Before he was the front-runner to be the next CEO of Microsoft, I sat down with Satya Nadella in San Francisco. We talked about the cloud, competition and the future of Microsoft. It’s very revealing, the challenges facing whoever is soon-to-be-announced new CEO.
Interesting to see how the (maybe) next Microsoft CEO thinks.
Microsoft’s legacy as a PC monopoly holder made it incapable of handling the fast changing, rapidly shifting post-mobile world. And now for the next year Microsoft will be distracted by integrating the two companies — all at a time when Samsung will be releasing a barrage of new phones, Google will be improving on Moto X and Android and, lest anyone forget, Apple will have a trick or two up its sleeve. Oh, by the way, there is that other Seattle-based company: Amazon has been quietly working on its own phones and has plans to take on the current smartphone establishment. And they don’t even care about making a profit — they just want marketshare.
That’s probably just how the next year will play out.
Software isn’t an industry where the monster company selling the last generation’s product gets to stay being the monster for the next generation. It’s the industry where a thousand hungry small companies are waiting for a shift in the market that will allow them to slay the monster, carve it up and eat it for breakfast.
A proposed class action lawsuit has been filed against Microsoft on behalf of its shareholders, alleging that the firm lied about the financial performance of its Surface RT tablet. The surprise revelation that sales were much less than expected came months later than required by law, the suit says, and immediately “eviscerated” $34 billion of Microsoft’s market value, materially impacting shareholders.
The suit names Microsoft as well as Steve Ballmer, Peter Klein, Frank Brod and Tami Reller as defendants.
The news for Microsoft and the Surface RT just keeps getting worse.
Faced with mounting criticism, Microsoft today quickly reversed course on some of the more draconian aspects of its coming Xbox One entertainment console. The firm will no longer require an always-on Internet connection and using and sharing games will work just as it does today on the Xbox 360.
Microsoft Corp. was recently in advanced discussions with Nokia Corp. about a purchase of the Finnish company’s device business, according to people familiar with the matter, in a marriage that could have reshaped the mobile-phone industry.
The talks have faltered, they said. One person said talks took place as recently as this month but aren’t likely to be revived.
The two sides made significant progress on a plan that would stitch the U.S. software giant with a mobile-phone pioneer. Both companies have struggled of late, as each has tried to adapt to a world in which consumers prefer smartphones built by Apple Inc. and Samsung Electronics Co.
I doubt this merger would have any significant impact on Apple or Samsung. It may help Nokia and Microsoft shake things up, but there’s already a lot at stake in the mobile market, so if they aren’t working closely already there’s little chance they ever will.
The new machine sees Microsoft add a Blu-ray drive and Skype functionality to its console, built in feedback into its gamepad triggers, and upgrades its Kinect camera sensor to 1080p high definition resolution.
Remember how Google sent Microsoft that cease and desist letter because Microsoft made a YouTube app, but cut out the ads? Well, Larry Page went on stage at Google I/O preaching about how being “negative is not how we make progress,” and “not every new technology is zero-sum.”
“We said, ‘oh the OEMs, that’s their design, they deal with it.’ We got huge diversity out of that at all possible price points, but it became hard to guarantee a uniform quality of experience that the end user had,” he explained. Pointing to the initial touchscreens in Microsoft’s first-generation phones, there were clearly devices with better hardware than others. “If you were in front of a bad one then people said that was a piece of crap; it didn’t work a damn.”
So let me get this straight. The way Apple does it, controlling hardware and software is the best way to do things. Got it.
And OEMs are to blame for everything that went wrong at Microsoft.
Perfect. Carry on Microsoft, you’re doing just fine.
Microsoft Corp is expected to invest around $2 billion in the deal, while private equity firm Silver Lake is expected to put in about $1 billion, the source said. Michael Dell is expected to roll over his roughly 16 percent stake and put in some of his own money so he has control of the company, the source added.
Speaking to V3, the firm’s product management director at Google Apps, Clay Bavor, said that due to what it sees as a lack of interest from its clients on the systems, it is holding back on any work at present.
“We have no plans to build out Windows apps. We are very careful about where we invest and will go where the users are but they are not on Windows Phone or Windows 8,” he said.
These internal Microsoft videos, provided to Wired by a person who worked on the project, show focus groups testing the ill-fated Kin. According to our source, these are pre-production models that changed very little from the shipping product, although “performance improved some prior to shipping.” Watch them, and you can readily see why the project tanked: Kin phones just weren’t usable. Or, as our source described them, they were a “pile of shit.”
Why should we believe that the latest round of Microsoft products are any better?
In the end, the death spiral for Microsoft is in full effect, and management is expending a lot of effort to speed it up. Anyone who dares point out that the entire system is collapsing, or worse yet suggests an alternative, gets Sinofsky’d. Or was it Guggenheimer’d? In any case, Microsoft is unwilling to change, and that is very clear. Even if they wanted to, they are culturally far beyond the point of being able to. What was a slow bleed of marketshare is now gushing, and management is clueless, intransigent, and myopic. Game over, the thrashing will continue for a bit, but it won’t change the outcome.
You may think that this is kind of harsh or maybe even an improbable outcome, but as you read through the story, you see that he is exactly right.
CNET got their hands on Steven Sinofsky’s memo to employees announcing his departure. They also received a copy of Steve Ballmer’s memo to employees.
Ballmer doesn’t exactly gush with emotion for the man that lead the Windows team and has been with the company since 1989. Word on the street is that Sinofsky wanted Ballmer’s job as CEO, but it doesn’t look like that was going to happen.
Sources have said the move came amid growing tension between Sinofsky and other top executives. Sinofsky, though seen as highly talented, was viewed at the top levels as not the kind of team player that the company was looking for.
Interesting times when Apple and Microsoft will let top executives like Sinofsky and Forstall walk or be forced out.