Wednesday, June 20, 2007

Who us - leadership? Nah, we just vest here.

Regular readers know that I'm a staunch critic of Microsoft's current leadership team. In fact, I'd argue they don't even deserve to be called that and instead resemble the Keystone Cops. Now, you might assume that this is primarily because of the stock's non-performance - and I'll admit that's a big factor. But it's also the endless strategy/execution issues and constant inability to get even minor details right. IMO, that shows a company that is badly led and poorly managed.

Here are just a few current examples:

It's always wise to take your premium-priced offering, justified in part on the promise of future "extras", and then stop delivering those amid rumors the team responsible has actually been disbanded. Meanwhile, MSFT cans the Digital Image Suite which arguably would have made a great extra (though MSFT says most of the functionality is in Vista already - it isn't).

Couldn't agree more. Is there anyone driving MSFT's overall branding and marketing? It sure doesn't seem like it. Add to the list of confusion three different products that all contain the name Messenger. WTF? This is really too bad because many of the "Live" products are superior to competitive offerings - but most users aren't going to wade through the confused naming/marketing message to try them. Oh well, at least "Microsoft TV: IPTV Edition" got renamed Mediaroom. Not exactly creative, but at least it's an improvement.

Did we upgrade the heatsinks in light of widely reported overheating problems? Well, we're not going to say specifically, even though pictures documenting the change exist, because er, ...why be honest?

Related. Can anyone read Holmdahl's responses and NOT conclude that Xbox failure rates exceed the industry average? So let me see if I understand the strategy here. Having lost $5B+ on the Xbox fiasco so far, with the ONLY hope for payback - no matter how unlikely - being via subsequent games sales and related, leadership thinks being less than forthright about overheating and reliability problems (not to mention blaming users for scratched disks despite evidence that it's a hardware problem) is going to get buyers to invest more in the platform? Brilliant.

This person obviously didn't get the memo from Raikes explaining that there's no demand for this type of solution and why it's therefore not in MSFT's future.

Oh, did we just brief the press on changes we were making? Sorry, consider it a belated April Fool's Day joke.

Ballmer: the allegations are "baseless". Days later, MSFT agrees to make changes. Apparently several state AGs, already pissed off at MSFT for past infractions, thought it had enough basis to threaten legal action if MSFT didn't comply. [BTW, this helped tank the stock as the revelations included timing of Vista SP1 which now looks like next year (beta late this year), thereby potentially pushing out Vista migrations even further.]

Excerpt: "Yahoo's search total grew 18.6 percent from the year-ago period, according to Nielsen/NetRatings. Microsoft Corp.'s MSN/ Windows Live took third place with 605.4 million searches, or 8.4 percent of searches in May. The service experienced 0.8 percent search growth year over year."

Remind me again, didn't YHOO's CEO just get ousted for his performance? 18.6 vs .8? Will there be ANY equivalent accountability doled out at MSFT? That's rhetorical btw as the answer is an emphatic "No".

Okay, so it's likely over-hyped. But can someone remember the last time a MSFT product caused anyone to drool or caused a traffic jam? MSFT is spending an order of magnitude more on R&D than AAPL and taking at least twice as long to get products to market, right?

Unsurprisingly, after a brief run, the stock returns to regular programming. For example, versus the NASDAQ (dividends excluded), MSFT has now underperformed over:

  • 1 day
  • 5 days
  • 10 days
  • 1 mth
  • 3 mths (just)
  • YTD
  • 3 years
  • 5 years

(Over one year, it's still ahead).

Meanwhile, where's MSFT's Board of Directors? MIA, as usual. Bottom line, if shareholders expect change then we're going to have to demand it.


  • This list could go on and on of stupid decisions and flubs that the leadership has made. I thought the Google capitulation was really odd. I didn't think that we prevented that sort of stuff, I mean isn't the settlement an admission of guilt? And so quickly. I just got a new Dell that had Google Desktop Search pre-installed, obviously they didn't have issues installing it. Oh, and getting the Google stuff off of the machine...holy crap that was hard. Overall, you're right, leadership just sucks. Meanwhile, it appears that SanjayP is getting ousted (good riddance, probably on a nice paid holiday). Good replacement, not hardly, some marketing wonk from EPG.

    By Anonymous Anonymous, at 12:45 AM  

  • "I thought the Google capitulation was really odd."

    Fake Steve Jobs has a humorous and sadly insightful overview here:

    Microsoft Goes Pussy

    Bottom line, MSFT caved. Some will argue that was smart. Maybe it was. But the odds are good that having caved here, we'll see numerous repeats in the future and not just GOOG-initiated.

    By Blogger MSFTextrememakeover, at 6:56 AM  

  • And how about this?

    $50 million to get new GTA content on the Xbox. Whee! (I mean, Wiii!)

    By Anonymous Anonymous, at 7:06 AM  

  • From the outside it seems like Microsoft is a suicidal auto-erotic octopus. All flaying tentacles and thinking everything is great while it's slowly choking to death.

    Microsoft has almost no direction, no over-arching vision, too many projects that do the same thing and it's stuck on the fence between wanting to play it safe or taking chances. They made a huge mistake with the multiple versions of Vista then again when they took their one hip, drool-worthy property XBox Live, and tried to up the cool factor on their web offerings by attaching the Live label. Live used to have one high visibility meaning, XBox Live, and the people on the street knew what it was. Now OneCare Live? Messenger Live? What in world does that even mean? Does it have any relation to what the consumers think of as it's original meaning?

    They embrace openness... or they don't. No one there seems to be on the same page, at least at the management level. Seems there are the managers that have lost all passion and their only concern is getting that stock price up or there are younger, still alive managers that want to really do something new or at least better but they end up getting thrown in the gears. Personally I'd like to see Microsoft spin out little start-ups, give the team the code, a full license to use it, some start-up cash and an agreement that if it makes over X in net then Microsoft gets a percentage up to Y. Make the teams fully responsible for their dev and marketing, let them focus on their killer product. It's not like they're talking now, so they might as well have the freedom.

    Then maybe something like the horrible Microsoft Spaces would either die or actually realize how bad they are and improve it.

    By Blogger Shawn Oster, at 11:46 AM  

  • week after week it just gets more and more frustrating. How many times must we say it BALLMER MUST GO. By any stretch of the imagination he is not a leader, he is a shoe salesman.

    This isn't about the poor stock price its about a lot more than that, a) our lack of direction or rather far too many different directions, trying to be all things to all men b) our enormous staff numbers worldwide are just staggering and growing and for what c) our review system that rewards partners and above for not achieving their goals and screws Joe in the trenches d) but mostly about our gutless leadership who time and after time openly portray an image of people I wouldn't trust an inch (and thats from someone inside the company, God knows what people outside think of them). For God's sake, do the right thing and resign already.

    To use an old phrase my mother used Microsoft is a jack of all trades and master of none.

    By Anonymous Anonymous, at 11:06 AM  

  • Regarding Microsot's dead naming strategy...I would be reluctant to blame the brand guys. Most of the screwups in product namning have a lot more to do with confused product strategy than poor naming. I think MSFT has done some good stuff with naming lately (Silverlight is a good example). If you want to look at bad naming, look at Google. "Google Apps for my Domain?" Please.

    By Anonymous Mark Simons, at 10:50 AM  

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