Microsoft biz heads slash makes Ballmer look like dead STEVE JOBS The Microsoft re-organisation unveiled by chief executive Steve Ballmer yesterday is the biggest - and riskiest - in his company's history. Not since Microsoft shifted from a PC software company to a PC-and-server-software-and-internet company have the top brass shifted the reporting lines so thoroughly. Back then, the change …
"So will that let them sell piles of phones and tablets and have a big pile of cash too?"
Err, no. But changing the reporting lines means there's nothing for the investors and analysts to compare performance with from previous years. That buys a failing CEO two years of uncertainty about corporate performance, in which he can gold plate his pension and retire. If he wants to stay, it buys time for a turnround (yeah, sure), and pillaging the captive customers with big prices rises can be presented as "growth" to an ill informed world.
That might seem a little cynical, but its roughly what my employers did to disguise a string of value destroying acquisitions.
"That might seem a little cynical"
No not cynical enough. I've heard whenever the buck-stop algorithm gets close to the top, it triggers the Prism diversion flow control step, delivers the current executives identity to the NSA and then to the Pentagon and the executive the cursor is currently on is hit by a drone strike. The bald bloke escapes unscathed.
@Ledswinger
I have a smelling there is a lot of truth in what you wrote. One thing is the outside/fiscal performance and statistics - other is the inside metrics, that are of course much more detailed. And as in case of the fiscal performance the ability to compare numbers is crucial.
I am not sure what is happening in that company - you cannot really see on Ballmer's face that he's worried etc. You cannot say that he's worried or ambushed by judging his actions, because he is known to be a rather unpredictable person/chair thrower.
Personally I must say, that during Gates' years it was like "ok, windows tax to be paid - but it is usable in a way". Now it's "wtf windows 8?! What am I suppose to do with that?!"...
Ballance sheet does not give a crap about the reporting lines. That is why it is there. If they do not deliver in one year, and even earlier, it will be known and they will be punished.
And there is no more captive audience anywhere. It is really easy to switch from one platform to another. I used to be Windows person 100%, now I use windows only at work and that is because the company will not allow BYOD yet, but it will, soon.
"some people are going to miss Eadon"
Seems unlikely.
There's no point having a point that makes sense, if the way you present it means most of your audience have already stopped listening.
He did have a point sometimes, but it was usually lost in the noise.
because Buffalo Bill's insisting on transferring all his money to Africa on his death, in some futile attempt to save likkle orphans, by giving them money (so they can buy guns and live to kill american citizens.)
As a result the American government's hiring in incompetent and compliant senior staff, to wind the company down, in such a way that customers remain with US companies. Then, when Gates dies, Microsoft shares will be worthless, and the whole transfer pricing from the US to the dark continent, will not be large.
Or at the very least, I can see no other explanation for Steve Ballmer.
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not->
I can't believe enterprise agreements like these won't keep them alive for a while yet:
"In what way was the Weinstock disastrous.?"
Massive market share? Yes, at one time. Massive diversified revenues too, at one time. And massive workforce. In the UK alone, they could have taken on all the relevant engineering graduates.
Many sectors and more money than the banks? Yes, at one time. But why?
Post Arnie crash? Yes. But the seeds were sown long before.
The main piece of the picture you're missing is the reasons for the above. One major reason for the eventual crash was a widespread HQ failure to invest adequately, in people, processes, technology, etc. Maybe even a failure of HQ to invest in a bit of market research and blue sky thinking ? (yukky expression, but...)
The ultra short version is that people like Weinstock led an "investment strike" in British industry in the 60s and beyond. Read on for a little more detail about GEC in particular.
Lack of investment by GEC HQ meant that there was cash sitting in the bank. Cash in the bank meant that shareholders got a nice dividend. Whenever the lack of investment meant lack of R+D was becoming critical, HQ could get the R+D on the market by buying yet another company or setting up yet another joint venture, and all would be OK again, wouldn't it?
Well no, not really, not in the longer term.
HQ's lack of investment became particularly visible outside the company at the time of the dot con boom. GEC hadn't really kept up with the rest of the carrier class market (cosy relationship with GPO/PO Telecom/BT being part of that, perhaps?). Anyway, having failed to develop competitive products of their own to compete in this massive new market, they had to buy technology in at at short notice and at the peak of the market. Two companies they bought were Fore and Raltec. Massively overpriced, did GEC no good at all, and highlighted to all concerned that GEC HQ had lost the plot.
Elsewhere, a fair amount of GEC had done nicely out of "cost plus" military contracts. "Cost plus" allegedly went away. Whoops.
Round about the same time as Fore and Raltec, GEC's main telecom customer, BT, was doing the procurement for "21CN", which was going to revolutionise BT's core network and their voice and data services. GEC ended up not being on the shortlisted suppliers. (BT later abandoned their 21CN voice rollout too).
Somewhere along the way, HQ's lack of investment combined with the complex and global nature of the corporate acquisitions (many of which hadn't been properly integrated organisationally, in part because it would have required investment) meant HQ didn't actually have a proper view of what was going on in the company financially, and in a rapidly changing company in many rapidly changing markets in multiple geographies, this was a bit of a snag. You won't normally hear me defend beancounters, but there is sometimes a role for bookkeepers and beancounters.
That's the short(ish) version. There's a book or two to be written, somewhere, if it's not already been done.
Any parallels with any Redmond-based technology companies currently not looking to be as blue chip as they used too? That's a different story.
Agree that RT will stay and I think it should stay.
RT devices that could be immediately administered with the same management and monitoring tools as laptops and win8 tablets could do well and would push sales of Microsoft services and servers.
The expensive full fat windows tablets are a cludge in comparison, useful for the odd legacy or specialist application (not unlike kinect for windows and, I'd hazard, destop touchscreens outside the point of sale type setups for which they are currently used).
I think that it's a failing of Microsoft that they've put so many unnecessary blocks in the way of SMEs and home users making the most of Microsoft software and services. This makes it easier to switch to competitors. E.g. Directaccess restricted to Win 8 Enterprise Software Assurance version.
I get that they "charge what the market will bear", but within every business and home there are submarkets, so ability to upgrade licenses and features easily without having to re-buy everything would encourage people to stick with Microsoft.
Have there been any changes to the management of Microsoft Licensing as part of this shakeup?
marketing now rests with a completely different operation
So the same department for marketing xbox and games is also going to be marketing windows and sql server?
We're either going to get really funky adverts for Visual Studio or very very dull marketing for the next Halo... which'll be bland and devoid of any colour or 3D whatsoever
"So, for example, the operating systems and engineering team under former Windows Phone chief Terry Myerson will work on Windows on mobile, PC and backend systems.
If you've been watching the munging-together of Windows for PCs and slabs and Windows for phones and have been either encouraged or horrified, expect more." -- When I read this, yesterday, on another website, I was horrified at the thought Microsoft has not learned from this lesson and is instead pushing them further down the line of horrifying mistakes. Where is the strategy for enterprise networks ? If they think that Windows Server + Metro Start screen is going to be accepted; they are completely deluded idiots. Somehow Microsoft are convinced that business types are immediately going to drop their Blackberries and iPhones and jump on the WinPhone wagon; it isn't very likely.
By saying that they are 'listening' customer feedback, then ignoring it and doing what they wanted to anyway. That's why Metro is still there, annoying users in Win8.1.
But Apple had Jobs and the RDF, Microsoft not only lacks that but they're generally seen as the uncool guy. Even IBM can be seen as the cool guy these days, but that's because they changed a lot in the last 15 years or so.
==--
> If they think that Windows Server + Metro Start screen is going to be accepted; they are completely deluded idiots
THEY aren't deluded idiots; HE is a deluded idiot. He's a run-of-the-mill marketing guy who woke up one morning as the CEO. While driving to work, he thought "gee, if people saw the same simpleminded interface on their PC as we put on our telephones, then when they go to buy a telephone, they'll want one of ours because it looks like the same blocky screen they use at work!"
Later that day, when he unveils his new "vision of the future", a soon-to-be fired manager asks, "What about the users? They'll hate it! They'll prefer the functional, pc-centric interface we've developed over 30 years."
"SCREW the users!" [bangs fist on conference table] "They are locked in to windows! They have to buy what we give them!" [throws chair]
Ballmer sees it as obvious that he should do what's best for MICROSOFT, not what's best for his customers. That beguiling reasoning is poisoned by greed. It blinds bad managers because it's logical. But the problem isn't that Ballmer wants what's good for the company instead of what's good for the customers.
► The problem is that he thinks there's a difference.
(If there really IS a difference, then managers need to be fired). This psychosis only affects big corporations. Every mom 'n pop bakery store knows that you only bake cookies which people want to eat. You don't put fish heads on them even if you also own the seafood restaurant next door.
-- faye kane ♀ girl brain
sexiest astrophysicist you'll ever see naked
Um, I actually think they've done their homework and looked at their reasonably credible experience with the cloud. In beginning, each MSFT product team was independently trying to be a cloud hero and doing crazy things (like forking the SQL Server code line). Getting to the cloud was a scorecard goal, which of course made doing the right thing much less important. It doesn't take a genius to know that all these services need to line up and sensibly share vision and execution with respect to privacy, security (NSA issues aside), billing, and marketing.
The real jeopardy will come from pushing customers into licensing schemes they don't want or don't understand. The nice thing about a subscription is that you can elect not to renew if something more attractive comes along. It's sometimes even cost effective to abandon an agreement in mid-term. The crap thing about subscriptions is that, for many things, we'll end up sending more money to Microsoft than ever before.
I don't like the article claiming demonic zeal. If anything, that resembles the criticisms of Steve Jobs, Walt Disney, or even Bill Gates. We vilify them while quietly following their lead.
Being engineering lead is a fundamentally good idea. Google and Apple have at least proven that, and they've also proven that engineers have marketable ideas. However, I fear the incumbent culture at Microsoft doesn't die so easily. That's not meant as a full on criticism of managers, many of whom were just getting on with their jobs within that culture. It's just that everyone from the top down is used to doing things in a certain way. The leaders are used to providing leadership in a certain way, while the lead are used to being, well, lead....
A bigger problem may well be the engineers themselves, many of whom probably don't realise they now need to grab their own jobs by the balls (perhaps to the extent of redefining themselves to survive), harder than they've ever had to before.
Of course, it could be one of 'those' changes. You know, one of those changes where there's a massive top down reorganisation, everyone is told how important it is to adapt to change, but where 99% of the staff mysteriously carry on doing exactly what they've doing already. Not everyone who preaches change has a pair of trousers to go with their mouth.
The thing to remember is that relevance trails revenues by a number of years ... in the tech industry it could even be a decade or more. IBM made megabucks for years after they became irrelevant. And that's pretty much the situation with Microsoft now. They may still have a stranglehold on the desktop, but they're no longer dictating the terms by which the entire industry operates.
Their death is not yet complete, though, and it's in everyone's best interest to see to it that Microsoft does receive the agonizing death it so richly deserves. There are still places where one can get sneered at for not exchanging documents in Microsoft formats, and believe it or not, there are still quite a few places where Exchange is believed to be a server program that actually works instead of failing all the time.
This is why I am happy to see Monkey Boy remaining in place as the CEO: he will continue to make major missteps. He clearly doesn't understand how to sell anything other than Windows and Office on Intel PC's. It's a shame for them, really -- they'd actually be in much better shape today if they had been broken up in the 1990's as originally intended. The divisions that produced something useful would be thriving today, and Windows would have been completely gone by now.
There is only one person I have ever encountered who would substitute something like "Microsoft FAIL" for actual English.
Eadon, my lover, my darling, is that you?
Are you back from the dead?
EADON SUCCEED!
(See, I even remember how to talk in your own unique language substitute!)
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Having contracted to Microsoft once and attended meetings in Redmond with a couple of product teams, I can say that changing to this structure can't be worse for their future success than their current one. In their current structure each separate division works hard to grab the resources and products of other divisions, or to block work by other divisions that they see as a threat to their own (look at how many products transferred from one division to another and then quietly died).
I'm sure that the new structure will bring it's own problems, but hopefully killing other divisions products will become a thing of the past.
was always a marketing manager first and foremost. What made him different to most marketing managers is that he understood that there's a thing called the customer experience, and how you can influence it with product design, packaging, sales, and presentation.
He was very, very good at this. He wasn't good at imagining completely new things. I don't think Apple ever did that. But he was very talented at refining and declunkifying technology someone else had already developed, and rounding the corners enough to make it feel like a desirable lifestyle accessory.
Most marketing types understand none of these things. At best they have some vague idea customers exist, and they can filter feedback through their own prejudices when - if - they report to HQ.
At worst they think if they're shouty enough and smarmy enough their sheer awesomeness can make customers suck up whatever crap they're selling.
Guess which description fits Ballmer.
For decades they've been running a promotion/release system (stack ranking) that entrenched people who's primary skill was at not getting fired. They need to balance that with some technical-managment turnover. Randomly firing 20% of the workforce would be a sensible start.
First, I see this having nothing whatsoever to do with Steve Jobs. Just saying.
Anyway, with that out of the way.. I see a few upsides and downsides. Will this work? I don't know.
Downsides:
* Possible lack of accountability, with just a head of the whole company and no divisional heads, projects could run out of control until such a time as Balmer personally notices them, sucking up time and resources for something that looks great to those working on it, but someone with outside perspective would see as a boondoggle.
* Excessive integration. This was one big problem they had with Windows 95 -- they had DLL hell from hell, with all these what should have been seperate components HEAVILY interdependent on each other. This caused them problems for years afterwards, even after WinME/2000 (when the Win95 line was discontinued in favor of the exclusive use of the Windows NT kernel based Windows line) they ended up with a mass of shell code and junk from this and it took them years to sort this mess out, and some of it still is not sorted out.
Upsides:
* COLLABORATION. I can't find any articles now that I tried to google it, but there've been plenty of historical articles about the hyper-competitiveness between Microsoft's divisions meaning that there's no collaberation -- people will KNOW there are two groups working on, say, the code for a menu, while due to being direct competitors they will be unable to share code or even techniques with each other. If they are taking radically different techniques, it may make sense to let both "finish" then either pick one or do a merge of the best of both -- but in general, it means duplicate effort for no reason, and two medicore to "OK" implementations when they could have gotten a better implementation done faster working together.
* Fewer meetings and overhead? Maybe.
*Ability to work on more projects? I listed "lack of accountability" as a disadvantage above, but if done right a nice "skunkworks" project may be more likely to be allowed to exist this way than with divisional heads as they had before.
Way back in the days when I worked for big business (remember ICI?), I learned that there were essentially only two types of business re-organisation. they were :-
1 Think, Plan, Communicate, Do (business goes on to prosper)
2 Panic, Juggle, Hope, Pray (the other thing)
Work out for yourselves what sort this is.
There is a case in recent history of a large high tech company that did an identically structured pivot attempt, and demonstrates one end game of such a "one company, one egg, one basket" strategy. I fear that this latest restructure puts Microsoft in grave danger of following the same example.
I used to work for DEC, where 1957-1982 there were many customer industry focused product lines. Things like Engineering Systems Group, Graphic Arts (that's Newspapers/Publishing), MDC (Manufacturing, Distribution & Control), Education, Commercial OEM, Technical OEM, Laboratory Data Products, etc. Some 130 of them, all pulling on the output of Central Engineering and Manufacturing, then applying their industry knowledge to ruthlessly deliver excellent value to customers in their target industries. Each product line paid for the sales presence they needed down to office level worldwide.
By 1982, there were some concerns in the Exec Committee that there was too much "who knows who" horse trading of capacity in manufacturing, so they elected to move to the same sort of model that Microsoft has just moved to. That of "one company, one strategy, one architecture" model, orientated around the strategic core asset - VAX (in the case of Microsoft this time around, it is Windows).
Aside from a financial bath in the very first quarter, where all the cracks in the processes that the Product line structure papered over got exposed, the company really mushroomed in sales performance.
Unfortunately, while specific members of the Exec Committee started citing a date when they'd outgrow IBM in size (who were 7x DECs size at the time), DEC missed virtually every strategic product transition at the low end. Management hyped up attacking the high end with very expensive ECL chips, while the labs in Hudson had $300 CMOS VAX chips ready to go. The very impressive Prism/Mica chips (30x VAX 11/780) taped out. But an exec committee that kept on flip-flopping between 32 bit and 64 bit edicts into engineering, then losing patience with the delays they'd caused - and killing the very projects that were the foundation of the next generation CPU technology. Key staff left.
It took a further 5 years to get Prism/Mica out - adding a couple of instructions, fixing on a 64 bit address space, and calling it Alpha AXP. By then, the rot had set in. That Silicon was the fastest CPU in the industry by nearly 2x for getting on 10 years, but the company above it faltered.
Ken Olsen (co-founder) got deposed, and Bob Palmer (new CEO) elected to move back to a different divisional model. So, he had PC, Storage, Components & Peripherals to play in the now horizontally integrated markets, and a few vertical industry ones (Consumer Process Manufacturing, Discrete Manufacturing & Defence, Healthcare - may have been one more). However, he also got the salesforce commissioned (something against the traditions of the company), and introduced a "two quarters missed financials and you're out" ethos in the divisional heads.
These final moves were Digitals death knell. You either had a lottery on who didn't get fired, handing extra responsibility to those leaders who happened to string together two quarters of good sales (largely by seasonal industry trends rather than own performance). Or the panic stricken ones would stuff their distribution channels with stock, hoping that would delay the inevitable for at least one more quarter.
Following a few Bob Palmer legal stunts with Intel and with Microsoft, the company was sold to Compaq, having accumulated losses in Bob Palmers 5 year reign equivalent to the total profits of the company in 35 years under Olsen.
Given the above, I think Microsoft need to be extra vigilant not to go the same way. The new organisation structure will give them every opportunity to follow in DECs footsteps if they are not extra careful. The key litmus test will come when the company needs to move from Windows to whatever platform needs to come next, and I currently see no seeds planted of what that will be.
The above post almost certainly brought to you by Ian Waring, who helped turn turn DECdirect UK into one of the finest and indeed most cost-effective and profitable customer-facing organisations in much of DEC UK (and, later, Europe). (I was a customer, not an employee)
Anybody who remembers the glory days of DECDirect catalogues (hardware and software) in the UK and Europe will understand (the US had a different catalogue), even if they never actually did business with DECdirect. I did so much business with them as a customer that 0800 393200 for DECdirect is burned in (presumably for life). Telephone order to computer in goods inwards in five days - not from stock, but built Just In Time. In Scotland. From girders, obviously. Or from Galway for software+documentation. Not from China.
The HQ people then decided (for invisible reasons) that "the channel" should do what DECdirect had been doing.
What this really meant was that the channel took the orders and the margin, but didn't do any of the demand creation (and definitely not in the smaller businessses, hmmm, sound familar here?). There were many reasons why DEC ended where it did, but the demise of DECdirect in favour of a model which ignored the reality of the box-shifting NVA channel was one of them.
Thank you Ian. Happy days.
The business sector you couldn't remember. Would it be telecom? Later on there was an Embedded+Realtime organisation too.
" I think Microsoft need to be extra vigilant not to go the same way"
I think it's already too late. ICBW.
Thank you - yes, Ian Waring, one and the same. The missing one was Transport, Media and Telecoms - TMT.
The Software Market is now radically different. Public Cloud Services are where the future price points are, and that's wall-to-wall Linux. Openstack aims at where the puck is, not to where the industry is going. Simple Open Source stacks (Node, Meteor, RoR, etc) on Simple commodity servers is where things are headed; have a squint at Digital Ocean as a taster. They are growing 30%/month and flying well under AWS, Rackspace, Azure, etc. 0-10,000 hosts in 6 months, including some 1,500 Rackspace customers in that time.
Thinking of Microsoft, it's almost like the old Alice in Wonderland quote. But they have plenty of useful work they could use (Yammer and Skype for two examples); just need someone at the centre to call out the strategy now.
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