
Microsoft Mission Impossible - coloneltcb
http://www.mondaynote.com/2013/10/13/microsoft-mission-impossible/
======
skrebbel
I don't understand the fatalist mood in articles like these.

Microsoft is still a very healthy company, and now they _finally_ got that
healthy competition. Competition is good for the market, it's good for us
consumers. Hell, it might even be good for Microsoft in the long run.

I'm admittedly a bit of a Microsoft fanboy, but I doubt that would've been the
case if MS had still been the monopolist steam roller it once was.

The current market has forced MS to truly innovate and to be a much more
friendly company in general (evidenced by e.g. their broad contributions to
open source these days). How can that be bad?

------
bane
One of the really surprising things about Microsoft is that despite all the
caustic internal politics, CEO antics, missteps, misfires, a business model
designed to extract maximum money from everybody, and even questionable
development and design practices, on occasion really _great_ software (and
hardware) comes out of there.

World class, amazing, top of the industry with no true peers.

For example, despite all of the good ideas and theory and philosophy, open
source, after 13 years of effort, (while there's definitely been good work
done in the area) has yet to produce an office suite that's _at least_ as good
as MS-Office is in all areas.

I'm sure the MS-Office codebase is a horrible mess, but the end user bits are
good enough for nearly all of the weird edge-cases that 99% of users want and
99% of users can learn to use it to some level of effectiveness in a couple
afternoons.

That's amazing.

~~~
quesera
I'd be interested to hear what your other examples are, but that doesn't
surprise me at all.

If OpenOffice (etc) ever had comparable staffing (quantity and variety, not
even questioning quality) that MSOffice has had for 15-20 years, I'd expect
more comparable results.

~~~
mtinkerhess
Visual Studio is probably the best way to write C++. Windows is probably the
best operating system for the enterprise and is ahead of OS X and Linux in
bringing a desktop OS to tablets and touch laptops. C# is arguably the best
language for writing enterprise applications. Xbox arguably won the console
war of the current generation. Kinect is the only consumer product like it.
Surface Pro is probably the best desktop replacement tablet. (disclosure:
microsoftie)

~~~
lokedhs
Yes, I think it's arguable that MS won the console war.

Could you tell me what you are measuring to reach that conclusion? Last I
looked, the only category where the Xbox was ahead is US sales, and even
there, they were only marginally ahead of the PS3.

~~~
e28eta
I question why anyone would think winning a generation (or two) would mean the
war is over?

There's pretty much always been multiple competing consoles, and I don't think
Sony and Nintendo are ready to throw in the towel.

~~~
bane
I would not be surprised at all if we see other competitors enter the market
in the next 2 or 3 generations. For example, Samsung or even an unknown. As
the hardware is now basically topping out, it will eventually commoditize to
the point that even smaller companies can have a go at the market.

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clarky07
I think the people who say Microsoft has been a huge failure for the last
decade should take a better look at the numbers that matter. The stock price
doesn't matter. In 2000, we were at the top of the tech bubble. Bubble means
valuations were stupid.

The story talks about 2000 report with 19.3 billion from windows and 23
billion total revenue. On the other hand, Microsoft made 19.9 billion in
revenue just last quarter, with 5 Billion in net profit. 6 Billion operating
income because of the surface writeoff.

Are other companies doing better? Yes. Could Microsoft have done better? Yes.
Have they done badly? Not at all. They have grown revenues and profits at huge
and absurd levels over several different divisions. They are also not going to
die any time soon, and I don't think there are too many options to take a
company this big private.

~~~
programminggeek
Microsoft has done quite well financially, but where they look bad is when you
see how much Google, Apple, Facebook, Amazon, etc. have grown in the same
period.

One thing I learned in business school is the measure of a CEO is not whether
or not they did a good job, but rather if they did a better job than someone
else in the same position. It's hard to look at Microsoft in the last 10 years
and think that they have done as well as they could.

~~~
clarky07
That's silly. Google, Facebook, and Amazon barely existed at the beginning of
this timeframe, and Apple was near death. Microsoft on the other hand was a
several hundred billion dollar company. To expect similar growth rates is
absurd, and only one of these companies is actually a direct competitor.

------
bigben
I would say their enterprise health isn't terrible and might even be growing.

But they're getting trounced in the consumer market so handily, and by so many
other competitors, that it seems impossible they'll see ever see meaningful
growth there. A lot of that is because of the legacy freight they're forced to
carry wrt their PC and enterprise concerns...and because of the memories of
everyone who had to deal with crappy MS systems in the 90's and early 00's.

I've often said it wouldn't be a terrible thing for MS to spin off a consumer
division. It could integrate fully into MS's current services, but it would be
free of the psychic burden of the "Microsoft" brand, with all of the stodgy
uncoolness that that entails. Not to mention a separate company would be free
to move more quickly in the face of the rapidly changing consumer market.
However, the board would probably consider this to be a "hail mary" play.

I will be very interested in seeing how the new CEO handles the consumer side.

------
maxander
I find the "iPhone killed Microsoft" story to be unconvincing, despite its
popularity. Yes, the iPhone is wildly successful beyond anything Microsoft has
invented in the 21st century, but _its a smartphone_ \- whereas, as this
article itself states, Microsoft was in the business of peddling a
Windows/Office bundle. So its not as if Apple and Microsoft are competing on
that front; no one buys an iPhone to replace their computer (or at least, I've
yet to see a single example of such), much less their word processor.

I mean, yes, Apple also handily outmanoeuvred Microsoft in those areas where
they do compete, and has beaten back Microsoft's forays into mobile. But
Microsoft's problems are much more mundane- office software became a
commodity, and they've failed to produce a new OS that's a clear-cut
improvement over Windows 95. One could imagine a Microsoft that found a way to
meaningfully innovate purely on the good old PC platform and be successful
without any of this mobile devices tomfoolery.

~~~
wvenable
Ask a teenager if they'd rather give up their iPhone or their laptop; I
guarantee they'll say laptop.

The real problem for Microsoft and PC makers is that everyone has a PC and
they don't need a new one. Whatever PC almost anyone has is now good enough.
People are spending their money on the latest phones and tablets.

~~~
throwawaykf
True, a teenager would say that, but that's because teenagers are pretty
shortsighted. Just wait until they get home and have to type up a school
report. A few attempts on the touchscreen and even the most headstrong
teenager will be ready to swap it for a laptop.

And while it's true that the PC market is sort of saturated, the tablet market
too will suffer the same fate.

In the end the only thing that will continue to sell is services.

~~~
wvenable
> Just wait until they get home and have to type up a school report.

I speak from experience, they will just use whatever PC is laying around or
stuffed in a corner.

------
allochthon
A note of context about the author -- Jean-Louis Gassée was the man behind
BeOS and was an executive at Apple in the 1980s.

------
programminggeek
The biggest problem with Microsoft after say 2005 was that it let things like
Windows and Office drag it down to the point that if things competed with
either, they were killed with fire.

For example, look at what Ray Ozzie got built with Azure, or what J Allard did
with the Xbox, Xbox 360, Zune, and Courier. Azure was in a prime spot to do
what Amazon ended up doing - being the computing platform for the cloud.
Instead, nobody at Microsoft wanted to listen to Ray because selling Windows
and Office on PC's and servers is the thing that drives MSFT today. Thus, if
it competed with either, it's not going to get the kind of respect it
deserves.

Look at where Microsoft is now on the consumer side. J Allard and his team
were basically paving the way for Microsoft to make great consumer devices.
Zune basically gave them Metro UI, Xbox 360 showed them how to do consumer
hardware and supply chain management worldwide, and they were working on the
Courier about the time the iPad hit. Microsoft did nothing with it and the
iPad replaced literally millions of low end Windows laptops and netbooks. It
took Microsoft something like 3 or 4 years to have an even competitive touch
tablet experience with the Surface, and then it bundled desktop Office on a
touch device.

The iPhone debuted in like 2007 and Microsoft is still peddling a desktop mode
Word Processor on a touch tablet as a good idea.

The Surface launched without consulting the one team that had shipped tens of
millions of hardware devices at Microsoft - the Xbox team and consequently
built about 3 million too many Surface RT units which cost the company $900
million in losses.

For as much as Microsoft is trying, and they really are trying, Windows and
Office are as much of a curse as they are a blessing in the modern era of
devices, services, and the cloud. Where they end up is anyone's guess, but all
the people who seemed to "get it" at Microsoft the last 7 years or so
basically got ran out of the company and I have no idea if the people who are
still there really "get it" enough to compete with the likes of Samsung,
Google, Sony, Amazon, and Apple.

Also, remember when Microsoft was so terrified of Google owning search that
they tried to buy Yahoo! for $45 billion? Imagine if that had gone through.

~~~
yuhong
I mentioned before that the HTML export in Word/Excel 2013 is pretty much
unchanged from 2003, complete with setting "Microsoft Internet Explorer 6 or
later" in Web Options causing things like VML to be required that is not
supported by IE10 anymore by default. You can see this if you draw a shape for
example. I wrote an Ars Technica forum post on this.

------
timedoctor
I have a completely contrarian view: They should stop trying to be a
competitor to Google and Apple. Continue with Windows and Office, and continue
to improve them.

Get out of EVERYTHING else including all internet services and everything that
is just a money-losing proposition.

Then buy back as many shares as possible, keep buying back shares and if the
shares get too expensive start paying billions and billions in dividends.

Not every company is meant to be the next wave of the future, why not be
content with how successful they are and be really good at it, continue to be
great at it, and get out of everything else, banking as much money as they can
in the process.

------
adamnemecek
Partial blogger says something partial, more news at 11.

------
grogenaut
Summary: Steve Jobs Steve Jobs Steve Jobs

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josephlord
> In an earlier incarnation I saw Microsoft play legal hardball against anyone
> who tried to sell PCs with both Windows and another OS installed at the
> factory…)

I know they played commercial hardball with people wanting to offer options
other than MS operating systems. Does anyone have any information about them
playing legal hardball (lawsuits or threats)?

~~~
juhanima
How about this one?

[http://www.justice.gov/atr/cases/f3800/msjudgex.htm](http://www.justice.gov/atr/cases/f3800/msjudgex.htm)

The relevant chapter is III.H.64: "An aspect of Microsoft's pricing behavior
that, while not tending to prove monopoly power, is consistent with it is the
fact that the firm charges different OEMs different prices for Windows,
depending on the degree to which the individual OEMs comply with Microsoft's
wishes. "

EDIT: Replaced the link to the final version in stead of a proposal, added the
quote

EDIT2: Duh, I totally missed your point. Yes, they have resorted to also that
tactics lately. Just a few high-profile cases.

\- Microsoft sues Barnes & Noble over patents -
[http://mashable.com/2011/03/21/microsoft-sues-barnes-
noble/](http://mashable.com/2011/03/21/microsoft-sues-barnes-noble/)

\- Microsoft sues Salesforce -
[http://news.cnet.com/8301-13860_3-20005306-56.html](http://news.cnet.com/8301-13860_3-20005306-56.html)

\- Microsoft sues Motorola -
[http://www.techdirt.com/blog/wireless/articles/20101001/1356...](http://www.techdirt.com/blog/wireless/articles/20101001/13562611251/microsoft-
sues-motorola-for-patent-infringement-over-android.shtml)

IMHO especially the B&N case is telling. A very sad story.

~~~
josephlord
Thanks for that although I don't think it backs up the point I was
questioning. Your inital quote confirms the commercial hardball that I never
doubted and your later links confirm patent licensing demands against Android
manufacturers although which isn't really about an "earlier incarnation [of
MS]" and they have been making patent licensing deals with a great number of
Android manufacturers so I'm not even sure I'd count it as hardball.

Note that I am not a supporter of Microsoft and avoid their products largely
because of the commercial hardball they played when they had monopoly power
but the original article suggested that they played "legal hardball" with OEMs
who wanted to ship devices (I interpreted as PC's) with additional operating
systems rather than just MS ones. I had no recollection of this and was
looking for a reference before I add it to the list of offences I believe MS
to have committed. It is not implausible but it was a new claim and I wanted
to understand it.

I'm interested in understanding why you think the B&N case is so sad and
telling. I haven't investigated the patents claimed but in principle the idea
that MS requests fees for using it's patents isn't actually a problem for me.

------
adventured
This article significantly understates the valuation picture of other tech
companies during the dotcom bubble era.

Cisco was briefly worth more than Microsoft during the dotcom bubble. They had
a $557 billion market cap, which is completely left out of the chart. Intel
peaked at $509 billion (August 2000) - also left out of the chart. Nortel was
worth $283 billion at their peak. Lucent was worth $285 billion. AOL was worth
$222 billion. Oracle and Sun were both worth over $200 billion. Yahoo was
worth $140 billion.

So they conveniently left out a cool $2.3 trillion or so in market cap among
just a few other tech companies. Not to mention the various crazy valuations
for companies worth tens of billions briefly.

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coldcode
I'd take the job on for about 5 seconds before I pulled my golden ripcord.
This is a job that no one likely can succeed at.

~~~
venomsnake
And I would take the job for $1 yearly and turn the company around. No golden
parachutes needed.

MS has so many resources and good people that it is almost impossible with the
right vision to fail on delivering.

