Should Microsoft trade rain for fog? Photo by Mark Dalmulder, via Flickr
Should Microsoft trade rain for fog? Photo by Mark Dalmulder, via Flickr

Put down the coffee and take a deep breath before you read this one.

In his new column for Forbes, business consultant and strategist Peter Cohan contends that new Microsoft CEO Satya Nadella should move the company to San Francisco. His argument, in essence, is that Seattle’s culture is too soft to challenge Microsoft to be innovative.

thompson
New Microsoft chairman John Thompson addresses employees last week as new CEO Satya Nadella, left, and former CEO Steve Ballmer look on. (Microsoft photo)

“If it is serious about innovation it needs to move where the innovation is happening so that its new business creators will be in entrepreneurial soil that values betting big on transforming enormous markets instead of playing bureaucratic games to hang on to a comfortable job until retirement,” Cohan writes.

He writes, “Today the most fertile ground for entrepreneurship is shifting from Silicon Valley to San Francisco. And that is where Microsoft must move if it hopes to break free of the yearning for a pension that keeps its people from the kind of thinking and action that spurs innovation that could accelerate Microsoft’s revenue growth.”

He adds, “There would clearly be significant turnover from people who did not want to move. But some of that might open positions for people who are more entrepreneurial. Attracting and motivating that talent in San Francisco would require Nadella to manage differently.”

Cohan delivers an indictment not only of Seattle’s tech workers and entrepreneurs but also of its venture capitalists and angel investors, quoting former Microsoftie and Clipboard founder Gary Flake to support his argument that an overall aversion to risk is bringing the Seattle region down.

It’s easy to pick apart the stereotypes in Cohan’s assessment of Seattle’s tech community and Microsoft’s workforce. From his perch somewhere outside of Boston, he also overlooks the emerging competitive dynamic between Microsoft and Amazon, especially the way the two companies are battling for talent and market share in cloud computing, and making each other better in the process.

He misses the influx of Silicon Valley and San Francisco companies into the Seattle region, with companies including Google, Twitter, Facebook and many others running large engineering centers here. He also ignores the fact that Microsoft already has a substantial presence in Silicon Valley.

But with Seattle native Bill Gates stepping down as Microsoft chairman, replaced by Silicon Valley tech exec John Thompson, this promises to be a recurring topic, or at least an ongoing concern, in a region that still remembers the sting from the departure of Boeing’s headquarters. So the healthy response in this case might be candid introspection, vs. quick rebuttal.

So is there any truth to what Cohan writes? And if so, can the Seattle region seize the opportunity of Microsoft’s leadership transition to make our tech community even stronger? 

Comments

  • flakenstein

    With all respect to Peter, I don’t agree with much that’s in his article. My comments from about a year ago were focused entirely on startup ecosystems and the challenges that the northwest has relative to the silicon valley. I won’t rehash any of that here other than to say that the strongest evidence for the disconnect between the two locations is the difference to valuation caps and note terms.

    As for MS, I don’t think there is any way that it should or could relocate to the valley. MS certainly has much to do in order to reclaim its former strength, but it can only do it with the help and support of it’s Redmond employees.

    So, in short, I am betting long on Seattle.

  • Stefan Batres

    This is complete non-sense, why is GeekWire even reporting on it? Mr. Cohen is probably just upset that the Patriots lost!

  • SeattleMike5

    Ha ha. What a moron.

  • http://www.christopherbudd.com Christopher Budd

    Wow, I envy Mr. Cohan for being able to get paid to write such outrageously crazy and unrealistic ideas for a major national publication. I’d be happy to write articles that are twice as crazy for half of what he’s making.

    I’ve worked in tech in both places. I think the main argument I’d make against this (chosen with conscious irony since we’re talking Microsoft) is summed up in one word: monoculture.

    I would argue that tech already suffers badly from a lack of cultural diversity to begin with. And that hampers the quality of products severely (why so many regular users are constantly frustrated by tech as designed). His argument essentially that all tech should spring from Northern California would only make that problem worse.

    Beyond that, the costs around this would be astronomical and would send property values in SF skyrocketing even further (exacerbating serious problems already there around this). The disruption to work would be enormous, essentially halting nearly all work from a year at least.

    He has a point about bureaucracy versus innovation being a problem at Microsoft, but a change of location isn’t going to solve that. And there’s plenty of staid tech companies in the Bay Area (like HP) who don’t seem to be getting more innovation through osmosis by being there.

    I wonder what’s next from Cohan, an article suggesting that the way to improve Apple’s fortunes is to take Steve Jobs’ brain out of cryofreeze and implant it into an Android (pun intended) so he can return to run Apple as the world’s first cybernetic CEO? Because that’s about as sensible and realistic a solution as what he’s proposing here.

  • rayburt456

    Brilliant.

  • Guest

    Wow, all the previous comments greatly exemplify the typical “Seattle” think. While I agree that a literal move is probably unpractical and undesirable, there is some thought provoking truth in Cohan’s piece. For example, I have never seen more employees that are “playing bureaucratic games to hang on to a comfortable job until retirement,” than at Microsoft. Also, true innovation IS happening in San Francisco, and to be the best you have to play with the best and not reside in your Redmond distortion field. But yeah, let’s just ridicule that guy and continue with the same old, same old. Typical Seattle.

    • SeattleMike5

      Right. I’ve worked in a few different major corporations, and there have been people “playing bureaucratic games to hang on to a comfortable job until retirement” in every one. It’s no different in San Francisco or Silicon Valley. And how is “real” innovation *only* happening in San Francisco? That’s ludicrous! Who’s living in an insular bubble? Peter Cohan is, in Boston, for one thing, and people who believe that companies can only be successful in San Francisco or Silicon Valley are similarly delusional. It has nothing to do with a fictional provincial attitude in Seattle.

      • Guest

        Well, SeattleMike, of course this exists in every major corporation, but which part of “never seen more … than at Microsoft” was so hard to comprehend? Also, SF and the Bay Area happen to be the MOST innovative, not the *only* as you suggest. If your surroundings have no effect on innovation, then why not move Microsoft to India or China altogether? The fact is that the best and brightest can be found foremost in the Bay Area and these days in SF proper, because that is where the very best people gravitate to. Just as the best economists gravitate to Boston, which may explain Cohan’s choice of residence. But hey, continue to enjoy your state of denial.

        • Guest

          I meant to write “SF and Silicon Valley” … since they’re both in the Bay Area.

        • SeattleMike5

          Well, “guest”, I’d hardly think you’re qualified to know what’s going on in all the departments at Microsoft anyway. In any case, I don’t know why you’re defending this ignorant business consultant masquerading as a “journalist”. Only ignorant blowhards would say that “the most” innovation is happening in San Francisco. There are plenty of the “best and brightest” in other American cities. I’m not buying your argument at all.

        • jdiaz

          Microsoft already has significant development happening in India and China not to mention Boston, Silicon Valley and Finland. This argument is silly.

  • balls187

    Meh, the only thing soft are the 9er’s receiving core.

  • Mark Easley

    Microsoft doesn’t need to move. They just need to do one thing: start offering free ads on Bing. The same way google offers free versions of all the Microsoft software. Let the games begin.

    • Guest

      So you’re suggesting that they be split up instead, because surely they would lose a subsequent law suit. That’s such a 90’s move. And people still wonder why so many despise Microsoft. And no, Google does not offer a free version of all the Microsoft software, their offerings are different, not just free in order to hurt and destroy.

  • n8r4d3

    You are an idiot. that is all.
    -Sincerely, a Seattleite and longtime Microsoft employee.

  • Erik Petersen

    I think it’s a click troll article.

  • Carlos Osuna-Roffe

    I agree with Peter Cohan, but mostly on the consumer side. Windows is not moving fast enough to compete with Silicon Valley based iOS and Android. Most of Linux is really based on SF and even Linux Torvalds move there to stay ahead of the curve. MySQL AB founders also moved to SF to keep the information flowing, and now that Oracle bought them, they have pushed MariaDB forward.

    Microsoft enterprise should remain in Redmond, since we need it to have a slower pace. SQL Server, BizTalk, Windows Server, CRM, etc, don’t need to move that fast. Azure has Amazon Cloud to compete so there’s no need for moving either.

    XBox is already a SanFran business, so I don’t think there’s a need to move there.

  • John

    We already have divisions in the Bay area. One example, Skype! Don’t say Seattle is not innovative. If that is the case, why Google and Facebook have offices here!

  • http://WiredPen.com/ kegill

    This made me LOL – really. I was in the Bay Area two weeks ago for a tech event and was reminded of how insular the worldview is from “Silicon Valley.” In its own way, it’s no different from the insular thinking inside the Beltway. Group think is a very real phenomena — just ask the auto makers in Detroit.

    Very Bad Idea.

  • Greg Dove

    Bad, reasons
    1) more chance for MS employees to be taken by other companies
    2) high California taxes
    3) have to pay their employees more to keep them from leaving to other companies.
    4) this writer only wants MS employees to come to San Francisco so he can take them.

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