How Microsoft went from leading to lagging, and how it’s trying to change

Microsoft's Craig Mundie showing a software prototype in 2009.

Craig Mundie showing a software prototype in 2009.

Earlier this week I was part of a small group of journalists and bloggers who spent the day questioning and listening to Microsoft’s top executives from Xbox, Office, Bing and other parts of the company. Just about every senior leader (except for those from Windows) took part in on-the-record briefings.

It was an annual event called TechForum, led by Microsoft’s Craig Mundie, the company’s longtime research and strategy chief who recently announced plans to retire next year. He’s serving as senior adviser to Microsoft CEO Steve Ballmer in the meantime.

There was a lot to absorb during the day, and I’ve been posting this week about some of the projects and trends that struck me during the day. But before the event fades from memory, there was one exchange toward the end of the day that’s worth sharing.

It came when Mundie was asked why Microsoft has struggled to keep up with Apple and other competitors over the past decade. It’s a common question, but Mundie gave a particularly introspective response, starting by cautioning that it wasn’t as simple as simply getting faster. Here’s an extended excerpt from his comments.

In many of the areas where people said, oh, you’re behind — Apple’s products are a great example, they did music players, and then they did touch devices and then they did phones and then they did tablets — well, it turns out that we had all four categories of those devices in the marketplace more than one year or two years before Apple did their first one. But for a whole variety of reasons — they were just business choices we made at the time — we didn’t end up capitalizing on them. And once we didn’t capitalize on the lead we had to fight our way back. So in each of those categories you go from leading to lagging not because we didn’t have the technology, and not because we didn’t do it fast enough. Some people said we did it too soon. It is a delicate balance.

On the other hand, we also shipped what have been our major products, particularly Office and Windows, at a scale that nobody else ever does. Our beta tests our bigger than the lifetime deliveries of most people’s software products. In every category. The only ones that even come close now are people doing phones, because phones as a device category have gotten big enough in absolute volume that you kind of get into the same zone. …

So those things had a long lead time, when we were packaging them up and testing them. And then shipping them in this, I’ll call it, increasingly uncontrolled hardware ecosystem. And so one of the things that has changed is we’re trying to provide more controls on the hardware ecosystem so it’s not so unruly, you could say, because that variety our testing process more complicated. And then the other thing is, because we’re able to move these things more into the services environment, as opposed to just shipping them as an upgrade, we bear the cost of managing the upgrade.

If you listen to an enterprise CIO over the last decade or 15 years, most of them would tell us, every two or three years, that’s absolutely the most frequently we would want to change.  In fact if you look at it, most of them who have paid for our software are skipping whole generations. They’re only upgrading every five or six years. In that environment, there was more pressure to be deliberate.

When we run these things in our own infrastructure, and you just buy a service, like you’re buying electricity, we say, hey, you know what, every 90 days we add a new feature. They say, great, we get a new feature. Didn’t have to do anything. Didn’t buy any new hardware, didn’t have to upgrade all the machines. So there is an element of the services component that allows the cycle time to be reduced. (Microsoft Office president Kurt DelBene) acknowledged it today when he talked about the Office evolution, and the Bing product evolution has been a whole rapid cycle. They introduce a new generation every 90 days.

So I think the company has the capability to engineer at whatever speed we need to. And it’s clear that there are certain categories now where getting it done more frequently is beneficial, and I think you’ll see us do that.

A lot to chew on there. It feels like Microsoft has gotten caught in the middle of the different markets it is trying to serve, from businesses to consumers. As Mundie makes clear, it’s not good enough to have the idea. The company needs to execute quickly and make the right business decisions.

Yes, consumers are driving tech trends in businesses these days, but the needs of businesses remain very different from the needs of consumers. The big question in my mind is whether Microsoft can become more nimble while trying to focus on both.

At the end of the day (literally) I still needed to be convinced that the company has made the fundamental changes to ensure it doesn’t end up trying to come from behind, again, when the next big thing arrives.

  • http://www.timacheson.com/ Tim Acheson

    “How Microsoft went from leading to lagging, and how it’s trying to change”

    This entire premise of this article really is absolute nonsense.

    “why Microsoft has struggled to keep up with Apple and other competitors over the past decade”

    Really? E.g. Windows, Microsoft’s flagship product? After over a decade of all out war, Mac has barely scraped past 5% market share against Windows. Perhaps the statement refers to mobile, as indeed Apple propaganda has a tendency to focus on mobile — because this is a segment in which Microsoft has only recently begun a major push.

    Where is Apple in games consoles? Where is Apple in productivity software? Microsoft is highly diverse business and is market leader in every key area — an odd definition of “lagging”.

    • http://geekwire.com Todd Bishop

      Thanks, Tim. As noted above, those are Craig Mundie’s own words related to music players, touch devices, phones and tablets. Essentially every big new consumer tech market that has emerged over the past decade.

      • http://www.timacheson.com/ Tim Acheson

        “music players, touch devices, phones and tablets”

        So, mobile then.

        Let’s not overlook gaming and general home entertainment, productivity software both installed and in the cloud, indeed both consumer and business cloud platforms, server operating systems and software, database platforms, enterprise platforms, development platforms and tools, programming languages, etc, etc. Microsoft is an extremely diverse business and is leading in its core segments.

        People who want to bash MS or hype Apple/Google always love to say “but mobile” and focus on that. ;)

        • Frank

          Total revenue, last four quarters:
          iPhone & related: $86.72B
          Microsoft Corporation: $72.97B

          • http://www.timacheson.com/ Tim Acheson

            Revenue does not present the whole picture, and the partial picture is not the good one you seem to believe it is.

            Over-priced products with short life-cycles requiring frequent upgrades OBVIOUSLY will generate much higher revenues all other factors being equal. And mobile is in rapid growth.

          • Brightest Aura

            Short life cycles. Apple enables users to install the newest OS on their iPhone going back to the iPhone 4. When the newest iPhone is released that will include four different models. Overpriced products? That is a matter of opinion.

          • http://www.timacheson.com/ Tim Acheson

            Short lifecycles is for Apple’s benefit, not ours.

            New models and products are in reality very similar to the previous models and products. That means more sales for Apple. And makes it easy to manage software upgrades. Supporting iPhone 4 is not impressive because it is so similar to the newer models — and what about the very many people still use iPhone 1, 2 and 3? Apple will disenfranchise loyal customers without hesitation, as we have seen time and again, e.g. releasing a new model so soon after the previous one, or switching Macs to Intel so PowerPC Mac owners are no longer supported by most software companies (and not even Apple).

            So, what’s your point, exactly?

          • Brightest Aura

            If you want to call a new phone a short life cycle in the tech industry, go for it. My point is Apple enables users to use the newest software on a phone that is over three years old. The iPhone 1, 2, and 3 models still work. Of course not all the features.

          • http://www.timacheson.com/ Tim Acheson

            It is a short lifecycle, and an unduly short one when the next model is so similar to the old one.

        • Roger

          What does MSFT have in general home entertainment that trumps AirPlay or iTunes for general home entertainment? Don’t say Xbox, you separated gaming and general home entertainment and the depth of content and breadth of iTunes clients trumps Xbox music/video.

          IMHO option, most people actually using MSFT office products would rather have pre-ribbon circa 2003 versions of the product but don’t have much say in the software they use. The fact that they had to extend the EoL date on WinXP also didn’t speak well to people embracing the new MSFT products.

          • http://www.timacheson.com/ Tim Acheson

            By revealing that you did not realise Xbox is a major general entertainment platform worldwide, you exposed yourself as somebody who knows little or nothing about Xbox and who is therefore poorly qualified to offer weighty opinions on the subject.

          • Hans

            Except XBox is not even $1 B revenue per year and is poised to get annilhilated by the upcoming Apple TV hardware that has its own software ecosystem. Utter annihilation is incoming to yet another failed MS line of business.

          • http://www.timacheson.com/ Tim Acheson

            “revenue”

            Revenue has nothing to do with it. My original point still stands.

            “annilhilated by the upcoming Apple TV hardware”

            That is pure conjecture, and frankly unlikely when superior platforms are available.

          • Brightest Aura

            AppleTV is winning. Microsoft is not losing because they are not playing. They tried and failed.

          • http://www.timacheson.com/ Tim Acheson

            Have you heard of Xbox? I suggest you do some research on the basic features — everything Apple TV does and much more. Dude, why discuss topics you clearly know very little about?

          • Brightest Aura

            The user can mirror their device onto the TV wirelessly with Xbox? Overpriced media device. When Apple lets companies write games for the AppleTV say goodbye. How much does a company have to pay to write a program for Xbox? $10,000? Their model will fade away along with revenues. That’s right, revenues do not matter to you.

          • http://www.timacheson.com/ Tim Acheson

            “The user can mirror their device onto the TV wirelessly with Xbox?”

            Why do anti-MS/Apple-fanboy commenter consistently waste my time with questions which the answer is readily available?

            I don’t see viewing a mobile device on a TV screen as a particularly special feature of Apple TV. There’s nothing new or impressive about connecting any device to any screen, wirelessly or otherwise. You do not need Apple TV to do that. And why connect an inferior device to the screen of a superior device? It’s pointless. What really matters is having the content and features where you need them, and just displaying a mobile device on a big screen is a lame solution.

            If you like this sort of cross-device functionality, take a look at Smartglass:
            http://www.xbox.com/en-GB/smartglass

          • Brightest Aura

            “I don’t see viewing a mobile device on a TV screen as a particularly special feature of Apple TV.”

            I am glad you are being honest. You lack the background experience to understand how this device enables a doctor, teacher, or executive to mirror anything on their display to a projector or TV via AppleTV.

            I looked at the link. The commercial failed to demonstrate a user mirroring documents like Word or PowerPoint through Smartglass, in other words, you or I cannot mirror everything that is on our display. The device you are suggesting primarily works as a remote control and does not have a use outside the home.

            Tim, there is more to life than video games and Xbox.

          • http://www.timacheson.com/ Tim Acheson

            “You lack the background experience to understand how this device enables a doctor, teacher, or executive to mirror anything on their display to a projector or TV via AppleTV.”

            No, you deliberately missed my point. The point is, you do not need Apple TV for this. Indeed, you would only believe otherwise if you are so obsessed with Apple that you have not tried any other technologies for the past half decade.

          • Brightest Aura

            Give me alternatives Tim that are in AppleTv’s price point. Please do not site Xbox as an example because a doctor cannot use his or her Xbox to mirror their presentation to a projector. You gleefully show your ignorance by recommending Smartglass. Smartglass does not perform the tasks I brought to the discussion.

          • http://www.timacheson.com/ Tim Acheson

            “Give me alternatives Tim that are in AppleTv’s price point.”

            Apple TV price: £99

            Price of doing what you described on Android: free.

            E.g. http://droid-at-screen.ribomation.com/

            Why attempt to discuss something you know nothing about? It’s lamentable, yet typical of Apple fanboys.

            If you want a mainstream commercial solution, there are countless examples:

            http://panasonic.net/avc/projector/android/

            “a doctor cannot use his or her Xbox to mirror their presentation to a projector”

            He could, but there are better ways. There are better ways than Apple TV, too. All you are proving here is that as an Apple fanatic you know about Apple products but are ignorant of the big wide world beyond Apple.

          • Brightest Aura

            The Panasonic wireless projector costs more than AppleTV and does not give the user flexibility. In other words, the Panasonic projector has to be used.

            The Android app does not have the flexibility like the AppleTV as well. How can I use my MacBook or Dell laptop with the Android app?

            Yes, I like Apple. But you are the one that is ignorant in this area Tim. You have not tried to mirror a computer wirelessly with a projector in the morning and TV in the afternoon. It’s okay to say AppleTV is the better product or let everyone know that you do not have the answer.

            First you tell me to use Smartglass, next an Android App is recommended, then a wireless projector.

          • http://www.timacheson.com/ Tim Acheson

            “The Android app does not have the flexibility like the AppleTV”

            Yes it does. What do you mean? And there are many others, that was just one obvious example which is FREE.”

            “How can I use my MacBook or Dell laptop with the Android app?”

            How can I use my Windows 7 or 8 laptop with Apple TV, apart from streaming content from iTunes? Screen mirroring does not work! The alternatives to Apple TV are in fact better and more flexible.

            Remember, we’re having this discussion because you thought screen mirroring was unique to Apple TV. In reality, Apple TV is an odd choice of product if this is what’s needed — in fact Apple is an odd choice in general with its proprietary lock-ins and notorious inflexibility.

          • Brightest Aura

            A bunch of nonsense from you Tim. You have exposed yourself as someone that only uses technology to play video games. You study the failing and faltering company called Microsoft, but you do not utilize their technologies as a tool. It’s all theory to you.

            AppleTV is the best choice for more than half of the tablet users. Of course the 2% of Microsoft tablets out there wouldn’t work with AppleTV; that’s okay, they can use Xbox or buy a wireless Panasonic projector. You have tried to research alternatives during our discussion because you do not have the answer. You came up short.

            I’ll listen to you when you talk about the latest video game or Office update, but don’t talk about devices you do not understand.

          • http://www.timacheson.com/ Tim Acheson

            “You have exposed yourself as someone that only uses technology to play video games. ”

            You’re the only one of us who has mentioned video games — repeatedly. I used the word Xbox once as part of a wider point. I infer from your comment that you wrongly believe that Xbox is merely a gaming platform — but there is much more to it than that, as you would know if you had ever used one. Are you aware that the Xbox platform has major apps, for example, and also major TV channels, movies, music, etc?

          • Brightest Aura

            According to the MS site: “The new way to watch TV.
            Connect your cable or satellite box to Xbox One and watch all your favorite television shows right through the console.1 All your favorite channels. All your favorite shows. All with the sound of your voice. You can even create your own personal channel by pinning the shows and apps you watch most. Gone are the days of switching
            inputs to watch TV or play a movie. Xbox One can do it all.”

            No I didn’t, but using my satellite receiver with Xbox doesn’t sound like a technology that is useful to me. In addition, I researched Smartglass and it is also not innovative enough for me to switch platforms.

            Sorry I cannot prove to you the future technologies that will be included in AppleTV. Any credible person that studies technology is aware that the device is evolving and is not a major product for Apple at this moment. Give it some time.

          • http://www.timacheson.com/ Tim Acheson

            “using my satellite receiver with Xbox doesn’t sound like a technology that is useful to me”

            Yet again you have totally misunderstood the technology you’re attempting to talk about, having quoted a chunk from the official website where you quickly went to address the conspicuous fact that you have virtually no knowledge whatsoever of this platform which you have been trying to criticise. This should come as no surprise to you by now. It should come as no surprise to anyone who has read Apple fanboy comments about MS in the past.

            “Sorry I cannot prove to you the future technologies that will be included in AppleTV.”

            I know. Which is why you were wrong to do so earlier, hence I called you out on it. Instead of admitting you were offering fantasy instead of fact, you drew me into this lengthy discussion in which at literally every step you have proved grossly ignorant of the MS technologies that you tried to criticise.

          • Brightest Aura

            Just because I cannot prove an issue does not make it untrue Tim. Tell me why Apple would not open the AppleTV to third party developers like they have with iOS devices. The truth is, you can’t. You use your own logic to make discussions work in your favor. Calling me ignorant when when you have your own insecurities about technology. You have not a clue about utilizing tech as a tool in business or other sectors.

          • http://www.timacheson.com/ Tim Acheson

            You made a bold claim. That claim was false. You cannot now conceal the fact by speculating that it might happen in the future.

          • Brightest Aura

            In addition, my five year old could build a better blog than your rainbow and clouds fantasy web site.

          • http://www.timacheson.com/ Tim Acheson

            Trolling duly noted.

            Resorting to ad hominem attack duly noted.

            The classic traits of an Apple fanboy commenting online, after bring exposed for all to see as profoundly ignorant of the topics he’s attempting to discuss.

          • Brightest Aura

            Hello Kettle, I’m black.

            Calling me ignorant when it is obvious you haven’t a clue.

          • http://www.timacheson.com/ Tim Acheson

            I wouldn’t say you’re ignorant in general. But you yourself have admitted to your ignorance of Xbox after you tried to discuss the platform, and you must surely accept that your ignorance of MS in general has been exposed for all to see as extremely weak during this discussion. That does not make you a bad person. It just adds very little weight to your side of the debate.

          • Brightest Aura

            …your ignorance of Xbox after you tried to discuss the platform…

            Again, the pot calling the kettle black. You thought Xbox enabled the user to mirror their device like the AppleTV. It fails in that area and I knew it. The user cannot mirror a PowerPoint presentation form their brand new Dell. Ironic since you have an Xbox.

          • http://www.timacheson.com/ Tim Acheson

            “You thought Xbox enabled the user to mirror their device like the AppleTV.”

            No, I said Apple TV is an expensive and odd way to achieve that. You do not need an intermediate device to display a mobile device on a screen. Are you familiar with the parable of the soup stone?

          • Brightest Aura

            I stand by my claim that I think that Apple will let third party developers write games for AppleTV. You failed to provide evidence of why Apple would not let this happen.

          • http://www.timacheson.com/ Tim Acheson

            That’s a prediction, but one which falls far short of your original bold claim. You attempted to argue that Apple will soon be a major player in games consoles. In reality, that was pure fantasy. Apple’s crowning glory was iOS but the company is now in decline.

          • Brightest Aura

            AppleTV runs off a variant of iOS. It’s still my prediction Tim and you can not prove counter the argument.

          • http://www.timacheson.com/ Tim Acheson

            That argument undermines your theory rather than strengthening it. The very simple games which iOS is capable of running are already available on games consoles in the indie segment but very unpopular on games consoles.

          • Brightest Aura

            Okay Tim, you seem like a black and white kind of guy, kind of a concrete thinker. So, lets imagine that Apple wants to transcend the simple games that run on mobile devices for the AppleTV, what would they have to do in order to run sophisticated games similar to PS3 or Xbox games? I am asking for your help with this AppleTV fantasy.

          • http://www.timacheson.com/ Tim Acheson

            The Catholic Church has a better business model than Apple. They are able to earn more money.

            http://money.msn.com/now/post.aspx?post=1a685537-b674-462d-9189-21772d2f4be4

            Die-hard fans and defenders of Apple often fall back on the company’s finances in response to criticisms and reports of failings of their beloved idol. For instance, if you dare to question the true quality and extent of Apple’s innovation, it won’t be long before somebody brings money into it to prove how great Apple is. Even as Apple’s share price crashed down to $400 yesterday, loyal supporters were wheeling out the old “if this much profit is failure, give me some failure” argument.

            But the Catholic Church is as big a business as Apple. And it makes an interesting comparison. Is the Catholic Church innovative? Are it’s products great, or even tangible? Making money does not demonstrate that a business or its products are great, it merely demonstrates that people are susceptible to marketing and ideologies.

          • Brightest Aura

            Failed argument Tim. You are not explaining Microsoft’s poor revenues. The Catholic Church?? Apple?? Hans is talking about MS. It’s typical when someone is desperate to start spewing off nonsense.

          • http://www.timacheson.com/ Tim Acheson

            No, I explained the church analogy.

          • Brightest Aura

            An explanation does not always mean you have a valid argument. Fail.

          • Brightest Aura

            Hans, that’s a typical Tim argument. I think it’s called a straw argument?

          • http://www.timacheson.com/ Tim Acheson

            All of my original points still stand. Your trolling fails.

          • Brightest Aura

            …you exposed yourself as somebody who knows little or nothing about Xbox and who is therefore poorly qualified to offer weighty opinions on the subject.

            Again, you decide to put Roger down by stating that he does not have the knowledge base to make a valid argument even though he clearly states that his statement is an opinion. Bullying tactics only work for a limited amount of time Tim. I am glad you are excited about the Windows OS, it takes a certain kind of person to have that passion. In the future please treat people as you would want to be treated. Roger and the other readers did not call you names or show their insecurity by saying you know less than them.

          • http://www.timacheson.com/ Tim Acheson

            “you decide to put Roger down by stating that he does not have the knowledge base to make a valid argument”

            His claim about Xbox proved beyond reasonable doubt that he has close to zero knowledge about it the platform.

            “even though he clearly states that his statement is an opinion”

            Opinions based on ignorance are not something to be encouraged and are the scourge of online discussions. It was more than just an “opinon” — it was a very strong statement, and bold claims demand a high level of confidence and a weighty burden of proof, both of which were grossly lacking.

            “Bullying tactics”

            You’re a troll.

          • http://www.facebook.com/people/Nathan-Ottenson/548655560 Nathan Ottenson

            Get Windows 8, right click video file and play to xbox. Works like a charm and it’s not tied to my itunes account in any way. And to be clear I’ve been using my PS3 as a media server/Streaming device long before Apple had even conceived of “air play”. Last point, Office 2013 is by far the most versatile and robust consumer word processing program available today.

          • Brightest Aura

            Roger, that is also typical of Tim. He puts you down in his argument to try to make you feel bad. You were very polite and professional in your comment, but he has to bring it to a the level of a 12 year old troll. Get used to it if you decide to engage in a tech argument with Tim.

        • Brightest Aura

          Gaming is the next area that Apple will destroy MS. Stand by and watch.

          • http://www.timacheson.com/ Tim Acheson

            Pure fantasy.

          • http://www.timacheson.com/ Tim Acheson

            “Gaming is the next area that Apple will destroy MS. Stand by and watch.”

            Apple has never destroyed Microsoft in any area. After all these years, Windows still has close to 100% market share versus Mac which has barely scraped past 5%.

          • Brightest Aura

            Apple destroys Softie in the following areas:

            Mobile phone hardware = destroy
            Mobile phone software = destroy
            Tablet hardware = destroy
            Tablet software = destroy
            AppleTV= where’s softie…destroy
            iPod= destroy
            Downloadable entertainment media = destroy
            Quality OS = destroy
            Customer satisfaction destroy

            I am waiting for some lame explanation from you, not a valid and comprehensive argument.

          • http://www.timacheson.com/ Tim Acheson

            “Mobile phone hardware”

            Which mobile phone hardware did you think Microsoft makes? Imbecile.

            “Mobile phone software”

            Compare the new iOS with WP8 — it’s universally acknowledged that Apple copied MS. Please list the main reasons why iOS beats WP?

            “Tablet hardware”

            Are you aware that Surface specs are far superior to iPhone? So what do you mean?

            “Tablet software”

            Nonsense. Please explain.

          • Brightest Aura

            Ahhhhh, the name calling. That’s when frustration presents itself and all logic is out the door. Tablet specs…please. They can’t give the RTs away. MS does not make phone hardware…another failure on their part. They have to rely on Nokia and other companies that are fading into oblivion. It will take more than a cool Nokia camera to move millions of their phones.

          • http://www.timacheson.com/ Tim Acheson

            I never seek to attack any commenter. Unlike the majority of those who challenge my comments, I never resort to ad hominem attacks. Dude, accusing me in this way is, in fact a classic form of ad hominem attack. You’re guilty of what you accuse me of. I am not.

            My criticisms are sometimes harsh, but always justified. I begin with any challenger by being polite and diplomatic, but when the debate is sabotaged by people citing outrageous falsehoods which I must then waste time debunking, I do admittedly get frustrated and lash out. I am only human.

        • Brightest Aura

          “Let’s not overlook gaming and general home entertainment…”

          Yes, let’s look it over gaming because it will not save Microsoft.

          • http://www.timacheson.com/ Tim Acheson

            Any company would be happy to have Microsoft’s entertainment division — even as the sole business. But Microsoft is a diverse company leading the market in all of its core sectors despite the best efforts of rivals for over a decade. So MS does not need its entertainment division to save it. MS does not need saving, except in another of your unfounded fantasies.

      • n8

        Check out my comment on this very topic on a post from Monday: http://www.geekwire.com/2013/details-emerge-apples-iwatch-set-debut-year/

    • calzoneous

      head in sand.

      • http://www.timacheson.com/ Tim Acheson

        “head in sand”

        Everything I wrote is true, and I could expand on it considerable. So what’s your point?

        • guest
        • Brightest Aura

          The point is MS is yesterday’s news. A boring tech company with little innovation. Their idea of innovation is buying Skype.

          • http://www.timacheson.com/ Tim Acheson

            You succeed only in revealing your profound lack of knowledge of Microsoft, their diverse product/service portfolio — including the market leaders in all of their core markets. If you know nothing about innovations from Microsoft, why attempt yo discuss the topic?

            Apple is yesterday’s news. What was the last big new product they released? iOS is old news.

          • Brightest Aura

            You succeed in using the same types of arguments. You try to bring the commenter down so he or she feels bad while trying to make yourself seem like an expert, no one else can have an opinion or could be correct.

            The Xbox will go away when Apple takes over this sector. Music, books, mobile apps and the home gaming system is next.

          • http://www.timacheson.com/ Tim Acheson

            I never seek to attack the commenter. Unlike the majority of those who challenge my comments, I never resort to ad hominem attacks. Dude, accusing me in this way is, in fact a classic form of ad hominem attack. You’re guilty of what you accuse me of. I am not.

            My criticisms are sometimes harsh, but always justified. I begin with any challenger by being polite and diplomatic, but when the debate is sabotaged by people citing outrageous falsehoods which I must then waste time debunking, I do admittedly get frustrated and lash out. I am only human.

    • http://www.facebook.com/luckyvic Victor Huang

      Microsoft is in the technology business. I don’t think shareholders have decided it is only in the businesses you have defined, which reflects in the performance of MSFT shares. At the end of the day, a company and its board can decide what field it wants to play in based on the resources it has. I think it is undeniable that Microsoft has had far more resources in terms of IP, capital and personnel than just about any company on the planet in the technology space a decade ago. To witness the miserable return since is disheartening. There isn’t much to defend here. We all wish our hometown guys do well.

    • self made big wig

      the pc market is now a laptop market. within the laptop market apple is 30+%. and it’s the only pc maker that is not declining.

      • http://www.timacheson.com/ Tim Acheson

        Clearly not because MS has almost 100% of the PC market overall. Doh!

        • Hans

          MS’s share dominance is on the sub $1000 commodity PC’s that are getting devoured by the emerging tablet market. Above $1000 it’s Apple or go home. Keep drinking the Kool-Aid, MS is toast.

          • http://www.timacheson.com/ Tim Acheson

            Your entire argument seems to be that you have a theory about Apple reducing Microsoft’s market share. Meanwhile in the real world Samsung is eating Apple’s mobile market share and Microsoft still reigns supreme in every other key segment despite Apple’s best efforts for the past decade.

          • http://www.facebook.com/people/Nathan-Ottenson/548655560 Nathan Ottenson

            Above $1000 it’s Apple or go home?!? And you accuse Tim of drinking Kool-Aid?

    • panacheart

      Microsoft still does well financially in core business areas where it gained a monopoly in the 80s and 90s. Its’ done well with Xbox too. But the question is really one of the future. Where is Microsoft going?

      Microsoft is a strong company with billions in the bank, so it’s not going anywhere soon. But the question for analysts is “where do you want to go today?” and clearly the future of Microsoft innovation is in question. A stronghold in the past does not guarantee it a leadership role in the future.

      Microsoft has been struggling for years to diversify its portfolio of
      products and services in anticipation of the day that desktop OS and
      Office licenses will no longer carry the company, but has been unable to produce significant revenue streams in consumer electronics to do that. It has done well with tools, SQL, and infrastructure, but consumer
      electronics and services still elude Microsoft. Xbox is clearly its only
      success story there.

      Analysts are looking for leadership – thought leadership and innovation that point to the future, and for a decade now Microsoft has a long string of losses and product discontinuation as it tries to innovate and diversify- tablet, phone, Bing, hotmail, aQuantive, music, zune, Kin Studio, Mediaroom, Surface, WEbTV, Millennium, Windows 8, MS Money, Passport, Smart watch, Frontpage, MSNTV, Playsforsure, Danger/Sidekick, Groove, LinkExchange.

      • http://www.timacheson.com/ Tim Acheson

        “clearly the future of Microsoft innovation is in question”

        No, it’s clearly not. Your concerns about MS would better describe Apple.

      • Brightest Aura

        Excellent point and you stayed on topic. Tim, decided to split your ideas and compare it to Apple instead of writing about MS.

    • Brightest Aura

      “Microsoft is highly diverse business….”

      Sometimes being highly diverse is not the best idea. I’d rather focus on making a few very good products than be mediocre in serval markets. If it can work, that’s is awesome, but it isn’t for MS.

      • http://www.timacheson.com/ Tim Acheson

        “I’d rather focus on making a few very good products than be mediocre in serval markets” [sic]

        This is classic anti-MS rhetoric, and fundamentally flawed. IN the case of MS, it’s diverse and excelling in all of their many core segments as I clearly stated.

        “Apple will enter the game console market soon.”

        This is a bold statement. Now I challenge you to prove it. You cannot do so, because it is at best pure fantasy and arguably a delusion. This characterises your arguments on this page, and indeed characterises anti-MS and pro-Apple commenters online.

        • Brightest Aura

          “This is a bold statement.” Tim’s reaction to Apple developing a game system within AppleTV.

          Why is that a bold statement Tim? Apple could easily enable developers to write apps for AppleTV. Why is this considered fantasy and not a possibility. Is a gaming system hard for a tech company to design?

          “Now I challenge you to prove it.”

          Really? I have to prove to you how a software developer could write a game program for an AppleTV? Okay…Apple opens up Apple TV to developers just like other iOS devices, companies write the software, then Apple profits from the sales of the games. Does that really seem like pure fantasy?

          • http://www.timacheson.com/ Tim Acheson

            Dishonest comment noted.

            You wrote: “Apple will enter the game console market soon.”

            That is a bold statement, and I have asked you to back it up. You are unable to do so, because it is pure fantasy. This is typical of the rhetoric from pro-Apple commenters online,.

    • Brightest Aura

      Where is Apple in games consoles?

      Yawn.

      • http://www.timacheson.com/ Tim Acheson

        Where is Apple in games consoles? Nowhere.

        • Brightest Aura

          Where is MS in phones? Nowhere
          Where is MS in tablets? Nowhere
          Where is MS… Nowhere.

          • http://www.timacheson.com/ Tim Acheson

            “Where is MS… Nowhere.”

            Riiiight.

            Where is MS in phones? Nowhere
            Where is MS in tablets? Nowhere

            WP8 adoption is slow in the US, but you’re ignoring the rest of the world. Even then, 6% of the US market and growing strongly is an unusual definition of “nowhere”. That’s about the same as Mac’s market share versus Windows, you realise that right? In fact, WP sales are growing six times faster than the smartphone market overall.

            WP is now the number 3 mobile platform and on its way to becoming number 2.

            You’re entire argument boils down to MS not having a strong presence in mobile. You can slice and dice it as much as you want to make it sound more important. MS only started making a serious play in mobile very recently.

            http://venturebeat.com/2013/05/16/windows-phone-jumps-to-third-in-global-smartphone-market-share-and-could-be-second-faster-than-you-think/

          • Brightest Aura

            There is no serious play with the failed MS mobile.

          • http://www.timacheson.com/ Tim Acheson

            Significant market share which is growing six times faster than the industry overall is an odd definition of failing. That’s putting it politely, my friend.

          • Brightest Aura

            If a Company only sells a million devices it is easy to grow six times faster. If Apple sells 35 million phones in a quarter, do you expect it to sell 210 million the following year? Besides, MS is only selling their OS, big deal. Yes, MS is failing in mobile.

          • http://www.timacheson.com/ Tim Acheson

            In Q2 2013 WP8 sales went up 32%.

            iPhone sales went DOWN.

            Do the math.

          • Brightest Aura

            I’ll do the math:

            iPhone 5 on the market for nearly a year, of course 4S & 4 have been on the market for a longer period of time and Apple sold 31 million phones. Nokia and HTC sold 8 million Windows phones during the same timeframe. Apple sold 23 million more phones. That’s a lot more phones sold by Apple Tim and Softie has been in the phone market for several years.

            I know, I know, you want to run the numbers to show YOY growth. I would much rather be in Apple’s position.

  • Bob

    OMG! Seriously? Do the excuses ever stop? MS got surpassed in relevance, market cap and revenue and profit too (in Apple’s case), because of a senior management team that was perpetually arrogant, over confident, and serially underestimated competitors and MS’s ability to respond. It doesn’t matter than in some cases they were first, despite Mundie trotting out that particularly lame excuse many times previously (e.g. Siri). That just makes the resulting failure that much more embarrassing. And the thing about it is that there was no shortage of people warning them that they were heading for a cliff. Starting mid last decade and even earlier, everyone from Mini-Microsoft to Wall Street was offerings warnings and advice. But MS’s SLT disregarded all of them; they knew better. Only it turns out they didn’t. Now the company is effectively a non-player in two critical markets for the future that it helped pioneer (tablets and smartphones) and being disrupted in its core of Windows and Office. And people primarily responsible for this failure, including very specifically Mundie (whose R&D group spent 10x more than Apple during the decade but didn’t deliver 1/1000 as much), are still cashing in millions each year in salary and stock, making excuses for their demonstrated incompetence instead of taking ownership for it, and promising they’ll get it right next time now that’s it’s likely too late.

    • Guest

      tl;dr

    • Dave

      And add to it the only person in management who will even acknowledge as much as Mundie has….is someone who has no power (never really did anyway) and is on his way out the door.

  • guest

    These guys are sad. They maintained they were winning years after it was obvious to most that MS was losing. The excuse then was that others were maximizing for the short term while MS was focused on the long. Now, when the objective numbers make it impossible to continue even that pretense, they finally admit their strategy failed. But they still want to blame it on their unique “scale”, which is no longer so unique, or basically anything or anyone other than themselves and their own poor choices. You can’t begin to fix a problem if you’re not prepared to admit its root cause. And frankly there’s little reason to think the team that failed so spectacularly is also capable of turning it around. Their numerous recovery attempts to date support that. MS deserves better.

  • Guest500

    Very simple- Out of control infighting. When your primary objectifies looking in rather than out, that’s when you have a problem. Microsoft has a problem, employes are miserable, the good ones that are left anyway, constantly fending off attacks, shoehorning “strategic BS” into a product so you can get it shipped, and doing endless nonsense PPTs justifying your existence to a moron makes for pour product decisions, loss of market share, and a lack of innovation.

  • Mark

    After thirteen years of systematically destroying their dominant competitive position, erasing >$250 billion of shareholder value, and letting companies that were minor players at the start of that period surpass them to become today’s leaders, it’s a little late to say “trust us, we got this”.

  • Self Made Big Wig

    I used to work there for 8 years. One day I got up and left, started my own company and made close to $2M on an exit within 18 months. And my products are now at Best Buy and AT&T stores (and I this was my first foray into consumer electronics and my first founded company). I gained an immense sense of accomplishment, self-realization and confidence. Had i stayed at Microsoft, I would still be having conversations with my boss why I am still no ready for L66 and what I CAN’T do. Never what I CAN do, it was always a defensive play. Especially the VP types at Microsoft… good grief – “you can’t do this, you are not ready for that, this is not your skill set”. In your face! So glad I left, there are no rules, no levels, only beautiful brains that think and steely guts that energize.

    Also, while the company has smart people, they are generally sheepish, timid. I mean what kind of a person joins Microsoft? I know what kind because I was that person. A person that seeks safety, security, stability. That person (again, that used to be me) is not a mover and shaker, he and she innovate within the boundaries, and the boundaries at MSFT are damn narrow. Even if you are working at MSR…your world class innovations have a very narrow filter they must go through to come to life.

    Gates, come back to your company and save it from itself. It needs a cultural shakeup and common goals. It needs stock options, not stock awards, it needs stock options, not huge paychecks. There is no incentive to innovate…just to survice and beat the spreadsheet. Give people a ton of options, low pay, see how it goes. Only the hungry and truly visionary will stay.

  • Davidjobs

    Typical microsoft duchebaggery. No mention of their inferior design and aesthetics capabilities, and complete disregard of an intuitive user experience. Make your spread sheets and STFU.