Ballmer forced out after $900M Surface RT debacle(computerworld.com)
computerworld.com
Ballmer forced out after $900M Surface RT debacle
http://www.computerworld.com/s/article/9241867/Ballmer_forced_out_after_900M_Surface_RT_debacle
9 comments
It's hard to see Microsoft recovering from this. You've outlined a set of problems that boil down to politics, and they inherently need political solutions this side of Chapter 11 or 7.
More specifically, Microsoft is a company selling products with a foundational technical component, but its run almost exclusively on political rather than technical merit.
I've said about much of the company's history that one of its secrets of success was writing software that basically worked (i.e. doesn't GP/segfault) ... I wonder how close the company is to losing that more and more often. A problem with e.g. the KIN, although it was rumored that was pushed to market simply to satisfy a contractual obligation to Verizon Wireless.
Which brings a final point: the politics is directed almost entirely inwards. Microsoft's long history of screwing partners is not doing it well in the devices and services world it's trying to compete in.
I suppose it could retreat to Windows on the desktop and servers/Office/enterprise in general and play that game out (a bit like IBM), but I suspect would take a massive political effort to constrain the company's ambitions prior to it getting a lot more thoroughly crushed in the marketplace.
More specifically, Microsoft is a company selling products with a foundational technical component, but its run almost exclusively on political rather than technical merit.
I've said about much of the company's history that one of its secrets of success was writing software that basically worked (i.e. doesn't GP/segfault) ... I wonder how close the company is to losing that more and more often. A problem with e.g. the KIN, although it was rumored that was pushed to market simply to satisfy a contractual obligation to Verizon Wireless.
Which brings a final point: the politics is directed almost entirely inwards. Microsoft's long history of screwing partners is not doing it well in the devices and services world it's trying to compete in.
I suppose it could retreat to Windows on the desktop and servers/Office/enterprise in general and play that game out (a bit like IBM), but I suspect would take a massive political effort to constrain the company's ambitions prior to it getting a lot more thoroughly crushed in the marketplace.
The build process sounds horrible. I can't believe there is such a difference between build systems in Google and Microsoft.
If they really don't have centralized build farms they're NUTS. Seriously? It isn't just buying you horsepower, either; it's buying you an identical build environment every time, done right at least. It guarantees there isn't some weirdness about a developer's workstation where it builds right there and not anywhere else.
This is a pure speculation article. Just because an analyst says does not mean a thing. Not worthy of Hacker News.
Microsoft used to be a company that produced terrible software and was yet utterly dominant. They're now a company that produces beautiful software (in my opinion) and are entirely unable to get people to buy it. I don't own a Windows tablet or a Windows phone, because the app selection is awful, but I've used both and they are fantastic. Speaking of which, with all their money, how are they not paying app developers to port things to their platform? With their marketing expertise, how are they not just shoving these phones into people's hands? When people think of Ballmer they think of Vista or "DEVELOPERS!" or throwing chairs about Google. I think of his failure to drive adoption.
i don't really trust microsoft products because they have a track record for being consumer hostile (like how they thought the xbox one phoning home was acceptable etc).
I'm also one of thousands of people who has my digital content locked up by them due to their ridiculously complex digital rights management on the 360, that is far far more ornate and frustrating than anything rootkit-toting sony has ever thrust upon me.
They are paying people to develop apps for their platform. oodles and oodles of cash. it's literally a joke amongst mobile developers that they have come to almost expect a pay-day from microsoft to port things to their platform.
In my opinion, they have meticulously dug themselves into a hole of being generally untrustworthy, and it will take a miracle to extricate them from it.
But hey, i'm not really happy with apple anymore either, so I am an equal-opportunity cynic.
I'm also one of thousands of people who has my digital content locked up by them due to their ridiculously complex digital rights management on the 360, that is far far more ornate and frustrating than anything rootkit-toting sony has ever thrust upon me.
They are paying people to develop apps for their platform. oodles and oodles of cash. it's literally a joke amongst mobile developers that they have come to almost expect a pay-day from microsoft to port things to their platform.
In my opinion, they have meticulously dug themselves into a hole of being generally untrustworthy, and it will take a miracle to extricate them from it.
But hey, i'm not really happy with apple anymore either, so I am an equal-opportunity cynic.
>But hey, i'm not really happy with apple anymore either, so I am an equal-opportunity cynic.
I was going to say, pretty much all the major players are doing the same things you criticize Microsoft for. That said, while I'm happy that they backtracked on the Xbox One nonsense, the fact that they went there to begin with makes it clear that they would return to the same old Microsoft if they ever got the chance. How did they ever think those "features" were acceptable?
I was going to say, pretty much all the major players are doing the same things you criticize Microsoft for. That said, while I'm happy that they backtracked on the Xbox One nonsense, the fact that they went there to begin with makes it clear that they would return to the same old Microsoft if they ever got the chance. How did they ever think those "features" were acceptable?
Really? The Surface RT is what drove the board to finally act? If that's actually true, it's much more of an indictment of the board and their absolute negligence than Ballmer at this point.
Rewind three years: Microsoft ships the Kin, its lackluster pseudo-feature phone 'built'[1] from the acquisition of Danger, Inc. Microsoft spent $500mm acquiring Danger and then killed off all of their products, and managed to send all of their best employees running to the exits.
Microsoft spent two years building the Kin phones, only to cancel them within months of their release. They probably spent in excess of a billion dollars on the whole thing when all was said and done, and for what? Windows Phone 7 was always going to be the iOS/Android competitor. Microsoft would've been far better off hauling the original $500mm to the middle of one of their campus soccer fields and lighting it on fire. At least then they wouldn't have had divided focus on smartphone operating systems for two years.
http://minimsft.blogspot.com/2010/07/kin-fusing-kin-clusion-...
Even worse was the aQuantive acquisition. $6.2 billion flushed down the toilet: http://money.cnn.com/2012/07/02/technology/microsoft-aquanti...
And Computerworld thinks a $900mm writedown for a product that—despite its flaws—is really a decent v1 is the straw that broke the camel's back? If that's true, the board is the real problem.
[1] My understanding is that Microsoft acquired Danger, canned their entire technology stack, and then rebuilt everything from scratch
Rewind three years: Microsoft ships the Kin, its lackluster pseudo-feature phone 'built'[1] from the acquisition of Danger, Inc. Microsoft spent $500mm acquiring Danger and then killed off all of their products, and managed to send all of their best employees running to the exits.
Microsoft spent two years building the Kin phones, only to cancel them within months of their release. They probably spent in excess of a billion dollars on the whole thing when all was said and done, and for what? Windows Phone 7 was always going to be the iOS/Android competitor. Microsoft would've been far better off hauling the original $500mm to the middle of one of their campus soccer fields and lighting it on fire. At least then they wouldn't have had divided focus on smartphone operating systems for two years.
http://minimsft.blogspot.com/2010/07/kin-fusing-kin-clusion-...
Even worse was the aQuantive acquisition. $6.2 billion flushed down the toilet: http://money.cnn.com/2012/07/02/technology/microsoft-aquanti...
And Computerworld thinks a $900mm writedown for a product that—despite its flaws—is really a decent v1 is the straw that broke the camel's back? If that's true, the board is the real problem.
[1] My understanding is that Microsoft acquired Danger, canned their entire technology stack, and then rebuilt everything from scratch
Two other Danger/KIN things they did which made them less attractive to future partners, which probably didn't help the Surface RT et. al.:
They tried to ignore Danger's contractual obligations to deliver more phone models to T-Mobile (hardly surprising from Microsoft). T-Mobile was sufficiently insistent they had to reverse course for a while, hampered by people lost or pushed out in the acquisition, and develop one more model using the original technology stack.
They suffered a catastrophic data loss: http://en.wikipedia.org/wiki/Microsoft_data_loss_2009 and I'm sure it didn't help that Ballmer denied it; per Wikipedia "Microsoft CEO, Steve Ballmer disputed whether there had ever been a data loss, instead describing it as an outage. Ballmer said, 'It is not clear there was data loss'. However, he said the incident was 'not good' for Microsoft."
Those sorts of comments echo the concern that he was not the right CEO for a company doing services.
(And of course they canned the original technology stack, Java on top of a BSD, with Oracle providing the back end fault tolerant storage they didn't spend enough money on to adequately back up.)
Getting back to your original question: maybe it's not so strange, KIN and Surface RT each represent a process so terribly broken it went all the way to the market and warehouses of unsaleable product after losing around a billion tangible dollars (much more in lost credibility and market, above kabdib estimates 40 billion for the RT). Ballmer undoubtedly claimed the KIN was a unique failure that he wasn't going to let happen again, and the Surface RT became the final straw when it showed he didn't have a handle on this.
They tried to ignore Danger's contractual obligations to deliver more phone models to T-Mobile (hardly surprising from Microsoft). T-Mobile was sufficiently insistent they had to reverse course for a while, hampered by people lost or pushed out in the acquisition, and develop one more model using the original technology stack.
They suffered a catastrophic data loss: http://en.wikipedia.org/wiki/Microsoft_data_loss_2009 and I'm sure it didn't help that Ballmer denied it; per Wikipedia "Microsoft CEO, Steve Ballmer disputed whether there had ever been a data loss, instead describing it as an outage. Ballmer said, 'It is not clear there was data loss'. However, he said the incident was 'not good' for Microsoft."
Those sorts of comments echo the concern that he was not the right CEO for a company doing services.
(And of course they canned the original technology stack, Java on top of a BSD, with Oracle providing the back end fault tolerant storage they didn't spend enough money on to adequately back up.)
Getting back to your original question: maybe it's not so strange, KIN and Surface RT each represent a process so terribly broken it went all the way to the market and warehouses of unsaleable product after losing around a billion tangible dollars (much more in lost credibility and market, above kabdib estimates 40 billion for the RT). Ballmer undoubtedly claimed the KIN was a unique failure that he wasn't going to let happen again, and the Surface RT became the final straw when it showed he didn't have a handle on this.
For me, the key point of the article is that the board asked,
How can you be that far off what consumers want? Was it that you're not listening to your team? Was it because the team was afraid to give him advice? Was it because the team saw a different reality? Or was it that the team lacked the skill set to anticipate the failure?
I believe they are realizing that there is a culture at Microsoft that is holding back the company.
How can you be that far off what consumers want? Was it that you're not listening to your team? Was it because the team was afraid to give him advice? Was it because the team saw a different reality? Or was it that the team lacked the skill set to anticipate the failure?
I believe they are realizing that there is a culture at Microsoft that is holding back the company.
It doesn't say anywhere that the board asked that. That was a quote from this Patrick Moorhead, "principal analyst with Moor Insights & Strategy."
The entire basis of this article is that guy's speculation. Is there any reason to believe he has any real insight into the situation? I'm kind of ready to file this under "bullshit speculation/self-promotion of some random 'analyst.'"
The entire basis of this article is that guy's speculation. Is there any reason to believe he has any real insight into the situation? I'm kind of ready to file this under "bullshit speculation/self-promotion of some random 'analyst.'"
> Is there any reason to believe he has any real insight into the situation?
His hypothesis fits the observation. IMHO, it fits better than the official "Ballmer got bored, decided to quit" explanation.
His hypothesis fits the observation. IMHO, it fits better than the official "Ballmer got bored, decided to quit" explanation.
The board didn't ask that, some analyst asked that. This article is mostly speculation and Kreliminology, so read it with a grain of salt.
This. I cannot believe the board gave him such an amazing amount of rope, for so very long, and they are just coming to ask those questions.
I wonder what they thought the problem was?
I wonder what they thought the problem was?
Ah, analysts. I do not trust them, most of them just blabber whatever they think people would like to hear. Journalists shouldn't cite them just because they are "analysts". This guy basically spreads a rumour.
They are especially annoying when it comes to Apple, Google or Microsoft. Two thirds offer no hard data at all but try to play Captain Hindsight.
I try not to use them in my articles, but I get so much pressure from editors who think "that readers want analysts insights".
They are especially annoying when it comes to Apple, Google or Microsoft. Two thirds offer no hard data at all but try to play Captain Hindsight.
I try not to use them in my articles, but I get so much pressure from editors who think "that readers want analysts insights".
Previous discussion of this article: https://news.ycombinator.com/item?id=6266637
I think the devices + services model is basically something that Ballmer wasn't really prepared to do. Microsoft isn't designed for that. It's designed around packaged software and selling to large enterprises on 2-4 year replacement cycles.
In hardware, it's a lot about supply chain management, something that Apple is basically the best in the world, far better than even Dell. A $900,000,000 write down is proof that MSFT doesn't understand supply chain management. Amazon understands how to manage these things, and that's why they often launch in the US first, then worldwide later. Google relies on hardware vendors to manage the supply chain and also has super limited distribution of their own devices to reduce risk.
One early report on the Surface said the Surface people didn't even talk to the Xbox people during development. So, it's not much of a surprise that the distribution didn't go well if they didn't really talk to the one team at MSFT that has done global hardware distribution.
In software services, you have to roll out updates more often. Microsoft is trying harder, but they need to get major releases out yearly and minor updates every couple months. Microsoft is going to do better at catching up in software services than hardware, but they aren't there yet and it's unclear that Ballmer and co. are totally willing to shift to a more web/net oriented mindset. Office 365 is probably the best example of executing on software services at scale and making a lot of money, but they got rid of guys like J Allard and Ray Ozzie who were pushing for devices and services almost 10 years ago.
Ultimately, Ballmer is not a devices guy or a services guy. He's a very very smart businessman who cut his teeth selling boxed software and to large enterprises. Things that weren't large enterprise or boxed software Windows were never going to get the same kind of support under him simply because that's not his perspective by default.
It is going to be a real challenge for Microsoft to find someone who can rebuild MSFT for the future.
In hardware, it's a lot about supply chain management, something that Apple is basically the best in the world, far better than even Dell. A $900,000,000 write down is proof that MSFT doesn't understand supply chain management. Amazon understands how to manage these things, and that's why they often launch in the US first, then worldwide later. Google relies on hardware vendors to manage the supply chain and also has super limited distribution of their own devices to reduce risk.
One early report on the Surface said the Surface people didn't even talk to the Xbox people during development. So, it's not much of a surprise that the distribution didn't go well if they didn't really talk to the one team at MSFT that has done global hardware distribution.
In software services, you have to roll out updates more often. Microsoft is trying harder, but they need to get major releases out yearly and minor updates every couple months. Microsoft is going to do better at catching up in software services than hardware, but they aren't there yet and it's unclear that Ballmer and co. are totally willing to shift to a more web/net oriented mindset. Office 365 is probably the best example of executing on software services at scale and making a lot of money, but they got rid of guys like J Allard and Ray Ozzie who were pushing for devices and services almost 10 years ago.
Ultimately, Ballmer is not a devices guy or a services guy. He's a very very smart businessman who cut his teeth selling boxed software and to large enterprises. Things that weren't large enterprise or boxed software Windows were never going to get the same kind of support under him simply because that's not his perspective by default.
It is going to be a real challenge for Microsoft to find someone who can rebuild MSFT for the future.
> but they got rid of guys like J Allard and Ray Ozzie who were pushing for devices and services almost 10 years ago
That's all Ballmer was good at. Getting rid of potential CEO rivals.
That's all Ballmer was good at. Getting rid of potential CEO rivals.
To me the problems with microsoft are manifold, and they are not at all related to ballmer's professional competencies, but to his complete lack of ethics, which ends up trickling down through the ranks (see employee infighting/politicking), trickling out to users of their software (see the not-having-a-choice-about-preinstalled-software-on-generic-laptops), trickling out to other tech companies (see the bullying microsoft subjects Android manufacturers to), and trickling out to competitors (see microsoft unfairly dictating standards to the marketplace and the infamous corruption of ISO standards in 2008).
microsoft's core expertise isn't technology or even marketing, it's bullying, and it's defending / extending an existing monopoly. When you look at microsoft today, what you really notice is that they're still going by the same old playbook, pretending that it's still 1997, which is proving to be a very ineffective approach. It won't make a difference whether Ballmer stays or goes, as long as the new CEO is going to be someone whom bill gates has specifically picked based on their allegiance to microsoft's old playbook.
microsoft's core expertise isn't technology or even marketing, it's bullying, and it's defending / extending an existing monopoly. When you look at microsoft today, what you really notice is that they're still going by the same old playbook, pretending that it's still 1997, which is proving to be a very ineffective approach. It won't make a difference whether Ballmer stays or goes, as long as the new CEO is going to be someone whom bill gates has specifically picked based on their allegiance to microsoft's old playbook.
I've heard that Ballmer's resignation was a surprise internally. Speculation is that "something must have happened," possibly large shareholders gearing up for some kind of fight. The Surface RT thing cost MS about $40B in market share, so upset investors makes sense.
My /guess/ is that Ballmer was driven out by the RT mess, combined with the Win8 mess, combined with a realization that MS isn't being directed very well from a technical standpoint. What will make Windows 9 a success? I just don't see it happening.
This is going to sound crazy, but I think the problems at MS can be summarized in a few short bullet points:
1. The review system. This has already been talked to death, but it's at the core of /why/ MS does the things it does, and it's got to be fixed. It will take time, and it will be painful, but if they don't address this then MS isn't going to be around in 20 years, maybe even 10.
2. Getting rid of toxic people. Less discussed, but canning a largish number of bad personalities would help a lot. (I was engineering ways around some real prizes -- if a guy's an incompetent jerk, it turns out you can architect him into being inconsequential!)
3. The build system. Hoo boy.
The way that Microsoft builds software hasn't been discussed much, but it's worth an in-depth look because if you can't build software effectively then you can't make it good. You can get fit and polish on a product /far/ more easily if you can turn it around and get rapid feedback, and Microsoft's process here is /broken/.
Ballmer has said, "Windows on everything," and right now if you're working on a system of any complexity, if it's not using Windows or one of its embedded variants you're going to get into trouble. Windows is the only politically safe choice. "Not Windows" and "Not able to run office" has killed a lot of perfectly reasonable products.
Building big systems at MS is a many hours-long process. If you built every component on a typical developer-class workstation it would take a couple of days (36 hours on my last attempt), assuming you've checked out the code at a time when it will build without errors. Good luck with that.
So you build just the pieces you need, but on a real project even that will take hours (3-4 hours in my experience). So you start to cowboy things and try to patch up a way to get your builds down to a tolerable few minutes. But the shortcuts you take make build breaks more likely when you check in, so here's what you do:
a) Find a working build. This might take a day or three, depending on whether things are broken or not.
b) Once you get that, stick with it as long as you can. Get your shit working.
c) When it comes time to check in, either
- sync minimally, try to ensure that things aren't dramatically busted, and submit, or
- get a working build (back to (a) and maybe several days of hunting for a window), merge, and submit. Congratulations, you're one of the good guys.
- Or check in blindly. That's right, some people don't even bother doing due diligence. Some groups have check-in barriers (required reviews, or build bots), but this adds additional hours even for simple changes.
The more dependencies you have, the worse things are; things are more likely to be broken, your own builds can take days, and every submit runs a high chance of breaking someone else. Staging a deliberate and breaking change across the dozens of depots is very difficult and time consuming.
If your organization's development pace is glacial, /of course/ you are going to be deferring bugs and avoiding changes to huge and mysterious bits of software, because fixing stuff means breaks at many levels, and tons of lost time.
MS needs to invest heavily, and I mean HEAVILY, in ways to make their engineering staff more productive. None of this false pride about how long it takes to compile umpteen million lines of code. The fact is, engineering is at the coal face using picks and shovels and breathing bad air, and Ballmer doesn't appreciate how having a frustrating, slow, error-prone and politicized build process has affected his ability to ship good products.
I'd say: Erect server farms so that every engineer can get a full build in five minutes. Microsoft has smart people; I think they could do it, though it would involve throwing away a bunch of politically sensitive components. The model that has every developer attempt to build Windows on his own workstation should be utterly tossed.