on shrinkwrap and preloads is facing a world where neither is generally accepted.
This leaves business and government markets, as well as gaming, and possibly services / online platforms with advertising-based revenue.
Meantime, Microsoft still have to support their legacy. Even some of the EOL products, which, despite best efforts, still live in places which have the power to command fixes.
That is a fantastic example of "Bad Strategy". It's fluffy, it doesn't mean anything, there's no tangible policy that can be derived from the grand statement, and it doesn't say "no" to anything.
For more discussion of that, and ways to do strategy better, I highly recommend "Good Strategy, Bad Strategy".
Is it weird that Google's mission statement doesn't describe their primary revenue stream? I suppose they could say that they're making information universally accessible and useful to individuals as well as advertisers. But I don't know, their mission statement makes them sound like the best library ever. Not an advertising company.
It's becoming an bigger and bigger stretch to wrap that mission statement around what Google does. Reader was a great tool for organizing information--they killed it. Cell phone hardware has very little to do with organizing information, but they spent $12 billion on Motorola.
I dont see an issue with investing in mobile. The cell phone is (mostly) a new distribution channel; a means of reaching consumers. It was critical that Google have unfettered access to its users, although these days mobile is increasingly a producer of information to be collected and organized.
Apparently, they see advertising as a means to an end. At least, that is what one can deduce from comparing their mission statement with their activities.
Google Search, Google Scholar, Google Books and Google Maps are what they want to do to collect the information, and they think they need mobile phones and self-driving cars to make it universally accessible (that, or that is on the fringe. A mission statement has to ride between being too vague and only barely describing parts of the business)
focus on creating a family of devices and services
It is interesting in that the focus has moved away from software of any kind to devices and services. It is a bold move towards a post OS, Office, post COTS software Microsoft. But you are right it is about as generic as it gets, change two or three words and it could equally be describing a car company.
Not that MS hasn't always been about that, but it's clear they're doubling down on it.
They might as well play by the same rules as their competitors.
It's unfortunate for consumers, and I hope that in the long run market forces and/or regulation will open things up again. However, for the immediate future, if your major competitors are running closed worlds and you're the only guys running an open one, there's only one direction that customers can move in.
Another way of interpreting this would be "Microsoft wants to get out of your way, it wants to be a (ubiquitous) platform so you can focus on what you're actually trying to do rather than on your OS or your device." Doesn't sound that awful to me.
TBH I don't perceive UAC popups as "something intrusive", they could be better, but they do their work fine: to stop non-tech savvy users from screwing up the PC.
I think its a general enough statement you can say whatever you want about it and it would make some sense.
That said, it's seriously lacking intent. Being everything to all people, all wrapped up in a single 'strategy' isn't necessarily going to solve the problems related to designing and building great software.
A better strategy for Microsoft today would be to become to tech what Disney is to family entertainment.
For their mission statement to be: "We want to be a significant part of everyone's technology experience".
Now that would be audacious... to re-gain some of what they've lost to Apple and Android, to be there within entertainment, automotive, health and government.
They already are in a lot of those places, but this statement would be a strong signal that they are going to fight every front.
> "our strategy will focus on creating ... bla bla bla.
I parse this as follows: PC sales are declining and selling Windows & Office licenses is not going to make it; now the option is either to focus on
- Windows Server and cloud services
OR
- copying Apple; go for closed gadgets/tracking devices with a processor
Copying Apple is a bad choice, very crowded space here / everybody wants to make an IPhone.
In the end this means bad news for Windows Server, however who cares ...
(On the other hand modern laptops nowadays look like tables, they have a touchscreen and detachable keyboards; there is some convergence here, so it is all very confusing)
PC sales are declining and selling Windows & Office licenses is not going to make it
This is the part I don't understand about the new spin from MS. Sales cycles are obviously extending, but how many offices in the universe don't run on PCs? Surely Microsoft are still making a lot of money selling business software, and in several fields their software remains dominant. There is plenty they could do to improve that business software and/or to adapt it to different ways of working, driving more sales based on genuine added value, but they don't seem to have much interest in doing so. That seems bizarre to me.
It's not sufficient that the market still exists, but it is no longer growing much and is beginning to show signs of shrinkage. Ya, you can still make money there, but less and less overtime. Good to get on top of these things and find other cash pandas.
Finding new/growing markets is all very sensible, but prioritising doing so at the expense of an existing and much larger market seems an odd choice unless you're really sure you're onto a winner.
If your old market is tanking, you don't have much choice. PCs still provide income for Microsoft, but there are few or no opportunities for investment oriented around growth, and Microsoft ultimately wants to be seen as a still growing company and not as HP. So given that MS makes money on PCs, but can't grow this or invest in any interesting way, it makes total sense that their attention would drift elsewhere to markets where they can grow profit.
We aren't very far apart here. The PC market exists, MS will still make money on it, but the future is somewhere else and we need to be there, especially since we can leverage and invest the money we still make from the PC market today.
The problem with Ballmer has always been that the man has literally no vision. I saw him speak once and have questions afterwards. He was actually a very good speaker but when the questions came the whole thing fell apart. Someone asked him to tell us his future direction for MS and his answer was some vague sci-fi nonsense.
Who does a talk, allows questions and doesn't realize this question will be asked? Or maybe he did and thought what he described was some kind of vision. The difference is, if you had asked Steve Jobs what his vision was he would have told you things that you would realize he could achieve and probably have some idea of the steps. What Ballmer said was completely generic and there was no reason to imagine MS needed to be involved in any of it. Worse, there wasn't really a compelling argument to even have what he was talking about (some kind of shitty voice recognition software that sends anything I say to the person I referred to by first name. And this I should trust to the inventors of the blue screen? Right).
That's such an overused word in marketing language. Everybody wants to "empower users", "empower people", "empower customers", "empower clients". What does that even mean anymore? Are we the downtrodden and unwashed without their "family of devices"? Marketing language in itself is something that really grates my nerves, but "empower" is the worst.
If their new tack is as sharp and focused as that memo, Microsoft is in trouble.
"We will be all things to all people by getting rid of anything that is not a huge profit center. Those profit centers will be organized in appropriate silos. Those silos will assign people to product committees for collaboration with other silos on individual products. Each committee will have a leader (Champion) who reports to the layer just below me. This new, tighter, organization will make us leaner and more nimble."
Sounds -- as good as it could for a large organization I guess but there is a lot of contradiction. Greater reach through consolidation? Nimble action through layers of management? We are all One except for these few special cases? Build on our character as Microsoft but emulate Apple? One Strategy through rigidly defined feifdoms with their own Champions battling for influence?
I also love their list of 'high-value activities' "high-value activities — serious fun, meetings, tasks, research, information assurance and IT/Dev workloads" Does anyone know what they mean by this?
And all of this couched in such thick Business-Speak that 10 different people will come away with 10 different messages.
Mr. Ballmer. For the love of all of the brilliant people you employ, step down. It's time.
I honestly think he doesn't realize that he's the problem and people around him won't tell him the truth. Ballmer is a very intimidating guy both in physical size and attitude and is always ready to be combative. This make it very difficult to have a open dialog with him.
Him remaining still as the CEO is not his fault its the boards fault they should have made moves to genteelly replace him a long time ago.
>"Ballmer is a very intimidating guy both in physical size and attitude and is always ready to be combative."
As larger than average person I'm fascinated/frustrated by the way physical presence affects people.
Most troublesome for me have been people who apparently feel intimidated and project it back as something intentional, as I'm trying to intimidate them or have intimidated others into agreement with me.
I don't know if intimidated is the right word, but I'm pretty average height - 5'11'', and I've personally observed over time that I feel much more insecure around bigger people. I'm not sure how common it is but it's something I've become consciously aware of and try to correct myself on. But even being aware of it, it's really hard to ignore. For example, I find I gain a lot of self-confidence when I sit at a conference table talking to someone, putting us on "equal" footing. But if standing where I'm looking up at someone I suddenly feel like a small boy talking out of place to a grown-up. It's silly but it's an overwhelmingly noticeable sensation that drives me crazy.
I suspect it could have evolved out of having a physically intimidating older brother growing up (I grew out of a lot of insecurities when I became taller than he was, but maybe not all).
>Most troublesome for me have been people who apparently feel intimidated and project it back as something intentional, as I'm trying to intimidate them
I am 6'7" tall and weigh 220 pounds. I've also been in IT for about 20 years in a corporate setting. Are you bigger than I am? I ask because I have never had anyone say that I intimidated them nor have I heard of anyone telling me that someone else is intimidated by me. I'm curious as to whether people are intimidated and just aren't telling me.
I'm your height, 60+ pounds heavier and no stranger to the gym. I've been in IT for going on 16 years.
I've had many people admit they were initially intimidated after we've gotten to know each other - women a bit more than men. I've had several problems arise from superficial assumptions/accusations by people who'd never fully interacted with me.
About your situation, there are a couple things I think can help/hurt:
* Build. I can remember being 220. I'm definitely perceived differently now, more "big" than "tall" or "slim" previously.
* I'm pretty quiet. I get the impression that people assume negatives before positives when they can't read a person.
* Jobs. I've done a lot of work in the public sector where things always seem to be contentious. In a place with less infighting and political maneuvering I'd hope for less assumption and undermining as well.
I'm not as tall as you, just 6'2" but I take the precaution of sitting when talking seriously to people (mostly students, I'm a teacher, I just carry a chair round the classroom). The result is less challenging behaviour from students (UK)
This is a good point, and it goes the opposite way too.
I'm a smaller than average guy (5 foot 4) and people that don't know me are often started when I'm vocal and assertive in meetings. I'm a working professional with opinions just like anyone else, and just because I'm short doesn't mean I don't want them heard.
Ballmer is very good in one thing and it is: remove the main rivals from inside microsoft. He was doing this since years to try to put himself in a secure position with no alternatives for the Board of Directors.
I think he will never step down. The only solution would be a strong pressure from all the main actionists of microsoft, but it seems they are all sleeping.
This is the change : "This means we will organize the company by function: Engineering (including supply chain and datacenters), Marketing, Business Development and Evangelism, Advanced Strategy and Research, Finance, HR, Legal, and COO (including field, support, commercial operations and IT). Each discipline will help drive our overall strategy. Each discipline will also be charged with improving our core capabilities in its area. We must improve in all aspects of the business."
So in the past each part of Microsoft seemed to operate both as a independent business (and sometimes competitor with other parts of Microsoft) and part of the whole. This re-aligns the company as a systems company focused on delivering a specific solution.
A number of interesting thoughts ran through my head here. Perhaps the most profound was that Microsoft has basically said "Oh by the way, the PC is dead." and by that tacit admission they fulfill the prophecy of this being the 'post PC' era. Microsoft's reorganization is more about serving customers through a fusion of device + OS + product and less about serving customers as the supplier of "OS" or "Backend business management" or "gaming platform". That makes them a lot more like Apple and really puts Dell and HP in a sticky place. One wonders what the world would look like if Apple embraced people making cloned hardware.
So if I read the tea leaves correctly, Ballmer is attempting to capture Google's Android strategy for Windows with the inclusion of the desktop/laptop component where the monetization comes not from the OS but from the environment.
I don't know if Microsoft can pull it off but it reads like they want to be what Google and Apple would be if they merged.
I give it top marks for aggressiveness, and it seems they are ready to step out of the shackles the monopolist next door, painting Google with that particular scarlet letter in the US and elsewhere.
If I were Michael Dell, my first step after taking the company private would be buying Canonical and installing Shuttleworth as EVP of OS.
> Perhaps the most profound was that Microsoft has basically said "Oh by the way, the PC is dead." and by that tacit admission they fulfill the prophecy of this being the 'post PC' era
All this talk about the "Post PC" era is misguided, with people leaving out the elephant in the room.
It's not PCs that are dead - PCs are fine, you can find one in most homes and most people interact with PCs daily. This isn't going to change for a long time.
Something else is dying - the traditional licensing model for software. Software is becoming a cheap commodity, due to open-source, due to the freemium model on the web, due to piracy, due to the $0.99 or ads-enabled apps that are so popular lately.
By contrast, there's been a lot of innovation in hardware / devices. Skipping over the obvious innovations, like smart-phones with touch-screens, for example Samsung's Chromebook is amazing - a good looking ultra-portable with good battery, that does 90% of what people need and that's so cheap that you can replace it should you break or lose it.
Let's think about what the Chromebook is, because it's fascinating - all the apps you run on it are web apps. The just released Firefox OS does the same thing and I'm sure it's going to be a success. Apple themselves, before releasing their iPhone SDK, were telling devs to build web apps.
So where is Microsoft in this picture? Nowhere. Their empire is built on Windows and Office and without these in the picture they are fucked. And they can't rely on the current PC market for upgrades, because PCs are more than good enough, so people don't feel the need for upgrades, unless they buy based on sex-appeal. Many companies are still on Windows XP and Office 2003.
This isn't a "Post PC" era. This is the "Web Era". Furthermore, all the mobile app stores are just passing fads.
Software is becoming a cheap commodity, due to open-source, due to the freemium model on the web, due to piracy, due to the $0.99 or ads-enabled apps that are so popular lately.
Cheap software is becoming a cheap commodity.
It's relatively easy for any competent software developer to write a diary app with a pretty UI skin, or a basic text editor and formatting engine to drive a lightweight word processor, or a simple puzzle game. I could write a relatively good application in any of those categories in a weekend, and no doubt so could thousands of other people on HN today.
And importantly, that's just fine. There are very many people who will get some value from a fun puzzle game or a simple personal organiser, and who will pay a small amount in return, and so there are many software developers who make a decent income writing just that kind of software.
But what about the next level up? When I had to write a serious document for an organisation that normally used an on-line "office suite", I gave up and switched to more traditional software. It turns out that things like footnotes and cross-references and tables of contents and careful page layout matter if you're producing something that many people are going to spend a lot of time using, and at the time Google Docs could do exactly none of those things while Word could do them all easily. At the rate they were paying me, with the time saved by using the more powerful software, the cost of that software was probably recovered in days, if not hours.
The reality of modern web and mobile software is that a lot of it is cheap, and it should be cheap, because it adds only a little value and it isn't very hard to create it. The trouble is that some software does add a lot more value and is hard to create and shoudn't be cheap, but companies like Microsoft have inadequately defended their ground and so even software that could save a customer $1,000 a week gets comments like "$10? No way!" on app stores.
This isn't a "Post PC" era. This is the "Web Era".
Not until Google Docs does footnotes and cross-references and tables of contents and careful page layout, it isn't. Some people just got the wrong memo.
> Not until Google Docs does footnotes and cross-references and tables of contents and careful page layout, it isn't.
LibreOffice does footnotes and cross-references just fine and LibreOffice is 0 USD. Here's the thing - MS Office is innovative and still the best at what it does. But it's old and like anything old, it becomes a commodity.
Adobe Photoshop is also innovative and still the best at what it does (by far). The problem that Adobe has though is that many Photoshop licensees are not professionals and can be served just as well by cheaper or even free software. Companies like Adobe also benefited a lot from piracy, as a lot of people ended up using Photoshop, even though not that many people can afford it.
Also, what you're seeing here unfolding with web apps is only the begging. In relative terms, the concept of a web app is still young. Even in early 2000, people had no idea that they can have apps running in their browser and broadband / 3G / 4G is still not a reality in many parts of this world. The combination of cheap and easily accessible on any platform, without any lock-in whatsoever, is extremely powerful. Couple this with devices that are designed to be portable and always connected and you've got a killer that will cannibalize everything else.
> The reality of modern web and mobile software is that a lot of it is cheap, and it should be cheap, because it adds only a little value and it isn't very hard to create it
Things like Google Docs / Google Calendar / Google Maps / Twitter / Wikipedia give me a hell of a lot more value than anything a desktop app could. Are you saying that you could build these in a weekend?
LibreOffice does footnotes and cross-references just fine
Sure, and it's a set of desktop applications that run locally on your own computer.
Did you realise you're supporting my position here?
The combination of cheap and easily accessible on any platform, without any lock-in whatsoever, is extremely powerful. Couple this with devices that are designed to be portable and always connected and you've got a killer that will cannibalize everything else.
We've seen thick client vs. thin client before, and no doubt we'll see it again. Today, however, we're still a long way from the utopia you describe.
Things like Google Docs / Google Calendar / Google Maps / Twitter / Wikipedia give me a hell of a lot more value than anything a desktop app could. Are you saying that you could build these in a weekend?
Well, you're obviously picking contrived examples, because most web applications aren't in that class. And of course no individual could literally build a replacement for those services in a weekend. However, it is interesting to consider some factors that would stop them:
1. Hardware resources and network bandwidth to serve so many users at once
2. Large volume of data behind the UI
3. Many import/export options, in some cases
Notice that of those, only the third has anything to do with how hard it is to write the software itself, and even then it's not core functionality. Providing compatibility with existing data formats is often extremely expensive in terms of developer effort, which is part of the reason that competing with the likes of Microsoft Office and Adobe Creative Suite is such a high barrier and why incumbents tend to change their file formats every five minutes.
On the other hand, if you were asking whether I could create a Twitter clone to share with friends at first and grow as friends-of-friends joined in, then sure, about a million people here really could write that in a weekend. The core functionality for most of the other services you mentioned could be implemented by a small team in times ranging from a few days to a few weeks, too.
The most interesting thing about this, IMHO, is that it means the core functionality for software with a completely different approach to solving the same problems might also be implemented fairly quickly, and isn't the factor limiting competition and the advancement of the technology. We're being held back by lots of other factors, but most of them are driven by commercial or marketing considerations, not the technology itself.
That's all true, but you also have to recognize the fact that the market for people like you is essentially saturated. To use a different example, this is why Adobe has abandoned selling boxed copies of Photoshop, and is moving to it's "Creative Cloud" rental scheme. That is the real benefit of web applications. It's not that they're easier for the user. That's a side benefit. The real benefit comes from the fact that you can turn what used to be a one-time purchase into an ongoing revenue stream. That's what Microsoft, Adobe, and all the other purveyors of boxed software are aiming towards.
Looking at it that way, PC vs. web is just a proxy for buy vs. rent. And, like it or not, the "buy" option is slowly being driven from the market.
That's all true, but you also have to recognize the fact that the market for people like you is essentially saturated.
I don't accept that premise, and moving to Creative Cloud in Adobe's case is a great example of why not.
As it happens, I use Creative Suite for work myself. My company paid a lot of money to buy it. There are plenty of things Adobe could have done that would have made it more valuable to us, and we would gladly have dropped the same money again to buy an upgrade that did a few of those things. But in several years, they haven't managed to do any of them, and so we haven't bought any of the most recent pre-CC versions.
The fact that Adobe's Creative Suite revenue stream dried up in our case has nothing to do with buy vs. rent, it has to do with not adding anything of value to us in several years of development and therefore not being worth buying again. For exactly the same reason, plus the fact that we would never allow our data to effectively be held hostage, we aren't subscribing to Creative Cloud, so Adobe will probably never get any more money from us for that product line.
PC vs. web is only a proxy for buy vs. rent if the purchase really was a one-off. For almost every piece of commercial software I use, that wouldn't necessarily be the case, and in fact the developers could easily add enough value that I'd pay them more money for an upgrade. The fact that they are pushing for the subscription model instead, even while doing funny maths that assumes I would have upgraded regularly to try and justify the cost, just demonstrates to me that they aren't actually confident that they know how to add that value and keep me paying them.
And, like it or not, the "buy" option is slowly being driven from the market.
I don't really accept that premise, either. Companies like Microsoft and Adobe have held near-unassailable leads in large and lucrative software markets for years. Of course they can abuse that position for a while to price gouge those who, rightly or wrongly, feel that they absolutely must have the latest versions of things to be able to work properly. It's even worthwhile for the software companies to offer the first hit for free, but in the end, what they're doing still isn't in the best interests of their customers. Sooner or later the market is going to figure that out, and sooner or later someone with a smarter plan is going to start providing a real alternative.
This is a great build-up to making the point that the server farm is where a lot of the expense of software and its support will go. So, you'd want to be a company that could build and support server software and do great integration with every client.
>> "...they want to be what Google and Apple would be if they merged"
I don't see much upside to becoming another Apple. I always thought of Apple's strategy as being dictated by MS, since the volume and business ends of the market were off-limits, Apple had to take what was left, making a niche for itself at the high end. Apple is doing well now, but their situation doesn't seem any less precarious than MS, and there certainly can't be room for both companies in Apple's market. Google's market, too, doesn't seem to have enough room for a MS.
If I was MS, my priority would be protecting the health of my cash cows. The PC is not literally dead. Just because a van is not a sports car doesn't mean companies that make vans are going out of business.
This reorganization seems to be a response to criticism of Windows 8 and Ballmer's leadership, and this seems to be Ballmer's way of saying he doesn't intend on going anywhere. At least, not without a lot of bureaucratic box-reshuffling.
That makes them a lot more like Apple and really puts Dell and HP in a sticky place. One wonders what the world would look like if Apple embraced people making cloned hardware.
I'm not sure, but it could lead to some very interesting manoeuvres if the big PC vendors decided relying on Windows was no longer safe and building one or more freely available alternatives was in their interests.
People joke a lot about the limitations of desktop Linux and talk about how OSS business applications lag their major commercial/closed competitors, but these hardware giants could find a natural and shared interest in collaborating with the community and each other to fix those deficiencies.
At that point, you have some hardware heavyweights with the resources to make business gear -- whether traditional PCs or newer devices -- on a large scale and with the credibility to take on the likes of Apple and Samsung, now also collaborating on a new generation of business software built from the ground up and with all of their interests aligned in making it as good as possible and with little interest in charging a high or any price for it. In short, it could give a new lease of life to the struggling PC big hitters, and would be a very credible threat to the likes of Microsoft, Apple and Samsung. Now throw in the big processor manufacturers, some of whose fortunes are also troubled by the loss of PCs but who also have the potential to make huge deals for new hardware ranges, and you've really got a party.
This has the "it would never happen" feel about it as I write it, but even thinking about it for a while, it does make a lot of sense from a commercial point of view, and HP under Whitman has already started shifting its strategy in a way that might support this kind of move.
I think this is true but "working with the community" from the giant's perspective is often different than the community's perspective. I see Oracle as an extreme example, but prior to them Sun's lip service on Java early on really didn't help the community trying to improve Java but it did keep it moving along a path.
I think this is true but "working with the community" from the giant's perspective is often different than the community's perspective.
Perhaps, but it would be a more natural alignment in the case of hardware companies that wanted the best possible software available to drive adoption of their platforms than in any previous case I can think of. Sun's business model for several of their technologies, including Java, was never entirely clear to me. On the other hand, a consortium of big hardware vendors spending a hundred million dollars to develop the best desktop software in history and then just giving it away to anyone who wants it for free has a pretty obvious business benefit if the result is changing market trends and protecting their multi-billion-dollar revenue streams.
>So in the past each part of Microsoft seemed to operate both as a independent business (and sometimes competitor with other parts of Microsoft) and part of the whole. This re-aligns the company as a systems company focused on delivering a specific solution.
that is a MBA speak. The reality is that horizontal partitioning is periodically replaced with vertical, and vice versa ... that is MBA action.
If you want to understand Microsoft, you could do a lot worse than reading http://hal2020.com/, by a former General Manager at Microsoft. I learn something from pretty much every blog post he writes.
For instance, in his most recent post he discusses how the lack of coordination between the divisions after the 2005 reorg can be viewed as a feature rather than a bug, but also something that now needs to be changed.
Is there a reason CEOs cannot use normal English but have to dilute the language so much?
For me the TL:DR after struggling to read it was - full steam ahead to the biggest walled garden on earth. We are still the Borg. Someone correct me if I am wrong.
I don't understand how anyone in their right minds can consider Windows to be the "biggest walled garden on earth". There is plenty to criticize about Microsoft, but when you descend into completely nonsensical arguments you lose all credibility.
They are moving in that direction since the W8 store was revealed and they are doubling down right now.
All parts of the company will share and contribute to the success of core offerings, like Windows, Windows Phone, Xbox, Surface, Office 365 and our EA offer, Bing, Skype, Dynamics, Azure and our servers. All parts of the company will contribute to activating high-value experiences for our customers.
High value experience is euphemism for gatekeeper from what I have seen.
I agree with you that Microsoft is becoming more closed, and that that is a bad thing. However, when you say "full steam ahead to the biggest walled garden on earth. We are still the Borg" it is so over the top that I can't take your comment seriously. Similarly to how I pretty much write off any comment that uses the terms M$ or "Cupertino idiot tax" unless used ironically.
If people want Microsoft to be "less closed", then they should stop avoiding Microsoft for platforms like Google and Apple, who are whooping Microsoft's ass by being far more closed.
Between the anti-open Google+/Play/Hangouts universe and the anti-open iOS iGarden, I'm surprised that it has taken Microsoft this long to catch up to their anti-open competitors.
Openness has nothing to do with abandonment of microsoft. It has all to do with the fact that they could not deliver good mobile device. And still can't.
They made errors on every step of the game - allowed carrirs to have saying on the devices, abandoned all lessons learned from PCs and building ecosystems and threw an inferior iOS me too (the UI was better though, the ideology the same)
I trialed a Nokia Lumia 920 with WP8 for a month before settling on a Note II, and I must say that I strongly disagree with your analysis of WP8. It seems very biased and it seems to be ignorant -- as in I don't believe you've actually used the platform as a daily driver for any period of time.
No offense, but calling it a "me too" iOS competitor is about as nuanced as calling Android a "me too" iOS competitor -- technically, Android is a "me too" product, just more mature, but it don't serve any useful end to point that out.
I was talking about the totally botched launch of WP7 mostly (and I have used wp7 device). While WP8 may be amazing it was just too late.
Android have the "dominant market share" thing going on about it.
MS had very short window to make a dent in the smartphone war but because of "reasons" never really got together to create a product that could be the smartphone win 3.11/98
My Nokia 900 is a great device, and I really like the OS.
Unfortunately the ecosystem never really picked up. I'm already looking to switch back to Android because I can't use WP with devices like my Pebble, among other things.
WP8 is the best phone OS out there. I absolutely love my Nokia Lumia after owning several iPhones. The mobile device is not the problem, the app store on the device is.
If OP had said criticized Microsoft for moving toward being more closed, I would have completely agreed with him (to the extent that it is relevant to the link, which it isn't really). But he said "full steam ahead to the biggest walled garden on earth. We are still the Borg", and so his comment loses all credibility.
Number of time desktop/workstation is used in the memo - 0, number of times PC - 4 , 3 of them about the past. Number of times devices is used 20+, experience - 10+ - microsoft from today officialy desires to be looked as a device/experience company when dealing with end users.
That is full steam ahead to appleland for me. And it will be closed and walled future. WP8 and W8 demonstrated the MS attitude good enough.
The borg came from the one goal, one vision, one direction etc.
I'm not disagreeing with your general point, I'm just saying that if you cut out the hyperbole and bring your criticism down to a more rational level it would carry a lot more force. "Microsoft is becoming more closed, and that is a bad thing for x,y,z reasons" carries a lot more weight to me than "Microsoft are the worst company in the world, and are literally the Borg".
This is not just directed at you, it seems to be a common thing with criticism of Microsoft - so over the top that rational discussion of what they are doing right and wrong gets thrown out the window.
"full steam ahead to the biggest walled garden on earth."
Ok, English is not my first language, and that "to" seems a bit ambiguous to me... But in context that was pretty clearly a move toward a walled garden, not a move done by a walled garden.
When you add "Windows" there it completely dillutes the argument because Windows on the desktop is far from a walled garden as a proprietary platform can be.
XBOX commands sizable chunk of a very lucrative market. If we have luck the console industry will implode soon because the current model is unsustainable, but at the moment XBOX is not not very big.
Shareholders want reasoning behind such large changes. It's really nothing more than describing where MSoft has been and what its strengths are
We will do this by leveraging our strengths. We have powered devices for many years through Windows PCs and Xbox. We have delivered high-value experiences through Office and other apps. And, we have enabled enterprise value through products like Windows Server and Exchange. The form of delivery shifts to a broader set of devices and services versus packaged software. The frontier of high-value scenarios we enable will march outward, but we have strengths and proven capabilities on which we will draw.
and what it recognizes as it's weaknesses
It is also clear to me and our leadership that we must do an extraordinary job to succeed in this modern world. We have delivered many great products and had much success in market, but we all want more. That means better execution from product conceptualization and innovation right through to marketing and sales. It also means operational excellence in cloud services, datacenter operations, and manufacturing and supply chain that are essential in a devices and services world. To advance our strategy and execute more quickly, more efficiently, and with greater excellence we need to transform how we organize, how we plan and how we work.
It then proposes the solution: the reorg. It gives benefits as to what it sees are possible with such a realignment.
Vagueness is related to the wide-reaching scope of the business, and high-level, long-term goals that they don't want to give metrics for, because they'll be held to them. It's also the description of the vision people see in the future when they think of MSoft (and in turn, how valuable shares will be).
I get that there's a lot of negative feelings towards corporations around the startup scene, but if they just said "Hey guys, we're completely restructuring so our teams can focus more", people (people important to Microsoft, i.e. shareholders) would want to know why the decision was made, how they see it playing out, when it will happen, and what the potential impacts could be in the future.
No, the TL;DR is that they are currently organized into (almost) self-sufficient business units by product category, but now they are going to switch to being organized into interdependent departments by job function category.
This is very interesting to me, and I'd like to know more about what didn't work in the previous structure.
I worked at Apple for a long time, and if I could have changed one thing organizationally it would have been to go _from_ the functional decomposition _to_ the product decomposition.
It could be a bit awkward at Microsoft, the way things were in the before time. You had things like a SaaS suite where one component was run by a service operations team under the Office org, but another component in the same suite being in the Server & Tools org. Oh, and then you'd have MSIT running those same services on their own data center infrastructure, with their own team of service engineers. You'd also have a "dedicated" version of that Saas offering, sold to huge corporations, where it was basically the same thing but on dedicated hardware and run by yet another team.
There was nothing unified about it.
On top of that, you'd have one or two competing products (usually via acquisitions, or one product would be positioned more toward consumers than enterprise), a legacy product, etc all with their own teams. The internal competitors were the enemy.
I agree that, at least for a large company, product/vertical structure is better than functional/horizontal structure, and I think that Microsoft is just too big to be one company at all anymore, and that they should have split off into separate subsidiary companies of a holding company, each with a clear product category and mission, somewhat like GE. Then they can even sell the money-losing ones if the board wishes.
> Is there a reason CEOs cannot use normal English but
> have to dilute the language so much?
Just look at this message board to see how much people will (naively or willfully) twist the meaning of what they read. pg has written about this as well [1] ... How he finds himself being extra careful about what he writes, trying to anticipate the ways that people will misunderstand what he's trying to say.
[1] Can't find the citation right now... Perhaps someone can provide the link in a reply.
It's not surprising coming from the salesman/CEO who thinks that a loud voice and throwing chairs makes sense. While CEO's with real vision innovate, Ballmer thinks rearranging the furniture is the answer.
Azure will not catch AWS because it's not a first class division. It's an offering in a broader context. Contrast with Amazon who has an SVP of AWS (and he's considered one of the "more important" SVPs). Any chance I had of considering Azure just evaporated.
And there's nothing that screams "ownership" like having a VP's reports "dotted-line" report into someone else, and to have that called out in a company-wide email.
Then if you read it, every product MS comes out with will need strong cooperation from 3 SVPs. New Phone? Get the hardware guy, OS guy, and apps guy to coordinate. Recipe for disaster.
There's a division called "Cloud" being headed up by Executive VP Satya Nadella that encompasses Azure and the apps that build on top of it (Office 365, visualstudio.com...)
No, there's a division called "Cloud and Enterprise Engineering Group". This suggest that either it encompasses non-cloud offerings specific to enterprise or the cloud they're building is targeting specifically enterprise.
Either way, they will not be focused on making Azure a product I wouldn't be interested in: 1 of 2 focuses or targeting someone I'm not.
Furthermore, looks like they've split sales/marketing from engineering which will probably help them build more features which are irrelevant to me and put as many PMs between the clients and engineers as possible.
That you're condemning Azure based on the name of the business unit its produced in and the location of sales and marketing people in a company makes me think that even if we'd named it "JOnAgain's Special Cloud!" that it would be unlikely to have been of interest to you.
(Edit: obviously by "we" I mean "my employer Microsoft", not that I had anything to do with any of these decisions.)
I too work in the newly-named "Cloud and Enterprise" group. Previously we were "Server and Tools Division" which also included Active Directory, Azure, and some other stuff as well.
The new name makes a lot more sense to me (and makes for a better acronym too).
I think this is a positive move for Microsoft. In particular, having all OS development work (including desktop, phone and XBox) looks like a good idea, as I've heard there have been a lot of problems with Windows Phone being managed on the periphery.
I'm not sure this is such a great idea. Doesn't the OS for the XBox have entirely different concerns than Windows for Enterprise? You cannot make an OS that works just as well for Billy the 10 year old gamer, and Mega Co. with 400,000 employees.
Apple's recognized this and decided to pretty much abandon enterprise. Linux has fragmented into different distributions (server, desktop, mobile) each with a different focus.
Microsoft, instead, has doubled down. They all even look the same.
You answered your own question the second after you asked it.
Look at Linux first. Note that it happily goes from cell phones to supercomputers. The reason that works is because "Linux" doesn't actually that much. Really, it means the kernel and (usually) the GNU userland. (Though note that Android proves that you can swap out the entire userland and still get something that people will call Linux.) Supercomputers don't have GUIs. Desktops run X or Wayland or Mir or whatever Ubuntu is doing these days, or sometimes just Chrome. Mobiles tend to run Android, although there's also Maemo and others. Meanwhile, a supercomputer would likely have no UI at all. In all cases, when we say these devices all "run Linux", we're really referring to the driver model, the kernel, and (when applicable) the user space.
The same happens with Windows. Windows Phone 8, Windows 8, Windows Server 2012, and the Xbox One all are Windows. They all run the Windows kernel, they all have the Microsoft CLR, and they all have (a lot of) the same APIs--especially at the driver layer. But while Windows 8, Windows Phone, and Xbox all run DirectX and have GUIs, Windows Server prefers to run headless. Windows Phone 8 and Windows both use WinRT, but Windows Phone 8's UI stack is slightly different from Windows 8 proper, mostly to facilitate power consumption and allow for the wildly different form factors. Xbox pretty clearly has a lot of Win 8 UI internally, but games mostly just code against DirectX. But of course these all count as Windows, because they all are Windows. Just sliced and diced in different directions, exactly like Linux does. And unlike Linux, there's actually a lot more in common that can legitimately be shared.
I don't think unifying all the OS here is really a big deal. It's been proven to work just fine with Linux (and actually, I'd argue, with OS X, but we can save that for another time).
The Linux kernel is used in a lot of different devices, this is true, but it's also a lot leaner than the Windows one. Although efforts have been made to pare down what Windows is, it's still got a footprint gigantically bigger than Linux. Where Windows can squeeze on to an ARM system, Linux runs on embedded systems that are even smaller.
The thing that's the most broken about Microsoft's strategy is it's not just the kernel being thrown everywhere, but the user interface. That's the most incoherent part of their strategy. Does the accounting department need to use the same UI as the Xbox? It's so confused.
OS X and iOS are similar, but not the same thing, although not as different as, say, Ubuntu is to Android. It's possible that the Ubuntu phone project might blur this distinction in time, it seems possible.
What I mean mostly is that just because Windows and it's user interface can run on all these different platforms doesn't mean it's an optimal approach. Then again, Microsoft has never shied away from monoculture. They're the Monsanto of software.
The Linux kernel is used in a lot of different devices,
this is true, but it's also a lot leaner than the Windows
one. Although efforts have been made to pare down what
Windows is, it's still got a footprint gigantically bigger
than Linux.
I think Windows Phone 8 shows that this is not meaningfully true anymore. There's more work to be done, but the kernel on those devices are quite minimal, happily running on underpowered ARM devices with minimal RAM, and still leaving plenty of room for apps.
My Windows Phone runs faster than my Android Phone on less hardware, for one example. I also know my car runs on Windows on pretty barebones embedded hardware as well. The two OSes also have slightly dissimilar user interfaces.
Windows is not Windows is not Windows in exactly the same way Linux is not Linux is not Linux.
So, the Windows kernel probably is pound-for-pound as lightweight as the Linux kernel. Whenever people talk about Windows they always drag the UI and such along, whereas with Linux they seem to merrily ignore all the chrome.
Any Windows kernel folks care to confirm/deny this?
I work at MSFT and while not involved with kernel stuff directly I interact with them from time to time. The sentiment among kernel people is they'd put the NT kernel up against Linux in efficiency any day of the week.
The challenge is that it's difficult to get just the NT kernel and minimal support libraries. There was an internal project called http://en.wikipedia.org/wiki/MinWin#cite_ref-zheng2007_10-0 Without watching the entire video, Wikipedia mentions something like a 25MB footprint for a usable NT kernel.
Windows installed OS features are a lot more a' la carte these days. It annoys me that there's not a ntsd.exe or telnet.exe on every box by default, but I suppose it's worth it for the greater goal. There's a lot of focus on Windows Server Core, Hyper-V, and Azure. Cloud is bringing everybody back to thinking about OS footprint again.
I think the Windows-sans-(stuff not everyone needs) approach is only going to become more normal.
I don't work on the kernel, but I'd note that you can very comfortably run Windows Server headless on 512 MB of RAM--just like you can with Linux. (MySQL will experience hellishly Pavlovian pain on either OS with that little RAM, though.)
What's the line you're drawing between an OS and a distribution? I certainly would have said that these various different Linux distributions you reference were different distributions of the same Operating System.
Which is the same thing with OS development at Microsoft. Microsoft builds one Operating System (Windows) and bundles it into different distributions (Xbox, Windows Mobile, Windows Server, etc).
In the old business model, you could have had kernel hackers throughout the company that didn't talk to each other. The Windows team would build an operating system and then other teams would adapt it - for example, Windows Server was part of Server and Tools Business, not the Windows division. It only makes sense to bring everybody under the same roof.
Personally, as a consumer I like using Apple products over MS, and I like using Microsoft products as an enterprise user (I'm a programmer). In my perfect world, the two companies would complement each other. Typically Microsoft has done far better in the enterprise versus consumers (the xbox is the rare exception). Apple is the reverse.
Hmmm, well, this seems to be some marvelous buzzword bingo / word salad. It's looking more and more like MS is well and truly clueless. They don't understand the market. They don't understand their strengths. They definitely don't understand their weaknesses. And Ballmer isn't going to leave until he has a heart attack or maybe two.
Edit: fine, I'll add some useful details. What are Microsoft's actual biggest advantages/disadvantages, how should they embrace the market? Advantages: the PC platform is still enormously powerful, and open, and they've still got huge ins with corporate computing. They could own the market on business oriented tablet form-factor computing but they don't have the vision. Disadvantages: stack ranking is poisonous to morale and retaining talent, the company is too monolithic (they used to be monolithic in multiple silos, now they're becoming monolithic in one giant silo, that's not better), and they still struggle with agility. The market? Android is the MS of the mobile generation, is it really so crazy to imagine that MS becoming the MS in mobile as well could be a route to success for them? And that's just what I could type in about 2 minutes.
the company is too monolithic (they used to be monolithic in multiple silos, now they're becoming monolithic in one giant silo, that's not better)
Exactly, they are too big, and this reorg is going to make that worse, not better. I think they would have been better off actually spinning off their business units into separate companies, each with a clear product category and a clear organizational mission.
One of the things that Surface, Xbox One, and Windows Phone 7/8 has shown is that MS is scared but not hungry. They're still arrogant. Much more so than if they were a bunch of separate companies rather than one huge empire.
My fellow Americans. As a young boy, I dreamed of being a baseball, but tonight I say, we must move forward, not backward, upward not forward, and always twirling, twirling, twirling towards freedom.
It's a word-template for "Reorganizational Memo - Large Software Business".
While I'm here:
"I see you're trying to reorganize your company, would you like help with that." - Clippy
All the critical decisions have already been made: Microsoft branded hardware, running Windows, everywhere. No courier. Bring XBOX solidly into the Windows fold. It's all Windows.
Why reorg? Who would accept the job of telling Ballmer that, when Nokia goes under, the "devices" part of that story is a fable? On top of that, the press release was apparently written by a student of Vogon poetry.
And why on Earth would you want to bring your entertainment console closer to a brand that says "stuff I use at work because my boss says I have to" to everyone who sees it? That's not marketing, it's the antithesis of marketing. Anti-marketing.
> Mark Penn... will lead with Tami the newly centralized advertising and media functions
I'm not sure why people bring up axing the courier as a negative thing. It was always a niche concept idea than a product that could survive in the market.
Seems like a rhetorical question, but it actually has an answer: Game console unit volume, even two generations ago when it was still growing, is less than 5% of mobile handset unit volume.
That said, walking past the Microsoft store at the Pru last night, the only display drawing a crowd was the Kinect darts game.
What is one good thing that Ballmer has done for MS? He's ridden the momentum left by Gates, and since then..... what? Nothing new & good. If I'm an investor in MS, is he really the best option? Not that Microsoft isn't a good company and does some great work (Microsoft Research labs are amazing, I don't care what people say), but honestly it seems like as a company, Microsoft hasn't really done anything new & better in over a decade. He's kept a steady course with the golden goose(s) of Windows/Office, of course.
Ah, good point on Azure, that's fairly big. Windows 7 I guess I don't really see as anything more than iteration. It was an honest question, so I appreciate a good answer!
MS has been profitable for almost every quarter. Just being able to maintain the Windows Eco system is a huge source of revenue. The real problem is that his leadership style isn't sexy, which affects our ability as shareholders to speculate on the stock price. MSFT stock has hovered around $25,30 for the last few years, which makes it hard to stomach for my investment scale. I am looking for a jump from $25 to $50.
Just imagine if he made a reckless but well advertized decision! The stock would rise and I would short that so hard they would name a cake after me.
"Going forward, our strategy will focus on creating a family of devices and services for individuals and businesses that empower people around the globe at home, at work and on the go, for the activities they value most."
I really was intrigued by comparing this vision to the previous vision of putting a computer in every home...
The previous was while completely open ended at least on some level measurable. The current is basically saying, we will make stuff to help customers do whatever wherever.
Agreed. And across business and personal use. "We will be all things to all people." If I'm a Microsoft employee there is not much here for me to get behind.
A fellow had just been hired as the new CEO of a large high tech corporation. The CEO who was stepping down met with him privately and presented him with three numbered envelopes. "Open these if you run up against a problem you don't think you can solve," he said.
Well, things went along pretty smoothly, but six months later, sales took a downturn and he was really catching a lot of heat. About at his wit's end, he remembered the envelopes. He went to his drawer and took out the first envelope. The message read, "Blame your predecessor."
The new CEO called a press conference and tactfully laid the blame at the feet of the previous CEO. Satisfied with his comments, the press -- and Wall Street - responded positively, sales began to pick up and the problem was soon behind him.
About a year later, the company was again experiencing a slight dip in sales, combined with serious product problems. Having learned from his previous experience, the CEO quickly opened the second envelope. The message read, "Reorganize." This he did, and the company quickly rebounded.
After several consecutive profitable quarters, the company once again fell on difficult times. The CEO went to his office, closed the door and opened the third envelope.
It wasn't immediately clear in Ballmer's statement, but is the Office division moving under the Cloud services group? It's interesting that they are putting their money-making operations (Office + Server&Tools) under Cloud with Satya Nadella instead of moving it over to Application Services under Qi Lu. Which, given the name, you would think Office would move under Applications.
The big push with Office is in Office 365 now, the desktop and server products of the Office family (Office, Exchange, Lync, Project Server, Sharepoint) are all direct results of the direction MS is headed with cloud services. Of course I don't see MS killing their on-premises products, but the change makes sense to me.
If they lose it they could always import some from the EU commission excess supplies. Seems that there is no global shortage for spineless inefficient bureaucracies.
They seem to be missing functions like "design" and "product", which is unfortunate. I'm sure they roll up to engineering and I bet they continue to garner little respect.
This seems horribly vague, except that they've been using the word "devices" a lot. Are they going to expand on the Surface thing and work closer with hardware vendors to make a complete suite of Microsoft-branded hardware?
It really sounds like they're embracing the cloud + hardware model that is becoming standard in the mobile space - you have devices purpose-built for your OS and sold with your company's blessing and you have a suite of 1st-party web-supported cloud services. Google's various webapps and Android and their pseudo-first-party Nexus gizmos, Ubuntu and their new Ubuntu phone OS and their Ubuntu One services, Apple and their iOS devices and their own iCloud services, and MS with Win8/WP8/Win8RT and their various SkyDrive/Live services.
My big problem with this huge move to cloud services is that interoperability has freaking tanked. Every consumer exists in one walled garden or another depending which infrastructure they bought into.
To me, this statement implies a hard push on the WP8/Win8RT devices as well as SkyDrive/Live services... which is going to be a hard fight, since winphone is really late to the party, and the confusing branding of Win8RT (is it Windows 8? What?) has basically resulted in every vendor and manufacturer avoiding it like it's radioactive.
Personally, I'd love a Win8RT HDMI stick device, but I'm weird that way... and Microsoft wants me to buy an XBox One so I'm guessing Win8RT HDMI sticks are off the menu.
The problem is Microsoft's short attention span. Their products are usually better than the competition, but either no one uses them and MS kills the product, or people start using it and MS lets the product stagnate until it's not better anymore (or significantly worse).
Windows Mobile was amazing, the best thing to ever happen to the mobile devices world. But it had grown stale long before Apple joined the market. Windows Phone debuted as a refreshing change in the marketplace and in some ways, ahead of Apple. And then the lack of continued innovation has stalled what little progress it was making. Then they killed Windows Phone (7) just to relaunch Windows Phone (8) as "mostly compatible".
The Zune software was miles ahead of Apple's spreadsheet program. Then they killed it. The Zune Pass was and still is miles ahead of anything else in the music subscription space. But it hasn't just stagnated, it's actively become worse. You used to pay $10/mo and get 10 DRM-free songs per month, making the subscription part completely free. Now that's gone. But still, Google Play Music All Access Pass is the only thing remotely competing with it.
I love Skydrive and you get massive amounts of space and massive amounts of integration, but how many times can they rebrand the same service? I started using Skydrive back when you would log into it using your MSN ID, then your Windows Live ID, then your Microsoft Account.
It's the ADD-style lack of focus that killed Sega, and Microsoft just rides that train for all its worth.
Obviously, Apple and Microsoft are different companies and looking back 16 years with the benefit of hindsight is a bit unfair.
And yet, even in the announcements, you can see a difference. Apple's is shorter, more direct, bereft of details but not trying to be everything to everyone. Most important is an emphasis on getting back to basics, whereas Microsoft is promising "one strategy, one Microsoft" and then immediately rattling off a laundry list of "core products". When every one of those products is core, it's clear nothing is.
If they want to start to "be cool" again, they definitely need to start to opensource at least the "client" stuff.. and could remain with the "cloud ones" closed. (including office here)
i think that if microsoft opens up some of its own software it would be a good sign .. things they dont monetize on.. like IE and the windows NT kernel (at least).. and with a bonus.. people would start to contribut to those projects..
This is a part of the strategy that has maded google cool.. and for the old timers to become cool too.. they need to learn some moves from the new boys in town.. just saying..
That whole memo seems like a parody of Microsoft -- it was pages long, included less than one page of actual content (and even that was confusing), was peppered with stock phrases (almost as bad as "our goals are to synergize using our core competencies, involving all stakeholders at the table in a comprehensive decision making process aimed at maximizing quality and correctness...".
I kind of hate Microsoft even more after reading it, even though the changes (were there any?) may be good.
"Terry Myerson will lead this group, and it will span all our OS work for console..."
Interesting, because I think XBox One (from One Microsoft) is a bit of a Hail Mary. It's not clear to me that the "next console" is going to be that big a deal. (My secret hope is that Apple has a really juicy Apple TV up its sleeve with iOS dev support, etc., and is just waiting to announce it when it will do the most good / damage.)
This sounds suspiciously like the beginnings of a death rattle.
What impressed me most about MS (worked with them around '97-2000) was that the company was divided into small divisions that had very precisely defined goals, and were able to operate somewhat autonomously (as long as they didn't conflict with core MS goals).
Moving from a federated empire to a Soviet-style, run-from-the-top dictatorship is not likely to end with much success.
How, exactly, does this top-level re-organization change what happens on the ground, where products are built? I fail to see what an organizational change does here that improves product creativity and collaboration across teams.
I can't imagine their chief problem was "if only our superiors had different reporting structures, then we could get along with ABC team from 123 group."
I have much respect for a certain Mr. Tatarinov, who might be forgiven for dreaming about dotted lines all night long...From the Report
"Kirill Tatarinov will continue to run Dynamics as is, but his product leaders will dotted line report to Qi Lu, his marketing leader will dotted line report to Tami Reller and his sales leader will dotted line report to the COO group."
This is going to be a disaster. Managing teams that large (thousands) is near impossible. Microsoft needs to become more fragmented with lower level P&L accountability to really innovate. This is understandably difficult when everything revolves around Windows and you have a shared salesforce. However, imo this is the only way forward for Microsoft.
An artifact of a form of management known as 'Matrix Management'. Any given employee could have 2 or more managers that they report to. If you want to expose your engineers directly to politics and managerial power struggles there is no better way...
I have to give MSFT some credit in this situation, for once. The acquisitions of Yammer and Skype, and evolution of the Azure and Office 365 platforms, are cornering the cloud collaboration market in the enterprise. MSFT has set a clear strategy in the cloud collab market up and down the stack, and it's paying off.
Interesting that the guy that said, "Developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers", didn't mention where the developer tools end up in the re-org...
It's easy to miss specific units when they enumerated so many of the organizations of such a large company. We haven't really moved:
> Cloud and Enterprise Engineering Group. Satya Nadella will lead development of our back-end technologies like datacenter, database and our specific technologies for enterprise IT scenarios and development tools...
Either A) Windows 8 is not selling very well. B) Windows Surface is being ignored C) The Microsoft stores aren't doing too well either D) Windows phone is dying or E) all of the above.
Anyway they can start by adding a left and right padding to their footer.
WHY are they keeping Lisa Brummel? MS' HR department is notoriously bad at recruitment and performance management. It's rotten at the core. I'm very disappointed that they didn't use this opportunity to nip the problem in the bud.
"The frontier of high-value scenarios we enable will march outward, but we have strengths and proven capabilities on which we will draw." What does that even mean? The letter is filled with nonsense sentences like this.
One thing won't change - they'll still remain complete jerks when it comes to software patents, vendor lock in, closed standards and other junk like that.
What look like complex failures in organizations are often rooted in simple causes. In Microsoft, it's stack-ranking and Enron-style (that is, visible in transfer packet) performance reviews.
When you have stack-ranking, you never get harmonious teams and "all-star" sub-organizations are out of the question. When performance reviews are part of the transfer process, people become largely immobile and teams become permanent camps and you get warring departments. Closed allocation, at that scale, is cultural toxic sludge in general.
Simple causes. Simple fixes. Wordy say-nothing emails that inject political complexity, when simple solutions are available, are really not helpful.
This seems simplistic to me. Doesn't Valve, your favorite poster boy for open allocation, also stack rank? There seem to be several sub-organizations at Microsoft that are harmonious, at least to an outsider's view (e.g. Azure since Scott Guthrie's involvement). As I understand it there's not too much pressure to hit the stack ranking curve until you get up to the several-hundred-report levels.
Valve stack-ranking is for compensation only-- not a "fire the unluckiest X percent" system. That can still be damaging, if low rank results in permanent underclass status, but that's a human problem that I have no insight into as it pertains to Valve.
I don't know enough about Valve to know how it works, or even if the culture lives up to the press. So I'm not going to try to comment on that.
In general, though, stack-ranking is destructive even if no one gets fired. In companies that use it, it becomes impossible to transfer without a top-10% political success review (sorry, I mean "performance" review) history. But if you're doing that well politically, then you don't want to transfer because it entails rolling the dice again. The result is that people become pretty much immobile.
Closed allocation actually forces engineering ladders (with their attendant negatives) into existence because unsuccessful/persecuted people can't move and successful people won't move at all unless they can get a permanent credibility bump (promotion). But that leads to an arrangement where managers avoid promoting their best people because they know it might cause them to transfer.
Stack ranking seems, to me, to be an incredibly bad idea for Microsoft as a whole. Do you know if they are considering moving away from it?
I think Stack Ranking can work in some situations, like mechanical (ie. non-heuristic) work, but for Engineers? I've never understood why they even considered that it would work.
How do you ensure that performance is rewarded fairly and consistently across an organization with tens of thousands of engineers? I'm not wild about the concept of stack ranking but I don't see any alternatives that don't have serious drawbacks of their own.
How about evaluating each engineer's job performance (based on sane productivity and code quality metrics) without forcing them to a curve, where even if your whole team is high-performing, someone will get a bad review and be marked for firing just because it's required that someone gets a bad review?
Jack Welch-style rank-and-yank is cruel and wildly inappropriate for software developers (or any human workers, I'd argue). It encourages political blame-shifting/scapegoating games that distract from the actual work. Just having the practice is also an implicit acknowledgement that your hiring process blows.
Performance curves are just a demented and sadistic way to manage people. They're also the epitome of b-school cargo culting.
The problem with this is that it enables weak-willed managers to claim that everyone on their team is great, serving as a kind of grade inflation that makes true high-performers seem less impressive. As I understand it, the curve is only enforced at something like the VP level, so it's not like a team of 10 great engineers is going to be forced to have 2 people scored as underperforming. Are there 200-person groups at Microsoft where everyone's better than average?
I'm not convinced that "weak-willed managers claiming that everyone on their team is great" is an actual problem.
And what if they really are all doing great, on a given team? Then no sense in punishing someone just because you have to punish someone.
And if someone is underperforming? Their direct manager's job is to take care of it. If the manager isn't even doing their job of managing people, a grading curve isn't going to fix that.
Also, if it's only enforced at a higher level of hierarchy, then what happens is that it's the junior members of underperforming departments that get the shaft. They probably had the least to do with the team's underperformance, but they also have the least power and therefore the least ability to dodge blame. Shit rolls downhill.
Is that a goal? I'd rather own a company where the pay was unfair and inconsistent but it delivered on products and made money. I'd rather work for one, too.
It's not like Jack Welch's worst idea isn't a driver of politics and strategic[1] moves in the real world.
[1] as in, bad for the company but the most rational move for the employee, like attempting to make sure every person added to your team is worse than you.
Trust your managers and allow people to move freely internally? If a manager is too stingy their people will move away from them; if a manager is paying a lot either they'll get results that justify it or they won't, and in the latter case they correct things or you fire them.
BTW, Wikipedians considered Microsoft's stack ranking notorious enough to provide the date they started doing it (http://en.wikipedia.org/wiki/Vitality_curve#Microsoft): "Starting in 2006 Microsoft has used a Vitality Curve despite intense internal criticism." Which I've noted elsewhere is the year in which Bill Gates stopped his day to day roles at Microsoft.
I could talk about how Ballmer himself is a significant problem, but then again these "simple fixes" would surely require removing him from an position of direct power in the company.
Microsoft has been doing stack ranking long before 2006. I left in 2005'and attended stack rank meetings, where managers indirectly decide your review score before you even get the form from HR. it goes back to at least the late 90s, IIRC.
There was certainly mention of "up or out", and a bad review or two would bring about the PIP stick (which seems to be only legal CYA before the firing, not for any hopes of real improvement). And, frankly, it was a long time ago and I haven't gone to any effort to remember details. I will say that in general it was as screwy and demotivating then as it is described to be now.
It was based on a model proposed by Ballmer's hero Jack Welch. What Ballmer forgot is that Welch himself said the "trim the bottom 10%" model didn't work once a company got larger than a certain size.
What Ballmer forgot is that Welch himself said the "trim the bottom 10%" model didn't work once a company got larger than a certain size.
I'm not sure that size is the issue. I think that the percentage of deadwood a company has being static is the problem.
A typical 10,000-person company probably has enough deadwood to make a 10% cut safe: a mature company that's accrued enough slackers and incompetents can endure a cut of the obvious nonperformers and few will be upset about it. Even many of the nonperformers will agree, to some extent, that it's time. Besides, the company will have a cut anyway if it underperforms. But if you cut 10% every year, after two or three iterations you are cutting good people, and the cultural effects of that make the process not worth it.
A new CEO was hired to replace an outgoing CEO. The outgoing CEO met with the incoming CEO for an exit interview. During the discussion, the departing CEO stated he had placed 3 very important letters in his drawer just as his predecessor had done for him. He explained that the new CEO would find opening the letters in order most useful when a serious event took place. He also stated the letters left for him had really helped him over his tenure.
Several months passed before a major event came up. The new CEO now remembered the letters and noticed they were numbered 1, 2, and 3. The former CEO had instructed they be opened in order for maximal benefit. The new CEO opened letter #1 and the paper inside had the words “blame it on your predecessor.” The new CEO did as the letter stated and amazingly he was able to avert serious problems and keep his job.
Several months passed before the next serious event took place. This one was growing in magnitude and things were starting to get ugly at the company. There were even calls for the CEO to step down. In desperation, the CEO opened the drawer and pulled out letter #2. With great fear he, opened it carefully to read the word “reorganize.” He followed the instructions and just as before he was saved. The whole company quieted down and went back to business as usual.
After about a year, a third serious event took place and it was much worse than the rest. The CEO knew how to get out of the mess because he had a third letter left to open. With a smile he reached for the letter #3 and opened it to read “write 3 letters.”