22 ms·

> They have one huge cash cow that funds the entire company Office, windows, Azure/development, Xbox/gaming are all integrated and cash cows.

zeusk 5y ago
Surface, Dynamics/PowerBI, Research, NeXT (Hololens)
- simonh 5y ago
  All utterly peripheral, they could wither and die and have no noticeable impact on the bottom line, which is exactly the point I'm making.
  - zeusk 5y ago
    Surface is already ~$8B of revenue/year business, not sure how or why you think a business of that size is unnoticeable or nobody would notice that if it were to wither away. Not sure how specific revenue figures I'm allowed to express here publicly but Dynamics and Hololens have also been big cashcows lately. Research, sure it isn't a direct revenue generating group but their patents portfolio is immense. Heck, even LinkedIn is $10B/year business now. Maybe you're living under a rock?
    - simonh 5y ago
      They’re nice businesses, but losing them would not substantially change or harm the company the way losing Windows or Azure would. The way losing AWS would harm Amazon, losing Search Ads would harm Google, losing iPhone would harm Apple. If Microsoft lost XBox or LinkedIN they’d walk it off. That’s the point I’m making.
simonh 5y ago
I addressed XBox specifically. They wrote off $1.5Bn over the XBox 360 red rings of death issue. It's possible they might have recouped that since, with inflation and interest adjustment, but doubtful. Windows and Azure are the tent poles I was thinking of when I said they had more than one now. I tend to see Windows and Office as fundamentally the same business though, along with development tools, in the same way that I think it's unreasonable to consider Apple's applications business separately from MacOS. Split Office from Windows and I think it would struggle, certainly it wouldn't have got to where it is now. It's an add-on to the Windows business. On it's own it wouldn't be industry dominating the way Windows, AWS, Google Search, etc are. It's a good business but not industry shaping, not anymore anyway.
- fossuser 5y ago
  Arguably Windows was starting to fail and Microsoft appeared to be in serious trouble. Then Nadella replaced Ballmer and corrected course: https://stratechery.com/2018/the-end-of-windows/ https://stratechery.com/2018/the-end-of-windows/ Now they’ve pivoted to grow azure and O365 successfully in addition to leverage the Xbox via game pass to fit into that strategic world. I think this mostly supports your point - it took an existential crisis and ousting a CEO that couldn’t adapt in order to save them when their cash cow started to falter.
  - NicoJuicy 5y ago
    Windows never failed in desktop OS. And didn't succeed in mobile in the first place. Nadella could quickly release office cross-platform because of work during Ballmer.
    - fossuser 5y ago
      Desktop operating systems as a differentiating feature started being a strategic failure because of the web. Ballmer doubled down on Windows at the expense of other stuff. There is a common HN trope that Ballmer was doing everything perfectly and Nadella just continued it. I don’t buy it and neither did the market. (Neither did Microsoft’s board presumably) I think Ballmer’s entire strategic direction was long-term wrong and Nadella changed it. This isn’t to say no projects started under Ballmer (they definitely did) it’s about whether those were prioritized or would have ever shipped under him successfully. If the wrong things are considered important - it doesn’t really matter what projects are happening.
      - zeusk 5y ago
        Google was the one pushing web relentlessly and has arguably made computing UX worse for everyone. From bad performance and overdone advertising+tracking to relatively smaller issues like bad accessibility. They're still trying very hard to put everything on web so Chrome can be what windows used to be.

zeusk 5y ago

Surface, Dynamics/PowerBI, Research, NeXT (Hololens)

simonh 5y ago
All utterly peripheral, they could wither and die and have no noticeable impact on the bottom line, which is exactly the point I'm making.
- zeusk 5y ago
  Surface is already ~$8B of revenue/year business, not sure how or why you think a business of that size is unnoticeable or nobody would notice that if it were to wither away. Not sure how specific revenue figures I'm allowed to express here publicly but Dynamics and Hololens have also been big cashcows lately. Research, sure it isn't a direct revenue generating group but their patents portfolio is immense. Heck, even LinkedIn is $10B/year business now. Maybe you're living under a rock?
  - simonh 5y ago
    They’re nice businesses, but losing them would not substantially change or harm the company the way losing Windows or Azure would. The way losing AWS would harm Amazon, losing Search Ads would harm Google, losing iPhone would harm Apple. If Microsoft lost XBox or LinkedIN they’d walk it off. That’s the point I’m making.

simonh 5y ago

I addressed XBox specifically. They wrote off $1.5Bn over the XBox 360 red rings of death issue. It's possible they might have recouped that since, with inflation and interest adjustment, but doubtful. Windows and Azure are the tent poles I was thinking of when I said they had more than one now. I tend to see Windows and Office as fundamentally the same business though, along with development tools, in the same way that I think it's unreasonable to consider Apple's applications business separately from MacOS. Split Office from Windows and I think it would struggle, certainly it wouldn't have got to where it is now. It's an add-on to the Windows business. On it's own it wouldn't be industry dominating the way Windows, AWS, Google Search, etc are. It's a good business but not industry shaping, not anymore anyway.

fossuser 5y ago
Arguably Windows was starting to fail and Microsoft appeared to be in serious trouble. Then Nadella replaced Ballmer and corrected course: https://stratechery.com/2018/the-end-of-windows/ https://stratechery.com/2018/the-end-of-windows/ Now they’ve pivoted to grow azure and O365 successfully in addition to leverage the Xbox via game pass to fit into that strategic world. I think this mostly supports your point - it took an existential crisis and ousting a CEO that couldn’t adapt in order to save them when their cash cow started to falter.
- NicoJuicy 5y ago
  Windows never failed in desktop OS. And didn't succeed in mobile in the first place. Nadella could quickly release office cross-platform because of work during Ballmer.
  - fossuser 5y ago
    Desktop operating systems as a differentiating feature started being a strategic failure because of the web. Ballmer doubled down on Windows at the expense of other stuff. There is a common HN trope that Ballmer was doing everything perfectly and Nadella just continued it. I don’t buy it and neither did the market. (Neither did Microsoft’s board presumably) I think Ballmer’s entire strategic direction was long-term wrong and Nadella changed it. This isn’t to say no projects started under Ballmer (they definitely did) it’s about whether those were prioritized or would have ever shipped under him successfully. If the wrong things are considered important - it doesn’t really matter what projects are happening.
    - zeusk 5y ago
      Google was the one pushing web relentlessly and has arguably made computing UX worse for everyone. From bad performance and overdone advertising+tracking to relatively smaller issues like bad accessibility. They're still trying very hard to put everything on web so Chrome can be what windows used to be.