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Steve Ballmer: We're a Devices and Services Company
Nerval's Lobster writes "According to Microsoft CEO Steve Ballmer's latest shareholder letter (not exactly a gripping read), Microsoft sees itself as a 'devices and services company.' The subsequent 1,200-odd words hammer that point, mentioning software such as Office and Windows 8 largely in the context of tablets and other hardware — and while Ballmer acknowledges the 'vast ecosystem of partners' building a 'broad spectrum of Windows PCs, tablets and phones,' he leaves the door wide open to Microsoft building its own toys in-house. If one takes Ballmer's words at face value, it seems that Surface, the tablet Microsoft's building in-house and promoting as a 'flagship' Windows 8 device, isn't so much a lark but the harbinger of the company's future direction. Whether Microsoft's decision to build its own devices affects its long-term relationship with Dell, Hewlett-Packard and other manufacturing titans remains to be seen. Perhaps Ballmer can take some comfort from Apple, which profited enormously by pursuing the 'we build everything in-house' route. But it's indisputable that a devices-centric approach is new ground for Microsoft."
It's not going to be a smooth ride. Microsoft will have to keep an eye on software updates to existing products as it attempts to shift it's position
Other than Xbox MS is largely unproven on the devices front. Surface could be a winner like Xbox or it could be a complete disaster like the Kin.
Windows 8 OS will either be a success or annoy users completely. It seems there's little to no middle ground. If you're gonna have to learn a new OS why does it have to windows?.
They're probably gonna piss off some OEMs as well. In the short term if they're lucky, long term if they're not.
Ballmer's track record is not great. Ballmer completely missed the way things were going with mobile and search. Sure, MS now has competitive products and services (some yet to launched (Surface), some not finished (updates to Windows after it was RTM)), but its behind Google on search and mobile. MS never misses and opportunity to miss an opportunity.
Now we're supposed to believe that Ballmer knows devices and services as well? They're at least three years behind Apple and Google. If they had been on the ball they could have predicted trends and even set trends, they could have had huge profits like apple and market share like google. There's only one reason they haven't. Ballmer.
Even the board knows it, this years bonus for him was 9% less than last year. That's three years in the trot he hasn't made his maximum bonus. Some of that is due to the economy, some of it is because he's simply missed opportunities to create or expand markets.
Watch those corners
Microsoft's mice and keyboards have always been really good - or a better way to put that would be - the old ones I bought years ago are really good. Still using them! I don't know about modern ones. My point? I like their peripherals so there is a chance the tech they make will be good. Software ... another matter.
MS has lost it's ability to turn on a dime it appears.
To be fair, only when Microsoft sees itself hurtling towards a cliff does it gain the ability to turn on anything resembling a dime. Even then the results are usually half-assed, with just enough marketing, copying, company-purchasing, and sometimes outright BS to pull it off. See also the late 1990's and Windows TCP/IP stack, IE, et al.
Gates had one other advantage that Ballmer does not: Microsoft was a whole lot more streamlined in 1996 than it is today.
In analogy terms?
Microsoft of 1996 was like turning a commercial fishing vessel: you could see it took effort, but it could turn quickly enough if it had to.
Microsoft of 2012 is like six oil supertankers welded together side by side, with two of them welded on backwards.
Quo usque tandem abutere, Nimbus, patientia nostra?
Microsoft is a monopolistic public utility that sells Windows and Office the way Consolidated Edison sells electricity. Everybody buys it, but nobody particularly likes it.
IBM is not a technology company; it's a multilevel sales organization.
Apple is not a hardware company; it's a software company that bundles its software with large, sleek, phone-shaped license-enforcement dongles.
Google is not an Internet services company; it's an advertising and market research company. So is Facebook.
HP is a printer ink company that's desperately trying to be something else. Anything else.
Oracle is not actually a company; it's actually a newly discovered type of supermassive singularity with a gravitational pull that only affects corporate accounts.
Yeah, I have to really wonder about Ballmer. I've never seen him where he wasn't at least somewhat off his rocker.
You keep wondering there, armchair quarterback. Let us know when you successfully run the largest software company on the planet.
that's the thing.. running it successfully doesn't seem to have been much of a chore - BUT everything he's gotten involved and has grown with dollar spending has lost ms money over the last 10 years. it would be easy to argue that had he done _nothing_ he could have ran it more successfully(nothing includes not firing windows kernel development team - and includes not hiring ui wizs to fuck things up - basically just leaving it on autopilot).
and even your witty reply includes "largest software company on the planet". but he's constantly trying to make it something else and burning billions and bridges in the process, this time a "devices and services" company which is a loss doing stupid business when you compare it to the business of selling sw which costs nothing to duplicate - devices and services have costs - and the turn arounds he has been in the helm for have been catastrophes excluding windows 7(windows8 still unproven, vista made a lot of money but could have brought in a lot more and made 7 unnecessary). zune was a catastrophe, kin was a catastrophe, xbox-franchise is a catastrophe financially, windows phone 7 has been a big fat turd(technically and financially - it's really sad when the wince was more successful in gathering manufacturer interest)... surface was a bomb(the original table, not the yet unproven tablet)..
(written on a MS keyboard. their hw has been pretty good - but not a good business for them.)
world was created 5 seconds before this post as it is.
Over the past 10 years we have watched some CEOs "of that level" run their tech companies straight into the toilette.
How is Sun Microsystems doing?
How is RIM doing?
How is Palm.. err USRobots.. no wait.. thats 3Com.. err.. PalmOne.. err.. Hows the hell is that Palm brand that Hewlett-Packard acquired doing these days?
By contrast, how are Intel, Cisco, Oracle, Apple, RedHat, Samsung, IBM, Google, VMWare/EMC, NetApp, Canonical, and about 100 other tech companies doing? Most are still stable-to-growing, even in this economic climate. Their brands are still very strong in the tech community, unlike the weakening Microsoft brand(s). They have growing mindshare, unlike Microsoft. They have greater *growth*, and they manage to do it without fudging numbers, channel-stuffing, or counting "downgrade licenses" as sales of their new goods.
Hell - Apple (a so-called premium brand!) and Google are almost printing their own money at this point, so don't go blaming the economy, either.
It's too easy to compare Ballmer with the short-sheeted dual-CEOs at RIM, the egomaniac (but vision-less) former CEO/lunatic of Sun, or the Eternal Microsoftie that's currently running Nokia.
Problem is, you illustrate my point for me, by comparing Ballmer to other, greater losers. Now compare him to the winners, and you'll notice that he comes up way the hell short...
Quo usque tandem abutere, Nimbus, patientia nostra?
Not everything they choose to do is successful so suddenly they're not a successful company? What kind of logic is that?
My reading of this thread suggests that the GP's logic is more that Ballmer has zeroed in on an area where Microsoft has made considerably less money, and has lost considerably more money, than in the company's core business of software.
From the things I've read as a casual follower of MS's progress, the Zune lost a ton of money, Windows Phone hasn't done all that well (the Kin vanished after months of hype, for instance), and I don't think the XBox has broken even when viewed over the whole history of the console rather than just in any one fiscal year.
Meanwhile, the Windows OS and Microsoft Office software businesses have been moneymakers for decades now.
So the logic appears to be not that "some of Microsoft's operations aren't successful, ergo the company as a whole is unsuccessful" -- instead, it's that "Microsoft is focusing more and more on its lossmaking operations, ergo the company as a whole will be increasingly unsuccessful."
Considering that this move directly threatens partners such as HP and Dell, we could wind up seeing more support from such companies for Linux as they seek to hedge their bets against Microsoft's incursion into the hardware market. I think the software and computer industry could be on the verge of becoming much more interesting.
Cheers,
"What in the name of Fats Waller is that?"
"A four-foot prune."