
Ballmer just opened the Second Envelope - jlhamilton
http://www.mondaynote.com/2010/05/30/ballmer-just-opened-the-second-envelope/
======
m0nastic
I just read this article and checked to see if someone had submitted it.

I think shaking the death-rattle for Microsoft is a bit premature, but I find
it interesting that at some point in a company's growth, making a truck-load
of revenue every quarter isn't sufficient.

Microsoft has a wonderfully lucrative cash cow that allows them to not be
successful at their other endeavors (with success for this argument being
defined as a similar market share as their primary business).

It reminds me of the starving artist dilemma, as in, if you live a comfortable
life without the danger of starving, are you as motivated to make it.

I flip flop about whether I believe in that argument, although at the risk of
using a statistically insufficient sample size (my own personal experience),
it would seem to be true.

~~~
altano
It's never ceases to shock me how bad the Microsoft commentary is on HN, not
because I don't agree with the conclusions, but rather because it mostly
operates on so little information.

For example:

> Microsoft has a wonderfully lucrative cash cow that allows them to not be
> successful at their other endeavors (with success for this argument being
> defined as a similar market share as their primary business).

Even though you say "cash cow" I'll give you the benefit of the doubt and
assume you mean both Windows and Office. It's fine that you haven't heard of
all of MS's other billion dollar businesses, but perhaps that should leave you
feeling unqualified to make sweeping commentary?

Here are some products off the top of my head that you've clearly never heard
of:

    
    
      * Business Productivity Online Suite (BPOS)
      * Exchange
      * SharePoint
      * Office Communications Server (OCS)
      * Dynamics CRM
      * SQL Server
    

Exchange's market share is comparable to that of Google's market share of
search (~70%), so I'm assuming that meets your definition of success based on
market share.

BPOS has 40 million _paying_ customers compared to Google Apps' 25 million
_total_ customers (which presumably only a tiny fraction of which are paying).

SharePoint is part of the Office division but is an entirely new product
driving billions of dollars of revenue.

Etc...

There's no reason for you to have heard of any of this. I only know all about
MS because I work for MS. But there's also no reason for you to talk about how
MS reminds you of the "starving artist dilemma."

~~~
blub
Every online community has its biases. For HN, it's being anti-MS and pro-
webapps, anti-desktop. Less than reddit, but still noticeable. Upmods are
pretty worthless when it comes to these subjects.

Getting all your tech news from places like HN or reddit can be harmful, they
distort reality significantly.

~~~
rosssd
What other news sites would you recommend to a HN reader to help balance this
out?

~~~
kmfrk
Metafilter might be a good place. Good news commenting sites with a great user
base aren't exactly a dime a dozen.

------
dasil003
_The “device” people saw in the video isn’t going to ship, but that doesn’t
mean we didn’t learn a bunch and innovate a bunch in the process._

So if a Microsoft team innovates in the Redmond forest and no one ever sees a
product...

~~~
joezydeco
" _In fact, the intention to mislead competitors is really the only effective
reason for a commercial entity to publicly release concept products._ "

<http://counternotions.com/2008/08/12/concept-products/>

------
commieneko
"Well, tablet is an area that will evolve going forward. Certainly it’s a
focus for what we’re doing in the Windows space, and how they’re thinking that
space. We’re going to have a bunch of netbooks and tablet stuff that’s in the
works there. We’ll just see how that evolves."

Isn't that a lovely and inspiring statement from a tech visionary? Don't you
get all tingly just reading that? (Oops, sorry, thats the circulation in my
legs going out again...)

Whats wrong with most tech execs is they are waiting for something to evolve,
and then hoping to jump on the band wagon. In the mean time, they are reacting
by running around in circles and trying to turn the crank on the old machine
faster and faster. Oh, and let's reorganize a bit. Yeah, that'll do it...

Embarrassing.

Jobs meanwhile, love him or hate him, is _making_ the next generation tech,
one piece at a time. And he's making it well. And he's making it closed and
proprietary.

I really wish our choices weren't between openness/freedom and
quality/innovation, but that's how it sits right now.

~~~
AmericanOP
I read your comment before I read the article. The quote comes from a recently
released exec, not Ballmer.

~~~
commieneko
I didn't say the quote was from Ballmer.

------
j_baker
I think that Microsoft could become awesome if they'd just quit trying to be
cool. They're very good at selling to enterprise customers, but they're
terrible at marketing to consumers. It strikes me as odd that this
reorganization is happening in the area where Microsoft has had the most
success marketing to consumers. We are talking about the division that makes
XBoxes correct?

~~~
contextfree
They think (correctly) that what's popular among consumers will eventually
infiltrate the enterprise ("the consumerization of IT") and vice versa.

~~~
tlack
I don't necessarily disagree with you but can you give some examples? I can
think of counter examples, all things that went from commercial business tool
to consumer not the other way around:

\- computers \- internet \- email \- blackberry \- unix (consumers now find
mac os x more dependable and durable than windows and prefer it aside from
cost)

------
vishaldpatel
And if you're a startup CEO, you keep a really big stack of envelopes for
continual reorganization and starting-again :D

------
RyanMcGreal
>Over the last decade, Wall Street has declined to reward Microsoft for its
superior profit. The explanation is simple: Professional investors don’t
believe Ballmer, and they don’t see bigger profits in Microsoft’s future.

This seems to suggest Wall Street has been wrong about Microsoft for the past
decade.

Likewise, I started seriously worrying about - and predicting - a housing
bubble-based recession in 2004. [1] I was wrong about it every year between
2004 and 2009.

[1] <http://www3.sympatico.ca/taylormcgreal/thecomingcrash.html>

------
shmichael
Microsoft has some amazing enterprise products. Excel is absolutely amazing.
Access is a great development tool for paperwork personnel. SQL Server is so
so simple to get up and running, and scale up to tremendous volume.

~~~
algorias
Agree re: Excel. Great product. Competitors don't even come close.

------
erikstarck
My guess: in 5-10 years Microsoft will be a service company.

We've seen this movie before and it's not just Microsoft that's shape
shifting. Google is becoming the new Microsoft, Microsoft is becoming the new
IBM, Facebook is becoming the new Google. Twitter is becoming the new
Facebook.

EDIT: why downvoted? Would it be so strange if Microsoft followed its former
arch enemy IBMs footsteps?

~~~
pavlov
Can't wait for 2040, when the cycle is complete and Twitter is the new IBM. My
bank statement will be much more convenient to read when it's limited to 140
characters.

~~~
Deestan
Given that it's a cycle, does that mean IBM will be the new Twitter at some
point?

~~~
j_baker
Either that or IBM becomes the new Sun.

------
moe
With regard to microsoft I think these days that Project Natal is going to be
huge.

If they play their patent cards right then that might very well push them back
to the top of the list.

~~~
m0nastic
I'm not sure how much of Natal is patentable by Microsoft, as the tech isn't
theirs (at least according to Wikipedia here:
[http://en.wikipedia.org/wiki/Project_Natal#cite_note-
MsPress...](http://en.wikipedia.org/wiki/Project_Natal#cite_note-MsPress-20)).

I'd also be willing to bet that the sales won't be that breathtaking (a $150
device that'll need some time for titles to take advantage of it).

If it were launching as a part of their next console, maybe it would be enough
of a differentiator to move units (which isn't something the 360 has had
trouble doing).

~~~
moe
I'm less interested in the gaming part but more in the ways this will invade
our daily lives.

 _If_ it works as advertised then it might soon be built into TV sets, PC
monitors and all sorts of public infrastructure that we can't even imagine,
yet.

 _If_ microsoft can hold a big piece of that cake then that should be huge.

I mean, obsoleting TV remote controls alone is big, but only the tip of the
iceberg. How about interactive advertising (stand in front of a shop-window,
interacting with a bigscreen), touch-free car dashboard, the whole "home
automation" area, and so on.

This is ofcourse all under the assumption that it really works as well as
shown in those videos.

------
moolave
With ramifications lined up with this decision, I would still put my money on
their Xbox division. I hope they put more capex on that.

~~~
riffraff
I was going to ask about it: to me the Xbox division seems pretty successful,
especially if you consider that ten years ago microsoft was not in the console
market at all.

Acccording to wikipedia, they have sold 40M units of the latest incarnation
(iphones total at 50), they have probably the best online services (according
to my hardcore gamers friends), the most open marketplace, and at least they
seem to be trying to innovate.

Is there a reason for never taking this division into account when talking
about how MS is going to die horribly because of only milking the cash cows?

