Saturday, July 28, 2012

Not Entirely A Lost Decade

Image representing Steve Ballmer as depicted i...
Image via CrunchBase
Steve Ballmer is no Steve Jobs, and Steve Ballmer is no Bill Gates. You needed a Steve Jobs to spring forth the iPhone and the iPad. And those two have taken Apple into the stratosphere. You can't fault Steve Ballmer for not having come up with the iPhone or the iPad, although he has made some strategic mistakes even in those two spaces coming in as a latecomer.

But I think Microsoft might be able to do with gestures what Apple has done with touch. 3D computing might see a better day for Microsoft.

Steve Ballmer's number one failure though is the corporate decadence at Microsoft. There is too much red tape in Redmond. That is something Steve Ballmer is capable of rectifying but has not. Most of the lost decade sting he has earned through that inaction.

Steve Jobs paid Ballmer the ultimate anti compliment by calling him Sculley.

Microsoft’s Lost Decade
Once upon a time, Microsoft dominated the tech industry; indeed, it was the wealthiest corporation in the world. ...... the 55-year-old Microsoft chief executive ...... the devolution of one of the industry’s innovators into a “me too” purveyor of other companies’ consumer products ..... a high-tech equivalent of a Detroit car-maker .... in the last decade Microsoft’s stock barely budged from around $30, while Apple’s stock is worth more than 20 times what it was 10 years ago ...................... In December 2000, Microsoft had a market capitalization of $510 billion, making it the world’s most valuable company. As of June it is No. 3, with a market cap of $249 billion. In December 2000, Apple had a market cap of $4.8 billion and didn’t even make the list. As of this June it is No. 1 in the world, with a market cap of $541 billion. ..................... something bloated and bureaucracy-laden, with an internal culture that unintentionally rewards managers who strangle innovative ideas that might threaten the established order of things. ..... Fiefdoms had taken root, and a mastery of internal politics emerged as key to career success ...... 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. ....... the Microsoft of old, the nimble player that captured the passions of a generation of techies and software engineers, is dead and gone. ....... “In the 40s, 50s, and 60s, Sears had it nailed. It was top-notch, but now it’s just a barren wasteland. And that’s Microsoft. The company just isn’t cool anymore.” ...... today the iPhone brings in more revenue than the entirety of Microsoft. ...... Gates was relentless, demanding the same intense commitment of everyone he hired. ..... In his 2011 book, Idea Man, Allen remembers meeting Ballmer: “I thought, This guy looks like an operative for the NKVD [the secret police of the U.S.S.R.]. He had piercing blue eyes and a genuine toughness.” ....... On August 24, 1995, Microsoft reached the pinnacle of cool, releasing what would then be its largest-selling operating system ever: Windows 95. Seeking to buy the first copies, computer geeks lined up at midnight around the block outside technology stores. ....... By the end of 1997, Windows 95, along with Microsoft’s other operating systems, ran on 86.3 percent of the P.C.’s in the U.S. (Apple’s Mac O.S., by contrast, then had only 4.6 percent of the market.) Worth $6.8 billion, Bill Gates had been named the richest man in the world by Forbes magazine in 1992. ...... “I think [I.B.M’s] addiction to the power they had in previous generations of computing really blindsided them from the paradigm shift of the PC” ....... By 1998 a prototype of the revolutionary tool was ready to go. Thrilled with its success and anticipating accolades, the technology group sent the device to Bill Gates—who promptly gave it a thumbs-down. The e-book wasn’t right for Microsoft, he declared. ......... simple touch-screen device was seen as a laughable distraction from the tried-and-true ways of dealing with data. “Office is designed to inputting with a keyboard, not a stylus or a finger,” the official said. “There were all kinds of personal prejudices at work.” .......... Microsoft failed repeatedly to jump on emerging technologies because of the company’s fealty to Windows and Office. “Windows was the god—everything had to work with Windows,” said Stone. “Ideas about mobile computing with a user experience that was cleaner than with a P.C. were deemed unimportant by a few powerful people in that division, and they managed to kill the effort.” ....... the dot-com crash. ..... Sixteen days later, Bill Gates handed off the C.E.O. reins to Ballmer. ..... Steve just wasn’t a ‘product guy.’ ..... A businessman with a background in deal-making, finance, and product marketing had replaced a software-and-technological genius. ....... More employees seeking management slots led to more managers, more managers led to more meetings, more meetings led to more memos, and more red tape led to less innovation. ...... In 2003, a young developer noticed that friends in college signed up for AIM exclusively and left it running most of the time. The reason? They wanted to use the program’s status message, which allowed them to type a short note telling their online buddies what they were doing, even when they weren’t at the computer. Messages like “gone shopping” and “studying for my exams” became commonplace. ...... each year the intensity and destructiveness of the game playing grew worse as employees struggled to beat out their co-workers for promotions, bonuses, or just survival. ....... a toxic stew of internal antagonism and warfare. ..... management by character assassination ...... stack ranking as the most destructive process inside of Microsoft, something that drove out untold numbers of employees. ..... One of the most valuable things I learned was to give the appearance of being courteous while withholding just enough information from colleagues to ensure they didn’t get ahead of me on the rankings ........ Finally, on November 14, 2006, Microsoft introduced its own music player, called Zune. Fifty-four days later, Steve Jobs unveiled the iPhone ...... By 2009, iPod maintained an astonishing 71 percent of the market, the kind of numbers rarely seen anywhere outside of a North Korean election. ...... Then, in June 2004, Steve Jobs announced that Apple was releasing its new operating system, called “Tiger.” And inside Microsoft, jaws dropped. Tiger did much of what was planned for Longhorn—except that it worked. ....... 2007. Apple had won hands down on Microsoft’s playing field for operating systems. ....... To date, Bing has lost about $6 billion for Microsoft; add in the earlier search products and the amount of money poured into the effort rises to almost $10 billion. ...... according to court records, in 2005 he proclaimed, “Google’s not a real company. It’s a house of cards.” ...... Until his dying days, Steve Jobs could not only predict the direction the marketplace would be heading, but help drive it there ...... Google Docs is a free Web program competing with Microsoft Office. Google Chrome OS is a free operating system targeted at Windows. .... Ballmer’s key business philosophy for Microsoft was so antiquated as to be irrelevant. The Microsoft C.E.O. used to proclaim that it would not be first to be cool, but would be first to profit ...... Google has almost the same amount of cash on its books as Microsoft—$50 billion to Microsoft’s $58 billion. Apple, on the other hand, started the year with about $100 billion. ...... Ballmer has said he plans to stay in the saddle until 2018 ..... Jobs acknowledged Ballmer’s role in Microsoft’s problems: “The company starts valuing the great salesmen, because they’re the ones who can move the needle on revenues, not the product engineers and designers. So the salespeople end up running the company.… [Then] the product guys don’t matter so much, and a lot of them just turn off. It happened at Apple when [John] Sculley came in, which was my fault, and it happened when Ballmer took over at Microsoft. Apple was lucky and it rebounded, but I don’t think anything will change at Microsoft as long as Ballmer is running it.” ..... Jobs put the ultimate blame on Bill Gates: “They were never as ambitious product-wise as they should have been. Bill likes to portray himself as a man of the product, but he’s really not. He’s a businessperson. Winning business was more important than making great products. Microsoft never had the humanities and liberal arts in its DNA.”
Frank X. Shaw Responds To Microsoft “Lost Decade” Articles
tripled revenue from $23 billion in 2000 to $70 billion in 2011 .... increased profits from $9 billion in 2000 to $23 billion in 2011. ..... returned $194 billion to shareholders via dividends and stock buyback. ..... created entirely new businesses, such as Xbox, the #1 gaming console in the world last year and Kinect, a pretty darn hot consumer electronic device. And, the company’s enterprise Server & Tools business grew significantly in the same time period, reaching $17 billion in 2011 ...... Windows 8, the new Office, Widows Azure, the great reviews for windows phone, Kinect, Halo freaking 4 on its way, Xbox as entertainment hub, the social integration in Bing ...... third most valuable company in the world
How Microsoft Lost Its Mojo
Does anyone really believe that Microsoft can compete against Apple, Samsung, and Google on smartphones, at this point?
Microsoft’s lost decade, chronicled
Apple’s role in the decline of Microsoft makes up a large part of the story
You Have To Read This Blistering Response From Microsoft's PR Boss On Its 'Lost Decade'
Microsoft's internal employee grading system led to it missing the boat in the mobile and tablet markets..... Microsoft has done well on a financial basis. But, the fact that it missed the two most important computing trends of the last decade is something that can't be ignored.

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