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Gary Rivlin at Fortune Magazine has some recent articles about Steve Ballmer and Microsoft senior management (The problem with Microsoft… & Why insiders think top management has lost its way). The articles make great fodder given the rise of Apple to be larger than Microsoft in both market capitalization and revenues. What is strange is that I love both of these companies. I’m an ex-Microsoft employee. It was a great place to work. And I have been an Apple fanboy for a long time (spending my entire signing bonus in 1997 on Apple stock). Let’s be clear Microsoft is still a large powerful company, they have just lost their way in defining the next generation of technology, business models, and customers.
Still, Ballmer needs to do something to shake Microsoft from what, at best, seems to be a textbook case of corporate ennui: MIT’s Michael Cusumano, who has featured Microsoft in several books, including the new work Staying Power, sees a company hopelessly stuck in neutral, in no small part because Microsoft has a weak board and no one expects Bill Gates, the company’s top shareholder, with about 5% of shares outstanding, to oust the CEO, who was the best man at his wedding. “Ballmer has been a good steward of Windows, and that’s about it,” Cusumano says.
Gary Rivlin nailed my feelings and analysis on Microsoft in The problem with Microsoft…. Microsoft is a juggernaut. But the markets and choices are evolving. There are a few successes like Silverlight, Kinect, XNA and Office. But generally the article highlights deeper structural and cultural issues.
- Windows Platform dominance – Licking the cookie
- Politicized management culture with “Made men” and “political assassins”
- Lack of urgency – Massive existing businesses SharePoint is the last $1B revenue business
- Killing products too early or too late – see Courier (too early) and Kin (too late it should never have made it to market)
- Stock stagnation – this has a lot of impact on hiring new talent, retaining talent that should retire (under water ESOP buys)
There is lots to love about Microsoft. But I think there are even more concerns for the future. Just look at what the latest generation of big web companies are building on: Yahoo! (PHP, MySQL, Hadoop), Google (Java, Python, BigTable), Facebook (PHP, memcache, Cassandra, Linux), LinkedIn (Solaris, Tomcat, Oracle), Groupon (Java, Salesforce, EC2, Zynga (PHP, MySql, AMF), Quora (MySQL. memcache, PHP). Sure there are shining examples of companies building on SharePoint and SQL Server and Azure, but do they have the size and scale of those previously mentioned? And look at the fight for mobile developers. Appcelerator’s quarterly developer survey shows percentage of developers “very interested” in developing for different platforms: iOS (91%); Android (85%); Windows Phone (29%); sure it’s a head of Blackberry (27%). But this just reinforces my concerns and disappointment. Microsoft is a huge company. And I hope they can continue to build world class products, markets and inspire future developers.