
Microsoft’s shares sink by more than 10% - vonnie
https://www.google.com/finance?q=NASDAQ:MSFT
======
MarkMc
Ballmer has been a terrible CEO. Time and again he has displayed poor
judgement that has cost shareholders billions of dollars.

Here's something to ponder: When Bill Gates retired as CEO in 2000, imagine
that the board of directors hadn't chosen Steve Ballmer to replace him.
Instead, they chose a CEO who stuck a sign on his desk saying "Windows and
Office Development - nothing else" and then went to sip cocktails on a beach
in the Bahamas for the next 13 years.

How much more would Microsoft be worth now?

I think Ballmer's alpha-male personality has blinded him to the 'do nothing'
option. He loves the thrill and prestige of investing billions of dollars in
new projects and is therefore biased against doing nothing and letting the
shareholders keep their money.

And when he does 'do something' his execution is often flawed. Here he is in
2007 talking about the new iPhone: "Would I trade 96% of the market for 4% of
the market? (Laughter.) I want to have products that appeal to everybody. Now
we'll get a chance to go through this again in phones and music players.
There's no chance that the iPhone is going to get any significant market
share. No chance. It's a $500 subsidized item. They may make a lot of money.
But if you actually take a look at the 1.3 billion phones that get sold, I'd
prefer to have our software in 60% or 70% or 80% of them, than I would to have
2% or 3%, which is what Apple might get." [1]

[1]
[http://usatoday30.usatoday.com/money/companies/management/20...](http://usatoday30.usatoday.com/money/companies/management/2007-04-29-ballmer-
ceo-forum-usat_N.htm)

~~~
clarky07
People who say Ballmer is a bad CEO based on the stock price really aren't
paying attention. He took over at the height of the tech bubble. Microsoft's
PE (and everything else) was a joke. Since he took over revenue and profits
have increased by an impressive amount. The only reason the stock has been
flat is that it was extremely over inflated when he took over.

(Certainly he has made mistakes, but frankly I think he's done just fine.
Windows phone 7-8 have been pretty good, just slightly late. Xbox has been
pretty successful. Azure has been fine. Bing has been the only real
failure/money loser, but at least it might be holding back Google to some
extent. That was the whole purpose anyways.)

~~~
IsThisObvious
I say Ballmer is a bad CEO because of the stack ranking employee evaluations
and the rampant smothering of prototype technologies that later turned out to
be valuable in favor of "core" technologies - you know, the two behaviors that
are absolutely toxic for a tech company.

~~~
twright0
"Stack ranking employee evaluations"

I agree with a great many criticisms of Microsoft, but this one always strikes
me as nonsensical. I was an intern at Microsoft and (while I never
participated in stack ranking) it never seemed particularly destructive. I
went on a tour of Valve and one question that was asked during the Q&A was
what kind of evaluation and ranking system they used - the answer was stack
ranking. Companies have to use some form of evaluation and ranking for their
employees once they grow past a certain size - it's just an organizational
requirement. The alternative is upper management without quantifiable
information about the many people under them, which makes it harder to
allocate resources and operate efficiently. Or so I imagine, I'm not in upper
management at a very large company, but that certainly seems to be the case
pretty much everywhere.

~~~
RandallBrown
Go through a stack ranking where you get a bad review simply because "there
are too many good developers on the team" before you say that it is a
nonsensical criticism.

Making employees feel like shit for reasons outside their control is bad
management.

~~~
throwawaykf02
Anecdotal, but, I know a bunch of good developers at Microsoft, and I've never
heard any one of them complain about that before. They complain about a bunch
of things, many of them related to upper management, but that "lost decade"
article was the first I heard anyone complaining about stack ranking.

------
300bps
With many of their new products, Microsoft seems to finally have viable
offerings. The dangerous thing for Microsoft's competition is that previous
iterations of Microsoft products stunk so you had to go to the competition by
default. That is not the case anymore so expect to see much thinner margins
for Apple, Google and others in the future.

Azure including their Virtual Machines are a great competitor to Amazon AWS
and EC2. I've used both.

Office 365 and Hosted Exchange are a great competitor to Google Apps. I've
used both.

Windows Phone 8 is a great competitor to iPhone. I had iPhone 3G, iPhone 4,
iPhone 4s and now a Nokia Lumia 928.

Windows Surface Pro (i.e. not RT) is a great competitor to iPad. It really is
a desktop/laptop replacement unlike the iPad and again, I've owned both.

Windows 8 had several issues out of the gate. I use it every day and spent the
10 minutes necessary to learn the new interface to get used to it. Many people
aren't willing to do that. Vista had even more problems, and Microsoft still
came roaring back with a very successful Windows 7. Microsoft is hoping
Windows 8.1 does the same thing for Windows 8.

In all of this, the customers win. Expect cheaper prices with increased
competition - example being how Amazon just lowered their EC2 pricing by as
much as 80%.

~~~
RyanZAG
I get that you're a Windows Dev and obviously try to put in the effort to find
the good things in Microsoft's current product line - but you also need to see
the reality here. Microsoft definitely does not have viable offerings.

Win8 is hated/feared more than Vista was.

The new xbox is probably the most panned product announcement I've ever seen.

Office 365 and Hosted Exchange are not competitors to Google Apps, they're
poor competitors to Office and Exchange.

Windows Phone has been a dismal failure in terms of actual customer traction -
especially outside USA. Numerous product placements are making this more of a
joke than anything - (everyone laughs when a hacker in Burn Notice pulls out a
Windows Phone).

Surface Pro is not even in the same market segment as an iPad - Surface Pro
competes with laptops and the Mac Air, not with the iPad. You can't use them
for the same tasks.

Azure is in no way a competitor to AWS/EC2 - it's more a competitor to Digital
Ocean in terms of scale, and Digital Ocean is outperforming it completely.

I get that you've used the Windows stuff and the competition and find the
Windows stuff better for you - that's likely because of how familiar you are
with the Windows environment and Windows announcements. However, most people
off the street are completely confused by it. You need to try and view the
situation objectively if you want to understand why the MS share price is
diving and all your customers are hopping ship.

~~~
josh2600
I second all of these conclusions and have a few anecdotes of my own to add.

WinXP is still the dominant Enterprise Operating system (crazy I know).

Exchange email is seen as a relic of a time gone by for new companies and
something that admins usually hate in large companies. Outsource it (and I'll
note that the largest reseller of Exchange, Intermedia, doesn't sell
Office365).

The first windows phone I had was Windows Mobile 4.0. The flipphone handsets
that came out during 6.0 were good, but every one of their gigantic, flagship,
Halo devices, was terrible. HTC had some of the most badass, feature-packed
phones ever, and the Operating system killed them. It's just a pile of bloat,
the same way WinPhone7 and WinPhone8 appear to be. Look at the work they've
done with Nokia where they basically paid Nokia billions of dollars in
marketing money to attempt to promote WinPho8 and ended up hemmoraging
marketshare in the transition from Symbian (Elop's "Burning Platform" memo
should go down as the worst corporate writing ever, and it's not lost on me
that he came from $MSFT).

I won't even dignify the surface with commentary. It was an unmitigated
disaster that everyone saw coming.

Azure is only large because of promo usage. It's not competitive even with
Digital Ocean in terms of scale (my personal opinion, I have no facts to back
this up except anecdotes I can't publish). There's a lot of empty instances in
Azure land.

Microsoft is making a lot of obvious errors. They continue to be unable to
remove FUD and the Cruft of age. If they go down this path, the inertia will
eventually kill them; it might take 20 years, but Microsoft is already
becoming a place that finds it hard to recruit. I would argue that without
their ridiculous abuse of the H1B program they would not be able to remain
competitive.

In short, there's a lot of stuff to fix. The bright spot for Microsoft, as
always, is licensing, but that's an ugly, ugly business.

My $.02.

~~~
300bps
_WinXP is still the dominant Enterprise Operating system (crazy I know)._

Source? Everything I see states that Windows 7 is the dominant Windows
operating system in the Enterprise.

 _HTC had some of the most badass, feature-packed phones ever, and the
Operating system killed them. It 's just a pile of bloat, the same way
WinPhone7 and WinPhone8 appear to be._

This is just silly. You bring up Windows Mobile 4.0, then 6.0. Then you lump
Windows Phone 7 and Windows Phone 8 in with them. Tell me - which WP8 phone
have you owned? Because you're replying to a thread I started in which I said
everything before WP8 stunk. So if you haven't used WP8, there isn't much
point to your comment.

 _I won 't even dignify the surface with commentary. It was an unmitigated
disaster that everyone saw coming._

Surface Pro is doing well. Surface RT is what is not doing well - as you said,
it's a solution looking for a problem.

 _There 's a lot of empty instances in Azure land._

Where do you get these stats?

 _and it 's not lost on me that he came from $MSFT_

And it's not lost on me that you use a 90s-era style anti-Microsoft inclusion
of a $ when mentioning them. Do you at least realize how biased you are or do
you lack introspection?

~~~
josh2600
You think Windows is great. I don't.

You think you can tell me my comment is worthless despite the many years I've
spent deeply entrenched in Microsoft culture. The past has relevance.

Well is relative with respect to the Surface Pro, but I won't waste my
keystrokes attacking its sales figures.

As I mentioned in another comment I've got a lot of folks who run big stuff on
Azure and I can tell you that almost all of their instance time is comped.
Take that for what it's worth, I don't run in Azure and don't plan to run in
Azure, but I can appreciate your comments here.

The $MSFT comes from StockTweets. I'm not biased, I am a student of the
industry. If you ask me to critique Apple, I'd have a number of things to say.
Microsoft isn't all negative, they still make a ton of money, but calling the
Kettle black isn't a crime. WP8 is not a dominant operating system. Azure is
not a dominant cloud infrastructure. Surface is not a dominant tablet.

We can debate semantics, but we can both agree that Microsoft has a lot of
work to do. I believe it's in the product, and, if I understand you correctly,
you believe it's in the branding/marketing. Chances are we're both partially
correct.

Does that make sense?

~~~
mgurlitz
> WP8 is not a dominant operating system. Azure is not a dominant cloud
> infrastructure. Surface is not a dominant tablet.

The closest claim that was made to any of these was that WP8, Azure, and
Surface Pro are "viable offerings" in their markets. Not that they're
dominant. You even give an example of "folks who run big stuff on Azure" \--
how is that not proof that Azure at least provides competition in the cloud
services market?

~~~
josh2600
It's a monopoly game with a power-law distribution. If you're not playing for
first place, eventually Amazon's Zero margin business will subsume all of the
smaller players.

I articulated this point in a blog post for our site[0] in which I describe a
phenomenon I call Bezos' Law. Essentially, the cost of cloud computing in
general (currently driven by AWS) is cut in half roughly every 18 months. This
is like Moore's law, except it's driven by market conditions instead of
technical innovation. The endgame of Bezos' Law is 0, but everyone else will
get out well before then (once it ceases being a profitable business). Since
AWS will be the largest player in cloud infrastructure, it will eventually
shift from being a profit center for other organizations and will become a
cost center. After that it becomes a matter of time.

IMHO, this is also the plan for Amazon's Commerce business long-term and is
why the market provides them with such a ridiculous P/E ratio.

So does Azure provide competition? Maybe. I think most of the people on Azure
are on there because Microsoft is comping the time (pure conjecture based on
the kinds of numbers they put forward). The endgame, from my perspective, is
that everyone gets choked out by Amazon with time unless someone upends them,
and that's why I think the position of "providing competition" isn't going to
materially move the needle for a company like Microsoft. Not now and not long
term. They've called Azure a billion dollar business, but only when counting
comped hours.

Lots of conjecture, I definitely put myself out there for some flaming, _but_
that's how you learn whether your positions can stand on their own merits. Let
me know what your thoughts are :).

To be clear, in spite of everything I've said today, I am long-term bullish on
Microsoft. I just think Ballmer isn't making smart decisions right now.

[0][http://blog.2600hz.com/post/55614383443/bezos-
law](http://blog.2600hz.com/post/55614383443/bezos-law)

------
dragontamer
SurfaceRT is a $900-million mistake right now.

There are so many ways to make SurfaceRT a compelling product. _If_ it
supported Win32 API, _IF_ it had domain-joining support, _if_ it wasn't
completely locked down to the Windows Store... maybe it'd be a compelling buy.
But as it is, it has all of the disadvantages of tablets (locked down,
proprietary API), with few of the advantages of Windows.

Then you've got XBox One mistake. So much wasted potential there...

Windows 8 has to happen though, the computing industry is evolving towards
touch controls, and as primitive as Windows8 is with touch... its a step in
the right direction for Microsoft. But they need to be more sensitive to their
business partners.

~~~
blacktulip
RT is a joke but what's wrong with XBox One?

~~~
dragontamer
Compared to the PS4, the XBox One hardware has 30% less shaders on the GPU, is
using DDR3 RAM instead of faster GDDR5 RAM, and is using the same CPU as the
PS4. All the while, it costs $100 more than the PS4.

So for the first time in XBox's history, the XBox is launching with _strictly
weaker_ hardware than its closest competitor. (XBox 360 at least had a GPU
that was 2x stronger than the PS3 GPU, and the XBox 360 also had faster RAM.
PS3 won on CPU power... but lost out on everything else.)

There is terrible, terrible press across the whole internet about the XBox
One-Eighty. Video Gamers overall have a negative impression on it.

[http://www.penny-arcade.com/comic/2013/06/12](http://www.penny-
arcade.com/comic/2013/06/12) [http://www.penny-
arcade.com/comic/2013/06/21](http://www.penny-arcade.com/comic/2013/06/21)

~~~
freehunter
>XBox 360 at least had a GPU that was 2x stronger than the PS3 GPU [et al]

And did it matter at all? From what I remember of this current generation's
history, if games looked any different on the PS3 than the 360, the developers
blamed it on the tools and how difficult the PS3 was to program for, not on
the weaker hardware. Developers made cross-platform titles for the Xbox first
and ported to the PS3 because Xbox was easier.

When I was 16 years old I argued console hardware specs. These days I don't
hear many experience gamers mention it at all, because when it comes down to
it, minor differences in specs doesn't really matter.

~~~
dragontamer
Why was the PS3 harder to program for? Because its GPU was out of date, its
RAM was split, and its architecture sucked. Programming the PS3 "incorrectly"
leads to extremely poor performance.

Certain memory transfers on the PS3 are just straight up broken:
[http://www.theinquirer.net/inquirer/news/1007286/ps3-hardwar...](http://www.theinquirer.net/inquirer/news/1007286/ps3-hardware-
slow-broken)

The XBox was "easier" to program for because it was a more balanced system.
Overall, the XBox360 was both simpler and more powerful.

By making XBox360 more powerful, previous soft-exclusives like Final Fantasy
and Metal Gear Solid made their way to the XBox360. Sony lost a lot of
publishers because of the boneheaded hardware they shoved into developer's
faces.

It is Microsoft that has made this mistake in this generation. Not only from a
policy stand point against indie gamers (ie: Oddworld moving to PS4 exclusive
title. As well as SuperGiant Games making Transistor PS4 exclusive), but also
by launching with weaker (yet paradoxically more expensive) hardware.

The PS4 will be easier to program for, it has a simpler more unified
architecture, and Sony's policies are more friendly towards developers.

While it barely matters for the end consumer, it is easy to see which systems
producers will prefer in the coming generation.

~~~
angersock
_" The PS4 will be easier to program for, it has a simpler more unified
architecture, and Sony's policies are more friendly towards developers."_

The architectures seem near identical--the only big difference would seem to
be that the XBO will have dedicated framebuffer memory, probably hidden behind
a system call anyways.

As for being more friendly to developers, Microsoft has always had the best
tools and documentation for developers (long live SGI, poor bastards).

I don't really see where you're getting this from.

~~~
dragontamer
Count the number of indie-developers on XBox One. Now count the 140 currently
announced titles on the PS4 (most of them indie games). The current joke: PS4
has more _exclusives_ than XBox One has launch titles. (slight hyperbole, but
the number of PS4 exclusives almost gets there. 30 titles from Sony
themselves, ~10 exclusive indie titles announced at E3, and all of a sudden
the game environment for PS4 looks mighty tasty)

It is dead obvious which console has won the support of indie developers.

Microsoft may have superior documentation... but when you _require_ indie
gamers to find a publisher before they're allowed to make an XBox one game,
the number of titles on your system will suffer significantly.

A number of PS4 indie developers want to program for the XBox One, but they
can't due to Microsoft's boneheaded policy. It doesn't matter how good the
XBox One development kit is, if Microsoft fails to hand it off to innovative
developers.

Again, XBox One _POLICY_ is bad for indie developers.

------
ricw
What is interesting is that over the last ten years microsoft has been unable
to win markets with its time tested strategy: keeping at it until it conquers
the market. It's because some very competent competitors have arisen that move
faster and better than microsoft. consequently its late-to-market-but-
persistent strategy fails.

Seemingly the only way a company can retain its leadership is by innovating
and then leading the market. Microsoft hasn't been that good at genuine market
innovation (we're talking revolutions), so unless it can use its strong stance
in markets it leads currently, the future isn't looking all that rosy for
microsoft..

~~~
smacktoward
This isn't entirely fair. Ten years ago Microsoft was just getting into the
video game business, now they essentially own it (though they definitely
fumbled the XBox One rollout). Ten years ago Azure didn't exist, now it's a
$1bn/year business and a credible threat to AWS. In both these cases Microsoft
started out with weak initial offerings and refined them into something people
found compelling. There are other markets where this approach has not yet
yielded fruit for them (mobile, tablet, search), but it's not really true that
it just never works.

 _> Microsoft hasn't been that good at genuine market innovation (we're
talking revolutions)_

Microsoft has never been about revolutionary innovation. MS-DOS was just a
rebadged version of Tim Paterson's QDOS. MacOS was the first OS to bring GUIs
to the mass market, not Windows. IE came after Netscape. Etc.

Since the beginning of the business their approach has been to be a "fast
follower" \-- to let other companies take the huge risks of pioneering a new
market, and then, if that market proves out, swoop in with a product of their
own. Generally speaking this has worked out really, really well for them.
Letting someone else do the pioneering isn't particularly heroic, but then, as
the saying goes, you can always tell the pioneers because they're the ones
with the arrows in their back.

~~~
JonFish85
And it's almost funny--they've been hamstrung by being too far ahead of the
pack in some ways. Look at all the trouble they had when they built Windows on
top of the IE engine. In a way, that's one of the first steps towards a real
use for the "cloud"\--what should be different about browsing for a file on
your computer and browsing the internet? And that ended up causing them some
serious money.

They flubbed their early efforts at mobile OS development also. They had a
real chance to corner the market before Apple was even making iPods, I
believe. But they got too focused on beating Blackberry and didn't really look
past them (in my opinion--I'm no expert).

Then the tablet: Microsoft was one of the first to really push tablet
computers. Unfortunately, the technology wasn't there to support the idea. So
they shelved it for awhile, then Apple came along ~10 years later and did it
"right". And now Microsoft is trying to play catch up to a field where they
did a decent amount of the early work.

~~~
beagle3
That's not how any of these things went.

> Look at all the trouble they had when they built Windows on top of the IE
> engine.

They didn't build windows on top of IE. They showhorned IE in as a technical
solution to a legal problem (How to abuse their monopoly without it being
patently obvious to everyone). Just to be clear - At the time, IE4 was way
better than Netscape4 - but it only became popular when it was available by
default. And it was a successful solution, on all accounts - they killed
netscape, they won the web (for a while), and they paid very little in damages
eventually.

> Then the tablet: Microsoft was one of the first to really push tablet
> computers. Unfortunately, the technology wasn't there to support the idea.

The technology WAS there, but Microsoft's UI wasn't - they continuously tried
(and failed) to make a desktop-OS touch-usable. I've never used one myself,
but everyone I know who had a Newton said it was "just right". And the palm
pilot worked very well too.

People underestimate what apple have done with the iphone and tablets -
they've figured out the UI/UX. Hardware is an important, but lesser part of
this equation. Microsoft, for 10 years, couldn't figure out that there even
was a UI/UX problem.

~~~
rsynnott
> I've never used one myself, but everyone I know who had a Newton said it was
> "just right".

Interestingly, a big part of the Newton's failure (along with the terrible v1
handwriting recognition, which was largely fixed later, and Apple's strained
finances) was that they went for a complete break with the past; there was
basically no developer familiarity. iOS was probably a sweet spot; new,
purpose-designed interface bearing very little resemblance to MacOS beyond
font choices, but almost the same under the hood.

------
RyanZAG
On the surface, Microsoft seem to have tons of problems in management
structure, product design, public relations, etc etc. However, at least in my
view, all of this isn't really a big issue and companies can easily survive on
this stuff. The key problem is a very simple one: Microsoft has forgotten why
they even exist. The goal of a company is to sell products to customers by
giving customers what they want.

Microsoft of 15-20 years back did they wonderfully - easier to use OS, better
features in Office, fast adoption of new hardware standards, etc. Microsoft of
today is actively trying to sell customers what they don't want. Metro.
Kinect. Office Ribbon. Bing. ARM Surface. The list goes on to almost every
product MS offers.

Microsoft needs to stop pushing products for the benefit of Microsoft. I'd
recommend the following: put up a poll and let the general public decide on
issues like Metro - and then follow those results, even if it means throwing
Metro out of the desktop. Microsoft needs to listen to customers simply
because other businesses are listening to Microsoft's customers, and those
customers are leaving.

Business 101 - it still applies even when you're not a startup anymore.

~~~
daigoba66
While overall I agree that Microsoft is really missing the mark when it comes
to creating products people want, I disagree on the premise.

The goal of a company is to profit from products _that sell_. It doesn't
necessarily mean they're building for what customers currently demand, but
knowing what customers _will_ demand.

The canonical example is Apple. If you listen to tech reviewers, Apple never
makes the product that people "want". Yet they continue to lead profits in
almost every product category they market.

~~~
RyanZAG
What? Some kind of cognitive dissonance here, maybe. People do not queue up
around the block waiting for hours on launch day for something they do not
want. People very much want exactly what Apple is making. They build exactly
what people want.

If you want an example of something that people do not want, would never queue
up for, and should not have been made? Metro.

In regards to the comment above on Metro fitting well on Xbox? Not a chance -
Metro is terrible and confusing to use on Xbox, and the adverts make it even
worse. If the xbox had launched with Metro as standard, it would have gotten
very negative launch reviews.

~~~
snom380
I think the point he was trying to make was that if Apple had issued a poll
before launching the iPad, people would most likely said "it has to run my
current OSX Apps and offer a way to switch back to OSX" because they would
consider the iPad a computer. Re the loud complaints about lacking USB ports
etc. when the iPad launched.

What Microsoft needs is someone in upper management with a vision about what
products they want to make and the persistence to make them happen. That's a
bit difficult to accomplish when there is a management shuffle with some top
executive deciding to spend more time with their family roughly every year.

------
at-fates-hands
Over the past five years, their stock is up over $5/share or around 21%. Not
bad for a company people keep expecting to fail.

Full disclosure: I always take the long view with tech companies, especially
the big ones. Start ups can have the wheels fall off over a 10% drop. Big
companies like MS, this is virtually nothing. I mean, look at Best Buy. Their
profits were down over 80% last year and they're still out there hammering
away.

Here's that BBY article I was alluding to: [http://www.webpronews.com/best-
buy-earnings-net-income-down-...](http://www.webpronews.com/best-buy-earnings-
net-income-down-90-2012-08)

"Hubert Joly is the CEO now, coming in as the company reports a 90% profit
drop thanks to less-than-stellar sales, and restructuring expenses."

~~~
seanmcdirmid
> Over the past five years, their stock is up over $5/share or around 21%.

How much as the economy grown in the last year, or how much has the dollar
inflated in the last 5 years. I'm sure there is some stock growth there, and
it definitely isn't tanking. But for someone who bought 5 years ago, was it a
good investment with respect to the market average for this sector?

~~~
at-fates-hands
>>> But for someone who bought 5 years ago, was it a good investment with
respect to the market average for this sector?

Yes, and here's why. . .

[http://www.kiplinger.com/article/investing/T052-C017-S001-wh...](http://www.kiplinger.com/article/investing/T052-C017-S001-why-
microsoft-is-a-smarter-investment-than-apple-t.html)

MS tends to be in the sweet spot for investors. It's not grossly over priced,
they hit their numbers on a regular basis, and no expects them to be
successful. Therefore, if one of their products hits big, investors are happy,
if they have a flop, no biggie, the shares are only $23.

Compare that to Apple. Their shares are in the $500 range and they are the
homecoming queen in the tech sector. If they have a flop, and you have a
sizable investment, you're hosed. If they hit their numbers, your large
investment stays put. It's a lot more riskier.

~~~
junto
Actually I have to agree with this. I own a number of tech stocks and MSFT has
a pretty stable price, but pays good dividends. Google and Apple on the other
hand yo-yo like crazy on the stock price. If you are interested in short term
bets on stock prices then GOOG and APPL are of course more interesting, but
I'm currently happy to see the dividends rolling in from MSFT.

------
HashThis
I used to work at Microsoft from 1996 to 2006. Here is a pattern that I've
seen, which explains so much of the problem with Balmer.

The strategy in 1990's was that software was sold in stored (EggHead). People
would compare the BULLETs or CHECKMARKS on two competing packages. Microsoft's
goal was to always have more and better checkmarks. That sold more software in
the 1990's.

Notice their newest re-org. They are making two big pushes DEVICES and
SERVICES. The entire company is becoming "functional" (devs vs testers vs
program managers, etc.). They all report to Balmer. Balmer is trying to be
like Steve Jobs.

Balmer talked about having "efforts" selected by him and execs in his office.
Those would be the major efforts of products. This is the same as picking
FEATURE BULLETS for the back of packaged software.

Microsoft does NOT have a strategy. They focus on packing feature bullets,
like it is a box of software. Watch them do that with XBox ONE, Windows Phone,
Windows 8, etc. Until they pick a strategy, they won't find a way to use
leverage to pull ahead.

------
vbuterin
This is nothing in the grand scheme of things. Just zoom out to the ten-year
chart:

[https://www.google.com/finance?q=NASDAQ:MSFT](https://www.google.com/finance?q=NASDAQ:MSFT)

~~~
zmmmmm
That is scary for a different reason - you can see then that MSFT has actually
barely grown at all in 10 years.

------
s3r3nity
I think it's a good time to buy -- the re-org underway will be intriguing, and
I'm very bullish on Windows (especially after 8.1)

I think they don't get enough credit for what they do really well (Windows
Phone is phenomenal; Office is still the gold standard; Skydrive works just as
well as Dropbox; SQL Server is key in many orgs; the offerings with the new
Xbox to be the media centerpiece of the home will be very interesting)

Have they missed the mark for being so late with tablets and underestimating
how much people would have shock at the new Windows 8 change? Sure -- but they
have too many smart people to let the stock drop and for them to 'fail'...keep
in mind that Apple was not far from here just a decade or so ago =)

------
blhack
One of Microsofts flagship products is Microsoft Office. It's a great suite of
software, it's ubiquitous, people are familiar with it, etc.

But the selling point of it is that it's _familiar_. When we recently starting
transitioning to google apps at my office, people damn near rioted.

It wasn't that MS Office offered something that GA didn't, it was that they
were scared that they wouldn't know how to work the new interface.

So...think about that, Microsoft. People aren't holding on to your product
because it is the _best_ , people are hanging on to your product because it is
the _most familiar_.

I think that time will erode that.

~~~
MichaelGG
Excel offers far more than familiarity. Anyone that thinks the competitors are
on-par probably doesn't use Excel much.

~~~
mrdodge
A lot of people use Excel for making lists and doing very simple calculations.
You can do that just fine in Google Apps.

------
mathattack
Looking up MSFT at finance.yahoo.com, their stock is at the same level it was
~15 years ago. (I'm not quoting the bubble peak, but 2 years before it) This
sounds more like a sloppy 15 years rather than a sloppy quarter.

~~~
testbro
Adjusting that for inflation, it's worth approximately 70% of that (based on
43% cumulative inflation 1998-2013).

~~~
sytelus
Does this take 3 stock splits in to account as well?

~~~
mathattack
The charts on Yahoo Finance (very good website, btw - I'm unaffiliated) adjust
for splits. This is why you don't see any discontinuity on split dates.

------
hnriot
Part of the demise of MSFT has nothing to do with MSFT, the landscape in which
they operate is just changing. I haven't used Windows in years, yet I used to
develop on the Win32 API, I gave up with it when they released all that OLE
nonsense. Now that world is largely one big IUnknown interface. The web has
democratized the consumer interface to technology, Apple has risen up from the
days when MSFT loaned them $100M to keep going. The world is nolonger a
Windows and Intel one. In the consumer world things have shifted, while in the
backend world, any IT person that's using Windows over a Unix variant is
laughed at. I remember the early days of IIS and even though NT had I/O
completion ports, it still couldn't keep up with the Unix offerings. Today
there are some viable server side offerings, Share Point is a decent product
(especially when compared to Lotus Notes) but Linux has eaten the server side
market, and Apple and Samsung have eaten the consumer side. I know nothing
about gaming, so maybe the xbox is the best product ever, who knows...

------
kenster07
I'm not surprised. Their time-tested strategy of blatant vendor lock-in is
being disrupted by competitors providing the same kind of software for free -
google docs, firefox/chrome, linux.

After the upcoming "adjustments," they should be able to survive at a somewhat
healthy level, but they will have to accept lower revenue and margin as a
persistent reality.

~~~
kvb
Revenue was up this quarter. The surface fiasco dinged profit a bit, but
financially they're still in great shape. Microsoft is not really
fundamentally about Windows anymore, they've now got a diverse portfolio of
businesses.

------
bdcravens
Funny linking to a blog that's now down. Stock prices are public info.

[https://www.google.com/finance?q=NASDAQ:MSFT](https://www.google.com/finance?q=NASDAQ:MSFT)

------
gioele
That plot looks much less scary if you see the current data in a longer time-
frame:
[https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...](https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1374273154280&chddm=1169552&chls=IntervalBasedLine&q=NASDAQ:MSFT&ntsp=0&ei=B73pUZjKOMzCwAOOag)

------
davidgerard
I know a few people with Windows phones, and they all love them. Apparently
it's actually a very nice phone. But every one of them laments the lack of
apps, and considers it a reason to move.

The trouble is that "Microsoft" and "Windows" sounds to the consumer like
"Monday 9am at the office". For the consumer market, they're tainted brands.

------
solnyshok
Windows 8 Home Premium (upgrade) started to sell at $29.99 during introductory
period last year. It was a time when I finally got licenses for all my PCs.
And many other people around me in my country did as well. Even if we cheated
a bit to install upgrade version on a clean home-made hardware. Previous
pricing was too high for developing world. ~$200 for an OS? I do not even know
for sure what was that price, it was too high to even care about it. What I am
really interested in, is what they will do with the pricing of 8.1. I hope
they do special upgrade pricing again for a couple of months. That's one way
to hide the fact that new Windows price is much less now than it was 5 years
ago.

------
hoilogoi
Microsoft needs to pull out of mobile and tighten their grip on the desktop
market. I can say anecdotally that the only reason many people stay with
Windows is for games.

I'd like to see Windows rebranded as "The Gaming OS which does much more than
just games". They need to keep the value of Windows tied to the value of
Steam. This means bending over backwards to the needs of game developers and
cementing the expectation that you need Windows if you want games before that
expectation goes away.

This may even mean marketing themselves to Mac and Linux users as the OS you
should dual boot if you want to play games. What a crazy thought.

~~~
yulaow
Pull out of mobile? Meanwhile the entire world is pushing mobile market making
a lot bigger than the desktop pc market? Not a really good idea. It would be a
suicide and they know it, that's why they are putting billions of money in
windows phone and nokia, they NEED at least a minimum marketshare (10%) in the
mobile market

~~~
Gormo
There are also lot of people making a lot of money in the energy industry. Is
it time for Microsoft to start drilling for oil, too?

"Mobile" has little overlap with the markets that MS has built 30 years of
competitive advantage in. Phones and tablets are _not_ general substitutes for
PCS.

Microsoft's venture into the "mobile" market has resulted in them slapping the
Windows name on products that are almost - but not quite - entirely unlike
Windows, and this has brought a good deal of frustration to many people.

------
cantankerous
Articles like this make me wonder if one of the reasons Steam opted to open up
Linux support was in the event that Microsoft imploded and Windows no longer
was a viable gaming platform they would still have a decent target. Seems far
fetched, but you never know these days. People sure do complain about Windows
8 a lot. I don't mind it, but I'm just one guy.

I don't immediately see how this would all happen in the short term, but stuff
like this tends to catch a lot of folks off guard.

------
maerF0x0
Innovation vs the world's worst CEO.

[https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...](https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1374269216984&chddm=296611&chls=IntervalBasedLine&cmpto=NASDAQ:TSLA&cmptdms=0&q=NASDAQ:MSFT&ntsp=0&ei=_q7pUdiON-
iqiQKq0wE)

~~~
guiomie
This comparaison is worthless. Here is an example of an extremly innovative
company vs Microsoft.

Innovation vs worlds worst CEO part 2:

[https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...](https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1374269216984&chddm=296611&chls=IntervalBasedLine&cmpto=NASDAQ:BBRY&cmptdms=0&q=NASDAQ:MSFT&ntsp=0&ei=_q7pUdiON-
iqiQKq0wE)

------
coldcode
They have the wrong Steve.

------
JonSkeptic
Is it weird that, given the surface, Windows 8, and the new xbox that I still
think Microsoft is overvalued after the drop?

~~~
dragontamer
I dunno. Given the ability for Microsoft to just up their CAL licenses for
their business buyers and pull revenue literally out of their ass... all the
while shoving Windows 8 down their partners thoats??

Microsoft is still big. As a business, they remain profitable. They have
plenty of time to turn the ship around.

Their business decisions may have been terrible these past years, but they're
still profitable, still making money nonetheless.

~~~
yulaow
The problem is the long term run. At the moment they are really profitable,
but with the switching of the market from pc-leadership to tablet-smartphone-
smartdevices leadershipt they are in big risks.

~~~
babesh
They could always do the IBM. Retrench, sell to corporate, cut costs.
Apparently very profitable.

~~~
seanmcdirmid
Kill your R&D and seed corn for short term gains? Very profitable today...but
what about tomorrow?

------
benhebert
Technology companies today have to be sexy. There has be an innate desire for
the products.

Just look at the resurgence of Samsung, that's sexy.

Microsoft? Some of their dev products might be okay, but Windows 8 and the new
Xbox are downright awful. Horrible campaigns behind both.

~~~
InclinedPlane
That's just confirmation bias. The number of very much unsexy tech companies
that consistently make billions of dollars hand over fist vastly outnumbers
that of the tiny handful of "sexy" tech companies. Is Foxconn sexy?

------
scrrr
Also: Corporate customers don't like backdoors in their software. Expect more
sinking.

------
AndyKelley
I'm pretty inexperienced with stock prices, but I zoomed out a bunch and this
drop doesn't look very noteworthy.

------
dons
... And S&P closes at all time high.

------
knodi
Make Windows 8 more like Windows XP.

------
icantthinkofone
I said this would happen. Unfortunately I said it would happen four years ago
which doesn't gain me any street cred.

------
ioncereadknuth
edit: bah. im not here to educate you.

------
RaduTyrsina
I don't understand how Ycombinator News works sometime. We have written this
article [http://wind8apps.com/microsoft-stock-
down-11-percent/](http://wind8apps.com/microsoft-stock-down-11-percent/) and
it was the FIRST here, it got on the front page, it got REMOVED and then
somebody submitted a simple link to the stock page.

I mean, don't we deserve a little credit for being quick enough? Or we ALWAYS
have to be the primary source of something. In this case, the google stock
page is only a tool.

Please explain on how this works because I have previously submitted stories
that I discovered and further developed.

I just need to understand how this community works to make the most of it.

thank you!

~~~
TallGuyShort
The guidelines and culture encourage submitting original sources: "Please
submit the original source. If a blog post reports on something they found on
another site, submit the latter." In this case, raw stock market information
from Google or another source would be the "original".

Also, the last time I saw one of your articles, a lot of people suggested
running a basic spell check over your articles. I can tell that still isn't
being done. More than "being first", your articles need to add meaningful
insight and information. That isn't conveyed if you text hasn't been well-
edited.

~~~
RaduTyrsina
Thank you for replying!

I will make sure to add meaningful insight and information!

Thanks!

