Last week Microsoft CEO Satya Nadella took another step in redefining his company for the post-Gates/Ballmer era, sending a 3100-word positioning memo to every Microsoft employee and to the world in general. I found it a fascinating document for many reasons, some of them even intended by Nadella, who still has quite a ways to go to legitimately turn Microsoft in the right direction.
We’re seeing a lot of this — companies trying to talk their way into continued technology leadership. Well talk is cheap, and sometimes that’s the major point: it can be far easier to temporarily move customers and markets through the art of the press release than by actually embracing or — better yet — coming up with new ideas. We’re at that point to some extent with this Nadella message, which shows potential but no real substance. But I think this was not written for customers so much as for the very employees it is addressed to.
It suggests to me a coming cultural revolution at Microsoft.
Read his message (the link is in the first graf) and I’ll wait for you to come back.
Wasn’t that slick? The major impression I got from this essay was that it had been highly polished, but then just look at Nadella with his perfect shirt and jacket and jeans. Tim Cook would love to look that good. The problem with polish is that it has to be underlaid with substance and this message is not, at least not yet.
Nadella begins at the altar of innovation, a word that at Microsoft has traditionally meant stealing technology. Of course he is the company cheerleader to some extent but Microsoft’s tradition of innovation is hard to even detect, much less celebrate or revive. This is revisionist history. Can he really believe it’s true?
He calls on Microsoft to rediscover its soul. I didn’t know Microsoft had lost its soul, though some might argue the company didn’t really have one. But if we can accept that Microsoft has in recent years started to play more fairly, is rediscovering its soul good or bad?
Nadella talks about “what only Microsoft can contribute to the world.” I honestly don’t know what that means, do you?
His message is of course a repudiation of Steve Ballmer’s Devices and Services strategy and of Steve, himself, which I see as VERY important. We’ve changed coaches so to start winning again we’ll change the labels, too. Services are still in there, devices, too, but something’s different — “mobile-first and cloud-first.”
I don’t mean to be a pedant but which is it — mobile first or cloud first? Only one thing can be first.
The gist of this is that Nadella intends to keep Microsoft important to personal and organizational productivity by emphasizing, it seems, the coordination of information in a world where users have multiple devices and there are a growing number of devices independent from any user — the so-called Internet of things.
The obvious problem here is that for the first time in a long time Microsoft isn’t a leader in any of this. They are sometimes a strong player (and sometimes not, like in mobile) but they are not embracing what Bill Gates saw as the very essence of Microsoft — establishing de facto standards. Windows is the top OS, but it’s pretty much ignored here. Same for Office. xBox is a big success but it’s not the top game system and it hardly creates a de facto standard. Windows Server and .NET are solid players but not dominant in the old sense that Microsoft can threaten to pull a few APIs and destroy a developer’s world. Microsoft is just one of many companies in accounting and business intelligence.
The reality here that Nadella — to his credit — at least alludes to, is that the playing field is now level, the score is 0-0 (or more likely 0-0-0-0-0) and for Microsoft to win they’ll have to play hard, play fair, and win on their merits. And that’s what leads into the discussion of culture and how the company will do anything it must to succeed. “Nothing is off the table,” Nadella wrote. This is the most important part of the message and, indeed, is probably the only part that really matters.
Microsoft has a shitload of money and thousands of good employees but it also has a corrosive management culture that tends to work against true innovation. Nadella’s biggest challenge is to change that culture. The next six months will be key. If it works, great. If it doesn’t, then there will be another CEO and another plan. Microsoft can probably afford to blow it another time or two, but that’s all. Good luck Satya. Time marches on.
What do you think Microsoft is doing?
Microsoft is talking to itself trying to convince itself change is good for the sake of change not because it is necessary or wanted by customers buying products. My take by reading between the lines is new interfaces and technology are good and staying with the old is out. Sadly I see Microsoft abandoning their core Windows and Server products in favor of cloud and smart phone products. This damn the core approach usually doesn’t work out too well, just ask the IT Administrators how many Server 2008R2 units have been replaced with Server 2012 versus how many new Server 2008R2 installs since the delivery of Server 2012? My guess is there are 20 to 50 new 2008R2 servers for every 2008R2 that has permanently migrated to Server 2012.
Change is the essence of being alive. Change happens whether you want it or not. The question for Microsoft is whether they will be a leader of change, or whether they will decline and die like the mainframe companies.
All of this has happened before, and all of this will happen again.
For me, if the question is Server 2008 or Server 2012, the answer is Neither. Open Source is so much cheaper and more flexible. Microsoft Server has a pretty strong position, but Microsoft does well to remember that it’s vulnerable.
“Change is the essence of being alive” an immature and undiscriminating cliche if ever their was one! Change can be either good or bad and the trick is to go with the good change and avoid the bad change. Of course when you get into as optimal a state as you are ever likely to achieve, you need to avoid change altogether as it’s all downhill from there!
I don’t see Microsoft abandoning their core Windows and Server products in favor of the cloud, in fact what I see them doing is making it incredibly easy to integrate the two into your organization and seamlessly share resources between the two. There are numerous industries that require on premises or controlled environments (e.g. Government contractors) and Microsoft isn’t about to abandon those lucrative markets.
One of Microsoft’s greatest strengths has always been it’s tool chain and in the past year they’ve made significant moves to strengthen those tools and make them work cross platform (e.g Xamarin collaboration, SyntaxTree, OWIN/Katana, Roslyn). Their “mobile-first and cloud-first” is a reference to their tool chain support.
With some changes of product names and a few other minor tweeks this could be about IBM, or, indeed, Nokia or a dozen other companies that have been around a while.
All we are seeing at Msoft is the near inevitable trajectory of a once maverick, and then dominant, company. The truth is that some hidden law of the universe always causes corporate sclerosis and atrophy leading to decline and death. This is usually slow and undramatic (except for those deeply into the relevant industry who wallow in such things).
Nadella is doing his best to battle against this (as a series of CEOs elsewhere have done). It is a futile activity, quite likely doing nothing would barely change the rate of decline. But then CEOs get rewarded for doing SOMETHING, so he has to be seen to try.
Failing all else, they pursue the entirely self serving (see Bob’s excellent recent articles about IBM!!!)
Msoft had enough momentum to roll on for a while yet, maybe a long while, wrapped in an aura from a glorious and predatory past. (Replace Msoft above with your chosen company name, even Apple or dare one breath it, Google).
Nothing and nobody lives for ever!
The ‘hidden law of the universe that causes corporate sclerosis and atrophy leading to decline and death’ is revealed in Ed Catmull’s book, ‘Creativity, Inc’.
Briefly put, the enterprise loses its balance between ‘Feeding the Beast’ and any other activity the enterprise engages in, including new product development. The result is that change cannot happen, and the enterprise dies a slow death.
I highly recommend this book. Once I read ‘If there is more truth in the hallways than in meetings, you have a problem’, I was hooked.
At Msft there is very little truth either in the meetings or hallways. It’s one gigantic group think spinning machine. If you are a manager there, everything you vomit is a great idea. If you are a VP, you have a dozen or more orbiting brown nosers constantly telling you how smart you are.
This is why products like vista and windows 8 get released to a public that instantly sees them as steaming piles. Nobody internal to the company is capable of objectively looking at anything.
It’s a shame Catmull got involved in the animation techie anti-poaching cartel. Really stains his character IMO.
more correctly, I believe, would have been “NoBODY is off the table.” MS will cut its way to greatness.
just look at all the examples where it’s worked.
uh…. ahhhh…. well, on to Step Two.
One one hand, MS has a lot of money to invest and even buy a complete chunks or even entire markets. On the other hand, its revenue generators are MS OS and MS Office, mainly from corporates.
So, in his shoes, I see 2 options. 1) Leave the software and the hardware business all together and start fresh with buying huge chunk of some industry, OR, sell MS as is, and become an investment company or maybe a credit card company. 2) Split the company into 2 – The traditional MS with its Windows, Office and Xbox, to continue doing whatever MS is doing and the new MS with most of the cash to start from scratch in 2 areas – Data aggregation and delivery and medical services. both of these domains are placed well within the M2M, Internet of things combined with Mobile and cloud based infrastructure and also physical data infrastructure. consider for example the following scenario of MS buying Comcast or other fiber, combined with buying satellite operator, providing powerful data network processing and delivery in a global scale, combined with extra smart mobile devices that connect any medical device to and within medical facilities (maybe buy Medtronic or Phillips Medical) – revolutionizing the way we are diagnosed and get medical treatment today. All this operated based on MS OS. It can be done the same with any other industry – banking, metro-management, whatever – they just need to choose. Judging on its past records, nothing revolutionary will happen, unless they will understand that innovation means not only products but the company itself. They have a huge opportunity.
Credit Card company??
Sure, all you need is money, data infrastructure and huge install base. MS has it all.But it was just an example. Witheir resources they can do anything they like.
I work as a contractor to AT&T on the network side and after 2 months of trying to get a PC to work with AT&T’s software under Win 7 64bit, I finally got to talk to someone over in India yesterday and it was decided that that software only works under 32bit. Other software I need still only works under XP. I was also told that many use a virtual machine but they (in India) don’t support that. Solution: Get my employer to buy a used old XP machine.
Just imagine all that. Is AT&T going to Win 8? Answer: not before 2016. Oh yeah “mobile first”, “cloud first”.
“…in India yesterday and it was decided…” well that settles it! 🙂 Seriously though, you might try googling the issue, and reading the numerous forum posts that will appear; someone may have an answer.
Seems to me it’s mobile first for devices, cloud first for services. I don’t see a problem there. The problem is all the rest of it. What fraction of employees even read the whole thing. And of those who did, how many eye-rolls per reader were there?
I’m with you Bob but I think there are even greater mistakes. First, the memo is way too long with too many messages. The troups will either stop reading it or forget it. A video would have worked better at that length.
The fake cheerleading and empty words like synthesize will bring out all of the cynics. Again, less words and direct points may help.
To the substance. They are toast on portable devices and their strategy has been pathetic. They’ve allowed Apple to build the spaceship office on their blunders. Their concept of cloud is the MS cloud which features lengthy exchange outages. Good luck with that first strategy.
MS needs to throw some people under the bus and kill or sell some failing products/services. Less is more if they want to reinvent themselves.
I had the same thought – it’s way too long. I stopped reading half way through because it became so repetitious with empty words. At least he never used the word “synergy”.
I’m not sure that Nadella isn’t blowing a dog whistle in a few places here. It’s difficult to tell unless you’re on the ground in Redmond. Having worked for very large organizations for the past 20 years, the talk of involving fewer people in decisions and reducing process and what those things imply is very powerful. I’d be excited about it if I worked there and hadn’t yet become jaded and beaten into an organizational stupor.
rp above encapsulates the underlying dynamic beautifully – and illustrates why the “drag” of the past is impossible to escape and change so hard to roll out to customers. It is very hard to be innovative when you need to change a vast installed base that you depend on for $. Innovation into a blank space is much easier – provided (a) you can find the space and (b) your idea succeeds – which most don’t.
Who would be a CEO? Ah – that’s why in the end, their solutions become delve serving on the IBM model. That is much easier to do!
Is Microsoft a Hippie or a Nerd?
My perception is that Microsoft would empower me to spend more of my time using technology for the sake of using technology, whatever that technology might be, I’m not quite sure. I’ll stick with my Mac and my iPod and spend my time playing music and riding my bike with no digital distractions.
I’ve decided no more Microsoft products that have to be security patched every month. Who the hell would even want a phone that has to be constantly patched and rebooted? It’s insane.
Their strategy is actually to make cosmetic UI changes every 2 years, just so they have something new to sell and bring in the bucks. The smart and savvy who are still using XP realized that a long time ago and stopped cutting MSFT new checks for no new value.
Office is the same way. When was the last time office got a new feature that was actually useful?
What made Apple Apple (as in the big behemoth of the last seven years) was the ability to walk away or caniblize their own products when they need to. Wake me up when Microsoft is ready to do that. The Surface 3 gets lots of praise, but it’s a X86 Windows desktop disguised as a tablet or maybe laptop. I can’t decide which and neither can Microsoft. The Start Menu is making a come back. Microsoft a current strategy is still tied to Windows as a desktop OS, but available on tablets like they did in 2002, and Office. They can’t imagine life without them. This is why companies fail.
Apple can caniblize because Apple has always had that reputation of doing so. Apple’s core customers are different – dedicated by intent, not entrapment (until iTunes), and have always been willing to follow Apple where-ever. New version makes old stuff obsolete? No problem, I’ll get there soon enough.
Apple sold to individuals. Compatibility doesn’t matter in that marketplace, ease of use does.
Microsoft sold to corporations, compatibility across the enterprise is key. Microsofts sales to home users were often for those who had corporate work, so compatibility is even more key. Home users of Apple products often upgrade because they want the latest & greatest. Home users of Microsoft products DON’T upgrade because it works well enough, or they have to maintain compatibility with their corporate environments which always lag at least one, now as many as 4 Moore’s Law generations behind (how many times do I have to be asked “can we support IE 6?” with our html5 app – It still happens…).
Different target audience, different expectations. Microsoft right now can’t make any “new” money off its old target audience, but was too late to enter the markets for any other, now already dominated by Google, Amazon, Apple, and Samsung.
Oh, and that current tv commercial is really going to hurt them in the OEM space – by targeting the surface as a laptop replacer, including Office, they are basically telling their OEM laptop market that they are expendable. The reaction is likely to move more OEM laptops over to Chrome or Android.
I almost spilled my coffee when he called Surface the “world’s best productivity tablet”! Seriously? It only still exists because it’s “Ballmer’s Baby”. And even then, it took three goes to make usable.
I agree in part with @Dee – innovation is for where there’s space for it. When it comes to tablets, it can only be connectivity and collaboration, and even then it’s really only just expanding current functionality.
But, more generally – yawn. It mostly reads like “high five, anyone? Anyone?”
Are you familiar with the salesman’s admonition “Sell what you got on the truck”?
Only took 3 to make it usable? Isn’t that the Microsoft tradition?
After 35 years at IBM, that memo had a real familiar ring to it– and it’s mostly gibberish of course. MS couldn’t innovate its way out of a paper bag and its unique contribution to the world is of having tried to quash more than it created. Its real genius was in locking up manufacturers to peddle its wares for it and to that, I tip my hat. Revisionist history? Oh hell yes! The world does beat a path to your door if you’re truly offering shiny new things that no one else has but that requires a certain speed and detachment that MS doesn’t have and will likely never develop. It will forever be carting around Windoze and Offus and there’s just no getting around that.
“Nadella talks about “what only Microsoft can contribute to the world.” I honestly don’t know what that means, do you?”
How about “Windows in the Cloud”, i.e. allow users to run actual Windows programs (i.e. actual EXE files calling the Win32 API) in cloudspace? Or has that already been done? I’m not up to date with the latest news about this, but it seems something that Microsoft should be able to do better than anyone else.
Microsoft Job cut Rumours
https://www.theverge.com/2014/7/15/5900763/microsoft-job-cuts-rumors
Who was his address really aimed at?
This MBA-speak is a symptom of a company that is completely out of ideas.
If the CEO of my company emitted so many buzzwords, I’d start looking for a new job immediately.
Big companies can’t innovate. They can’t take risk above a certain percentage defined by the shareholders. But becuase there’s no money in it, they also don’t want to support old products. That’s why “software as a service” is so seductive: get a monthly rental fee per user and then it does make sense to fix bugs. The issue then is how much do you charge? Most models are too high considering the cost of shrink wrap Windows is $100, and you’ll keep it for at least 2 years, they really shouldn’t be charging more than $5.00/mo, the same as an Xbox live annual subscription. But I’m sure they’d want to charge much more than that.
Nadella: ‘Death by PowerPoint’
😉
MS should go open source and become the tool maker for said tech as OS rules, something Apple recognizes but is able to thrive, for now, due to their understanding of the market, combined with a unique combination of robust operating system (UNIX) and hardware set. Windows, as an OS, just can’t scale so MS should become a tool maker and business middleware company, which they’re good at, and stop trying to be cool. True innovation is hard, eating one’s children, as Jobs did, is hard but MS has to do this in order to survive. At this point in time, they remind me of congress, a place totally devoid of ideas in every sense of the word.
“I don’t mean to be a pedant but which is it — mobile first or cloud first? Only one thing can be first.”
Well No. Both can be first. cloud and mobile are two sides of the same coin. They work in tandem. Each represents one half of the client and server system. What mobile first and cloud first means is that the server components that they will build will focus first on working well in the cloud and the client components that they build will focus first on working well on mobile platforms.
I agree it is a culture problem. But revolution is not a word you can use with culture unless you want to go the Mao Zedong route. Culture has to be built, created, selected. Microsoft is a large organization consisting of many people who have a stake in the current culture – their jobs, seniority, mode of operation, comfort, pay grade are all derived from that culture. It is a self-selecting group and trying to pry their fingers off is probably not going to work. MS will just hang around for a long time (like Novell) and become increasingly irrelevant – although still big and still making money.
By choosing the term Cultural Revolution (and capitalizing it) I was referring directly to Mao. The only way Microsoft can actually do what this memo proposes is by firing most of the company managers. If he’s serious that’s exactly what Nadella will do.
You’re right. The employee ranking system which caused so much damage may be gone, but the attitudes it caused remain, and won’t go away until the organization is turned upside down and shaken. That kind of competition destroys any incentive to create, and creates a ‘Game of Thrones’ atmosphere.
A lot of the big IT companies use the employee ranking system, and more importantly they then cross-compare with the intention of trying to keep salaries low.
I don’t think that little bit of corporate sleight of hand is going away any time soon.
[…] time it was triggered by the article by Cringely The Coming Microsoft Cultural Revolution. In it he links to a pep-talk by Microsoft’s new CEO. It’s worth a quick read. As […]
I think Microsoft is throwing whatever s**t they can at the wall and hoping something will eventually stick, which I guess is a strategy you can only try when you have billions and billions of dollars to burn.
Revolutions are never announced in advance – they simply happen. A catalyst, a visionary, a lightning rod, a call to action. The masses are swept up – some for, some against – and action begins immediately. Not in the ivory tower, not as a result of a six-point plan and a snazzy graphic, but because of a passionate call to action, reaction. Revolution says “we must have change” and “when do we want it? Years ago, but we didn’t realize it.”
Don’t give me a glossy memo beautifully typeset on a website with photos of the corporate’s pleasing architectural holdings so pristine they look like stock photos (ditto the leader) – there isn’t time – give us raw passion and immediate action – the type that sees the workers killing the bad products and those who don’t buy the new new resigning on their own terms immediately.
This isn’t a revolution.
But it needs to be.
[…] The Coming Microsoft Cultural Revolution […]
See “Monday Note” by Jean-Louis Gassee for a clean dissection: https://www.mondaynote.com/
“Microsoft’s New CEO Needs An Editor”
I am unclean? Yet I am a native English speaker!
Wow … Jean-Louis Gassée totally nails it. Microsoft should hire him as their next CEO after Nadya crashes and burns.
“Jean-Louis Gassée totally nails it. Microsoft should hire him as their next CEO after Nadya crashes and burns.”
After starting Apple France, JLG has not had a stellar record as an executive. What has he done? He wasted a great opportunity and a lot of money as head of the Apple Product Division, and then he headed that great failure, Be Inc. I think he’s better placed as a commentator and venture capitalist.
All he is doing is criticizing a speech with “Whatever is well conceived is clearly said,
And the words to say it flow with ease.” Not every corporate speech is going to be a Gettysburg Address. I wonder what part of that section you mentioned, “nailed it”.
Now, this is a hard entry to comment. My question is: Why Can’t Microsoft Deliver? They have all the pedigree, all the tech, all the marketing fluff. Is it in their DNA not being able to assimilate customer use cases and actually deliver on what they say they are doing?
We have numerous customers that should be amazingly happy utilizing Office365 or Azure if it worked as advertized but since it breaks ever so often on simple hangups or inconsistencys, we can not honestly promote their platforms.
I would be among the first to welcome innovation from Microsoft, but my recent (~ 15 years) experience has made me believe that apart from hereditary products like OS and Office, Microsoft need to start by actually deliver solid functionality in line with customer expectations.
I have been repeatedly underwhelmed with new products and releases during this time and I see no real difference between Microsoft and any open source project in terms of functional delivery. The difference lays in that the open source users are expecting some functional roughness but MS customers are not – furthermore they are charged heavily for the stuff that doesn’t fulfill their functional needs.
An interesting analysis and a more focused view of what the essay is trying to say by Jean-Louis Gassee can be found below. His interpretation anyway.
https://www.mondaynote.com/2014/07/13/microsofts-new-ceo-needs-an-editor/
What Micro$oft is doing is trying to be Google. From the design of the presentation of the letter to the closing sentiment to “…delight a customer.” Micro$oft is trying to be Google. That would be a revolution.
Yet Google, with the worst customer support known to man, blatantly ignores customers and generally refuses to communicate with them at all.
Bob, not that I disagree with you here, but let’s be honest, we’re Google *users*. Very few people (in comparison) are actual, paying, Google *customers*. For services like Google Maps, this is becoming a real problem.
“Yet Google, with the worst customer support known to man, blatantly ignores customers and generally refuses to communicate with them at all.”
Not sure about that. My support experiences with Google (Google Apps for Business) have been near stellar. Quick, on point, on task.
Bob, my experiences with other tech/comm companies, such as my ISP and DirecTV, beg to differ.
Translation, Windows 8 is not the next Vista. Windows 8 will not be fixed, and you will accept it.
I read the whole memo and the search term “Windows 8” doesn’t return any results. I think that’s telling, don’t you?
In my mind the crux of the issue here for any major shake-up comes down to:
what are you willing to kill.
employees seemingly top the list, that is expected…but microsoft should really use this opportunity to kill off some other things while the opportunity avails itself.
without hesitation I can say windows phone should be tossed. I understand some users are very satisfied with the platform, but it is number three in a two horse race, and hasn’t attracted developers. there seem to be rumors that full support may be offered for android apps, but one wonders then what the point of the platform is at all.
if microsoft only cuts headcount, its probably a sign that the company is legitimately dying.
Rilke and Nietzsche in the same memo? A first for a tech memo!
There’s a (sorta-kinda) development blog on MSDN that I follow. He’s very opinionated.
A couple months about he wrote about there being things that only Microsoft can do, because it’s so darn big.
http://blogs.msdn.com/b/eric_brechner/archive/2014/05/01/being-big.aspx
And as a bonus, to go with Bob’s revolution riff, here:
http://blogs.msdn.com/b/eric_brechner/archive/2014/01/01/you-want-a-revolution.aspx
As I went through this message only one picture came to my mind – huge lay offs. I think it is very clear – new culture, less managers, probably less engineers as well. Somebody wrote that M$ is copying Google, but I think the reality is that they want to be IBM. Probably the next announcement will be how they are going to give 20+$ per share till 2020 🙂
Microsoft needs a collaboration culture where ideas come from anywhere and everywhere without filters. They need to become a flat company, by reducing boundaries and hierarchies to become a leaner organization, so that collaboration can take root both inside the company and outside. Promotions and financial rewards should be based on collaboration. I seriously doubt that Microsoft culture can be changed radically without some serious pruning of the current status quo, which means layoffs and changes to management at every level.
Microsoft lost all the worth they had left when they killed live.com .
LOL!
What he is talking about here is Organizational Change. It is one of the hardest things in the universe to accomplish. It costs a lot of money and takes more time and dedication than most leaders have. It really breaks down like this: 20% of the organization will be gung-ho and totally supportive, 20% will be totally negative and oppose the effort at any and all opportunities, and the final 60% just will not care. The last group will be motivated or poisoned to the change based on their exposure to the previous two groups. In essence, they’ll go with the flow. Odds are it will split 50-50, so in the end, half the organization will be for the change and half against it.
The chance of success with this mix is near zero. The best that can be hoped for is a lame, half-hearted attempt with mediocre results. So, to stack the deck and improve his/her chances of success, the leader must eliminate the negative group. This means identifying and firing that negative 20% of the company and not just workers. The managers are the worst of the bunch. The leader has to be willing to show people the door at all levels of the organization. That’s a hard thing to do and it creates a lot of enemies. It can also scare the hell out of the other two groups and you could lose some of them too if you aren’t careful.
All of the large organizations that I know of that have successfully implemented change have used some form of this method. If we don’t see this type of activity at MS then you can rest assured that nothing will change there. This will just be feel-good smoke that is being blown up the posteriors of analysts, shareholders, and the media. (Which I fear it is.)
“It must be considered that there is nothing more difficult to carry out nor more doubtful of success nor more dangerous to handle than to initiate a new order of things; for the reformer has enemies in all those who profit by the old order, and only lukewarm defenders in all those who would profit by the new order”
Nicolo Machiavelli
I would only add that the problem with deadwood in layers of management is that, in an organization of any size, those individuals have cultivated one skill above all others: the ability to keep their jobs. Microsoft’s “stack ranking” was natural selection for this ability. This means that Nadella has a massive amount of inertia to overcome — the management corps probably believes that it can wait him out until he fails and is replaced. Microsoft’s success makes this problem worse than, say, IBM in 1991 because there’s no existential threat to its business to justify huge layoffs and forced marches and the board will only tolerate so much change in one swoop (why do you think Ballmer was allowed to stay on for so long?).
After reading Nardella’s entire memo, I have come to the conclusion that you can take the number of words (3100) and multiply it by 2 to get an idea of how many people are going to get the ax. Approx. 6200.
Windows 8 looked like it was trying to be Android but very unfriendly Android. They sell windows 8 computers with instructions on how to download ver 8.1 so that you can use it like the old Windows. I tried unsuccessfully to install .NET to use it for development as my old Visual C++ didn’t seem to work on new computers with new Windows. The installation program kept telling me that I had to update lots of various files so I tried but often updating theses files meant updating other files and sometimes the new files wouldn’t install because their install software said I already had an even newer version of the software so one install program says I need something updated and another says its already updated ane REFUSES to load the software again?… Even if I got it to load and work, it is FAT. Its HUGE and it will only work in new Windows. I decided to develop apps using javascript, HTML5, and PHP instead. This software runs on all platforms without being changed. Plus it is accessible from the internet without me having to write all the interface software. Most of the work was done in Chrome or Internet Explorer.
Microsoft needs to learn a new word that they have never heard and is probably “verboten” to even utter at Microsoft SIMPLIFY! Any software that inspires 500 page books to use is too complicated (ie WORD).
“Microsoft has a shitload of money and thousands of good employees but it also has a corrosive management culture that tends to work against true innovation. Nadella’s biggest challenge is to change that culture.”
No truer words have been written – perhaps Nadella should shoot a video of himself walking into an average Microsoft meeting, collecting all the cups of Kool-Aid and throwing them in the trash — then I’d believe he might be serious about addressing the neck-stepping management culture in Redmond.
This is the takeaway. This is what Nadella wants Microsoft to be:
“At our core, Microsoft is the productivity and platform company for the mobile-first and cloud-first world. We will reinvent productivity to empower every person and every organization on the planet to do more and achieve more.”
I would so love to be dictator for a day at Microsoft. Because this is not what I would tell Microsoft to do with itself.
It’s founding objective – to put a computer running Microsoft software on every desk and in every home – has largely been achieved. That was such a compelling vision that it led inexorably to Windows (make computers usable by anyone) and Office (give everyone something useful to do with computers). The result was a transformation in human experience.
But what do you do for a second act?
Microsoft has two problems.
They suffer from the Innovator’s Dilemma. Their existing Windows/Office business is incredibly lucrative and they have a fiduciary responsibility to their shareholders to continue to pursue that business as long as it remains profitable. So no matter how radical anyone wants to be, the company MUST continue to sell Windows and Office software in ginormous quantities. They can’t kill what they have to pursue a new market.
They have a very badly damaged brand. Most people who are their customers don’t like them. They don’t like Windows. And they don’t like Microsoft as a company. Windows is a quirky platform loaded with legacy compromises driven by that need to continuously sell in huge volumes. Microsoft is deemed a predator that can’t work or play well with others. Nobody trusts it.
Microsoft has two advantages.
They have close to $80 billion in cash and only $12 billion of debt.
In the next 10 years essentially every computer on the planet will need to be retired or have its operating system upgraded. And most of those computers run Microsoft software.
I would tell Microsoft to stop doing everything it is doing right now. I would freeze Windows 8.1 in place except for a team devoted to security fixes.
And then I would set the company on a 10 year mission to make the first of a new generation of computing platforms. The company’s objective should be “to upgrade every computer running Microsoft software on every desk and in every home to become intelligent and self-aware”.
This is Google’s stated objective but in reverse. Google ITSELF wants to become an intelligent self-aware computing system. It sees the path to achieving that running through a massive cloud-based infrastructure of servers that Google operates.
Microsoft should democratize AI. It should take that $80 billion, and the legions of engineers it employs, and it should risk a moonshot. During the 10 years, it would focus its energies inward on the immense task of understanding and replicating human brains in hardware and software, and productizing the result into tools that can be deployed anywhere personal computing devices are now used.
Microsoft should ruthlessly spin out or close divisions and products that don’t align with that vision. It would become a much smaller, much more focused company. Shareholders would get a big divestiture dividend like AT&T produced when it was forcibly broken up by the courts. In the downsizing it can also work to rebuild trust – a web of former Microsoft businesses will create a network of people who have a fundamentally positive Microsoft relationship which can suck the toxins of the antitrust era out of the company’s business networks.
Microsoft is one of the very few companies that has the cash, and the talent, and the global scope, to attempt that feat. It would be a worthy 2nd act for a company that has already rewired human civilization once.
Nadella’s a smart person. So is Gates who hired him to be CEO. What’s the next move?
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(1) More layoffs, especially for the folks in the former Nokia handset division.
No brainer — revenue is not marching up, investors are cranky, mergers mean layoffs.
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(2) Google is the enemy, so do what they’re doing.
Google has more market cap and less than half the employees of Microsoft. Google is the enemy via a process of elimination: (1) Apple is big and will always command a 10% impossibly loyal fanbase, so no point in assailing that. (2) Facebook is big, but not really an enterprise business. (3) Amazon is mooning us locally in Seattle, but only interesting as far as AWS and S3 are concerned.
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(3) Grow the cloud and let 1000 clients bloom.
Nadella was chosen from cloud services and I’m sure understands Microsoft’s strengths and weaknesses there. From the cloud’s point-of-view everything’s a client and it almost doesn’t matter what the client is. There’s a connection at a certain bandwidth and you serve up what you can given the throughput you have. Clients don’t matter individually, only collectively so that they are sucking and supplying data from and to the cloud.
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Actually I’m not sure there’s much difference with what Ballmer would be doing either. Nadella’s memo has the line: “We will build tools to be more predictive, personal and helpful.” Generic, throwaway, but pretty much an indication of making your data available to you (stored conveniently in the cloud) and some kind of logic on patterns in it. Perhaps Ballmer would care more about the devices, but I’m not so sure.
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The difference I see between Microsoft and Google is that Google always tries to do as much in the cloud as possible before relenting to client-side computing. I kind of see Android as a last resort that the browser was just not capable enough and creating Chrome to grow the browser where needed. Microsoft started with languages and then operating environment (DOS) before operating system (Windows). Microsoft has a history of rich client computing. Google seems to come to that grudgingly.
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I’m struck by how similar Microsoft and Yahoo’s positions are. Both are giants of the past and both have the feeling that events have gone past them and they are running from behind. I think Yahoo’s CEO is making the right moves if her organization can use them to catch up or at least slow the decline. Microsoft is still playing defense and that is what a copycat strategy is when you’re behind, but Microsoft has always been a clever imitator, not an innovator. I don’t think being a closed-source, proprietary Google can save them. Yes they have a vast treasure, but that is slow death to just copy and spend. This memo-layoff tandem could become an annual ritual.
“mobile-first and cloud-first” = “devices and services”
Big layoffs announced today, mostly within the 25,000 employees that came from Nokia.
Microsoft’s success has been due to useful, although not elegant, computer code and smart, although often ruthless (and illegal?), marketing methods.
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At some point they should have sat down and mapped out a strategy to create computer code with a logical upgrade path that is flexible enough to satisfy their customers’ needs and desires. There is no excuse for computer code that constantly needs bug and security fixes and doesn’t allow users to satisfy their own (not Microsoft’s) needs and desires. And there is absolutely no excuse for computer code that doesn’t work properly.
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With this background, I don’t see much room for success with their wildly optimistic projections of future greatness. (I’ve never read such a lumbering catalog of BS.)
It looks to me like Nadella is going after Microsoft’s administration. He maybe going to restructure the decision making process. Not a bad idea from my experience there a long time ago. I suspect the reference to the cloud means Microsoft sees more money in renting Office rather than selling it.
In 2005 I predicted MSFT would not be a IT company that matters in 10 years (2015). They are tracking well on my prediction.
Good luck to Microsoft.
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Because they have seldom innovated in the past, but continue to swell their heads that that is what they actually did, they will not figure it out their true course until too late. Their ship is listing already but they won’t notice until it’s too late.
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Shoring up their O/S and Office platforms will not really help much. While there is yet revenue to be reaped from these products, it’s a shrinking market. For example, servers. With layer after layer of abstraction being applied in the data centers (cloud computing, virtualization, service APIs, etc), how hard will it really be to switch the whole foundation to something else without the application layer even noticing? Someone is going to come along and do this, and it’s not going to require a company of 127,000 employees. If there’s money to be made there, especially if the capital costs like operating systems go to zero, someone will do it.
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Nadella ought to put together some small groups (20-50 people) and set them loose on interesting problems, including ones that could eat Microsoft’s lunch, and then increase funding and people for those that are getting things done. Have these groups report right up to the CEO. Cut out all the in-fighting and turf-protecting in which middle management engages. Frankly, a shrewd CEO could use the reactions of middle management to these groups as a litmus test as to which managers need the axe and which can stay.
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Still, I don’t see it happening. Big corporations get too big to move, and there is too much latent fear in the managerial ranks, for any quick, wise changes to ever take hold.
Very interesting timing on your article. Mere minutes ago I read how Apple and IBM are collaborating. For IBM it is a pass to be more trendy with the enterprise market without having to make a big effort. Reminds me of the WorkPad version of the Palm Pilot some time back. For Apple it gains even more traction in the enterprise market. Executed well it should be a win-win. But is it too little, too late for IBM ?
[…] Can the company transcend culturally and empower it’s employees towards innovation? […]
My take was that “Device” was dropped. It’s hard to see past so much management BS; you’d have to be a dedicated Microsoftie to take anything away from the rant.
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Speaking as a user of desktops and notebooks I’d say that Microsoft lost focus on how their users use their products. Windows 8 on desktop was a reversal of their many failed attempts to put Windows on a mobile phone. Instead they put a mobile OS on to a desktop. Why would one OS be right on to two devices which are used in fundamentally different ways?
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Often the leader who brings about change doesn’t stay until the end of that process; There’s some coup along the way. For that reason alone Satya Nadella’s time at Microsoft will be short. I’m not making comment on his ability, but if he didn’t upset those at the top at Microsoft then he’s not changing the company sufficiently.
Agreed. Nadella claims MS will obseess over their customers, but Windows 8 has been and continues to be a big F-U to their customers. If he’s serious about changing that culture, you’d think he might mention where they’ve gone astray and how he’ll rectify that. Instead, corporate boilerplate.
Color me not impressed.
Microsoft doesn’t innovate, it steals innovations. Ok. But so does Oracle and every other large tech company with the exception of Apple. Who are they going to steal innovations from? Open Source and Apple. Who else ?
A bit late to the party as usual, I would like to write about the Developmental Platform – Visual Studio and its components- which only reinforces the Windows Installation base- this is key for Microsoft. In organizations such as mine, where we install medical equipment for labs and hospitals, all the controlling software is written in VB and hence, we have no other option other than installing Windows for all our customers. But now with the End of Life for XP, all new installations have moved to Windows 7 without any major hassle. Transition to Windows 8 has not been so pretty. The only reason all our suppliers have not developed these controlling software on Linux is cost of development. Now if Microsoft moves towards a mobile first, cloud first strategy, there will be a considerable cost of development for each of these manufactures(and every such industry – hi-tech equipment controlled by a PC). Soon all these will be replaced by tablets running Android, unless Microsoft makes their Mobile platform backward compatible – i.e existing apps developed for windows desktop run seamlessly on their Tablet OS. If that screws up the mobile experience, MS is going to find itself between a rock and a hard place – their mobile strategy will fail and a major chunk of their existing user base will be up for grabs. Interesting times ahead.
Vivek
Big layoffs at Microsoft being announced today, apparently largely within the 25,000 employees from the Nokia acquisition. I guess that takes care of the “devices” part of “devices and services”.
Here it is, 18,000
https://www.zdnet.com/microsoft-layoffs-of-18000-employees-begin-7000031705/
“I don’t mean to be a pedant but which is it — mobile first or cloud first? Only one thing can be first.”
Not necessarily, they can be two parts of the same thing. There are two approaches to mobile—device oriented (Apple) and cloud oriented (Google). Either the emphasis is on the device, with support from the cloud, or vice versa. This is Microsoft throwing in with the cloud first mobile paradigm. That’s huge because MS has always been device first with the PC over the mainframe. This is Satya, the Azure guy, repositioning the company in a fundamental way.
Sounds like you’ve made a very good case for Allen Mulally joining the board of Microsoft to assist with the cultural revolution. Sadly, he just joined Apple, which doesn’t need it.
Satya and Ginni share the same speech writer
https://www.computerworld.com/s/article/9249837/U.S._Senator_blasts_Microsoft_s_H_1B_push_as_it_lays_off_18_000_workers?x=y&mm_ref=http%3A%2F%2Fwww.reddit.com%2Fr%2Fnews%2F
U.S. Senator blasts Microsoft’s H-1B push as it lays off 18,000 workers
Republican lawmaker takes issue with U.S. corporate belief that there’s a STEM shortage
http://m.computerworld.com/s/article/9249837/U.S._Senator_blasts_Microsoft_s_H_1B_push_as_it_lays_off_18_000_workers?x=y&mm_ref=http%3A%2F%2Fwww.reddit.com%2Fr%2Fnews%2F
It’s the law of supply and demand applied to stem workers. There is a shortage of stem workers at the price companies are willing to pay. There would no doubt be an unlimited supply of workers at a salary of $1M/yr. But few Americans want to work for competitive rates, especially considering the time and effort required to become qualified.
Americas are forced to pay absurd amounts for health insurance drugs and healthcare, so no Americas can’t compete with Europeans or the third world which has universal healthcare,, which is much less burdensome and on average much higher quality interms of results and price
Indians can also work from India which should be elegal as they are not laying taxes etc
Things need to be regulated
Everything is regulated, medicine drugs insurance, nothing is supply and demand
Except when it comes to labour
Why not just go to Victorian age and have children work for two pence
They took the pensions away, the security the vacation the sick leave, now they take away the pay and the job
It’s been a gradual process
Supply and demand is some excuse made by marketing to rape the people while the companies prosper with no regulation
Things are regulated when it suits companies, unregulated when it does not suit them
Nothing is supply and demand, everything is very regulated, medicine health and education is not supply and demand
There are no basic rights for the people like in Europe, no right to education healthcare or a job
Europe could do the same, make a few rich at the expense of the majority, we just chose not to, it’s not clever
Ronc, are you defending the hyper capitalists and the corporations so the average worker has no education, no healthcare, no pension and is just discarded like a pice of trash, when cheap labour comes along, I noticed you always seem to defend this kind of third world where you have the rich and poor and no middle class
Europe decided not to be this way
Do you work for the corporations or do you actually believe in creating a third world society with the haves and have nots
After WWII Europeans decided they wanted heathcare, education and pensions, they could have opted for being like the third word but they did not
Ask the Swiss or Germans or very other country in Europe what they want to be and if they believe in this supply and demand you defend, there are better ways, the Germans do it, and so do many other countries
Cheaper labour is not necessary nor does it bring prosperity, ask the Germans and other European countries how they do it
America loves cheap labour, they used to love slavery too, does not make it right
Maybe this kind of world would suit you better
Let me summarise it for you, the new America, the upper cast has everything, the lower cast American has nothing
No car no house, no gas, just a Facebook account
So that America can become like India
This is what the newvau rich Indian upper casts propose
Supply and demand that’s it
The bad-ass Silicon Valley VC talks context and lack of innovation in Silicon Valley – YouTube
https://m.youtube.com/watch?v=_NK1HC9nvwg
And here is more evidence government and companies have trolls on web sites to stop people from organizing and spread doubt and fear and promote their agenda hire hb1 lower wages and fire people, enough of the oppressive heavy handed government already promoting the mega rich like a third world country
https://www.activistpost.com/2014/02/yes-there-are-paid-government-trolls-on.html
An H-1B cap hike would mean a grim future for workers
In the immigration debate, its tech versus academics
https://www.computerworld.com/s/article/9248416/An_H_1B_cap_hike_would_mean_a_grim_future_for_workers
Sent from my iPad
Wow this article sparked a lot of interest. As someone firmly in the Apple camp as a device user, I am no MSFT apologist, but I think that level of interest shows how big a player MSFT really is.
Which is what I have taken away from Nadellas comments. There are really very few companies that have the breadth and depth of relevant assets MSFT has. If they can ever harness them in some compelling way the sky is the limit. The problem is the never ending tension between growing some individual unit versus limiting that unit in order to further some larger corporate initiative. This is not a MSFT problem, it is what all big corporations face. Thus the analogies to IBM.
IMHO, they should restructure or outright divest the major successful units (azure, office, xbox, ADFS, to name a few) and let them compete unrestrained. There is some serious value to be unlocked.
As it happens, I recently attended a MSFT sales presentation and unfortunately (from my perspective) they are still much of a bundling mindset. Think office but on a MUCH grander scale. Its not a bad business idea, quite the opposite, but as a consumer of their services, it scared the hell out of me.
I guess I don’t see why the MS products you mentioned need to be divested to be unbundled. As users, we can use one service without the others. MS may choose to sell bundles at discount prices, but just like with cable, you don’t need to buy the bundle. It may be true that they could change the pricing structure for individual products, but divesting them completely may raise their costs. Wouldn’t they have to duplicate their real estate and building expenses; also legal and accounting functions, etc.?
If you don’t believe in displacing Americans by hiring hb1 here’s a petition you can sign, unless you like the mega rich and corporations destroying your livelihood and benefits if you have any left
https://www.petition2congress.com/7637/abolish-h1b-visa-program/
I support the H1B program because it represents the best principles of the USA – a free market economy that yields the highest return.
If you are against the H1B program then you must be all for affirmative action because that’s what a ban would mean. I love it when white guys LOVE free market economics UNTIL they start feeling some heat. First they hate the government and pray christ for zero government. As soon as companies want to expand the H1B program they BEG the government to step in and regulate the market in their favor.
For all who are against the H1B program – is it OK to pay black men more for a job that a white person can do for less money? If it’s Not ok to pay black men more money then why is it ok to pay whites more for a job that Indians and other Asians are willing to do for less money???
Pure hypocritical BS.
It’s human nature to put one’s own self interest above that of others. Sometimes it’s legal as in the case of self-defense and sometimes it’s not as in the case of robbery. Whether something is legal or illegal often depends on the laws that govern. It’s only natural to want to protect one’s wealth as well as the source of such wealth. So while I can’t disagree with expanding H1B, immigration, and equality in general, I can understand the existence of minimum wage laws, limiting immigration, unionization, and in general the passing of laws to protect the citizens’ feeling of security in their own country.
I trust anything that comes out of a fraudsters mouth 😉
https://www.sfgate.com/entertainment/article/Stanford-Says-Cringely-Never-Completed-Doctorate-2979415.php
I would strongly suggest NOT to trust a fraudster/liar like Cringe-ly. If he is such an authority on technology, why doesn’t he share some of his inside knowledge of starting or running tech companies? They guy was a COMMUNICATIONS major from Stanford. His claim to Apple fame was that he carried an Apple 2 from Steve Jobs’ hatchback.
Don’t waste your eyeballs. Just relegate this guy to the nearest dumpster.
His formal qualifications are in the wiki: “Stephens received a Master’s degree in Communication in 1979 from Stanford University and also pursued work toward a doctorate there. He has stated that he was an early employee of Apple Inc.” But we don’t read him because he is an “authority”, but rather an unusually well-informed journalist. He writes numerous thought-provoking articles. One time, he wrote a few sentences, followed by “Now talk among yourselves”: https://www.cringely.com/2010/12/19/its-all-downhill-from-here/ .
Dear Ronc,
Please read the original URL catching cringely in the web of deceit he wove. Would you trust a liar? Would you trust a felon with your money? Would you value the opinion of someone who violates their professional trust?
https://www.sfgate.com/entertainment/article/Stanford-Says-Cringely-Never-Completed-Doctorate-2979415.php
I did read it. It’s old news and the explanation is at the end of the article “Stephens says he finished his dissertation and was asked to make changes to obtain his doctorate but didn’t follow through. “Obviously, I should have fixed the paper,” he says. “I was just so tired, and I wasn’t aiming for an academic career.” In other words he finished “working” on the doctorate but not “completing” it. Bill Gates and Steve Jobs went to college, but never “completed” it to the point of obtaining the degree. I consider myself to be scrupulously honest. Even if I realize I made a mistake in a post, I go back and make another post to correct it. But during an argument my wife manages to find all manner of lies that I told, but which I can’t recall saying in the same words. More lies have been heard than have ever been told.
People choose convenience over quality every time. Or at least enough of the time for the statement to have relevance. That, coupled with a familiar quote of P.T. Barnum’s, pretty much says it.
What “statement”?