“Once the dream workplace of tech’s highest achievers, it is suffering key defections to Google and elsewhere… These days it’s Google, not Microsoft, that seems to have the most momentum… For most of its three decades, Microsoft has faced intense criticism. But in the past it came from the outside world. Rivals complained about its heavy-handed tactics. PC makers griped that it was hogging the industry’s profits,” Jay Greene reports for BusinessWeek. “Now much of the sharpest criticism comes from within. Dozens of current and former employees are criticizing — in BusinessWeek interviews, court testimony, and personal blogs — the way the company operates internally.”
Greene reports, “More than 100 former Microsofties now work for Google, and dozens of others have scattered elsewhere. It’s not a mass exodus. Microsoft has 60,000 employees, and many of them are undoubtedly happy with their jobs and the company’s culture… Still, there’s no doubt that Microsoft is losing some of its most creative managers, marketers, and software developers… Mark Lucovsky, who had been named one of Microsoft’s 16 Distinguished Engineers, defected to Google last November. He blogged that Microsoft’s size is getting in its way. ‘I am not sure I believe anymore that Microsoft knows how to ship software,’ he wrote.
“Employees’ complaints are rooted in a number of factors. They resent cuts in compensation and benefits as profits soar. They’re disappointed with the stock price, which has barely budged for three years, rendering many of their stock options out of the money. They’re frustrated with what they see as swelling bureaucracy, including the many procedures and meetings Chief Executive Steven A. Ballmer has put in place to motivate them. And they’re feeling trapped in an organization whose past successes seem to stifle current creativity. ‘There’s a distinct lack of passion,’ says one engineer, who would talk only on condition of anonymity,” Greene reports.
Greene reports, “To many employees, Vista, the Windows update, exemplifies the company’s struggles. When the project was conceived half a decade ago, it was envisioned as a breakthrough: an operating system that would transform the way users store and retrieve information. But the more revolutionary features have been dropped, and Vista will arrive three years after researcher Gartner Inc. originally predicted that it would ship. Worse yet, they say, nobody has been held accountable. ‘People look around and say: ‘What are those clowns doing?” says Adam Barr, a program manager in the Windows group.”
“To succeed, Microsoft needs motivated workers camping out in their offices at all hours to compete with tenacious rivals such as Google, Yahoo!, Salesforce.com, and a reborn Apple Computer. Yet current and former employees say there are many demoralized workers who are content to punch the clock and zoom out of the parking lot,” Greene reports. “Some employees say Microsoft isn’t innovating enough: It’s too busy upgrading Windows. With some of its key breakthrough features gone, Vista’s improvements include better handling of peripheral devices, such as printers and scanners, and cutting in half the time it takes to start up. Those are needed improvements, and there’s no doubt that hundreds of millions of copies will be sold as people upgrade to new PCs. But the changes are hardly the stuff of cutting-edge software engineering.”
“With revenue growth slowing, Ballmer has tried to squeeze more down to the bottom line to make the company more appealing to investors,” Greene reports. “Even the cuts that seem trivial have dampened morale. Just whisper the word ‘towels’ to any Microsoft employee, and eyes roll. Last year, Microsoft stopped providing a towel service for workers who used company locker rooms after bike rides or workouts. Employees who helped the company build its huge cash stockpile were furious. And don’t even mention stock options. Employees long counted on them to bolster their salaries. Microsoft minted thousands of employee millionaires as the stock climbed 61,000% from its 1986 public offering to its peak in 2001. Now shares are trading exactly were they were seven years ago. Microsoft has doubled its payroll in that time, adding more than 30,000 new employees, not including attrition. That means more than half of Microsoft’s employees have received virtually no benefit from their stock holdings.”
Full article, with Ballmer f bombs, and much, much more here.
BusinessWeek also has a podcast (that’s “podcast,” not “blogcast,” Microsofties) about Microsoft’s problems. More info here.
Additionally, BusinessWeek has an interview with Microsoft CEO Steve Ballmer here.
MacDailyNews Take: Hey, Microsoft employees, “Towels!” We found a nice one for you guys and gals, but, alas, it’s sold out.
Related MacDailyNews articles:
PC World: Microsoft innovation – an oxymoron – September 15, 2005
Microsoft debuts Dashboard Widgets, er, ‘Microsoft Gadgets’ – September 13, 2005
Chair hurling Microsoft CEO Ballmer: ‘I’m going to f—ing kill Google’ – September 03, 2005
Cringely: Biggest threat to Microsoft might not be Google at all, but Apple – August 26, 2005
AP: Microsoft’s ‘insanely late’ Windows Vista has Apple ‘Mac-like look and feel’ – August 03, 2005
Microsoft’s Windows Vista will attempt to incorporate many features from Apple’s Mac OS X Tiger – August 01, 2005
Microsoft’s Windows ‘Vista’ too little, too late; could be rough times ahead for Redmond – July 28, 2005
Dvorak: Mac OS X is already better than Windows, Vista may be end of line for Microsoft’s dominance – July 26, 2005
Apple CEO Steve Jobs’ ultimate goal: ‘to take back the computer business from Microsoft’ – June 16, 2005
As usual, Apple leads, Microsoft tries to follow – June 02, 2005
Is Microsoft finally about to crumble? – May 26, 2005
Forrester CEO: ‘Microsoft is in its most vulnerable moment in history’ – May 09, 2005
Apple’s Mac OS X ‘Tiger’ wins rave reviews; Microsoft’s Windows ‘Longhorn’ is MIA – April 30, 2005
Microsoft employees leaving due to (and blogging about) malaise smothering company – April 25, 2005
Microsoft’s lack of momentum, malaise won’t end anytime soon – March 16, 2005
Experts: ‘the days of Microsoft’s hegemony may soon be over’ – March 08, 2005
Is Microsoft dying? – February 11, 2005
“If I bought 100 shares at $26 in ’98 I’d have started with $2,600 in value. Fees? What fees?
” width=”19″ height=”19″ alt=”wink” style=”border:0;” /> Today, after six splits (don’t know the exact number), I’d have 6,400 shares at $26. That’s $166,400 worth of stock. My original purchase has gone up sixty-four (whoops, not six!) times in value even though the price of individual stocks is exactly the same.”
You’re absolutely clueless. When a stock splits, the price ALSO splits!!!
Here’s how it REALLY works…using real MSFT prices in this example…
Buy 100 shares of MSFT at $64 in Sept. 2000 = $6,400
The stock has split (2 for 1) only once since 2000, on Feb. 18, 2003 to be exact. So you now own 200 shares.
MSFT closed yesterday at $26.27. 200 x $26.27 = $5,254.
Conclusion: You have lost $1,146 over the last 5 years in your investment in MSFT stock. I rest my case.
Despite predictably dire misperceptions and unreliable third-hand reports in the “media,” the decision-makers in the Real IT World know that the road to the Glorious Future of Trusted Computing will still be paved by only one company. It will be achieved via the .NET domain and the Vista operating system, by virtue of global public acceptance as reflected in established market share. The war was already won many years ago.
©
“According to the AAPL graph you linked to it was trading at $7 in Jan. of ’03. This is not really true.”
Yes, it is true. The charts are ALREADY ADJUSTED FOR ALL SPLITS. Why can’t you understand that? I give up.
Reality check, I’m speaking from the perspective of someone who bought and now holds MSFT stocks purchased in ’98. What their holdings are currently worth. Not what you buy and sell today.
Try reading what I wrote again. Just trying to edumacate. Your choice.
“With revenue growth slowing, Ballmer has tried to squeeze more down to the bottom line to make the company more appealing to investors,”
Squeeze real hard to give top managers BIGGER RAISES
Guys, I bought AAPL at $15 in Jan. of ’98. It has split twice since then. If it hadn’t split each share would currently be worth over $200. You think I don’t know that?
I’m talking about how people can confuse points and shade issues by indiscriminately interchanging current split adjusted share price with the value of a person’s portfolio. The article mentioned how employees were bumming over current stock price. Well, if they’d exercised some of their options over the past ten years, the splits would have greatly increased their number of shares held, while the price has releveled to still give them some decent value.
That’s my last try. Cheers.
As I see it Apple were in a slightly similar situation to Microsoft, although not of remotely the same scale. Where they chose to innovate (more than before) and launched the iMac, OS X, iPod etc etc Microsoft have chosen to do exactly what they’ve always done – steal ideas but not in such a ways as to take the best elements and build on them but to take the best elements and average them out, to cut margins, to have endless meetings, to cut benefits and so on and so forth.
They’re like two show-jumpers, one (apple) takes all the obstacles running and clears them, they may wobble a few of the hurdles but they move on to bigger and better things. The other (microsoft) wanders up to it, thinks it looks a bit daunting so backs away, when it eventually tackles it it just about makes but only by blundering its way straight through, due to its size it makes it but not with any style or grace.
Employees leaving M$ could also be called a DIASPORA the dispersion of any people from their original homeland.
MW = lost
as in the lost tribes of Israel, not the TV show!
Steve Jobs.
That guy really knows where his towel is.
Ok, one final post to prove my point, then I’m moving on to something constructive. You obviously haven’t actually invested anything in MSFT or else you’d know this already, but here goes, using the actual MSFT stock prices on the dates in question here…
Buy 100 shares of MSFT on 1/2/98 @ $131.13 = $13,113
Here are all three of the stock splits that have occurred since then (all were 2 for 1)…2/23/98, 3/29/99 and 2/18/03.
Therefore, today you would now own 800 shares.
Today’s price: $26.87 x 800 = $21,496
Since 1998, MSFT stock is indeed up, but not even 2x, much less 64 times or whatever crazy amount you were saying before.
Also, your same original investment was worth $25,600 in September 2000 (400 shares @ $64), so it’s actually gone down in the last 5 years ($21,496 today) as I proved earlier.
Sputnik is starting to sound like a preacher man!
“…Glorious Future of Trusted Computing…”
MW = talk
as in, its all talk, and nothing else.
sometime ago I wondered (on MDN) what the morale was like at MS…I got my answer. With top management getting bigger raises and the peons who do the work are getting the cuts, I wonder when the rats are the only ones trying to keep the bloatboat afloat
Artisculated, your securites liscensing has been revoked.
“They’re frustrated with … the many procedures and meetings Chief Executive Steven A. Ballmer has put in place to motivate them.”
Translation: They’re sick of the requirement to “give it up” for monkeyboy.
Maybe all the towels are going to Ballmer to soak up his sweat when he does the monkey dance.
I couldn’t resist posting this post because the magic word is DEATH, could it be the end of M$ as we know it?
“Microsofties”??
I thought they were called “Microserfs”…
Several months ago I read of a comment from Steve Ballmer, who was addressing the employees of Microsoft. One employee asked why employees couldn’t get a bigger raise since Microsoft was doing so well. Steve Ballmer’s reply was that the profits were to reward the shareholders and NOT for the employees.
I suppose on the surface, Ballmer’s reply may sound appreciative for the support of the shareholders, but a thought came to mind: How much of Microsoft stock is owned by the upper management of Microsoft?
Good move by Microsoft in eliminating the free towels for employees. After all, just think of how many towels that sweat pig Ballmer must have used each day.
ooooooo – HARSH
” width=”19″ height=”19″ alt=”smirk” style=”border:0;” />
Squeeze real hard to give top managers BIGGER RAISES
—
Huh? Okay, MS does not care about paying managers with cash, they pay with stock..
Bill Gates makes 600,000 a year. Nice, but his wealth is in MS stock.
My point? No one is sweating over cash compensation at MS, it’s all about company stock.
More sad tales from schools that have gone Wintel
1:45am, Sep 16 – By Dennis Sellers
On Sept. 13, I offered “sad tales from a school system that went from Macs to Dells”. Since then I’ve received many more such horror stories. I thought I’d share a few of them with you as we end the work week.
° ”It all sounds very familiar (my district has it its own Dell mess following heavy Mac use). Recently, one of our totally Wintel centric IT guys admitted that ‘we have wasted millions’ on all this Windows crap.”
“From my perspective as a teacher, the biggest problem is the routine failure to get a Windows problem fixed. I make a ‘Help Desk’ call and nobody comes to fix things. Since the IT department is just across the parking lot, I go over, do some friendly chit-chat and eventually somebody comes over. The next problem is that nothing is fixed and they just walk away with no explanation or plan to return. They are apparently so accustomed to not solving problems that they have no conscience about leaving a task unfixed.
“I have a newer Windows machine from when our district lab was updated, but I can not use it for anything. It requires an ‘Administrator’ setting, and the IT guy could not fix that. The head IT guy said it could be fixed, but that it takes time and so they may or may not do it someday (my original request was at the beginning of the 2004-2005 school year).”
° ”I’m the tech coordinator at a middle school. Last year I used eight 7th and 8th grade students to wipe 50 iBooks, add RAM, reinstall 9.2.2, 10.2, AppleWorks, other assorted software, configure static TCP/IP addresses, and setup users and permissions. They did it all in about four weeks and they ran great all year. Gee, I wonder if they could have done that with ‘real world’ computers? Of course not, Macs make sense and work logically. Isn’t it a shame the ‘real world’ doesn’t.”
° “In my local k-8 district, they have some 1,500-1,700 Macs with PC’s in administration (they chose SASE for administration and it was problematic since they needed Citrix for the Macs which was ‘difficult,’ but then later went to Microsoft Remote and all is well. But they buy new Macs in bundles and get more than great life from them. Some are 5-8 years old or more with little else going wrong outside of a KB, mouse and occasional hard drive. That’s a more than great return on the investment. However, they do spend more than goodly amounts on training the teachers,” which is a great help.
Also, on Sept. 14 I did an editorial about the Federal Emergency Management Agency’s Web site being Windows-centric. If you’re having trouble accessing the FEMA site on your Mac, Macsimum reader Jason Emanuelson has a suggestion: “Though it is not a really desirable option, you can use the FEMA site, if you get one of the plug-ins for either Safari like Safari Enhancer or Firefox. They can effectively trick those Web servers into believing they are MSIE 6 clients running on Windows.”
Thoughts? Write me at dsellers@macsimumnews.com
And don’t forget this week’s Macsimum News poll. We’re asking, “Will you buy an iPod nano?” The iPod nano is the replacement for the iPod mini.
“My point? No one is sweating over cash compensation at MS, it’s all about company stock.”
Precisely. And since the stock has absolutely flatlined over the past 4-5 years now, nobody is making any money off of their stock options, so there you go. Of course, since Gates and Ballmer together own 12% of the total stock, they have no reason to worry, but the run of the mill employee that doesn’t get paid enough certainly does.
Artisculated, regardless of how you may want to spin it, I’m sorry, but the historical stock price charts do not lie, nor are they deceptive in any way.
All I know is this…if you bought (or otherwise already owned) even 1 single share of MSFT stock 5 years ago, your investment in that stock is worth less money today than it was back then. Period, end of story. It doesn’t take a rocket scientist to figure that one out.
Mediocre-Soft
That’s funny!
John Gee: “Mediocre-Soft That’s funny!”
Not be confused with Meaty Okra Soft, however. :o)