Yes, owning a handset company will fix all of this . . .



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Source: WSJ

Category: Technology

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13 Responses to “Microsoft: 11 Fix-It Strategies”

  1. bigal says:

    Is Microsoft on the same path as Sears but 10+ years behind?

  2. Bob A says:

    So basically for $7.2 billion another buyer could have bought Nokia, switched it to Android and killed Windows Phone once and forever. It’s really kind of shame somebody didn’t put that dog down.

  3. Internet Tourettes says:

    As a veteran of the tech bubble, most of these acquisitions, mergers, or divestments are mere ploys to shuffle the income statement and muddy the balance sheet for 4 quarters or so. A vulture acquisition via a bond buy out would have been much cheaper (Nokia was going to run out of money in ‘14) so there must be some real fear in Redmond these days…….

  4. mllange says:

    They may have difficulty convincing most to leave their old moblile OS (and library of apps) behind, but there is a large market out there for first-time smartphone buyers.

    “Windows Phone’s success has been in convincing first time smartphone buyers to choose one of its devices with 42% of sales over the past year coming from existing featurephone owners. This is a much higher proportion than Android and iOS. The Lumia 520 is hitting a sweet spot, offering the price and quality that new smartphone buyers are looking for.

    “Featurephone owners present a huge opportunity, representing more than half of all mobile users globally** and this will be the new battleground over the next year. With the iPhone 4 and lower end or older Samsung Galaxy models selling well among first time smartphone owners, there is plenty of competition for these customers. The brands that win in this segment will be those that understand and address the needs of consumers in terms of price, content, and quality.”

  5. GeorgeBurnsWasRight says:

    You have to wonder if Balmer is actively trying to sabotage his successor.

    The only positive effect I can see is a few more phone sales to people who wanted to buy the Nokia phone but were afraid of being stuck with an orphan if Nokia went under. But that doesn’t begin to pay for the cost of the deal.

  6. rp says:

    How about a Skype-phone that works anywhere in the world with an extremely low flat rate?

  7. Slash says:

    After reading that Vanity Fair article (I know it’s from 2012, but it was new to me), I am kinda stunned Microsoft has lasted this long. Must be wheezing along on Office license and Xbox sales. And I was glad to see that Bing has been a money loser for Microsoft. I hate those damn commercials.

    Ballmer has to be the worst CEO in recent memory, in terms of disastrous decision making that significantly harms a company. I didn’t know enough about him to form much of an opinion (other than observing that he resembles a hyperactive Lex Luthor), but after reading about how very wrong he was about every single tech advance of the last, say, 15 years, I’m convinced he’s the highest paid idiot in America. And that list is not a short one.

    I agree with Internet Tourettes about the Nokia purchase. It’s amusing how corporations almost always seem to double down on the stupid, rather than correcting it.

  8. Alex says:

    While the comparison with Sears is apt, I think of them more like their old partner, IBM.

    Both companies used shrewd business practices to become the king of the cats. Although there was great stuff going on in the research departments of both companies, especially IBM, very little of it made it into the products, which were always technically inferior. IBM had a Turing award winner (John Backus) spend most of his career there, and his most important work never made it out of the lab.

    When you’re on top, you can be a little clumsy technically and stay on top with good marketing. But if you are not on top, you can’t catch up that way. Microsoft’s crown jewel is and was their desktop operating system, so they began with that to try to build their mobile OS, and you can’t do that.

    I’m not going to go into all the technical details, but I spent most of my career as a computer science professor (albeit a theoretician), and what it boils down to is that when you have a kernel and basic set of libraries that is designed for a “large” application, it all has to be rewritten to get it to work in a smaller space. You can build up from a smaller OS, but not down from a bigger one. I believe this is why Microsoft mobile OSs (including tablets) have not been able to leapfrog the competition – they have hamstrung themselves and they will never be able to overcome that disadvantage.

    Microsoft even used a variation of this argument in their defence in the antitrust case – they said Internet Explorer was so tightly intertwined with the OS that they couldn’t remove it. It’s stupid to do that with an application like a browser, unless you are deliberately trying to lock it in, but the idea that once you start using your libraries you are stuck with them is sound.

    By contrast, the third leg of the 1980s computing stool is, I think, adapting relatively well. Intel seems to know what their challenges are, and how to meet at least some of them. Microsoft could look to them for inspiration, but I doubt very much they will.

  9. Robert M says:

    If the guy at Microsoft thought he was smarter than Microsoft and left for Nokia to help them, then how is failing to help Nokia a good thing for Microsoft? It’s like doubling down in a marriage by remarrying your Ex.

  10. RW says:

    I am not particularly knowledgeable about Microsoft much less its internal sociopathology — used some of their early compiler products and adaptive hardware (allowed apple machines to run CP/M for e.g.) and of course had little choice but to use their office suite (everyone else bloody well did) — but what little I know strongly suggested Balmer was more of a caporegime, an implementer and enforcer, rather than an idea guy: Bill Gates was the don who sequestered himself each year with lots of literature and deep reflection to set the course of Microsoft’s direction going forward and I am not sure that stopped after he putatively ‘stepped down.’

    No excuses for Balmer of course — the buck stops where it stops and he was the one cashing the CEO checks — but I suspect many of the worst policy misses could be laid at Gate’s doorstep regardless: An orientation to relentless competition has its costs and one of them is vision restricted to leveraging current advantage rather than opening alternative paths.

    • constantnormal says:

      “An orientation to relentless competition has its costs and one of them is vision restricted to leveraging current advantage rather than opening alternative paths.”


      Microsoft’s main competitive strategy has never been to innovate or lead, but to hang back, observe where the puck is going, and then buy/obliterate the player occupying that space and attempt to position themselves at that position, with no significant competence in that role.

      That strategy only worked once, with PCs, and never has since. They were late to recognize the importance of the internet, and have never recovered. They have utterly failed to establish themselves as a (profitable) player in the entertainment realm, and have (repeatedly) failed to do so in the mobile realm.

      If one looks at the graphic, it is abundantly clear that Office is carrying the company, providing the bulk of the net profits (profits shown are operating profits). Office will never translate well to the mobile markets, it desperately needs to incur creative destruction and be replaced by a simpler, cleaner product. But that would break the existing base of installed documents that is the sole anchor keeping Office in place. The time for Microsoft to “eat their own children” was long ago, and now someone else will do it for them.

      Who that will be, I haven’t a clue, but I suspect it will be no one in that space today.

    • Slash says:

      Sure. To clarify my opinion of Ballmer, from reading the Vanity Fair article, on the tech side, Gates definitely was responsible for choking innovation at Microsoft because something didn’t jibe with his image of the company or what it should be doing, or competed with a favored product or idea. So yeah, I guess at least half the blame should go to Gates.

      But Ballmer’s opinions of tech innovations (esp. from other companies) were so (from the outside) hilariously wrong and public, he really does deserve some extra ridicule. He’s a pathetic figure, a manic cheerleader literally shouting down any opinion that implies that Microsoft is not the most great and powerful tech company of all time, despite abundant evidence to the contrary. It would be nice if people would hurry up and get over this idea that the person who yells the loudest is right and that saying something enough times makes it true.