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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

December 24, 2012 at 10:18 AM

More Microsoft: Behind an 8 ball?

My Sunday column on Microsoft provoked many comments. My “takeaway,” as they say in corporate America, can be boiled down to: Plenty of cash and talent, poor management since “BillG” stepped away, more fragile than many might think.

Today, the New York Times reported on disappointing sales for Windows 8. PC sales are weak; people are waiting longer to replace their personal computers. Nor is it faring as well against Apple and other competitors on other devices. “According to NPD, stores in the United States sold 13 percent fewer Windows devices from late October, when Windows 8 made its debut, through the first week in December, than in the same period last year.”

Some emails from current and former ‘softies:

Bill Gates was a software guy. When he was CEO, the good and bad MS decisions were engineering based. WinME, for example, was terrible, but it was necessary as a stopgap to support some new hardware standards that Win95 didn’t support (USB I think, although I may be remembering incorrectly). Great software engineers were valued and treated very well.

Ballmer is a marketing guy, and under him, MS has changed from a software engineering-driven company to a marketing-driven company. Newness and flash are valued more highly than solid engineering. Vista, for example, was a marketing decision. MS needed an new OS to stay in people’s sight for marketing reasons, and the fact that it was an engineering disaster didn’t much matter.

Gates surrounded himself with genius level technical people, and these are the kind of people that got promoted. Ballmer surrounds himself with enthusiastic team players (sometimes referred to as “grinning idiots” by disgruntled engineers) that fit well with a marketing-driven culture. I don’t know if this is good or bad. Lots of companies succeed with various cultures, so MS may do fine as a marketing-driven company. But it won’t be the MS of Bill Gates.

And

I will provide a view point to your quandary about MS being a mystery to you at this point. MS is like a Boiling Frog! … I am a former softie. I worked in a product group and MS IT. In both places, saw and experienced the dysfunction you spoke about in your article. Kurt Eichenwald deserves some sort of an award for his article. It was so right on the money. I left MS because of abuse of the power managers have in stack ranking. My manager actually made up imaginary story and used it. Neither HR nor anyone else would help me in the least bit. He actually recanted it and still no one stepped up, when I challenged it.

The “boiling frog,” of course, doesn’t realize he’s in trouble until it’s too late. And:

When I first started every employee felt they had the ability to innovate and make decisions. By the time I left the company had changed to a bureaucracy. People were too interested in turfs and power than doing the right thing. I had an office in building 8, which at the time was where Gates and Ballmer resided. One day I was walking down the hall and here comes Ballmer walking down the middle of the hall with his arms spread out so anyone that met him had to basically stand at attention up against the wall…Don’t get me wrong the company gave me huge opportunities, but I saw at the time it was on a path of losing out. You’re right the person to go is Ballmer, he has done more harm than good…Thanks for writing a truthful article. Hopefully the board of Directors pick up on it and start forcing change. The only problem is the board is made up of cronies who get their hands filled with cash and stock.

And from Daily Finance: “The great debate: Buy, sell or hold Microsoft.”

Today’s Econ Haiku:

“Where’s Rudolph?” they asked

“Ran over the fiscal cliff”

Santa said, “Oh, deer.”

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