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Pondering the Future of a Re-Org'd Microsoft
puddingebola writes "This story from Forbes touches on Steve Ballmer's announcement that Microsoft will reorganize. From the article, 'Microsoft CEO Steve Ballmer appears to be planning a major reorganization. His apparent objective is to help the company move toward becoming a "devices and services company," as presented in the company's annual shareholder letter last October.' What follows is an analysis of the current state of Microsoft's current ventures: shrinking PC sales, Nokia management calling for a change of course, Office 360 lagging, a $1 Billion investment in Nook, the losses on Xbox. Once again, if Microsoft starts to lose the revenue of Windows and Office, how long does the boat float? And what of the suggestion, on the verge of another update in the Xbox console, that Microsoft should sell the Xbox division?"
Brilliant move! De-emphasize the divisions that bring in the big bucks *and* have a unique advantage over competitors for legacy reasons, while placing even more emphasis on the divisions that lose money and have mediocre market share.
Seriously, this move by Ballmer is about the direct opposite of what a business in transition should do. I wonder how much longer before the stockholders finally kick him out.
To a first approximation, Microsoft *is* Windows and Office. That's what keeps everyone locked in. That's what brings in the big volume licenses. Cede that, and the rest of the edifice collapses entirely. Ballmer might not like it, but Microsoft is a software company and lives or dies on desktop software. The truth is that they have to transition to a more mature company model, paying dividends and making a lot fewer splashes. They aren't ever going to be hip and cool and revolutionary. And their customers don't want them to be.