Posts Tagged ‘ballmer’


What’s the world coming to?  Microsoft lost money in the software business last quarter, the first loss in a decades long string of positive earnings from the world’s biggest software company.  Sheesh!  Yes, there were extenuating circumstances that you can read about here, but the loss signals the breadth and depth of the impact that the tablet is having on the hardware market.  The iPad tablet to be precise and its economy size, iOS sharing little brother, the iPhone.  For a quick slide show on iPad’s penetration and adoption check out this presentation from Business Insider.

Last time I asked if hardware was becoming sexy again and why.  The answers seem to be “Yes” and “Because tablets have reached a new price point that opens up more emerging global markets to computing.” Tablets and their near kin, smartphones, are defining a global computing platformfor the next decade and beyond promising first world information access to many people formerly left in the dust.

The writing was already on the wall when analyst firms IDC and Gartner recently documented a stall in the PC/laptop forward momentum.  Lower PC sales means fewer operating system sales and all that goes with it.  To be sure, tens of millions of units are still being sold this year along with operating systems and productivity software often bundled in.  But growth has stalled as new customers in emerging markets are voting to type on Gorilla Glass over keyboards.

Every paradigm goes through a predictable lifecycle and the computer operating system dependent on hardware sales is another example, not an exception.  Microsoft, Intel and others invested heavily in thin, ultra-light laptop machines as the next thing that would protect the franchise and compete with tablets, but they were still too expensive and ultimately not cool enough.  If Microsoft expects to get its OS mojo back it will need to cajole its hardware partners into really being competitive with tablets.

Right now, everything is going the way of the tablet and Apple can almost do no wrong.  Even when a European judge made a finding in favor of Samsung in a patent dispute with Apple recently, he declared the Samsung gear “not as cool” as Apple’s and therefore not infringing on Apple patents.  That’s just amazing.

Windows 8 comes out later this year and Microsoft has introduced a tablet of its own, the Surface.  The game is far form over but the latest brush with reality suggests Microsoft might have been prescient in going “all in” as Steve Ballmer said of the company’s approach to cloud computing some time ago.  Microsoft is at some intermediate point in its journey from vendor of licensed software to ringmaster of a giant subscription economy.  Like many companies in similar transitions, the going isn’t always smooth but if anyone can pull this off it ought to be the guys in Redmond.

When I’ve spent time with the Redmond gang over the last couple of years I’ve been impressed with how much they get it, not just at a high level but throughout the organization.  All in, Azure, and retail stores suggest a company thinking its way through the changes.  And analytics and social networks suggest they really get it.  Maybe all in should be replaced by we get it or better, we get you, but not quite yet.

But on a cautionary note getting to the cloud or to tablets won’t be enough; this is a business model change that every company has to deal with and Microsoft has done more than many already.  Now, Microsoft’s partners have to pick up the gauntlet and evangelize more than ever.

This week (on July 25) Zuora will release a Fireside Chat video discussion that I am participating in.  It will be all about the cloud and subscriptions and I expect an important theme will be the attention that subscription companies need to pay not to selling but to service and ensuring customer happiness.  And, oh, heck, while I am talking about myself I might as well mention that my new book is coming out around the same time — “The Subscription Economy — How Subscriptions Improve Business.”

While the changes in the industry might be painful for some, they also represent innovation and creative destruction which is the hallmark of a vibrant economy.  The issue for us is not how to slow down change but how to embrace and leverage it.  Once the election clears out I think Q4 could be an important turning point as winners and losers get back to the work of inventing the future and making money.

 

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There is a very good article in the current issue of Vanity Fair (with Alec Baldwin on the cover) about Microsoft.  In “How Microsoft Lost Its Mojo” Kurt Eichenwald recounts the failures and bad decisions of the company’s “lost decade” a time overseen by current CEO Steve Ballmer.

If you are in this business you can probably recall at least some of the major inflection points related to missed opportunities and in-fighting that cost the company its market leading position.  I thought it was just me, but Eichenwald even compared Microsoft to Detroit auto makers and their past glory.  For good measure he ends with a long quote from Steve Jobs’ biography about the difference between having a sales or ops guy running the show and having a product guy in charge.  Sad.  Worth reading.

According to the article, Microsoft’s stock has barely budged over the last ten years while other tech companies flew by — Google, Facebook and of course Apple.  In one recent quarter iPhone alone made more money than all of Microsoft.

The article quotes Ballmer saying he wants to remain at Microsoft till 2018 but I don’t think the company can wait that long.  The article also implies that Ballmer might be a smart pick to break the company up and to take the legacy products into the sunset while more product oriented people try to salvage the core of innovation, if it still exists.

Fun fact:  According to Wikipedia, “Ballmer was the second person after Roberto Goizueta to become a billionaire in U.S. dollars based on stock options received as an employee of a corporation in which he was neither a founder nor a relative of a founder.”

Ten years of stagnation can’t be sitting well with Wall Street.  What will it take to orchestrate a palace coup?


David Nour, the founder of Relationship Economics, publishes an interesting and articulate newsletter.  I don’t always agree with him but even when I don’t we aren’t that far apart.  His latest post on “Tomorrow’s Social CEO” is an example.

Nour correctly observes (and laments) that few of the current batch of corporate leaders is socially connected.  According to his post, “Eric Schmidt (Google) is an infrequent Twitterer and not a blogger; Steve Ballmer (Microsoft) does not blog or have a Twitter account; Michael Dell is on Twitter but is not an external blogger.  It is also remarkable that neither Steve Jobs (Apple) nor Larry Ellison (Oracle) have a Twitter, Facebook, LinkedIn or blog presence that we could find.”

My facile observation: Yes, and look where it’s gotten them.

Seriously, though, I agree that the executive of tomorrow will be much more of a social animal but as they say in court rooms from time to time, absence of proof is not proof of absence.  What I mean, and this is almost pure hypothesis, is that organizations are becoming more social but perhaps the right application hasn’t come along yet to enable a CEO to be more social in a professional setting.

To borrow a regrettable phrase, the CEO is the decider.  He or she spends the day making decisions for the organization so that it can continue on its mission of maximizing shareholder value and serving the customer.  Other people in the enterprise do the social work for the organization for a very obvious reason—doing it right requires capturing a mountain of data, analyzing it and only then taking action.  CEOs don’t have the time.

CEOs are great at analyzing data once it’s captured and presented to them.  I once knew a guy who could scan a balance sheet, no matter how complex, and in a matter of moments begin making cogent observations and recommendations.  He was murder on finding misspellings on a lunch menu too.

I think the blog might be the natural social medium for today’s CEO.  Since Reagan, even U.S. presidents have made weekly radio broadcasts—a social outreach, albeit one way—a standard part of the job.  My preference would be to change that to a weekly newspaper column though.  Written words are more accessible and longer lasting and enable you to elaborate a complex idea but that’s a subject for another time.

So, why aren’t CEO’s more social?  If it’s because the right social medium hasn’t come along yet, there’s good news on the horizon in the form of a new generation of collaboration software and I think of Chatter from salesforce.com as the example.  Though currently only available as a tool for filtering the social stream within an enterprise, I can see a day when that restriction is lifted.

A collaboration product like Chatter does the necessary work of filtering the social stream so that only what’s most important to the decider gets in front of him or her.  That makes socializing the CEO possible.

Eric Schmidt is on friendly terms with Marc Benioff, who is very much socially adept, and I don’t know if Schmidt has tried Chatter.  Michael Dell already has a Chatter deployment measured in the tens of thousands at Dell, which is a big Salesforce customer.  It’s hard to say if there’s a possibility of Steve Jobs adopting Chatter and, of course, Larry Ellison and Steve Ballmer will likely have their own brands of collaboration software before they’d use Salesforce.

So my mild disagreement with Nour is really one of timing.  Yes tomorrow’s CEO will need to be social and maybe collaboration software is the way they’ll get there.