9 ms·

(I think) it's not hard to understand where microsoft went wrong. Ballmer just doesn't seem to get where the industry is going. As evidence, this quote from t

by x0x0 12y ago

(I think) it's not hard to understand where microsoft went wrong. Ballmer just doesn't seem to get where the industry is going. As evidence, this quote from the article: Indeed, Ballmer seemed to have no intention of leaving when he announced a massive reorganization of the entire company in July 2013. Behind the scenes he had also begun negotiating an acquisition that was meant to transform Microsoft. He had become convinced that the company had to make hardware too. The reason why goes back to his chart. The two companies which have seen the greatest increases in the share of profits they take are Apple and Samsung, particularly Apple, whose share of the technology industry’s profits leapt from 7 percent in 2008 to 21 percent in 2013. To Ballmer, the message was clear, and so, in December 2012, he began talking to the Finnish smartphone-maker, Nokia, whose C.E.O., Stephen Elop, had worked at Microsoft. There was a defensive reason for the deal as well as an offensive one. Nokia was pretty much the only company left that was making Windows phones. If Nokia went under, what would happen to Microsoft’s phone business? Apple and Samsung's phone businesses are entirely different. Apple is selling ios to the high and middle end market. Samsung is getting devoured from the bottom, because there is very little difference between android oems, whereas Apple doesn't need (or want!) the bottom. It's pretty amazing that someone like Ballmer wouldn't see that coming, given that Xiaomi and the other chinese competitors are running a classic competitive playbook on Samsung. Stratechery has written about this at length, though I don't recall if it was clearly discussed in a single article or my mental synthesis from a collection. Either way, differentiated companies -- apple -- require completely different strategies than nondifferentiated -- samsung.

latch 12y ago
That might be one of the mistakes, but it isn't the start of the problem. Tangibly, it's either United States v. Microsoft Corporation or Longhorn / Vista. Intangibly, it's the attitude that permeated the company that said "we are right because we are Microsoft." There were few people you could talk to who'd think you had anything to offer someone who worked at Microsoft. You still see this today around products like Bing, IE, Xbox and Azure (I know the last 2 are popular, but the xbox has been a loss leader (and what it's leading too isn't clear yet) and Azure, like everyone else, is being crushed by Amazon (it really is, they spend a ton more money and get a fraction of the market (that's Bing-style success!)) I remember a story from the only time I was on their campus. An employee (I remember his name) was telling me how they wanted to make IIS great, so they hired an expert Apache consultant to learn more about apache. I'm listening, thinking "wow, this is great, they're really interested in bettering themselves." He then proudly went on to tell me how the Apache expert had an amusingly outdated understanding of IIS and by the end of the gig they'd convinced him of how great IIS was. They'd literally rather pay people to tell them how great they are, then admit they might have something to learn. This perfectly encapsulated my time as a .NET developer. Lucky this was at the start of an MVP conference, so I took the hint, skipped most of the conference and visited Seattle (oh, but I did attend 1 talk where the speaker said Visual Studio would add a color picker and people applauded him).
- trentnelson 12y ago
  IIS has a fundamentally technically superior architecture to Apache, thanks to Windows having a technically superior architecture for doing high performance multi-threaded asynchronous I/O (overlapped I/O and I/O completion ports).
- curiousDog 12y ago
  Just curious, do you work for Microsoft? Last I heard, Azure was doing pretty well, considering Office 365, TFS and a host of other internal services are hosted on it. They seem to be the most formidable competition to AWS right now (and I believe that, I tried all GCE, AWS and Azure over the weekend and while AWS was the best, Azure was a close second while GCE was just slow and buggy).
  - latch 12y ago
    No, I don't. Also, my view of Azure pretty much comes from experience with it long ago and a year-old Gartner analysis [1]. I can easily accept that Azure is very different than it used to be. I can also easily accept that it's doing better against AWS than anyone else. But I'd need hard numbers to refute that Gartner analysis. Spending 50% more than your competitor and having a market share less than 1/5 (probably a lot more, since the 1/5 is 15 providers combined), is something I struggle to call "success". I'd be less harsh if this didn't fit a pattern. And I know spending more and having less is the price that challengers face, but again, not being an incumbent (and failing to mount a real challenge) is a pattern we've seen before. [1] http://readwrite.com/2013/08/21/gartner-aws-now-5-times-the-size-of-other-cloud-vendors-combined http://readwrite.com/2013/08/21/gartner-aws-now-5-times-the-...
    - curiousDog 12y ago
      Ah, I believe this is what I came across and is more recent: http://www.fool.com/investing/general/2014/06/05/heres-why-microsoft-corporation-is-the-biggest-aws.aspx http://www.fool.com/investing/general/2014/06/05/heres-why-m...
  - jsolson 12y ago
personZ 12y ago
Either way, differentiated companies -- apple -- require completely different strategies than nondifferentiated -- samsung. How is Apple differentiated? To a user that wants a smartphone to send emails, visit websites, play fantasy football, take pictures, etc, Apple is every bit in competition with Xiaomi as Samsung is. To many, many users, smartphones are effectively a commodity now. Which is why Apple devices feature some of the best screens, the best cameras, the best processors. Any illusions that Apple isn't fighting the competitive fight, and hard, is just contrived nonsense. They are fighting damn hard to make a compelling case for their devices, and doing a good job at it. whereas Apple doesn't need (or want!) the bottom Apple still makes and sells the iPhone 4S, a three year old device. You can get this in the $200-ish range. Further most of Apple's pricing has been contingent upon the scam that are cell phone contracts, where right now you can get the iPhone 5, for instance, for "$0". That is, by most definitions, the "low end".
- vinceguidry 12y ago
  > Apple still makes and sells the iPhone 4S, a three year old device. You can get this in the $200-ish range. Further most of Apple's pricing has been contingent upon the scam that are cell phone contracts, where right now you can get the iPhone 5, for instance, for "$0". That is, by most definitions, the "low end". No, the consumers on the real low end of the cell phone market can't afford or can't get approved to have a contract. Most phone makers chase this market in some way, Apple doesn't.
  - personZ 12y ago
    Most phone makers chase this market in some way, Apple doesn't. Except that they still make and sell the iPhone 4s. That is absolutely and undeniably chasing the "very low end" market (it's $199 no contract, which is pretty bottom tier). http://www.virginmobileusa.com/shop/cell-phones/iPhone4S-8GB-white-phone/features/ http://www.virginmobileusa.com/shop/cell-phones/iPhone4S-8GB... Now I suppose we can just keep arguing this down, but historically Samsung was "Chasing the low end" because their devices were $0 on a contract (ergo, in the $600 range. The iPhone 5s is currently $0 on a contract). Now that floor keeps falling, Apple is selling a $200 device, and we're still going to argue that they super don't care about the low end, and they're some sort of exclusive device despite burger flipping teenagers buying it?

by x0x0 12y ago

latch 12y ago

That might be one of the mistakes, but it isn't the start of the problem. Tangibly, it's either United States v. Microsoft Corporation or Longhorn / Vista. Intangibly, it's the attitude that permeated the company that said "we are right because we are Microsoft." There were few people you could talk to who'd think you had anything to offer someone who worked at Microsoft. You still see this today around products like Bing, IE, Xbox and Azure (I know the last 2 are popular, but the xbox has been a loss leader (and what it's leading too isn't clear yet) and Azure, like everyone else, is being crushed by Amazon (it really is, they spend a ton more money and get a fraction of the market (that's Bing-style success!)) I remember a story from the only time I was on their campus. An employee (I remember his name) was telling me how they wanted to make IIS great, so they hired an expert Apache consultant to learn more about apache. I'm listening, thinking "wow, this is great, they're really interested in bettering themselves." He then proudly went on to tell me how the Apache expert had an amusingly outdated understanding of IIS and by the end of the gig they'd convinced him of how great IIS was. They'd literally rather pay people to tell them how great they are, then admit they might have something to learn. This perfectly encapsulated my time as a .NET developer. Lucky this was at the start of an MVP conference, so I took the hint, skipped most of the conference and visited Seattle (oh, but I did attend 1 talk where the speaker said Visual Studio would add a color picker and people applauded him).

trentnelson 12y ago
IIS has a fundamentally technically superior architecture to Apache, thanks to Windows having a technically superior architecture for doing high performance multi-threaded asynchronous I/O (overlapped I/O and I/O completion ports).
curiousDog 12y ago
Just curious, do you work for Microsoft? Last I heard, Azure was doing pretty well, considering Office 365, TFS and a host of other internal services are hosted on it. They seem to be the most formidable competition to AWS right now (and I believe that, I tried all GCE, AWS and Azure over the weekend and while AWS was the best, Azure was a close second while GCE was just slow and buggy).
- latch 12y ago
  No, I don't. Also, my view of Azure pretty much comes from experience with it long ago and a year-old Gartner analysis [1]. I can easily accept that Azure is very different than it used to be. I can also easily accept that it's doing better against AWS than anyone else. But I'd need hard numbers to refute that Gartner analysis. Spending 50% more than your competitor and having a market share less than 1/5 (probably a lot more, since the 1/5 is 15 providers combined), is something I struggle to call "success". I'd be less harsh if this didn't fit a pattern. And I know spending more and having less is the price that challengers face, but again, not being an incumbent (and failing to mount a real challenge) is a pattern we've seen before. [1] http://readwrite.com/2013/08/21/gartner-aws-now-5-times-the-size-of-other-cloud-vendors-combined http://readwrite.com/2013/08/21/gartner-aws-now-5-times-the-...
  - curiousDog 12y ago
    Ah, I believe this is what I came across and is more recent: http://www.fool.com/investing/general/2014/06/05/heres-why-microsoft-corporation-is-the-biggest-aws.aspx http://www.fool.com/investing/general/2014/06/05/heres-why-m...
- jsolson 12y ago

personZ 12y ago

Either way, differentiated companies -- apple -- require completely different strategies than nondifferentiated -- samsung. How is Apple differentiated? To a user that wants a smartphone to send emails, visit websites, play fantasy football, take pictures, etc, Apple is every bit in competition with Xiaomi as Samsung is. To many, many users, smartphones are effectively a commodity now. Which is why Apple devices feature some of the best screens, the best cameras, the best processors. Any illusions that Apple isn't fighting the competitive fight, and hard, is just contrived nonsense. They are fighting damn hard to make a compelling case for their devices, and doing a good job at it. whereas Apple doesn't need (or want!) the bottom Apple still makes and sells the iPhone 4S, a three year old device. You can get this in the $200-ish range. Further most of Apple's pricing has been contingent upon the scam that are cell phone contracts, where right now you can get the iPhone 5, for instance, for "$0". That is, by most definitions, the "low end".

vinceguidry 12y ago
> Apple still makes and sells the iPhone 4S, a three year old device. You can get this in the $200-ish range. Further most of Apple's pricing has been contingent upon the scam that are cell phone contracts, where right now you can get the iPhone 5, for instance, for "$0". That is, by most definitions, the "low end". No, the consumers on the real low end of the cell phone market can't afford or can't get approved to have a contract. Most phone makers chase this market in some way, Apple doesn't.
- personZ 12y ago
  Most phone makers chase this market in some way, Apple doesn't. Except that they still make and sell the iPhone 4s. That is absolutely and undeniably chasing the "very low end" market (it's $199 no contract, which is pretty bottom tier). http://www.virginmobileusa.com/shop/cell-phones/iPhone4S-8GB-white-phone/features/ http://www.virginmobileusa.com/shop/cell-phones/iPhone4S-8GB... Now I suppose we can just keep arguing this down, but historically Samsung was "Chasing the low end" because their devices were $0 on a contract (ergo, in the $600 range. The iPhone 5s is currently $0 on a contract). Now that floor keeps falling, Apple is selling a $200 device, and we're still going to argue that they super don't care about the low end, and they're some sort of exclusive device despite burger flipping teenagers buying it?