4 ms·

As a student of history this means you should go all in on out of the money calls.

by mrits 5y ago

adventured 5y ago
There could be substantial lag. Microsoft went net sideways from 1998 to 2013, and then up ten fold since.
- jonathankoren 5y ago
  I still don't understand how Microsoft reinvented itself. Did they manage to sell some very large and entrenched companies on Azure, or what?
  - fidesomnes 5y ago
    subscription models for everything.
  - cududa 5y ago
    One culture mostly evaporated due to the consent decree. The people left fought over resources and fiefdoms of what was left/ within new parameters. Ballmer left, Satya built a new culture with new values. Sounds pedantic but that's truly it.
  - adventured 5y ago
    Financially, cloud has become an extraordinary profit machine for Microsoft, far beyond anything traditional consumer Windows ever has been (for a long time obviously it was far and away the cash cow). Their operating income margin, for a company so massive, is mind boggling. $70 billion in operating income from $168b in sales (41.6%). By comparison it was 28% in 2013. So their margin has rather dramatically re-expanded during the Nadella era, like they're a younger company again. I think Microsoft is benefiting from not gorging and becoming obese again (employee count vs sales) as it did during the late Gates years and the Ballmer years. Microsoft could trivially load up on people for no great reason other than to always be expanding to fill the margin (many companies do that), but they seem to have made a conscious decision to be more disciplined. I bet that's working in their favor, as high levels of bloat usually acts like quicksand for larger older companies. They're probably more nimble now than when they had half the sales back in 2013. Nadella seemed immediately able to relax on the Windows-everything philosophy in a way Gates and Ballmer were unable to (they were perhaps too wed to the first chapter of Microsoft, people get blinded by such biases, even very smart people). And to his credit, Gates didn't try to get in Nadella's way as he made changes, Gates had been chairman of Microsoft from 1981 to 2014, with his stature and financial capabilities he could have been a real slag in the way of change.
  - jedberg 5y ago
    They got a new CEO who actually cared about engineers. Some of his first acts were open sourcing things, actually participating in open source and contributing, and supporting Linux. When Nadella started, I actually said to others that for the first time in my career I would consider working at Microsoft. Also they sold the shit out of Azure. Every big enterprise contract would include $500,000 of Azure credit for free, and the sales reps would constantly remind you that you're going to lose your free money. So CIOs would say, "Hey we have all this credit we should use it" and then all of a sudden their company was using Azure and liking it (because it's a pretty great platform if you're already using a ton of MS products in your enterprise). It's no coincidence Nadella was in charge of Azure before being CEO. He knows how to make things developers actually like.
    - jdmichal 5y ago
      There's more than this. This covers what might happen at a tech company, but what about all those other companies that don't employ developers? Well, Microsoft also has Azure Active Directory and Office 365. Replacing expensive AD and Exchange servers -- and the employees to manage them -- with a simple monthly subscription makes a pretty convincing case to a lot of companies. Especially those that would like to minimize IT as much as possible, because it's not a core competency.
      - formerly_proven 5y ago
        Yes, and all of those not-primarily-software industries haven't yet caught on that unconditionally using SaaS is not a good idea, while at least some software companies are realizing this now. In SW land the pendulum starts to come back from SaaS-all-the-way, outside SW land it's still in full swing to SaaS-all-day-every-day.
        jedberg 5y ago
        I don't agree with you, but even if I did, Microsoft is probably best positioned to take advantage of such a trend, since they have the most seamless experience going from their cloud products to their hosted products.
  - mensetmanusman 5y ago
    I saw it first hand being in a different F500 company. Basically all the old tools were written in excel/word/ppt and it was cheaper to just subscribe to O365 than to switch. Monetizing yearly subscriptions is way more profitable than waiting every 5-10 years for people to buy the next version.
  - alx__ 5y ago
    In my mind they released VS Code and have been excellent in supporting it They bought GitHub and LinkedIn
- lapetitejort 5y ago
  Perhaps bet on ten years after regulatory capture makes them an entrenched company?
- deleted 5y ago
  [deleted]

As a student of history this means you should go all in on out of the money calls.

by mrits 5y ago

As a student of history this means you should go all in on out of the money calls.

adventured 5y ago

There could be substantial lag. Microsoft went net sideways from 1998 to 2013, and then up ten fold since.

jonathankoren 5y ago
I still don't understand how Microsoft reinvented itself. Did they manage to sell some very large and entrenched companies on Azure, or what?
- fidesomnes 5y ago
  subscription models for everything.
- cududa 5y ago
  One culture mostly evaporated due to the consent decree. The people left fought over resources and fiefdoms of what was left/ within new parameters. Ballmer left, Satya built a new culture with new values. Sounds pedantic but that's truly it.
- adventured 5y ago
  Financially, cloud has become an extraordinary profit machine for Microsoft, far beyond anything traditional consumer Windows ever has been (for a long time obviously it was far and away the cash cow). Their operating income margin, for a company so massive, is mind boggling. $70 billion in operating income from $168b in sales (41.6%). By comparison it was 28% in 2013. So their margin has rather dramatically re-expanded during the Nadella era, like they're a younger company again. I think Microsoft is benefiting from not gorging and becoming obese again (employee count vs sales) as it did during the late Gates years and the Ballmer years. Microsoft could trivially load up on people for no great reason other than to always be expanding to fill the margin (many companies do that), but they seem to have made a conscious decision to be more disciplined. I bet that's working in their favor, as high levels of bloat usually acts like quicksand for larger older companies. They're probably more nimble now than when they had half the sales back in 2013. Nadella seemed immediately able to relax on the Windows-everything philosophy in a way Gates and Ballmer were unable to (they were perhaps too wed to the first chapter of Microsoft, people get blinded by such biases, even very smart people). And to his credit, Gates didn't try to get in Nadella's way as he made changes, Gates had been chairman of Microsoft from 1981 to 2014, with his stature and financial capabilities he could have been a real slag in the way of change.
- jedberg 5y ago
  They got a new CEO who actually cared about engineers. Some of his first acts were open sourcing things, actually participating in open source and contributing, and supporting Linux. When Nadella started, I actually said to others that for the first time in my career I would consider working at Microsoft. Also they sold the shit out of Azure. Every big enterprise contract would include $500,000 of Azure credit for free, and the sales reps would constantly remind you that you're going to lose your free money. So CIOs would say, "Hey we have all this credit we should use it" and then all of a sudden their company was using Azure and liking it (because it's a pretty great platform if you're already using a ton of MS products in your enterprise). It's no coincidence Nadella was in charge of Azure before being CEO. He knows how to make things developers actually like.
  - jdmichal 5y ago
    There's more than this. This covers what might happen at a tech company, but what about all those other companies that don't employ developers? Well, Microsoft also has Azure Active Directory and Office 365. Replacing expensive AD and Exchange servers -- and the employees to manage them -- with a simple monthly subscription makes a pretty convincing case to a lot of companies. Especially those that would like to minimize IT as much as possible, because it's not a core competency.
    - formerly_proven 5y ago
      Yes, and all of those not-primarily-software industries haven't yet caught on that unconditionally using SaaS is not a good idea, while at least some software companies are realizing this now. In SW land the pendulum starts to come back from SaaS-all-the-way, outside SW land it's still in full swing to SaaS-all-day-every-day.
      - jedberg 5y ago
        I don't agree with you, but even if I did, Microsoft is probably best positioned to take advantage of such a trend, since they have the most seamless experience going from their cloud products to their hosted products.
- mensetmanusman 5y ago
  I saw it first hand being in a different F500 company. Basically all the old tools were written in excel/word/ppt and it was cheaper to just subscribe to O365 than to switch. Monetizing yearly subscriptions is way more profitable than waiting every 5-10 years for people to buy the next version.
- alx__ 5y ago
  In my mind they released VS Code and have been excellent in supporting it They bought GitHub and LinkedIn
lapetitejort 5y ago
Perhaps bet on ten years after regulatory capture makes them an entrenched company?
deleted 5y ago
[deleted]