9 ms·

Microsoft CEO Candidate Elop Said to Mull Windows Shift

28 points by kshatrea 13y ago

taylorwc 13y ago
Was anyone else dumbfounded by the idea of selling the Xbox business? That's been one of the only bright points in MSFT's consumer products for the past decade.
- dragontamer 13y ago
  It also hasn't made Microsoft any money. The majority of the money in the XBox business has been from Android Patents. http://www.businessinsider.com/microsoft-earns-2-billion-per-year-from-android-patent-royalties-2013-11 http://www.businessinsider.com/microsoft-earns-2-billion-per... From a business standpoint, the XBox is one of the worst performers in the entire Microsoft company.
  - kunai 13y ago
    That statement has never been proven. It's something an analyst spewed out.
    - dragontamer 13y ago
      http://www.neowin.net/news/report-microsofts-xbox-division-has-lost-nearly-3-billion-in-10-years http://www.neowin.net/news/report-microsofts-xbox-division-h... Dude, its a known fact that the XBox division is a dog from an investment perspective.
- CaveTech 13y ago
  Until Xbox One, at least.
  - dragontamer 13y ago
    http://www.neowin.net/news/report-microsofts-xbox-division-has-lost-nearly-3-billion-in-10-years http://www.neowin.net/news/report-microsofts-xbox-division-h... Nope. The only reason XBox360 made any money was because of XBox Live subscriptions and Ad Revenue. Neither selling consoles, nor games have made any money for Microsoft.
    - CaveTech 13y ago
      Wasn't referring to their earnings at all. XBox is one of the few MSOFT products that has a positive brand image overall.
      - taylorwc 13y ago
        That's exactly what I was thinking. Even if it was barely breakeven, I'd think that the value of having a consumer product with recurring revenue and [generally] positive customer experience is of greater value than its cash flows.
      - dragontamer 13y ago
        Its easy to have a positive brand image if you're bleeding money. See Youtube, before the advertizements. The real trick is capturing a positive brand image while still making the company money. The XBox One tried to refocus itself as a more profit-oriented machine. Why is it "always online" ??? Because XBox Live subscriptions and Ad-revenue were the #1 source of revenue for XBox. Why is the XBox One weaker than the PS4?? Because XBox never made money off of games. In fact, Microsoft lost money as far as games themselves are concerned. Microsoft made a decision: they decided to attempt to make the next generation XBox One profitable at all. Those decisions have cost the XBox One its reputation... but were probably necessary so that the XBox division actually could make money. When you have a part of your company that is continuously bleeding money, with an inability to actually monetize your brand... you need to spin it off. Its basic business strategy. The other possibility is if they could find a way for XBox One to make money while still keeping a positive brand image. At the end of the day, Microsoft needs to make money, but the XBox isn't doing that for them.
- fidotron 13y ago
  Not when looked at from a return on investment perspective. The profits, when they've existed, are dangerously close to being totally eclipsed by the truly massive occasional losses/write-offs. MS have a problem in that they don't really have a successful consumer products division. One way around that is to stop worrying about it, which seems to be an increasingly popular point of view.
  - panabee 13y ago
    Can someone provide some analysis and numbers to support this? Creating a gaming hardware console is naturally capital intensive, but has the PlayStation always generated losses for Sony? How about the Wii for Nintendo? What is the breakdown on the Xbox P/L statement? (I realize this doesn't exist in the wild, but someone knowledgeable feel free to hazard a guess, case-study style ...)
manishsharan 13y ago
Can't Microsoft do better than Elop ? Gates and Balmer were visionary founders in their time. I am not sure Elop will measure up ; he seems to be only looking out for himself.
- halviti 13y ago
  Ballmer from half a decade ago. http://www.youtube.com/watch?v=eywi0h_Y5_U http://www.youtube.com/watch?v=eywi0h_Y5_U
  - Touche 13y ago
    He was laughing at the $500 on-contract iPhone that quickly had its price lowered.
    - gnaffle 13y ago
      In other words, he was unable to anticipate that Apple would be able reduce the price of the iPhone, like they did with the iPod?
      - Touche 13y ago
        Apple miscalculated the optimal price initially and then changed it a few months later. No, obviously he couldn't anticipate that. Microsoft squandered their lead in smartphones, you can blame them and Ballmer for that, but the particular video people love to continuously bring up has nothing to do with where MS made mistakes.
        gnaffle 13y ago
        I would on the contrary take it as obvious that any CEO of a competing company would take the iPhone as a threat, and anticipate and plan for any possibility, just from having looked at history and seen where Apple went with for instance the iPod. I think this video very clearly shows how Ballmer managed to not take the iPhone seriously, and that has everything to do with why Microsoft made mistakes and were slow to respond from 2007 onwards. The same thing happened with the iPad as well. From everyting he said, you could see that he regarded them as toys.
BigChiefSmokem 13y ago
They need young, real "down to Earth" technology people like Scott Hanselman or J Allard to run that old monolith. I would list other people from tech but those people would never tolerate working for the Microsoft board. Anyone that wears a suit and tie to work is going to just steer Microsoft further and further into the ground. Elop needs a hoodie.
- fhd2 13y ago
  Wow, ageism is nothing new, but I've never seen clothism before. What kind of experience and character traits do you think the next Microsoft CEO should have? I'm having trouble deducing those from age/clothing.
  - deleted 13y ago
    [deleted]
  - BrainInAJar 13y ago
    hipster-ass VC slave "startup founder" type, from the sounds of it
  - ProAm 13y ago
    If the next Microsoft CEO doesn't have a github account it will clearly show the company is heading in the wrong direction and needs to put some serious consideration towards a pivot.
- drawkbox 13y ago
  Scott Gu or Scott Forstall would be good, or maybe Scott Hanselman. It's any Scott's race. Basically they need to get back to their developer/engineer focused products to innovate. They are riding off the fumes/grace of the last innovations still. Maybe someone that will take Visual Studio and Azure cross platforms and really build tools the developers love not things that they hate like Sharepoint (and for some, Windows).
- programminggeek 13y ago
  Tech is not Microsoft's problem per se. Microsoft has great tech, they are building some great products, and are genuinely getting a lot better at a lot of things pretty fast. They just don't know how to sell to consumers well yet. They haven't had to do that until the last 5-10 years. J Allard, Ray Ozzie, and the like have the potential to do great things, but honestly CEO of Microsoft is maybe not what they would do best at or enjoy. Microsoft needs a systems thinker, someone who gets the business side and the tech side, while having the ability to shepherd great products on the consumer side and service the business needs of their huge enterprise customers. That is a ridiculously tall order and I'm not sure that anyone would do an outstanding job with it.
rpedela 13y ago
I don't really know who Elop is, but I do agree that having Office available on all platforms would help Microsoft.
- at-fates-hands 13y ago
  I thought you could buy Apple versions of the Office products already, or am I missing something?? Getting their stuff on the Android and Linux platforms would help a lot, but then again, Linux has plenty of Open Source alternatives already.
  - kaoD 13y ago
    OP said all platforms. It would make waiting for the microwave to finish less tedious.
- Joeri 13y ago
  It wouldn't help their bottom-line. If office on android is good enough that you can give people a tablet instead of a windows laptop then microsoft loses out on a windows license. Also, pricing on android would have to be much lower than on the desktop to get any traction, again cutting into revenue. iOS is no better, given they are competing against the free iwork alternative in the consumer space, and would end up replacing more profitable laptops in the business space. I don't see an office on android / ios strategy as anything but a money loser in the short term. In the long term there is a risk of a competing product stepping in where they are not, but office has no cross-platform competition right now worth worrying about, and definitely nothing on mobile. I still think the windows on tablets strategy is the most likely path to long-term profit.
gtCameron 13y ago
The best part of this article is the quote from Microsoft spokesman Frank Shaw when asked to comment about what Bloomberg is reporting: "We appreciate Bloomberg’s foray into fiction and look forward to future episodes"
- r0h1n 13y ago
  Frank Shaw is arguably one of the most outspoken, take-no-prisoners, pugnacious PR heads of any large software company. Examples: http://www.theverge.com/2013/10/23/4975448/microsoft-frank-shaw-rips-into-apple-for-comparing-iwork-to-office http://www.theverge.com/2013/10/23/4975448/microsoft-frank-s... http://www.businessinsider.com/microsofts-david-pogue-tweet-2013-10 http://www.businessinsider.com/microsofts-david-pogue-tweet-... http://pulse2.com/2012/07/28/frank-x-shaw-responds-to-microsoft-lost-decade-articles/ http://pulse2.com/2012/07/28/frank-x-shaw-responds-to-micros...
sker 13y ago
> analyst Rick Sherlund said the sale of Bing and Xbox, along with other moves, could lift fiscal 2015 earnings by 40 percent Short term, quarterly numbers-focused business people. Lying off 50% of their employees will also improve their numbers by 2015. Apple and Google have become the largest tech companies thanks to their consumer facing products. Selling Xbox and Bing will only seal MS's faith as another IBM. Windows Phone and Surface will stagnate (even more) and eventually they will have to be let go too. Non-tech people often ask me if IBM still exists when it is mentioned in a conversation. They'll be asking the same thing about Microsoft in a decade or two if Elop takes over.
- riffraff 13y ago
  but IBM _does_ exist and (IIRC) has doubled it's capitalization in the last decade while paying out dividends every year. It's not necessarily a bad fate for the stockholders, even if it's way more cool to be Apple than to be Oracle.
- rtfeldman 13y ago
  IBM not only still exists, they are massively successful. Today they're worth more than Microsoft, in fact, because of a strategic decision to refocus on selling to businesses that has worked out extremely well. They've stopped being a household name since they stopped selling to households, but I doubt they're losing much sleep over that. Microsoft's ratio of popular to unpopular consumer products has been dismal for years; it's hardly unreasonable to think they might likewise do better by refocusing. http://en.wikipedia.org/wiki/Ibm#1980.E2.80.932013 http://en.wikipedia.org/wiki/Ibm#1980.E2.80.932013
  - gnaffle 13y ago
    I'm not too sure about that. A lot of Microsofts dominance in business comes from the ubiquity of its operating system, while IBM has _always_ been big in enterprise / mainframe computing and research regardless of their "foray" into PCs. Giving up the consumer market to focus on business puts this dominance in danger (even more so than the mobile/tablet threat), because someone might very well and up doing to Microsoft what Microsoft did to the minicomputer makers, and eat their business "from the bottom up". So I think the interesting question is whether Microsoft could survive and thrive on enterprise software/services in an environment where neither Windows nor Office were dominant.
r0h1n 13y ago
This is a very unusual kind of planted leak in the context of a candidate who is in the reckoning for being CEO. There are only two possible motives behind this story - either to scuttle or to aid Elop's chances of becoming CEO. Given that Bloomberg seems to cite three sources who vouched for Elop's thinking on this, I think this could be a tactical move from Elop (because it would be relatively harder for his opponents to get three senior Microsoft sources to smear him). Elop is shadow signaling his thinking to various Microsoft stakeholders. "I am not status quo. I will reconsider all old notions. I know Microsoft needs radical change. The era of Windows is over."
- forgotAgain 13y ago
  Or back to the future at Microsoft? http://emuneee.com/blog/2012/11/12/microsofts-org-chart/ http://emuneee.com/blog/2012/11/12/microsofts-org-chart/
- r00fus 13y ago
  So Windows is a "burning platform"? I'm sure his hatchet-man reputation (and consequent results) aren't impressing long shareholders. It could also be a reminder to shareholders of what happened to Nokia. Elop's vision of "burning the village in order to save it" sounds pretty apocalyptic.
- pnathan 13y ago
  Concur with this analysis. This is an unofficial official strategy statement, done with plausible deniability. Effectively, he is stating what the board would be hiring if they hired him. It also effectively puts the option on the public discussion board.
KaoruAoiShiho 13y ago
Picked the wrong horse for the billion dollar investment. https://www.microsoft.com/en-us/news/press/2001/nov01/11-11comdex2001keynotepr.aspx https://www.microsoft.com/en-us/news/press/2001/nov01/11-11c...
snarfy 13y ago
>As he formulates some broad strategic outlines for Microsoft, Elop is drawing on his years as CEO of Nokia Oyj, where he showed he wasn’t wedded to homegrown software by canceling the company’s then-dominant Symbian phone software in 2010, said the people What? He was purposefully planted there by Microsoft for that exact purpose- kill symbian so microsoft can buy nokia for a steal.
nbevans 13y ago
So basically Elop has just publicly ruled himself out of contention with these ridiculous opinions. Casting off Xbox at this critical point would be a disaster and massively weaken Microsoft's position. The post-PC era is dictating very clearly that Xbox may be the last "full PC" device remaining in the modern home... and he wants to cast it off? Bing... it's better than defaulting their products to use Google. Microsoft Office is a fine product but it is a legacy one. I wonder what Elop's "opinion" is of Azure? That ridiculously high productivity and highly agile team that's been pumping out releases on a 2-3 weekly cycle for the past 2 years? Wait. What? Why is Elop even in the running at all for the CEO position? That itself is fucking insane. Look what he did to Nokia!
ApacheEcho 13y ago
He destroyed Nokia and he'll destroy Microsoft if he's given the power. He just can't run a company. I'd vote for Tony Bates.
hbharadwaj 13y ago
First off, MS's answer to the question is more than enough - "We appreciate Bloomberg’s foray into fiction and look forward to future episodes". Three unnamed people? Really? Sherlund is an idiot. The proposition, if you ask any consultant/financial analyst/Rick Sherlund is to maximize shareholder value. The problem with MSFT, Apple, Google is that shareholders are short sighted and don't understand how technology works or the charms of integrated offerings. They only see Product/Service/Capability-Cost mappings and see that by disposing money losing assets, they can enhance value proposition through the remaining assets. Elop's strategy is fine if MS is in a money crunch and wants to undertake Cost Optimizations. It's not fine when MS is in the midst of their "3 screens, one cloud" transformation. If XBox and Bing continue their trend of losing money in the next 5 years, then yes, I would do things that Elop is fictionally proposing to do. Until then, hell no.
noahl 13y ago
The real question here is whether operating systems have been commoditized, and if so, what Microsoft should do about it. It's certainly true that I can get the windows-on-a-desktop paradigm from Windows (pre-8), OS X, or GNOME or KDE from five years ago. I could probably get the Metro user experience from an especially clever KDE Plasma plugin too. However, despite free software versions being widely available, we've only seen two windows-on-a-desktop operating systems in wide use, and one of them (OS X) has a very limited install base. This means that the free versions are not equivalent to Windows, as much as I'd like them to be. I see two reasons for that: 1) Getting the details right is really, really hard. This is especially true when there are a large number of computer users who are used to Windows - I don't think it's impossible to make another OS that they would use, but it would take a huge amount of usability engineering. (This is basically what Ubuntu is trying to do; but that's a side note here.) 2) Application compatibility is really, really important. In other words, even if GUIs are a commodity, the APIs underneath them aren't. This is something that is currently being attacked on two fronts - the Web is providing an alternative, standard API across desktop platforms, and non-Windows mobile devices are forcing developers to use non-Windows APIs. That makes Windows just another incompatible system to weigh the costs and benefits of developing for, rather than the standard which every program must support. Elop isn't just looking at the explosion of tablets and smartphones, markets where Microsoft doesn't have much marketshare. He's also looking at the fact that the Chromebook has been the best-selling laptop on Amazon for at least a year, if not more. That shows that (2) is no longer enough of an advantage to keep Windows on consumer computing devices. It probably is enough to keep it on business workstations for a while longer, but he's smart enough to know that won't last forever - business IT is becoming increasingly consumerized. (1) is still an advantage, but the Chromebook and tablets both show that people will use a simplified, well-designed interface that's not Windows - hence the move to Metro with Windows 8. Given all this, what is Microsoft going to do? The operating system cat is out of the bag, and it's probably not going back in. People are going to increasingly expect to bring their own devices into work, and some of those devices are not going to be running Windows. If platforms that don't run Office gain significant marketshare in the business world, then businesses will have to start considering alternatives, and maybe even start using formats that aren't doc and xls. Thus, Microsoft's next move is clear. It offers Office on all popular platforms, allowing businesses to continue to not think about alternative office software. Apple makes its money from devices, and probably won't even fight if Microsoft does this. Google won't be happy because of Google Docs, but Microsoft has enough legacy support and can offer good enough enterprise management features that they'll still do well in this market. In the meantime, Microsoft continues working full-tilt on Windows - just because it's no longer dominant doesn't mean that they can't make significant amounts of money from it. My thought would have been to bring the Metro interface to Xbox, although apparently Elop is thinking differently. It might even be true that the Office programs continue to work best on Windows. But whatever happens in the OS market, there's no reason Microsoft can't extend its office software dominance for a while longer.

28 points by kshatrea 13y ago

Was anyone else dumbfounded by the idea of selling the Xbox business? That's been one of the only bright points in MSFT's consumer products for the past decade.

dragontamer 13y ago
It also hasn't made Microsoft any money. The majority of the money in the XBox business has been from Android Patents. http://www.businessinsider.com/microsoft-earns-2-billion-per-year-from-android-patent-royalties-2013-11 http://www.businessinsider.com/microsoft-earns-2-billion-per... From a business standpoint, the XBox is one of the worst performers in the entire Microsoft company.
- kunai 13y ago
  That statement has never been proven. It's something an analyst spewed out.
  - dragontamer 13y ago
    http://www.neowin.net/news/report-microsofts-xbox-division-has-lost-nearly-3-billion-in-10-years http://www.neowin.net/news/report-microsofts-xbox-division-h... Dude, its a known fact that the XBox division is a dog from an investment perspective.
CaveTech 13y ago
Until Xbox One, at least.
- dragontamer 13y ago
  http://www.neowin.net/news/report-microsofts-xbox-division-has-lost-nearly-3-billion-in-10-years http://www.neowin.net/news/report-microsofts-xbox-division-h... Nope. The only reason XBox360 made any money was because of XBox Live subscriptions and Ad Revenue. Neither selling consoles, nor games have made any money for Microsoft.
  - CaveTech 13y ago
    Wasn't referring to their earnings at all. XBox is one of the few MSOFT products that has a positive brand image overall.
    - taylorwc 13y ago
      That's exactly what I was thinking. Even if it was barely breakeven, I'd think that the value of having a consumer product with recurring revenue and [generally] positive customer experience is of greater value than its cash flows.
    - dragontamer 13y ago
      Its easy to have a positive brand image if you're bleeding money. See Youtube, before the advertizements. The real trick is capturing a positive brand image while still making the company money. The XBox One tried to refocus itself as a more profit-oriented machine. Why is it "always online" ??? Because XBox Live subscriptions and Ad-revenue were the #1 source of revenue for XBox. Why is the XBox One weaker than the PS4?? Because XBox never made money off of games. In fact, Microsoft lost money as far as games themselves are concerned. Microsoft made a decision: they decided to attempt to make the next generation XBox One profitable at all. Those decisions have cost the XBox One its reputation... but were probably necessary so that the XBox division actually could make money. When you have a part of your company that is continuously bleeding money, with an inability to actually monetize your brand... you need to spin it off. Its basic business strategy. The other possibility is if they could find a way for XBox One to make money while still keeping a positive brand image. At the end of the day, Microsoft needs to make money, but the XBox isn't doing that for them.
fidotron 13y ago
Not when looked at from a return on investment perspective. The profits, when they've existed, are dangerously close to being totally eclipsed by the truly massive occasional losses/write-offs. MS have a problem in that they don't really have a successful consumer products division. One way around that is to stop worrying about it, which seems to be an increasingly popular point of view.
- panabee 13y ago
  Can someone provide some analysis and numbers to support this? Creating a gaming hardware console is naturally capital intensive, but has the PlayStation always generated losses for Sony? How about the Wii for Nintendo? What is the breakdown on the Xbox P/L statement? (I realize this doesn't exist in the wild, but someone knowledgeable feel free to hazard a guess, case-study style ...)

manishsharan 13y ago

Can't Microsoft do better than Elop ? Gates and Balmer were visionary founders in their time. I am not sure Elop will measure up ; he seems to be only looking out for himself.

halviti 13y ago
Ballmer from half a decade ago. http://www.youtube.com/watch?v=eywi0h_Y5_U http://www.youtube.com/watch?v=eywi0h_Y5_U
- Touche 13y ago
  He was laughing at the $500 on-contract iPhone that quickly had its price lowered.
  - gnaffle 13y ago
    In other words, he was unable to anticipate that Apple would be able reduce the price of the iPhone, like they did with the iPod?
    - Touche 13y ago
      Apple miscalculated the optimal price initially and then changed it a few months later. No, obviously he couldn't anticipate that. Microsoft squandered their lead in smartphones, you can blame them and Ballmer for that, but the particular video people love to continuously bring up has nothing to do with where MS made mistakes.
      - gnaffle 13y ago
        I would on the contrary take it as obvious that any CEO of a competing company would take the iPhone as a threat, and anticipate and plan for any possibility, just from having looked at history and seen where Apple went with for instance the iPod. I think this video very clearly shows how Ballmer managed to not take the iPhone seriously, and that has everything to do with why Microsoft made mistakes and were slow to respond from 2007 onwards. The same thing happened with the iPad as well. From everyting he said, you could see that he regarded them as toys.

BigChiefSmokem 13y ago

They need young, real "down to Earth" technology people like Scott Hanselman or J Allard to run that old monolith. I would list other people from tech but those people would never tolerate working for the Microsoft board. Anyone that wears a suit and tie to work is going to just steer Microsoft further and further into the ground. Elop needs a hoodie.

fhd2 13y ago
Wow, ageism is nothing new, but I've never seen clothism before. What kind of experience and character traits do you think the next Microsoft CEO should have? I'm having trouble deducing those from age/clothing.
- deleted 13y ago
  [deleted]
- BrainInAJar 13y ago
  hipster-ass VC slave "startup founder" type, from the sounds of it
- ProAm 13y ago
  If the next Microsoft CEO doesn't have a github account it will clearly show the company is heading in the wrong direction and needs to put some serious consideration towards a pivot.
drawkbox 13y ago
Scott Gu or Scott Forstall would be good, or maybe Scott Hanselman. It's any Scott's race. Basically they need to get back to their developer/engineer focused products to innovate. They are riding off the fumes/grace of the last innovations still. Maybe someone that will take Visual Studio and Azure cross platforms and really build tools the developers love not things that they hate like Sharepoint (and for some, Windows).
programminggeek 13y ago
Tech is not Microsoft's problem per se. Microsoft has great tech, they are building some great products, and are genuinely getting a lot better at a lot of things pretty fast. They just don't know how to sell to consumers well yet. They haven't had to do that until the last 5-10 years. J Allard, Ray Ozzie, and the like have the potential to do great things, but honestly CEO of Microsoft is maybe not what they would do best at or enjoy. Microsoft needs a systems thinker, someone who gets the business side and the tech side, while having the ability to shepherd great products on the consumer side and service the business needs of their huge enterprise customers. That is a ridiculously tall order and I'm not sure that anyone would do an outstanding job with it.

rpedela 13y ago

I don't really know who Elop is, but I do agree that having Office available on all platforms would help Microsoft.

at-fates-hands 13y ago
I thought you could buy Apple versions of the Office products already, or am I missing something?? Getting their stuff on the Android and Linux platforms would help a lot, but then again, Linux has plenty of Open Source alternatives already.
- kaoD 13y ago
  OP said all platforms. It would make waiting for the microwave to finish less tedious.
Joeri 13y ago
It wouldn't help their bottom-line. If office on android is good enough that you can give people a tablet instead of a windows laptop then microsoft loses out on a windows license. Also, pricing on android would have to be much lower than on the desktop to get any traction, again cutting into revenue. iOS is no better, given they are competing against the free iwork alternative in the consumer space, and would end up replacing more profitable laptops in the business space. I don't see an office on android / ios strategy as anything but a money loser in the short term. In the long term there is a risk of a competing product stepping in where they are not, but office has no cross-platform competition right now worth worrying about, and definitely nothing on mobile. I still think the windows on tablets strategy is the most likely path to long-term profit.

gtCameron 13y ago

The best part of this article is the quote from Microsoft spokesman Frank Shaw when asked to comment about what Bloomberg is reporting: "We appreciate Bloomberg’s foray into fiction and look forward to future episodes"

r0h1n 13y ago
Frank Shaw is arguably one of the most outspoken, take-no-prisoners, pugnacious PR heads of any large software company. Examples: http://www.theverge.com/2013/10/23/4975448/microsoft-frank-shaw-rips-into-apple-for-comparing-iwork-to-office http://www.theverge.com/2013/10/23/4975448/microsoft-frank-s... http://www.businessinsider.com/microsofts-david-pogue-tweet-2013-10 http://www.businessinsider.com/microsofts-david-pogue-tweet-... http://pulse2.com/2012/07/28/frank-x-shaw-responds-to-microsoft-lost-decade-articles/ http://pulse2.com/2012/07/28/frank-x-shaw-responds-to-micros...

sker 13y ago

> analyst Rick Sherlund said the sale of Bing and Xbox, along with other moves, could lift fiscal 2015 earnings by 40 percent Short term, quarterly numbers-focused business people. Lying off 50% of their employees will also improve their numbers by 2015. Apple and Google have become the largest tech companies thanks to their consumer facing products. Selling Xbox and Bing will only seal MS's faith as another IBM. Windows Phone and Surface will stagnate (even more) and eventually they will have to be let go too. Non-tech people often ask me if IBM still exists when it is mentioned in a conversation. They'll be asking the same thing about Microsoft in a decade or two if Elop takes over.

riffraff 13y ago
but IBM _does_ exist and (IIRC) has doubled it's capitalization in the last decade while paying out dividends every year. It's not necessarily a bad fate for the stockholders, even if it's way more cool to be Apple than to be Oracle.
rtfeldman 13y ago
IBM not only still exists, they are massively successful. Today they're worth more than Microsoft, in fact, because of a strategic decision to refocus on selling to businesses that has worked out extremely well. They've stopped being a household name since they stopped selling to households, but I doubt they're losing much sleep over that. Microsoft's ratio of popular to unpopular consumer products has been dismal for years; it's hardly unreasonable to think they might likewise do better by refocusing. http://en.wikipedia.org/wiki/Ibm#1980.E2.80.932013 http://en.wikipedia.org/wiki/Ibm#1980.E2.80.932013
- gnaffle 13y ago
  I'm not too sure about that. A lot of Microsofts dominance in business comes from the ubiquity of its operating system, while IBM has _always_ been big in enterprise / mainframe computing and research regardless of their "foray" into PCs. Giving up the consumer market to focus on business puts this dominance in danger (even more so than the mobile/tablet threat), because someone might very well and up doing to Microsoft what Microsoft did to the minicomputer makers, and eat their business "from the bottom up". So I think the interesting question is whether Microsoft could survive and thrive on enterprise software/services in an environment where neither Windows nor Office were dominant.

r0h1n 13y ago

This is a very unusual kind of planted leak in the context of a candidate who is in the reckoning for being CEO. There are only two possible motives behind this story - either to scuttle or to aid Elop's chances of becoming CEO. Given that Bloomberg seems to cite three sources who vouched for Elop's thinking on this, I think this could be a tactical move from Elop (because it would be relatively harder for his opponents to get three senior Microsoft sources to smear him). Elop is shadow signaling his thinking to various Microsoft stakeholders. "I am not status quo. I will reconsider all old notions. I know Microsoft needs radical change. The era of Windows is over."

forgotAgain 13y ago
Or back to the future at Microsoft? http://emuneee.com/blog/2012/11/12/microsofts-org-chart/ http://emuneee.com/blog/2012/11/12/microsofts-org-chart/
r00fus 13y ago
So Windows is a "burning platform"? I'm sure his hatchet-man reputation (and consequent results) aren't impressing long shareholders. It could also be a reminder to shareholders of what happened to Nokia. Elop's vision of "burning the village in order to save it" sounds pretty apocalyptic.
pnathan 13y ago
Concur with this analysis. This is an unofficial official strategy statement, done with plausible deniability. Effectively, he is stating what the board would be hiring if they hired him. It also effectively puts the option on the public discussion board.

KaoruAoiShiho 13y ago

Picked the wrong horse for the billion dollar investment. https://www.microsoft.com/en-us/news/press/2001/nov01/11-11comdex2001keynotepr.aspx https://www.microsoft.com/en-us/news/press/2001/nov01/11-11c...

snarfy 13y ago

>As he formulates some broad strategic outlines for Microsoft, Elop is drawing on his years as CEO of Nokia Oyj, where he showed he wasn’t wedded to homegrown software by canceling the company’s then-dominant Symbian phone software in 2010, said the people What? He was purposefully planted there by Microsoft for that exact purpose- kill symbian so microsoft can buy nokia for a steal.

nbevans 13y ago

So basically Elop has just publicly ruled himself out of contention with these ridiculous opinions. Casting off Xbox at this critical point would be a disaster and massively weaken Microsoft's position. The post-PC era is dictating very clearly that Xbox may be the last "full PC" device remaining in the modern home... and he wants to cast it off? Bing... it's better than defaulting their products to use Google. Microsoft Office is a fine product but it is a legacy one. I wonder what Elop's "opinion" is of Azure? That ridiculously high productivity and highly agile team that's been pumping out releases on a 2-3 weekly cycle for the past 2 years? Wait. What? Why is Elop even in the running at all for the CEO position? That itself is fucking insane. Look what he did to Nokia!

ApacheEcho 13y ago

He destroyed Nokia and he'll destroy Microsoft if he's given the power. He just can't run a company. I'd vote for Tony Bates.

hbharadwaj 13y ago

First off, MS's answer to the question is more than enough - "We appreciate Bloomberg’s foray into fiction and look forward to future episodes". Three unnamed people? Really? Sherlund is an idiot. The proposition, if you ask any consultant/financial analyst/Rick Sherlund is to maximize shareholder value. The problem with MSFT, Apple, Google is that shareholders are short sighted and don't understand how technology works or the charms of integrated offerings. They only see Product/Service/Capability-Cost mappings and see that by disposing money losing assets, they can enhance value proposition through the remaining assets. Elop's strategy is fine if MS is in a money crunch and wants to undertake Cost Optimizations. It's not fine when MS is in the midst of their "3 screens, one cloud" transformation. If XBox and Bing continue their trend of losing money in the next 5 years, then yes, I would do things that Elop is fictionally proposing to do. Until then, hell no.

noahl 13y ago

The real question here is whether operating systems have been commoditized, and if so, what Microsoft should do about it. It's certainly true that I can get the windows-on-a-desktop paradigm from Windows (pre-8), OS X, or GNOME or KDE from five years ago. I could probably get the Metro user experience from an especially clever KDE Plasma plugin too. However, despite free software versions being widely available, we've only seen two windows-on-a-desktop operating systems in wide use, and one of them (OS X) has a very limited install base. This means that the free versions are not equivalent to Windows, as much as I'd like them to be. I see two reasons for that: 1) Getting the details right is really, really hard. This is especially true when there are a large number of computer users who are used to Windows - I don't think it's impossible to make another OS that they would use, but it would take a huge amount of usability engineering. (This is basically what Ubuntu is trying to do; but that's a side note here.) 2) Application compatibility is really, really important. In other words, even if GUIs are a commodity, the APIs underneath them aren't. This is something that is currently being attacked on two fronts - the Web is providing an alternative, standard API across desktop platforms, and non-Windows mobile devices are forcing developers to use non-Windows APIs. That makes Windows just another incompatible system to weigh the costs and benefits of developing for, rather than the standard which every program must support. Elop isn't just looking at the explosion of tablets and smartphones, markets where Microsoft doesn't have much marketshare. He's also looking at the fact that the Chromebook has been the best-selling laptop on Amazon for at least a year, if not more. That shows that (2) is no longer enough of an advantage to keep Windows on consumer computing devices. It probably is enough to keep it on business workstations for a while longer, but he's smart enough to know that won't last forever - business IT is becoming increasingly consumerized. (1) is still an advantage, but the Chromebook and tablets both show that people will use a simplified, well-designed interface that's not Windows - hence the move to Metro with Windows 8. Given all this, what is Microsoft going to do? The operating system cat is out of the bag, and it's probably not going back in. People are going to increasingly expect to bring their own devices into work, and some of those devices are not going to be running Windows. If platforms that don't run Office gain significant marketshare in the business world, then businesses will have to start considering alternatives, and maybe even start using formats that aren't doc and xls. Thus, Microsoft's next move is clear. It offers Office on all popular platforms, allowing businesses to continue to not think about alternative office software. Apple makes its money from devices, and probably won't even fight if Microsoft does this. Google won't be happy because of Google Docs, but Microsoft has enough legacy support and can offer good enough enterprise management features that they'll still do well in this market. In the meantime, Microsoft continues working full-tilt on Windows - just because it's no longer dominant doesn't mean that they can't make significant amounts of money from it. My thought would have been to bring the Metro interface to Xbox, although apparently Elop is thinking differently. It might even be true that the Office programs continue to work best on Windows. But whatever happens in the OS market, there's no reason Microsoft can't extend its office software dominance for a while longer.