
Microsoft’s Lost Decade - f3r3nc
http://m.vanityfair.com/business/2012/08/microsoft-lost-mojo-steve-ballmer
======
brudgers
" _In December 2000, Microsoft had a market capitalization of $510 billion,
making it the world’s most valuable company. As of June it is No. 3, with a
market cap of $249 billion. In December 2000, Apple had a market cap of $4.8
billion and didn’t even make the list. As of this June it is No. 1 in the
world, with a market cap of $541 billion."_

In other words, Apple is currently about where Microsoft was when they started
paying dividends a little more than a decade ago...i.e. The point where they
went from a growth company to a the sort of "blue chip" held by index funds.

The past decade has been spent securing their place in enterprise - their core
market and one in which Apple, Google, and Facebook offer little competition.
With loads of cash, a conucopia of brilliant personnel and Gates and Ballmer
as the two largest shareholders, the whims of Wall Street bloggers don't have
much effect.

~~~
nl
Yes, Microsoft has a safe market in the enterprise.

But in 2000 they still had a growing consumer market (remember Windows 95 was
only 5 years ago).

Now they are struggling to protect that consumer market, while markets they
expected to dominate (remember when Windows Mobile + Exchange was supposed to
kill off Blackberry?) have proven to be no only complete failures for
Microsoft, but have become weaknesses through which other companies are
pushing products into the Enterprise.

Just about every CIO in the world said the iPhone would never be allowed in
the enterprise, right up until their CEO demanded it.

Then the same CIOs discovered they could sell using Google Mail in their
enterprise as "Oh, it's just the same as GMail", while cutting their costs
hugely over Exchange.

Then VMWare came along and allowed CTOs to run non-homogenous platforms in the
datacenter, and do it much cheaper than the old way.

Make no mistake: Microsoft makes good money and is still a force, but the last
decade truly was a lost opportunity for them.

~~~
sseveran
GMail is not even close to a replacement for exchange in a large company.
Small companies like mine can use it just fine but I can't see it working as
well in a large company. In fact if I still had to write large quantities of
mail (which I used to) I would still use outlook as a client as it has much
more developed workflows and a richer set tools.

~~~
MattRogish
Outlook works just fine talking to Google Mail; our Windows users connect to
Outlook. The rest of us Mac folks use Sparrow (which is not long for this
world, unfortunately).

Everyone has iPhones, which work great with Google Mail and Google Calendar.
I'm exceptionally happy that, for most small and medium sized businesses,
there's no need for anything other than Google Mail.

I'm not entirely sure why "Enterprises" would need Outlook, but I'll cede
that's a market I don't know very well, so there may be very good reasons for
it.

------
starik36
It kills me when people say that MS had a lead on smartphones with Windows
Mobile OS, as mentioned in the article. That product sucked hard, along with
others that sucked at the time (e.g. Palm, Symbian, etc...). The lead was an
illusion because there wasn't anything good to compete against it and
consumers barely tolerated it.

Once iOS, then Android, appeared on the scene, the house of cards that was
Windows Mobile collapsed in no time. Microsoft didn't have any kind of
smartphone lead.

------
forkandwait
While I am a confirmed Microsoft hater, the one place they shine is in
providing an environment (.NET + SQL Server + whatever) for the building of
medium sized (10 to 1000), internal, pointy-clicky applications. There is no
equivalent in Unix or Mac, and this is a _massive_ market -- all the lower
level office workers who get some small data thing from somewhere (a customer
order, a change order, whatever), enter the data after a little bit of
thinking, and move on.

I am a data analyst forced to work on MS environments, and it sucks ass (I
have a parallel Unix toolchain installed, plus we use SAS (which sucks ass,
too, but that is a different story)). It would suck ass if I was building and
deploying internet apps. But for pseudo custom form based applications
designed for non-programmers to do glorified data entry, it rocks.

Also, there are probably 40 million "analysts" who don't even know what
scripting is and are utterly dependent on Excel, even though they could
probably increase their productivity 100-fold if they got a little bit of
command line and R and SQL under their belt. However, they don't even know
they have an alternative, so Microsoft is totally safe in this zone for at
least a few years.

~~~
ahi
Have you used Powershell?

------
arocks
There are several flaws in this article which was pointed out in a Forbes
article [1]. It highlights the failure of a company's strategy against the
background of changing macroeconomic factors.

Also, here is Ballmer's reaction [2] to this article.

[1]: [http://www.forbes.com/sites/venkateshrao/2012/07/25/the-
real...](http://www.forbes.com/sites/venkateshrao/2012/07/25/the-real-reason-
for-microsofts-woes/print/) (print version)

[2]:
[http://www.forbes.com/sites/richkarlgaard/2012/07/11/microso...](http://www.forbes.com/sites/richkarlgaard/2012/07/11/microsofts-
steve-ballmer-talks-about-windows-8-bill-gates-and-steve-jobs-and-why-
microsofts-lost-decade-is-a-myth/)

~~~
watmough
[1] is utterly unreadable. The original Vanity Fair article is 1000x better by
comparison.

Microsoft started to crack around 97. They failed several times to build a
database application for Windows/Office.

Eventually, they managed to get MS Access (Cirrus) out, and Visual C++ 1.0 had
been out for a while already.

That period was the last time that Microsoft really did anything exciting.
aside from .NET perhaps.

Not to say that much of what they've done hasn't been good. But XBox, they
ground that one out. Bing, they ground that one out. Courier, killed. Surface,
Windows 8, ground it out in response to external events.

Ballmer needs to go, but even Ballmer leaving won't fix them. Maybe Jim
Allchin was their last great hope as a leader, but that opportunity has now
passed.

~~~
umwhat
Jim Allchin -- the man at the head of Windows Vista -- is probably not the guy
Microsoft is looking for.

------
maytc
"Cool is what tech consumers want. Exhibit A: today the iPhone brings in more
revenue than the entirety of Microsoft.

No, really."

------
hahahanononono
As the lone MBA in the comment thread, I want to point out that the "culture"
and "incentives" of your company have a lot to do with it's success. Microsoft
(and Amazon, which hired a bunch of fucksticks from MSFT) made it impossible
to build great new products internally and suffered for it.

~~~
hga
AWS's offerings are not "great new products [built] internally"???

Kindle? Kindle Fire? (Not been following the latter, but I though the e-paper
Kindles have been wild successes.)

Or let's get to "culture", does Amazon practice stack ranking?

------
velodrome
Lost decade? No.

Microsoft has positions in all the right places. They were in tablets, phones,
and other devices early. However, the execution was poor. They did have a good
shot at emerging tech markets and they still do.

Microsoft still dominates business/enterprise. Apple, the consumer end.

Microsoft is just being displaced. They have a limited time to respond before
it really starts to erode their profits.

~~~
CharlieA
"Microsoft has positions in all the right places."

This.

Microsoft today is still one of the world's biggest companies, with a lot of
talented people and considerable inlets into practically every home and office
in the developed world. Apple of yesterday grew to eclipse Microsoft in a
matter of years--there's no reason Microsoft can't pull off a similar reversal
with the right maneuvering of its own considerable resources.

~~~
wpietri
One of the reasons Microsoft is unlikely to pull it off is precisely that they
are one of the world's biggest companies.

When Apple bought NeXT, Steve Jobs had a tight cadre of very talented people
who he trusted greatly. It was basically his invasion force. Apple at that
point was in crisis, and wasn't particularly big. Market cap: $2 billion.
Revenue $7 billion, down from $11 billion two years before. Employees, 9,300.
They were doing basically one thing, selling computers, and they were
obviously fucking it up.

Microsoft is much larger ($250 billion market cap, 92,000 employees), and
they're still fat and sassy on their monopoly rents from Windows and Office.
Few there feel any reason to change. The company is so much larger than Apple
was that just getting a handle on it is a massive task. Actually turning it
around is a very tall order.

Even though Apple was much smaller, it was something like 7 years before
things really started to take off. Even if somebody could turn Microsoft
around as quickly, how will they get the board and the investors to sit still
for such a long period? Jobs could do it because Apple was his baby and Jobs
was Jobs. But who has the mojo to do it with Microsoft?

A much more likely path is the one Yahoo is on: slow decline plus musical CEOs
as a variety of highly paid people rearrange deck chairs over and over.

~~~
nl
That might be the obvious path, but there is an obvious counter-example: IBM +
<http://en.wikipedia.org/wiki/Louis_V._Gerstner,_Jr>.

I guess at IBM is was obvious things had to change - it might take a while
before MS gets to that point.

~~~
crag
An excellent example. And every MS exec should study the history of IBM. IBM a
huge company managed to turn itself around.

------
automagical
Desktop link: [http://www.vanityfair.com/business/2012/08/microsoft-lost-
mo...](http://www.vanityfair.com/business/2012/08/microsoft-lost-mojo-steve-
ballmer)

------
facorreia
What was the total profit of Microsoft during this "lost decade"?

~~~
raldi
That's like asking, "How far did your car coast after you ran out of gas?"

~~~
achal
And getting an answer along the lines of "I think I got some 200 miles."

~~~
CamperBob2
While everybody else coasted 500.

~~~
raldi
I wouldn't call what their competitors did "coasting."

------
rlu
just...no.

[http://www.neowin.net/news/what-the-hell-is-microsofts-
lost-...](http://www.neowin.net/news/what-the-hell-is-microsofts-lost-decade)

~~~
marze
Well, how about the stock? Certainly not a lost decade by any measure of
Microsoft's stock price.

Some incredibly awesome denial in the comment thread of your link, rlu.

~~~
diego
Microsoft underperformed the market indices in the past ten years (SP500,
Nasdaq, Dow Jones). That means its shareholders would have been better off
selling the stock and investing in a diversified fund.

~~~
recoiledsnake
Does that take into account the dividends paid?

------
skadamat
Repost, OP had to post the mobile link to the article

------
cjdentra
What I haven't seen discussed is the impact of the anti-trust action against
MS back in the Netscape days. I wonder what the effect on the corporate
zeitgeist was then and how it all unfurled over time.

------
josephlord
Do you remember when startups were terrified that MS would move in and crush
them? MS would make them an offer that they couldn't refuse, sell out or be
crushed.

MS don't inspire fear like they used to.

