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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?"
What is "Office 360" is that Microsoft office for the X-Box? Sounds like input would be pretty slow.
First they'll drop the software, then they'll drop the devices, and then they'll be IBM 2.0. How ironic.
How about just stopping the crappy product releases? Windows 8 is a joke, the Xbox 360 is over engineered, your server product make me laugh because Linux can do everything for free and better. When will Microsoft wake up the fact they release crap, users are getting fed up with it. They're losing market share because finally the average user is noticing that better, cheaper and more reliable software and hardware exist. The key to Microsoft becoming successful is to just reboot itself and start turning out high quality products.
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.
[Steve Ballmer's] objective is to help the company move toward becoming a "devices and services company,"
Maybe he can deliver me a chair?
Ballmer: "Guys, MS will live its biggest reorganization ever: I resign."
Slashdot, fix the reply notifications... You won't get away with it...
The only thing inhibiting Microsoft's growth is incompetence at the top.
As a naive individual with little to no business knowledge or training, could somebody please explain how Steve Ballmer is still CEO of Microsoft?
What knowledge is the board of directors privy to that the entire rest of the world isn't that has kept him employed for so long?
I *must* be overlooking something to explain how somebody could so completely mismanage Microsoft to the point of irrelevancy and still work there.
Except that the Xbox div loses tons of money. They might be smart to sell it off before the the publicity gets REALLY bad after the Xbox One presentation at E3. After then it'll be hard for MS to give the Xbox brand away.
This article did not discuss the reorganization plans. Instead it whined and complained about Microsoft's poor sales performance.
If by insane you mean the price the market dictates you would be correct.
Fun fact, the price the market dictates is the price the market dictates. If you want cheaper workers, go hire in fly over country.
Except that the Xbox div loses tons of money.
It always amazes me how many people actually think that the Xbox is a highly profitable endeavor for Microsoft. While it has turned profitable recently, the Entertainment & Devices Division (where XBox is accounted for) is only mildly profitable. Nowhere near the profit rate of Microsoft's enterprise and desktop cash-cows. It is a stretch to call the Xbox a fiscal "success", at best one could now say it is not "money-losing". It is highly unlikely that Microsoft could expand the revenues and margins of EDD into a company-sustaining business.
with Microsoft is because he was lucky enough to have known Bill Gates and Paul Allen
Right, and the board must feel that if they get rid of the 'original team' facet, the stock price will suffer. It's incredibly short sighted - in the long run the founders are dead, so they have to do it sometime unless they're planning to have Bill Gates's head in a jar run the company. But public companies rarely do 'long-term'.
In the meantime, get your re-org boots on, Microsofties.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
So long, Microsoft. Wonder who we'll be getting our OS from shortly after you go bankrupt?
Are YOU using the TOOL, or is the TOOL using YOU? Think about it!
As long as the first ones out the door are the ones that designed and built windows 8 - I'm ALL for that.
Win 8, the greatest thing to happen for Linux - EVER!
_ _ _ Go for the eyes Boo! GO FOR THE EYES!
We have a paid relationship with a Linux OS vendor. When we find problems we file bugs into their system, and they generally *do* get addressed. Not always as fast as we'd like or in the exact way that we'd like, but they do get attention.
You somehow missed the start of last decade, when market started to become global.
From an employer's perspective, the difference between an US-based remote worker and an India-based remote worker is the salary (to a greater extent) and cultural differences (to a smaller extent, includes English proficiency). Speed of communication is just as good (instantaneous regardless of where you are) and cheap (VoIP).
Apart from some relatively small cultural differences (which can be ignored with little effort), everything else is advantageous for the India-based worker: smaller salary, less pretentious, able and willing to work overtime for insignificant compensation, etc. Even if Quality of Work might (arguably) be lower, you can get 5 IN workers for half the price of an US worker and (arguably) have quantity offset quality. But to date, my 10+ years global workforce experience tells me that IN-based work quality is about 60-70% of US-based quality (valid for coding and support, YMMV) for a much, much lower salary. Mexico, for that matter, is worse than that (mainly due to laziness; they're smart but hellishly lazy).
One more thing to mention: the horrible Indian accent and general incompetence you sometimes encounter when calling support has a very simple root cause: the employer got overly greedy and went for the cheapest outsourcing company they found. their mindset was: "why pay 1/4 of the salary and have good customer service when we can pay 1/7 of the salary and fuck our customers?" - Dilbert method FTW.
Note: My global workforce and outsourcing experience covers USA, Ireland, Germany, France, Italy, Chile, Mexico, India, Romania, China, Singapore, Japan and Egypt. I could literally write a short novel about each.
...gis sdrawkcab (usually not responding to ACs; don't bother posting as AC)
VB6 migration path to VB.net: Fuck you. Recode.
Winforms to Web: Fuck you. Recode.
Silverlight to WPF: Fuck you. Recode.
WPF to anything:Take a guess.
Microsoft Office interface: Fuck you. Retrain.
Windows interface: Fuck you. Retrain.
Old Windows phone: Fuck you.
New Windows phone: Maybe we'll let your app on our store, and by the way. Fuck you.
Why anybody, at this point, would invest *any* time in any windows language or platform is beyone me. Think Android. Think iOS.
Please do not read this sig. Thank you.
I don't think IBM should take your insults lying down. IBM knew when to shift. They may not be high-profile in the PC world anymore, but they've certainly spun off their product lines to companies that could handle them. Meanwhile, IBM themselves haven't exactly disappeared. A quick cut-and-paste from Wikipedia: "In 2012, Fortune ranked IBM the #2 largest U.S. firm in terms of number of employees (433,362),[7] the #4 largest in terms of market capitalization,[8] the #9 most profitable,[9] and the #19 largest firm in terms of revenue.[10] Globally, the company was ranked the #31 largest in terms of revenue by Forbes for 2011.[11][12] Other rankings for 2011/2012 include #1 company for leaders (Fortune), #1 green company worldwide (Newsweek), #2 best global brand (Interbrand), #2 most respected company (Barron's), #5 most admired company (Fortune), and #18 most innovative company (Fast Company).[13]"
In SOVIET RUSSIA... erm...NSA AMERICA, the Internet logs onto YOU!
Your post is so full of urban myths, disinformation and wrong assumptions, that the only true words I could find were "the", "or", "who", "a" and "and".
...gis sdrawkcab (usually not responding to ACs; don't bother posting as AC)
MS got addicted to their cash cow near-monopolies. If they split up into multiple companies, then each part has to compete on its own and will have to find ways to survive without milk from the Cash Cow. They may flounder at first, but eventually will become competitive again. There's probably no shortcut.
Rehabilitation from addiction can be painful.
Table-ized A.I.
Is this Microsoft's jumping the shark moment?
Whenever I hear of a large software company suddenly saying they're now a devices and services company, I have to wonder if they have a good grasp on what's happening.
They keep thinking they're going to move everything to the cloud and subscriptions, but I'm not sure if their customers actually want that from them.
One does have to wonder if they're not just trying to figure out what to do next to stay relevant in some segments -- but you have to be sure to not destroy the main revenue streams you already have.
Lost at C:>. Found at C.
I don't think IBM should take your insults lying down. IBM knew when to shift. They may not be high-profile in the PC world anymore, but they've certainly spun off their product lines to companies that could handle them. Meanwhile, IBM themselves haven't exactly disappeared.
That is because IBM has always been about being in businesses that are higher margin and where they can use their breadth and depth of talent, IP, etc. to their advantage. Once the PC market became a commodity they moved on. Big iron is much harder to commoditize and they can sell services around it that use the computing power as business tools. Even as they spin off some businesses they buy others, such as Monday (PwC Consulting) that fit within their services model.
MS has always been, first and foremost, a software company. Services always seemed as an afterthought and focused on their software rather than providing business solutions.
I'm a consultant - I convert gibberish into cash-flow.
You mean Windows 8 is the greatest thing to happen for Apple.
Microsofts screw ups tend to benefit Apple more than Linux.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
IBM is one of the rare companies who reinvented themselves and eventually thrived again. It rarely happens such that it's a marvel and probably the best real-world lesson for any tech company trying to do the same.
Apple is sometimes described as a company that came back from the brink, but for the most part still do what they always did: upper-middle-end computer-driven consumer hardware. IBM went from mostly hardware to mostly services.
Table-ized A.I.
The point is that if they spent money in Indiana, Ohio, Michigan... They could soak up lots of smart people but its not "trendy" and they won't put money into the system to MAKE trendy spots in Fly Over Country.
It's worth remembering that IBM still gets a significant share of its profits from mainframes. It's not the "growth Growth GROWTH" that CEOs chase blindly through the maze, but as a cash cow it allowed IBM to survive a few wrong turns before stumbling onto services as the next big thing.
There's a lesson there for Microsoft, I think.
Socialism: a lie told by totalitarians and believed by fools.
Apple is sometimes described as a company that came back from the brink, but for the most part still do what they always did: upper-middle-end computer-driven consumer hardware. IBM went from mostly hardware to mostly services.
I'd disagree - I think Apple did essentially re-invent itself when it switched from Apple Computer to Apple back in '07.
It realized it's future was mobile devices, and despite it's massively profitable iPod franchise, effectively cannibalized it completely with the touch-based offerings, iPhone and iPad. Prior to this change Apple was a Mac/iPod company, afterwards it was the iPhone company (and still is).
Make sure everyone's vote counts: Verified Voting
Once the PC market became a commodity they moved on.
No, not exactly. IBM flailed around in the commodity PC market for quite some time before finally exiting. Remember the PS/2 and PS/1? (What ever happened to the PS/0 anyway?) They tried for a long time to push massively overpriced junk in a market full of inexpensive "clones", even attempting to take over the market with proprietary junk like the MCA bus interface, thinking somehow that everyone would give up on the clones and run back to IBM and their high prices. Eventually, they moved their manufacturing to Lenovo in China, but still kept selling PCs and laptops with their name on them, well into the 2000s, until they sold that division to Lenovo (who got to keep using the IBM name for 5 years afterwards as part of the deal). For a very long time, they were the gold standard for business laptops with their Thinkpad line though their PCs weren't anything special after they finally gave up on the PS/2-type strategies and made industry-standard PCs like everyone else.
So no, they didn't "move on" when the PC market became a commodity; it took them a very long time to wake up and smell the coffee, and even then it took them a while before they finally sold off that business unit.
While it has turned profitable recently, the Entertainment & Devices Division (where XBox is accounted for) is only mildly profitable.
And the Entertainment & Devices Division includes other things besides XBox, including (last I checked) the Macintosh software division. When they stuck the mac stuff in that category, that's when it started actually being profitable.
That, plus with failure rate of the XBox 360 being somewhere near 30% for a while, it's hard to believe they've come anywhere near break-even.
"First they came for the slanderers and i said nothing."
Simple: because that's where most of the qualified workers are. Yes, there's some qualified workers in fly-over cities, but not at nearly the density or number of the west coast cities (not even at the density of places like SLC, Phoenix, Colorado Springs, Austin, etc.). Worse, a lot of tech workers simply don't have any interest in living in the ultra-conservative heartland cities like Omaha. Even if you paid relocation for them, you wouldn't find that many takers.
Once the PC market became a commodity they moved on.
So no, they didn't "move on" when the PC market became a commodity; it took them a very long time to wake up and smell the coffee, and even then it took them a while before they finally sold off that business unit.
I didn't mean to imply they did so immediately; as you pointed out they tried to differentiate themselves, with little success beyond the thinkPads, to be abel to command a premium. Eventually they simply exited the market when it became they could not get premium pricing. But that is my main point - IBM shifted its focus to areas where they can extract a premium; existing the PC market is just one example of how and when they do that.
I'm a consultant - I convert gibberish into cash-flow.
Speaking as an certified accountant, you cannot possibly come up with a situation where you can install linux in a business for zero cost.
You ignored my argument: then you cannot even call $100 lying on the pavement "free" since it will cost you time (i.e. money) to bend down and pick it up.
Therefore you are not using the commonly used definition of the word "free".
You couls day "Linux costs nothing to acquire", but then again we have a perfectly good word for that: free.
The moment you have a single employee do any work on it you immediately will incur cost.
Doesn't change anything: Linux itself is free. Using it might cost money (no shit!).
Claiming that linux is free of any cost however is utter nonsense and easily shown to be false.
Seriously, this is not what any normal human speaking english means by free.
If you give something to someone "for free" you know like a present, they will not assume that it has zero lifetime cost, unless they are a very special kind of fool.
Just imagine that:
A: Hey look I got this I pad as a present. I love free stuff!
B: it's not free.
A: yes it is I didn't pay for it.
B: No, it's not free.
A: WTF?
B: you have to pay for the electricity to charge it. You spend more in gas in your car driving the extra weight around. Hence not free.
A: fffffffffffuuuuuuuuuu
B: [dies after having a copy of the complete OED land on his head]
Linux is free in any normal definition of the word.
If we use your definition, then nothing ever is free, and free becomes an entirely pointless word since it can be applied to nothing.
SJW n. One who posts facts.
Case in point, this past week my business partner has spent roughly 20 hours upgrading to windows 8 and trying to get Office 2013 to work on her PC. That's 20 hours not spent working on client projects. And we have projects to work on so Windows 8 + Office 2013 have cost us $2000. Meanwhile this week I've worked 20+ hours on projects on my Mac. Just as I have for 10 years now. Yes I know I pay premium upfront for Apple products, but they've stayed out of my way and let me get work done.
"The problem with socialism is eventually you run out of other people's money" - Thatcher.
Who do you think approved Win8, and who pushed for the dumb strategy of trying to unify the UI across all devices? It was the guy at the top.
And as the other poster said, Win8 was a boon for Apple, not Linux. Linux shot itself in the foot by adopting the same idiotic unified-UI strategy with Unity and Gnome3. The KDE folks had the right idea, wanting to have different UIs for different devices (but running the KDE libs underneath them all; kde-desktop for the desktops and laptops, kde-netbook for netbooks, and kde-active for phones and tablets), however almost no one in Linux-land wants anything to do with KDE for some reason, and instead they prefer to keep using Gnome, while simultaneously bitching about the Gnome devs and their arrogance and removal of features.
Did IBM really reinvent itself, or just shrink some of it's cthulhu tentacles while expanding others?
Microsoft just never really diversified, it basically has only two tricks, Windows and Office. There are other things profitable for Microsoft but they're tied to those products (ie, Visual Studio, selling certificates, etc). MS has been obstinately resolute about Windows and because they've been a monopoly they've gotten flabby when it comes to competing. People know they're not so great at actual quality and are slow to make changes. They really need something to fall back on other than the self assured notion that everyone will always buy Windows.
In some ways Microsoft feels a bit like DEC back in the days when it declared Unix to be snake oil, in that they're blind to the actual competition. Microsoft wants to sell to the big mass market, the home users and such, but they've never made much headway there other than Windows and that market has always been very lukewarm to them. They're never going to be the media company that they think they can be. Meanwhile they do have a strong business presence but they've not been very competitive in that market at all, instead relying upon inertia in IT and reluctance to change platforms.
Nothing is ever free.
Well, here's where we disagree on the meaning of a word. One defintion is used in dictionaries is "free: at no charge".
Linux fits the bill, as do many other things, and I shall keep using this perfectly fine word that I and most of my fellow Englishmen can agree on the meaning of.
Seriously, you are claiming that $100 lying on the floor is not free money. Very few people and dictionaries would agree with you on this one.
And yes I know what opportunity cost is, and what it doesn't do is alter the definition of widely understood words.
SJW n. One who posts facts.
After 10 years you still didn't get your project done?
Man what a slacker.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
So no, they didn't "move on" when the PC market became a commodity; it took them a very long time to wake up and smell the coffee, and even then it took them a while before they finally sold off that business unit.
To their credit, they moved far quicker and far better than any of their original competitors. Look at HP and Dell (or the companies they merged with) as an example of why IBM is a model for every company trying to divest from a core but dying business.
Those who can, do. Those who can't, sue.