10 ms·

Steve Ballmer's Microsoft

179 points by lleims 14y ago

CubicleNinjas 14y ago
"While Microsoft is no disruptive force in tech today, the truth is that it has never been." This is so false it is painful for me to read. I'm embarrassed for the author. "The company's core competency is a process it uses for entering and consuming existing industries. After it enters a market, it rides off the innovations of its competitors, uses its existing brand power and sheer size to tackle a large surface area at the bottom of the market, and then, finally, it develops a valuable platform on top of the new market. As the platform grows, it slowly squeezes out the existing players." Name one instance of this in the past 15 years. One. Oh wait, the author lists a few! Xbox? Well, they have operated at a loss for the first seven years or so, ousted the entire create leadership team (Bach and Allard say howdy), and now are turning nice sums of coin. But this isn't truly Microsofts win, it is the entire industry's failures. Nintendo and Sony are seeing bad times. The currency difference is hurting Japanese companies, who are tired of innovating. Even many lead game designers are admitting the Japanese are years behind the US market. With Sony in turmoil and Nintendo trying to figure out how to right the ship, it is no wonder the years Xbox has seen a profit are only recently. "Windows Mobile" In 2010 Ballmer himself said they' lost a "whole generation of users". They dropped the ball so hard that even after the debut of the iPhone, when Google realized it was time to explore a new approach to Android, Ballmer didn't understand why it would be popular. Ballmer displayed a weak passion for mobile yes, but the crime here is that he displays no vision. Windows 7 is years too late. Nokia will die in a vain attempt to give this OS a chance, but it will never work. The audience only sees two contenders in the ring. "Windows" This is the only horse worth mentioning. It, and thus Office, are the default winners. Xerox, Kleenex, and Windows. They win this category by default as 99% of users could care less about the OS they use. But there are an insane amount of products not mentioned here! Where are the Zunes, the silverlights, the Vistas, or the Azures? There are hundreds of horrific decisions we all watch spiral out of control. Remember the Kin? How I so wanted to play with its awkwardness. Or the Courier? How I pulled at my hair when they killed not only the product, but laid off the entire team. Remember Ensemble or Bizzare Creations? They made some beautiful games. Remember Surface? Remember a decade of IE's disgraceful finger in the face of all web users? This is a history of successes? It sounds like a meandering path of exploration, where one in one hundred connects. This is luck. The overall premise here is that Microsoft deserves a gold star for existing. They made 6.3B profit last quarter! Give them a break. For comparison, Apple made 11.6B profit last quarter. That was a 47% increase from the previous year, which also had a 41% increase. These products were ideas that Microsoft had left behind, too busy swerving around trying to find a mission. Apple took the best ideas and developed a valuable ecosystem to grow as a platform. Sound familiar?
- DeepDuh 14y ago
  Courier looked extremely promising and I'm saying that as an OSX,iPhone,iPad user. How they could kill that thing off still blows my mind. Then again we have only ever seen an interface mockup, haven't we? Maybe the software / device they had didn't work. Still no excuse to just let this idea go, I still think that a booklet style tablet with pen, capacitive touchscreen and these GUI ideas would be great for many usecases. What's MS's thought process here? "Yeah no, we don't think specialized solutions like these are great for us, let's instead keep smashing on Win32 until it fits unto smartphones and tablets and serve one huge shit sausage." I wait with pleasure for the business user reactions once Windows' most useful and perfected feature, the start menu, is gone and replaced with a touch optimized fullscreen window with gigantic whitespaces and huge mouse paths for achieving anything. It is going to be beautiful.
  - CubicleNinjas 14y ago
    I completely agree! The rumor I'd heard was that Courier was killed because independent teams created the device components. When put together it wasn't refined enough to pass review. Plus, they didn't see tablets as a viable market...again. Fingers crossed there was a much cooler reason. I'm happy to say leaders from the Courier team left and started Paper on iOS. It is a dream to use and shows that they had the talent to make the Courier happen, if given the chance. http://itunes.apple.com/us/app/paper-by-fiftythree/id506003812?mt=8 http://itunes.apple.com/us/app/paper-by-fiftythree/id5060038... Ha, ha - agreed on the start menu as well. I really do wish MS well (they can't have not tested this, right?), as their plan is pretty much a Hail Mary pass. But these sorts of decisions don't instill hope.
- tallanvor 14y ago
  You're focused entirely on the consumer space, completely missing one of Dustin's big points. Where is Microsoft still doing big business? The Business Division, which is not only Office products like Word and Excel, but also SharePoint. They do huge business with SQL Server and Exchange, and products like Lync and Forefront are still growing. --Consumers could care less about those products, but obviously businesses have chosen to continue investing in them. Comparing Microsoft and Apple is silly. Microsoft is still primarily a software and services company while Apple has always been a hardware company - the only reason they're in software at all is to help sell their hardware.
facorreia 14y ago
Well said. It's amazing to see high level publications bashing Microsoft without even mentioning their hugely successful set of offerings for enterprises, and the impressive speed at which they're building the Azure services platform. I never bet against Microsoft.
maybird 14y ago
(229) M Entertainment and Devices How did they lose money on Xbox?
- mey 14y ago
  Entertainment/Devices is more then just Xbox. Skype acquisition could be in there, warrenty costs, and windows mobile. I doubt they are loosing money on "Xbox" depending on how you define that bubble.
- reidmain 14y ago
  They only recently started making money with every sale of a Xbox 360. Typically console makers sell their hardware at a loss to get it into as many hands as possible and then make money with software. That is why Nintendo is taking such a bath this generation. People buy a Wii for the novelty and only get one or two games where Microsoft and Sony are much more about the games they have on their consoles.
  - cube13 14y ago
    Nintendo has always sold their hardware for profit. They made money on the Wii from day one. They're taking a bath right now because the strength of the Yen versus USD removes a lot of their export profit. That, combined with the fact that they're ramping up production of the 3DS and the next console, is the reason they lost money.
  - Steko 14y ago
    Nintendo's taking a bath for multiple reasons but in regards to the wii (1) they rode it for too long and (2) all it did was games while the more robust hardware in the PS3 and Xbox made them more useful.
    - Drbble 14y ago
      And people got bored of the gimmick controller pretty quick, and it was too uncomfortable to use for standard game controls.
- 14y ago
dean 14y ago
The stock market is all about the future, not the past. A lot of people see Microsoft's future as being less profitable than its past. That's why people belittle it. Microsoft makes a ton of money, no one will deny that, but they make less money than they used to. It's funny how the OP shows the financial numbers for one quarter and says the "the trend here is clear". You can't determine a trend on one quarter, you have to compare to other quarters. Here are some numbers from Google Finance (http://www.google.com/finance?q=msft http://www.google.com/finance?q=msft) The first number is Q1 (Mar '12), the second is 2011 Net profit margin 29.34% 33.10% Operating margin 36.62% 38.83% Return on average assets 17.80% 23.77% Return on average equity 30.86% 44.84% Looks like the trend is down. Also, their stock price has been basically flat for 10 years. That tells you what the market thinks of Microsoft.
- rvn1045 14y ago
  "they make less money than they used to" That's incorrect, your looking at profit margins and not actual profits. Profits have actually been increasing every year in the last few years (except in 2009).
- Steko 14y ago
  People belittle Ballmer because: (1) they were the big villain for a long time and there's still a lot of unspent schadenfreude with their name on it. (2) they've always been juxtaposed with Apple which is in meteoric rise like nothing we've really ever seen. (3) because monkey boy Their stock price is flat only if you don't include the dividends they've paid out.
  - lkrubner 14y ago
    "Their stock price is flat only if you don't include the dividends they've paid out." You have that backwards. If people think a company will pay out big dividends, then they bid up the price of the stock. That Microsoft's stock has remained mostly flat despite good dividend payments suggests that the stock would have plummeted without the dividend payments, and it will plummet if the dividend payments stop. A flat stock price despite good dividends suggests weakness, not strength.
toot 14y ago
This is way off topic, but I was wondering does anyone know what this blog is built with, and if a site template is available? I really like the design and notice that another YC blogger Ilya Lichtenstein is using the same design on his site
- deleted 14y ago
  [deleted]
- akanster 14y ago
  Svbtle by Dustin Curtis - https://news.ycombinator.com/item?id=3742314 https://news.ycombinator.com/item?id=3742314
- yankcrime 14y ago
  And here's the obligatory clone: https://github.com/natew/obtvse https://github.com/natew/obtvse
owlishness 14y ago
I used to work for Microsoft, and while I now work for a "cooler" company, it's good to see people doing some actual analysis about it instead of blind M$ bashing.
- laconian 14y ago
  I used to work for them too. The atmosphere just got worse with every passing year. I don't think Ballmer's done anything to rejuvinate the culture. It just keeps getting more cutthroat and political.
  - brg 14y ago
    Another way of saying this is that the employees are well tenured.
rpikeca 14y ago
Blamer should have been gone a long time ago. They have lost some real visionaries because of him and lost site of what they are in the market to provide.
- dm8 14y ago
  Why? Kinect and Xbox came to fruition under his leadership. And that division alone can become billion dollar business for MSFT. Agreed WP7 was late but MSFT takes pride in being late to any market. After all, they are last man standing in most of the markets. Zune failed but can't he have couple of failures? Btw, their core enterprises business is growing.
  - deleted 14y ago
    [deleted]
  - Drbble 14y ago
    "Billion dollar business" is a miserable failure at MSFT current size.
Teapot 14y ago
Microsoft is only as good as the people paying allows it to be. If/when Windows refunds becomes popular, and people get the next-door kid to install an OS and LibreOffice. Then MS dies fast.
mrb 14y ago
"Microsoft's execution in mobile has been excellent". This could not be farther from reality. Microsoft has consistently lost money in the mobile market, to a point they are ashamed of it, and don't even give sale figures for the Windows Phone OS anymore. Profits from this business unit is reported in the "Entertainment and Devices" unit, which has turned a loss this quarter, again, of $229M. The only argument the author makes for claiming Microsoft's execution has been excellent is that "Windows Phone 7 is really good". Well, guess what? It may or may not be true that Windows Phone 7 is good, but it takes a whole lot more than a good OS to make a profit. You need to establish a community of developers who will write apps for your platform, you need to create an easy-to-use market place for end-users, you need to talk to phone manufacturers to make plenty of phones running your OS, you need to make deals with carriers to sell your phones, etc. Microsoft has failed at most of this, hence their financial losses. Microsoft's execution in the mobile market is, so far, a failure, and Ballmer is partly responsible.
- dcurtis 14y ago
  This isn't really an issue that you can take an extreme on. Even in relative "failure," Microsoft has executed correctly in mobile. Actually, their execution has been way better than I would have expected. It is losing money, sure, but short term losses are not important when you're talking about entering a market as large as the mobile phone market after the existing players are firmly entrenched. The traditional metrics of success only matter after you've been successful.
  - Smudge 14y ago
    Yep. Microsoft sold the Xbox at a loss and didn't turn a profit from it until 2008 - 6 years after it first edged its way into the market. By that metric, it's way too soon to call Microsoft's mobile execution a failure.
    - jpadkins 14y ago
      Their first smart phone was windows mobile 2003. They been at it 9 years, 1 reboot and 2% market share. (longer if you count their pda days). it's pretty much a failure.
jarrett 14y ago
"Microsoft makes an endless quantity of software that is alluring to big businesses, like Office, SQL Server, Exchange, SharePoint, etc..." Let me offer some perspective on this. I worked for a number of years as a programmer at a large (read: "enterprise-scale") entity. Being in closer physical proximity to the general workforce than our IT department, I was often the go-to guy when employees needed tech support. And one thing I learned is that Microsoft's overcomplicated software saps countless hours of productivity from organizations. I shudder to imagine the salary dollars that go to waste every day as people search for a certain button in the Outlook interface, fiddle with Word's quirky indentation logic, try to set up mail forwarding in Exchange, and panic over the "lost" (actually hidden) rows in their Excel workbooks. If I were running a BigCo, I'd avoid exposing my regular employees to MS products. If my DBAs wanted to use SQL Server, ok, no problem. When it comes to software that is purely internal to the tech department, I'd trust their decision. But if I would never force my marketing department to do all their mail and calendaring with Outlook, unless of course I were willing to accept the inevitable productivity hit.
- tobtoh 14y ago
  You've never used Lotus Notes then ... you have no idea what non-intuitive counter-productive UI is until you use Notes.
  - OlivierLi 14y ago
    It's that much worse when your company still uses a version that has reached end of life. I must loose a good 30 minutes a day because of that.
  - hedgie 14y ago
    i consistently ask myself how the fuck IBM sells anything to anybody.
  - aerique 14y ago
    Thanks, I had repressed my memories of Lotus Notus for many years :-| Now I have to make an appointment with my shrink again.
throwaway63-90 14y ago
Developers, developers, developers. OK, Steve, whatever you say. It's only a matter of time before they lose their business customers. Then they are really in trouble.
- snowwrestler 14y ago
  It will be a while before that comes to pass. There aren't any significant competitors to Excel, Active Directory, or Exchange.
  - throwaway63-90 14y ago
    With Excel, I'm not sure. But if customers who are getting increasingly greater exposure to UNIX, through various channels, learn about UNIX alternatives to Active Directory and Exchange that work as well or better, but which cost less, it may well come to pass.
    - DeepDuh 14y ago
      Apple's 'Numbers' is actually quite good for most use cases, it's quite a bit more elegant as Excel anyway. The problem with Apple is their lack of experience in business support and their shortcomings in Q&A in the mac department lately. But windows 8 will definitely open up opportunities for contenders like Apple and Google in the business world.
      - throwaway63-90 14y ago
        Interesting.
        DeepDuh 14y ago
        Here's the key feature of Numbers vs. Excel: It not only has multiple Sheets, but multiple tables per sheet. Besides tables you can for example add text fields and images to a sheet. This makes it much much more natural to create reports and it encourages to split up your huge tables in logical units. Oh and one other thing: Modifying columns/rows is consistant over all iWorks applications: Alt + arrow-keys let's you insert rows/columns above, below, to the right or left. MS Office's inconsistency and lack of hotkeys for such an essential feature makes me rage every time I use it. Numbers sure has shortcomings though: no pivot tables, very limited scripting support, limited filtering / data manipulation. That's why I look at it as a very good spreadsheet tool, but not a data analysis tool - that's when Excel and/or Matlab come into play.
chj 14y ago
One thing could be sure is that he's business man, not really a product man, and hundreds of miles from a technology man. The problem of this is, he can't really manage his reports because he has no real idea of what they are doing, and what's going wrong. Jobs isn't a technology man either, but he knows what a good products is, and who are good in technology. Microsoft needs a great CTO to compensate what's not there in Ballmer. Btw, they should fire the one who decided WP7 doesn't need native development kit. That is the most stupid idea I've ever seen. Gee, they had the best native toolchain inherited from years of work on WM!
etrain 14y ago
Forbes named "worst CEOs" based on one pretty clear criteria: These CEOs have failed to create value (or stopped creating value) for their shareholders over long periods, yet remain employed, and their companies remain pretty large. GE has underperformed the S&P by 40% since Immelt took over, Microsoft by 30%, Walmart by 40%, and while both Lampert and Chambers created value for a while, their companies have substantially trailed the market over the last 3 and 10 years, respectively. Ballmer is perhaps guilty of inheriting a growth company just as it stopped growing, but you can't deny that Microsoft has essentially stopped growing under his watch.
- kevin_morrill 14y ago
  During Ballmer's tenure as CEO tripled revenues and more than doubled profits. It's one of the 5 most profitable companies in the world.
  - etrain 14y ago
    First - my point was about shareholder value. That has been depressed substantially since he took over, on a market relative basis. Second, It was the largest company in the world when he took the reigns. He's been the boss for 12 years. 9% annualized revenue growth and 6% annualized earnings growth doesn't strike me as astronomical, particularly when people were calling for 25% annualized growth for MSFT in 99/00. Again, you can argue that Microsoft was overvalued when Ballmer took over (and you'd be right), but the point is that even on the basis of fundamentals, his performance has not been outstanding.
6ren 14y ago
It's true there's much to be learned from microsoft on commercially successful platforms. They began with BASIC interpreters - a platform - which became a standardization across machines, to the extent that manufacturers boasted they were Microsoft BASIC compatible. Then, their insight that DOS was important. The original PC had a choice of three OS's - MSDOS was cheapest. Start at the low end, as the article says. Perhaps one reason they failed where iPhone succeeded was that the iPhone initially wasn't a platform. There was no appstore, you couldn't actually run apps on it, only those built in. The original iPhone was an app, not a platform - and it seems likely that that's what was needed to create that market. Of course, that doesn't excuse MS from not playing catch up as fast as Google did.
- Drbble 14y ago
  iPhone sexy hardware and OS made the market, not the lack of an app store
simonh 14y ago
If MS had thrown all their weight behind WP7 and made it their base platform for mobile computing going forward, with no compromises, I'd say fine. They missed the boat in 2007 but they're doing all the right things to catch up. But their'e not. WP7 is a technological dead end that will be replaced within the next 12 months by a phone version of Windows 8. Current Silverlight apps will run on that, but in reality developers will need to rewrite for the WinRT platform to get the benefits of full native performance and functionality. Meanwhile you can't develop WP7 apps in C or C++, it's .NET/XNA only. Cluster#@&
nikcub 14y ago
But Ballmer really is clueless. When I was at Techcrunch, we were preparing for an interview with him a couple of years ago and decided to throw in a couple of fun questions. Mike and I were both Age of Empire fans, so we decided to bring up the gaming division and ask why Microsoft got rid of Ensemble Studio's. He had no idea what we were talking about. Here was a major company decision that affected millions of customers world wide and it was obvious that he didn't know what we were talking about because he gave a generic 'sometimes you have to make tough decisions' answer after a long pause and no real explanation. When it came to asking about anything else, such as Google, he would ramble on for minutes about how they suck. Nothing deep, all just threats and insults about how Microsoft are kings. The problem is that all the smart people at Microsoft have left. The guys who could steer the company through the technology space - like Gates, Ozzie, Allard, etc. These guys were visionaries, Microsoft is now run by MBAs. The Ballmer group of business guys forced out the smart geek kids and are now running the camp. It has gone from being a leader to just reacting to competitors and then ranting about them.
pelumini 14y ago
A lot supported Forbes' Adam Hartung, but the number that rose up and spoke in support of Steve is amazing. The summary, Microsoft and Balmer are doing averagely well and shouldn't be tagged with that WORST label thing.
kaolinite 14y ago
Who actually is this Dustin Curtis guy? Looking at the list of the members of the "svbtle blog network" (here: http://svbtle.com/ http://svbtle.com/), he seems to be the only one without a company or achievement by his name (instead, he's labelled as "villain"). His writing is good, I'm just wondering who he is :-)
fauigerzigerk 14y ago
The contrarian opinion is refreshing but the fact is that Microsoft does not own any of the platforms that emerged in the past 10 years, maybe with the exception of game consoles, which is a rather fleeting business.
amalag 14y ago
I think any CEO who parades himself around his campus in an iPhone 'funeral' right after it's launched DEFINITELY deserves the worst CEO award.
basseq 14y ago
Microsoft makes a killing in the enterprise services market (aside: where, arguably, quality and user experience is less important than scaleability, end-to-end services, and feature set). The problem is that the latest round of technology (mobile, gaming, etc.) is not enterprise in the least. For an example of enterprise thinking failing in recent years, look no further than Research in Motion. Businesses will always have their own set of problems and solutions. As Dustin points out, this is very profitable. But I think the line between enterprise and consumer software (and hardware) is blurring to the point that there's not a clear delineation. If you can't be attractive to the consumer market, you're going to start seeing other people eating your lunch in the consumer market (see also: rise of iDevices in corporate IT shops, entrants like Google and Dropbox, etc.). Microsoft throws its legacy weight around, which counts for a lot. And they have some genuine good products, which counts for a little. But, IMO, their progress moving forward is more hindered than helped by Ballmer.

179 points by lleims 14y ago

"While Microsoft is no disruptive force in tech today, the truth is that it has never been." This is so false it is painful for me to read. I'm embarrassed for the author. "The company's core competency is a process it uses for entering and consuming existing industries. After it enters a market, it rides off the innovations of its competitors, uses its existing brand power and sheer size to tackle a large surface area at the bottom of the market, and then, finally, it develops a valuable platform on top of the new market. As the platform grows, it slowly squeezes out the existing players." Name one instance of this in the past 15 years. One. Oh wait, the author lists a few! Xbox? Well, they have operated at a loss for the first seven years or so, ousted the entire create leadership team (Bach and Allard say howdy), and now are turning nice sums of coin. But this isn't truly Microsofts win, it is the entire industry's failures. Nintendo and Sony are seeing bad times. The currency difference is hurting Japanese companies, who are tired of innovating. Even many lead game designers are admitting the Japanese are years behind the US market. With Sony in turmoil and Nintendo trying to figure out how to right the ship, it is no wonder the years Xbox has seen a profit are only recently. "Windows Mobile" In 2010 Ballmer himself said they' lost a "whole generation of users". They dropped the ball so hard that even after the debut of the iPhone, when Google realized it was time to explore a new approach to Android, Ballmer didn't understand why it would be popular. Ballmer displayed a weak passion for mobile yes, but the crime here is that he displays no vision. Windows 7 is years too late. Nokia will die in a vain attempt to give this OS a chance, but it will never work. The audience only sees two contenders in the ring. "Windows" This is the only horse worth mentioning. It, and thus Office, are the default winners. Xerox, Kleenex, and Windows. They win this category by default as 99% of users could care less about the OS they use. But there are an insane amount of products not mentioned here! Where are the Zunes, the silverlights, the Vistas, or the Azures? There are hundreds of horrific decisions we all watch spiral out of control. Remember the Kin? How I so wanted to play with its awkwardness. Or the Courier? How I pulled at my hair when they killed not only the product, but laid off the entire team. Remember Ensemble or Bizzare Creations? They made some beautiful games. Remember Surface? Remember a decade of IE's disgraceful finger in the face of all web users? This is a history of successes? It sounds like a meandering path of exploration, where one in one hundred connects. This is luck. The overall premise here is that Microsoft deserves a gold star for existing. They made 6.3B profit last quarter! Give them a break. For comparison, Apple made 11.6B profit last quarter. That was a 47% increase from the previous year, which also had a 41% increase. These products were ideas that Microsoft had left behind, too busy swerving around trying to find a mission. Apple took the best ideas and developed a valuable ecosystem to grow as a platform. Sound familiar?

DeepDuh 14y ago
Courier looked extremely promising and I'm saying that as an OSX,iPhone,iPad user. How they could kill that thing off still blows my mind. Then again we have only ever seen an interface mockup, haven't we? Maybe the software / device they had didn't work. Still no excuse to just let this idea go, I still think that a booklet style tablet with pen, capacitive touchscreen and these GUI ideas would be great for many usecases. What's MS's thought process here? "Yeah no, we don't think specialized solutions like these are great for us, let's instead keep smashing on Win32 until it fits unto smartphones and tablets and serve one huge shit sausage." I wait with pleasure for the business user reactions once Windows' most useful and perfected feature, the start menu, is gone and replaced with a touch optimized fullscreen window with gigantic whitespaces and huge mouse paths for achieving anything. It is going to be beautiful.
- CubicleNinjas 14y ago
  I completely agree! The rumor I'd heard was that Courier was killed because independent teams created the device components. When put together it wasn't refined enough to pass review. Plus, they didn't see tablets as a viable market...again. Fingers crossed there was a much cooler reason. I'm happy to say leaders from the Courier team left and started Paper on iOS. It is a dream to use and shows that they had the talent to make the Courier happen, if given the chance. http://itunes.apple.com/us/app/paper-by-fiftythree/id506003812?mt=8 http://itunes.apple.com/us/app/paper-by-fiftythree/id5060038... Ha, ha - agreed on the start menu as well. I really do wish MS well (they can't have not tested this, right?), as their plan is pretty much a Hail Mary pass. But these sorts of decisions don't instill hope.
tallanvor 14y ago
You're focused entirely on the consumer space, completely missing one of Dustin's big points. Where is Microsoft still doing big business? The Business Division, which is not only Office products like Word and Excel, but also SharePoint. They do huge business with SQL Server and Exchange, and products like Lync and Forefront are still growing. --Consumers could care less about those products, but obviously businesses have chosen to continue investing in them. Comparing Microsoft and Apple is silly. Microsoft is still primarily a software and services company while Apple has always been a hardware company - the only reason they're in software at all is to help sell their hardware.

facorreia 14y ago

Well said. It's amazing to see high level publications bashing Microsoft without even mentioning their hugely successful set of offerings for enterprises, and the impressive speed at which they're building the Azure services platform. I never bet against Microsoft.

maybird 14y ago

(229) M Entertainment and Devices How did they lose money on Xbox?

mey 14y ago
Entertainment/Devices is more then just Xbox. Skype acquisition could be in there, warrenty costs, and windows mobile. I doubt they are loosing money on "Xbox" depending on how you define that bubble.
reidmain 14y ago
They only recently started making money with every sale of a Xbox 360. Typically console makers sell their hardware at a loss to get it into as many hands as possible and then make money with software. That is why Nintendo is taking such a bath this generation. People buy a Wii for the novelty and only get one or two games where Microsoft and Sony are much more about the games they have on their consoles.
- cube13 14y ago
  Nintendo has always sold their hardware for profit. They made money on the Wii from day one. They're taking a bath right now because the strength of the Yen versus USD removes a lot of their export profit. That, combined with the fact that they're ramping up production of the 3DS and the next console, is the reason they lost money.
- Steko 14y ago
  Nintendo's taking a bath for multiple reasons but in regards to the wii (1) they rode it for too long and (2) all it did was games while the more robust hardware in the PS3 and Xbox made them more useful.
  - Drbble 14y ago
    And people got bored of the gimmick controller pretty quick, and it was too uncomfortable to use for standard game controls.
14y ago

dean 14y ago

The stock market is all about the future, not the past. A lot of people see Microsoft's future as being less profitable than its past. That's why people belittle it. Microsoft makes a ton of money, no one will deny that, but they make less money than they used to. It's funny how the OP shows the financial numbers for one quarter and says the "the trend here is clear". You can't determine a trend on one quarter, you have to compare to other quarters. Here are some numbers from Google Finance (http://www.google.com/finance?q=msft http://www.google.com/finance?q=msft) The first number is Q1 (Mar '12), the second is 2011 Net profit margin 29.34% 33.10% Operating margin 36.62% 38.83% Return on average assets 17.80% 23.77% Return on average equity 30.86% 44.84% Looks like the trend is down. Also, their stock price has been basically flat for 10 years. That tells you what the market thinks of Microsoft.

rvn1045 14y ago
"they make less money than they used to" That's incorrect, your looking at profit margins and not actual profits. Profits have actually been increasing every year in the last few years (except in 2009).
Steko 14y ago
People belittle Ballmer because: (1) they were the big villain for a long time and there's still a lot of unspent schadenfreude with their name on it. (2) they've always been juxtaposed with Apple which is in meteoric rise like nothing we've really ever seen. (3) because monkey boy Their stock price is flat only if you don't include the dividends they've paid out.
- lkrubner 14y ago
  "Their stock price is flat only if you don't include the dividends they've paid out." You have that backwards. If people think a company will pay out big dividends, then they bid up the price of the stock. That Microsoft's stock has remained mostly flat despite good dividend payments suggests that the stock would have plummeted without the dividend payments, and it will plummet if the dividend payments stop. A flat stock price despite good dividends suggests weakness, not strength.

toot 14y ago

This is way off topic, but I was wondering does anyone know what this blog is built with, and if a site template is available? I really like the design and notice that another YC blogger Ilya Lichtenstein is using the same design on his site

deleted 14y ago
[deleted]
akanster 14y ago
Svbtle by Dustin Curtis - https://news.ycombinator.com/item?id=3742314 https://news.ycombinator.com/item?id=3742314
yankcrime 14y ago
And here's the obligatory clone: https://github.com/natew/obtvse https://github.com/natew/obtvse

owlishness 14y ago

I used to work for Microsoft, and while I now work for a "cooler" company, it's good to see people doing some actual analysis about it instead of blind M$ bashing.

laconian 14y ago
I used to work for them too. The atmosphere just got worse with every passing year. I don't think Ballmer's done anything to rejuvinate the culture. It just keeps getting more cutthroat and political.
- brg 14y ago
  Another way of saying this is that the employees are well tenured.

rpikeca 14y ago

Blamer should have been gone a long time ago. They have lost some real visionaries because of him and lost site of what they are in the market to provide.

dm8 14y ago
Why? Kinect and Xbox came to fruition under his leadership. And that division alone can become billion dollar business for MSFT. Agreed WP7 was late but MSFT takes pride in being late to any market. After all, they are last man standing in most of the markets. Zune failed but can't he have couple of failures? Btw, their core enterprises business is growing.
- deleted 14y ago
  [deleted]
- Drbble 14y ago
  "Billion dollar business" is a miserable failure at MSFT current size.

Teapot 14y ago

Microsoft is only as good as the people paying allows it to be. If/when Windows refunds becomes popular, and people get the next-door kid to install an OS and LibreOffice. Then MS dies fast.

mrb 14y ago

"Microsoft's execution in mobile has been excellent". This could not be farther from reality. Microsoft has consistently lost money in the mobile market, to a point they are ashamed of it, and don't even give sale figures for the Windows Phone OS anymore. Profits from this business unit is reported in the "Entertainment and Devices" unit, which has turned a loss this quarter, again, of $229M. The only argument the author makes for claiming Microsoft's execution has been excellent is that "Windows Phone 7 is really good". Well, guess what? It may or may not be true that Windows Phone 7 is good, but it takes a whole lot more than a good OS to make a profit. You need to establish a community of developers who will write apps for your platform, you need to create an easy-to-use market place for end-users, you need to talk to phone manufacturers to make plenty of phones running your OS, you need to make deals with carriers to sell your phones, etc. Microsoft has failed at most of this, hence their financial losses. Microsoft's execution in the mobile market is, so far, a failure, and Ballmer is partly responsible.

dcurtis 14y ago
This isn't really an issue that you can take an extreme on. Even in relative "failure," Microsoft has executed correctly in mobile. Actually, their execution has been way better than I would have expected. It is losing money, sure, but short term losses are not important when you're talking about entering a market as large as the mobile phone market after the existing players are firmly entrenched. The traditional metrics of success only matter after you've been successful.
- Smudge 14y ago
  Yep. Microsoft sold the Xbox at a loss and didn't turn a profit from it until 2008 - 6 years after it first edged its way into the market. By that metric, it's way too soon to call Microsoft's mobile execution a failure.
  - jpadkins 14y ago
    Their first smart phone was windows mobile 2003. They been at it 9 years, 1 reboot and 2% market share. (longer if you count their pda days). it's pretty much a failure.

jarrett 14y ago

"Microsoft makes an endless quantity of software that is alluring to big businesses, like Office, SQL Server, Exchange, SharePoint, etc..." Let me offer some perspective on this. I worked for a number of years as a programmer at a large (read: "enterprise-scale") entity. Being in closer physical proximity to the general workforce than our IT department, I was often the go-to guy when employees needed tech support. And one thing I learned is that Microsoft's overcomplicated software saps countless hours of productivity from organizations. I shudder to imagine the salary dollars that go to waste every day as people search for a certain button in the Outlook interface, fiddle with Word's quirky indentation logic, try to set up mail forwarding in Exchange, and panic over the "lost" (actually hidden) rows in their Excel workbooks. If I were running a BigCo, I'd avoid exposing my regular employees to MS products. If my DBAs wanted to use SQL Server, ok, no problem. When it comes to software that is purely internal to the tech department, I'd trust their decision. But if I would never force my marketing department to do all their mail and calendaring with Outlook, unless of course I were willing to accept the inevitable productivity hit.

tobtoh 14y ago
You've never used Lotus Notes then ... you have no idea what non-intuitive counter-productive UI is until you use Notes.
- OlivierLi 14y ago
  It's that much worse when your company still uses a version that has reached end of life. I must loose a good 30 minutes a day because of that.
- hedgie 14y ago
  i consistently ask myself how the fuck IBM sells anything to anybody.
- aerique 14y ago
  Thanks, I had repressed my memories of Lotus Notus for many years :-| Now I have to make an appointment with my shrink again.

throwaway63-90 14y ago

Developers, developers, developers. OK, Steve, whatever you say. It's only a matter of time before they lose their business customers. Then they are really in trouble.

snowwrestler 14y ago
It will be a while before that comes to pass. There aren't any significant competitors to Excel, Active Directory, or Exchange.
- throwaway63-90 14y ago
  With Excel, I'm not sure. But if customers who are getting increasingly greater exposure to UNIX, through various channels, learn about UNIX alternatives to Active Directory and Exchange that work as well or better, but which cost less, it may well come to pass.
  - DeepDuh 14y ago
    Apple's 'Numbers' is actually quite good for most use cases, it's quite a bit more elegant as Excel anyway. The problem with Apple is their lack of experience in business support and their shortcomings in Q&A in the mac department lately. But windows 8 will definitely open up opportunities for contenders like Apple and Google in the business world.
    - throwaway63-90 14y ago
      Interesting.
      - DeepDuh 14y ago
        Here's the key feature of Numbers vs. Excel: It not only has multiple Sheets, but multiple tables per sheet. Besides tables you can for example add text fields and images to a sheet. This makes it much much more natural to create reports and it encourages to split up your huge tables in logical units. Oh and one other thing: Modifying columns/rows is consistant over all iWorks applications: Alt + arrow-keys let's you insert rows/columns above, below, to the right or left. MS Office's inconsistency and lack of hotkeys for such an essential feature makes me rage every time I use it. Numbers sure has shortcomings though: no pivot tables, very limited scripting support, limited filtering / data manipulation. That's why I look at it as a very good spreadsheet tool, but not a data analysis tool - that's when Excel and/or Matlab come into play.

chj 14y ago

One thing could be sure is that he's business man, not really a product man, and hundreds of miles from a technology man. The problem of this is, he can't really manage his reports because he has no real idea of what they are doing, and what's going wrong. Jobs isn't a technology man either, but he knows what a good products is, and who are good in technology. Microsoft needs a great CTO to compensate what's not there in Ballmer. Btw, they should fire the one who decided WP7 doesn't need native development kit. That is the most stupid idea I've ever seen. Gee, they had the best native toolchain inherited from years of work on WM!

etrain 14y ago

Forbes named "worst CEOs" based on one pretty clear criteria: These CEOs have failed to create value (or stopped creating value) for their shareholders over long periods, yet remain employed, and their companies remain pretty large. GE has underperformed the S&P by 40% since Immelt took over, Microsoft by 30%, Walmart by 40%, and while both Lampert and Chambers created value for a while, their companies have substantially trailed the market over the last 3 and 10 years, respectively. Ballmer is perhaps guilty of inheriting a growth company just as it stopped growing, but you can't deny that Microsoft has essentially stopped growing under his watch.

kevin_morrill 14y ago
During Ballmer's tenure as CEO tripled revenues and more than doubled profits. It's one of the 5 most profitable companies in the world.
- etrain 14y ago
  First - my point was about shareholder value. That has been depressed substantially since he took over, on a market relative basis. Second, It was the largest company in the world when he took the reigns. He's been the boss for 12 years. 9% annualized revenue growth and 6% annualized earnings growth doesn't strike me as astronomical, particularly when people were calling for 25% annualized growth for MSFT in 99/00. Again, you can argue that Microsoft was overvalued when Ballmer took over (and you'd be right), but the point is that even on the basis of fundamentals, his performance has not been outstanding.

6ren 14y ago

It's true there's much to be learned from microsoft on commercially successful platforms. They began with BASIC interpreters - a platform - which became a standardization across machines, to the extent that manufacturers boasted they were Microsoft BASIC compatible. Then, their insight that DOS was important. The original PC had a choice of three OS's - MSDOS was cheapest. Start at the low end, as the article says. Perhaps one reason they failed where iPhone succeeded was that the iPhone initially wasn't a platform. There was no appstore, you couldn't actually run apps on it, only those built in. The original iPhone was an app, not a platform - and it seems likely that that's what was needed to create that market. Of course, that doesn't excuse MS from not playing catch up as fast as Google did.

Drbble 14y ago
iPhone sexy hardware and OS made the market, not the lack of an app store

simonh 14y ago

If MS had thrown all their weight behind WP7 and made it their base platform for mobile computing going forward, with no compromises, I'd say fine. They missed the boat in 2007 but they're doing all the right things to catch up. But their'e not. WP7 is a technological dead end that will be replaced within the next 12 months by a phone version of Windows 8. Current Silverlight apps will run on that, but in reality developers will need to rewrite for the WinRT platform to get the benefits of full native performance and functionality. Meanwhile you can't develop WP7 apps in C or C++, it's .NET/XNA only. Cluster#@&

nikcub 14y ago

But Ballmer really is clueless. When I was at Techcrunch, we were preparing for an interview with him a couple of years ago and decided to throw in a couple of fun questions. Mike and I were both Age of Empire fans, so we decided to bring up the gaming division and ask why Microsoft got rid of Ensemble Studio's. He had no idea what we were talking about. Here was a major company decision that affected millions of customers world wide and it was obvious that he didn't know what we were talking about because he gave a generic 'sometimes you have to make tough decisions' answer after a long pause and no real explanation. When it came to asking about anything else, such as Google, he would ramble on for minutes about how they suck. Nothing deep, all just threats and insults about how Microsoft are kings. The problem is that all the smart people at Microsoft have left. The guys who could steer the company through the technology space - like Gates, Ozzie, Allard, etc. These guys were visionaries, Microsoft is now run by MBAs. The Ballmer group of business guys forced out the smart geek kids and are now running the camp. It has gone from being a leader to just reacting to competitors and then ranting about them.

pelumini 14y ago

A lot supported Forbes' Adam Hartung, but the number that rose up and spoke in support of Steve is amazing. The summary, Microsoft and Balmer are doing averagely well and shouldn't be tagged with that WORST label thing.

kaolinite 14y ago

Who actually is this Dustin Curtis guy? Looking at the list of the members of the "svbtle blog network" (here: http://svbtle.com/ http://svbtle.com/), he seems to be the only one without a company or achievement by his name (instead, he's labelled as "villain"). His writing is good, I'm just wondering who he is :-)

fauigerzigerk 14y ago

The contrarian opinion is refreshing but the fact is that Microsoft does not own any of the platforms that emerged in the past 10 years, maybe with the exception of game consoles, which is a rather fleeting business.

amalag 14y ago

I think any CEO who parades himself around his campus in an iPhone 'funeral' right after it's launched DEFINITELY deserves the worst CEO award.

basseq 14y ago

Microsoft makes a killing in the enterprise services market (aside: where, arguably, quality and user experience is less important than scaleability, end-to-end services, and feature set). The problem is that the latest round of technology (mobile, gaming, etc.) is not enterprise in the least. For an example of enterprise thinking failing in recent years, look no further than Research in Motion. Businesses will always have their own set of problems and solutions. As Dustin points out, this is very profitable. But I think the line between enterprise and consumer software (and hardware) is blurring to the point that there's not a clear delineation. If you can't be attractive to the consumer market, you're going to start seeing other people eating your lunch in the consumer market (see also: rise of iDevices in corporate IT shops, entrants like Google and Dropbox, etc.). Microsoft throws its legacy weight around, which counts for a lot. And they have some genuine good products, which counts for a little. But, IMO, their progress moving forward is more hindered than helped by Ballmer.