Pondering the Future of a Re-Org'd Microsoft 400
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?"
Re:Why is Ballmer still CEO? (Score:5, Informative)
Mis-titled Article (Score:4, Informative)
This article did not discuss the reorganization plans. Instead it whined and complained about Microsoft's poor sales performance.
Re:Sell the only post-pc success story MS has? (Score:4, Informative)
Except that the Xbox div loses tons of money.
It always amazes me how many people actually think that the Xbox is a highly profitable endeavor for Microsoft. While it has turned profitable recently, the Entertainment & Devices Division (where XBox is accounted for) is only mildly profitable. Nowhere near the profit rate of Microsoft's enterprise and desktop cash-cows. It is a stretch to call the Xbox a fiscal "success", at best one could now say it is not "money-losing". It is highly unlikely that Microsoft could expand the revenues and margins of EDD into a company-sustaining business.
Re:Better Idea (Score:2, Informative)
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:The circle of lifen (Score:5, Informative)
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]"
Re:Why is Ballmer still CEO? (Score:5, Informative)
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.
Re:Never Heard of Office 360 (Score:5, Informative)
I'd buy an Xbox today if it could replace my office pc. I need word, excel, and support for network printers.
On my Linux ultrabook I have LibreOffice which opens anything produced on word, and I've been using a great HP printer server that gives me wireless and internet printer access for a long time. Seriously, whats the gain by using Microsoft?
Re:The circle of lifen (Score:4, Informative)
It's worth remembering that IBM still gets a significant share of its profits from mainframes. It's not the "growth Growth GROWTH" that CEOs chase blindly through the maze, but as a cash cow it allowed IBM to survive a few wrong turns before stumbling onto services as the next big thing.
There's a lesson there for Microsoft, I think.
Linux costs less. Linux does not cost nothing. (Score:2, Informative)
Free means you don't pay anything for it.
Speaking as an certified accountant, you cannot possibly come up with a situation where you can install linux in a business for zero cost. You might not pay to acquire the operating system software but you will pay for support, training, installation, administration, hardware, application software, data migration, and more. It might cost less but it will never cost nothing. The moment you have a single employee do any work on it you immediately will incur cost.
If you want to make the argument that linux often is more cost effective please do. It is a credible argument which is easily supported by facts. Claiming that linux is free of any cost however is utter nonsense and easily shown to be false.
Re:The circle of lifen (Score:3, Informative)
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 their high prices. Eventually, they moved their manufacturing to Lenovo in China, but still kept selling PCs and laptops with their name on them, well into the 2000s, until they sold that division to Lenovo (who got to keep using the IBM name for 5 years afterwards as part of the deal). For a very long time, they were the gold standard for business laptops with their Thinkpad line though their PCs weren't anything special after they finally gave up on the PS/2-type strategies and made industry-standard PCs like everyone else.
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.