8 ms·

Ballmer just opened the Second Envelope

139 points by jlhamilton 16y ago

m0nastic 16y ago
I just read this article and checked to see if someone had submitted it. I think shaking the death-rattle for Microsoft is a bit premature, but I find it interesting that at some point in a company's growth, making a truck-load of revenue every quarter isn't sufficient. Microsoft has a wonderfully lucrative cash cow that allows them to not be successful at their other endeavors (with success for this argument being defined as a similar market share as their primary business). It reminds me of the starving artist dilemma, as in, if you live a comfortable life without the danger of starving, are you as motivated to make it. I flip flop about whether I believe in that argument, although at the risk of using a statistically insufficient sample size (my own personal experience), it would seem to be true.
- Maciek416 16y ago
  I guess the truck-load of revenue isn't sufficient because investors still expect Microsoft to push fresh and innovative products. They certainly have the people and the business units to do it (look at all the ideas that Microsoft Research goes through every year). The question is, how do you get a really original and fresh idea at Microsoft to make it past the cannibalistic obstacle course we've all heard about? Surely MS has the spare cash to throw around to "test" ideas like Courier on the market, so why don't they? It seems like a much more sure thing than Zune. Then again, perhaps that experience has made them more risk-averse. If you were Ballmer and wanted to promote stock growth, what would you do -- if you could try anything at this point?
  - m0nastic 16y ago
    I honestly don't know what they were thinking with the Zune. What's amusing is that by all accounts it's a really nice portable media player. Microsoft basically finally made a nice portable media player just after the point where growth stopped in portable media players. Courier I find interesting. I was one of the people who thought the demo looked really interesting. It totally spoke to me as a device that if it operated the way it did in the video (which is a big if), I'd have had a real use for. But I don't know if that means it would have actually been successful as a product. I think if Microsoft thought they could build it, and that it would be successful, they'd have done so. The fact that they scrapped it (or did whatever it is you do with a product concept video that you never actually said was going to be a product) shows me that they don't understand that market, or don't think it exists sufficiently. I think part of the problem is the way Microsoft Research is structured. According to Bill Buxton (who is kind of my dream "wish he was my uncle"), Microsoft Research is basically tasked with incubating long-term technologies. In this video, he talks about how some of the stuff he's been working on over the past decade is now starting to get used in shipping projects: http://channel9.msdn.com/posts/LarryLarsen/CES-2010-NUI-with-Bill-Buxton/ http://channel9.msdn.com/posts/LarryLarsen/CES-2010-NUI-with... While I think that's awesome for Microsoft to be that forward-looking, I think they also need a more short-term skunkworks. Maybe not as radical as Google's "20% time", but I think something that shortens the amount of time between "concept and prototype". Windows Phone 7 seems like a pretty good idea. It's a fairly novel approach to interface design; but it didn't just spring up. Microsoft basically plodded through ten years of bad mobile strategy and pissed away their technology lead until even they couldn't pretend that they were headed in the right direction. If you contrast that with Palm, who also developed and launched a completely new platform in a relatively short period of time, I think it's obvious that Microsoft works in glacial time. Then again, Palm's gamble hasn't really paid off either. I think Microsoft couldn't possibly bet too big on mobile. I know it's trendy, and I'm certainly not being profound, but I don't think it's ludicrous to consider it the largest growth market in computing for the next decade. I think the problem (which the original article points out, is that Google has pretty much screwed their existing business model by giving away Android).
    - JamieEi 16y ago
      MS has started several labs groups that fit in between long-term academic research and product groups. For example, I work in Office Labs (www.officelabs.com). Our goals are something along what you describe in the Office / IW space.
      - m0nastic 16y ago
        I find this promising. Although, I can't honestly think of a Microsoft product with less of a need for radical new ideas than Office (Unless replacing PowerPoint is on the agenda). Looking at the site you mentioned it definitely seems like you guys are working on cool stuff; I just hope this sort of thing is going on within other product groups.
    - thesethings 16y ago
      Sidebar: I smiled when you described Bill Buxton as "wish he was my uncle," because amongst friends I call Paul Graham, Tim OReilly, and Kathy Sierra, "Uncle Paul," "Uncle Tim," And "Cousin Kathy." It started because I was getting slightly made fun of for quoting them so often... like I knew them. So I kinda upped the joke ante by saying stuff like, "Uncle Paul always says ______."
  - gruseom 16y ago
    Fund a thousand startups and make it clear that they can cannibalize whatever they want. And make it easy for MS employees to get in on the action.
  - lsc 16y ago
    > I guess the truck-load of revenue isn't sufficient because investors still expect Microsoft to push fresh and innovative products. This is the key, I think, to Microsoft's behaviour. and I think it's a mistake on the part of the investors. Microsoft is an /excellent/ cash cow, and not so great of an innovator. If I was the majority shareholder of Microsoft, I'd demand that they make their first priority delivering me a giant dividend cheque. Sure, Microsoft still has some good people, and they should keep those people busy moving windows forward, and maybe even doing some original research... but, at this point in their development, they are a cash cow. they need to realise this and start issuing nice fat dividends, rather than trying to 'buy' parts of the console gaming or internet search markets.
  - loewenskind 16y ago
    >I guess the truck-load of revenue isn't sufficient because investors still expect Microsoft to push fresh and innovative products. I'm sorry, but when has MS ever done this? Office. I'm struggling to think of a single other example ever. Everything they've ever done, as far as I can tell, has been to take what others have done and make either a cheaper (as in, how much will it cost me to use it) copy of it or used their existing monopoly to force it in place. One has to expect that when a companies model works like this that they won't be able to keep up at some point. I think the zune was the first incident of this happening. As someone mentioned elsewhere Zune showed up at the party years late, so even though it was decent and cheap everyone had moved on.
- xenophanes 16y ago
  If you make a ton of revenue and pay it all out in dividends, that's fine. If you make a ton of revenue, and then lose it, then people get unhappy.
- thaumaturgy 16y ago
  No offense, but I don't think Gassée is someone that can be trusted to judge a company's life expectancy.
- raganwald 16y ago
  > Microsoft has a wonderfully lucrative cash cow that allows them to not be successful at their other endeavors (with success for this argument being defined as a similar market share as their primary business). I disagree with this basic premise. Let's put our investor hats on. There are these businesses, Windows and Office. They throw off a certain cash flow. It doesn't last forever. So what to do? First, we re-invest some of that cash flow into extending the life of the cash flow from the profits themselves. Advertising, new versions, and so forth. Second, we can pay a dividend to investors. If the taxes are onerous, we can do magical things with trusts or some such to reduce taxes. Third, we can invest the cash flow in new businesses, basically treating ourselves as a VC or startup lab. We hope to turn the new businesses into streams of cash flow. WHy do we assume that options one and three are always on the table? If investors can get a better rate of return investing the cash flow from Office and Windows than Ballmer is delivering, why are we asking Ballmer to 1. Generate cash from Office and Windows and 2. Produce better returns than we can? I think the time has come to stop expecting so much from SteveB. Get him to generate tons of cash from Office and Windows and give the money to investors. Let them decide whether to invest that into Google stock or Apple stock or the next YCombinator round or whatever they like.
  - waterlesscloud 16y ago
    I think Office can last a long, long time. The buy-in from business is huge. I don't think most businesses are going to trust the cloud. Maybe they should, but what they're doing now with Office works well enough, so they'll likely stay with it for quite a while. There's still a lot of mainframe stuff out there in cobol, after all. And a crazy amount of DOS. Business moves sloooooow.
    - boredguy8 16y ago
      If Office doesn't innovate in the space of collaboration / versioning, they won't be around in a meaningful way in 5-10 years, I can almost guarantee it. And this is working in a place (a university) not known for fast change (just try getting faculty to start using a new ANYTHING). Right now, all collab suites I've seen, and I've been approached by more than I care to count (though undoubtedly not all), are kludge-y addons to move FILES around. The beauty of what Google's doing (and a lot of their playing is creating a pointillist map) is in this space: they're making it so I can get (right now mostly) text from one place to another through multiple streams to a final display regardless of ANYTHING. There are still some places file metaphors exist (docs), but that's fading in their newer products. Add robust lines of demarcation (privacy/security via groups) and the 'features' of Word don't beat the 'killer app' of portable, trackable, malleable information that people can collaborate on without effort. So: watch out, Office. (Though I love what you're doing in Excel)
- irrelative 16y ago
  To me, the most striking part of this author's argument is that Microsoft isn't prevalent enough. They're still making plenty of money, but he wants them to be chasing the tech press a little more. It's pretty obvious to me: Microsoft isn't in the innovation business just like IBM and GE. They make money hand over fist, but they don't focus on the latest fad of social media or micro-blogging or mobile devices. If those any of those businesses show long term growth and profitability, one of the established leaders will acquire them and I would imagine Microsoft is constantly looking at such businesses for acquisition. On a side note, I think he's reading into leadership departures in ways that suggest that he has more information regarding them, but he never shows it. An anecdote does not make a trend.
- altano 16y ago
  It's never ceases to shock me how bad the Microsoft commentary is on HN, not because I don't agree with the conclusions, but rather because it mostly operates on so little information. For example: > Microsoft has a wonderfully lucrative cash cow that allows them to not be successful at their other endeavors (with success for this argument being defined as a similar market share as their primary business). Even though you say "cash cow" I'll give you the benefit of the doubt and assume you mean both Windows and Office. It's fine that you haven't heard of all of MS's other billion dollar businesses, but perhaps that should leave you feeling unqualified to make sweeping commentary? Here are some products off the top of my head that you've clearly never heard of: * Business Productivity Online Suite (BPOS) * Exchange * SharePoint * Office Communications Server (OCS) * Dynamics CRM * SQL Server Exchange's market share is comparable to that of Google's market share of search (~70%), so I'm assuming that meets your definition of success based on market share. BPOS has 40 million paying customers compared to Google Apps' 25 million total customers (which presumably only a tiny fraction of which are paying). SharePoint is part of the Office division but is an entirely new product driving billions of dollars of revenue. Etc... There's no reason for you to have heard of any of this. I only know all about MS because I work for MS. But there's also no reason for you to talk about how MS reminds you of the "starving artist dilemma."
  - blub 16y ago
    Every online community has its biases. For HN, it's being anti-MS and pro-webapps, anti-desktop. Less than reddit, but still noticeable. Upmods are pretty worthless when it comes to these subjects. Getting all your tech news from places like HN or reddit can be harmful, they distort reality significantly.
    - deleted 16y ago
      [deleted]
    - rosssd 16y ago
      What other news sites would you recommend to a HN reader to help balance this out?
moe 16y ago
With regard to microsoft I think these days that Project Natal is going to be huge. If they play their patent cards right then that might very well push them back to the top of the list.
- m0nastic 16y ago
  I'm not sure how much of Natal is patentable by Microsoft, as the tech isn't theirs (at least according to Wikipedia here: http://en.wikipedia.org/wiki/Project_Natal#cite_note-MsPress-20 http://en.wikipedia.org/wiki/Project_Natal#cite_note-MsPress...). I'd also be willing to bet that the sales won't be that breathtaking (a $150 device that'll need some time for titles to take advantage of it). If it were launching as a part of their next console, maybe it would be enough of a differentiator to move units (which isn't something the 360 has had trouble doing).
  - moe 16y ago
    I'm less interested in the gaming part but more in the ways this will invade our daily lives. If it works as advertised then it might soon be built into TV sets, PC monitors and all sorts of public infrastructure that we can't even imagine, yet. If microsoft can hold a big piece of that cake then that should be huge. I mean, obsoleting TV remote controls alone is big, but only the tip of the iceberg. How about interactive advertising (stand in front of a shop-window, interacting with a bigscreen), touch-free car dashboard, the whole "home automation" area, and so on. This is ofcourse all under the assumption that it really works as well as shown in those videos.
- aaronbrethorst 16y ago
  The guy who originally headed it up (I don't know if he's still directly in charge of it) is absolutely brilliant, driven and highly market-focused. I remarked to him several years ago that I wished I could buy stock in him, personally. If he's not tapped as one of the next 'Baby Bills' sometime in the next couple years, then it's time to worry.
- kmfrk 16y ago
  Their Xbox division still runs with big deficits if I am not mistaken. I don't have any recent data on it, but a while ago, it wasn't profitable. Their market share is great, but I don't know how they convert it to profits.
vishaldpatel 16y ago
And if you're a startup CEO, you keep a really big stack of envelopes for continual reorganization and starting-again :D
deleted 16y ago
[deleted]
moolave 16y ago
With ramifications lined up with this decision, I would still put my money on their Xbox division. I hope they put more capex on that.
- riffraff 16y ago
  I was going to ask about it: to me the Xbox division seems pretty successful, especially if you consider that ten years ago microsoft was not in the console market at all. Acccording to wikipedia, they have sold 40M units of the latest incarnation (iphones total at 50), they have probably the best online services (according to my hardcore gamers friends), the most open marketplace, and at least they seem to be trying to innovate. Is there a reason for never taking this division into account when talking about how MS is going to die horribly because of only milking the cash cows?
- protomyth 16y ago
  It will be interesting what the revenue / profits of this division are reported as, since they finally moved the Mac BU out of it.
dasil003 16y ago
The “device” people saw in the video isn’t going to ship, but that doesn’t mean we didn’t learn a bunch and innovate a bunch in the process. So if a Microsoft team innovates in the Redmond forest and no one ever sees a product...
- joezydeco 16y ago
  "In fact, the intention to mislead competitors is really the only effective reason for a commercial entity to publicly release concept products." http://counternotions.com/2008/08/12/concept-products/ http://counternotions.com/2008/08/12/concept-products/
erikstarck 16y ago
My guess: in 5-10 years Microsoft will be a service company. We've seen this movie before and it's not just Microsoft that's shape shifting. Google is becoming the new Microsoft, Microsoft is becoming the new IBM, Facebook is becoming the new Google. Twitter is becoming the new Facebook. EDIT: why downvoted? Would it be so strange if Microsoft followed its former arch enemy IBMs footsteps?
- bvi 16y ago
  And FourSquare is becoming the new Twitter?
- pavlov 16y ago
  Can't wait for 2040, when the cycle is complete and Twitter is the new IBM. My bank statement will be much more convenient to read when it's limited to 140 characters.
  - rdrimmie 16y ago
    This month you spent $100 on food, $300 on utilities including Internet access, and $60 on gas. Then we charged you $19.
  - Deestan 16y ago
    Given that it's a cycle, does that mean IBM will be the new Twitter at some point?
    - j_baker 16y ago
      Either that or IBM becomes the new Sun.
RyanMcGreal 16y ago
>Over the last decade, Wall Street has declined to reward Microsoft for its superior profit. The explanation is simple: Professional investors don’t believe Ballmer, and they don’t see bigger profits in Microsoft’s future. This seems to suggest Wall Street has been wrong about Microsoft for the past decade. Likewise, I started seriously worrying about - and predicting - a housing bubble-based recession in 2004. [1] I was wrong about it every year between 2004 and 2009. [1] http://www3.sympatico.ca/taylormcgreal/thecomingcrash.html http://www3.sympatico.ca/taylormcgreal/thecomingcrash.html
shmichael 16y ago
Microsoft has some amazing enterprise products. Excel is absolutely amazing. Access is a great development tool for paperwork personnel. SQL Server is so so simple to get up and running, and scale up to tremendous volume.
- algorias 16y ago
  Agree re: Excel. Great product. Competitors don't even come close.
commieneko 16y ago
"Well, tablet is an area that will evolve going forward. Certainly it’s a focus for what we’re doing in the Windows space, and how they’re thinking that space. We’re going to have a bunch of netbooks and tablet stuff that’s in the works there. We’ll just see how that evolves." Isn't that a lovely and inspiring statement from a tech visionary? Don't you get all tingly just reading that? (Oops, sorry, thats the circulation in my legs going out again...) Whats wrong with most tech execs is they are waiting for something to evolve, and then hoping to jump on the band wagon. In the mean time, they are reacting by running around in circles and trying to turn the crank on the old machine faster and faster. Oh, and let's reorganize a bit. Yeah, that'll do it... Embarrassing. Jobs meanwhile, love him or hate him, is _making_ the next generation tech, one piece at a time. And he's making it well. And he's making it closed and proprietary. I really wish our choices weren't between openness/freedom and quality/innovation, but that's how it sits right now.
- AmericanOP 16y ago
  I read your comment before I read the article. The quote comes from a recently released exec, not Ballmer.
  - commieneko 16y ago
    I didn't say the quote was from Ballmer.
j_baker 16y ago
I think that Microsoft could become awesome if they'd just quit trying to be cool. They're very good at selling to enterprise customers, but they're terrible at marketing to consumers. It strikes me as odd that this reorganization is happening in the area where Microsoft has had the most success marketing to consumers. We are talking about the division that makes XBoxes correct?
- contextfree 16y ago
  They think (correctly) that what's popular among consumers will eventually infiltrate the enterprise ("the consumerization of IT") and vice versa.
  - tlack 16y ago
    I don't necessarily disagree with you but can you give some examples? I can think of counter examples, all things that went from commercial business tool to consumer not the other way around: - computers - internet - email - blackberry - unix (consumers now find mac os x more dependable and durable than windows and prefer it aside from cost)

139 points by jlhamilton 16y ago

I just read this article and checked to see if someone had submitted it. I think shaking the death-rattle for Microsoft is a bit premature, but I find it interesting that at some point in a company's growth, making a truck-load of revenue every quarter isn't sufficient. Microsoft has a wonderfully lucrative cash cow that allows them to not be successful at their other endeavors (with success for this argument being defined as a similar market share as their primary business). It reminds me of the starving artist dilemma, as in, if you live a comfortable life without the danger of starving, are you as motivated to make it. I flip flop about whether I believe in that argument, although at the risk of using a statistically insufficient sample size (my own personal experience), it would seem to be true.

Maciek416 16y ago
I guess the truck-load of revenue isn't sufficient because investors still expect Microsoft to push fresh and innovative products. They certainly have the people and the business units to do it (look at all the ideas that Microsoft Research goes through every year). The question is, how do you get a really original and fresh idea at Microsoft to make it past the cannibalistic obstacle course we've all heard about? Surely MS has the spare cash to throw around to "test" ideas like Courier on the market, so why don't they? It seems like a much more sure thing than Zune. Then again, perhaps that experience has made them more risk-averse. If you were Ballmer and wanted to promote stock growth, what would you do -- if you could try anything at this point?
- m0nastic 16y ago
  I honestly don't know what they were thinking with the Zune. What's amusing is that by all accounts it's a really nice portable media player. Microsoft basically finally made a nice portable media player just after the point where growth stopped in portable media players. Courier I find interesting. I was one of the people who thought the demo looked really interesting. It totally spoke to me as a device that if it operated the way it did in the video (which is a big if), I'd have had a real use for. But I don't know if that means it would have actually been successful as a product. I think if Microsoft thought they could build it, and that it would be successful, they'd have done so. The fact that they scrapped it (or did whatever it is you do with a product concept video that you never actually said was going to be a product) shows me that they don't understand that market, or don't think it exists sufficiently. I think part of the problem is the way Microsoft Research is structured. According to Bill Buxton (who is kind of my dream "wish he was my uncle"), Microsoft Research is basically tasked with incubating long-term technologies. In this video, he talks about how some of the stuff he's been working on over the past decade is now starting to get used in shipping projects: http://channel9.msdn.com/posts/LarryLarsen/CES-2010-NUI-with-Bill-Buxton/ http://channel9.msdn.com/posts/LarryLarsen/CES-2010-NUI-with... While I think that's awesome for Microsoft to be that forward-looking, I think they also need a more short-term skunkworks. Maybe not as radical as Google's "20% time", but I think something that shortens the amount of time between "concept and prototype". Windows Phone 7 seems like a pretty good idea. It's a fairly novel approach to interface design; but it didn't just spring up. Microsoft basically plodded through ten years of bad mobile strategy and pissed away their technology lead until even they couldn't pretend that they were headed in the right direction. If you contrast that with Palm, who also developed and launched a completely new platform in a relatively short period of time, I think it's obvious that Microsoft works in glacial time. Then again, Palm's gamble hasn't really paid off either. I think Microsoft couldn't possibly bet too big on mobile. I know it's trendy, and I'm certainly not being profound, but I don't think it's ludicrous to consider it the largest growth market in computing for the next decade. I think the problem (which the original article points out, is that Google has pretty much screwed their existing business model by giving away Android).
  - JamieEi 16y ago
    MS has started several labs groups that fit in between long-term academic research and product groups. For example, I work in Office Labs (www.officelabs.com). Our goals are something along what you describe in the Office / IW space.
    - m0nastic 16y ago
      I find this promising. Although, I can't honestly think of a Microsoft product with less of a need for radical new ideas than Office (Unless replacing PowerPoint is on the agenda). Looking at the site you mentioned it definitely seems like you guys are working on cool stuff; I just hope this sort of thing is going on within other product groups.
  - thesethings 16y ago
    Sidebar: I smiled when you described Bill Buxton as "wish he was my uncle," because amongst friends I call Paul Graham, Tim OReilly, and Kathy Sierra, "Uncle Paul," "Uncle Tim," And "Cousin Kathy." It started because I was getting slightly made fun of for quoting them so often... like I knew them. So I kinda upped the joke ante by saying stuff like, "Uncle Paul always says ______."
- gruseom 16y ago
  Fund a thousand startups and make it clear that they can cannibalize whatever they want. And make it easy for MS employees to get in on the action.
- lsc 16y ago
  > I guess the truck-load of revenue isn't sufficient because investors still expect Microsoft to push fresh and innovative products. This is the key, I think, to Microsoft's behaviour. and I think it's a mistake on the part of the investors. Microsoft is an /excellent/ cash cow, and not so great of an innovator. If I was the majority shareholder of Microsoft, I'd demand that they make their first priority delivering me a giant dividend cheque. Sure, Microsoft still has some good people, and they should keep those people busy moving windows forward, and maybe even doing some original research... but, at this point in their development, they are a cash cow. they need to realise this and start issuing nice fat dividends, rather than trying to 'buy' parts of the console gaming or internet search markets.
- loewenskind 16y ago
  >I guess the truck-load of revenue isn't sufficient because investors still expect Microsoft to push fresh and innovative products. I'm sorry, but when has MS ever done this? Office. I'm struggling to think of a single other example ever. Everything they've ever done, as far as I can tell, has been to take what others have done and make either a cheaper (as in, how much will it cost me to use it) copy of it or used their existing monopoly to force it in place. One has to expect that when a companies model works like this that they won't be able to keep up at some point. I think the zune was the first incident of this happening. As someone mentioned elsewhere Zune showed up at the party years late, so even though it was decent and cheap everyone had moved on.
xenophanes 16y ago
If you make a ton of revenue and pay it all out in dividends, that's fine. If you make a ton of revenue, and then lose it, then people get unhappy.
thaumaturgy 16y ago
No offense, but I don't think Gassée is someone that can be trusted to judge a company's life expectancy.
raganwald 16y ago
> Microsoft has a wonderfully lucrative cash cow that allows them to not be successful at their other endeavors (with success for this argument being defined as a similar market share as their primary business). I disagree with this basic premise. Let's put our investor hats on. There are these businesses, Windows and Office. They throw off a certain cash flow. It doesn't last forever. So what to do? First, we re-invest some of that cash flow into extending the life of the cash flow from the profits themselves. Advertising, new versions, and so forth. Second, we can pay a dividend to investors. If the taxes are onerous, we can do magical things with trusts or some such to reduce taxes. Third, we can invest the cash flow in new businesses, basically treating ourselves as a VC or startup lab. We hope to turn the new businesses into streams of cash flow. WHy do we assume that options one and three are always on the table? If investors can get a better rate of return investing the cash flow from Office and Windows than Ballmer is delivering, why are we asking Ballmer to 1. Generate cash from Office and Windows and 2. Produce better returns than we can? I think the time has come to stop expecting so much from SteveB. Get him to generate tons of cash from Office and Windows and give the money to investors. Let them decide whether to invest that into Google stock or Apple stock or the next YCombinator round or whatever they like.
- waterlesscloud 16y ago
  I think Office can last a long, long time. The buy-in from business is huge. I don't think most businesses are going to trust the cloud. Maybe they should, but what they're doing now with Office works well enough, so they'll likely stay with it for quite a while. There's still a lot of mainframe stuff out there in cobol, after all. And a crazy amount of DOS. Business moves sloooooow.
  - boredguy8 16y ago
    If Office doesn't innovate in the space of collaboration / versioning, they won't be around in a meaningful way in 5-10 years, I can almost guarantee it. And this is working in a place (a university) not known for fast change (just try getting faculty to start using a new ANYTHING). Right now, all collab suites I've seen, and I've been approached by more than I care to count (though undoubtedly not all), are kludge-y addons to move FILES around. The beauty of what Google's doing (and a lot of their playing is creating a pointillist map) is in this space: they're making it so I can get (right now mostly) text from one place to another through multiple streams to a final display regardless of ANYTHING. There are still some places file metaphors exist (docs), but that's fading in their newer products. Add robust lines of demarcation (privacy/security via groups) and the 'features' of Word don't beat the 'killer app' of portable, trackable, malleable information that people can collaborate on without effort. So: watch out, Office. (Though I love what you're doing in Excel)
irrelative 16y ago
To me, the most striking part of this author's argument is that Microsoft isn't prevalent enough. They're still making plenty of money, but he wants them to be chasing the tech press a little more. It's pretty obvious to me: Microsoft isn't in the innovation business just like IBM and GE. They make money hand over fist, but they don't focus on the latest fad of social media or micro-blogging or mobile devices. If those any of those businesses show long term growth and profitability, one of the established leaders will acquire them and I would imagine Microsoft is constantly looking at such businesses for acquisition. On a side note, I think he's reading into leadership departures in ways that suggest that he has more information regarding them, but he never shows it. An anecdote does not make a trend.
altano 16y ago
It's never ceases to shock me how bad the Microsoft commentary is on HN, not because I don't agree with the conclusions, but rather because it mostly operates on so little information. For example: > Microsoft has a wonderfully lucrative cash cow that allows them to not be successful at their other endeavors (with success for this argument being defined as a similar market share as their primary business). Even though you say "cash cow" I'll give you the benefit of the doubt and assume you mean both Windows and Office. It's fine that you haven't heard of all of MS's other billion dollar businesses, but perhaps that should leave you feeling unqualified to make sweeping commentary? Here are some products off the top of my head that you've clearly never heard of: * Business Productivity Online Suite (BPOS) * Exchange * SharePoint * Office Communications Server (OCS) * Dynamics CRM * SQL Server Exchange's market share is comparable to that of Google's market share of search (~70%), so I'm assuming that meets your definition of success based on market share. BPOS has 40 million paying customers compared to Google Apps' 25 million total customers (which presumably only a tiny fraction of which are paying). SharePoint is part of the Office division but is an entirely new product driving billions of dollars of revenue. Etc... There's no reason for you to have heard of any of this. I only know all about MS because I work for MS. But there's also no reason for you to talk about how MS reminds you of the "starving artist dilemma."
- blub 16y ago
  Every online community has its biases. For HN, it's being anti-MS and pro-webapps, anti-desktop. Less than reddit, but still noticeable. Upmods are pretty worthless when it comes to these subjects. Getting all your tech news from places like HN or reddit can be harmful, they distort reality significantly.
  - deleted 16y ago
    [deleted]
  - rosssd 16y ago
    What other news sites would you recommend to a HN reader to help balance this out?

moe 16y ago

With regard to microsoft I think these days that Project Natal is going to be huge. If they play their patent cards right then that might very well push them back to the top of the list.

m0nastic 16y ago
I'm not sure how much of Natal is patentable by Microsoft, as the tech isn't theirs (at least according to Wikipedia here: http://en.wikipedia.org/wiki/Project_Natal#cite_note-MsPress-20 http://en.wikipedia.org/wiki/Project_Natal#cite_note-MsPress...). I'd also be willing to bet that the sales won't be that breathtaking (a $150 device that'll need some time for titles to take advantage of it). If it were launching as a part of their next console, maybe it would be enough of a differentiator to move units (which isn't something the 360 has had trouble doing).
- moe 16y ago
  I'm less interested in the gaming part but more in the ways this will invade our daily lives. If it works as advertised then it might soon be built into TV sets, PC monitors and all sorts of public infrastructure that we can't even imagine, yet. If microsoft can hold a big piece of that cake then that should be huge. I mean, obsoleting TV remote controls alone is big, but only the tip of the iceberg. How about interactive advertising (stand in front of a shop-window, interacting with a bigscreen), touch-free car dashboard, the whole "home automation" area, and so on. This is ofcourse all under the assumption that it really works as well as shown in those videos.
aaronbrethorst 16y ago
The guy who originally headed it up (I don't know if he's still directly in charge of it) is absolutely brilliant, driven and highly market-focused. I remarked to him several years ago that I wished I could buy stock in him, personally. If he's not tapped as one of the next 'Baby Bills' sometime in the next couple years, then it's time to worry.
kmfrk 16y ago
Their Xbox division still runs with big deficits if I am not mistaken. I don't have any recent data on it, but a while ago, it wasn't profitable. Their market share is great, but I don't know how they convert it to profits.

vishaldpatel 16y ago

And if you're a startup CEO, you keep a really big stack of envelopes for continual reorganization and starting-again :D

deleted 16y ago

[deleted]

moolave 16y ago

With ramifications lined up with this decision, I would still put my money on their Xbox division. I hope they put more capex on that.

riffraff 16y ago
I was going to ask about it: to me the Xbox division seems pretty successful, especially if you consider that ten years ago microsoft was not in the console market at all. Acccording to wikipedia, they have sold 40M units of the latest incarnation (iphones total at 50), they have probably the best online services (according to my hardcore gamers friends), the most open marketplace, and at least they seem to be trying to innovate. Is there a reason for never taking this division into account when talking about how MS is going to die horribly because of only milking the cash cows?
protomyth 16y ago
It will be interesting what the revenue / profits of this division are reported as, since they finally moved the Mac BU out of it.

dasil003 16y ago

The “device” people saw in the video isn’t going to ship, but that doesn’t mean we didn’t learn a bunch and innovate a bunch in the process. So if a Microsoft team innovates in the Redmond forest and no one ever sees a product...

joezydeco 16y ago
"In fact, the intention to mislead competitors is really the only effective reason for a commercial entity to publicly release concept products." http://counternotions.com/2008/08/12/concept-products/ http://counternotions.com/2008/08/12/concept-products/

erikstarck 16y ago

My guess: in 5-10 years Microsoft will be a service company. We've seen this movie before and it's not just Microsoft that's shape shifting. Google is becoming the new Microsoft, Microsoft is becoming the new IBM, Facebook is becoming the new Google. Twitter is becoming the new Facebook. EDIT: why downvoted? Would it be so strange if Microsoft followed its former arch enemy IBMs footsteps?

bvi 16y ago
And FourSquare is becoming the new Twitter?
pavlov 16y ago
Can't wait for 2040, when the cycle is complete and Twitter is the new IBM. My bank statement will be much more convenient to read when it's limited to 140 characters.
- rdrimmie 16y ago
  This month you spent $100 on food, $300 on utilities including Internet access, and $60 on gas. Then we charged you $19.
- Deestan 16y ago
  Given that it's a cycle, does that mean IBM will be the new Twitter at some point?
  - j_baker 16y ago
    Either that or IBM becomes the new Sun.

RyanMcGreal 16y ago

>Over the last decade, Wall Street has declined to reward Microsoft for its superior profit. The explanation is simple: Professional investors don’t believe Ballmer, and they don’t see bigger profits in Microsoft’s future. This seems to suggest Wall Street has been wrong about Microsoft for the past decade. Likewise, I started seriously worrying about - and predicting - a housing bubble-based recession in 2004. [1] I was wrong about it every year between 2004 and 2009. [1] http://www3.sympatico.ca/taylormcgreal/thecomingcrash.html http://www3.sympatico.ca/taylormcgreal/thecomingcrash.html

shmichael 16y ago

Microsoft has some amazing enterprise products. Excel is absolutely amazing. Access is a great development tool for paperwork personnel. SQL Server is so so simple to get up and running, and scale up to tremendous volume.

algorias 16y ago
Agree re: Excel. Great product. Competitors don't even come close.

commieneko 16y ago

"Well, tablet is an area that will evolve going forward. Certainly it’s a focus for what we’re doing in the Windows space, and how they’re thinking that space. We’re going to have a bunch of netbooks and tablet stuff that’s in the works there. We’ll just see how that evolves." Isn't that a lovely and inspiring statement from a tech visionary? Don't you get all tingly just reading that? (Oops, sorry, thats the circulation in my legs going out again...) Whats wrong with most tech execs is they are waiting for something to evolve, and then hoping to jump on the band wagon. In the mean time, they are reacting by running around in circles and trying to turn the crank on the old machine faster and faster. Oh, and let's reorganize a bit. Yeah, that'll do it... Embarrassing. Jobs meanwhile, love him or hate him, is _making_ the next generation tech, one piece at a time. And he's making it well. And he's making it closed and proprietary. I really wish our choices weren't between openness/freedom and quality/innovation, but that's how it sits right now.

AmericanOP 16y ago
I read your comment before I read the article. The quote comes from a recently released exec, not Ballmer.
- commieneko 16y ago
  I didn't say the quote was from Ballmer.

j_baker 16y ago

I think that Microsoft could become awesome if they'd just quit trying to be cool. They're very good at selling to enterprise customers, but they're terrible at marketing to consumers. It strikes me as odd that this reorganization is happening in the area where Microsoft has had the most success marketing to consumers. We are talking about the division that makes XBoxes correct?

contextfree 16y ago
They think (correctly) that what's popular among consumers will eventually infiltrate the enterprise ("the consumerization of IT") and vice versa.
- tlack 16y ago
  I don't necessarily disagree with you but can you give some examples? I can think of counter examples, all things that went from commercial business tool to consumer not the other way around: - computers - internet - email - blackberry - unix (consumers now find mac os x more dependable and durable than windows and prefer it aside from cost)