Microsoft’s shares sink by more than 10%

https://www.google.com/finance?q=NASDAQ:MSFT

by vonnie • 13 years ago

140 289 13 years ago

dragontamer10• 13 years ago

SurfaceRT is a $900-million mistake right now.

There are so many ways to make SurfaceRT a compelling product. If it supported Win32 API, IF it had domain-joining support, if it wasn't completely locked down to the Windows Store... maybe it'd be a compelling buy. But as it is, it has all of the disadvantages of tablets (locked down, proprietary API), with few of the advantages of Windows.

Then you've got XBox One mistake. So much wasted potential there...

Windows 8 has to happen though, the computing industry is evolving towards touch controls, and as primitive as Windows8 is with touch... its a step in the right direction for Microsoft. But they need to be more sensitive to their business partners.

blacktulip• 13 years ago

RT is a joke but what's wrong with XBox One?

dragontamer10• 13 years ago

Compared to the PS4, the XBox One hardware has 30% less shaders on the GPU, is using DDR3 RAM instead of faster GDDR5 RAM, and is using the same CPU as the PS4. All the while, it costs $100 more than the PS4.

So for the first time in XBox's history, the XBox is launching with strictly weaker hardware than its closest competitor. (XBox 360 at least had a GPU that was 2x stronger than the PS3 GPU, and the XBox 360 also had faster RAM. PS3 won on CPU power... but lost out on everything else.)

There is terrible, terrible press across the whole internet about the XBox One-Eighty. Video Gamers overall have a negative impression on it.

http://www.penny-arcade.com/comic/2013/06/12 http://www.penny-arcade.com/comic/2013/06/21

samsnelling• 13 years ago

OP might not think there is something wrong with the XBox One... however I there is no denying that it was a PR catastrophe with the it's always online stuff. Flip flopping after a product introduction does not bode well IMO.

Edit: OP does not like the XBox One ... my bad. :)

y0ghur7_xxx• 13 years ago

http://venturebeat.com/2013/07/13/microsofts-xbox-one-chief-...

http://www.neoseeker.com/news/23234-microsofts-one-mistake-p...

guizzy3• 13 years ago

Nothing per se at this point, but their previous stance on DRM allowed their main competitor to gain a large PR advantage.

However saying that the Xbox One will fail like the WinRT did is very premature; the PS3 had a slow start and still made a respectable showing this generation, and the 3DS was considered a debacle until a price cut and the right games came along and it suddenly exploded in popularity.

schabernakk• 13 years ago

I think he is referring to the PR disaster the Xbox One had a couple weeks back with the only online requirement, Kinect always listening and other lockdown mechanisms implemented on the machines making sharing games or similar things more or less impossible.

I don't know it this will have much impact on the actual sale numbers, the release date is still quite some time in the future and the PS4 despite all the love it currently gets from the gaming scene also requires a Sony account you have to pay monthly to be usable.

I am pretty sure it will play out like it always does: lots of complaining and in the end it will get bought nevertheless. [1]

[1] http://img5.imageshack.us/img5/6062/1258035395841.jpg

speeder• 13 years ago

When Xbox One was announced, if I facepalmed harder my head would detach from my neck.

Then Sony and made their announcements, of features that are actually normal and expected since consoles exist, as if it was something totally new and awesome, in a very obvious way to give more ammo to Microsoft keep shooting themselves.

It was very entertaining.

Specially looking at the stock market (when Xbone wss announced, SONY shares jumped 8%) too.

jaredmcateer• 13 years ago

There was a very good comment I read about this that basically said, it's very telling of how bad the industry is screwing over their consumers when the most exciting thing you hear this year is that Sony just isn't going to mess with the status quo.

yulaow7• 13 years ago

I'm of the idea that microsoft auto-killed the surface rt in the exact moment in which they decided to release it at the same time of the surface pro. Maybe, if they had let pass something like 1 year or 18 months between the two (without annuncing at all the surface pro in this time), more people would have tried the rt and it would have gained some momentum in the market.

bcoates• 13 years ago

The RT had months to sink or swim on its own and was already something nobody wanted by the time you could order a Pro.

The market confusion between the two is enormous, and it's not going in the direction Microsoft wanted: I routinely run into people who are under the impression that all tablets with Windows that they see are crippled ARM devices and not usable computers. If tablets running Windows are Microsoft's future they badly poisoned the well with RT.

vondur• 13 years ago

The surface RT was targeted at Consumers, I don't think the lack of joining active directory would be something most people would miss. I don't think most people would care about the Windows store lock down, provided that the store has good apps in it. They were trying to use the fact that it has a Real copy of Office on it as a selling feature, except that Office on the RT's ran really poorly.

alipang• 13 years ago

There's lots of business people (a subset of consumers) who'd might consider buying a surface for their home if they could use it effectively for their work as a bonus. Unfortunately, no active directory support and terrible performance in Office means its not really compelling.

Just saying, not all consumers are "my mom" who just wants to play candy crush saga and check their email.

zmmmmm3• 13 years ago

The surface RT was targeted at Consumers

There's the problem - it's not actually targeted at anybody properly. It's a business tablet (office pre-installed, heavily marketed with its keyboard and flip stand, all the ads show chic business people in suits dancing around). But it can't join a domain, won't run the line-of-business apps people actually need, doesn't support VBA (so your excel sheet will load but if it is at all interesting, it won't work), and the built-in office is not actually licensed for commercial use, so businesses who care about the fine details of that sort of thing can't actually use it anyway.

Ok, so its a consumer tablet. But it's not got essential things like a good gmail app (didn't even have outlook when it shipped), youtube appp, it sucks for viewing photos you plug in on a USB drive, can't run Chrome, has (or had) few games worth running and has a confusing new UI that is hard to figure out, so playing with it in the store usually results in frustration.

It's half awesome for each of its audiences, but its got showstoppers for both of them. It's a true first generation product, and if there was time and room for the second generation it could be awesome. But Haswell is here and the OEMs have no patience for waiting around for RT to improve when they can be selling something that actually meets everyone's needs.

doctorpangloss• 13 years ago

IF it had domain-joining support

Perhaps Microsoft's problem is that features like "domain-joining support" make their products "compelling."

lmm• 13 years ago

Keeping your files and settings synced between multiple machines is a huge problem, and frankly MS has the best implementation available today. Who cares if they haven't given it a sexy name?

outside12342• 13 years ago

I know its hard to believe, but most folks work at large enterprises.

JonFish856• 13 years ago

I feel like their biggest problem was confusion. Apple does this very well: their products aren't terribly confusing. As a consumer thinking about buying a tablet computer, you think OK there's the iPad, but what else? Oh, Microsoft has a tablet. Hey, it runs Windows, I know windows! But Windows RT? It doesn't run my existing card games? I thought it was Windows? Oh but if I buy the pro, it'll run my Windows stuff? How do I install my card games? But it's more money? What's different about that one?

Screw it, I'll just get the iPad.

junto2• 13 years ago

This hits the nail on the head. It isn't just that Apple do this well, very well, but Microsoft are just terrible at it!

LordHumungous2• 13 years ago

Also, it was marketed as something that's a laptop replacement- it runs windows! it has a keyboard! Oh but it only has 15GB of available storage. Never mind, I guess I'll just get a laptop after all.

dombili• 13 years ago

Spot on. It's really strange that enormous companies like Microsoft can't see why consumers choose Apple. Maybe they do see it, but can't execute their plan, but I doubt that's the case with Microsoft. What would stop them? They have the money, marketing, talented people in place. There's no excuse.

smacktoward2• 13 years ago

The problem is that if you add all those compelling features to Surface RT, you end up with Surface Pro. Which brings you right back to the question of why Surface RT needs to exist.

(The answer: because Surface Pro is too expensive to appeal to the consumer tablet market, and because Microsoft wants to hedge its bets in case Intel can't catch up to ARM in the mobile space. But both of those are reasons why Microsoft would want Surface RT to exist, not why a customer would.)

dragontamer10• 13 years ago

Not really. Win32 API existed on MIPS machines back when Windows NT was ported over to MIPS. I'm not asking for x86 compatibility, I'm just asking for a way for Chrome / Firefox to be cross-compiled onto the SurfaceRT.

Win32 API is the only real reason why people use Windows. Take that away, and you've got... well... SurfaceRT.

peterkelly2• 13 years ago

Win32 should be in a nursing home right now awaiting death.

They should have just made a clean break from it. I can't understand why anyone would want to deal with that abomination in this day and age.

And given that it's ARM, you wouldn't be able to run any of your existing apps anyway, without the vendors recompiling (and quite possibly having to update their code in the process).

com2kid• 13 years ago

Win32 should be in a nursing home right now awaiting death.

It is well tested, has high performance due to its heritage, and is really damn flexible. You rarely find yourself going "well that isn't possible" with Win32 given how many iterations the API has been through.

Unfortunately making a general purpose API of any sort tends to get ugly as more and more stuff is added to it, and then add in legacy requirements, and yes things are pretty icky at times.

But any other API that is capable of as much as Win32 is would end up looking almost as bad, minus a lot of the legacy cruft, except of course in the time it takes to develop such an all encompassing API, you'd end up with legacy cruft all of your own!

jdjb2• 13 years ago

Win32 is the only thing going for Microsoft on the windows side. They're far too late to the touchscreen party to dictate the tempo of UI design and thus they appear as a "me too" solution. The only thing they could possibly offer that Google/Apple can't would be to run windows-specific applications on your latest version of Windows. Throw that away and there's no reason why a Surface Pro 360 beats a Galaxy Tab 4 or iPad 4/5.

davidgerard6• 13 years ago

Win32 will be around as long as COBOL or Java. It's one of those boring "forever" technologies that the world actually runs on.

pgeorgi• 13 years ago

Win32 is the only official way to "side-load" applications to a Windows box (ie. not through their store). That's reason enough for me to reject Windows systems that don't have an open Win32 environment.

Every recent architecture change was used to lock down Windows: Windows on x86-64 enforces driver signing harder than Windows on x86. Windows 8 enforces Microsoft signed Modern UI apps.

Windows on ARM enforces full lock down (drivers, Win32 apps, Modern UI apps, bootloader). It also prevents those signed Modern UI apps to run their own JIT. While one could argue that this is for security (inability to mark data as executable code after the fact, and so on), it's not even possible to use the CLR JIT on your own dynamically generated byte code, which might be a crude workaround for other VMs (JS, Java, ...): add a CLR target.

If the CLR JIT is considered unsafe, Microsoft should disable it altogether (but that would slow down the platform even more), but if it's safe they should make it available to developers. This isn't about security, it's about their competition.

Open Win32 is what keeps Microsoft somewhat honest (since they can't simply lock it down that way, as long as they keep caring about compatibility). The only redeeming part of the Windows on ARM story is that it doesn't matter commercially. May it stay that way.

JonSkeptic• 13 years ago

Is it weird that, given the surface, Windows 8, and the new xbox that I still think Microsoft is overvalued after the drop?

yulaow7• 13 years ago

they have still enough gains in the professional market and also the cloud service (azure, office365, ...) but... yeah. They have failed totally in the tablet market atm having like 0% of the marketshare, they have a really tiny marketshare in the phone market (3-4%) also if, in their defense, i must say that windows phone is a nice os, and windows8 is not helping at all in the consumer-pc market. In the long term, at the moment, they are risking a lot.

dragontamer10• 13 years ago

I dunno. Given the ability for Microsoft to just up their CAL licenses for their business buyers and pull revenue literally out of their ass... all the while shoving Windows 8 down their partners thoats??

Microsoft is still big. As a business, they remain profitable. They have plenty of time to turn the ship around.

Their business decisions may have been terrible these past years, but they're still profitable, still making money nonetheless.

yulaow7• 13 years ago

The problem is the long term run. At the moment they are really profitable, but with the switching of the market from pc-leadership to tablet-smartphone-smartdevices leadershipt they are in big risks.

lotso2• 13 years ago

Yes, because Windows and IEB are a fraction of Microsoft.

ricw• 13 years ago

What is interesting is that over the last ten years microsoft has been unable to win markets with its time tested strategy: keeping at it until it conquers the market. It's because some very competent competitors have arisen that move faster and better than microsoft. consequently its late-to-market-but-persistent strategy fails.

Seemingly the only way a company can retain its leadership is by innovating and then leading the market. Microsoft hasn't been that good at genuine market innovation (we're talking revolutions), so unless it can use its strong stance in markets it leads currently, the future isn't looking all that rosy for microsoft..

smacktoward2• 13 years ago

This isn't entirely fair. Ten years ago Microsoft was just getting into the video game business, now they essentially own it (though they definitely fumbled the XBox One rollout). Ten years ago Azure didn't exist, now it's a $1bn/year business and a credible threat to AWS. In both these cases Microsoft started out with weak initial offerings and refined them into something people found compelling. There are other markets where this approach has not yet yielded fruit for them (mobile, tablet, search), but it's not really true that it just never works.

Microsoft hasn't been that good at genuine market innovation (we're talking revolutions)

Microsoft has never been about revolutionary innovation. MS-DOS was just a rebadged version of Tim Paterson's QDOS. MacOS was the first OS to bring GUIs to the mass market, not Windows. IE came after Netscape. Etc.

Since the beginning of the business their approach has been to be a "fast follower" -- to let other companies take the huge risks of pioneering a new market, and then, if that market proves out, swoop in with a product of their own. Generally speaking this has worked out really, really well for them. Letting someone else do the pioneering isn't particularly heroic, but then, as the saying goes, you can always tell the pioneers because they're the ones with the arrows in their back.

JonFish856• 13 years ago

And it's almost funny--they've been hamstrung by being too far ahead of the pack in some ways. Look at all the trouble they had when they built Windows on top of the IE engine. In a way, that's one of the first steps towards a real use for the "cloud"--what should be different about browsing for a file on your computer and browsing the internet? And that ended up causing them some serious money.

They flubbed their early efforts at mobile OS development also. They had a real chance to corner the market before Apple was even making iPods, I believe. But they got too focused on beating Blackberry and didn't really look past them (in my opinion--I'm no expert).

Then the tablet: Microsoft was one of the first to really push tablet computers. Unfortunately, the technology wasn't there to support the idea. So they shelved it for awhile, then Apple came along ~10 years later and did it "right". And now Microsoft is trying to play catch up to a field where they did a decent amount of the early work.

seanmcdirmid5• 13 years ago

Ten years ago Microsoft was just getting into the video game business, now they essentially own it

Sony and Nintendo might disagree. Nintendo kicked serious butt for most of the last generation. Sony has been doing well, at least matching MS, in the last part of the last generation. The next generation still hasn't started much, though Nintendo definitely messed up on its start. It remains to be seen if there is much of a console market left; the winners of this generation just may very well be Apple and to a lesser extent, Google.

adventured• 13 years ago

Microsoft owns the video game business? They have a small fraction of the whole pie. They don't own anything. Their Xbox One screw-up and their embarrassing about-face showed how truly tenuous their position is.

Android, iOS, free to play, Facebook / web platforms, Ouya and the coming onslaught of embedded video game technology into TV's and other solo Android machines, Valve's console entry, Steam, Nintendo, Sony; publishers like Activision etc; indie producers like Mojang etc; and on and on and on and on. Microsoft is just one big player in a very large market.

Microsoft is in a position of weakness in gaming. If the Xbox One doesn't sell on par with the PlayStation 4, or if it doesn't sell in volumes at least on par with the 360, they're going to very quickly find themselves on the outside looking in just like in mobile (lackluster sales will also take down the Kinect platform).

RyanZAG5• 13 years ago

"Ten years ago Microsoft was just getting into the video game business, now they essentially own it"

The facts say otherwise:

http://www.vgchartz.com/article/250111/2012-year-on-year-sal...

snom3804• 13 years ago

That $1B nummer includes software sales to Amazon, Rackspace etc so it's not really comparable to Amazon (which also lumps AWS together with other stuff).

Generally though I find it interesting that there is almost no mention of it either here on HN or other places. When AWS has an outage, everyone notice because lots of high profile sites and services go down. Azure has had a few outages and we've barely heard about it.

I think the difference now in the new markets is that Microsoft has talented competitors, including Google which has copied the strategy you mention with the twist if giving their software away for free.

mikelat• 13 years ago

They clearly think they own the market too despite the fierce competition from Sony and Nintendo, because the Xbox platform is now clearly about benefiting themselves and rather than selling a product to their customers. Hence the emphasis on things like digital sales with heavy DRM (although now that's gone, its an important point that they completely thought they would get away with that), Television, Kinect, Excessive amounts of Advertising, etc.

What's sad is how at E3 the best thing for a lot of the gamers was how they weren't going to get screwed by heavy DRM from Sony.

philwelch• 13 years ago

Ten years ago Azure didn't exist, now it's a $1bn/year business and a credible threat to AWS

"Credible threat to AWS"? That billion dollar figure includes all Microsoft cloud revenue, including revenue Microsoft earns from AWS: http://gigaom.com/2013/04/29/say-what-microsoft-azures-a-1-b...

nick2• 13 years ago

Can you give some sources? Last time I checked PS had a bigger market share than Xbox.

kabdib• 13 years ago

now they essentially own [the video game business]

Not even close. And it looks like they're about to throw it away.

NicoJuicy• 13 years ago

Actually, Microsoft has never been a "innovator"... but more a long term strategist. They copy, iterate and improve things.

One thing i always remember is that you should wait untill SP2 (service pack 2) to upgrade your windows version.

Windows Vista SP2 was Windows 7 (with again, slighter improvements), while Vista in the beginning, wasn't awefull. It was superior on SP2 and it got it's respect with a "new" release, named Windows 7.

Windows 8 is a lot of change, thanks to statistics, they'll improve again and as usual, i'll wait untill SP2 to switch. Perhaps even 8.1 if i really like it :-)

bdcravens• 13 years ago

Funny linking to a blog that's now down. Stock prices are public info.

https://www.google.com/finance?q=NASDAQ:MSFT

hoilogoi• 13 years ago

Microsoft needs to pull out of mobile and tighten their grip on the desktop market. I can say anecdotally that the only reason many people stay with Windows is for games.

I'd like to see Windows rebranded as "The Gaming OS which does much more than just games". They need to keep the value of Windows tied to the value of Steam. This means bending over backwards to the needs of game developers and cementing the expectation that you need Windows if you want games before that expectation goes away.

This may even mean marketing themselves to Mac and Linux users as the OS you should dual boot if you want to play games. What a crazy thought.

yulaow7• 13 years ago

Pull out of mobile? Meanwhile the entire world is pushing mobile market making a lot bigger than the desktop pc market? Not a really good idea. It would be a suicide and they know it, that's why they are putting billions of money in windows phone and nokia, they NEED at least a minimum marketshare (10%) in the mobile market

Gormo• 13 years ago

There are also lot of people making a lot of money in the energy industry. Is it time for Microsoft to start drilling for oil, too?

"Mobile" has little overlap with the markets that MS has built 30 years of competitive advantage in. Phones and tablets are not general substitutes for PCS.

Microsoft's venture into the "mobile" market has resulted in them slapping the Windows name on products that are almost - but not quite - entirely unlike Windows, and this has brought a good deal of frustration to many people.

CamperBob25• 13 years ago

(drivebyacct2, it looks like it's time for drivebyacct3 to make its debut. You appear to be hellbanned.)

rsynnott15• 13 years ago

They need to keep the value of Windows tied to the value of Steam.

The same Steam who has done more than anyone else to make MacOS and Linux viable gaming platforms?

The trouble with games is that there's really no lockin, and porting is not that difficult, so if the publishers see MacOS and/or Linux becoming larger platforms, they'll put out more stuff for them (this is already happening, especially with indies and Valve), and few will stay on Windows because they really need game X from 1995 to keep working.

Microsoft's real strength is the enterprise, where people do need terrible internal app from 1995 that no-one has modified since then to keep working. You can't do that on Linux or MacOS easily; both are pretty happy to break binary compatibility when it suits.

vbuterin• 13 years ago

This is nothing in the grand scheme of things. Just zoom out to the ten-year chart:

https://www.google.com/finance?q=NASDAQ:MSFT

zmmmmm3• 13 years ago

That is scary for a different reason - you can see then that MSFT has actually barely grown at all in 10 years.

coldcode• 13 years ago

They have the wrong Steve.

RyanZAG5• 13 years ago

On the surface, Microsoft seem to have tons of problems in management structure, product design, public relations, etc etc. However, at least in my view, all of this isn't really a big issue and companies can easily survive on this stuff. The key problem is a very simple one: Microsoft has forgotten why they even exist. The goal of a company is to sell products to customers by giving customers what they want.

Microsoft of 15-20 years back did they wonderfully - easier to use OS, better features in Office, fast adoption of new hardware standards, etc. Microsoft of today is actively trying to sell customers what they don't want. Metro. Kinect. Office Ribbon. Bing. ARM Surface. The list goes on to almost every product MS offers.

Microsoft needs to stop pushing products for the benefit of Microsoft. I'd recommend the following: put up a poll and let the general public decide on issues like Metro - and then follow those results, even if it means throwing Metro out of the desktop. Microsoft needs to listen to customers simply because other businesses are listening to Microsoft's customers, and those customers are leaving.

Business 101 - it still applies even when you're not a startup anymore.

lotso2• 13 years ago

Metro. Kinect. Office Ribbon. Bing. ARM Surface. The list goes on to almost every product MS

I assume when you say Metro, you mean on Windows 8. Metro on WP and Xbox is really great, and I think 8.1 will fix a lot of problems with Metro on 8. Metro as a design language is, IMO, really good. Implementation on Windows, not so much.

Kinect? The fastest selling consumer device in history? The numbers speak for themselves.

Office Ribbon is a step forward in UI design for menu systems. Looking for a good resource on their thought process behind it, but you can see a partial explanation here. http://blogs.msdn.com/b/jensenh/archive/2005/09/14/467126.as... The ribbon backlash seems more against the fact that the UI changed than that the ribbon is bad UI design.

Bing is a long term play and I think it's starting to pay off with FB, Apple, and Yahoo deals, not to mention the deep integratin of Bing services in Windows, Xbox, and Windows Phone.

Arm Surface was a disaster.

Microsoft needs to stop pushing products for the benefit of Microsoft. I'd recommend the following: put up a poll and let the general public decide on issues like Metro - and then follow those results, even if it means throwing Metro out of the desktop. Microsoft needs to listen to customers simply because other businesses are listening to Microsoft's customers, and those customers are leaving.

Design by committee is terrible. Design by the general population is even worse.

daigoba66• 13 years ago

While overall I agree that Microsoft is really missing the mark when it comes to creating products people want, I disagree on the premise.

The goal of a company is to profit from products that sell. It doesn't necessarily mean they're building for what customers currently demand, but knowing what customers will demand.

The canonical example is Apple. If you listen to tech reviewers, Apple never makes the product that people "want". Yet they continue to lead profits in almost every product category they market.

RyanZAG5• 13 years ago

What? Some kind of cognitive dissonance here, maybe. People do not queue up around the block waiting for hours on launch day for something they do not want. People very much want exactly what Apple is making. They build exactly what people want.

If you want an example of something that people do not want, would never queue up for, and should not have been made? Metro.

In regards to the comment above on Metro fitting well on Xbox? Not a chance - Metro is terrible and confusing to use on Xbox, and the adverts make it even worse. If the xbox had launched with Metro as standard, it would have gotten very negative launch reviews.

davidgerard6• 13 years ago

Microsoft has forgotten why they even exist.

Microsoft is an office supply company. They got their niche by being cheaper and easier for the office worker. Bill Gates became the richest man in the world by selling EVERYONE a box of paperclips.

This is not sexy growth times. It's a boring business. You know, like most businesses that just make a steady profit.

Win32 will be around forever. It'll be like COBOL and Java. There's always buckets of money doing boring work no-one else wants to. It doesn't get you sexy startup cred with dancing VCs; it does get you a long-term living.

rlu• 13 years ago

Wasn't Steve Jobs the one that always said customers don't know what they want?

kenster07• 13 years ago

I'm not surprised. Their time-tested strategy of blatant vendor lock-in is being disrupted by competitors providing the same kind of software for free - google docs, firefox/chrome, linux.

After the upcoming "adjustments," they should be able to survive at a somewhat healthy level, but they will have to accept lower revenue and margin as a persistent reality.

kvb• 13 years ago

Revenue was up this quarter. The surface fiasco dinged profit a bit, but financially they're still in great shape. Microsoft is not really fundamentally about Windows anymore, they've now got a diverse portfolio of businesses.

blhack• 13 years ago

One of Microsofts flagship products is Microsoft Office. It's a great suite of software, it's ubiquitous, people are familiar with it, etc.

But the selling point of it is that it's familiar. When we recently starting transitioning to google apps at my office, people damn near rioted.

It wasn't that MS Office offered something that GA didn't, it was that they were scared that they wouldn't know how to work the new interface.

So...think about that, Microsoft. People aren't holding on to your product because it is the best, people are hanging on to your product because it is the most familiar.

I think that time will erode that.

taopao• 13 years ago

Time, and the Ribbon, and Metro...

davidgerard6• 13 years ago

Huh. We moved to GApps and our people cried tears of joy.

Mind you, that was moving from Lotus Notes for email and calendar. Fuck me, GApps is heaven by comparison. I wrote the Uncyclopedia article inspired by having to use the damn thing: http://en.uncyclopedia.co/wiki/Lotus_Notes

MichaelGG2• 13 years ago

Excel offers far more than familiarity. Anyone that thinks the competitors are on-par probably doesn't use Excel much.

mrdodge• 13 years ago

A lot of people use Excel for making lists and doing very simple calculations. You can do that just fine in Google Apps.

300bps9• 13 years ago

With many of their new products, Microsoft seems to finally have viable offerings. The dangerous thing for Microsoft's competition is that previous iterations of Microsoft products stunk so you had to go to the competition by default. That is not the case anymore so expect to see much thinner margins for Apple, Google and others in the future.

Azure including their Virtual Machines are a great competitor to Amazon AWS and EC2. I've used both.

Office 365 and Hosted Exchange are a great competitor to Google Apps. I've used both.

Windows Phone 8 is a great competitor to iPhone. I had iPhone 3G, iPhone 4, iPhone 4s and now a Nokia Lumia 928.

Windows Surface Pro (i.e. not RT) is a great competitor to iPad. It really is a desktop/laptop replacement unlike the iPad and again, I've owned both.

Windows 8 had several issues out of the gate. I use it every day and spent the 10 minutes necessary to learn the new interface to get used to it. Many people aren't willing to do that. Vista had even more problems, and Microsoft still came roaring back with a very successful Windows 7. Microsoft is hoping Windows 8.1 does the same thing for Windows 8.

In all of this, the customers win. Expect cheaper prices with increased competition - example being how Amazon just lowered their EC2 pricing by as much as 80%.

thetrb• 13 years ago

Well, the market and the customers don't seem to agree on all of this:

The market share of Windows Phone 8 is extremely small and doesn't seem to pick up.

The PC market is shrinking extremely and many analysts now point to Windows 8 as one of the reasons behind that. You can point to a 10 minute learning curve and while I agree that the new Windows interface is not hard to learn I still think it's an extremely bad user experience. The standard apps are just so incredibly bad (e.g. the mail app, the photo app, the video app, even the store itself) that I'm not using them at all. I spend 99.9% of my time on the old Windows desktop.

The market share of the Surface again is extremely small and I don't see any indications of it growing.

I totally agree that competition is good for the customer (and might potentially be bad for competitors), but so far that doesn't help Microsoft.

300bps9• 13 years ago

The key point I was trying to make was:

With many of their new products, Microsoft seems to finally have viable offerings.

Your statement of:

Well, the market and the customers don't seem to agree on all of this

Seems to miss that point. Just to be more clear - it was only in the last few weeks that Verizon had a flagship Windows Phone 8 device available (Nokia Lumia 928). Has the market really had time to absorb that Verizon now has a Windows Phone 8 device that can compete with the iPhone? I don't think it has. As a former iPhone user, I was personally responsible for at least a dozen people buying iPhones. Now as a Windows Phone 8 user for the past couple weeks, I am responsible for someone returning their iPhone 5 to get a Lumia 928 and there are three additional people in my office who are now going to get a Lumia instead of the iPhone 5 they were planning on when they are next eligible for an upgrade.

The PC market is shrinking extremely and many analysts now point to Windows 8 as one of the reasons behind that.

...and Windows ME was a failure, Windows Vista was a failure and Windows 8 is proving to be less than stellar. Let's see how it is when Windows 8.1 is released generally and people have time to react to Haswell processors having been released. There are also a lot of people that bought iPads thinking it would fully replace their PC that are now sorely disappointed.

The market share of the Surface again is extremely small and I don't see any indications of it growing.

Surface Pro is selling well. Don't judge it by Surface RT which was a desperate attempt at increasing market share to get more Windows 8-style applications developed.

microcolonel2• 13 years ago

Too bad they're selling all your data to the government, and using what they haven't yet sold to sell more crap to you.

RyanZAG5• 13 years ago

I get that you're a Windows Dev and obviously try to put in the effort to find the good things in Microsoft's current product line - but you also need to see the reality here. Microsoft definitely does not have viable offerings.

Win8 is hated/feared more than Vista was.

The new xbox is probably the most panned product announcement I've ever seen.

Office 365 and Hosted Exchange are not competitors to Google Apps, they're poor competitors to Office and Exchange.

Windows Phone has been a dismal failure in terms of actual customer traction - especially outside USA. Numerous product placements are making this more of a joke than anything - (everyone laughs when a hacker in Burn Notice pulls out a Windows Phone).

Surface Pro is not even in the same market segment as an iPad - Surface Pro competes with laptops and the Mac Air, not with the iPad. You can't use them for the same tasks.

Azure is in no way a competitor to AWS/EC2 - it's more a competitor to Digital Ocean in terms of scale, and Digital Ocean is outperforming it completely.

I get that you've used the Windows stuff and the competition and find the Windows stuff better for you - that's likely because of how familiar you are with the Windows environment and Windows announcements. However, most people off the street are completely confused by it. You need to try and view the situation objectively if you want to understand why the MS share price is diving and all your customers are hopping ship.

300bps9• 13 years ago

Win8 is hated/feared more than Vista was.

This is revisionist thinking and shows your own bias that you accuse me of.

You have a review of every single Microsoft product. I have to ask - what is your experience with Office 365, Hosted Exchange and Azure?

What tasks can you do with an iPad and not with Surface and vice-versa?

Flagship Windows Phone 8 (i.e. Lumia 920 or Lumia 928) is better than an iPhone. I've owned 3 iPhones - how many Windows Phone 8 flagship devices have you owned?

josh26007• 13 years ago

I second all of these conclusions and have a few anecdotes of my own to add.

WinXP is still the dominant Enterprise Operating system (crazy I know).

Exchange email is seen as a relic of a time gone by for new companies and something that admins usually hate in large companies. Outsource it (and I'll note that the largest reseller of Exchange, Intermedia, doesn't sell Office365).

The first windows phone I had was Windows Mobile 4.0. The flipphone handsets that came out during 6.0 were good, but every one of their gigantic, flagship, Halo devices, was terrible. HTC had some of the most badass, feature-packed phones ever, and the Operating system killed them. It's just a pile of bloat, the same way WinPhone7 and WinPhone8 appear to be. Look at the work they've done with Nokia where they basically paid Nokia billions of dollars in marketing money to attempt to promote WinPho8 and ended up hemmoraging marketshare in the transition from Symbian (Elop's "Burning Platform" memo should go down as the worst corporate writing ever, and it's not lost on me that he came from $MSFT).

I won't even dignify the surface with commentary. It was an unmitigated disaster that everyone saw coming.

Azure is only large because of promo usage. It's not competitive even with Digital Ocean in terms of scale (my personal opinion, I have no facts to back this up except anecdotes I can't publish). There's a lot of empty instances in Azure land.

Microsoft is making a lot of obvious errors. They continue to be unable to remove FUD and the Cruft of age. If they go down this path, the inertia will eventually kill them; it might take 20 years, but Microsoft is already becoming a place that finds it hard to recruit. I would argue that without their ridiculous abuse of the H1B program they would not be able to remain competitive.

In short, there's a lot of stuff to fix. The bright spot for Microsoft, as always, is licensing, but that's an ugly, ugly business.

My $.02.

nilsbunger• 13 years ago

I see many mid-size and larger companies deploying O365. They do it because it's familiar to their IT, it fits in with their existing policy systems, and it works well with their existing MS Office workflows (office web apps, and sharepoint in the cloud). In some cases, I know Google tried to win their business too.

Try google search autocompletion of "google apps vs" and the first result is office 365.

Whether O365 can "win" is another question, but it's definitely a credible competitor.

(Not to be an MS apologist -- we've tried Azure and had to hightail back to EC2, they screw up many other things, but O365 fits a purpose for many companies well)

amanne• 13 years ago

That's a lot of blanket statements states as if they were the truth.

Office 365 and Hosted Exchange are not competitors to Google Apps, they're poor competitors to Office and Exchange.

Uhh, why not?

Azure is in no way a competitor to AWS/EC2 - it's more a competitor to Digital Ocean in terms of scale, and Digital Ocean is outperforming it completely.

Again, reference?

You need to try and view the situation objectively if you want to understand why the MS share price is diving

Share price is diving? As compared to what? If you read the "article" you can see that the share price was ~28 just three months ago and today it closed at more than $31.

..and all your customers are hopping ship.

I am completely lost with the extreme hyperbole here.

skylan_q• 13 years ago

I wouldn't bother arguing some people are in the Microsoft camp as a matter of religion. I work in a Microsoft shop and it's depressing how awful the offerings are and how helpless you become when you depend on something that's broken and have no power to correct it, fix it, or work around it. It's actually caused me to search for work outside of my day job just so that I can work with technology that's actually well-documented, workable, and supported by real, organic communities.

Shorel2• 13 years ago

Win8 is hated/feared more than Vista was.

Not from what I have seen. Vista was hated with intensity, while Win8 is simply 'not necessary yet'/'not better enough to make me upgrade from Win7'.

About the Surface Pro vs Mac Air vs iPad: I expect to be able to use a dockable 2014 Ubuntu Tablet for all the tasks I could do with any of these in 2013.

nivla• 13 years ago

Win8 is hated/feared more than Vista was.

True and obvious among techies but not sure about the average joe.

The new xbox is probably the most panned product announcement I've ever seen.

They really f#ed up on that one (not the concept but the way it was presented) and it got worse when Sony decided to throw in a few blows while they were still down.

Office 365 and Hosted Exchange are not competitors to Google Apps, they're poor competitors to Office and Exchange.

Agree it wasn't the best Idea to go cloud. They just made it easy for their existing consumers to compare the pros and cons between them and Google's offering.

Windows Phone has been a dismal failure in terms of actual customer traction - especially outside USA.

What? If anything Windows Phone and Nokia is growing exceptionally in the emerging markets specifically India and Africa.

Surface Pro is not even in the same market segment as an iPad.

Yes it is. Surface Pro is a great mix of device. I already have a laptop/utrabook but wanted a tablet when travelling. The options were Ipad, Nexus 10 or Surface pro. I ended up choosing Surface pro because it offers everything I need in a tablet while letting me use my work apps on the go. Git, Visual Studio, Photoshop, you name it, if it installs on your laptop, it installs on the Surface. Can't emphasize how productive it has been ever since I got it.

ivanhoe• 13 years ago

Your own experience (or mine) is not a good way to measure the potential of those products. It's all about the average consumers, what they like or not...

mark2423• 13 years ago

I made a joke once to my boss that the day is coming very quickly when a kid is going to enter the workforce, and on her first day she'll ask, "why does the company that makes the Xbox also make spreadsheet software?"

The reality today is that Microsoft does not have the engineering talent that they used to have, and their design talent has been completely drained. They simply are not a 21st century software company anymore. The marketplace perception of Microsoft now is that they are a dinosaur that also makes a gaming console. Period.

They may very well have a functional competitor to EC2, but I cannot think of one serious company that is choosing Azure over AWS, or Rackspace, or even Digital Ocean or Heroku. The Azure Case Studies page is an absolute joke, a mockery of what you would expect from a behemoth as Microsoft. The simple fact is that Amazon completely owns the market that Microsoft is trying to break into. (This is especially funny given the years 1992-1996)

They may very well have a functional competitor to Google Docs/Drive/Apps/whatever it's called now, but again, Google is totally dominating that market (crappy updates to Gmail aside). Microsoft is stuck on the outside looking in, and anyone who is starting a company, given the choice between Office 365 and Google Apps, they aren't picking Office anymore.

Windows Phone is a joke and I'm not going to devote any more words to it.

Windows 8 isn't even worth any discussion.

The reality is, is that as kids in college today enter the workforce with their Android or iPhone, and Gmail/Gdrive, and knowledge of AWS, the need for Microsoft (which you have to admit, MS has been coasting on for probably 15-20 years now) is evaporating. If all Microsoft ever tries to do now is play catchup to Amazon, Google, and Apple, they're won't necessarily be squashed, but they'll just become irrelevant.

disgruntledphd2• 13 years ago

Office, Office, Office. While I would much, much prefer to be writing my data analytic reports in Markdown/LaTeX and formatting them beautifully, the need for people (sales people, damn you sales!) to quickly steal slides and put them in their own presentations requires me to use Powerpoint.

Given that i hate Apple much more than I hate Microsoft (because seriously, Apple are much more dangerous) I'm stuck on Windows (until I write some kind of Markdown/LaTeX to power point converter (unfortunately, I also have a thesis to finish, so that's a while away yet) for work, where the first thing I install is Cygwin (and the thing I miss most is easy X-forwarding) and yet I can't switch.

Additionally, Excel is a fine product for quick and dirty analysis, while being a nightmare for any kind of continued development, so I end up using that.

Please don't mention Impress and Calc, I use them but Impress just doesn't interoperate well enough with powerpoint to make it useful, and Calc is good (regex search) but not as polished as Excel.

Its so unbelievably depressing that I'm stuck with this on the desktop, but that's the power of network effects for you.

For another example, see Facebook.

zmonkeyz• 13 years ago

Agreed. After 10 minutes I was fine with using Windows 8 and don't see what the big deal is among people who are technical. With someone like my mom or sister i could see it being a bit more of an issue.

rsynnott15• 13 years ago

Azure including their Virtual Machines are a great competitor to Amazon AWS and EC2. I've used both.

They may be for running Windows servers, but they're certainly not price-competitive for running Linux servers in most cases.

Expect cheaper prices with increased competition - example being how Amazon just lowered their EC2 pricing by as much as 80%.

I suspect that's more to do with Google's EC2 clone, which is actually price-competitive with AWS. Also, that reduction was just on dedicated instances, which pretty much nobody uses; they largely exist for things like PCI compliance.

scrrr• 13 years ago

Also: Corporate customers don't like backdoors in their software. Expect more sinking.

mathattack4• 13 years ago

Looking up MSFT at finance.yahoo.com, their stock is at the same level it was ~15 years ago. (I'm not quoting the bubble peak, but 2 years before it) This sounds more like a sloppy 15 years rather than a sloppy quarter.

testbro2• 13 years ago

Adjusting that for inflation, it's worth approximately 70% of that (based on 43% cumulative inflation 1998-2013).

mathattack4• 13 years ago

Yes. No dividends for most of that period too, which usually compensates for inflation.

sytelus• 13 years ago

Does this take 3 stock splits in to account as well?

at-fates-hands2• 13 years ago

Over the past five years, their stock is up over $5/share or around 21%. Not bad for a company people keep expecting to fail.

Full disclosure: I always take the long view with tech companies, especially the big ones. Start ups can have the wheels fall off over a 10% drop. Big companies like MS, this is virtually nothing. I mean, look at Best Buy. Their profits were down over 80% last year and they're still out there hammering away.

Here's that BBY article I was alluding to: http://www.webpronews.com/best-buy-earnings-net-income-down-...

"Hubert Joly is the CEO now, coming in as the company reports a 90% profit drop thanks to less-than-stellar sales, and restructuring expenses."

seanmcdirmid5• 13 years ago

Over the past five years, their stock is up over $5/share or around 21%.

How much as the economy grown in the last year, or how much has the dollar inflated in the last 5 years. I'm sure there is some stock growth there, and it definitely isn't tanking. But for someone who bought 5 years ago, was it a good investment with respect to the market average for this sector?

at-fates-hands2• 13 years ago

>> But for someone who bought 5 years ago, was it a good investment with respect to the market average for this sector?

Yes, and here's why. . .

http://www.kiplinger.com/article/investing/T052-C017-S001-wh...

MS tends to be in the sweet spot for investors. It's not grossly over priced, they hit their numbers on a regular basis, and no expects them to be successful. Therefore, if one of their products hits big, investors are happy, if they have a flop, no biggie, the shares are only $23.

Compare that to Apple. Their shares are in the $500 range and they are the homecoming queen in the tech sector. If they have a flop, and you have a sizable investment, you're hosed. If they hit their numbers, your large investment stays put. It's a lot more riskier.

minimax• 13 years ago

MSFT is keeping up with the S&P 500, but it's still doing pretty poorly compared to its biggest competitors (GOOG, AAPL, ORCL).

onebaddude2• 13 years ago

I don't understand. It's stock performance has been as good or better than those competitors in the very short term.

Are you talking all-time? Microsoft crushes those companies. And IBM crushes it.

My point is, to say that Microsoft is doing poorer than those competitors, you have to pick a very specific time period. Over the long-run, right up until today, Microsoft has been and will continue to be a wealth generating machine, albeit in a competitive market.

davidgerard6• 13 years ago

I know a few people with Windows phones, and they all love them. Apparently it's actually a very nice phone. But every one of them laments the lack of apps, and considers it a reason to move.

The trouble is that "Microsoft" and "Windows" sounds to the consumer like "Monday 9am at the office". For the consumer market, they're tainted brands.

RaduTyrsina2• 13 years ago

I don't understand how Ycombinator News works sometime. We have written this article http://wind8apps.com/microsoft-stock-down-11-percent/ and it was the FIRST here, it got on the front page, it got REMOVED and then somebody submitted a simple link to the stock page.

I mean, don't we deserve a little credit for being quick enough? Or we ALWAYS have to be the primary source of something. In this case, the google stock page is only a tool.

Please explain on how this works because I have previously submitted stories that I discovered and further developed.

I just need to understand how this community works to make the most of it.

thank you!

mikeash• 13 years ago

Not submitting links to your own articles is probably a good start.

dntrkv• 13 years ago

Why would we go to your link over the Google Finance link? Most of us are engineers here and don't want to sift through bs to find the info we need. The Google Finance link is straight to the point and gives us the info we need to have a discussion.

TallGuyShort• 13 years ago

The guidelines and culture encourage submitting original sources: "Please submit the original source. If a blog post reports on something they found on another site, submit the latter." In this case, raw stock market information from Google or another source would be the "original".

Also, the last time I saw one of your articles, a lot of people suggested running a basic spell check over your articles. I can tell that still isn't being done. More than "being first", your articles need to add meaningful insight and information. That isn't conveyed if you text hasn't been well-edited.

RaduTyrsina2• 13 years ago

Thank you for replying!

I will make sure to add meaningful insight and information!

Thanks!

knodi• 13 years ago

Make Windows 8 more like Windows XP.

dons• 13 years ago

... And S&P closes at all time high.

MarkMc2• 13 years ago

Ballmer has been a terrible CEO. Time and again he has displayed poor judgement that has cost shareholders billions of dollars.

Here's something to ponder: When Bill Gates retired as CEO in 2000, imagine that the board of directors hadn't chosen Steve Ballmer to replace him. Instead, they chose a CEO who stuck a sign on his desk saying "Windows and Office Development - nothing else" and then went to sip cocktails on a beach in the Bahamas for the next 13 years.

How much more would Microsoft be worth now?

I think Ballmer's alpha-male personality has blinded him to the 'do nothing' option. He loves the thrill and prestige of investing billions of dollars in new projects and is therefore biased against doing nothing and letting the shareholders keep their money.

And when he does 'do something' his execution is often flawed. Here he is in 2007 talking about the new iPhone: "Would I trade 96% of the market for 4% of the market? (Laughter.) I want to have products that appeal to everybody. Now we'll get a chance to go through this again in phones and music players. There's no chance that the iPhone is going to get any significant market share. No chance. It's a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I'd prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get." [1]

[1] http://usatoday30.usatoday.com/money/companies/management/20...

codinghorror• 13 years ago

I've historically liked him because of the "developers, developers, developers" thing, but over the last 5-10 years I think history has proven you right. He's a bad CEO who consistently makes bad decisions.

snom3804• 13 years ago

In a stable market with no big changes, he would be an excellent CEO, and he was generally considered a good one until the last few years (some would say after Vista, other after the iPhone).

dschiptsov• 13 years ago

"developers, developer, developers" could be called a "behavior smell". Something is very wrong when CEOs are jumping that way.))

throwawaykf027• 13 years ago

Half-agreed. I still like him because he's the only rich and powerful person who would do that ridiculous dance on stage for the whole world to see, only in the name of people like me, me, me!

But "bad CEO"? Come on! If you look beyond the HN filter bubble, he has definitively diversified MS beyond its early Windows/Office shackles, increased revenues consistently and made (most of) the new divisions very profitable.

And if you think there's no "HN bubble", ask yourself why there's this huge front-page thread about MSFT tanking 10% but little talk about GOOG tanking 14%.

JonFish856• 13 years ago

No Azure? No XBox? I feel like those have made Microsoft a decent chunk of cash since they hit the market...

Retric4• 13 years ago

XBox has made far less money than a stock buy back plan would have therefore it was a bad idea. I don't know the specifics on Azure but it's still in the rounding error stage.

MichaelGG2• 13 years ago

Has Xbox actually been profitable? I understood that overall, they're still down a net few billion. I can see how entertainment and taking over the home and living room (especially after their moronic handling of Media PC) is important, but I don't think it's been a cash maker by itself.

A quick search turns up one article[1] claiming 3BN loss over 10 years.

As far as Azure, I'd be surprised if they've recovered all the money they've put into engineering and so on. Maybe if you consider they had to do a lot of similar work for MS online.

1: http://www.neowin.net/news/report-microsofts-xbox-division-h...

rsynnott15• 13 years ago

XBox is only profitable if you read the data very carefully (ignoring sunk costs), or if you take the 360 _on its own_, ignoring the original and XBox Live. It will probably eventually be profitable, but it isn't now.

I'd be astonished if Azure is profitable; AWS isn't, and it sees vastly higher volume at similar prices. And, of course, profitability for Azure is a messy concept; is it profitable when it makes more than they spend on it, or when it makes more than what they spend on it plus what they're losing by selling fewer Windows Server licenses to Amazon et al?

guizzy3• 13 years ago

Ballmer got it wrong regarding the iPhone, but I doubt that doing nothing was an option in that case.

Against its rivals in the computer segment, Microsoft didn't have to act, but Apple came at them from a different angle; by leveraging its dominant position in the music player market. Nokia, which had a crushingly dominant place in the smartphone business when Apple joined, tried the "just keep doing what you do" strategy for a long while; their marketshare steadily dropped. Probably not coincidentally, it was an ex-MS exec Elop that changed that strategy, with results comparable to Microsoft's. RIM is still clinging to it, with no success.

In comparison, Google had a more measured, deliberate approach, but they did react to Apple. When Apple went into the smartphone business, Google was gearing up to fight against Nokia, RIM and Microsoft. The disruption caused by Apple forced Google to reevaluate. They figured out key places where Apple was unable or unwilling to compete on, and capitalized on those.

regularfry• 13 years ago

My memory is that MS were ready to go with an actually decent, capable release of Windows Phone (WP6.5? maybe?), which then got clobbered and reworked into a consumer OS when they panicked over how well the iPhone was doing.

Apple didn't come at them in an unavoidable way at all - Apple was going for a small sector of the consumer market, where MS could have ripped the business market away from an already-floundering RIM inside a generation. It's just not Apple's way to target enterprise functionality the way MS can.

yulaow7• 13 years ago

You are right and i'm asking since years: are microsoft investors blind? Why they not make any pressure on the directors board to change the ceo? How much time they need again? Or are they trusting the "reorganize reorganize reorganize" that is now ballmer motto?

tnuc• 13 years ago

Ballmer is ideal material as a COO but he is in no way CEO material.

He didn't even join the board until he got made CEO.

He has done a pretty good job with maintaining the lines that make Microsoft the bulk of its revenue but in new areas he is very fucking useless.

Bill Gates did some masterful work at making Windows the dominant force that it is but Balmer has done nothing but waste money on Windows Phone and Surface.

If only Balmer was smart enough to realize he needs someone else to get new shit off the ground, then Microsoft would have half a chance.

tluyben22• 13 years ago

They have the cash and they have the researchers. Brilliant researchers doing excellent research. Thing is; they don't really use that research. A few things end up in cash cow products (like one of the automated data type detection features of rise4fun.com went into Excel), but that's about it.

throwawaykf027• 13 years ago

Whenever people mention Microsoft as only a "Windows and Office" company, I know they have a very outdated perspective of the company. Look at all the billion dollar divisions they have that are not Windows and Office. Sure, almost all their other products such as SharePoint, AD, Exchange, SQL Server, .NET are based on Windows, but people buy Windows because they want those products, not the other way around.

Also: Ballmer was absolutely right when he made that comment about the iPhone. The iPhone did not sell phenomenally well at all when it was introduced. It did alright, but nowhere near what it does now. The average Joe could not afford one at $600. I know, because I had the original one (only because my employer bought it for me, of course), and and I was the envy of people everywhere. Random people on the street and at restaurants and airports would ask me wistfully how I liked it.

When it did take off was when AT&T started subsidizing iPhones to the tune of $400 per phone (and then make money off the contracts, because the average Joe is a short-sighted chump). That's when suddenly everyone I knew had a brand new iPhone (and later, Android phones). I would credit that business model for bringing about the smartphone revolution more than the revolutionary design Apple introduced.

Did Ballmer absolutely miss the alternative strategy? Of course! But so did Apple / AT&T initially. It was probably born later out of desperation when the iPhone wasn't selling as they hoped.

reaperhulk• 13 years ago

You hold a rather unusual view of how the iPhone progressed. The subsidy model already existed for numerous other smartphones -- but they sucked. Apple sold ~4 million iPhones from launch to end of 2007. Those were unsubsidized purchases and they captured >20% of smartphone market share (http://arstechnica.com/apple/2008/01/the-truth-about-the-iph...). It seems pretty clear-cut that it wasn't a new carrier sales model that made the iPhone a success.

sdm• 13 years ago

No, you have to keep in mind that the first iPhone was really just US only. It took off when it went global with the iPhone 3G.

rsynnott15• 13 years ago

I would credit that business model for bringing about the smartphone revolution more than the revolutionary design Apple introduced.

That wasn't actually a new business model. Subsidy was already pretty much standard in the US; it's just that for whatever reason (probably risk-aversion), AT&T didn't do it for the iPhone for the first six months.

anologwintermut• 13 years ago

At the 2010 company meeting, Balmer said "Last time I told you do good things and the stock price will follow [LONG PUASE] Do good things and the stock price will follow." That was when I decided Balmer could say one thing as CEO that would positively impact the stock price and by definition it would be the last thing he could ever say as CEO. (Sometimes I wonder if that pause was him coming to the same conclusion)

That line, coupled with the fact that it was preceded by a cheesy line form a TV show about high-school football that most SDE's wouldn't get caught watching let alone bye into the sentiment when applied to a software company, really didn't make me think he was in touch with ... well anything.

mpg33• 13 years ago

Microsoft spends a lot of money on R&D....I think Windows will become primarily a enterprise OS and Microsoft as result will shrink but will still be important.

b0rsuk• 13 years ago

Microsoft got extremely rich thanks to Windows and Office. Windows and Office was pretty much all to profit from back then. It was the whole of it pretty much, they stagnated web browsers with IE6.0 after putting Netscape out of business. Microsoft thrived by being able to control the whole industry.

Windows and Office is not the whole story today.

jiggy2011• 13 years ago

If they had said "Windows/Office and nothing else" imagine how much they would be getting slated on HN?

Like if Apple announced an "iPhone and nothing else" strategy.

Companies with billions of dollars in the bank are in the best position to do risky R&D projects and the rest of the industry is better because of it.

rsynnott15• 13 years ago

Yeah, it isn't that he tried to diversify that's the problem, but that he did it so incredibly clumsily. A company with billions in the bank had no business bringing out WP7, say.

cnlwsu• 13 years ago

I would think the grandiose gestures of billion dollar investments are meant to have pretty press releases to try to inflate the stock values.

nazgulnarsil• 13 years ago

we must do something this is something we must do this

clarky073• 13 years ago

People who say Ballmer is a bad CEO based on the stock price really aren't paying attention. He took over at the height of the tech bubble. Microsoft's PE (and everything else) was a joke. Since he took over revenue and profits have increased by an impressive amount. The only reason the stock has been flat is that it was extremely over inflated when he took over.

(Certainly he has made mistakes, but frankly I think he's done just fine. Windows phone 7-8 have been pretty good, just slightly late. Xbox has been pretty successful. Azure has been fine. Bing has been the only real failure/money loser, but at least it might be holding back Google to some extent. That was the whole purpose anyways.)

IsThisObvious• 13 years ago

I say Ballmer is a bad CEO because of the stack ranking employee evaluations and the rampant smothering of prototype technologies that later turned out to be valuable in favor of "core" technologies - you know, the two behaviors that are absolutely toxic for a tech company.

JumpCrisscross• 13 years ago

Steve Ballmer started at Microsoft in January 2000 [1]. Since then the S&P 500 has gained 15 points, the Nasdaq has lost 12, and Microsoft...about 45 [2]. Thus MSFT has under-performed the S&P 500 by over 60 points and the Nasdaq by over 33.

This does not show that Ballmer is crap. Just that Microsoft has been crap since Ballmer took over. Generously: he has been unable to arrest the disintegration of shareholder value.

UPDATE: Out of the 3 395 overlapping 20 trading day time periods between 7 January 2000 and 19 July 2013 MSFT outperformed the S&P 500 ETF (SPY) in 1 543 of those periods, or 45% of the time. Thus, if you were to flip a coin on any trading day between those dates and, were it to come up heads, buy and hold MSFT for 20 trading days you would, on average, make money on 9 out of 20 days. If you made money you made, on average, 4.9%. If you lost money you lost, on average, 4.6%. Comparable statistics for SPYs are a 59% win rate (3 out of 5 times), 3.2% up, 4.4% down.

[1] https://en.wikipedia.org/wiki/Steve_Ballmer

[2] https://www.google.com/finance?chdnp=0&chdd=0&chds=0&chdv=0&...

MarkMc2• 13 years ago

People who say Ballmer is a bad CEO based on the stock price really aren't paying attention

Most of the criticism here doesn't mention the stock price, but since you bring it up...

He took over at the height of the tech bubble. Microsoft's PE (and everything else) was a joke.

Even if you set your start date as the collapse of the tech bubble in 2002, Microsoft's stock price has remained pretty flat. You might argue that the market was still overvaluing Microsoft in 2002, but perhaps that was because it overvalued the ability of its CEO to grow profits and return cash to shareholders.

Since he took over revenue and profits have increased by an impressive amount

How much of the increase in profits is due to the Windows/Office cash cow, which would have existed under any other CEO? For the remaining growth in profits, how much money was invested to achieve that growth? After all, any CEO can increase company profit by $1 billion per year - he just needs to put $20 billion in a bank account.

hrktb• 13 years ago

I think most people are unconfortable with Balmer's lack of pushing Microsoft in new directions. Not so long ago Blackberry's numbers wheren't bad, they were selling a boatload of devices, clausing new deals all around the world, and pushing these facts as a sign of health. But it just felt wrong because all the good news were about fields bound to die or shrink in the near future.

Balmer as a CEO brings plenty of money, sales are strong, figures are good, but mostly in fields that might as well disappear in the next years. Even things like Office and .NET which should have many years left are so heavily bound to windows that they might as well get silently siloed into niche markets while the current PC market gets disrupted.

jasonkolb• 13 years ago

I think the next Xbox is going to be the thing that finally takes him out. Not one gamer I know wants one, and the 360 works just fine for the family. They managed to derail what was one success story he could actually point to... It's going to be an epic bellyflop. I say he's out after the sales figures come in next year.

Maven9114• 13 years ago

The xbox is such a small percentage of Ms overall sales, id highly doubt it...plus Amazon and other retailers have sold out of pre orders already

maerF0x0• 13 years ago

Innovation vs the world's worst CEO.

https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...

guiomie2• 13 years ago

This comparaison is worthless. Here is an example of an extremly innovative company vs Microsoft.

Innovation vs worlds worst CEO part 2:

https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...

benhebert• 13 years ago

Technology companies today have to be sexy. There has be an innate desire for the products.

Just look at the resurgence of Samsung, that's sexy.

Microsoft? Some of their dev products might be okay, but Windows 8 and the new Xbox are downright awful. Horrible campaigns behind both.

InclinedPlane• 13 years ago

That's just confirmation bias. The number of very much unsexy tech companies that consistently make billions of dollars hand over fist vastly outnumbers that of the tiny handful of "sexy" tech companies. Is Foxconn sexy?

ioncereadknuth• 13 years ago

edit: bah. im not here to educate you.

HashThis• 13 years ago

I used to work at Microsoft from 1996 to 2006. Here is a pattern that I've seen, which explains so much of the problem with Balmer.

The strategy in 1990's was that software was sold in stored (EggHead). People would compare the BULLETs or CHECKMARKS on two competing packages. Microsoft's goal was to always have more and better checkmarks. That sold more software in the 1990's.

Notice their newest re-org. They are making two big pushes DEVICES and SERVICES. The entire company is becoming "functional" (devs vs testers vs program managers, etc.). They all report to Balmer. Balmer is trying to be like Steve Jobs.

Balmer talked about having "efforts" selected by him and execs in his office. Those would be the major efforts of products. This is the same as picking FEATURE BULLETS for the back of packaged software.

Microsoft does NOT have a strategy. They focus on packing feature bullets, like it is a box of software. Watch them do that with XBox ONE, Windows Phone, Windows 8, etc. Until they pick a strategy, they won't find a way to use leverage to pull ahead.

gioele• 13 years ago

That plot looks much less scary if you see the current data in a longer time-frame: https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...

hnriot2• 13 years ago

Part of the demise of MSFT has nothing to do with MSFT, the landscape in which they operate is just changing. I haven't used Windows in years, yet I used to develop on the Win32 API, I gave up with it when they released all that OLE nonsense. Now that world is largely one big IUnknown interface. The web has democratized the consumer interface to technology, Apple has risen up from the days when MSFT loaned them $100M to keep going. The world is nolonger a Windows and Intel one. In the consumer world things have shifted, while in the backend world, any IT person that's using Windows over a Unix variant is laughed at. I remember the early days of IIS and even though NT had I/O completion ports, it still couldn't keep up with the Unix offerings. Today there are some viable server side offerings, Share Point is a decent product (especially when compared to Lotus Notes) but Linux has eaten the server side market, and Apple and Samsung have eaten the consumer side. I know nothing about gaming, so maybe the xbox is the best product ever, who knows...

AndyKelley• 13 years ago

I'm pretty inexperienced with stock prices, but I zoomed out a bunch and this drop doesn't look very noteworthy.

s3r3nity• 13 years ago

I think it's a good time to buy -- the re-org underway will be intriguing, and I'm very bullish on Windows (especially after 8.1)

I think they don't get enough credit for what they do really well (Windows Phone is phenomenal; Office is still the gold standard; Skydrive works just as well as Dropbox; SQL Server is key in many orgs; the offerings with the new Xbox to be the media centerpiece of the home will be very interesting)

Have they missed the mark for being so late with tablets and underestimating how much people would have shock at the new Windows 8 change? Sure -- but they have too many smart people to let the stock drop and for them to 'fail'...keep in mind that Apple was not far from here just a decade or so ago =)

cantankerous• 13 years ago

Articles like this make me wonder if one of the reasons Steam opted to open up Linux support was in the event that Microsoft imploded and Windows no longer was a viable gaming platform they would still have a decent target. Seems far fetched, but you never know these days. People sure do complain about Windows 8 a lot. I don't mind it, but I'm just one guy.

I don't immediately see how this would all happen in the short term, but stuff like this tends to catch a lot of folks off guard.

solnyshok• 13 years ago

Windows 8 Home Premium (upgrade) started to sell at $29.99 during introductory period last year. It was a time when I finally got licenses for all my PCs. And many other people around me in my country did as well. Even if we cheated a bit to install upgrade version on a clean home-made hardware. Previous pricing was too high for developing world. ~$200 for an OS? I do not even know for sure what was that price, it was too high to even care about it. What I am really interested in, is what they will do with the pricing of 8.1. I hope they do special upgrade pricing again for a couple of months. That's one way to hide the fact that new Windows price is much less now than it was 5 years ago.

icantthinkofone• 13 years ago

I said this would happen. Unfortunately I said it would happen four years ago which doesn't gain me any street cred.

Microsoft’s shares sink by more than 10%

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