Analyzing one of American corporate history’s greatest mysteries — the lost decade of Microsoft — two-time George Polk Award winner (and Vanity Fair’s newest contributing editor) Kurt Eichenwald traces the “astonishingly foolish management decisions” at the company that “could serve as a business-school case study on the pitfalls of success.”
Relying on dozens of interviews and internal corporate records—including e-mails between executives at the company’s highest ranks—Eichenwald offers an unprecedented view of life inside Microsoft during the reign of its current chief executive, Steve Ballmer, in the August issue.
Today, a single Apple product—the iPhone—generates more revenue than all of Microsoft’s wares combined.
Read full scathing article, including a bit about Microsoft’s irrational, self-defeating, clinging lust for mechanical keyboards, via Vanity Fair – very highly recommended – here.
MacDailyNews Take: Excerpts from a BusinessWeek interview with Steve Jobs, October 12, 2004:
Steve Jobs: Apple had a monopoly on the graphical user interface for almost 10 years. That’s a long time. And how are monopolies lost? Think about it. Some very good product people invent some very good products, and the company achieves a monopoly. But after that, the product people aren’t the ones that drive the company forward anymore. It’s the marketing guys or the ones who expand the business into Latin America or whatever. Because what’s the point of focusing on making the product even better when the only company you can take business from is yourself? So a different group of people start to move up. And who usually ends up running the show? The sales guy… Then one day, the monopoly expires for whatever reason. But by then the best product people have left, or they’re no longer listened to. And so the company goes through this tumultuous time, and it either survives or it doesn’t.
BusinessWeek: Is this common in the industry?
Steve Jobs: Look at Microsoft — who’s running Microsoft?BusinessWeek: Steve Ballmer.
Steve Jobs: Right, the sales guy. Case closed.
Related articles:
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Bad news for Microsoft’s iPad killer? – July 2, 2012
Dear Microsoft, Steve Balmer and Bill Gates: What is up with your obsession with keyboards? – June 28, 2012
Jason Schwarz: Top 10 reasons why Microsoft’s Surface is DOA – June 22, 2012
Why I love Microsoft’s vaporware Surface tablet – June 22, 2012
Microsoft’s Surface tablet said to be Wi-Fi only at launch; no 4G, no 3G, no 2G, not even 1G – June 22, 2012
Microsoft outsources Surface assembly to Pegatron; prices above $799 for Windows 8, above $599 for Windows RT expected – June 21, 2012
Acer founder: Microsoft will quit making tablets soon – June 21, 2012
Devastating video shows Microsoft’s Surface event aping Steve Jobs’ iPad unveiling (with video) – June 20, 2012
Thanks to Apple, Microsoft is doomed in the era of mobile computing – June 20, 2012
Why wouldn’t Microsoft let anyone touch its Surface tablets’ keyboard cover? – June 20, 2012
The cost of Microsoft’s Surface tablets – June 20, 2012
Apple’s revolutionary iPad vs. Microsoft’s anti-tablet ‘Surface’ – June 20, 2012
Microsoft’s Surface tablets provokes ‘sense of betrayal’ among Windows PC assemblers – June 20, 2012
Fox News: Copier Microsoft is doomed to fail with Surface tablet – June 19, 2012
Microsoft’s Surface tablet destined to be as successful as the Zune – June 19, 2012
Surface: Why Microsoft’s big mystery turns out to be a big mistake – June 19, 2012
Microsoft’s Suicide, er… ‘Surface’ – June 19, 2012
ZDNet Sr. Tech Editor Perlow: Microsoft’s Surface has catastrophe written all over it – June 19, 2012
Microsoft previews own ‘Surface’ tablet – June 18, 2012
Microsoft touts ‘major’ June 18 event said to showcase Windows RT tablets – June 15, 2012
ZDNet’s Kingsley-Hughes: Microsoft’s Windows 8 is an awful, horrible, painful design disaster – June 8, 2012
Analyst meets with big computer maker, finds ‘general lack of enthusiasm’ for Windows 8 – June 8, 2012
Dvorak: Windows 8 an unmitigated disaster; unusable and annoying; it makes your teeth itch – June 3, 2012
The Guardian: Microsoft’s Windows 8 is confusing as hell; an appalling user experience – March 5, 2012
More good news for Apple: Microsoft previews Windows 8 (with video) – June 1, 2011
GREAT lead photo of Monkey Boy for the article. Love it!
Yes, two thumbs sideways….the mark of a true InDecider….
As Death becomes Microsoft, Microsoft becomes Death….
MDN Take. Bang on.
Same happened at RIM too.
In my Rodney Dangerfield voice…
“I get no respect I tell ya. Why just the other day I sent MDN a tip to this article shortly after it was posted, and then what? Nothing till a few days later they run the article. And no thanks for the tip. I just get no respect!”
In my Westley voice
“Get used to disappointment.”
Join the club.
I like our stragety, I like it a lot …….
May Steve Ballmer remain CEO for as long as it takes, we love him!
While I like their “stragety,” I really like their strategy.
This article doesn’t really tell us anything new. Though, the point of pitting associates against one another isn’t new. After all, I’ve read time and again that this happens at Apple. There’s a fine line between competition and downright aggression. On a lighter note, I do get a chuckle glancing at the pic in the article.
The words we never want to hear: “Steve Ballmer, you’ve been fired!” and the accompanying image.
The link is to a promotional summary. I’m going to see if I can buy just the August edition through the app. There’s a link to a summary of Paul Allen’s published account of his time with Gates, which is worth reading if you haven’t already. Gates is a shown as a shallow-if-smart person of no integrity.
I was wondering about that. I thought, “For a VF article this is very brief.” I’ll check that out.
Paul Allen on First Meeting Steve Ballmer:
“He Looked Like a Stalinist Police Officer.”
(so choice..)
With any luck Steve will buy out Nokia and then the board will place Elsop at the helm.
It’s “Elop”.
I think Carly is available.
I downloaded the Vanity Fair iPad app, and they sell single issues for $4.99. However, they are still showing July as the latest available. I plan on buying August and savoring every juicy bite. After all, only Steve Ballmer could fill the shoes of Bill Gates.
This MDN link definitely is NOT to the full Vanity Fair article, which only is available in the printed magazine (as of Friday, July 6). It was not yet available in the iPad App, which I guess must be delayed by a few days each month, to give print retailers time to receive the magazine and place it on newsstands.
Why is this bad?………….
“Steve Jobs: Look at Microsoft — who’s running Microsoft?
BusinessWeek: Steve Ballmer.
Steve Jobs: Right, the sales guy. Case closed.”
Ballmer is not a “sales guy”; just a poor used car salesman who happened to have a well connected roommate with a wealthy father.
I don’t see any evidence that Ballmer could qualify as being an innovative leader no matter what his position. His best asset is being able to act like a bully.
It’s amusing to me, when people use bigoted statements like this, against sales people, to illustrate how terrible someone is.
I get that stereotypes are stereotypes for a reason, but you can’t point at one steretype to validate another.
Steve Jobs was an innovator, creator and one of the worlds best salesman. You miss understand the statement. Steve Balmer is a smart bully, salesman, that lacks vision. He may know the management of things but fails to lead people with vision within Microsoft. He tries to maintain the status quo. Balmer the Clown focused on selling in the now and never had vision for the future. Where their is no vision the people perish. Salesmen without vision don’t run big companies well.
Microsoft is experiencing Karma. They may have brought computers to the masses, but the way they did it is coming back to bite them in the a$$. They may never recover longterm. They may be around but their glory days are gone. Google will also fall. Both companies steal others work and then claim them as their own. You always pay the price for your actions. The day has come for Microsoft. The next decade it will come for Google and all its so called Android partners (i.e. Samsung, HTC and others). Probably from some small start up company in a garage bought by Apple, Inc. if not by Apple’s own innovations independently.
Correct ….. MS is falling and fast ……
When Wondoz 8 arrives it will turn off a lot of people and MS will continue to sell 7 with their Service Updates and that will last for X years but no growth ……
I like their stragety, I like it a lot!
I thought the key phrase was “… Ballmer is not a “sales guy”…”
I don’t think that OP was denigrating sales guys & you could argue that Jobs wasn’t either. Just pointing out that they probably don’t make the best visionaries for leading a company.
Which of course, is not saying that sales people aren’t the salt of the earth.
All of which connects back to Monkeyboy, who is neither a good sales person, nor a visionary.
And really – why would you want to have Monkeyboy in your field anyway?
How poor could he have been if he was “rooming” at Harvard?
Karma.
“Analyzing one of American corporate history’s greatest mysteries — the lost decade of Microsoft — ”
Are you F’ing kidding me? Easy there Columbo… Bill Gates retires, MS ships Vista, and everything goes to Sh*t. Now dopey Steve Ballmer (of Procter Gamble fame) is running the show. Case Closed.
MS (stock price) was going sideways for years before Vista.
XP was out, Longhorn was delayed and delayed, nothing for Wall St. to get excited about. The Vista didn’t affect the share price, because the money just kept coming. Now the money stream is slowing, and MS is panicking.
When reading the Vanity Fair article and the discussion of stack ranking, I kept thinking about how this resembles the Hunger Games with Ballmer as President Snow.
Yes, I thought the same thing. It puts the book in a whole new light.
Not a surprise here. Historically, almost every company who was once successful failed in the same pattern. They failed not because lack of smart engineers in their companies, but because full of abundant “stay the same course” managers. Xerox, Kodak, DEC, Sun, Nokia, RIM, a long list. Verdict is still out for Apple. Let’s come back in 10 years to judge Apple.
You can add Sony to that list, they are a text-book example.
From the article: “Ed McCahill, who worked at Microsoft as a marketing manager for 16 years, says, “You look at the Windows Phone and you can’t help but wonder, How did Microsoft squander the lead they had with the Windows CE devices? They had a great lead, they were years ahead. ”
That guy’s delusional. WINCE was always utter crap.
-jcr
The more I read about this toxic company and Tweedle Bill and Tweedle Steve, the more I am convinced that Microsoft as a living entity would be classified as a sociopath. Further, I wonder as to the sanity of these two terrible, tweedling tottering titans.
It is either that or Microsoft became Kronos and has been eating its own young. I read a few of the comments on the Vanity Fair website and I think that the ex-MS employees are the lucky ones.
…the more I am convinced that Microsoft as a living entity would be classified as a sociopath. stated by Alex in Toronto.
Corporations are people, my friend. -Mitt Romney, 2012 campaign trail
There you go.
STEVE BALLMER: 500 dollars? Fully subsidized? With a plan? I said that is the most expensive phone in the world. And it doesn’t appeal to business customers because it doesn’t have a keyboard. Which makes it not a very good email machine.
And it may sell but @$99 and it does email, web, photos, music, I look at that and say …..
I like our plan, I like it a lot!
So does Michael Dell ….
From Tuesday’s WallStreet Journal: “In the nine months ending March 31, the online-services division [Bing, etc.] posted an operating loss of $1.45 billion on revenue of $2.1 billion….” To which Mr. Ballmer says “Bing is a service that is probably amongst the things I’m most excited about at Microsoft, most excited.”. That’s probably other than their phone strategy.
I’m taking bets as to when Microsoft kills Binky. My bet is 2013.
Steve Jobs: Look at Microsoft — who’s running Microsoft?
BusinessWeek: Steve Ballmer.
Steve Jobs: Right, the sales guy. Case closed.
Microsoft may well become history’s classic case of how to destroy your business by way of Marketing-As-Management. For the moment, that exalted position is held by Eastman Kodak. 😯
Where the fuck is the article?
This is so unfair to the legacy of the great CEO Steve Ballmer. May he continue to reign and lead Microsoft for many, many years ahead. We like his strategy…we like it a lot.