
Microsoft’s Resurgence Under Satya Nadella - yarapavan
https://www.wsj.com/articles/microsofts-resurgence-under-satya-nadella-11549022422
======
Bamafan
Long story, short:

1\. Realize the world is moving beyond Windows

2\. Cede mobile OS to Android/iOS, that battle is lost.

3\. Realize, next great revenue stream is the Cloud (Azure).

~~~
nostromo
The problem is they are no longer best-of-breed for any of their markets,
except maybe Office.

Microsoft doesn't break out Azure revenue, but by all accounts it's quite
small compared to AWS.

And Office is very much under threat. If you work with young people you'll
notice they tend to prefer G Suite apps over Office - most likely because
Google has done a great job getting their software into schools.

~~~
king_magic
Uh, Azure revenue, by many accounts, is greater than AWS:

[https://www.forbes.com/sites/bobevans1/2018/10/29/1-microsof...](https://www.forbes.com/sites/bobevans1/2018/10/29/1-microsoft-
beats-amazon-in-12-month-cloud-revenue-26-7-billion-to-23-4-billion-ibm-
third/#39c070312bf1)

[https://www.forbes.com/sites/bobevans1/2018/04/27/microsoft-...](https://www.forbes.com/sites/bobevans1/2018/04/27/microsoft-
tops-amazon-in-q1-cloud-revenue-6-0-billion-to-5-44-billion-ibm-third-
at-4-2-billion/#3b3145d95d4b)

And sorry, G Suite is a joke compared to desktop Office for serious work. It
doesn't matter what the youngin's prefer, what matters is what gets (or
facilitates getting) real work done in the enterprise, which generally
revolves around Excel and PowerPoint in some fashion.

~~~
nostromo
Microsoft includes a bunch of non-Azure products under their cloud revenue.
And they do it to confuse people and falsely claim they're outpacing AWS,
which as you just proved, works.

~~~
GVIrish
Why shouldn't Office365 be counted in cloud revenue? "Cloud Revenue" doesn't
exclusive mean IaaS or PaaS.

~~~
techfoolery
Because SaaS isn't cloud computing. SaaS is essentially a fully available
software application that you don't run on your own machines.

There's similarities, but key differences that you can easily look up to
better understand. Hence part of why most aren't huge fans of including O365
to claim Azure's bigger than AWS.

~~~
ticmasta
Do you think Amazon subtracts their own massive utilization of AWS out from
their numbers? Not likely.

~~~
greenail
How is buying your own product GAAP? None of the cloud providers can claim
their usage of their own products as revenue, it is a cost.

------
fitzroy
[https://outline.com/9BWnsj](https://outline.com/9BWnsj)

~~~
godelmachine
Thanks

------
Brahma111
I have mentioned this to many.. Satya could go down as one of the greatest
turnaround masters of all time. I had consulted with MS a long time ago
(2005-6). The work place was toxic. I might have been with the wrong
group..but even uttering Java was considered sacrilegious. If you took a Mac
to their office, the security would look at suspicion. Needless to say, I
never returned back after my stint. Fast-forward. MS is the largest
contributor to Linux source. In MS Ignite conferences, it's not about Windows
and .Net anymore rather you would find healthy all round discussions. The
developer community has slowly started trusting them more than other biggies.
Not just Satya himself but he has his second line all focused in creating a
customer friendly environment. I will put my money on MS till Satya is at the
helm of affairs.

------
Ruxbin1986
Steve Ballmer, technical bits aside. Just couldn't play as a successful CEO in
PR Role. He was too aggressive, abrasive and even somewhat rude.

Aside from that, one of thing most amusing things and one Ballmer excellent
business moves was suing nearly every Android Smartphone Company for patent
infringement. Microsoft literally makes money off of Android Smartphones but
what's confusing to me is how Apple takes all of the flak.

~~~
skizm
IIRC the android revenue is rolled into the x-box revenue under some nebulous
category when they break out revenue in their earning (forget the exact
title). This hides the massive losses they are taking on x-box and all things
x-box related. The android revenue is almost pure profit and nearly $2B
annually. (they make this money by licencing patents to phone makers that use
android such as HTC and Samsung)

~~~
rasz
Arent most of those patents pure junk? Afair the only valid patent in there
was something to do with FAT long filenames , and that one was killed with
Linus help back in 2013.

~~~
Ruxbin1986
I can't recall but I think many of them were User Interface related and rather
specific.

Not like the Apple claim of "Rounded Rectangles" but I will admit that it did
appear even at face value that both Apple and Microsoft had a strong case
against HTC, Samsung, etc.

But I guess one of these makes better headlines for clickbait. YMMV.

------
doctorpangloss
A VC friend of mine characterized these kinds of answers nicely: incredible,
profound bullshit that no one seems to know how to cut through.

On a level specific to Microsoft, their biggest threat is how agreeable and
self-deprecating everything they do is now. Corporate cultures thrive on
hierarchy, and yet their employees are pretty comfortable admitting to their
friends that Windows and Azure are crap. The quiet trie flippers at Google,
Amazon, Facebook, Oracle and Apple never speak ill of the product. Those
people go and hunt _leakers_.

Nobody at Microsoft wants to hunt leakers anymore. That bloodthirsty lust for
dollars is what made it possible for a whole generation of middle managers to
hit the country club in the first place. So what does it say that the us-
versus-them mentality is gone?

The CEO should be going out and saying, "Come work for us. Look how much
_nicer_ we are. Trie flippers might score better on their programming quizes,
but they're insufferable." Instead he's talking, in coded language, about
expanding to serve the Chinese government, which is impossible in an
organization that believes in personal freedoms and positive life outcomes.

On a meta-level, what do we do with all the CEOs who are essentially
beneficiaries of our increasingly correlated bull runs? Has it really boiled
down to, "Since non-mineral and utility revenues are correlated at huge market
cap companies, you're a good CEO as long as your likable?"

~~~
gnu8
Microsoft deserves to go gentle into that good night because of all the damage
they’ve done to the computing industry over the years, for example killing Be
and Netscape with monopolist tactics and creating a terminally insecure
software monoculture of the lowest common denominator of Windows and IE, that
we’re still recovering from today. (Google is repeating the lesson today -
Android is the Windows 98 of mobile).

I’m glad to see them disappear and it drives me crazy to talk to all of these
people who think Office 365 and Azure are sex on a stick. They’ve either
forgotten the past or they don’t care.

Microsoft deserves to die.

~~~
ggambetta
> They’ve either forgotten the past or they don’t care.

Or they're too young to know or remember!

Working with recent grads, I've discovered that for most of them Bill Gates
has always been this grey-haired, well-natured philanthropist. They can't
believe it when I tell them of how universally reviled Microsoft was, and I
feel like Grandpa Simpson talking about onions in his belt :(

~~~
kazinator
I speak here perhaps not only for myself but others: although _Microsoft_ had
been reviled, and still is, somehow _Gates_ escaped that personally. I've
never felt that I dislike Bill Gates.

There had been a smaller Microsoft before the rise of MS-DOS and Windows.
Microsoft was a vendor of BASIC interpreters that were integrated into some 8
bit microcomputers, which I used. The Apple II's "Applesoft" basic was derived
from Microsoft's work. Its name is a portmanteau of Apple and Microsoft, a
kind of touchstone that highlights a complex history of cooperation and
rivalry between the two.

~~~
sifoobar
Here, let me fix that for you:

[https://www.bimmerfest.com/forums/attachment.php?attachmenti...](https://www.bimmerfest.com/forums/attachment.php?attachmentid=43014&stc=1)

Bu xie, my pleasure.

~~~
kazinator
I actually had that in an earlier edit of my comment!

I got rid of it for lack of stability in the URL. There doesn't appear to be a
nice semi-permanent home on the web for these photos.

------
m0zg
It's important to know when to give up, sure, but what did he actually start?
Everything that carries MS today (Azure, Exchange Online, subscription
software, Office 365, XBox) was started and got traction under Ballmer.

~~~
remir
Everything is about perception. What Satya did was change Microsoft's image
and culture for the better, insuring Microsoft's cash cows have a future and
stay relevant in a world that is changing rapidly with other strong
competitors.

Ballmer's style of leadership would not fly today. Saying stuff like Linux is
cancer, the iPhone a toy/joke, acting like a clown during conference.

~~~
sonnyblarney
"What Satya did was change Microsoft's image and culture for the better,
insuring Microsoft's cash cows have a future and stay relevant in a world that
is changing rapidly with other strong competitors.

Ballmer's style of leadership would not fly today. "

Totally disagree.

Which of MS customers do you think care about 'perception' of how nice the CEO
is?

Do you think Siemens is going to spend $500M on Google cloud because their CEO
is nicer than Ballmer was?

Which Windows users are thinking about Satya vs. Ballmer? 99% of Windows users
have no idea who either of those people are :)

Satya's 'nice guy ways' are almost irrelevant to the business overall, other
than maybe recruiting, or something like that, but I doubt they've ever had a
problem.

Analysts and investors read GAAP statements and those are 100x more important
than 'how nice' the CEO is perceived.

Some issues, like Linux as you mention, I think are important, but I'll bet
that Ballmer would have arrived there anyhow.

Linux support was not so much a strategic decision as it was a 'forced hand'.
They had basically no choice and the decision was inevitable.

I think that the reason Ballmer was disliked by Wall St. was A) the failure of
Windows Mobile b) the perception that Windows was in decline (it's not) c)
Cloud revenues had not yet hit the big time yet.

I actually feel that the P/E ratio pushed on Ballmer would have come around
for him eventually.

I like Satya, I think he's the right choice - but he still has to prove
himself. As of today, he's mostly riding Ballmer's coattails.

~~~
m0zg
There is one area where Satya is better leadership-wise. The success of
Microsoft in the long term ultimately depends on its ability to run a good
engineering organization. Everyone at MS knew Ballmer was never an engineer,
so he had very little respect from the engineering rank and file. His brash,
business oriented personality and the lack of "filter" did not help matters.
While it is true that customers largely don't give a shit who runs Microsoft
as long as it's run reasonably well, Microsoft employees (and prospective
employees) do care, and the ability to attract and retain them is the
cornerstone of Microsoft's continued success.

I saw a post in another thread that suggested that former enlisted men do
better as officers than people who were never soldiers. The same is true here
in terms of people leadership, if not the vision.

~~~
Ruxbin1986
Does anyone know the major departures during Ballmer? I know the original lead
for Microsoft Windows Server Manager and MMC.exe literally quit and morale hit
the absolutely floor among the entire organization. He eventually ended up at
Amazon and another guy ended up at what became Pivotal.

------
devereaux
A big resurgence: They make an operating system that supports Linux with just
a few clicks. They make hardware devices that can also natively run Linux very
well, for when I need it.

It feels like Apple when OSX was introduced, only better.

Many people here may not like Windows 10, but the more I use it, the more I
like it.

~~~
koalaman
I am writing this from my personal Windows 10 machine and I am not a big fan.

Random things that have aggravated me just in the last few days:

    
    
      * For some reason I suddenly had to create a pin a few days ago to login instead of my password. why?
    
      * skype is now magically in my list of background programs. 
    
      * There is news in the start menu when I want to launch an app!?
    
      * whenever I want to do something a little hard, like copy a large number of files, things tend to go pear shape very fast.
    
      * It's very hard to find basic settings from the start button search thingy.  Chrome OS and OS X are way better at that. 
    
      * windows shell still is unpleasant, and the goobuntu subsystem just isn't convenient due to the incompatibility of windows file paths. Also it's very ugly for some reason
    
      * More generally dealing with Windows drives drives really sucks. I'm always shuttling things around trying to fit them into particular drives. Linux LVM is so much better.
    

I could go on. I wish they'd just go back to being an operating system. Now
that they're not considered a monopoly anymore they're taking the opportunity
to jam their whole 1st party ecosystem of crap down Windows 10 users throats.
It's not fun for me.

The only reason I pay for Windows is to play games. I prefer Linux as a user,
but the hardware and display issues are a pain. I also agree that Windows
feels snappier and prettier. Chrome OS with Crostini would actually be pretty
perfect if it didn't crash on me every couple of hours.

~~~
ndiscussion
Have you tried Linux recently? I installed arch a few months ago, and almost
all of my steam games run on it out of the box (no extra setup required).

I have an AMD Vega 64 graphics card, drivers are all handled automatically.

My Xbox 360 controllers with wireless dongle are handled automatically.

If you want to use xbox one controllers, any bluetooth adapter will work out
of the box, but you do have to install a package called xpadneo.

AMD drivers on Linux are great right now, and most hardware is supported with
nothing extra.

~~~
koalaman
I use it daily for work. Haven't used it at home for years.

My main blocker games wise is Battlefield series which I don't believe works
on linux.

------
phytax
Why is somebody posting articles behind paywalls?

And then: "We do not accept cancellations by mail, email, or by any other
means. "

Really?

------
sonnyblarney
"When Satya Nadella took Microsoft Corp.’s helm five years ago, the
conventional wisdom was that the company’s glory days were behind it."

Have a look at this MS revenues [1] and consider why for a moment there is any
'conventional wisdom' like this?

MSFT stock price did languish during this time of amazing growth which I guess
validates that 'conventional wisdom' was in fact sour, but it's hard to see
why it was.

Robert Shiller, in a recent interview on the FT alphaville podcast [2]
indicated how so much of valuation was based on 'narrative' and that a lot of
this narrative is in fact fiction.

For whatever reason, the industry press never liked Ballmer, and I guess they
like Satya. Surely, there have been some changes afoot, but in terms of
fundamental business orientation, I don't see any reason why Satya is 'better
than' Ballmer. At HN, we might see things like VS Code and open sourcing
Chakra as 'important', and although they are relevant, those issues are
_small_ peanuts in the MS bigger picture.

[1] [https://www.statista.com/statistics/267805/microsofts-
global...](https://www.statista.com/statistics/267805/microsofts-global-
revenue-since-2002/)

[2] [https://itunes.apple.com/ca/podcast/robert-shiller-market-
na...](https://itunes.apple.com/ca/podcast/robert-shiller-market-narratives-
are-like-diseases/id448302257?i=1000427224773&mt=2)

~~~
Bamafan
> For whatever reason, the industry press never liked Ballmer, and I guess
> they like Satya

Ballmer made several missteps:

1\. Fruitless foray into mobile with acquisition of Nokia and Windows Mobile
and Windows Phone strategies.

2\. Billion+ dollar acquisition of Skype that basically went no where.

3\. Remember a company called aQuantive? Don't worry, neither does anyone
else. Ballmer's MS purchased them for $6 billion.

That's off the top of my head, but I'm sure there are more examples.

~~~
sonnyblarney
"Ballmer made several missteps:"

Growing an already massive company company by 3x in revenue is the important
thing, which is the 'bottom line' in which missteps have to be contextualized.

Any company in tech is going to make mistakes, this should be happening, so
listing them off doesn't so much help - what matters is how all of this works
out in the mix.

I worked in mobile during that time, it was vicious. Surely MS could have done
better, but I view it more as lost opportunity than failure.

Remember that 80% of acquisitions fail. Google spent $3B on Nest. Apple spent
$3 Billion on Beats, it remains to be seen if they'll make that up in profit.

~~~
Bamafan
> Growing an already massive company company by 3x in revenue is the important
> thing, which is the 'bottom line' in which missteps have to be
> contextualized.

Yes, he managed to creatively squeeze revenue out of existing markets. This is
what he was known for.

But as far as finding new markets or growing existing markets, he failed and
that's all Wall Street cares about.

> Surely MS could have done better, but I view it more as lost opportunity
> than failure.

Non other than Bill Gates himself refers to MS Mobile strategy as a failure:
[http://fortune.com/2013/02/19/today-in-tech-why-bill-
gates-c...](http://fortune.com/2013/02/19/today-in-tech-why-bill-gates-calls-
old-microsoft-mobile-strategy-a-mistake/)

> Remember that 80% of acquisitions fail. Google spent $3B on Nest. Apple
> spent $3 Billion on Beats, it remains to be seen if they'll make that up in
> profit

Ballmer's failure rate on major acquisitions may have been 100%. (I'm not even
kidding)

~~~
scarface74
Beats was already profitable when they bought it.

[https://www.forbes.com/sites/zackomalleygreenburg/2018/03/08...](https://www.forbes.com/sites/zackomalleygreenburg/2018/03/08/dr-
dres-3-billion-monster-the-secret-history-of-beats-3-kings-book-excerpt/)

Beats Music was also the foundation of Apple Music which is also gaining
subscribers like crazy.

[https://www.forbes.com/sites/careypurcell/2018/05/15/with-50...](https://www.forbes.com/sites/careypurcell/2018/05/15/with-50-million-
subscribers-apple-music-still-lags-behind-spotify-for-now/)

------
bayulxc5
The only product from Microsoft I use is Windows and they're ruining it. So,
sorry Satya, but...

~~~
electrichead
You don't use GitHub or LinkedIn or Skype either?

You might also rely on sites that are built with Microsoft technologies (Stack
overflow for example) or find that your workplace gets by with Excel.

It's hard to say you don't use their technologies.

~~~
bayulxc5
I don't use github or linkedin. I don't use skype either... because Microsoft
ruined it and everybody left (for business now I use Hangouts and for gaming
now I use Discord).

~~~
yuy910616
that's clearly wrong. not everybody left. you left

~~~
VRay
Everyone I know quit using Skype too.. it's tough to have this argument
without access to expensive market research reports, though

More anecdotally, the only time I used Skype in the last few years was when I
had a remote job interview with LINE. (Ironically, LINE's core product is a
Skype competitor, and they refused to use it for the interview even though I
said I'd rather stick with LINE and not install Skype. If that isn't a red
flag, I don't know what is, haha)

------
B1FF_PSUVM
What resurgence? From a consumer point of view, MS is all but gone to the
corporate pastures where Oracle feeds.

