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Ballmer Admits Microsoft Whiffed Big-Time On Smartphones
Nerval's Lobster writes "During an executive Q&A at Microsoft's Financial Analyst Meeting on Sept. 19 (video), outgoing CEO Steve Ballmer admitted that Windows Phone had a minuscule share of the smartphone market, and expressed regret over his company's inability to capitalize on burgeoning interest in mobile devices. 'I regret that there was a period in the early 2000s when we were so focused on what we had to do around Windows that we weren't able to redeploy talent to the new device called the phone,' Ballmer told the audience of Wall Street analysts and investors. 'That is the thing I regret the most.' Back in 2007, Ballmer famously denigrated the first-generation iPhone as an expensive toy that would fail to gain significant market share. He was forced to eat his words after the iPhone became a bestseller and ignited a huge market for touch-screen smartphones. Google subsequently plunged into that smartphone arena with Android, which was soon adopted by a variety of hardware manufacturers. While the iPhone (running iOS) and Android carved up the new market between them, Microsoft tried to come up with its own mobile strategy. The result was Windows Phone, which (despite considerable investment on Microsoft's part) continues to lag well behind Android and iOS in the smartphone wars. Even as he focused on discussing Microsoft's financials, Ballmer also couldn't resist taking some swipes at Google, suggesting that the search-engine giant's practices are 'worthy of discussion with competition authority.' Given Microsoft's own rocky history with federal regulators, that's sort of like the pot calling the kettle black; but Ballmer's statement also hints at how, in this new tech environment, Microsoft is very much the underdog when it comes to some of the most popular and lucrative product segments."
MS whiffed when they put balless in charge of anything. He can stop blaming others...
Microsoft misread several markets really badly in the early 2000s and present. They had an attitude that they had "won" the entire PC and computing market for now and forever.
This caused them to grow really complacent and unimaginative and slow to react to market changes.
But possibly the worst factor was the narrow Microsoft-centric nerdism amongst a good share of the Microsoft faithful that kept eyes closed to very obvious shortcomings in Microsoft's various bungled attempts in the last decade.
Priest: "Universe from nothing, no laws of physics, sped up time"+ huge discrepancies. Creationism? No. Big Bang Theory
Absolutely.
Ballmer is the one that put the "Every department MUST rate their employees, and MUST fire the employees that have the lowest ratings. Every year." system in place, which is...insane. And stupid. In fact, it's so insane and stupid it's almost unbelievable. This guy is the CEO of one of the richest companies in the world? And he put a system in place to ENSURE that EVERYONE spends most of their workday sabotaging the other employees in order to save their own job?
Ballmer only got/kept the job because he's buddies with Gates, and buddies with the Board. That's how it works in EVERY corporation these days, but generally the CEO is somebody that, at worst, is harmless. Ballmer was actively incompetent, and his idiocy damaged the company. He should be sued by the shareholders.
'I regret that there was a period in the early 2000s when we were so focused on what we had to do around Windows that we weren't able to redeploy talent to the new device called the phone."
He referring to the early 2000s when there wasn't a new version of Windows for 6 years?
what do you expect? ballmer got his MBA at harvard at the same time the current GE CEO was there. and that's where the ranking system was born, at GE
...that's what is keeping me from buying into their [eco]system. The cash Microsoft have collected from me over the years should be enough, I believe. The name Microsoft just makes me yawn.
Anyone feel the same?
Microsoft simply failed to recognize that people use phones differently than they use desktop computers. MS started by trying to make a desktop Windows run on a smartphone. That cratered because a UI that works on a desktop is awkward and hard to use on the small screen of a phone. Lack of touchscreen support didn't help one bit. And even after they got that concept, they've continued to try to force people into the Windows ecosystem rather than attempting to fit their phones into the existing ecosystems. People don't care much about Office on their phones beyond e-mail and for personal use Exchange integration is almost irrelevant because most people's e-mail accounts aren't Exchange, they're generic POP3/IMAP4 accounts or GMail. Now Microsoft is left with a minority position and an unwillingness to play in anyone else's sandbox, not to mention having actively torqued off the owner of one of the two biggest sandboxes out there (Google). Is it any wonder they're having a hard time gaining traction?
What happens if all the members of that team are above average in terms of company wide productivity? Or you have a weak team where all of them are below average? You lose one of the better employees and one of the worst employees. But, it's not even a break even situation as stress and burn out will affect the stronger team more than the weak team.
Normally, I'd assume that you're trolling, but there's a lot of morons on here that view humans as replaceable machinery to be used and discarded on a whim because having a job is a "privilege" and not a right. But, without a decent job, you can't afford an apartment, food or anything beyond the most meager of necessities, because ZOMG we can't actually set up a system that will care for people that aren't already hugely wealthy.
The right wing's complete and utter incompetence on economic matters is threatening to render the US back to the 3rd world.
CE was barely a good PDA OS, much less a phone OS. At that time, the mistake Microsoft made was putting a PC UI on PDAs. They corrected that w/ Windows Phone 8, albeit late to market, but the real mistake they did there was going overboard and putting that same UI on the PC version of Windows 8.
Otherwise, my Lumia has a fine interface, and is actually the best handheld for typing that I've had.
This is a cop out statement if I ever heard of one.
Just Wiki http://en.wikipedia.org/wiki/Windows_Mobile#Windows_Mobile_2003
And you will see that at one point Microsoft had 41% of the "smartphone" market at the time. Their only major competitor was RIM.
I mean Microsoft defined "smartphone", their phones allowed you to run apps, games and multimedia and was the natural evolution of Windows Pocket PC which was also a major player in the early 2000's.
To say that Microsoft did not invest talent into mobile devices and phones in the early 2000 is pure, unadulterated bullshit.
Yes, iPhone was a disruptor in the market, but Ballmer simply turned over and gave up on Windows Mobile products. It was 100% his own incompetence as a CEO to maintain a product that had, at one time, a major segment of the market.
Its like Ballmer is trying to make it sound like he just didn't see the potential for Microsoft to capitalize on phones and was too focused on desktops, and not the bigger reality that Ballmer is just incompetent as a CEO for letting a product that once defined the market at the time slip into irrelevance.
Ballmer the Blamer, this is going to define him as he wraps up his days at Microsoft.
I haven't thought of anything clever to put here, but then again most of you haven't either.
Absolutely.
Ballmer is the one that put the "Every department MUST rate their employees, and MUST fire the employees that have the lowest ratings. Every year." system in place, which is...insane. And stupid. In fact, it's so insane and stupid it's almost unbelievable. This guy is the CEO of one of the richest companies in the world? And he put a system in place to ENSURE that EVERYONE spends most of their workday sabotaging the other employees in order to save their own job?
(as an ex-Microsoftie) the negative impact of the review system wasn't just about saving yourself from landing in the bottom 10% and being managed out, it was all through the scale also for the top performers. There was a forced distribution curve, across often quite small and visible groups of employees. Only so many % in a certain pay level band and role type could get the best rating, only so many % could get the next level etc. This had significant impact on your yearly bonus, and on your career opportunities.
Problem was: 1) You often knew who your internal competition for getting a good rating was (and you were often asked to provide 360* feedback on them...). 2) The people who decided on your final rating (moving people up and down to fit the curve) was usually skip-level execs that had no direct visibility on your performance unless you played politics - which this obviously became a very strong incentive to do. Getting a good rating was about focusing on internal success factors and self-marketing (making sure you were perceived better than your internal competition) much more than external (customer/market) focus, performance and results. I still believe the senior leadership team grossly underestimate the toxic effect this have on the org, and how much focus and resources are wasted on these internally driven motivations.
This was one of the main reasons for me leaving. I'm now very glad to be working somewhere were we can succeed together. It makes such a difference. And for friends still there, I really hope the new CEO can put an end to this madness.
Everyone keeps coming up with suggestions to put them back on top. Everyone just shut up. I like them exactly where they are at. They still provide some competition in the marketplace, which is good. They did, however, get knocked down a few pegs...which is really where we want them at, right? I for one, don't want MS to have a killer phone/tablet. Keep them around, but in the exact spot they are in now: NOT ON TOP.
Doctors destroy health, lawyers destroy justice, universities destroy knowledge, religion destroys spirituality
Which party is it that's in favor of cutting food stamps to give tax breaks to the rich?
Ballmer's rich, he may be a Democrat, but he has a vested interest in seeing that conservative policies are followed. As those policies are how he was able to accumulate so much wealth without contributing anything of value. Under a more liberal economic policy and regulatory set up, MS would never have been allowed to grow as big as it has, without earning that size. They would have been broken up in the late '90s when they used their size to stifle innovation across the industry.
Bottom line here is that it's the conservatives that are always trumpeting this sort of maladaptive business practice so that they can easily scare voters.
Let's not forget the monkey dance
Really, the stupidest thing the man ever did was laugh out loud in public at the iphone. That pretty much says it all. He doesn't understand technology. That would seem to be a nice quality to have for his role. The entire strategy there is wait for someone else to do something nice, get some traction, use your own market share to muscle your way into the market, and then start pushing everybody else out. That worked for Gates, but Ballmer was too slow to react. Constantly. Could not see it coming, and then laughs at the biggest shift in technology in the last decade. Dweeb.
I'll try to be neutral, but I think there's a more correct version of the left-wing economics in the US (what you've described is a more "theological" version of it, so to speak).
It's that below a certain amount of wealth, your ability to create wealth is arbitrarily curtailed, while above a certain wealth, your ability to create wealth has diminishing returns. So we have an inefficient allocation of wealth that is self-reinforcing. The rising tide will benefit all on average, but especially the poor, if we work to counteract the inequalities.
Basically, personal wealth is used as both an incentive to create more societal wealth, and a means to create more personal wealth. Ideally the incentive and the means aspects should be decoupled so you don't get locked in by circumstance.
It makes sense if that market is at least partially responsible for eroding one of their key markets. While iOS and Android are not completely responsible for the substantial drop in PC sales, the rise of the smart device has played a substantial role. If Microsoft cannot find a way to insert itself into this market, then its long term outlook on the consumer end of the business is cast in substantial doubt.
It's clear by the introduction of a (heavily crippled) Office variant for Android and iOS that they are ultimately willing to surrender to the temptation to once again put a version of Office on a platform it does not control. It did so with Mac, but Macs have always been bit players so I don't think that represents the kind of shift MS is prepared to pursue now. It's the first sign that the company is prepared to cede market dominance to Android and iOS, and get its piece of the pie by releasing some variant of Office, which is the company's backbone.
It's still just dipping its toe in the water, but I suspect over the next couple of years you're going to see major shifts in how MS views its consumer offerings. From what I can tell, there is a growing ill sentiment among shareholders to Microsoft just endlessly throwing money at consumer markets and not getting any kind of return. Even the XBox, while it has been in the black on a quarterly basis for the last few quarters, still is years away from paying back the vast investment in capital and R&D that Redmond threw at it.
The world's burning. Moped Jesus spotted on I50. Details at 11.
> what do you expect? ballmer got his MBA at harvard at the same time the current GE CEO was there. and that's where the ranking system was born, at GE
What you are referring to is the Jack Welch approach. Its a strategy that was developed to eliminate excess employees. It works. Its biggest pro is that once implemented it shows the main result of excess employee elimination in a short period of time. It has two major flaws one that appears in the short term and one that appears in the long term if you continue to the use the strategy. The major flaw in the short term is that you can have a department full of amazing employees but you're forced to eliminate someone, this is probably something most companies are willing to accept when deploying the strategy. The other major flaw which Microsoft is now seeing is what happens when you keep this strategy around for too long. It creates a hostile environment where no one wants to help each other. No department wants to see the other succeed nor do they want to see their co-workers succeed because you're in constant competition for your own job.
Its a strategy that can work and it did for General Electric, but Jack Welch had other strategies he mixed with this strategy that made it work with GE.
I think a huge part of their problem is with branding. Apple and Android are seen as cool and sexy whereas Microsoft is perceived as uncool and business-oriented. XBox is the only exception I can think of. The exact same hardware, delivered by a cool, edgy start-up, could have done much better.
To be fair, I haven't even touched a Windows phone, but my perception is that it's going to try to lock you into MS offerings (Apple does this too) and it will try and keep you from doing cool things if that doesn't somehow make money for MS.
Is this really true, is this just my perception, or is this the general perception? Bear in mind that first-hand experience (reality) has nothing to do with the perception of those that haven't touched it.
Competition Good, Monopoly Bad.
The world basically hates Microsoft. There are tons of reasons for it, but when it comes to new computing devices (that is to say, non-PCs) they do NOT want Microsoft running it because of their horrible experience with Microsoft stuff. It's a discussion which would last until the end of time as to what and who is to blame if the people's experiences were caused by others people and that it's not Microsoft's fault or even if it's just perception which is no longer valid. It doesn't matter. It's like the stock market -- it is what people believe it is and that's the end of the story.
So when given a choice, people choose "not Microsoft." Not so much that they choose Android or Apple of whatever. It's that they voted "not Microsoft." And I think that says more than enough in a completely clear and understandable way. However, has Microsoft paid any mind to this problem? Have they worked to reverse those problems at all? Once again, opinions will vary, but I'm saying NO. No visible effort at attempting to win the hearts and minds of the users. They already have dominance and all their effort was, in my opinion, coasting and doing just enough to maintain and take advantage of their dominance.
To this day, one example of Microsoft hubris sticks in my mind the strongest and I just can't get beyond it. Microsoft one day changed their volume licenses of Windows to "upgrade only." This enabled them to sell two copies of Windows for each computer sold. A business who wanted to save money on licensing used to buy enough seats for their users and that was it. But Microsoft just changed the license terms and said "you have to have Windows in order to qualify to use your volume licensed images." When I learned about that, I was just furious. No longer can we save money by telling Dell, "no OS... we'll take care of it." Sell it twice and use it once. Come on!!!
Not only did they lose the good will of the end users who hate Microsoft for speed, usability and stability reasons, they started taking advantage of the businesses who are their primary source of money.
So when people have a choice, choosing "not Microsoft" seems like a rational choice.
I used to work for Microsoft from the mid-90's to the mid-2000's and once again Ballmer engages in the worst kind of revisionist history. The problem wasn't that he didn't "redeploy talent". The problem is that the vision for phone and tablets was WRONG. He can't admit that because that would be admitting that the fault lies at the top, specifically with Gates and himself. A lot of CEO are guilty of that. In earning calls they'll blame their problems on "execution", implying that their strategy is flawless but the peons just can't do anything right.
Things used to turn out OK at Microsoft because there was a culture that encouraged debate. You could fight for your ideas regardless of rank. It was OK to disagree with your boss, your VP, or even your CEO. Eventually, the ideas that prevailed were mostly right.
But all that went away during the Ballmer years. The key to success at MS nowadays is to be a yes-man. Starting in 2001-2002 I started noticing that when somebody would disagree with a superior in a meeting the atmosphere would get very awkward. People would stare at their shoes. The whole place felt like soviet Russia. Reports would be embellished at every hierarchical levels (and they multiplied; I was 6 steps away from Gates when I started, 12 steps from Ballmer when i left).
It's like a soviet factory that has a quota to produce 5000 tractors a year. The line workers would tell their manager that with the parts shortages, they didn't think they could build more than 3000. The manager would tell the plant director that they wouldn't quite hit the quota; maybe they'd build 4500. The director would tell comrade Komissar that he's think they would exceed the quota by 500. The Komissar would report to the party chairman that they'd handily beat the quota and build 6000 tractors. At the end of the year 2000 tractors were built and nobody knew how their predictions could be so off.
Regrettably, you're correct. There really isn't a left-wing in this country when it comes to economics and an exceptionally few principled libertarians are the only real right-wing. Sure, the tea-party has made right-wing rhetoric more popular, but with the exception of those few libertarians most in the GOP are all for the corrupt corporatist 'partnership' between government and business that was the great economic project of neo-conservative "compassionate conservatism". Sure, the rule of the democratic party since 2008 which managed to pass a health-care reform might make one think the left had risen again. But when one actually looks at the bill he realizes, contrary to establishment Republican rhetoric, the ACA is another business/government partnership which was itself created by Republican think-tanks. There hasn't been a real economic left in this country since before Clinton (incidentally, the notion that Clinton was himself on the left, popular during the Bush years among Republicans, is laughable but indicative; they regard a president as leftist who supported welfare reform and further deregulated the credit market).
What we have in the politics of this country is a broad consensus. Republicans get elected campaigning for smaller government, but their campaign is financed by a corporation which expects to receive a return on its investment. Democrats get electing campaigning for tighter regulation on business, but their campaign is financed by businesses which hope for regulations that will benefit them and harm competition. Both campaign on social issues which people care deeply about--and rightly so--but neither means to do anything significant about them unless forced. Both exploit divisions in Congress they create to ensure angry voters will come to the polls.
The center is the problem. I'm pretty far on the right, having great sympathy with the agrarians and distributists and reckoning modern industrial capitalism as destructive toward traditional values, but I'd sooner have more real socialists elected by the Democratic party with this lot. Compromise is possible between two people who are principled. The socialist may wish to raise the minimum wage and reduce working hours to increase employment and justice toward the workers. I might agree, if he can show his proposal doesn't lead to excess inflation, since such a proposal would be good for strengthening family life. I would ask in return that we increase tax credits for homeowners (single-homeowners only, of course, and for homes valued under a certain threshold) since this would at once decrease taxes and increase the independence and stability of the family. The socialist might agree, for in spite of shrinking the tax base slightly, such a proposal would help move us toward a more progressive tax policy--something which was once an ideal for the left in this country but has eroded for many reasons. Yet the socialist and I will never agree on the importance of private property. That is alright. We won't agree on everything, but we can find common ground precisely because we are both principled. Thus I wish there were a real left and a real right in this country, that we might find compromise. But the centrist D's and R's can never compromise and never agree, precisely because they stand for nothing other than victory for their tribe and the corporate sponsorship that comes with it.
To be fair, it worked at Microsoft for a long time as well. This system works well as long as there is certain upward mobility for all involved, specifically the stock price. When the Microsoft stock was doubling every few years, this reward system really did not ruffle much feathers as everyone still took part in the stock price rising. Sure, you may have not gotten as much stock as the "top performer", but you got enough that you really didn't think about it much.
This all changed once Microsoft stock started stagnating. This took all these safety nets away. Now, your performance review/rating took even GREATER effect as you were not getting rewarded for "free" with stock price rising. Now, you had to fight hand and tooth against your co-workers to make sure that you got yours.
THIS is why MS started tanking. The infighting that happened because rewards were true zero-sum game. If you win, someone else loses. It took all motivation to cooperate and build something together.
http://allthingsd.com/20130824/beyond-monkey-boy-its-a-steve-ballmer-quote-tacular/
On iPods (2006): "No, I do not [have an iPod]. Nor do my children. My children - in many dimensions theyâ(TM)re as poorly behaved as many other children, but at least on this dimension I've got my kids brainwashed - you don't use Google and you don't use an iPod"
On Android (2011): "You don't need to be a computer scientist to use a Windows Phone. I think you do to use an Android phone ... It is hard for me to be excited about the Android phones"
On the iPhone (2007): "There's no chance that the iPhone is going to get any significant market share. No chance. It's a $500 subsidized item"
On Linux (2001): "Linux is a cancer that attaches itself in an intellectual property sense to everything it touches"
On the iPhone once again (2007): "$500, fully subsidized, with a plan! That is the most expensive phone in the world and it doesn't appeal to business customers, because it doesn't have a keyboard, which makes it not a very good email machine"
And, a vid, for all to enjoy ---
http://www.youtube.com/watch?v=eywi0h_Y5_U
Muchas Gracias, Señor Edward Snowden !