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Microsoft Businesses The Almighty Buck Windows

Pondering the Future of a Re-Org'd Microsoft 400

Posted by timothy
from the sconces-division-is-going-to-be-awesome dept.
puddingebola writes "This story from Forbes touches on Steve Ballmer's announcement that Microsoft will reorganize. From the article, 'Microsoft CEO Steve Ballmer appears to be planning a major reorganization. His apparent objective is to help the company move toward becoming a "devices and services company," as presented in the company's annual shareholder letter last October.' What follows is an analysis of the current state of Microsoft's current ventures: shrinking PC sales, Nokia management calling for a change of course, Office 360 lagging, a $1 Billion investment in Nook, the losses on Xbox. Once again, if Microsoft starts to lose the revenue of Windows and Office, how long does the boat float? And what of the suggestion, on the verge of another update in the Xbox console, that Microsoft should sell the Xbox division?"
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Pondering the Future of a Re-Org'd Microsoft

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  • by Anonymous Coward on Thursday June 06, 2013 @11:29AM (#43925893)

    What is "Office 360" is that Microsoft office for the X-Box? Sounds like input would be pretty slow.

    • by oodaloop (1229816)
      That was Microsoft's Office suit for the French Republican Calendar. My personal favrote is Microsoft Office 365.25.
    • by telchine (719345) on Thursday June 06, 2013 @11:45AM (#43926127)

      It's the new name for Office 365 after they realised they can only deliver 98.63% uptime.

      • Actually, it's a simple manifestation of American cultural imperialism: They've calculated American vacation days into the name and forgot that elsewhere in the world, the numbers could be different.
    • Re: (Score:3, Funny)

      by Tablizer (95088)

      It's how many minutes it takes to launch it.

    • by OakDragon (885217) on Thursday June 06, 2013 @01:05PM (#43927103) Journal

      They were going to call it "Office 180", then completely changed direction.

  • The circle of life (Score:2, Interesting)

    by Anonymous Coward

    First they'll drop the software, then they'll drop the devices, and then they'll be IBM 2.0. How ironic.

    • by intermodal (534361) on Thursday June 06, 2013 @12:15PM (#43926527) Homepage Journal

      I don't think IBM should take your insults lying down. IBM knew when to shift. They may not be high-profile in the PC world anymore, but they've certainly spun off their product lines to companies that could handle them. Meanwhile, IBM themselves haven't exactly disappeared. A quick cut-and-paste from Wikipedia: "In 2012, Fortune ranked IBM the #2 largest U.S. firm in terms of number of employees (433,362),[7] the #4 largest in terms of market capitalization,[8] the #9 most profitable,[9] and the #19 largest firm in terms of revenue.[10] Globally, the company was ranked the #31 largest in terms of revenue by Forbes for 2011.[11][12] Other rankings for 2011/2012 include #1 company for leaders (Fortune), #1 green company worldwide (Newsweek), #2 best global brand (Interbrand), #2 most respected company (Barron's), #5 most admired company (Fortune), and #18 most innovative company (Fast Company).[13]"

      • I don't think IBM should take your insults lying down. IBM knew when to shift. They may not be high-profile in the PC world anymore, but they've certainly spun off their product lines to companies that could handle them. Meanwhile, IBM themselves haven't exactly disappeared.

        That is because IBM has always been about being in businesses that are higher margin and where they can use their breadth and depth of talent, IP, etc. to their advantage. Once the PC market became a commodity they moved on. Big iron is much harder to commoditize and they can sell services around it that use the computing power as business tools. Even as they spin off some businesses they buy others, such as Monday (PwC Consulting) that fit within their services model.

        MS has always been, first and foremost,

        • Re: (Score:3, Informative)

          by Grishnakh (216268)

          Once the PC market became a commodity they moved on.

          No, not exactly. IBM flailed around in the commodity PC market for quite some time before finally exiting. Remember the PS/2 and PS/1? (What ever happened to the PS/0 anyway?) They tried for a long time to push massively overpriced junk in a market full of inexpensive "clones", even attempting to take over the market with proprietary junk like the MCA bus interface, thinking somehow that everyone would give up on the clones and run back to IBM and thei

          • Once the PC market became a commodity they moved on.

            So no, they didn't "move on" when the PC market became a commodity; it took them a very long time to wake up and smell the coffee, and even then it took them a while before they finally sold off that business unit.

            I didn't mean to imply they did so immediately; as you pointed out they tried to differentiate themselves, with little success beyond the thinkPads, to be abel to command a premium. Eventually they simply exited the market when it became they could not get premium pricing. But that is my main point - IBM shifted its focus to areas where they can extract a premium; existing the PC market is just one example of how and when they do that.

          • So no, they didn't "move on" when the PC market became a commodity; it took them a very long time to wake up and smell the coffee, and even then it took them a while before they finally sold off that business unit.

            To their credit, they moved far quicker and far better than any of their original competitors. Look at HP and Dell (or the companies they merged with) as an example of why IBM is a model for every company trying to divest from a core but dying business.

  • Better Idea (Score:5, Insightful)

    by Murdoch5 (1563847) on Thursday June 06, 2013 @11:34AM (#43925973)
    How about just stopping the crappy product releases? Windows 8 is a joke, the Xbox 360 is over engineered, your server product make me laugh because Linux can do everything for free and better. When will Microsoft wake up the fact they release crap, users are getting fed up with it. They're losing market share because finally the average user is noticing that better, cheaper and more reliable software and hardware exist. The key to Microsoft becoming successful is to just reboot itself and start turning out high quality products.
    • by jeffclay (1077679) on Thursday June 06, 2013 @11:43AM (#43926109)
      Imagine that; Microsoft needs to reboot itself to become functional again.
    • Re:Better Idea (Score:5, Insightful)

      by Doug Otto (2821601) on Thursday June 06, 2013 @11:54AM (#43926247)
      "Linux can do everything for free and better"

      Linux brings in a substantial portion of my income but statements like that hurt its adoption, not help it. In an "real" corporate environment, Linux isn't free. I've never met a CEO who wanted to base his/her business on unsupported software. By supported, I mean when something goes down, they want a throat to grab (and sue if things get really bad). The result is something like RedHat or OUL, which has support, not definitely isn't free.

      Also, if you come into my office and the best pitch you have for Linux on your project is "it's free", you'll be asked to leave.

      • Re: (Score:2, Informative)

        by Anonymous Coward

        Ever actually try to grab a throat at MS? Last time I tried I got "It's our bug, but we have no fix for you. Don't hold your breath for the next version either"

      • Re:Better Idea (Score:5, Insightful)

        by jedidiah (1196) on Thursday June 06, 2013 @12:15PM (#43926525) Homepage

        > I've never met a CEO who wanted to base his/her business on unsupported software

        Then you've not been around much. Plenty of companies outside of a very small set of "glamourous" ones will happily trade a little risk for a really big discount.

        Don't try to conflate the Fortune 100 with everyone because it's simply not the case.

        • by unixisc (2429386)
          Well, if one wants supported Linux, one can always adapt RedHat, and it'd be as fully supported as Solaris or Windows.
      • Well said. I think people who pitch "linux is free" have at best some (indeed free) Linux machines at home or work but never worked in enterprise-grade server software business, nor do they know much about it.

        • Re:Better Idea (Score:4, Insightful)

          by serviscope_minor (664417) on Thursday June 06, 2013 @01:18PM (#43927243) Journal

          I think people who pitch "linux is free" have ...

          Have what? read the dictionary?

          Free means you don't pay anything for it.

          You know those "win a car" competitions? Would you claim that the car you win isn't free since it needs petrol?

          Would you claim that bending down to pick up $100 on the floor isn't free money since you had to waste potential earning time to pick it up?

          Are you going to use a different value of the word "free" from everyone else. Try readinf "the free dictionary". Ha it's a lie: it's not free because you had to pay for internet access!

      • While I generally agree with your post, I wonder is there any throat to grab for theCEO if windows fuxors something up?

      • I never have mod points when I really need then. Exact, "is freee!!!" is not a good answer to "why should I use it?". It's no good to be free if it is incapable of do the necessary work
      • by devent (1627873)

        Linux is free period. It's just a fact. Like the sun is bright.
        Only because you chose to pay for support, you now proclaim "but but but for support I still have to pay"

        Example: I can go to debian.org download and install full Linux. Or I download and install CentOS if I want Redhat Linux.
        This is free. Please point to where I can download Windows 2003 Enterprise Server for free (and legal). There is no such site. You have to pay first $$$ to Microsoft.

        Now how you handle support is entirely up to you.
        You can

      • by Taelron (1046946)
        I work for a multi-national organization and we spefically use Linux in place of Windows because of the fact, in terms of licensing, it is free. We have in house engineers that support our applications. So once you factor in the cost of an in house engineer supporting the application only and an in house engineer supporting the application plus licensing, Linux comes out as the much cheaper alternative. We also routinely see Linux machines performing in mission critical roles far exceed the same performanc
    • When will Microsoft wake up the fact they release crap, users are getting fed up with it.

      People have been putting up with it for over 20 years; why would MS change their strategy now?

      • Re: (Score:2, Interesting)

        by Anonymous Coward

        When will Microsoft wake up the fact they release crap, users are getting fed up with it.

        People have been putting up with it for over 20 years; why would MS change their strategy now?

        Isn't the point of TFA that Microsoft is changing course?

        Changing course from scraping along the side of the iceberg to directly ramming into it, but still...

      • by Murdoch5 (1563847)
        Because even 10 years ago the average user didn't know crap software from good software, now the average user is changing.
    • Re:Better Idea (Score:4, Insightful)

      by Tablizer (95088) on Thursday June 06, 2013 @12:14PM (#43926523) Homepage Journal

      Microsoft's strong-point used to be that you could get stuff done with their GUI's without having to read much of the manuals. Average Monday-blawzay hangover employees could click their way to getting stuff up and going via GUI trial and error. While that's not necessarily a lofty advantage, it fit a need and companies liked that.

      But they got away from that by stuffing their UI's and tools with "enterprise-level" gobbledygook because they want to compete on IBM's and Oracle's turf. Now they are the worse of both: bloated and bureaucratic without the reliability and support structure of IBM (relatively speaking).

      I would recommend they go back to their roots of get-it-done GUI tools or front-ends. They could even do so for Linux front-ends for server admins who don't want to learn Linux command-lines and scripting. Again, I'm not necessary condoning such practices or employees, only saying there is a market (profits) for such tools and they have existing experience there.

    • your server product make me laugh because Linux can do everything for free and better.

      "For free"? Hah! Not hardly. The fact that some linux distros (but not all) are distributed free of charge hardly makes installing linux in a business free of charge. You seem to have neglected the cost of hardware, installation, training, support, application software, integration with existing systems, and data migration just to start. While there are plenty of cases where linux is the better option financially there are NO cases where it is genuinely free. (as in beer)

      As for better, that depends en

  • by JDG1980 (2438906) on Thursday June 06, 2013 @11:35AM (#43925983)

    Brilliant move! De-emphasize the divisions that bring in the big bucks *and* have a unique advantage over competitors for legacy reasons, while placing even more emphasis on the divisions that lose money and have mediocre market share.

    Seriously, this move by Ballmer is about the direct opposite of what a business in transition should do. I wonder how much longer before the stockholders finally kick him out.

    To a first approximation, Microsoft *is* Windows and Office. That's what keeps everyone locked in. That's what brings in the big volume licenses. Cede that, and the rest of the edifice collapses entirely. Ballmer might not like it, but Microsoft is a software company and lives or dies on desktop software. The truth is that they have to transition to a more mature company model, paying dividends and making a lot fewer splashes. They aren't ever going to be hip and cool and revolutionary. And their customers don't want them to be.

    • by h4rr4r (612664) on Thursday June 06, 2013 @11:39AM (#43926051)

      The problem is they have historically sacrificed everything for windows desktop. Office could be running on other platforms, but it won't for that reason.

      The OSX version should not even be called office, since it lacks so many corporate features like Excel services.

    • by stenvar (2789879)

      Windows and Office are dying. Microsoft needs to use the remaining revenue they can squeeze from them to start up new division and products without tying them to these dying software systems. So far, almost everything else they have done has failed because it had to be tied to Windows and Office.

    • MS got addicted to their cash cow near-monopolies. If they split up into multiple companies, then each part has to compete on its own and will have to find ways to survive without milk from the Cash Cow. They may flounder at first, but eventually will become competitive again. There's probably no shortcut.

      Rehabilitation from addiction can be painful.

  • by telchine (719345) on Thursday June 06, 2013 @11:36AM (#43925993)

    [Steve Ballmer's] objective is to help the company move toward becoming a "devices and services company,"

    Maybe he can deliver me a chair?

    • Wait, so Ballmer wants to make MS a company that sells things MS has a terrible reputation for?

  • by hcs_$reboot (1536101) on Thursday June 06, 2013 @11:36AM (#43926001)
    Ballmer: "Guys, MS will live its biggest reorganization ever: I resign."
  • by Galaga88 (148206) on Thursday June 06, 2013 @11:39AM (#43926053)

    As a naive individual with little to no business knowledge or training, could somebody please explain how Steve Ballmer is still CEO of Microsoft?

    What knowledge is the board of directors privy to that the entire rest of the world isn't that has kept him employed for so long?

    I *must* be overlooking something to explain how somebody could so completely mismanage Microsoft to the point of irrelevancy and still work there.

    • by Anonymous Coward on Thursday June 06, 2013 @11:43AM (#43926107)
      Because he was grandfathered in. The guy has no technical or business knowledge and the only reason he has anything to do with Microsoft is because he was lucky enough to have known Bill Gates and Paul Allen when they were forming the company.
      • with Microsoft is because he was lucky enough to have known Bill Gates and Paul Allen

        Right, and the board must feel that if they get rid of the 'original team' facet, the stock price will suffer. It's incredibly short sighted - in the long run the founders are dead, so they have to do it sometime unless they're planning to have Bill Gates's head in a jar run the company. But public companies rarely do 'long-term'.

        In the meantime, get your re-org boots on [dilbert.com], Microsofties.

    • As a naive individual with little to no business knowledge or training, could somebody please explain how Steve Ballmer is still CEO of Microsoft?

      A literal interpretation of your sentence is that you are asking someone with little to no business knowledge or training to answer your questions.

      (Which is probably what you'll get on Slashdot.)

      What knowledge is the board of directors privy to that the entire rest of the world isn't that has kept him employed for so long?

      Maybe it's something that *he* knows about the Board of Directors.

    • by sjbe (173966) on Thursday June 06, 2013 @12:15PM (#43926535)

      As a naive individual with little to no business knowledge or training, could somebody please explain how Steve Ballmer is still CEO of Microsoft?

      I would surmise it is a combination of the following:

      * Balmer is among the largest shareholders in the company and good buddies with his predecessor who is the largest shareholder and Chairman
      *Microsoft has a relatively unimpressive and compliant board largely hand picked by Bill Gates and Balmer
      *The fact that despite their problems the company remains hugely profitable which makes it harder for the board to complain even if they were inclined to do so.
      *The company's large market cap and strong cash position make them a very unattractive target for a buyout and difficult for activist investors
      *There are credible rumors that Balmer culls potential rivals [reuters.com] within the company

      I'm sure there are other reasons but those are probably among the bigger reasons.

    • by rahvin112 (446269)

      Massive stock holdings. He's IIRC the second largest stock holder in Microsoft.

    • by PolygamousRanchKid (1290638) on Thursday June 06, 2013 @12:23PM (#43926631)

      Microsoft needs to hire Ballmer a personal chauffeur to drive him around. Hans Reiser would be the perfect man for the job. He's tanned, rested and experienced.

      They also should buy him a house . . . right next to John McAfee would be perfect. That seems to have worked before . . .

    • by Cassini2 (956052)

      Microsoft is very cleverly following the Harkonnen plan from Dune. Under pressure from the government, Bill Gates needed to leave Microsoft. As such, Harkonnen's brought in "The Beast Rabban" (Steve Balmer).

      Rabban's job was to so badly mismanage everything, that anything would be preferable to the continued domination of Steve Balmer. Then, at the appointed moment, Bill Gates can be brought back to rescue Microsoft and save Dune. The regulators will accept Bill Gates, because anything is better than Wi

  • Bearing in mind the IT Market is constantly shifting if they carry on the way they have then they are pinning their hopes on Intel/AMD bringing out the next range of processors at 30Ghz. Its not likely to happen. They never capitalised properly on the mobile space although they have a long history with Mobile Phone OS's. No doubt whatever they do they'll keep up their long history of pissing on the hand that feeds them :(
  • Mis-titled Article (Score:4, Informative)

    by fortunatus (445210) on Thursday June 06, 2013 @11:49AM (#43926187)

    This article did not discuss the reorganization plans. Instead it whined and complained about Microsoft's poor sales performance.

  • Nobody would ever buy the Xbox division because nobody is going to buy the new Xbox. It's such an utter disaster, they might as well just sell their Xbox line to Sony for $0 because that's what they're effectively doing. They're handing them 100% of their profits and killing the product line. Who the hell is going to buy a device that spies on you with a camera and mic 24/7 even when it's turned off, records your apparent moods, doesn't play movies when too many people are in the room, doesn't play used
    • Wishful thinking. No one ever went broke from underestimating the taste of the American public. I do hope xbox one is a massive failure. I don't really believe it, though.

      • There are ardent brand loyalists who will buy one no matter what, but based on everything I've read the reaction to Xbox One's feature set has been nearly catastrophic. I don't think it's outside the realm of possibilities for the console to be an abject failure. I think fewer than a million sold is unlikely, but it could do worse than GameCube numbers.
    • Your post is so full of urban myths, disinformation and wrong assumptions, that the only true words I could find were "the", "or", "who", "a" and "and".

  • by kheldan (1460303) on Thursday June 06, 2013 @12:01PM (#43926335) Journal
    So long, Microsoft. Wonder who we'll be getting our OS from shortly after you go bankrupt?
  • Reorgs are rarely the result of or for the benefit of external factors and market pressures. Reorgs exist for two key reasons: inertia and political infighting. Inertia is when senior management gives up on trying to fix unfixable problems and resorts to throwing all the moving pieces in the air and hoping something works. Political infighting is self evident - just turf wars and stepping all over each other for personal gain. First the senior managers try to push specific underlings out of their jobs - and

  • A new xBox was launched on May 21. Unfortunately, like all digital markets, gaming is moving increasingly mobile, and consoles show all the signs of going the way of desktop computers

    This guy clearly has no idea what he is talking about. First of all, the new XBox was announced on May 21, not launched. Secondly, yes mobile gaming is increasing due to the popularity of smartphones and tablets, but true gamers aren't going to be flocking to play a new Call of Duty on their smartphone. The next generation

    • The article is based almost entirely on rumors and bad information, but that's what you get from these "Forbes Contributor" articles. They're not from the Forbes staff, they're basically a curated set of blogs hosted by Forbes.

  • by gestalt_n_pepper (991155) on Thursday June 06, 2013 @12:14PM (#43926513)

    VB6 migration path to VB.net: Fuck you. Recode.
    Winforms to Web: Fuck you. Recode.
    Silverlight to WPF: Fuck you. Recode.
    WPF to anything:Take a guess.
    Microsoft Office interface: Fuck you. Retrain.
    Windows interface: Fuck you. Retrain.
    Old Windows phone: Fuck you.
    New Windows phone: Maybe we'll let your app on our store, and by the way. Fuck you.

    Why anybody, at this point, would invest *any* time in any windows language or platform is beyone me. Think Android. Think iOS.

    • by JBMcB (73720)

      You're missing some:

      32-bit to 64-bit ADO.NET drivers (they finally relented and released the 64-bit Access 2010 engine that gives you a few, but that was five years after your 32-bit SQL module completely broke in 64-bit SQL 2005)

      SQL Server 2000 -> 2005: When automatically creating object change scripts, the code created in 2005 breaks in 2000 due to system object reorganization, with no backwards compatibility in 2005. Nice.

      Flight Simulator (way to kill an immensely popular franchise)
      Mechwarrior (Ditto)

  • Jumping the shark? (Score:4, Insightful)

    by gstoddart (321705) on Thursday June 06, 2013 @12:37PM (#43926777) Homepage

    His apparent objective is to help the company move toward becoming a "devices and services company,"

    Is this Microsoft's jumping the shark moment?

    Whenever I hear of a large software company suddenly saying they're now a devices and services company, I have to wonder if they have a good grasp on what's happening.

    They keep thinking they're going to move everything to the cloud and subscriptions, but I'm not sure if their customers actually want that from them.

    One does have to wonder if they're not just trying to figure out what to do next to stay relevant in some segments -- but you have to be sure to not destroy the main revenue streams you already have.

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