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Ballmer Dismisses Android. Oh, This Will Come Back to Bite Him

6 points by nextparadigms 16y ago

Ballmer fails to see what will be big in tech, once again

bradleyland 16y ago
While this is mostly just a take-down piece about Ballmer and his lack of vision, there is some new insight here that I'm not sure I've read elsewhere. At least not written explicitly: "...when he’s [Ballmer] done nothing but extend their old business, Windows and Office, which is fine, but there are a lot of other CEO’s who could’ve done that just as well or better. Businesses don’t last forever. It takes someone special, a visionary, to create new growth opportunities in the company." Some time ago, there was a little storm around how poorly Ballmer had done as Microsoft CEO, mostly because of the flat-line stock. There were some good rebuttals showing growth in profits under his direction, which seemed to shock everyone in to believing that maybe he didn't do all that badly. Everyone seemed to kick the dirt and say, "Well, we all know stocks aren't the best indicator of success or failure of a company. While Microsoft is doing fine from financial perspective, Wall Street simply doesn't recognize it." But let's back up a moment and realize that Wall Street isn't interested in what you're doing today. Stocks are bought and sold based on what people thing you're going to do tomorrow; next quarter; next year; five years from now. Apple's recent growth can be attributed, in large part, to iPad sales. This is a new market. Speaking from Microsoft's market perspective, this is money that, at best, would not have been spent elsewhere. At worst, it was money that consumers might have spent on a netbook. I've seen research both ways, and honestly, neither side is terribly convincing. The bottom line is that while Ballmer has managed to squeeze a little more life out of Windows, he hasn't moved Microsoft forward. That's inexcusable for a company with the engineering and capital resources Microsoft has.
JunkDNA 16y ago
Google has made no secret of the fact that they designed Android as a hedge against MS control of the mobile landscape. It wasn't until Apple came out of nowhere with the iPhone that they had to set their sights on both targets. Ballmer should be very concerned about Android. Microsoft is a software company. They make money selling software licenses. Google is an advertising company. Therefore, Google can give operating system software away for free all day, without hurting their own core business (in fact, the goal is obviously a net benefit). This has MS backed into a corner. If they compete on price, Android devices will be cheaper. If they go high-end, they bump into the maw of Apple with excellent design and tight hardware/software integration. The mobile versions of Windows need to be so compelling that consumers are willing to pony up the extra cash, but not so expensive as to draw comparisons to Apple. Talk about threading the needle. The main play MS has is tight enterprise integration (sharepoint, Exchange, Office, etc...). There is probably a way for them to make a case to IT managers about the benefits of the total MS stack. But it's still not clear how big an impact the enterprise is going to have on the mobile space, which seems to be driven largely by the consumer sector. Interestingly, Apple is is using this same jujitsu on Google. Apple is a hardware company. They make money selling shiny, physical stuff. They are trying to hit Google where it hurts by offering advertising revenue to developers (and taking a comparatively small piece for themselves). If they want, they can ratchet up the payout to developers all day without impacting their core business. Google can't do that.
mcknz 16y ago
At this point, Ballmer's made so many terrible and crazy "predictions" that I find it hard to believe he actually means them -- it's like he feels obligated to slam every potential MS competitor or he's showing weakness.

6 points by nextparadigms 16y ago

Ballmer fails to see what will be big in tech, once again

While this is mostly just a take-down piece about Ballmer and his lack of vision, there is some new insight here that I'm not sure I've read elsewhere. At least not written explicitly: "...when he’s [Ballmer] done nothing but extend their old business, Windows and Office, which is fine, but there are a lot of other CEO’s who could’ve done that just as well or better. Businesses don’t last forever. It takes someone special, a visionary, to create new growth opportunities in the company." Some time ago, there was a little storm around how poorly Ballmer had done as Microsoft CEO, mostly because of the flat-line stock. There were some good rebuttals showing growth in profits under his direction, which seemed to shock everyone in to believing that maybe he didn't do all that badly. Everyone seemed to kick the dirt and say, "Well, we all know stocks aren't the best indicator of success or failure of a company. While Microsoft is doing fine from financial perspective, Wall Street simply doesn't recognize it." But let's back up a moment and realize that Wall Street isn't interested in what you're doing today. Stocks are bought and sold based on what people thing you're going to do tomorrow; next quarter; next year; five years from now. Apple's recent growth can be attributed, in large part, to iPad sales. This is a new market. Speaking from Microsoft's market perspective, this is money that, at best, would not have been spent elsewhere. At worst, it was money that consumers might have spent on a netbook. I've seen research both ways, and honestly, neither side is terribly convincing. The bottom line is that while Ballmer has managed to squeeze a little more life out of Windows, he hasn't moved Microsoft forward. That's inexcusable for a company with the engineering and capital resources Microsoft has.

JunkDNA 16y ago

Google has made no secret of the fact that they designed Android as a hedge against MS control of the mobile landscape. It wasn't until Apple came out of nowhere with the iPhone that they had to set their sights on both targets. Ballmer should be very concerned about Android. Microsoft is a software company. They make money selling software licenses. Google is an advertising company. Therefore, Google can give operating system software away for free all day, without hurting their own core business (in fact, the goal is obviously a net benefit). This has MS backed into a corner. If they compete on price, Android devices will be cheaper. If they go high-end, they bump into the maw of Apple with excellent design and tight hardware/software integration. The mobile versions of Windows need to be so compelling that consumers are willing to pony up the extra cash, but not so expensive as to draw comparisons to Apple. Talk about threading the needle. The main play MS has is tight enterprise integration (sharepoint, Exchange, Office, etc...). There is probably a way for them to make a case to IT managers about the benefits of the total MS stack. But it's still not clear how big an impact the enterprise is going to have on the mobile space, which seems to be driven largely by the consumer sector. Interestingly, Apple is is using this same jujitsu on Google. Apple is a hardware company. They make money selling shiny, physical stuff. They are trying to hit Google where it hurts by offering advertising revenue to developers (and taking a comparatively small piece for themselves). If they want, they can ratchet up the payout to developers all day without impacting their core business. Google can't do that.

mcknz 16y ago

At this point, Ballmer's made so many terrible and crazy "predictions" that I find it hard to believe he actually means them -- it's like he feels obligated to slam every potential MS competitor or he's showing weakness.