Microsoft’s Mojo Declines Inexorably
March 31st, 2008It wasn’t so long ago that Microsoft had a fearsome presence in the PC industry. If you got on their bad side for any reason, were viewed as a potentially serious competitor, or some combination of both, you had to prepare for them to trounce you. Certainly Netscape felt their wrath, as did companies that tried to push alternatives to the MS-DOS operating system way back when.
However, a read of the filings involved in a certain class action lawsuit against the Windows Vista marketing scheme presents the picture of a company forced to kowtow to Intel and other partners in order to create the false impression of Vista readiness.
A full summary of the sad tale is described in an excellent piece over at the Ars Technica site.
In short, Intel didn’t want to see the market for its 915 chipset — extremely underpowered as far as full Vista compatibility was concerned — to dry up. Such dealers as Best Buy didn’t want to see PC sales for the holiday season in 2006 tank as folks awaited newer, more powerful models that could handle Vista’s exorbitant system requirements with aplomb. So Microsoft, evidently with some reluctance, went along with a dual compatibility rating that largely confused customers who bought computers that couldn’t deliver the full Vista experience.
Does this sound like an all-powerful company that can enforce its dictates through force of will and shady marketing tactics? That may have worked at one time, but no more. Today, while earnings have remained good, MIcrosoft’s stock price remains relatively flat, particularly when you compare it to Apple and Google.
Recent surveys show that Windows Vista gets poor marks for customer satisfaction, both in the consumer and business markets. Microsoft’s name no longer has the prestige it used to carry, at least according to recent surveys.
Without going into excessive detail, it’s clear to me that Microsoft’s fearsome image is severely tarnished. When you extend past their core competency in desktop operating systems and applications, they don’t do so well. The ill-conceived attempt to bear hug Yahoo strikes me more as a move of desperation than a carefully-conceived plan to gain traction in the online marketplace. Surely Microsoft could have spent far less addressing the shortcomings of its own efforts to compete. After all, Google started with nothing. But then again, so did Microsoft, but that was long ago and far, far away.
Unfortunately, while it seems to make for good headlines to write lurid headlines about apparently successful attempts to find security failings in Mac OS X, or possible unsold iPhones (when they are actually in short supply in many of the usual outlets), Microsoft’s failings don’t seem important.
Consider the fact that over a billion dollars was allocated to repair an estimated 12 million defective Xbox 360s, which amounts to roughly the entire production run as of that time. Why? Because of severe overheating problems that would require replacing the consoles. If something similar happened to Apple on even a fraction of that scale, you’d see the headlines plastered on the front pages of the mainstream press around the world.
In other words, Microsoft can make mistakes, deliver faulty products, but just go on laughing to the bank with large profits on their remaining successful products. Apple? The slightest mistake will get them into a jam.
Please understand I’m making no attempt to be objective here, as such a thing is impossible for any journalist. But since I do use Windows from time to time, I’ll try to fairly represent what’s really going on.
First and foremost, Windows Vista is widely acknowledged as a huge let-down. Maybe not an abject failure, as tens of millions of copies have been preloaded onto new PCs, but with a major petition begging Microsoft to extend the lifetime of XP, you can bet a lot of people don’t want the upgrade.
Where’s the petition for Apple to continue to support Tiger, or allow you to downgrade even on the latest models? That’s not a question that’s being asked — although I’m sure a few downgraded because of Leopard’s known version point-zero defects that haven’t been fixed as of 10.5.2.
Whenever Microsoft moves beyond its software business, trouble arises. Assuming that the Xbox 360 woes have been resolved, there’s the failure of the Zune, which ended up being largely a clone of an older iPod, rather than represent a new and better way to carry your music.
Relying on products that are just good enough, rather than innovate as they claim to do, will ultimately hurt Microsoft big time.
This doesn’t mean Microsoft can’t come back. As a new generation of management begins to take over — except for the often irrational-sounding Steve Ballmer of course — it’s quite possible the company will begin to change direction and learn from its mistakes in the years to come. Companies routinely go through ups and downs, and surely Apple is a prime example.
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Yes, at least to an outside observer Ballmer seems to be a large part of the problem, not the solution, doesn’t he? Microsoft needs a new CEO who can do exactly what Steve did when he came back to Apple — simplify, simply swiftly and simplify ruthlessly. Scale down aspirations to move in dozens of different directions at once, terminating or selling off a lot of side operations. Streamline your organization by getting rid of all the people associated with these projects. Resign yourself that there are lots of things that you’re never going to do well and get out of them. Identify the relatively few things you may be capable of doing well and discipline yourself to focus on them exclusively, remembering that in essence Microsoft is by its essence a software company. Simplify your internal organization so as to cut down on red tape, committees and bureaucracy. Simplify your core products such as Windows and Office, pruning away the bells and whistles so that they do the basic things they are supposed to do and do them well. Go back to actually innovating rather than simply copying the creativity of other corporations (the recently announced cooperation between MS and Intel about developing software able to do a better job of capitalizing on multiprocessing offers a glimpse of how this might be done). I’ve made a list of the things that I think would need to be done to save MS from its worst instincts (and also from the problems that confront organization where bigness becomes counterproductive because of the kind of internal culture it creates) — and at the same time I’m pretty sure I’ve made a list of precisely the things Ballmer is by nature incapable of doing.
The pendulum always swings back. It did for Apple and it will probably swing back for Microsoft. It is fashionable to hate Microsoft now. Just as it was to hate Apple in the 90s. Microsoft will eventually streamline and get back to their core business model.
Possibly, but it will require a major leadership change. I don’t think Ballmer has it in him.
Peace,
Gene
Gene, I agree with your statement about Ballmer. I don’t think he will be the one to turn them around either. If memory serves me correctly Steve Jobs made an indirect comment (Jab?) about Ballmer as Bill Gates was stepping down from day-to-day operations on this subject.
How could Ballmer not be the right man for the job? Don’t you know he and Bill Gates were college buddies?
Many of the more obvious problems in Microsoft seem to have happened around the time Bill G started turning things ever to Ballmer. From the outside, Vista looks like the ultimate failure in project management; far too many features initially, and no adult supervision to say we can’t do everything at once. This all doesn’t make Steve J a genius, but it sure does say something about Ballmer.
1) KARL: When did anyone really like Microsoft? In 1983? Maybe. Anyone who appreciates good technology (and doesn’t just want a job or to control people) has been a longtime fan of Apple. Nobody hated Apple in the 90’s except the same people that are always threatened by them–windows geeks and IT people hooked on Microsoft products that are designed with the IT staff in mind first and people in mind, well, not in mind at all. They are threatened because they can’t bother to even learn how to use the Apple systems MSFT copied, and they are afraid that if people learn the Mac they will realize how bad WIndows is in comparison. Then they would have to learn a new OS and they don’t really like tech in the first place, they just wanted a high paying job where MSFT would help them obfuscate everything so that they could not be dislodged from their cushy, M$ supported jobs.
2) When are MSFT investors going to wake up and dump the stock? It sits there at $30 (or lower) for years and years and years and years, and APPL goes up by leaps and bounds–1,800% in 5 years! What a bunch of losers–I know Microsoft are paying dividends, but still, with no growth and only the small dividends, why not just buy a nice CD and get 2% interest–that would be government insured! :-)) Can MSFT interest you in a Christmas club account? 🙂
When did anyone really like Microsoft? Originally the little breadbox Mac shipped with MacDraw and MacWrite, about the only two applications on the planet it could run, and used a hideously quirky dot-matrix printer that could and did drive strong men to drink. It was little more than a toy, although a toy with a lot of obvious potential. Several things transformed it into a useful tool that demanded to be taken seriously: the advent of Postscript and the original Laser Printer, the addition of a 20 mb. (!) hard disk on the Mac SE, and the first really useful software, Word , Excel and a long-dead database, all of which came from Microsoft, and at the time we loved them. Because of the synergy between these three developments we could actually use our Macs to get work done. We need to honor all three of these things, because if they hadn’t happened, we wouldn’t have Macs today. A few years later I (and pretty much everybody else) positively loved Microsoft because of the wonderful Word 5.1, which went to show that once upon a time Microsoft was capable of putting out a truly great product. Back then, Microsoft had such a well-respected reputation among Mac users that we were amazed at the appearance of Word 6, legendary for its awfulness. That’s when the trouble started, things have never been fully the same since.
Ha – well maybe “like” wasn’t the correct word to use on a Mac related site 🙂 In the mid-nineties Apple was tankin’ and Microsoft was what people bought. I’m not going to argue if people liked or disliked buying Microsoft products. But there is no denying that Microsoft was on a roll and on top of it’s game.
Now that the pendulum has swung back in Apple’s favor, there is no denying that Apple is on a roll while Microsoft is struggling. The pendulum will swing back. Maybe not as far as it once did, but it will. I just hope it isn’t at Apple expense when it does.