24 ms·

Microsoft, currently the most valuable company, is having a Nadellaissance

310 points by crones 7y ago

baybal2 7y ago
I'm failing to see what has changed. Point is that they still make the lion share of their revenue from milking PC OEMs and plumpy corporate clients. The fact that they changed tools for doing so, does not change the scheme at large. Their hosting service Azure just took over their AD and sharepoint clients with some extra being the genuine new clientele I'd say that under Nadella, they grew even more recalcitrant, and dependent on their main revenue sources. Ever got a visit from an MS salesperson recently? One that came to us to do AD was almost begging us to switch to AD on Azure. I'd also say that MS became a little bit akin google in that their new product efforts fall into unending cycles of rebrandings, and half-hearted restarts. A lot of oldtimer MS devs I knew say that now they got a genuine fear of every new tech coming from MS almost customarily becoming an abandonware in 2-3 years term.
- maxxxxx 7y ago
  “A lot of oldtimer MS devs I knew say that now they got a genuine fear of every new tech coming from MS almost customarily becoming an abandonware in 2-3 years term.” That’s how I have been feeling from around the time WPF came out... And they reinforce that fear regularly.
  - ZanyProgrammer 7y ago
    UWP feels like it’s going to be abandonware.
1024core 7y ago
Satya has done a tremendous job turning around Microsoft. It was headed in the direction of becoming a slowly sinking behemoth under Ballmer, but he's turned it around. Sundar, on the other hand, is just content collecting $$ and showing more ads.
- bryanlarsen 7y ago
  The stuff propping up Microsoft now (Office 365, Azure, Windows 10) were all started under Ballmer, weren't they?
  - shubhamjain 7y ago
    How does that matter? The article clearly states that Microsoft was still hanging on Window and PC software for majority of its revenue and made terrible bets (like Nokia acquisition) under Ballmer. Satya worked hard to change the direction of the company. He pushed to cut budgets from other departments and invested in Azure. Another important thing is that he resisted the urge to make shiny bets (like self driving cars) and kept the company focused on its cloud strategy.
    - Spooky23 7y ago
      They still are. Azure is to Office 365 as Apple's rebirth is to the iPod. "Halo effect". Office 365 was a classic Microsoft bundled cost play -- you have this big investment in your EA around the Microsoft ecosystem and you basically pay to put email in the cloud, and get Sharepoint and Skype for free. They then made deals on EA renewal to convert "on-prem" Office licenses to subscriptions to lock you in. In subsequent renewals, Microsoft uses Azure gift cards like a "tax credit" to drive behavior without a competitive process. They're essentially applying the Office 365 playbook to Windows Server/Active Directory/SQL Server and eventually Windows Client. Example: You pay for Azure AD by getting ATP for "free". It's not taking away from Satya, his genius is dressing up the classic Microsoft hard-nosed deal playbook and making it friendlier in key ways, and cutting the cord on legacy. (Which is a risk, as it's an opportunity for AWS, Google, Oracle, etc to sell) But ultimately, the strategy existed and was executed before with Ballmer, but with less charisma and humanity.
  - Amezarak 7y ago
    Yeah, it's hard to see what Nadella's leadership has actually added to MS from where I've standing. As best as I can tell, there hasn't been any major new products or shifts since Ballmer left. People talk about MS "stagnating" under Ballmer, and that's true of the stock price, but revenue and profit more than doubled under Ballmer and he introduced multiple new billion-dollar products/services. Nadella has made some notable acquisitions (LinkedIn, Github, Minecraft), but I'm not real sure that these are really winners from a business perspective, aside from Minecraft. Sure, Ballmer had failures too - Windows Phone and Zune didn't take off. But you can't win every time. EDIT: Sorry, was lazy and abbreviated Windows Phone to WP.
thrower123 7y ago
What a great difference between him and Ballmer. I'd not be surprised if they eat Amazon's lunch on cloud computing in the next few years.
- simonebrunozzi 7y ago
  I would never, ever underestimate Andy Jassy. I consider him on par with Jeff Bezos, in terms of leadership and execution, if not superior. source: worked at AWS 2008-2014.
  - thrower123 7y ago
    Possible, but from the inside as a Microsoft Partner, it feels like most of the world is just starting to move to the cloud, and when they do, they go Azure, because they are already dependent on Exchange.
    - cheeze 7y ago
      If you're already locked into msft, then yeah msft makes sense. But one thing people often forget is that AWS is cheaper than everyone else. This matters to most companies. Also, Azure is a pretty miserable dev experience for many of their services. Many of AWS smaller services aren't great, but better from what I've used/general sentiment.
      - dragonwriter 7y ago
        > But one thing people often forget is that AWS is cheaper than everyone else. GCP is, AFAIK, usually cheaper; but AWS is more established, and the “no one ever got fired for being buying...” player of public cloud (which has to chafe MSFT, since they pretty much displaced IBM in that role for on-prem.)
      - thrower123 7y ago
        The thing there is that almost everyone is already dependent on Office. Breaking that is nearly impossible.
Causality1 7y ago
I guess those Solitaire Premium subscriptions are really bringing in the cash.
notananthem 7y ago
Nadellaissance doesn't work at all and its breaking my soul, fuck off pithy headlines. That said, the board has done well picking leadership, Satya's driven a lot of amazing cultural change, and business too.
- glenneroo 7y ago
  > Nadellaissance doesn't work at all and its breaking my soul, fuck off pithy headlines. Care to explain? Do you work there? "doesn't work at all" meaning he's lazy?
  - rconti 7y ago
    I think parent means the contrived term "Nadallaissance" as a headline gimmick.
    - OscarDC 7y ago
      To be fair, it looks really weird as a word to a French speaker. It reads almost like "adolescence" which roughly means "teenage years". I guess to an English speaker it sounds more like "Renaissance" but even that I'm not sure.
      - crispinb 7y ago
        To an English speaker it looks more like "wanker"
    - anticensor 7y ago
      I read it as "Nadella-nuissance".
- crispinb 7y ago
  True - one of the most egregious atrocities I've ever seen committed against English. I don't read Bloomberg in any case, but have no idea how I'd make myself read that article & maintain reasonable mental health regardless of the location.
spectramax 7y ago
It’s unfortunate to see Microsoft (along with Adobe, etc) expanding into Ads. If nothing else, they could really differentiate and join forces with Apple from privacy standpoint to oppose Google, Amazon and Facebook. Instead, “Intellisense with AI now available on VS Code” is Microsoft’s nice way of saying “We harvest the shit out of your data”. Ah, like a true Ad company. Don’t get me started on Windows 10 telemetry. I really believe that Apple’s bet on privacy will pay off well in the long term. They’re different companies (Apple is selling hardware) but boy they could have gone into Ads with a MASSIVE user base but they chose to limit Ads in the App Store. It would have been huge expansion opportunity but they didn’t pursue it. And it will pay off as privacy awareness spreads and Microsoft could join them as operating system providers.
- exelius 7y ago
  Yeah, Apple had the foresight to see the next big thing in tech was going to be privacy. But I think it’s reflective of a larger societal problem: we don’t know who to trust anymore. It seems like every company is trying to scam its users, so Apple is betting that there is a valuable segment of the market willing to pay a premium to do business with a brand that has no ulterior motives past selling you a device at a high markup, and maybe some value-add services. To be fair, this has always been a problem — I think the recent failings of the historical trust model are due to better information rather than any increase in exploitative behavior. But prior to the smartphone era, trust was a fuzzy, emotional problem where a customer’s trust in a brand could be influenced by marketing alone. Today it is an explicit, quantifiable problem where users are willing to vote with their feet. What companies are we bestowing authority upon? Do those companies’ business models truly have our best interests at heart? What guarantees do users have that their trust won’t be violated? I firmly believe that whoever can solve these questions to the market’s satisfaction will own the future.
  - scarface74 7y ago
    Apple being big into privacy is just a benefit of their business model - they don’t need to make money off a data as a hardware company.
JamesBarney 7y ago
> There’s a bit of Silicon Valley cred, too, thanks to its acquisitions of LinkedIn, the professional social network, and GitHub, the software code repository. I would have thought open sourcing so much of it's framework, vscode, and typescript would have had a greater impact.
- max76 7y ago
  > I would have thought open sourcing so much of it's framework I have a pedantic correction here. Instead of open sourcing the .NET Framework they wrote a new opensource framework (named .NET core) that is very similar to their closed source framework. Microsoft is currently supporting and expanding both frameworks.
  - n00j 7y ago
    FYI a lot of the .NET Framework is also opensource https://referencesource.microsoft.com/ https://referencesource.microsoft.com/
    - lozenge 7y ago
      It's shared source, not open source. It isn't even complete enough to compile.
  - majkinetor 7y ago
    FYI, only way forward is core. Microsoft doesn't really invest much in older net and related (for example PowerShell 5). There may be fixes here and there but are mostly security. It defies logic to support 2 frameworks, one of which is WAY BETTER then the other and x-platform.
    - majkinetor 7y ago
      And only few days after this comment, is official: https://devblogs.microsoft.com/dotnet/introducing-net-5/ https://devblogs.microsoft.com/dotnet/introducing-net-5/
  - 7y ago
kerng 7y ago
I think Nadella was driving more of a cultural change within the company. Business wise the path to Azure and the cloud was pretty straightforward and he stuck to it. The question to ask might be, would Ballmer have done something else then focus on cloud? Like focus more energy on phones for instance? That could have led to a different financial result.
loudmax 7y ago
Microsoft's core revenue is still due to market lock-in of their proprietary technologies: MS Office and Windows itself. There are other office suites out there, but nothing can gain much market share without complete compatibility for MS Office file formats: docx, pptx, etc. Microsoft produced a version of Office for Macs and that allowed Apple to grow greater than niche, but their market share was always tiny compared to Windows. Outside of Windows and Mac, you're in Open Source land, which is great if you're technically minded and want to tinker and explore, but not much of an option for folks who just want their computers to work with the consumer software and file formats around them. Other than Apple, where are the commercial alternatives to Microsoft? I'd be much more sympathetic to Nardella's renaissance if it meant real consumer choice. The situation is better than it was under Ballmer, but not as good as it could be in a real free marketplace.
- bgorman 7y ago
  G Suite, WPS Office, WordPerfect
  - tabtab 7y ago
    Their compatibility with existing MS documents is not good enough yet. This is largely because you'd have to mirror many glitches and idiosyncrasies in MS's code to have full compatibility. Or as the say in the industry "bug-for-bug compatibility".
    - arethuza 7y ago
      To be fair there are features in Excel that you can't use in Excel online - password protected workbooks, watches etc.
  - jlarocco 7y ago
    Google's office software is a joke compared to the standalone versions of Office. Microsoft's web based Office is pretty bad, too, but at least they don't mangle imported documents quite as bad. I know everybody thinks they're "good enough" for most people, but they're still crap compared to the regular desktop programs.
oneplane 7y ago
I like line about market cap being a useless metric for your own success. It's great on the meta-business side of things, but for real-world things it's hardly relevant.
rdslw 7y ago
As an investor I bought few years ago MSFT stock. I did it as I saw two things: 1. azure 2. o365 1. because I knew what happened (and was happening) with AWS 2. because microsoft moved to subscription model Those two things, connected with third "secret" incredient: BIGGEST user base (corporate) which WILL use those two offerings = success. Satya is/may be great. I bought stock around 2014/2015 because of the above and nothing more. If you have a big userbase you can monetize it really really well.
- spectramax 7y ago
  I think your reasoning is a perfect example of Confirmation bias, I do agree with your points but there is no way to analyze this objectively - market is a complex system with game theory and all kinds of players doing unpredictable things, disasters such as password leaks, etc. If results were the opposite, one can come up with various other reasons to explain their losses.
  - TheGRS 7y ago
    Sure, but if you do understand what a company is doing under the hood, you can make informed long-term investments based on that (which still pose a risk because of the reasons you stated). If you knew Facebook's history and engineering practices years ago you would have accurately predicted that the other shoe would eventually drop. If you paid attention to Microsoft's shift in focus you would either have thought that it was foolish to try to beat Amazon or it was a great space to invest in because AWS has many flaws. I dunno, I'm just trying to say that knowledge about this stuff can give you an edge in investing.
  - ljcn 7y ago
    To be fair the comment says "I bought it because x, y, z", which is probably true; not "it has gone up because x, y, z", although that might be implied.
  - cjarrett 7y ago
    Most of the initiatives Satya has gotten credit for were started under Ballmer. Some of the worst moves I've seen regarding current MSFT internal culture were direct results of Satya Source: Me, at MSFT before Ballmer left and still there now. That doesn't mean Satya's not had a good effect overall. Part of the investor postives were due to PR differences that Satya made (which are very good), and his ability to talk about the future of the company is far superior to Ballmer.
macspoofing 7y ago
It's true. It's always hard to figure out exactly how much credit the CEO should get for successes or failures of the company, but since Nadella became CEO Microsoft made a lot of good decisions that really set them up for the future. Office365 is terrific. Azure is cementing itself as the default cloud for enterprises and a solid 2nd or 3rd option outside of the enterprise. Windows 10 is great.
jgalt212 7y ago
The subscription model is great/easy, but from the tax side I am leaning more towards the purchase model over AWS. I recently saw the Delta Airlines paid no Federal Taxes last year because of accelerated depreciation costs. With AWS, there is no accelerated depreciated, just current expenses. Anywho, I'm off to a new data center ground-breaking ceremony.
calvinbhai 7y ago
Having read Nadella's book Hit Refresh as soon as it went on sale, Microsoft performance since then doesn't look surprising at all. Having listed what's wrong (with their product focus, company culture etc), and where they plan to head, its' almost like the book informs the reader where puck is going to be (from Satya's POV). It's funny that 15 years back I was so anti MS and pro Google and now I think it's the other way!
- maxxxxx 7y ago
  “It's funny that 15 years back I was so anti MS and pro Google and now I think it's the other way!” Stay skeptical of all of them. No need to be fan of one of the big techs. In the end they are all greedy organizations that want to dominate. None of them should be trusted.
  - bovermyer 7y ago
    I'm both wary of and hopeful about Microsoft and Google. "Trust but verify" and all that.
    - spectramax 7y ago
      I’ve always found this phrase an oxymoron.
      - bovermyer 7y ago
        Where humans are involved, mistakes will happen. Trusting someone but verifying their work is a safe and sane pairing.
        apetresc 7y ago
        But the whole point of trusting is that you get to skip verifying. What's the difference between trusting and not trusting if you still have to put in the work of verification anyway?
morsmodr 7y ago
A good article, well rounded in nature by giving the pros and cons to Microsoft's rebirth. How it impacts Microsoft internally and externally to the market in general. We need more articles like this on the internet.
ousta 7y ago
The Azure investment started under ballmer-era
mtgx 7y ago
Personally, I'm more impressed by the company's President, Brad Smith, who seems to want real change in terms of digital rights. He's the man behind every single "pro user rights" Microsoft announcement you've seen in the past few years. Meanwhile, Nadella is the man behind every single user-hostile and user-tracking feature you've seen introduced in Windows 10 (pretty much).
jcoffland 7y ago
> “I don’t know of any other software company in the history of technology that fell onto hard times and has recovered so well,” says Reed Hastings, CEO of Netflix Inc. How about Apple?
- jacques_chester 7y ago
  Historically considered to be a hardware company.
scarface74 7y ago
Microsoft’s “performance” wasn’t bad by any objective metric during the Ballmer era. If the stock market were rational, MS stock would have been doing a lot better under Balmer than it did. But then again, if the stock market were rational, Lyft would have never been able to go public and Tesla would basically be worthless.
- hangonhn 7y ago
  Hang on. Stock market price is suppose to price in future earnings too. So, the price is always to some extend speculative and may look quite divorced from present circumstances. So, if during the Balmer era the price was depressed, it reflects the negative predicted outcome for Microsoft and if it is a bit lofty, it reflects expectations of better days to come for MSFT.
  - scarface74 7y ago
    Well it is suppose to be the current value of all future earnings. But the stock market isn’t usually rational. But like the old saying goes: “The stock market can stay irrational a lot longer than you can stay solvent.” There was nothing on the radar between 2000-2007 that even hinted at Microsoft remaining dominant.
  - sonnyblarney 7y ago
    Future earnings are difficult to predict, so they factor in the warm fuzzy things that the CEO talks about, and how much 'confidence' they have in them. Also - times change. In the 2000's people just thought MS was 'old'. Now they are realizing there's some life in the beast. Satya deserves a lot of credit, nothing bad to say - but in hindsight it also seems as if MSFT was under priced.
- jillesvangurp 7y ago
  MS was basically making money no matter what given the highly lucrative office + windows franchise that Bill Gates left behind. I wouldn't credit Balmer with that too much he just basically kept on milking that. The problem by the time he left was that there was increasingly less to squeeze. Shareholders tend to look forward rather than backward and it was getting very clear that windows and office were increasingly less critical to users and that there were some serious revenue issues around that going forward. Windows on the server was basically getting less relevant by the day. Windows desktop was feeling a lot of pressure from Apple and increasingly Google. Office sales were suffering when companies started using alternative office tools from e.g. Google. Windows Phone was not working that great either and struggled to gain market share on Apple and Google. The Nokia acquisition that Balmer pushed through was sort of the nail in the coffin here. That was an expensive failure and that is 100% on Balmer. The keyword in those strategies was windows. Under Balmer it absolutely had to be windows everywhere. Server, desktop, mobile, IOT, and all the rest. It wasn't working. That's why Balmer 'left' (i.e. was pretty much fired but in a nice face saving way). Nadella killed that windows everything strategy and turned things around. Office is now liberated from Windows and making a lot of money for MS again. Cloud is growing more important as well, courtesy of mostly non windows software running on Linux in Azure. Meanwhile windows on the desktop seems pretty cool now that MS has added Linux integration, a non MS browser, and a few other things that make it a lot more attractive for developers and users and now that they are no longer forced to be in this windows everything walled garden. Even mobile is doing great for MS now that they can focus on treating IOS and Android as first class citizens.
deleted 7y ago
[deleted]
sgustard 7y ago
Is it time to add Microsoft to FAANG?
- kerneltime 7y ago
  MAFANG!
- qlm 7y ago
  It probably should have always been there. I feel like the only reason Netflix is included in that acronym is to stop it from looking a bit like a homophobic slur.
naringas 7y ago
_
victor106 7y ago
The new Microsoft is good and Nadella is awesome. The one product that really sucks from this Microsoft is Azure. I commented in a thread before Azure is the absolute worst cloud provider amongst the big three after we thoroughly evaluated all three. AWS is the best and GCP is next. But due to management pressure we had to go with Azure. Unfortunately the best product does not always win in the enterprise. (That is why Steve Jobs never wanted to sell directly to enterprises).
- TomMarius 7y ago
  Could you please go more in depth? What is so good about Amazon and what is wrong about Azure? Thank you! The thing is that it seems to be the opposite when you're looking at it as a non-technical manager.
  - victor106 7y ago
    We had about 70 pages of solid analysis done on this that I unfortunately can’t share but some of the highlights:- 1. Terrible UI 2. Unclear Documentation 3. Frequent service outages. 4. Scalability issues, they were unable to scale a server in prod past 1000 connections where as in AWS/GCP they were able to 10x that with similar server specs. Something to do with how server defaults were set 5. Severe performance degradation and network exhaustion. To be fair there were some positives but nothing exceptional. But end of the day it kind of doesn't matter as Azure is going to be used in enterprises just because they have the legacy MSFT sales force that is tight with managements high up in the org. No wonder MSFT hit $1T. Its such a shame for our industry though. Engineering teams at other cloud providers sweat and toil to get things right for their customers whereas MSFT uses other means to beat them. Hopefully they can at least fix things after they get in. But we know the chance of that happening is slim.
    - nojvek 7y ago
      It’s just not Azure. Microsoft has a cultural problem of treating designers as second class citizens. Only some teams get the value of good design and UX.
tus87 7y ago
Is that a word for poor quality control?
gwern 7y ago
Are CEOs underpaid or overpaid?
m0zg 7y ago
The higher the rise, the harder the fall. Great old-timers continue to jump ship in droves, and new people only apply after getting rejected by FANGs of the world. Given the size of the company this will take a while longer to play out, but play out it will, eventually.

310 points by crones 7y ago

I'm failing to see what has changed. Point is that they still make the lion share of their revenue from milking PC OEMs and plumpy corporate clients. The fact that they changed tools for doing so, does not change the scheme at large. Their hosting service Azure just took over their AD and sharepoint clients with some extra being the genuine new clientele I'd say that under Nadella, they grew even more recalcitrant, and dependent on their main revenue sources. Ever got a visit from an MS salesperson recently? One that came to us to do AD was almost begging us to switch to AD on Azure. I'd also say that MS became a little bit akin google in that their new product efforts fall into unending cycles of rebrandings, and half-hearted restarts. A lot of oldtimer MS devs I knew say that now they got a genuine fear of every new tech coming from MS almost customarily becoming an abandonware in 2-3 years term.

maxxxxx 7y ago
“A lot of oldtimer MS devs I knew say that now they got a genuine fear of every new tech coming from MS almost customarily becoming an abandonware in 2-3 years term.” That’s how I have been feeling from around the time WPF came out... And they reinforce that fear regularly.
- ZanyProgrammer 7y ago
  UWP feels like it’s going to be abandonware.

1024core 7y ago

Satya has done a tremendous job turning around Microsoft. It was headed in the direction of becoming a slowly sinking behemoth under Ballmer, but he's turned it around. Sundar, on the other hand, is just content collecting $$ and showing more ads.

bryanlarsen 7y ago
The stuff propping up Microsoft now (Office 365, Azure, Windows 10) were all started under Ballmer, weren't they?
- shubhamjain 7y ago
  How does that matter? The article clearly states that Microsoft was still hanging on Window and PC software for majority of its revenue and made terrible bets (like Nokia acquisition) under Ballmer. Satya worked hard to change the direction of the company. He pushed to cut budgets from other departments and invested in Azure. Another important thing is that he resisted the urge to make shiny bets (like self driving cars) and kept the company focused on its cloud strategy.
  - Spooky23 7y ago
    They still are. Azure is to Office 365 as Apple's rebirth is to the iPod. "Halo effect". Office 365 was a classic Microsoft bundled cost play -- you have this big investment in your EA around the Microsoft ecosystem and you basically pay to put email in the cloud, and get Sharepoint and Skype for free. They then made deals on EA renewal to convert "on-prem" Office licenses to subscriptions to lock you in. In subsequent renewals, Microsoft uses Azure gift cards like a "tax credit" to drive behavior without a competitive process. They're essentially applying the Office 365 playbook to Windows Server/Active Directory/SQL Server and eventually Windows Client. Example: You pay for Azure AD by getting ATP for "free". It's not taking away from Satya, his genius is dressing up the classic Microsoft hard-nosed deal playbook and making it friendlier in key ways, and cutting the cord on legacy. (Which is a risk, as it's an opportunity for AWS, Google, Oracle, etc to sell) But ultimately, the strategy existed and was executed before with Ballmer, but with less charisma and humanity.
- Amezarak 7y ago
  Yeah, it's hard to see what Nadella's leadership has actually added to MS from where I've standing. As best as I can tell, there hasn't been any major new products or shifts since Ballmer left. People talk about MS "stagnating" under Ballmer, and that's true of the stock price, but revenue and profit more than doubled under Ballmer and he introduced multiple new billion-dollar products/services. Nadella has made some notable acquisitions (LinkedIn, Github, Minecraft), but I'm not real sure that these are really winners from a business perspective, aside from Minecraft. Sure, Ballmer had failures too - Windows Phone and Zune didn't take off. But you can't win every time. EDIT: Sorry, was lazy and abbreviated Windows Phone to WP.

thrower123 7y ago

What a great difference between him and Ballmer. I'd not be surprised if they eat Amazon's lunch on cloud computing in the next few years.

simonebrunozzi 7y ago
I would never, ever underestimate Andy Jassy. I consider him on par with Jeff Bezos, in terms of leadership and execution, if not superior. source: worked at AWS 2008-2014.
- thrower123 7y ago
  Possible, but from the inside as a Microsoft Partner, it feels like most of the world is just starting to move to the cloud, and when they do, they go Azure, because they are already dependent on Exchange.
  - cheeze 7y ago
    If you're already locked into msft, then yeah msft makes sense. But one thing people often forget is that AWS is cheaper than everyone else. This matters to most companies. Also, Azure is a pretty miserable dev experience for many of their services. Many of AWS smaller services aren't great, but better from what I've used/general sentiment.
    - dragonwriter 7y ago
      > But one thing people often forget is that AWS is cheaper than everyone else. GCP is, AFAIK, usually cheaper; but AWS is more established, and the “no one ever got fired for being buying...” player of public cloud (which has to chafe MSFT, since they pretty much displaced IBM in that role for on-prem.)
    - thrower123 7y ago
      The thing there is that almost everyone is already dependent on Office. Breaking that is nearly impossible.

Causality1 7y ago

I guess those Solitaire Premium subscriptions are really bringing in the cash.

notananthem 7y ago

Nadellaissance doesn't work at all and its breaking my soul, fuck off pithy headlines. That said, the board has done well picking leadership, Satya's driven a lot of amazing cultural change, and business too.

glenneroo 7y ago
> Nadellaissance doesn't work at all and its breaking my soul, fuck off pithy headlines. Care to explain? Do you work there? "doesn't work at all" meaning he's lazy?
- rconti 7y ago
  I think parent means the contrived term "Nadallaissance" as a headline gimmick.
  - OscarDC 7y ago
    To be fair, it looks really weird as a word to a French speaker. It reads almost like "adolescence" which roughly means "teenage years". I guess to an English speaker it sounds more like "Renaissance" but even that I'm not sure.
    - crispinb 7y ago
      To an English speaker it looks more like "wanker"
  - anticensor 7y ago
    I read it as "Nadella-nuissance".
crispinb 7y ago
True - one of the most egregious atrocities I've ever seen committed against English. I don't read Bloomberg in any case, but have no idea how I'd make myself read that article & maintain reasonable mental health regardless of the location.

spectramax 7y ago

It’s unfortunate to see Microsoft (along with Adobe, etc) expanding into Ads. If nothing else, they could really differentiate and join forces with Apple from privacy standpoint to oppose Google, Amazon and Facebook. Instead, “Intellisense with AI now available on VS Code” is Microsoft’s nice way of saying “We harvest the shit out of your data”. Ah, like a true Ad company. Don’t get me started on Windows 10 telemetry. I really believe that Apple’s bet on privacy will pay off well in the long term. They’re different companies (Apple is selling hardware) but boy they could have gone into Ads with a MASSIVE user base but they chose to limit Ads in the App Store. It would have been huge expansion opportunity but they didn’t pursue it. And it will pay off as privacy awareness spreads and Microsoft could join them as operating system providers.

exelius 7y ago
Yeah, Apple had the foresight to see the next big thing in tech was going to be privacy. But I think it’s reflective of a larger societal problem: we don’t know who to trust anymore. It seems like every company is trying to scam its users, so Apple is betting that there is a valuable segment of the market willing to pay a premium to do business with a brand that has no ulterior motives past selling you a device at a high markup, and maybe some value-add services. To be fair, this has always been a problem — I think the recent failings of the historical trust model are due to better information rather than any increase in exploitative behavior. But prior to the smartphone era, trust was a fuzzy, emotional problem where a customer’s trust in a brand could be influenced by marketing alone. Today it is an explicit, quantifiable problem where users are willing to vote with their feet. What companies are we bestowing authority upon? Do those companies’ business models truly have our best interests at heart? What guarantees do users have that their trust won’t be violated? I firmly believe that whoever can solve these questions to the market’s satisfaction will own the future.
- scarface74 7y ago
  Apple being big into privacy is just a benefit of their business model - they don’t need to make money off a data as a hardware company.

JamesBarney 7y ago

> There’s a bit of Silicon Valley cred, too, thanks to its acquisitions of LinkedIn, the professional social network, and GitHub, the software code repository. I would have thought open sourcing so much of it's framework, vscode, and typescript would have had a greater impact.

max76 7y ago
> I would have thought open sourcing so much of it's framework I have a pedantic correction here. Instead of open sourcing the .NET Framework they wrote a new opensource framework (named .NET core) that is very similar to their closed source framework. Microsoft is currently supporting and expanding both frameworks.
- n00j 7y ago
  FYI a lot of the .NET Framework is also opensource https://referencesource.microsoft.com/ https://referencesource.microsoft.com/
  - lozenge 7y ago
    It's shared source, not open source. It isn't even complete enough to compile.
- majkinetor 7y ago
  FYI, only way forward is core. Microsoft doesn't really invest much in older net and related (for example PowerShell 5). There may be fixes here and there but are mostly security. It defies logic to support 2 frameworks, one of which is WAY BETTER then the other and x-platform.
  - majkinetor 7y ago
    And only few days after this comment, is official: https://devblogs.microsoft.com/dotnet/introducing-net-5/ https://devblogs.microsoft.com/dotnet/introducing-net-5/
- 7y ago

kerng 7y ago

I think Nadella was driving more of a cultural change within the company. Business wise the path to Azure and the cloud was pretty straightforward and he stuck to it. The question to ask might be, would Ballmer have done something else then focus on cloud? Like focus more energy on phones for instance? That could have led to a different financial result.

loudmax 7y ago

Microsoft's core revenue is still due to market lock-in of their proprietary technologies: MS Office and Windows itself. There are other office suites out there, but nothing can gain much market share without complete compatibility for MS Office file formats: docx, pptx, etc. Microsoft produced a version of Office for Macs and that allowed Apple to grow greater than niche, but their market share was always tiny compared to Windows. Outside of Windows and Mac, you're in Open Source land, which is great if you're technically minded and want to tinker and explore, but not much of an option for folks who just want their computers to work with the consumer software and file formats around them. Other than Apple, where are the commercial alternatives to Microsoft? I'd be much more sympathetic to Nardella's renaissance if it meant real consumer choice. The situation is better than it was under Ballmer, but not as good as it could be in a real free marketplace.

bgorman 7y ago
G Suite, WPS Office, WordPerfect
- tabtab 7y ago
  Their compatibility with existing MS documents is not good enough yet. This is largely because you'd have to mirror many glitches and idiosyncrasies in MS's code to have full compatibility. Or as the say in the industry "bug-for-bug compatibility".
  - arethuza 7y ago
    To be fair there are features in Excel that you can't use in Excel online - password protected workbooks, watches etc.
- jlarocco 7y ago
  Google's office software is a joke compared to the standalone versions of Office. Microsoft's web based Office is pretty bad, too, but at least they don't mangle imported documents quite as bad. I know everybody thinks they're "good enough" for most people, but they're still crap compared to the regular desktop programs.

oneplane 7y ago

I like line about market cap being a useless metric for your own success. It's great on the meta-business side of things, but for real-world things it's hardly relevant.

rdslw 7y ago

As an investor I bought few years ago MSFT stock. I did it as I saw two things: 1. azure 2. o365 1. because I knew what happened (and was happening) with AWS 2. because microsoft moved to subscription model Those two things, connected with third "secret" incredient: BIGGEST user base (corporate) which WILL use those two offerings = success. Satya is/may be great. I bought stock around 2014/2015 because of the above and nothing more. If you have a big userbase you can monetize it really really well.

spectramax 7y ago
I think your reasoning is a perfect example of Confirmation bias, I do agree with your points but there is no way to analyze this objectively - market is a complex system with game theory and all kinds of players doing unpredictable things, disasters such as password leaks, etc. If results were the opposite, one can come up with various other reasons to explain their losses.
- TheGRS 7y ago
  Sure, but if you do understand what a company is doing under the hood, you can make informed long-term investments based on that (which still pose a risk because of the reasons you stated). If you knew Facebook's history and engineering practices years ago you would have accurately predicted that the other shoe would eventually drop. If you paid attention to Microsoft's shift in focus you would either have thought that it was foolish to try to beat Amazon or it was a great space to invest in because AWS has many flaws. I dunno, I'm just trying to say that knowledge about this stuff can give you an edge in investing.
- ljcn 7y ago
  To be fair the comment says "I bought it because x, y, z", which is probably true; not "it has gone up because x, y, z", although that might be implied.
- cjarrett 7y ago
  Most of the initiatives Satya has gotten credit for were started under Ballmer. Some of the worst moves I've seen regarding current MSFT internal culture were direct results of Satya Source: Me, at MSFT before Ballmer left and still there now. That doesn't mean Satya's not had a good effect overall. Part of the investor postives were due to PR differences that Satya made (which are very good), and his ability to talk about the future of the company is far superior to Ballmer.

macspoofing 7y ago

It's true. It's always hard to figure out exactly how much credit the CEO should get for successes or failures of the company, but since Nadella became CEO Microsoft made a lot of good decisions that really set them up for the future. Office365 is terrific. Azure is cementing itself as the default cloud for enterprises and a solid 2nd or 3rd option outside of the enterprise. Windows 10 is great.

jgalt212 7y ago

The subscription model is great/easy, but from the tax side I am leaning more towards the purchase model over AWS. I recently saw the Delta Airlines paid no Federal Taxes last year because of accelerated depreciation costs. With AWS, there is no accelerated depreciated, just current expenses. Anywho, I'm off to a new data center ground-breaking ceremony.

calvinbhai 7y ago

Having read Nadella's book Hit Refresh as soon as it went on sale, Microsoft performance since then doesn't look surprising at all. Having listed what's wrong (with their product focus, company culture etc), and where they plan to head, its' almost like the book informs the reader where puck is going to be (from Satya's POV). It's funny that 15 years back I was so anti MS and pro Google and now I think it's the other way!

maxxxxx 7y ago
“It's funny that 15 years back I was so anti MS and pro Google and now I think it's the other way!” Stay skeptical of all of them. No need to be fan of one of the big techs. In the end they are all greedy organizations that want to dominate. None of them should be trusted.
- bovermyer 7y ago
  I'm both wary of and hopeful about Microsoft and Google. "Trust but verify" and all that.
  - spectramax 7y ago
    I’ve always found this phrase an oxymoron.
    - bovermyer 7y ago
      Where humans are involved, mistakes will happen. Trusting someone but verifying their work is a safe and sane pairing.
      - apetresc 7y ago
        But the whole point of trusting is that you get to skip verifying. What's the difference between trusting and not trusting if you still have to put in the work of verification anyway?

morsmodr 7y ago

A good article, well rounded in nature by giving the pros and cons to Microsoft's rebirth. How it impacts Microsoft internally and externally to the market in general. We need more articles like this on the internet.

ousta 7y ago

The Azure investment started under ballmer-era

mtgx 7y ago

Personally, I'm more impressed by the company's President, Brad Smith, who seems to want real change in terms of digital rights. He's the man behind every single "pro user rights" Microsoft announcement you've seen in the past few years. Meanwhile, Nadella is the man behind every single user-hostile and user-tracking feature you've seen introduced in Windows 10 (pretty much).

jcoffland 7y ago

> “I don’t know of any other software company in the history of technology that fell onto hard times and has recovered so well,” says Reed Hastings, CEO of Netflix Inc. How about Apple?

jacques_chester 7y ago
Historically considered to be a hardware company.

scarface74 7y ago

Microsoft’s “performance” wasn’t bad by any objective metric during the Ballmer era. If the stock market were rational, MS stock would have been doing a lot better under Balmer than it did. But then again, if the stock market were rational, Lyft would have never been able to go public and Tesla would basically be worthless.

hangonhn 7y ago
Hang on. Stock market price is suppose to price in future earnings too. So, the price is always to some extend speculative and may look quite divorced from present circumstances. So, if during the Balmer era the price was depressed, it reflects the negative predicted outcome for Microsoft and if it is a bit lofty, it reflects expectations of better days to come for MSFT.
- scarface74 7y ago
  Well it is suppose to be the current value of all future earnings. But the stock market isn’t usually rational. But like the old saying goes: “The stock market can stay irrational a lot longer than you can stay solvent.” There was nothing on the radar between 2000-2007 that even hinted at Microsoft remaining dominant.
- sonnyblarney 7y ago
  Future earnings are difficult to predict, so they factor in the warm fuzzy things that the CEO talks about, and how much 'confidence' they have in them. Also - times change. In the 2000's people just thought MS was 'old'. Now they are realizing there's some life in the beast. Satya deserves a lot of credit, nothing bad to say - but in hindsight it also seems as if MSFT was under priced.
jillesvangurp 7y ago
MS was basically making money no matter what given the highly lucrative office + windows franchise that Bill Gates left behind. I wouldn't credit Balmer with that too much he just basically kept on milking that. The problem by the time he left was that there was increasingly less to squeeze. Shareholders tend to look forward rather than backward and it was getting very clear that windows and office were increasingly less critical to users and that there were some serious revenue issues around that going forward. Windows on the server was basically getting less relevant by the day. Windows desktop was feeling a lot of pressure from Apple and increasingly Google. Office sales were suffering when companies started using alternative office tools from e.g. Google. Windows Phone was not working that great either and struggled to gain market share on Apple and Google. The Nokia acquisition that Balmer pushed through was sort of the nail in the coffin here. That was an expensive failure and that is 100% on Balmer. The keyword in those strategies was windows. Under Balmer it absolutely had to be windows everywhere. Server, desktop, mobile, IOT, and all the rest. It wasn't working. That's why Balmer 'left' (i.e. was pretty much fired but in a nice face saving way). Nadella killed that windows everything strategy and turned things around. Office is now liberated from Windows and making a lot of money for MS again. Cloud is growing more important as well, courtesy of mostly non windows software running on Linux in Azure. Meanwhile windows on the desktop seems pretty cool now that MS has added Linux integration, a non MS browser, and a few other things that make it a lot more attractive for developers and users and now that they are no longer forced to be in this windows everything walled garden. Even mobile is doing great for MS now that they can focus on treating IOS and Android as first class citizens.

deleted 7y ago

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sgustard 7y ago

Is it time to add Microsoft to FAANG?

kerneltime 7y ago
MAFANG!
qlm 7y ago
It probably should have always been there. I feel like the only reason Netflix is included in that acronym is to stop it from looking a bit like a homophobic slur.

naringas 7y ago

victor106 7y ago

The new Microsoft is good and Nadella is awesome. The one product that really sucks from this Microsoft is Azure. I commented in a thread before Azure is the absolute worst cloud provider amongst the big three after we thoroughly evaluated all three. AWS is the best and GCP is next. But due to management pressure we had to go with Azure. Unfortunately the best product does not always win in the enterprise. (That is why Steve Jobs never wanted to sell directly to enterprises).

TomMarius 7y ago
Could you please go more in depth? What is so good about Amazon and what is wrong about Azure? Thank you! The thing is that it seems to be the opposite when you're looking at it as a non-technical manager.
- victor106 7y ago
  We had about 70 pages of solid analysis done on this that I unfortunately can’t share but some of the highlights:- 1. Terrible UI 2. Unclear Documentation 3. Frequent service outages. 4. Scalability issues, they were unable to scale a server in prod past 1000 connections where as in AWS/GCP they were able to 10x that with similar server specs. Something to do with how server defaults were set 5. Severe performance degradation and network exhaustion. To be fair there were some positives but nothing exceptional. But end of the day it kind of doesn't matter as Azure is going to be used in enterprises just because they have the legacy MSFT sales force that is tight with managements high up in the org. No wonder MSFT hit $1T. Its such a shame for our industry though. Engineering teams at other cloud providers sweat and toil to get things right for their customers whereas MSFT uses other means to beat them. Hopefully they can at least fix things after they get in. But we know the chance of that happening is slim.
  - nojvek 7y ago
    It’s just not Azure. Microsoft has a cultural problem of treating designers as second class citizens. Only some teams get the value of good design and UX.

tus87 7y ago

Is that a word for poor quality control?

gwern 7y ago

Are CEOs underpaid or overpaid?

m0zg 7y ago

The higher the rise, the harder the fall. Great old-timers continue to jump ship in droves, and new people only apply after getting rejected by FANGs of the world. Given the size of the company this will take a while longer to play out, but play out it will, eventually.