3 ms·

At what point can we safely assume that Balmer was simply incompetent?

strictnein 10y ago
Balmer was good at what he did: making Microsoft lots of money. Balmer ran MS from 2000 to 2014. Here's what the profits for that time period (since 2002) looked like: https://www.statista.com/statistics/267808/net-income-of-microsoft-since-2002/ https://www.statista.com/statistics/267808/net-income-of-mic... So not incompetent, just focused on something else.
- throwawaymsft 10y ago
  I'd say he was average at making money. It sounds impressive but you need to annualize and compare it to the market as a whole. 5.36B to 22B in 12 years = 11.7% annualized profit increase from 2012 to 2014. However, MSFT stock appreciation was 22 -> 41 or 5.2% annualized. (Stock includes expectations of future growth, etc.) Average S&P was ~7.8% for that time period. Ballmer would have done better for investors by just investing in an index fund.
  - strictnein 10y ago
    You including their 2003 stock split in your calculations? edit: because, if not, it's more like a 9.85% return on the stock
    - throwawaymsft 10y ago
      Thanks for the catch; I didn't account for the split. Still, it looks like the SPY handily beat MSFT's return over that time period. https://www.google.com/finance?chdnp=0&chdd=1&chds=1&chdv=0&chvs=Linear&chdeh=1&chfdeh=0&chdet=1392411600000&chddm=1081115&chls=IntervalBasedLine&cmpto=NYSEARCA:SPY&cmptdms=0&q=NASDAQ:MSFT&ntsp=0&ei=UGpUWIn_NoL82AaWl6iQCw https://www.google.com/finance?chdnp=0&chdd=1&chds=1&chdv=0&...
- dbg31415 10y ago
  Revenue isn't the issue. It's the sheer number of missed opportunities and bumbles during Balmer's tenure. Search / Online Advertising... lost to Google. Google went from under $1B to $74B. Could have been Microsoft's. https://www.statista.com/statistics/266206/googles-annual-global-revenue/ https://www.statista.com/statistics/266206/googles-annual-gl... Smart Phones... lost to Apple and Google. During Balmer's tenure Apple went form ~$1B in to ~$54B. Could have been Microsoft's. https://www.statista.com/statistics/267728/apples-net-income-since-2005/ https://www.statista.com/statistics/267728/apples-net-income... And... what did they even get for a $7B investment in Nokia? Cloud Services... lost to Amazon. AWS has grown to $10B -- with no end in sight to the growth there. Could have been Microsoft's. http://www.recode.net/2016/4/28/11586526/aws-cloud-revenue-growth http://www.recode.net/2016/4/28/11586526/aws-cloud-revenue-g... Online Office Tools... including email servers for SMBs... lost to Google. Despite having a near 100% share in office tools prior to the advent of Google Docs. The UX for their first generation of "flat office" made it damn near unusable. Personally I still think Office 365 is weak compared to Google Suite. $9B investment in Skype... only to have it be less interesting than Google Hangouts or Slack. Microsoft Project / Project Central is all but irrelevant at this point. Lost out to Atlassian, GitHub, Trello, Asana... 200 other tools. Windows 8... So Windows 10 has been nice. Office 365 is getting there. Azure has been improving as well. It's clear someone lit a fire the last year or so to fix all the shit that was stagnant or fucked up during the last 15 years.

Balmer was good at what he did: making Microsoft lots of money. Balmer ran MS from 2000 to 2014. Here's what the profits for that time period (since 2002) looked like: https://www.statista.com/statistics/267808/net-income-of-microsoft-since-2002/ https://www.statista.com/statistics/267808/net-income-of-mic... So not incompetent, just focused on something else.

throwawaymsft 10y ago
I'd say he was average at making money. It sounds impressive but you need to annualize and compare it to the market as a whole. 5.36B to 22B in 12 years = 11.7% annualized profit increase from 2012 to 2014. However, MSFT stock appreciation was 22 -> 41 or 5.2% annualized. (Stock includes expectations of future growth, etc.) Average S&P was ~7.8% for that time period. Ballmer would have done better for investors by just investing in an index fund.
- strictnein 10y ago
  You including their 2003 stock split in your calculations? edit: because, if not, it's more like a 9.85% return on the stock
  - throwawaymsft 10y ago
    Thanks for the catch; I didn't account for the split. Still, it looks like the SPY handily beat MSFT's return over that time period. https://www.google.com/finance?chdnp=0&chdd=1&chds=1&chdv=0&chvs=Linear&chdeh=1&chfdeh=0&chdet=1392411600000&chddm=1081115&chls=IntervalBasedLine&cmpto=NYSEARCA:SPY&cmptdms=0&q=NASDAQ:MSFT&ntsp=0&ei=UGpUWIn_NoL82AaWl6iQCw https://www.google.com/finance?chdnp=0&chdd=1&chds=1&chdv=0&...
dbg31415 10y ago
Revenue isn't the issue. It's the sheer number of missed opportunities and bumbles during Balmer's tenure. Search / Online Advertising... lost to Google. Google went from under $1B to $74B. Could have been Microsoft's. https://www.statista.com/statistics/266206/googles-annual-global-revenue/ https://www.statista.com/statistics/266206/googles-annual-gl... Smart Phones... lost to Apple and Google. During Balmer's tenure Apple went form ~$1B in to ~$54B. Could have been Microsoft's. https://www.statista.com/statistics/267728/apples-net-income-since-2005/ https://www.statista.com/statistics/267728/apples-net-income... And... what did they even get for a $7B investment in Nokia? Cloud Services... lost to Amazon. AWS has grown to $10B -- with no end in sight to the growth there. Could have been Microsoft's. http://www.recode.net/2016/4/28/11586526/aws-cloud-revenue-growth http://www.recode.net/2016/4/28/11586526/aws-cloud-revenue-g... Online Office Tools... including email servers for SMBs... lost to Google. Despite having a near 100% share in office tools prior to the advent of Google Docs. The UX for their first generation of "flat office" made it damn near unusable. Personally I still think Office 365 is weak compared to Google Suite. $9B investment in Skype... only to have it be less interesting than Google Hangouts or Slack. Microsoft Project / Project Central is all but irrelevant at this point. Lost out to Atlassian, GitHub, Trello, Asana... 200 other tools. Windows 8... So Windows 10 has been nice. Office 365 is getting there. Azure has been improving as well. It's clear someone lit a fire the last year or so to fix all the shit that was stagnant or fucked up during the last 15 years.