

Microsoft CEO Candidate Elop Said to Mull Windows Shift - kshatrea
http://www.bloomberg.com/news/2013-11-08/microsoft-ceo-candidate-elop-said-to-mull-windows-shift.html

======
sker
_> analyst Rick Sherlund said the sale of Bing and Xbox, along with other
moves, could lift fiscal 2015 earnings by 40 percent_

Short term, quarterly numbers-focused business people. Lying off 50% of their
employees will also improve their numbers by 2015.

Apple and Google have become the largest tech companies thanks to their
consumer facing products. Selling Xbox and Bing will only seal MS's faith as
another IBM. Windows Phone and Surface will stagnate (even more) and
eventually they will have to be let go too.

Non-tech people often ask me if IBM still exists when it is mentioned in a
conversation. They'll be asking the same thing about Microsoft in a decade or
two if Elop takes over.

~~~
rtfeldman
IBM not only still exists, they are massively successful. Today they're worth
more than Microsoft, in fact, because of a strategic decision to refocus on
selling to businesses that has worked out extremely well. They've stopped
being a household name since they stopped selling to households, but I doubt
they're losing much sleep over that.

Microsoft's ratio of popular to unpopular consumer products has been dismal
for years; it's hardly unreasonable to think they might likewise do better by
refocusing.

[http://en.wikipedia.org/wiki/Ibm#1980.E2.80.932013](http://en.wikipedia.org/wiki/Ibm#1980.E2.80.932013)

~~~
gnaffle
I'm not too sure about that. A lot of Microsofts dominance in business comes
from the ubiquity of its operating system, while IBM has _always_ been big in
enterprise / mainframe computing and research regardless of their "foray" into
PCs.

Giving up the consumer market to focus on business puts this dominance in
danger (even more so than the mobile/tablet threat), because someone might
very well and up doing to Microsoft what Microsoft did to the minicomputer
makers, and eat their business "from the bottom up".

So I think the interesting question is whether Microsoft could survive and
thrive on enterprise software/services in an environment where neither Windows
nor Office were dominant.

------
gtCameron
The best part of this article is the quote from Microsoft spokesman Frank Shaw
when asked to comment about what Bloomberg is reporting:

"We appreciate Bloomberg’s foray into fiction and look forward to future
episodes"

~~~
r0h1n
Frank Shaw is arguably one of the most outspoken, take-no-prisoners,
pugnacious PR heads of any large software company. Examples:

[http://www.theverge.com/2013/10/23/4975448/microsoft-
frank-s...](http://www.theverge.com/2013/10/23/4975448/microsoft-frank-shaw-
rips-into-apple-for-comparing-iwork-to-office)

[http://www.businessinsider.com/microsofts-david-pogue-
tweet-...](http://www.businessinsider.com/microsofts-david-pogue-
tweet-2013-10)

[http://pulse2.com/2012/07/28/frank-x-shaw-responds-to-
micros...](http://pulse2.com/2012/07/28/frank-x-shaw-responds-to-microsoft-
lost-decade-articles/)

------
r0h1n
This is a very unusual kind of planted leak in the context of a candidate who
is in the reckoning for being CEO. There are only two possible motives behind
this story - either to scuttle or to aid Elop's chances of becoming CEO.

Given that Bloomberg seems to cite three sources who vouched for Elop's
thinking on this, I think this could be a tactical move from Elop (because it
would be relatively harder for his opponents to get three senior Microsoft
sources to smear him).

Elop is shadow signaling his thinking to various Microsoft stakeholders. _" I
am not status quo. I will reconsider all old notions. I know Microsoft needs
radical change. The era of Windows is over."_

~~~
forgotAgain
Or back to the future at Microsoft?

[http://emuneee.com/blog/2012/11/12/microsofts-org-
chart/](http://emuneee.com/blog/2012/11/12/microsofts-org-chart/)

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taylorwc
Was anyone else dumbfounded by the idea of selling the Xbox business? That's
been one of the only bright points in MSFT's consumer products for the past
decade.

~~~
fidotron
Not when looked at from a return on investment perspective. The profits, when
they've existed, are dangerously close to being totally eclipsed by the truly
massive occasional losses/write-offs.

MS have a problem in that they don't really have a successful consumer
products division. One way around that is to stop worrying about it, which
seems to be an increasingly popular point of view.

~~~
panabee
Can someone provide some analysis and numbers to support this? Creating a
gaming hardware console is naturally capital intensive, but has the
PlayStation always generated losses for Sony? How about the Wii for Nintendo?
What is the breakdown on the Xbox P/L statement? (I realize this doesn't exist
in the wild, but someone knowledgeable feel free to hazard a guess, case-study
style ...)

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BigChiefSmokem
They need young, real "down to Earth" technology people like Scott Hanselman
or J Allard to run that old monolith. I would list other people from tech but
those people would never tolerate working for the Microsoft board.

Anyone that wears a suit and tie to work is going to just steer Microsoft
further and further into the ground. Elop needs a hoodie.

~~~
fhd2
Wow, ageism is nothing new, but I've never seen clothism before.

What kind of experience and character traits do you think the next Microsoft
CEO should have? I'm having trouble deducing those from age/clothing.

~~~
BrainInAJar
hipster-ass VC slave "startup founder" type, from the sounds of it

------
noahl
The real question here is whether operating systems have been commoditized,
and if so, what Microsoft should do about it.

It's certainly true that I can get the windows-on-a-desktop paradigm from
Windows (pre-8), OS X, or GNOME or KDE from five years ago. I could probably
get the Metro user experience from an especially clever KDE Plasma plugin too.

However, despite free software versions being widely available, we've only
seen two windows-on-a-desktop operating systems in wide use, and one of them
(OS X) has a very limited install base. This means that the free versions are
_not_ equivalent to Windows, as much as I'd like them to be.

I see two reasons for that:

1) Getting the details right is really, really hard. This is especially true
when there are a large number of computer users who are used to Windows - I
don't think it's impossible to make another OS that they would use, but it
would take a huge amount of usability engineering. (This is basically what
Ubuntu is trying to do; but that's a side note here.)

2) Application compatibility is really, really important. In other words, even
if GUIs are a commodity, the APIs underneath them aren't. This is something
that is currently being attacked on two fronts - the Web is providing an
alternative, standard API across desktop platforms, and non-Windows mobile
devices are forcing developers to use non-Windows APIs. That makes Windows
just another incompatible system to weigh the costs and benefits of developing
for, rather than the standard which every program must support.

Elop isn't just looking at the explosion of tablets and smartphones, markets
where Microsoft doesn't have much marketshare. He's also looking at the fact
that the Chromebook has been the best-selling laptop on Amazon for at least a
year, if not more. That shows that (2) is no longer enough of an advantage to
keep Windows on consumer computing devices. It probably is enough to keep it
on business workstations for a while longer, but he's smart enough to know
that won't last forever - business IT is becoming increasingly consumerized.
(1) is still an advantage, but the Chromebook and tablets both show that
people will use a simplified, well-designed interface that's not Windows -
hence the move to Metro with Windows 8.

Given all this, what is Microsoft going to do? The operating system cat is out
of the bag, and it's probably not going back in. People are going to
increasingly expect to bring their own devices into work, and some of those
devices are not going to be running Windows. If platforms that don't run
Office gain significant marketshare in the business world, then businesses
will have to start considering alternatives, and maybe even start using
formats that aren't doc and xls.

Thus, Microsoft's next move is clear. It offers Office on all popular
platforms, allowing businesses to continue to not think about alternative
office software. Apple makes its money from devices, and probably won't even
fight if Microsoft does this. Google won't be happy because of Google Docs,
but Microsoft has enough legacy support and can offer good enough enterprise
management features that they'll still do well in this market.

In the meantime, Microsoft continues working full-tilt on Windows - just
because it's no longer dominant doesn't mean that they can't make significant
amounts of money from it. My thought would have been to bring the Metro
interface to Xbox, although apparently Elop is thinking differently. It might
even be true that the Office programs continue to work best on Windows. But
whatever happens in the OS market, there's no reason Microsoft can't extend
its office software dominance for a while longer.

------
snarfy
>As he formulates some broad strategic outlines for Microsoft, Elop is drawing
on his years as CEO of Nokia Oyj, where he showed he wasn’t wedded to
homegrown software by canceling the company’s then-dominant Symbian phone
software in 2010, said the people

What? He was purposefully planted there by Microsoft for that exact purpose-
kill symbian so microsoft can buy nokia for a steal.

------
manishsharan
Can't Microsoft do better than Elop ? Gates and Balmer were visionary founders
in their time. I am not sure Elop will measure up ; he seems to be only
looking out for himself.

~~~
tdees40
It's hard to get excited about the guy who ran Nokia into the ground.

~~~
rbanffy
Only if you believe he left Microsoft and worked for Nokia. If you consider he
has always been working for Microsoft all the time, he successfully completed
the mission of running Nokia into the ground so Microsoft could buy the
salvage.

~~~
r00fus
Yeah, as an investor, that's the kind of guy I'd like to have managing my
company (not).

Hatchet men are useful, well paid, but definitely not high-profile, except to
knock down and make their successor look better by comparison (see HP:
Apotheker and Whitman).

------
hbharadwaj
First off, MS's answer to the question is more than enough - "We appreciate
Bloomberg’s foray into fiction and look forward to future episodes". Three
unnamed people? Really?

Sherlund is an idiot. The proposition, if you ask any consultant/financial
analyst/Rick Sherlund is to maximize shareholder value. The problem with MSFT,
Apple, Google is that shareholders are short sighted and don't understand how
technology works or the charms of integrated offerings. They only see
Product/Service/Capability-Cost mappings and see that by disposing money
losing assets, they can enhance value proposition through the remaining
assets.

Elop's strategy is fine if MS is in a money crunch and wants to undertake Cost
Optimizations. It's not fine when MS is in the midst of their "3 screens, one
cloud" transformation. If XBox and Bing continue their trend of losing money
in the next 5 years, then yes, I would do things that Elop is fictionally
proposing to do. Until then, hell no.

------
nbevans
So basically Elop has just publicly ruled himself out of contention with these
ridiculous opinions.

Casting off Xbox at this critical point would be a disaster and massively
weaken Microsoft's position. The post-PC era is dictating very clearly that
Xbox may be the last "full PC" device remaining in the modern home... and he
wants to cast it off?

Bing... it's better than defaulting their products to use Google.

Microsoft Office is a fine product but it is a legacy one.

I wonder what Elop's "opinion" is of Azure? That ridiculously high
productivity and highly agile team that's been pumping out releases on a 2-3
weekly cycle for the past 2 years?

Wait. What? Why is Elop even in the running at all for the CEO position? That
itself is fucking insane. Look what he did to Nokia!

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KaoruAoiShiho
Picked the wrong horse for the billion dollar investment.

[https://www.microsoft.com/en-
us/news/press/2001/nov01/11-11c...](https://www.microsoft.com/en-
us/news/press/2001/nov01/11-11comdex2001keynotepr.aspx)

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rpedela
I don't really know who Elop is, but I do agree that having Office available
on all platforms would help Microsoft.

~~~
at-fates-hands
I thought you could buy Apple versions of the Office products already, or am I
missing something??

Getting their stuff on the Android and Linux platforms would help a lot, but
then again, Linux has plenty of Open Source alternatives already.

~~~
kaoD
OP said _all_ platforms. It would make waiting for the microwave to finish
less tedious.

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ApacheEcho
He destroyed Nokia and he'll destroy Microsoft if he's given the power. He
just can't run a company. I'd vote for Tony Bates.

