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Ballmer, Gates on Microsoft's Future
RoadFever writes: "At the Microsoft shareholders meeting, CEO Ballmer acknowledged they may have a popularity bug. "We understand, based upon the fact that our industry didn't rally to support us, that we need to change the way we interact and relate to our industry," Ballmer said.
There's a summary article in the Seattle Times and more stuff on the Microsoft investor relations page.
Will words translate to action? Well, the company might want to start by toning down the habit of taking credit for every innovation: "Really, the reason you see open source there at all is because we came in and said there should be a platform that's identical with millions and millions of machines," Gates said." The question-and-answer session near the end of the meeting has the most juicy quotes.
Forget all the anti-trust stuff and "we don't play well with other" crap for a minute. In terms of "investment relations" what MS needs to do is pay out a god damn dividend. They're sitting on a pile of cash, and the days of constant double digit growth are behind them. They are going to have to face up to the fact that they are a grown, mature company and their stock price is going to act accordingly.
That's what's driving their licensing debacle, BSA audits, etc. They've hit the wall in terms of market penitration on the desktop, they never achieved the "slam dunk/home run" domination of the server market they thought they would (not to mention where they do dominate there-- small print, file, web servers they've got linux/BSD nipping at their heels) and the X-box is going to put a hit on revenues for the next few years even if its a runaway success. Other than Web Sevices, which at best are a few years away, they have no room for massive growth.
So, if the stockprice ain't going up all that much they better start paying out on all that cash they're sitting on, or some investers are going to be none too happy.
(then again, I'm a code jockey, what the f**k do I know about finance)
When asked what members of the Freedom to innovate network can do to help Microsoft now that the trial is winding down. Did that sound like a planted question or what?! And they didn't answer the question at all. They just said the FTIN is a lobby organization that's been useful to us, so join the FTIN!
I had a good laugh anyway...
Mozilla
The PC platform that Gates is touting was created by IBM, not Microsoft. Sure, Microsoft software was running on all of them but what made it appealing was the low costs of the hardware which came about by IBM's rather loose licensing policies. It took a very long time for the PC to become vaguely usable, but it remained cheap and ubiquitous which is why it eventually came to dominate.
But Microsoft's position in that domination was, at best, an accident. They were in the right place at the right time and did a good job of screwing IBM. Credit to them for that, but not much else.
This sig has been temporarily disconnected or is no longer in service
In the Q&A portion near the end, I thought it was interesting how two different people (both women, I believe) brought up the topic of the number of women on the board. Apparently 1/23 isn't a good enough number for them.
If you were to distill the -essence- of what was said (especially on women on the Board and in the company), you'd end up with exactly nothing. Sure, they may be concerned about this, or feel strongly about that. I'll allow for that possibility. But feelings don't equate to action. They're just feelings, the same as "happy" and "sad".
Even the sweeping apparently-grandiose statements made wrt "Open Source" and "Free Software" really reduce to nil. Sure, they may have been a factor in the popularity of "Open Source". But there are probably as many coders inspired by a rainbow, or a fascinating geological formation.
In short, I have to give credit for an amazing non-statement, which said exactly nothing and offered nothing. However, the credit has a value of $0.00.
It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
Yes, the Q&A was quite revealing. I think the open source question appeared to be basically ignored, politely.
The issue of women execs was also something you could tell they weren't going to address, which is very strange, in that most of Bill Gates foundation work has focussed on educating women and providing contraceptive measures for women in third-world countries.
As to China, this again was something that didn't seem to be that interesting to the execs.
Very disappointing responses, overall. One related news item in the Seattle P-I business section today noted that many MSFT employees have picked up their purchases of stock recently.
Does this mean we're nearing the bottom of the market, or that they know something we don't?
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--- Will in Seattle - What are you doing to fight the War?
In answer to the question of why MSFT doesn't pay a "g**d damn dividend", it's pretty simple.
Look, MSFT is a shell company, one that permits Bill and Paul and a few other major shareholders to buy other companies. By maximizing the capital growth and having no dividends, they reduce their effective tax rate to 8 to 10 percent. Then they sell off a few shares and pay the 5 year capital gains tax on them, or sell the high purchase shares and keep the low purchase shares, thus getting a capital loss.
That's why there's no dividend.
Until MSFT becomes more like GE, where no single shareholder owns more than 20 percent of the stock, this will never change.
This is their way of avoiding taxes. People like me buy a mix of stocks - some dividend and some non-dividend - we use the non-dividend stock to go long on capital gains and thus reduce our tax hit (realized income) and use the dividends from the other stock (or bonds, PERQs, SPARQs, money market) to provide enough cash flow for expenses.
Thus we pay less tax than the working poor do. My realized income is very small. And so is Bill's and Paul's.
Unless you change the tax system, we'll keep doing things like that. There is no incentive to realize earned income, under the current system.
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--- Will in Seattle - What are you doing to fight the War?
What he seems to be saying is that Linux can't run on an Apple Mac or an Archimedes.
Surely one of the main reasons for open source is because there is such a diversity of similar but not identical hardware, having the source code means you can probably get it to run.
In fact, he was talking complete and utter crap. The PC is the least standard platform available. the only parts that are consistent are the CPU instruction set (which is hardly relevent since virtually everything is written in C and can be recompiled), and the VGA registers - which are now pretty much obsolete and used only as a fallback. There are at least a dozen different types of network hardware, a vast number of sound cards, a quite a lot of different quirks in the motherboards. Identical? Like hell!
Gates and Ballmer exude pure arrogance in the way they take credit for everything from the BIOS to free software. The victor is the one who writes history, eh? Good thing they're not the victor yet, and their attempts at writing the history books come off as lies.
Gee, I didn't know Gates was responsible for all that free software I used to use back in the CPM days before M$ even existed. Even the stuff I wrote too! Thank you, Bill Gates! Without you, I wouldn't exist today!
I don't know a whole lot about Mennonite churches, but isn't this a little liberal for them?
--------- Matt
Is it just me or was Visicalc the killer app that drove mass adoption of consumer PCs? Thank them for the use of computers in the office and in homes, along with games and the human friendly hardware ideas implemented by Woz. And after that the desktop publishing revolution drove creative professionals to adopt computers, thank Adobe. You can argue that MS software creates standardization and makes PCs cheaper, but that is a very weak argument because of how the ridiculous prices they can set for their software through their monopoly powers (don't argue that point, it has been proven in court) inflates the price of PCs. It seems to me that YOUR computer history starts in the 80s, when MS was a real force and not yet another developer.
I am not a MS basher, I use Office 10 and it is a good product. I don't conisder it innovative or great however, and it didn't drive my computer purchase; programs from companies that innovate, not standardize, did that.
"Reality is just a convenient measure of complexity" -Alvy Ray Smith
It makes me remember when Mr. Gates said that internet is too dumb to be successful.
Tell me do you remember?
It also remembers me when Mr. Gates stole Pen-Computing technology from a young-innocent-guy who thought he could trust a company like Microsoft
Yep, there are lots of stories about these things.
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I know life isn't fair, but why can't it ever be un-fair in MY favor!?
"We understand, based upon the fact that our industry didn't rally to support us, that we need to change the way we interact and relate to our industry."
Translation: "No more Mr. Nice Microsoft. From now on we will use stronger threats."
"MR. BALLMER: I just want to add one thing, echo what Bill said, but encourage you to go to our web site. If there's a key learning for us, we can't have free software, it's kind of inconsistent with the goals of most people in the room. We recognize it, it probably doesn't fit in most of these people's mind's eye, so we're not going to embrace that."
It's quite simple really. They tell shareholders what they want to hear and their shareholders don't want to hear about free software.. Yet! I've said it a hundred times: the free software revolution is in its infancy. When the 'critical mass' of OSS code base is reached, which is inevitable, Microsoft is going to have to innovate or die. Free and proprietary software are not complementary and they will not peacefully co-exist for much longer.
"How is this juicy? Gates and Ballmer have been asked by the people who own their company and all of the intellectual property if they have any plans of giving it all away for free. They said essentially "no", because then there'd be no business to speak of and all of your investments would be worthless."
From the transcript: "As in prior years, we have the company store here in an adjoining room, so that you have an opportunity to go in and purchase Microsoft products."
But I thought they OWNED the company? They have to purchase products that were the fruit of intellectual property that they OWN?
Did you happen to read the "owners" question? It seemed they thought the open-source model was better, and that Microsoft was "maybe on the wrong side of that trend of long-term?" Seems juicy to me.
"We understand, based upon the fact that our industry didn't rally to support us, that we need to change the way we interact and relate to our industry," Ballmer said.
What Gate's is saying is that he invented Open Source by opening the PC bios; which started the PC hardware revolution.
Until this admission, Compaq had been credited with clean-room reverse-engineering the PC bios. IBM had outsourced the CPU and OS thinking that control over the proprietary BIOS gave them comntrol over manufacture of the system.
Since Gates signed many NDA's with IBM, I wonder if this admission might get him into any trouble.
Anyway, a more complete quote:
"really the reason that you see open source there at all is because we came in and said there should be a platform that's identical with millions and millions of machines, and the bios of that should be open to everybody to use, and all the extensibility should be there." -- Bill Gates
When I die, please cast my ashes upon Bill Gates -- for once, make him clean up after me!
first, Mr. Ballmer says: "The last three years, the period of the lawsuits, people ask us what we've learned. From the lawsuit itself, I don't know exactly how to answer that question from time to time..."
and shortly afterwards: "We need to expand the range of companies, bigger companies, established companies that we have relationships with, in the telecommunications industry, in the media industry..."
i thought that if they were a monopoly that they were not allowed to do precisely this type of thing. indeed, it would appear that Mr. Ballmer hasn't learned anything from the law suits.
check out my comic: Essential Tremors
"In fact, there's a very virtuous cycle where people do free things, some people find that adequate, sometimes companies will take that work and turn it into commercial products, those companies will hire people, pay taxes. And so you see the free software and the commercial software existing together.
There is a particular approach that breaks the cycle called the GPL that is not worth getting into today, but I don't think there is much awareness about how so-called free software foundations designed that to break that cycle."
Bill is implying that GPL is an affront to the American system by saying companies hire people and pay taxes, as if something is wrong with GPL because it doesn't. The American system is for capitalism, but also for free speech and thus the open exchange of ideas. We need to strike a *balance*, not just put down anything non-capitalistic in nature. This line of thinking is simple minded and would be ludicrous if it weren't so dangerous.
He says GPL was "designed" to break the cycle where people develop free software then enhanced commercial software is developed on that free base. This shows again shows Bill is a bit delusional, I don't get the impression that GPL was created to destroy business, but to protect from exploitation the systems that hard working volounteers have built. Bill's cycle sounds awefully familiar:
A company develops innovative software, Microsoft borrows it, and then runs them out of business.
Microsoft borrows kerberos, "extends it", and makes renders it non-interoperable with existing implementations.
Numerous other examples can be cited. *shrug* I think Bill will need some therapy before we see any honest attempts at change.
Semantics. Thanks for the attack on my intelligence though. =P
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I just wish I could c:\format Internet
But this is what stood out to me. Bill Gates himself has now called slashdot "brilliant"! He could, of course, be talking about newsgroups. If you've spent much time there, you know the linux groups are much more friendly than the groups full of MS apologists. The truth is that people who write software, and give it away for free are friendly!
Once I was working on writing a driver for a network card on microcontroller hardware. I wrote to Alan Cox, to ask for help. My work had nothing to do with GNU or linux, but guess what.... He responded, and told me exactly what I needed to know! I doubt Ballmer would do that!
MS may try to copy our developer model, but it will never work. People in a corporate atmosphere cannot harness the full power of cooperation, because it's not in their nature.
Free unix account: freeshell.org
The things that bothers me the most from the minutes of this shareholder meeting? The fact that only 8.9% of Microsoft shares (how many shareholders is that?) agreed that Microsoft should avoid engaging in deals with the Chinese Government that would result in further human rights abuses by the Chinese Government.
The attitude at the meeting seemed to me to be that "as long as we make a buck, we don't care."
hrmmmm...sounds like a certain former vice president I know...
But actually when you think about it, the reason Microsoft is in its position of dominance today is because they decided to open their APIs to software developers and concentrate on compatibility, as opposed to Apple, who kept all their secrets tightly held. It was the reason for Apple's eventual demise. In the last few years, however, Microsoft has gone the other direction...closing things up and making them "Microsoft Only". No wonder nobody likes them anymore...
Why would he do that if he didn't think there was going to be other companies selling 8086-based machines?
Perhaps that wa part of the forsight, but he probally just wanted to lock IBM into Microsoft so they would be forced to use Microsoft.
--- Justin Dearing http://www.justaprogrammer.net/ We're just programmers.