Microsoft: Epic Fail

[El Presidente]

The bungling clowns who brought us Windows 8 today admitted that when they bought Nokia last year for $7.9 billion they had no idea what they were doing, and have written $7.4 billion off the cost and are making 7-8,000 redundant.

 

[deletebeepbeepbeep]

I got a kick out of reading their recent mission statement yesterday having been made aware of it by FT.

The FT article is quite amusing:

About 10 days ago, Satya Nadella sent a 1,500 word email to all staff to tell them about Microsoft’s new mission statement. A reader duly forwarded the message to me with a note saying: sometimes your job is too easy.
I glanced at the email, and agreed. With material like this, my job is too easy. I sat back and waited for someone else to take the memo to pieces. Only no one did.
That could be because no one could get through it. At 1,500 words it is about twice the length of this column, and while I am trying quite hard to encourage you to read on, Mr Nadella made no such effort. His was the usual mishmash of “platforms”, “drivers”, “ecosystems”, “aligns”, “DNAs” and “going forwards” — as well as some more ambitious combinations such as “extend our experience footprint”.
This is what routinely passes for CEO communication in corporate America. But what is special about this example is it came from a big leader of a big company making a big announcement. Microsoft’s third chief executive was trying to convince the world that the company has a plan, and to remind employees what it is, in case they had forgotten. Yet what he came up with was unreadable, largely meaningless hyperbole — and no one turned a hair.
Many readers will have failed to get past the first word. “Team,” the memo begins. Microsoft employees are not one team, or, if they are, ought not to be. Studies have shown that the ideal number of members of a team is four or five, not 120,000-plus.
“Every great company has an enduring mission.” Mr Nadella goes on. This sounds good, only it is not true. I like to think that the Financial Times is a great company; we have endured 127 years without an official mission.
With some clearing of the throat about how proud he is in announcing it, the CEO unveils the new mission of Microsoft: “to empower every person and every organisation on the planet to achieve more”.
The first sign of trouble is the word “planet”. There is a rule that says whenever this word is used as a substitute for “world”, the sentence in which it appears is utter tosh. If the cosmic resonance is gratuitous, the author is writing through his hat.
In the early days of Microsoft, Bill Gates came up with a vastly better mission: a computer on every desk and in every home. There was no windy nonsense about planets, nor any tiresome talk of empowering. Best of all, it was precise. The main problem with the new mission is not its grandiosity but its emptiness. Achieve more what? On this vital question, Mr Nadella is silent.
Indeed, the best way to empower people on the planet to achieve more would be to persuade them to love their mobile devices a little less and turn them off occasionally and get on with something real instead.
Not content with announcing his new mission, Mr Nadella empowers himself to achieve still more: “Today I want to share more on the overall context and connective tissue between our mission, worldview, strategy and culture.”
To have a mission and a vision and worldview is greedy. But to have so many abstract things with lots of connective tissue between them leaves one feeling slightly sick.
In turn he explains each element. Culture, he explains, “is about where everyone is bringing their A game and finding deep meaning in their work”. This is all very well, but spelling it out will do no good. By simply telling your underlings to bring their A games to work, all you do is alienate people who do not like sporting metaphors.
Equally, everyone wants meaning at work, but hardly any white-collar workers ever find it. Mr Nadella has so overexcited himself that he has decreed mere meaning is no longer enough: it has to be deep, or else it does not count. By thus raising the bar so impossibly high, he has ensured no employee has a hope of clearing it.
After a lot more evangelical posturing, Mr Nadella slips into his final paragraph two words that finally mean something. “Tough choices”, he warns, will soon have to be made — using the very same words that Lord Hall of the BBC chose last week when he said that 1,000 jobs were to go. This is the latest CEO euphemism for firing people, and is one of the most disingenuous. “Tough choices” implies this-hurts-me-more-than-it hurts-you, while at the same time suggesting the CEO has automatically made the right choice — the non-firing option would be even worse.
Having dropped this bombshell, Mr Nadella swiftly reverts to upbeat for his closing rallying cry: “I really do believe that we can achieve magical things when we come together as one team and focus.”
I, on the other hand, really do believe that magic is best left to Harry Potter and coming together as one team of 120,000 is impossible, especially when planning to take an axe to part of it.

http://m.ft.com/cms/s/0/f00b0b08-1f4f-11e5-aa5a-398b2169cf79.html

Microsoft have untold amounts of cash but boy do they like to waste it.

 

[Fef]

If ever there is a company that has lost its way over the years, it must be Microsoft. Apart from the early years, they never seem to have their eye on the ball anymore.

Years back, Gates had an epiphanic moment when he realised that the internet was becoming mainstream and Microsoft were in danger of being left behind, resulting in the famous memo which rapidly changed the company's efforts and direction - just in the nick of time. They grabbed Mosaic, turned it into Internet Explorer, and started the 'Browser War' with Netscape, overpowering the latter with massive resources to preserve the bottom line of the Windows OS.

When Gates effectively retired, he was replaced with the hard-nosed 'slaphead' Steve Ballmer, whose aggressive management style made sure that people kept their heads below the parapet, and motivated staff by dancing around on stage at keynotes shouting "Woo, I love this company! Wooo". The disaster that is Windows 8 effectively happened on his watch; his lieutenants - the 'yes' men who surround the bulldog on a daily basis - didn't have the courage to do what Gates would have done by saying "This is stoopid".

And now Satya Nadella, a CEO who must be financially recompensed in direct proportion by the volume of US corporate bullsh*te he spouts. A man with no vision. A company stood almost still in the middle of a bustling market, holding their hands up and wondering what to do next - while others rush about their business.

In its heyday, Microsoft was quite happy generating revenue by churning out new, even more bloated, versions of Microsoft Office and Windows. They didn't notice Google cornering the search market until it was far too late. Google had the vision that if they grabbed the search market, they would almost 'own' the internet. Google introduced Google Docs to rival Office, Google Maps, Google analytics, the Android operating system. The list goes on. Where was the Microsoft vision? They were convinced that users would dump their keyboards and mice, and use touch screen kit instead. Right. Apple have contrived an ecosystem involving a desktop and a mobile OS on products - desktops, laptops, pads (who would have thought, eh?) mobile phones and even watches - which are all joined together. Where's Microsoft in all this? They have missed so many opportunities.

IBM - once the musclebound powerhouse of the computer world - at first dismissed the threat of these tiddly little microcomputers as they could never match the power of the mainframe, but decided to take part in the microcomputer arena when it was far too late. They are now a tiny shadow of what they once were. Ironically, IBM chose not to develop their PCDOS operating system for their IBM PC themselves, but bought it - almost off the peg - from a small software company - called Microsoft.

How the world turns!

Just my view. E&OE.

 

[Gullflyinghigh]

I got a kick out of reading their recent mission statement yesterday having been made aware of it by FT.

The FT article is quite amusing:



http://m.ft.com/cms/s/0/f00b0b08-1f4f-11e5-aa5a-398b2169cf79.html

Microsoft have untold amounts of cash but boy do they like to waste it.

Thank you for sharing that, I very much doubt I would have seen it otherwise.

It's a shame that such a huge company, with the power to do things differently if they truly want, now sound the same as ever other company out there.

We get it where I work, all this talk about being 'one team' and questions about whether we understand the executive team's vision for the future, despite the vast majority not knowing the name of any one actually on it and it having no bearing on anything...it's all just fluff. Pointless meandering fluff.

 

[Bozza]

Just my view. E&OE.

Yet both their revenues and profits continue to rise...

$51bn in 2007 with a profit of $14bn.
$86bn in 2014, with a profit of $22bn.

...and their share price has been on an upward trajectory for at least five years.

And they have nearly $100bn cash in the bank.

How do they sleep at night?

 

[beorhthelm]

In its heyday, Microsoft was quite happy generating revenue by churning out new, even more bloated, versions of Microsoft Office and Windows. They didn't notice Google cornering the search market until it was far too late. Google had the vision that if they grabbed the search market, they would almost 'own' the internet. Google introduced Google Docs to rival Office, Google Maps, Google analytics, the Android operating system. The list goes on. Where was the Microsoft vision? They were convinced that users would dump their keyboards and mice, and use touch screen kit instead. Right. Apple have contrived an ecosystem involving a desktop and a mobile OS on products - desktops, laptops, pads (who would have thought, eh?) mobile phones and even watches - which are all joined together. Where's Microsoft in all this? They have missed so many opportunities.

and they still churn out a bonkers about of cash. the problem isnt a lack of vision so much as trying to be a bleeding edge tech company. MS should have said, we're not chasing the internets, we're about business and productivity software, corporate users. yep they'd have been slapped by Wall St, but after a couple of quarters they'd have grown used to the idea, and its where they've end up anyway. however long the way they've spunked billions on Nokia, Bing, Surface. the only diversion that has worked out is Xbox and even thats not a profit centre.

a couple of decades ago the conglomerate corporations started to break up because it was realised they weren't efficient, they lacked focus and expertise on non-core business. for some odd reason this lesson hasn't been realised to apply with in the world of tech companies, you cant do everything. let Google search, Apple do consumer devices, Nokia do phones (oops, all but killed a very sucessful company there, although they were facing problems already). lesson to Google, dont get too bogged down in trying to do productivity, and to Apple, dont venture to far in to luxury jewlery. stick to what you know, and do it well.

 

[Gwylan]

Yet both their revenues and profits continue to rise...

$51bn in 2007 with a profit of $14bn.
$86bn in 2014, with a profit of $22bn.

...and their share price has been on an upward trajectory for at least five years.

And they have nearly $100bn cash in the bank.

How do they sleep at night?

If you want to see a company in decline, have a look at HP. There's a share price that has almost halved in five years (as opposed to Microsoft's rise) and, in contrast to the write-off of Nokia, has written off about $9 billion TWICE (with EDS and Autonomy). Now the company's trying to get into the cloud market ... about three years after other vendors did

 

[beorhthelm]

cloud... there's another impending fail for Microsoft. leave it to Amazon and Google who have built out extensive networks and data centers for a decade.

 

[Frampler]

Their attempts to enter the mobile market have been absolutely disastrous (the only people I know with Windows Phones have them as employer-provided work phones).

BUT, the Surface Pro 3 is a cracking bit of kit - the only device I've used that can really be both a tablet and a full-spec laptop. I've been testing out the preview build Windows 10 and I'm impressed with what I see. They've also made a big move into Cloud Services. If I owned shares in Microsoft, I wouldn't be selling it today.

 

[Gwylan]

cloud... there's another impending fail for Microsoft. leave it to Amazon and Google who have built out extensive networks and data centers for a decade.

Disagree with this. Microsoft has an extensive array of datacentres too and offers much easier integration with existing systems. The transformation from on-premise Office to Office 365 and easy integration with Azure has been slickly done. I think Microsoft, Amazon and Google will divvy up this market between them with others struggling to get a foothold

 

[Gwylan]

Their attempts to enter the mobile market have been absolutely disastrous (the only people I know with Windows Phones have them as employer-provided work phones).

You clearly haven't got any teenage children. My daughter pestered us for ages for a Lumia as kids at here were socially dead without one

 

[Bry Nylon]

The bungling clowns who brought us Windows 8 today admitted that when they bought Nokia last year for $7.9 billion they had no idea what they were doing.

There's two ways of looking at this. Yes, it's $7.9bn down the shitter. But on the flipside they've got the GOSBTS ringtone.

 

[BrickTamland]

Yet both their revenues and profits continue to rise...

$51bn in 2007 with a profit of $14bn.
$86bn in 2014, with a profit of $22bn.

...and their share price has been on an upward trajectory for at least five years.

And they have nearly $100bn cash in the bank.

How do they sleep at night?

Easier than apple no doubt

 

[Vankleek Hill Seagull]

If you want to see a company in decline, have a look at HP. There's a share price that has almost halved in five years (as opposed to Microsoft's rise) and, in contrast to the write-off of Nokia, has written off about $9 billion TWICE (with EDS and Autonomy). Now the company's trying to get into the cloud market ... about three years after other vendors did

July 2010 - $46.20 / Today - $30.60. Nowhere near halved. More like a 33% decline over 5 years. However, HP shares were at their lowest in Nov 2012 at $12.44. Since then the price of the shares has increased 2.5 times to the current value. That doesn't seem like a company in decline.....