Skip to comments.This Is The Perfect Steve Ballmer Quote To Illustrate Exactly What Went Wrong At Microsoft
Posted on 12/11/2013 7:37:46 AM PST by SeekAndFind
Steve Ballmer has delivered his final interview as Microsoft CEO, talking to long-time Microsoft reporter Mary Jo Foley.
The interview is complimentary, focusing on Ballmer's successes, and cruising past his failures like mobile and tablet computing the words "iPhone," "iPad," "Android," and "Google" don't appear.
But in celebrating Ballmer's success, we see why Microsoft is flailing today. We see why the company wants to hire Alan Mulally, a CEO that is celebrated for his turnaround expertise. It's strange to see a company expected to generate $84 billion in sales for fiscal 2014, a 7.4% annual increase, need a turnaround expert.
Here's the quote from Ballmer that pretty much explains how the company got in the position it's in: "In the last five years, probably Apple has made more money than we have. But in the last 13 years, I bet we've made more money than almost anybody on the planet. And that, frankly, is a great source of pride to me."
Ballmer explains that from day one, his job at Microsoft was to think about money.
He says he was "the business guy, whatever that meant," when Microsoft was just starting out. And from that day forward, he thought about, "How do you make money? How do you make money? How do you make money?"
He adds, "That doesn't mean nobody else ever thought about it, but 'How do you make money?' was what I got hired to do. I've always thought that way."
This is the problem with Ballmer and his run at Microsoft. His starting point for any decision at the company centers on money. He thinks about how Microsoft will make, or lose money on a product.
At Google, the product comes first, then the company starts to figure out plans for making money.
(Excerpt) Read more at businessinsider.com ...
Just look at the Windows Phone and Windows 8.
The issue isn’t just “making mony” per se, the issue is when do you sacrifice short term to increase long term gains. Building a cheap, inferior product and trading on reputation may “make more money” this year but it can also put you out of business five years down the line and then you aint making no money at all.
Actually I love them both - great products!
This doesn’t explain it. At least not in terms the market can understand.
What explains it is that you are evaluated at the business unit manager level in terms of return on investment.
That makes bundling Office with the Surface Pro 2 a political impossibility. Instead, you get Office 365 for a month, and ads that claim Office is bundled with the Surface Pro 2.
In short, what has killed, and will continue to kill MSFT is horrendous product marketing.
Surface can destroy the iPad if Office is bundled and the Type Cover is included. It’s not, so it won’t. Also, the price difference between a 256 and 513MB version is almost double. Memory can’t be that expensive, and the backplane is the same.
X-Box One. No backward compatibility with the 360, and it costs $100 more than the PS4. PS4 has no backward compatibility either, but it is selling three times more units (conservatively) than MSFT.
If that trend continues, developers will choose PS4 to support before MSFT. You don’t see developers clamoring to support the Windows Phone.
Amazing - you pioneer the business model that killed Apple (provide a good, low cost OS and give away the developer tools while your competitor charges a premium for hardware, OS, software, and developer tools.
MSFT is failing because they forgot why they made more money in the first ten years. Good software at a reasonable price. (Value discipline).
Google is wrecking both companies, and will continue to do so, using the same business model MSFT used to kill Apple (before MSFT bought Apple).
Pretty simple. Windows 8 blows! Although the youngsters may like and use the tile-ey thingies on the tablets and phones, as a desk/laptop OS it is horrible. It is not just different the way 95 was from NT, or 7 from 2000, it is bloated and weighted toward all the social tile-ey thingies.
No recognizeable start menu (added later), no means to go directly to system functions, or paths to system functions in a familiar way.
All in all, sticking with 7 until the wheels fall off, then moving to the ultimate windows patch, Linux.
How do you make money? How about selling your database software suite for a tens of thousands of dollars per license? How about changing your volume licensing scheme to be so convoluted as to be vexing to even the most seasoned IT accounting professional? How about treating your mom and pop shops like complete trash while sending your mega-corporation clients on sales junkets to Hawaii?
I’ve been an IT professional for over 20 years. I’ve worked with enterprise-class Microsoft products like Server, SQL, SharePoint, Active Directory, Exchange, etc. for over 10 years, and I’ve been actively involved in licensing “true ups” for the last 5. I’ve never seen a company contort themselves in ways like Microsoft to keep a customer happy, but in the end, they still make hundreds of thousands of dollars off of their clients for what? A license?
I’ve worked in mom and pop shops who spent $500 for a single server license while large corporations with thousands of servers pay less than half of that, and while I’m not complaining about the difference between single vs. volume licensing, I am complaining about how they treat these two customers respectively. Mom and pop shop wants support for their product? Call India, wait for a call back, muddle through a possible fix, get frustrated. Corporation wants support? You get a TAM to make a call, you get an English-speaking support rep on the phone in minutes, and you get regular follow up.
Microsoft isn’t in the business of customer happiness, they’re in the business of making money, even if that means a program riddled with security holes.
RE: Microsoft isnt in the business of customer happiness, theyre in the business of making money,
Which leads to the next question: How do you make money of your customers aren’t happy with your product?
Well, since Microsoft IS making money, obviously, customers are somewhat satisfied with what they have... otherwise, they’d have gone with another product long time ago.
Every company needs a top exec whose job is to think about how to make money. Putting him in as the very top dog is generally a bad idea.
The Leader of a company that wants to excel must have a vision above and beyond "making money" to achieve that goal. Making money is a by-product, not the goal.
No, they’re making money because they’re in the pockets of the major OEMs (HP, Dell, Lenovo) thus forcing customers in to Windows.
I build PCs as a hobby, and when people come to me to build them a computer, my first question is “what’s your purpose for a new computer?” If they say email and Skype and Facebook, I suggest they call HP or Dell or Lenovo and ask for a Linux distribution laptop or PC. HP and Lenovo will build a machine for you with Linux if you ask, and if you decline the EULA on your machine, you can mail Microsoft your copy of the media that comes with your new computer, and they’ll refund the $100 to you for the license.
If someone comes to me and wants a gaming machine, I have no choice but to give them a Windows computer since the major gaming corporations (EA, Blizzard, Bethesda) don’t code for Linux (yet).
I personally use Ubuntu Linux for everything, but I am a gamer and I do have a gaming PC with Windows 7. I do not use it for anything other than gaming, however.
One week after receiving my 8.1 Dell which I purchased online at Dell’s site for $150.00 off on Black Friday to replace a ten year old XP system I can weigh in on Windows 8.1.
Overall I like the new OS. The start page is slick tiles and all. I can access every thing I need to, some in a different way. The desktop File explorer icon gets you to folders, Windows key and X shortcut gets you to into all system management functions such as control panel and task manager.
My only complaint is the Mail App. I was able to set it up to access both my live.com and att.net imap mail in one place which I like.
It however is not usable for things like “Send link by email” in Internet explorer or the “Scan to email” function on my Brother printer or email a picture from Photo Gallery program.
I had to install my copy of Office 2003 and the Outlook Mail program does work to enable the functions the Mail App would not.
I'm satisfied with Windows XP and Office 2003. As is the company I work for.
This is not going to make any more money for Microsoft.
MS destroyed itself from within, yes it will still exist and make money, but it lost its crown as an innovator long long ago.... And this guy and his leadership is not the sole reason, but a very very big part of it. Now, to be fair, this guy did nothing without GATES approval, so Mr Gates owns this as well.
However, when you decide you are going to rate all your employees on a 5 point scale and 20% of them no matter how goo d they are will be graded as an F when compared to the rest of their team, you are going to undermine the very thing that put you and keeps you on top. You could be a certified genious and superstar, but if you get teamed up with 4 other superstars who burn just a bit brighter than you, or worse yet, are better at playing the political game than you, and POOF you get a bad review, no raise, and you say F this, and go get a job elsewhere for more money and less BS... And this is EXACTLY what MS did for years, drove off great talent that they had, and lost completely their ability to innovate.
They aren’t going out of business, but they will never be a tech leader again. They destroyed their ability to innovate, and have spent so much time trying to defend a dying territory that the were end gamed around.... They are still doing it to this day. Nearly 7 years since the first Iphone was introduced and there STILL isn’t a version of MS OFFICE for iOS and their Android version finally came out late this year and isn’t compatible with the overwhelming number of tablets on that OS....
Balmer made money for stock holders, but he destroyed the company as an innovator...and basically traded long term greatness for shorter term ROI. MS will not go out of business but they are done being a place that young engineers are clamoring to go work for.... And that’s a very bad thing long term.
Two words, “Industry Standard”.
Products like Microsoft Word have been crap from day one. But everyone uses it. Why? Because of the perception that it is industry standard. So no other company will put in the time and effort to make a viable replacement that is not a buggy archaic piece of junk. Every now and then there has ALMOST been a viable alternative. But since Word is ‘industry standard’ no one can sell enough copies of an alternative to make enough money to polish it and add competitive features. So every competitor dies on the vine and buggy cash-cow keeps on dominating. Business p4roductivity software is still microsoft’s market to lose.
Microsoft offered me cash to port my apps to their devices, I looked at the numbers and told them it wasn’t worth it... Based on the emptiness of their app store, I know I am not alone.
I don’t care who wins the console wars, but your facts are just wrong:
I don’t know where you got your numbers from. Over the Black Friday weekend the Xbox One was responsible for 31% of all console sale, the 360 responsible for 30% of all sale. The PS4 was responsible for 12% of sales.
If you are referring to comments by Michael Patcher he’s giving you his guesstimate, he has no real sales figures. Those numbers I quoted you are directly from sales figures from Target and WalMart. In fact I’ll go you one further... I think Patcher is full of horse dung; go back and read about product shipments... Sony once again (like the PS3) undershipped for the Holiday season, there are simply not enough units to meet demand. On the other hand Microsoft has shipped 3x the amount of units they initially shipped for the Xbox 360. In fact quite a few analysts are projecting Xbox One may win initial sales simply because of the consoles availability.
Both Sony and Microsoft have each sold 2 million consoles worldwide since launch:
So I have no clue what Patcher is talking about.
Microsoft never learned how to lead. Always reactive, always predation upon a segment created and defined elsewhere, always attempted one-upsmanship with feature creep that doesn’t play well together. A me-too colossus that made it big on an apparent cheap cost of entry.
Personally, I have used MS products for years and most of the time I like them and the way they work. I very recently was introduced to Windows Office 2013. OH my Lord! As far as I am concerned this new ‘latest and greatest’ Office product is the pits.
Pay a yearly subscription to use!? Everything is online and it uses the Browser for Excel. Plus it wants to put everything in the ‘cloud’ to safeguard it. Uh... No! Not for me. I’ll just keep on using the older MS office until these ‘geniuses’ get their act back together. My data is mine, I don’t want it on the cloud for any reason.
It’s like the old military credo ‘If you can touch it, you own it and control it’. If my data is in the cloud, I can’t do that and anyone who can ‘hack’ into it can then own my data.
So if Ballmer was thinking Money, money, money.... How do we make more money? Then he forgot a big lesson! If you don’t keep your customer happy, then that customer will go elsewhere for the product he/she desires and that WILL make them happy.
Microsoft’s problem is they are your prototypical front runner. They do grea when they are ahead, but when they are behind the curve and have to catch up they flounder... even when their products are superior.
A perfect example was the Zune, a far, far better device than an iPod, but never caught on because they never spent the necessary time or money to market it. The device was wi-fi enable so you could download music and podcasts from home without hooking to a PC or any wi-fi enabled location. You had the ability to instantly share music with other Zune users... it was a pretty amazing device and a good 5-6 years ahead of its time.
Another example... I have both a Surface 2 and an iPad... I barely use my iPad anymore, the Surface is simply a better device, but the Surface is so far behind the iPad and Google tablets in terms of sales base that I’m not sure they can get enough of a grip on the market. It would help if they cut the price on the device substantially.
I'm well along the way with Linux. I've got a couple of machines with 7, the rest with XP and not moving beyond them. Using Mint and LMDE, depending on computer.
MS makes money off pissed customers like me because all the software I require only runs on Windows and requires MS access and excel. I can not describe my hatred of Win 8 and the ribbon toolbars of ms office.
“It however is not usable for things like Send link by email in Internet explorer or the Scan to email function on my Brother printer or email a picture from Photo Gallery program.”
Exactly. When your products don’t work with other of your own products, you gotta start asking yourself about who’s running the operation.
I was ready to move on from my Blackberry about a year ago. I started shopping. First place I looked was the Window’s Phone. I did this because synchronization with Office is a key requirement.
With version 7 of their phone OS, they dropped USB synchronization of their phones with Office. You CAN synchronize your phone, of course, if you are willing to send all of your contacts, email, and what not TO THE CLOUD. It’ll synch with the cloud.
This was before Snowden too. Then Snowden started dropping secrets about cooperation between MSFTGOOGLEYAHOO and the NSA, and I just smiled.
iPhone? Same deal - send your stuff to the cloud, and you’re good.
Android? Same deal, only with Google.
The only company that supports USB synch with Office?
Blackberry. I stuck with my Blackberry, even though at the time you couldn’t get one that had 4G support. You can now, but I can’t upgrade yet.
As for the PS4 numbers. The only reason why the numbers are even is because MSFT went worldwide while the PS4 only came out in US and CAN.
I’m not saying the Xbox One isn’t a good console, because it is. I’m saying that if the strategic goal of big IP players is to have console dominance (whether that is smartphones, PCs, tablets, or gaming devices), MSFT isn’t going to meet that goal.
My company develops software for the PC. I want MSFT to win. One set of tracks makes it easier for third party companies to flourish.
Ballmer ROYALLY screwed that up, permanently. He took his foot off of Apple’s throat, and Apple will end up coming back and killing them off as a result, only it won’t be Apple, because they never learned from their first mistake against MSFT.
Google got in there with Android, and now it isn’t even a contest. There are more Android devices out there than all other phone OS’s combined.
Even MSFT is incapable of learning from its OWN mistakes. There was a version of Office that prevented you from opening and using documents created from previous versions of Office. There was such a hue and cry about it that they ended up having to provide a free upgrader, and then they NEVER did that again for Office.
The Gaming division never learned this, apparently, from the Office division and so Xbox One players are stuck with a THE MOST expensive console with a VERY limited list of titles, utilizing ZERO of their loyal customer’s investment in their 360 console and title’s.
Mulally, if he is brave enough, should come in and teach these people some simple marketing lessons that could reestablish MSFT as a player again.
Lord knows they have the cash. They just don’t have any respect for their customers, and the killer is arrogance in strategic decision making. MSFT has a stage four case of it.
>> Ballmer explains that from day one, his job at Microsoft was to think about money.
The Business Insider’s view concerning cause of failure...
Yet another article from BI showing its liberal affinity.
Microsoft stock has been flat since Dec 2000. It went up when Steve Ballmer said he was leaving.
Windows 7 can be modified so it works ok but there are several annoyances I hate. I have downloaded several free and one paid programs to get Windows 7 to work well enough. Windows 8 comes along and you wonder if they are putting crack in their caffeinated drinks up in Redmond.
They have a desktop tile but there is no icons on that desktop and no start button to get to your files and programs....
Right click and create new folder and call it Computer. Create shortcuts to the desktop from c:\program files was how I got started then found some programs to fix other annoyances like you cannot easily change the font. You have to go into the registry to do that! Get the free Windows 8 font changer instead.
I upgraded to Windows 8.1 and it was get this, it is a 3.6GB download! The start button is next to useless. The Stardock.com version called Start8 is 7.1mb and gives you multiple start menu and options.
Windows 8 has about 1.6gb of updates from Windows update site! The bug fixes are bigger then the original install!
They added a BIG stupid arrow Switch between apps square box that won’t go away. Putting an X on it was to easily close it wasn’t sophisticated enough for them so you have to play a game. Point your mouse in the upper left corner and maybe it will go away. Try Alt + Tab key combination to make it go away...temporarily.
I went back to Windows 7 after a few months of being frustrated with Windows 8.
I installed Windows 8.1 in a virtual window using a free program called VMware Player. I looked at the install size and it was nearly 30gb
The Xbox, and their keyboards (especially the ergonomics, I use them on all three of my PC's home and office) and mice, are clearly very competitive and give value for dollar.
Their software? Increasingly, not so much.....
The Model T, the DC-3, the Nikon F, the original Kentucky Fried Chicken, the iPod.
All of them were huge successes (and made a lot of money by the way) because their creators realized that their job "from day one" was to think about a top quality product.
When the guys who "think about money" take over the reins, it's often the case that the product line goes into the crapper.
Not arguing that MSFT's product marketing has been horrible, IMO what's really killing them is how they insist on bundling and pricing their products.
Makes it damn' near impossible for most enterprises to understand what it is they're really paying for and why they're paying it.
Have you tried licensing Microsoft Lync for your enterprise lately?
We are trying to make the transition to Azure right now.
We almost gave up. The price is amazing, but its not ready for prime time.
If the product marketing and development folks on Azure were working for us, they’d be on a breadline right now.
Unconscionable lapses in basic product considerations, especially around security.
For small to medium sized rapid application developments, it's ok.