10 ms·

Microsoft’s Lost Decade

87 points by f3r3nc 14y ago

rlu 14y ago
just...no. http://www.neowin.net/news/what-the-hell-is-microsofts-lost-decade http://www.neowin.net/news/what-the-hell-is-microsofts-lost-...
- Herring 14y ago
  Microsoft would look like a huge success if it wasn't for Apple & Google, is what that article is saying.
- marze 14y ago
  Well, how about the stock? Certainly not a lost decade by any measure of Microsoft's stock price. Some incredibly awesome denial in the comment thread of your link, rlu.
  - diego 14y ago
    Microsoft underperformed the market indices in the past ten years (SP500, Nasdaq, Dow Jones). That means its shareholders would have been better off selling the stock and investing in a diversified fund.
    - recoiledsnake 14y ago
      Does that take into account the dividends paid?
- allwein 14y ago
  His biggest argument for Microsoft not having a lost decade is the things that Microsoft plans on releasing in the next year?
deleted 14y ago
[deleted]
facorreia 14y ago
What was the total profit of Microsoft during this "lost decade"?
- raldi 14y ago
  That's like asking, "How far did your car coast after you ran out of gas?"
  - achal 14y ago
    And getting an answer along the lines of "I think I got some 200 miles."
    - raldi 14y ago
      Exactly -- what an amazing amount of momentum to have wasted!
    - CamperBob2 14y ago
      While everybody else coasted 500.
      - raldi 14y ago
        I wouldn't call what their competitors did "coasting."
maytc 14y ago
"Cool is what tech consumers want. Exhibit A: today the iPhone brings in more revenue than the entirety of Microsoft. No, really."
skadamat 14y ago
Repost, OP had to post the mobile link to the article
velodrome 14y ago
Lost decade? No. Microsoft has positions in all the right places. They were in tablets, phones, and other devices early. However, the execution was poor. They did have a good shot at emerging tech markets and they still do. Microsoft still dominates business/enterprise. Apple, the consumer end. Microsoft is just being displaced. They have a limited time to respond before it really starts to erode their profits.
- gbog 14y ago
  > Microsoft still dominates business/enterprise. Apple, the consumer end. Would you happen to have any data to support this? In my world, Microsoft dominates both ends, by a very large margin.
  - MrScruff 14y ago
    As stated in the article, the iPhone alone brings in more revenue than Microsoft's entire product line, so it's difficult to see how they can dominate the consumer end by 'a very large margin'.
    - ebf 14y ago
      Obviously, it depends on how you define owning the consumer market.
- CharlieA 14y ago
  "Microsoft has positions in all the right places." This. Microsoft today is still one of the world's biggest companies, with a lot of talented people and considerable inlets into practically every home and office in the developed world. Apple of yesterday grew to eclipse Microsoft in a matter of years--there's no reason Microsoft can't pull off a similar reversal with the right maneuvering of its own considerable resources.
  - latch 14y ago
    Methinks you both might be missing the economic meaning of "lost decade". It essentially refers to a gradual decline. There can be no doubt that, from its shares, it _has_ been a lost decade. Even breaking even would be considered a decline in comparison to other similar investment options. Also, talking about what Microsoft might do in the future, doesn't magically erase the financial and business criticism of the past. If anything, past performance is a better indicator than "if XYZ can turn around, so can we". Momentum is huge. As for Microsoft having "positions in all the right places". They have an amazingly strong position in two massive markets. Again, lost decade refers to growth and decline, and unfortunately for Microsoft, neither of these markets is seeing nearly as much growth as other markets. No one is saying that Microsoft isn't making a fortune on desktop and enterprise sales, they are saying that they are failing to capture key markets, such as mobile and tablets. In some markets, like internet or entertainment, their market share isn't horrible, but it's costing them a fortune. In short, Microsoft's stock price is horrible. If Microsoft thinks the stock is undervalued, they should be buying it back. They are insignificant in a number of important markets, and in those markets where they are a player (but not a leader), they tend to be losing massive amounts of money.
automagical 14y ago
Desktop link: http://www.vanityfair.com/business/2012/08/microsoft-lost-mojo-steve-ballmer http://www.vanityfair.com/business/2012/08/microsoft-lost-mo...
arocks 14y ago
There are several flaws in this article which was pointed out in a Forbes article [1]. It highlights the failure of a company's strategy against the background of changing macroeconomic factors. Also, here is Ballmer's reaction [2] to this article. [1]: http://www.forbes.com/sites/venkateshrao/2012/07/25/the-real-reason-for-microsofts-woes/print/ http://www.forbes.com/sites/venkateshrao/2012/07/25/the-real... (print version) [2]: http://www.forbes.com/sites/richkarlgaard/2012/07/11/microsofts-steve-ballmer-talks-about-windows-8-bill-gates-and-steve-jobs-and-why-microsofts-lost-decade-is-a-myth/ http://www.forbes.com/sites/richkarlgaard/2012/07/11/microso...
- crag 14y ago
  From the article: "So what happened? Why did Microsoft lose its lead? Simply put, the technological winds shifted, starting around 1997, to favor vertical integration." Well ok.. I mean, "is the sky blue"? Tell me something I don't know. And next time, (to the author) tell me on page 1. Don't make me wade though 2 1/2 pages of historical crap to get your point. My thoughts on the author's profound (sic) reason: Change is constant. Those who recognize that win. MS didn't. They might in the future though. Look, not even [his holiness] Steve Jobs recognized change. He finally came around after failures; like the near collapse of Apple; or him being forced out of the company he help create; and of course Next. I remember when Next was first shown at Comdex. What an amazing machine. I was working for Novel at the time (anyone remember Netware?) at the booth. I ran over to see this Cube. It was beautiful. Ahead of it's time. Which is why it' failed. Actually I think Next marks when Steve did recognized change. He just had bad timing. Eventually it all came together for him... I mean look at the Mac now. Of course I state all of this in hindsight. I didn't recognize change either. Though my guesses are better now. That comes with age. :) Sorry got off topic.. look my point is, isn't not seeing change the reason ALL companies decline? MS will either reinvent itself, or when enterprise dries up, it will too.
  - bdunbar 14y ago
    when enterprise dries up By Enterprise you don't mean 'large companies that have 24/7 operations' because .. that category is not going away. What do you mean by 'dries up'?
starik36 14y ago
It kills me when people say that MS had a lead on smartphones with Windows Mobile OS, as mentioned in the article. That product sucked hard, along with others that sucked at the time (e.g. Palm, Symbian, etc...). The lead was an illusion because there wasn't anything good to compete against it and consumers barely tolerated it. Once iOS, then Android, appeared on the scene, the house of cards that was Windows Mobile collapsed in no time. Microsoft didn't have any kind of smartphone lead.
josephlord 14y ago
Do you remember when startups were terrified that MS would move in and crush them? MS would make them an offer that they couldn't refuse, sell out or be crushed. MS don't inspire fear like they used to.
hahahanononono 14y ago
As the lone MBA in the comment thread, I want to point out that the "culture" and "incentives" of your company have a lot to do with it's success. Microsoft (and Amazon, which hired a bunch of fucksticks from MSFT) made it impossible to build great new products internally and suffered for it.
- hga 14y ago
  AWS's offerings are not "great new products [built] internally"??? Kindle? Kindle Fire? (Not been following the latter, but I though the e-paper Kindles have been wild successes.) Or let's get to "culture", does Amazon practice stack ranking?
brudgers 14y ago
"In December 2000, Microsoft had a market capitalization of $510 billion, making it the world’s most valuable company. As of June it is No. 3, with a market cap of $249 billion. In December 2000, Apple had a market cap of $4.8 billion and didn’t even make the list. As of this June it is No. 1 in the world, with a market cap of $541 billion." In other words, Apple is currently about where Microsoft was when they started paying dividends a little more than a decade ago...i.e. The point where they went from a growth company to a the sort of "blue chip" held by index funds. The past decade has been spent securing their place in enterprise - their core market and one in which Apple, Google, and Facebook offer little competition. With loads of cash, a conucopia of brilliant personnel and Gates and Ballmer as the two largest shareholders, the whims of Wall Street bloggers don't have much effect.
- nl 14y ago
  Yes, Microsoft has a safe market in the enterprise. But in 2000 they still had a growing consumer market (remember Windows 95 was only 5 years ago). Now they are struggling to protect that consumer market, while markets they expected to dominate (remember when Windows Mobile + Exchange was supposed to kill off Blackberry?) have proven to be no only complete failures for Microsoft, but have become weaknesses through which other companies are pushing products into the Enterprise. Just about every CIO in the world said the iPhone would never be allowed in the enterprise, right up until their CEO demanded it. Then the same CIOs discovered they could sell using Google Mail in their enterprise as "Oh, it's just the same as GMail", while cutting their costs hugely over Exchange. Then VMWare came along and allowed CTOs to run non-homogenous platforms in the datacenter, and do it much cheaper than the old way. Make no mistake: Microsoft makes good money and is still a force, but the last decade truly was a lost opportunity for them.
  - sseveran 14y ago
    GMail is not even close to a replacement for exchange in a large company. Small companies like mine can use it just fine but I can't see it working as well in a large company. In fact if I still had to write large quantities of mail (which I used to) I would still use outlook as a client as it has much more developed workflows and a richer set tools.
forkandwait 14y ago
While I am a confirmed Microsoft hater, the one place they shine is in providing an environment (.NET + SQL Server + whatever) for the building of medium sized (10 to 1000), internal, pointy-clicky applications. There is no equivalent in Unix or Mac, and this is a massive market -- all the lower level office workers who get some small data thing from somewhere (a customer order, a change order, whatever), enter the data after a little bit of thinking, and move on. I am a data analyst forced to work on MS environments, and it sucks ass (I have a parallel Unix toolchain installed, plus we use SAS (which sucks ass, too, but that is a different story)). It would suck ass if I was building and deploying internet apps. But for pseudo custom form based applications designed for non-programmers to do glorified data entry, it rocks. Also, there are probably 40 million "analysts" who don't even know what scripting is and are utterly dependent on Excel, even though they could probably increase their productivity 100-fold if they got a little bit of command line and R and SQL under their belt. However, they don't even know they have an alternative, so Microsoft is totally safe in this zone for at least a few years.
- ahi 14y ago
  Have you used Powershell?
cjdentra 14y ago
What I haven't seen discussed is the impact of the anti-trust action against MS back in the Netscape days. I wonder what the effect on the corporate zeitgeist was then and how it all unfurled over time.

87 points by f3r3nc 14y ago

rlu 14y ago

just...no. http://www.neowin.net/news/what-the-hell-is-microsofts-lost-decade http://www.neowin.net/news/what-the-hell-is-microsofts-lost-...

Herring 14y ago
Microsoft would look like a huge success if it wasn't for Apple & Google, is what that article is saying.
marze 14y ago
Well, how about the stock? Certainly not a lost decade by any measure of Microsoft's stock price. Some incredibly awesome denial in the comment thread of your link, rlu.
- diego 14y ago
  Microsoft underperformed the market indices in the past ten years (SP500, Nasdaq, Dow Jones). That means its shareholders would have been better off selling the stock and investing in a diversified fund.
  - recoiledsnake 14y ago
    Does that take into account the dividends paid?
allwein 14y ago
His biggest argument for Microsoft not having a lost decade is the things that Microsoft plans on releasing in the next year?

deleted 14y ago

[deleted]

facorreia 14y ago

What was the total profit of Microsoft during this "lost decade"?

raldi 14y ago
That's like asking, "How far did your car coast after you ran out of gas?"
- achal 14y ago
  And getting an answer along the lines of "I think I got some 200 miles."
  - raldi 14y ago
    Exactly -- what an amazing amount of momentum to have wasted!
  - CamperBob2 14y ago
    While everybody else coasted 500.
    - raldi 14y ago
      I wouldn't call what their competitors did "coasting."

maytc 14y ago

"Cool is what tech consumers want. Exhibit A: today the iPhone brings in more revenue than the entirety of Microsoft. No, really."

skadamat 14y ago

Repost, OP had to post the mobile link to the article

velodrome 14y ago

Lost decade? No. Microsoft has positions in all the right places. They were in tablets, phones, and other devices early. However, the execution was poor. They did have a good shot at emerging tech markets and they still do. Microsoft still dominates business/enterprise. Apple, the consumer end. Microsoft is just being displaced. They have a limited time to respond before it really starts to erode their profits.

gbog 14y ago
> Microsoft still dominates business/enterprise. Apple, the consumer end. Would you happen to have any data to support this? In my world, Microsoft dominates both ends, by a very large margin.
- MrScruff 14y ago
  As stated in the article, the iPhone alone brings in more revenue than Microsoft's entire product line, so it's difficult to see how they can dominate the consumer end by 'a very large margin'.
  - ebf 14y ago
    Obviously, it depends on how you define owning the consumer market.
CharlieA 14y ago
"Microsoft has positions in all the right places." This. Microsoft today is still one of the world's biggest companies, with a lot of talented people and considerable inlets into practically every home and office in the developed world. Apple of yesterday grew to eclipse Microsoft in a matter of years--there's no reason Microsoft can't pull off a similar reversal with the right maneuvering of its own considerable resources.
- latch 14y ago
  Methinks you both might be missing the economic meaning of "lost decade". It essentially refers to a gradual decline. There can be no doubt that, from its shares, it _has_ been a lost decade. Even breaking even would be considered a decline in comparison to other similar investment options. Also, talking about what Microsoft might do in the future, doesn't magically erase the financial and business criticism of the past. If anything, past performance is a better indicator than "if XYZ can turn around, so can we". Momentum is huge. As for Microsoft having "positions in all the right places". They have an amazingly strong position in two massive markets. Again, lost decade refers to growth and decline, and unfortunately for Microsoft, neither of these markets is seeing nearly as much growth as other markets. No one is saying that Microsoft isn't making a fortune on desktop and enterprise sales, they are saying that they are failing to capture key markets, such as mobile and tablets. In some markets, like internet or entertainment, their market share isn't horrible, but it's costing them a fortune. In short, Microsoft's stock price is horrible. If Microsoft thinks the stock is undervalued, they should be buying it back. They are insignificant in a number of important markets, and in those markets where they are a player (but not a leader), they tend to be losing massive amounts of money.

automagical 14y ago

Desktop link: http://www.vanityfair.com/business/2012/08/microsoft-lost-mojo-steve-ballmer http://www.vanityfair.com/business/2012/08/microsoft-lost-mo...

arocks 14y ago

There are several flaws in this article which was pointed out in a Forbes article [1]. It highlights the failure of a company's strategy against the background of changing macroeconomic factors. Also, here is Ballmer's reaction [2] to this article. [1]: http://www.forbes.com/sites/venkateshrao/2012/07/25/the-real-reason-for-microsofts-woes/print/ http://www.forbes.com/sites/venkateshrao/2012/07/25/the-real... (print version) [2]: http://www.forbes.com/sites/richkarlgaard/2012/07/11/microsofts-steve-ballmer-talks-about-windows-8-bill-gates-and-steve-jobs-and-why-microsofts-lost-decade-is-a-myth/ http://www.forbes.com/sites/richkarlgaard/2012/07/11/microso...

crag 14y ago
From the article: "So what happened? Why did Microsoft lose its lead? Simply put, the technological winds shifted, starting around 1997, to favor vertical integration." Well ok.. I mean, "is the sky blue"? Tell me something I don't know. And next time, (to the author) tell me on page 1. Don't make me wade though 2 1/2 pages of historical crap to get your point. My thoughts on the author's profound (sic) reason: Change is constant. Those who recognize that win. MS didn't. They might in the future though. Look, not even [his holiness] Steve Jobs recognized change. He finally came around after failures; like the near collapse of Apple; or him being forced out of the company he help create; and of course Next. I remember when Next was first shown at Comdex. What an amazing machine. I was working for Novel at the time (anyone remember Netware?) at the booth. I ran over to see this Cube. It was beautiful. Ahead of it's time. Which is why it' failed. Actually I think Next marks when Steve did recognized change. He just had bad timing. Eventually it all came together for him... I mean look at the Mac now. Of course I state all of this in hindsight. I didn't recognize change either. Though my guesses are better now. That comes with age. :) Sorry got off topic.. look my point is, isn't not seeing change the reason ALL companies decline? MS will either reinvent itself, or when enterprise dries up, it will too.
- bdunbar 14y ago
  when enterprise dries up By Enterprise you don't mean 'large companies that have 24/7 operations' because .. that category is not going away. What do you mean by 'dries up'?

starik36 14y ago

It kills me when people say that MS had a lead on smartphones with Windows Mobile OS, as mentioned in the article. That product sucked hard, along with others that sucked at the time (e.g. Palm, Symbian, etc...). The lead was an illusion because there wasn't anything good to compete against it and consumers barely tolerated it. Once iOS, then Android, appeared on the scene, the house of cards that was Windows Mobile collapsed in no time. Microsoft didn't have any kind of smartphone lead.

josephlord 14y ago

Do you remember when startups were terrified that MS would move in and crush them? MS would make them an offer that they couldn't refuse, sell out or be crushed. MS don't inspire fear like they used to.

hahahanononono 14y ago

As the lone MBA in the comment thread, I want to point out that the "culture" and "incentives" of your company have a lot to do with it's success. Microsoft (and Amazon, which hired a bunch of fucksticks from MSFT) made it impossible to build great new products internally and suffered for it.

hga 14y ago
AWS's offerings are not "great new products [built] internally"??? Kindle? Kindle Fire? (Not been following the latter, but I though the e-paper Kindles have been wild successes.) Or let's get to "culture", does Amazon practice stack ranking?

brudgers 14y ago

"In December 2000, Microsoft had a market capitalization of $510 billion, making it the world’s most valuable company. As of June it is No. 3, with a market cap of $249 billion. In December 2000, Apple had a market cap of $4.8 billion and didn’t even make the list. As of this June it is No. 1 in the world, with a market cap of $541 billion." In other words, Apple is currently about where Microsoft was when they started paying dividends a little more than a decade ago...i.e. The point where they went from a growth company to a the sort of "blue chip" held by index funds. The past decade has been spent securing their place in enterprise - their core market and one in which Apple, Google, and Facebook offer little competition. With loads of cash, a conucopia of brilliant personnel and Gates and Ballmer as the two largest shareholders, the whims of Wall Street bloggers don't have much effect.

nl 14y ago
Yes, Microsoft has a safe market in the enterprise. But in 2000 they still had a growing consumer market (remember Windows 95 was only 5 years ago). Now they are struggling to protect that consumer market, while markets they expected to dominate (remember when Windows Mobile + Exchange was supposed to kill off Blackberry?) have proven to be no only complete failures for Microsoft, but have become weaknesses through which other companies are pushing products into the Enterprise. Just about every CIO in the world said the iPhone would never be allowed in the enterprise, right up until their CEO demanded it. Then the same CIOs discovered they could sell using Google Mail in their enterprise as "Oh, it's just the same as GMail", while cutting their costs hugely over Exchange. Then VMWare came along and allowed CTOs to run non-homogenous platforms in the datacenter, and do it much cheaper than the old way. Make no mistake: Microsoft makes good money and is still a force, but the last decade truly was a lost opportunity for them.
- sseveran 14y ago
  GMail is not even close to a replacement for exchange in a large company. Small companies like mine can use it just fine but I can't see it working as well in a large company. In fact if I still had to write large quantities of mail (which I used to) I would still use outlook as a client as it has much more developed workflows and a richer set tools.

forkandwait 14y ago

While I am a confirmed Microsoft hater, the one place they shine is in providing an environment (.NET + SQL Server + whatever) for the building of medium sized (10 to 1000), internal, pointy-clicky applications. There is no equivalent in Unix or Mac, and this is a massive market -- all the lower level office workers who get some small data thing from somewhere (a customer order, a change order, whatever), enter the data after a little bit of thinking, and move on. I am a data analyst forced to work on MS environments, and it sucks ass (I have a parallel Unix toolchain installed, plus we use SAS (which sucks ass, too, but that is a different story)). It would suck ass if I was building and deploying internet apps. But for pseudo custom form based applications designed for non-programmers to do glorified data entry, it rocks. Also, there are probably 40 million "analysts" who don't even know what scripting is and are utterly dependent on Excel, even though they could probably increase their productivity 100-fold if they got a little bit of command line and R and SQL under their belt. However, they don't even know they have an alternative, so Microsoft is totally safe in this zone for at least a few years.

ahi 14y ago
Have you used Powershell?

cjdentra 14y ago

What I haven't seen discussed is the impact of the anti-trust action against MS back in the Netscape days. I wonder what the effect on the corporate zeitgeist was then and how it all unfurled over time.