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Break Microsoft Up
Hugh Pickens DOT Com writes "Tom Worstall writes in Forbes that the only way to get around the entrenched culture that has made Microsoft a graveyard for the kind of big ideas that have inspired companies like Apple, Google, and Amazon is to split the company up so as to remove conflicts between new and old products. With Ballmer's departure, instead of finding someone new to run the company, bring in experts to handle the legal side and find suitable CEOs for the new companies. 'The underlying problem for Microsoft is that the computing market has rapidly left behind the company's basic strategy of controlling the machines that people use with operating-system software,' says Erik Sherman. 'The combination of mobile devices that broke Microsoft's grip on the client end, and cloud computing that didn't necessarily need the company in data centers, shattered this form of control.' Anyone can see how easily you could split off the gaming folks, business division, retail stores, and hardware division says John Dvorak. Each entity would have agreements in place for long-term supply of software and services. 'This sort of shake up would ferret out all the empire builders and allow for new and more creative structures to emerge. And since everyone will have to be in a semi-startup mode, the dead wood will be eliminated by actual hard work.'"
classic old-school, google gets praise for the chromecast, for having an OS, for being in mobile, being in search, being in social networks.. and that's all good. Apple ditto.. but not acceptable for MS. Microsoft needs a good shaking but there are some strong elements in there that need to be supported and accelerated. They have as much right to push for the unified vision as anyone
I think the problem is that their unified vision is anything but unified. Hell, they can't even make up their minds about what Windows 8 is supposed to be.
One of the most successful companies of all time, which is still doing billions in business, and everyone can't wait to tell them how they are fucking it up...
Why don't all these brilliant analysts go make billions if they are so smart?
Well, while Windows Mobile used to be the best option for a smartphone out there, and shows that MS were at least trying to be in that market a long time ago.. the fact remains that they haven't come up with anything good on their own for a long time. They try to muscle their way in on everything, rather than making people want their devices. Look at all that shit with the Xbone. Xbox Live had started turning a profit, but they weren't happy with that, and kept trying to push ways to squeeze even more money out of their subscribers. If they focused on creating good products that people love, rather than thinking "how can we take a piece of this emerging market?", they'd be a lot better off.
which is totally what she said
FTFA :- "Anyone can see how easily you could split off the gaming folks, business division, retail stores, and hardware division says John Dvorak."
Agreed. Each of those areas could be self-contained, if it isn't already.
"Each entity would have agreements in place for long-term supply of software and services. 'This sort of shake up would ferret out all the empire builders and allow for new and more creative structures to emerge."
Why? There will always be empire builders. And why would "new and more creative structures" emerge? If the existing divisions are lagely self-contained, what stops that now? I have witnessed companies down-sizing and splitting up - management become obsessed with it as an end in itself, like "well we shut down that department, what can we shut down next?". They stop thinking about the product. "Creative" groups are the first up against the wall.
On a much smaller scale, I saw a company of about 30 people reduced to about 5 because the new owner, a devout Thatcherite, just thought "The smaller the better". It ended up with the craftsman in the workshop keep having to stop making stuff to go and answer the phone; that was not efficient.
I don't think anybody is saying Microsoft shouldn't be allowed to continue as a single entity with their current strategy. They're saying it's not proving to be a very good strategy, and that the entity known as Microsoft might be more profitable if it was broken into several things.
See, Apple and Google seem to be able to execute on their strategies. But Microsoft is so concerned about cutting into sales off Office or their desktop OSes that some of their other offerings aren't doing so well.
Yes, but has it been working for them? Because, arguably, the Windows Phone and the Windows tablets aren't selling overly well, Windows 8 itself is proving a little lackluster, and Microsoft has generally been stuck doing "me too" for years.
So, either they need to start making different decisions (like allowing one division to do stuff that isn't dictated by another), start dropping products which are underperforming ... or split into multiple divisions so that they can be separate businesses and actually try to thrive.
But I think it's hard to not come to the conclusion that something about how Microsoft is doing their strategy is causing some of their products to be selling terribly.
The "lose money on everything but make it up on volume" works when you're a hugely rich company, but it's still a terrible strategy.
Lost at C:>. Found at C.
No one recognized the Year of Linux having come and possibly passed, because it was in the pocket, not the desktop.
Back in 1999, this breakup may have been a good idea, comply with the Court monopolistic findings and make 2 much more agile companies.
But what is the point now? The techscape is very different and Microsoft's woes is mostly the result of internal bureacracy that built up complying with that now obsolete order. Get rid of the bureaucracy, not split the company. At worst, it goes to court and I find it very hard that MS will lose.
What MS needs is leadership that's more adventurous than "Look! Me too!" and backed by MS's considerable but ever slowly dwindling resources. In the last 15 years, all they added for themselves on top of the OS and Office was Xbox. The problem long term for MS is that the desktop is now old hat and it has no share in mobile. On top of that, for most users, Operating Systems will be given ever less importance to the end user. Already, I have friends who do their Quickbooks and Intuit taxes online with just a browser. Something they couldn't do 15 years back. They use one of the free office softwares and edit pics with another free program that's better than 90% of the pay programs. Their OS at this point couldn't matter less and that's how they like it. All that matters is their data and being able to manipulate it. 15 years ago, it was unfathomable to get on in the world with anything but Windows. Now you can get along with minimum 3 OSes.
MS's OS (and it's wealth) comes at considerable cost to others. License fees ratchet up every so often and what now. If other industries/companies can do away with a cost, they will. And that means eventually dumping Microsoft. Especially when this expensive commodity can be replaced for free. With Chromebook, this is creeping in. 15 years ago, this was unfathomable and crap like Lindows was a joke from a 3rd tier company no one heard of. Because Ballmer was right - it's about the applications, stupid. Developers and all that.
Ironically, that's exactly what MS now lacks in the mobile arena. They lost at their own game. They're suffering the same problem Linux had on the desktop - marketshare. With the Microsoft Zune, they skated to where the puck was, not where it was going. Taste that, friends, because that's just sweet. Now that OS agnostic world is on the horizon, Windows becoming a niche among professionals and gamers but no longer synonymous with computing, or even desktop computing.
Who knew? The Year of Linux on the Desktop will probably come when the OS couldn't matter one bit anymore and for that very reason.
they haven't come up with anything good on their own for a long time
I'd say that they at least deserved credit for Kinect. While it was obviously released in response to the unforeseen success of the original Wii and its novel control methods, the fact remains that it went beyond being just a "me too" product and was genuinely innovative in its own right.
That said, it was arguably the exception rather than the rule, probably because it came from the XBox division and wasn't a threat to the entrenched interests and politics of the main Windows and Office divisions that have crushed so much potential innovation within MS.
"Slashdot - News and Chat Sites Deviant". (Click "homepage" link above for details).
The moment someone uses John Dvorak to support an argument, I stop taking them seriously.
Well, they bought the Kinect ... so if the extent of Microsoft's 'innovation' is technology they buy, then yes. But in terms of a single really ground breaking piece of technology Microsoft developed in-house, it's much harder to think of recent examples.
Yes, the Kinect is a pretty good system, but let's not lose sight of the fact that it was purchased technology. All this means is Microsoft is still rich enough and occasionally observant enough to pick up technology other people have created.
In terms of their own creation of products from scratch -- I don't think their recent track record is all that impressive. Sure, they've got bazillions of dollars and can keep buying stuff, but as an innovative technology company goes, they've proven a little stagnant recently. Their tablets, phones, Windows 8 ... none of those are doing anywhere near as well as a company the size of Microsoft would expect, and Microsoft s bordering on being a bit player in the mobile market.
Lost at C:>. Found at C.
Well, there will be people who say the iPod was nothing special (I'm not one of them) because of mp3 players existing before then. But both of you are forgetting about the iPad - first real successful tablet in that form.
But I think the problem is that technology levels make some items inevitable and we're really waiting for technology to advance for the next big idea to manifest. Not so much the next big idea itself. Unless they can replace our eyeballs with an attractive replacement that also acts as a phone, camera, and HUD... convergence technology is pretty limited right now to what we have - a phone, tape recorder, gps, browser, camera, etc in our pockets.
Everything from there will be an evolution until that eyeball form factor is feasible.
Otherwise it's like waiting for the next big idea on the desktop in 1985 (when the 386 was released). Milestones (integrated soundcard, etc) came and went but the next big revolutionary idea never came. Evolution came. We went far since then. Looking back, home computing seems like a revolution. But it's one revolution, lots of little evolutions.
The next big idea (www and internet for the common man) did, but it was not strictly a desktop thing imo. But again, www is the revolution. Lots of evolutions since then to make the web page of 1993 look antique.
Nope.
The problem is that there's people running Microsoft who still think the way to sell more Windows 8 isn't to listen to customers and fix Windows 8's problems, it's to make (eg.) the next release of Direct3D Windows-8-only thereby "forcing" people to upgrade (LOL!)
No sig today...
Sorry - but that is not 100% correct. Being a former MS employee, they were working in their research division on Project Natal in the 90's, which became the backbone of the Kinect. I saw it at many research fairs at the Redmond campus.
Imagine if the Apple Mac department had blocked the iPhone and/or iPad because it could eat into the Mac market share (which I'm sure it did). I guess Apple would by far not be as profitable as it is now.
The iPhone is indeed killing iPod sales. The iPad is destroying all growth in Mac sales. And Apple is quite happy with that. Steve Jobs himself said (and I'm quite sure he quoted someone else) that "if you don't cannibalise your products, someone else will".
Splitting Microsoft along business/consumer lines:
MicrosoftBusiness:
*WindowsDesktop (Profitable)
*WindowsServer (Profitable)
*WindowsServerApplications (Profitable)
*WindowsCloud (Profitable)
*WindowsMouseAndKeyboardWhatnots (Profitable)
MicorsoftConsumer:
*Bing (Lossy)
*Xbox (BreakEvens)
*WindowsPhone (Lossy)
*WindowsTablets (Lossy)
I predict that MicrosoftConsumer would quickly cease trading in the wake of this split, leaving only Microsoft standing.
Bullshit because all that would do is make one company with bad management into a bunch of companies with bad management, it wouldn't solve a damned thing. Frankly the whole TFA is full of shit, if it were true why not break up Apple? Why not Google? After all they too have products that don't really go together as far as an overarching strategy yet they are doing just fine aren't they?
No what has caused MSFT to go off the rails and what any CEO with a brain, hell what ANY person with a brain should do in that situation is simple....LISTEN TO YOUR CUSTOMERS! How so many large companies can totally screw up in something so damned simple is beyond me, but that is exactly what happened with MSFT. Ballmer had his head so far up Wall Street and Cupertino's collective asses all he could do was go "ZOMFG apps apps apps MOBILE!" while he not ONCE, not a single time, actually bothered to sit down with the grunts in the field and go "What does the folks want to buy?"
You look at the moves MSFT has made in the past few years and one thing becomes crystal clear...every new feature, and starting with Win 8 every new OS, its all been designed to give MICROSOFT more advantages, not a damned thing for the user. Its like the entire system is designed by Dilbert's PHB! I mean how hard is it to picture Ballmer and his lackeys sitting at the big table going "Well what do we need...well selling a new OS every 5 years is great for the user and the ecosystem but we have to make those quarterly earnings projections, so we'll just ship them out the door ASAP. What do you mean they'll be half baked? That's good, that means it'll screw up quicker and they'll have to buy new hardware which means new license sales! Okay wall street is jerking off to ARM so we'll make WOA, of course i know all the software won't run, that's the point dumbass, we'll have the appstore market all to ourselves! Oh yeah they say tablets and smartphones are hot so we'll make Windows not run worth a shit without touch, that will make people shell out Apple prices for these tablets, oh who gives a fuck if most PCs won't run it, did you see the Financial Times? Its all about corporate control and apps so the fact that most PCs and software won't run well just means we corner the market again!"
So it does NOT need breaking up, what it needs is NOT a CEO but instead a LEADER, one that will get his head out of the Financial Times and stop coming up with more ideas to make the products better for MSFT and instead be making damned sure they know what the CUSTOMERS want, because all they did under Ballmer was toss away good will and burn bridges to try to out Apple Apple while ignoring that if their customers would have wanted an Apple they'd have bought one!
ACs don't waste your time replying, your posts are never seen by me.
No what has caused MSFT to go off the rails and what any CEO with a brain, hell what ANY person with a brain should do in that situation is simple....LISTEN TO YOUR CUSTOMERS!
Clarification: Listen to your customers, and figure out how to make them _want_ to give you their money and come back for more, instead of figuring out how to take their money away from them.
:) Microsoft was. So _listening_ to people has its dangers as well.
When you talk about out-Apple Apple, I have the impression that Surface is what all the fanboys asked Apple to do with MacOS X, and what they predicted Apple do to, and Apple just wasn't stupid enough to do it
Yup. It seems to me that Microsoft still has the idea lodged in their collective heads that they're in a position to say, "Fuck you if you don't like our product. You have to buy it anyway." Unfortunately, they are still kind of in that position, but their position is increasingly tenuous.
In terms of their own creation of products from scratch
That's a pretty high bar you've set. It seems like for you, to qualify as an innovation you have to single handedly build every component within the device at the company internally from first principles (aka "scratch"). The Kinect was as much an innovation as the iPod... it was an evolution of technology, built on existing technology but packaged in a way that brought widespread consumer adoption.
Can you point to any device from any company that is built fully in-house from scratch? Just looking at the companies listed by TFA as innovative, I can't think of one. Amazon's Kindle Fire? Built on top of Android and chasing the sucess of the iPad. Google's Android? Bought. Google's self driving car? They bought the talent from the DARPA challenges. Google Glass? Under the same principles you will not call the Kinect innovative Google Glass is not innovative - built on the technology others have created. What about the original iPad? Every piece of functioning technolgoy within was purchased from another company. So maybe the OS is all in-house.... but iOS is based on OSX which is based on BSD, so I guess they call short of your bar as well.
Sorry, ALL technology today is built off the technology others have created. The Kinect used Primesense's sensor to create an innovative gaming device the same way the iPad used someone elses's touch screen technology to create an innovative tablet. Give credit where it is due.
Ballmer was a successful CEO. At wringing out profits. Which is what Wall Street wanted. But doesn't drive the company forwards.
From here:
http://stratechery.com/2013/if-steve-ballmer-ran-apple/
There are two types of people in the world: Those who crave closure
The notion that economic success is somehow punished in our society is a classic self-serving martyr complex. We merely place limits (or at least we should) on how much success one is entitled to enjoy at the expense of others.
http://alternatives.rzero.com/
Why did it take them 15-20 years to get it out of the research labs?!!?
There are two types of people in the world: Those who crave closure
You could also argue that Ballmer brought a failure culture into MSFT too.
http://www.slate.com/blogs/future_tense/2013/08/23/stack_ranking_steve_ballmer_s_employee_evaluation_system_and_microsoft_s.html
'Surround yourself with idiots so you don't get fired' doesn't seem like a very good way to have a successful company.
There are two types of people in the world: Those who crave closure
I think that's on the back of their business cards, in very small print.
There are two types of people in the world: Those who crave closure
The problem is that there's people running Microsoft who still think the way to sell more Windows 8 isn't to listen to customers and fix Windows 8's problems,
There's a reason for this.
The root of the problem is that Microsoft believes in a zero-sum game, namely that:
"Empowering the customer results in Microsoft losing power."
This is a very common attitude in the publishing industry. They would rather lose their customers than lose their grip on power.
This is the driving philosophy that explains so much of what's going on in the industry:
* DRM -- Screw paying customers for the sake of retaining power over them
* Artificial limitations -- Hurt the customer so that products don't cannibalize each other
* Metro -- Badly inconvenience the customer for the sake of some dubious strategic marketing theories
* Locked-down RT bootloader -- Make the hardware less valuable simply to prevent a few Android installs
The list goes on and on.
Which just goes to show you, profit isn't everything. Profit is great and all, I know that but if that's all that you care about eventually you lose your way and lose the confidence of the very people who are giving you the money that makes you profitable.
Then again, that can be applied to so many other companies other than Microsoft. GM, Verizon, Comcast, AT&T, Time Warner, several of the large banks, etc.
I've always said that this fucked up need for more and more quarterly profits will lead to the downfall of companies. All Wall Street cares about is profit, profit, and more profit. The people on Wall Street do not give a damn about the future well being of the companies that they fuck over, when they're done fucking them over and all that's left is a dead husk of a company they'll just go onto the next company to fuck over.
This need for more and more quarterly profits needs to end and we need to get back to a economically sound long term investment strategy.
OK, let me clarify ... because clearly you feel the need to be pedantic.
What unique combination of technologies to produce something novel and groundbreaking has MS developed over the last 10 years?
They couldn't make their own motion controller work, so they bought one and integrated that with XBox, but they didn't build it. The Zune was a "me too" product which apparently 'squirted' and nobody bought. Their tablets and phones, just more "me too" and the market doesn't seem interested. Tabbed browsing, Firefox had that before MS. I'm told at one point they made decent keyboards and mice -- but not what I'd call innovative.
Other than that, I don't believe Microsoft has 'innovated' much of anything in years. And in a lot of cases, they've done a piss poor job of copying what other people created.
I'm not saying you need to create every single piece of technology from scratch without relying on anything before. I'm saying they haven't strung together existing bits of technology to create anything which is novel or innovative in a very long time.
If Microsoft is reduced to making copies of other products, resting on their laurels and collecting revenue from Office and OS upgrades and not making new and interesting things ... then Microsoft despite all of this money on R&D is either pissing it away, or the management are incapable of taking it to the product stage and have anybody buy it.
Sorry, but Microsoft has become everything they used to criticize IBM for being -- too large to adapt, too rigid in their thinking, and missing out on what it is people are looking for in some of these newer technologies.
By rights with their resources and spending on R&D Microsoft should be putting out reams of cool stuff. Instead they've given us tablets and phones nobody wants, Windows 8 and not a whole lot else.
Microsoft may not be in trouble now, but long-term if they're not capable of making anything new and interesting ... they could be really screwed, because gone are the days where they could just trot out an OS every few years and an update to Office and make shit tons of money. You only have to look at their market share in tablets and phones to realize that.
Lost at C:>. Found at C.
Kinect was a complete technology even before they bought it
No it was not. Primesense had a sensor and some algorithms in a consumer and developer unfriendly package. The sensor wasn't a new idea -- structured light has been around for decades The algorithms weren't a new -- the CV algorithms to process the data have been around for decades. Microsoft took these ideas and went the last mile of making it a reality for consumers and developers, which obviously is not easy since no one had done it before.
Microsoft buying the Primesense sensor and using it in their product is equivalent to Apple buying a multi-touch screen and using it in the iPhone. But no one is saying the iPhone wasn't an innovation.
Again, if you're arguing that very little actual innovation takes place, you will see a great deal of agreement.
No, I'm arguing that innovation is almost never the sudden development of a new and radical technology from scratch, but almost always the application or combination of existing technology in new ways. Even look at the Internet, the greatest innovation of our generation, It didn't happen over night, built by one company or entity from scratch; it was an evolution of technologies over 20 or so years.
[T]he Kinect is not innovative, it's just better than other similar things which came before
Really? Something comes out which is better than everything before it and that's not an innovation? What exactly is *your* idea of an innovation. You've told us plenty about what isn't an innovation, but I don't really see any indication from you about what *is* an innovation.
Splitting Microsoft along business/consumer lines:
MicrosoftBusiness: *WindowsDesktop (Profitable)
Profits for Windows Desktop are declining.
*WindowsServer (Profitable) *WindowsServerApplications (Profitable) *WindowsCloud (Profitable) *WindowsMouseAndKeyboardWhatnots (Profitable)
MicorsoftConsumer: *Bing (Lossy) *Xbox (BreakEvens) *WindowsPhone (Lossy) *WindowsTablets (Lossy)
I predict that MicrosoftConsumer would quickly cease trading in the wake of this split, leaving only Microsoft standing.
You missed a new profit center - Android Racketeering.
Truth is like the sun. You can shut it out for a time, but it ain't goin' away. - Elvis Presley (source: imdb.com)
Howso? I don't see them in that position at all.
A person or business can set themselves up with the best of technology *without ever using a Microsoft product*...Can you name one significant area where that isn't true?
Sure, pre-Intel/Mac days for some database stuff a Windows machine is the only thing that made sense, but those days are long gone.
I think M$ is dead...watch closely and observe. This is what it looks like when a giant tech company fails.
Thank you Dave Raggett
And yet you are still locked into Microsoft because you felt the need to buy their Office suite.
This isn't a criticism, merely an observation - I am in the same boat. For me, this lock in is about being able to create and edit business documents, as well as downloading existing Office documents and templates from the web and not having to worry about whether they will work in Numbers or Open Office.
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