Microsoft’s dysfunctional corporate culture doesn’t bode well for the company’s future

Apple Online Store“As they marvel at Apple’s new iPad tablet computer, the technorati seem to be focusing on where this leaves Amazon’s popular e-book business,” Dick Brass writes for The New York Times. “But the much more important question is why Microsoft, America’s most famous and prosperous technology company, no longer brings us the future, whether it’s tablet computers like the iPad, e-books like Amazon’s Kindle, smartphones like the BlackBerry and iPhone, search engines like Google, digital music systems like iPod and iTunes or popular Web services like Facebook and Twitter.”

MacDailyNews Take: Microsoft never brought people the future, they brought people a flawed, insecure, upside-down and backwards Mac OS ripoff and an Office suite. Most of Microsoft’s “innovations” are things Apple did with their Mac operating systems years before. When Microsoft tries to “innovate” on their own they come up with things like MS Bob and a $10,000 five hundred pound Big Ass Table. Wake up, Dick.

Brass continues, “Some people take joy in Microsoft’s struggles, as the popular view in recent years paints the company as an unrepentant intentional monopolist. Good riddance if it fails. But those of us who worked there know it differently. At worst, you can say it’s a highly repentant, largely accidental monopolist. It employs thousands of the smartest, most capable engineers in the world. More than any other firm, it made using computers both ubiquitous and affordable. Microsoft’s Windows operating system and Office applications suite still utterly rule their markets.”

MacDailyNews Take: Ah, we see. You used to work there (Dick Brass was a vice president at Microsoft from 1997 to 2004). Hey, Dick, McDonald’s rules the hamburger market; doesn’t mean they make the best hamburgers. There are very few instances where having the most market share equals the best-in-class product. In fact, it’s so rare that only three spring quickly to mind: iPod, iTunes Store, and Coca-Cola. Look at any other market, from sports cars to operating systems and the best product in it never has the most market share. And, if Microsoft’s engineers are so smart, how come Microsoft’s products suck so routinely? Windows is a joke, XBox is a $1+ billion faulty Red Ring of Death mess, Zune is an even bigger joke than Windows… We could go on for quite some time. Her’s an oldie, but a goodie: By its very nature Wintel cannot be the best – September 18, 2002.

Brass continues, “The company’s chief executive, Steve Ballmer, has continued to deliver huge profits.”

MacDailyNews Take: Aye, may Steve Ballmer remain Microsoft CEO for as long as it takes!

Brass continues, “Its founder, Bill Gates, is not only the most generous philanthropist in history, but has also inspired thousands of his employees to give generously themselves.”

MacDailyNews Take: Bill Gates is trying to buy his way into heaven with ill-gotten gains. It’s easy to be generous with Steve Jobs’ money.

Brass continues, “Microsoft has become a clumsy, uncompetitive innovator.”

MacDailyNews Take: Now we know for sure that Dick worked at Microsoft; he doesn’t know the definition of “innovator.” Microsoft doesn’t innovate, no matter how many times Ballmer says the word in interviews and presentations. Microsoft copies poorly and steals. In the rare times they do try to “innovate,” the results are ridiculous.

Brass continues, “Its products are lampooned, often unfairly but sometimes with good reason. Its image has never recovered from the antitrust prosecution of the 1990s. Its marketing has been inept for years; remember the 2008 ad in which Bill Gates was somehow persuaded to literally wiggle his behind at the camera? While Apple continues to gain market share in many products, Microsoft has lost share in Web browsers, high-end laptops and smartphones. Despite billions in investment, its Xbox line is still at best an equal contender in the game console business. It first ignored and then stumbled in personal music players until that business was locked up by Apple.”

Brass writes, “Microsoft’s huge profits — $6.7 billion for the past quarter — come almost entirely from Windows and Office programs first developed decades ago.”

MacDailyNews Take: Let’s see: Again, Microsoft Windows wouldn’t exist without Apple’s Mac and Microsoft’s Office monopoly wouldn’t exist without their Windows monopoly. SO, without Apple, Microsoft either wouldn’t exist today or they’d be a two-person shop making a paint program for Macs and Amigas.

Brass continues, “Like G.M. with its trucks and S.U.V.’s, Microsoft can’t count on these venerable products to sustain it forever. Perhaps worst of all, Microsoft is no longer considered the cool or cutting-edge place to work. There has been a steady exit of its best and brightest.”

MacDailyNews Take: When was Microsoft ever considered “cool” or “cutting edge?” Never. They paid well, had good benefits, a nice location, and, long ago, their stock used to appreciate; that’s why people wanted to work there.

Brass continues, “What happened? Unlike other companies, Microsoft never developed a true system for innovation. Some of my former colleagues argue that it actually developed a system to thwart innovation. Despite having one of the largest and best corporate laboratories in the world, and the luxury of not one but three chief technology officers, the company routinely manages to frustrate the efforts of its visionary thinkers.”

MacDailyNews Take: Okay, so there actually is some innovation at Microsoft, but it just never gets out the door? We can see that as a possibility.

Brass continues, “Not everything that has gone wrong at Microsoft is due to internecine warfare. Part of the problem is a historic preference to develop (highly profitable) software without undertaking (highly risky) hardware. This made economic sense when the company was founded in 1975, but now makes it far more difficult to create tightly integrated, beautifully designed products like an iPhone or TiVo.”

MacDailyNews Take: Agreed. Please see: Apple was right all along: vertical market quality trumps horizontal market woes – April 30, 2006. Also check out: Fragmandroid: Google’s mad dash to Microsoftdom – December 15, 2009.

Brass continues, “Internal competition is common at great companies. It can be wisely encouraged to force ideas to compete. The problem comes when the competition becomes uncontrolled and destructive. At Microsoft, it has created a dysfunctional corporate culture in which the big established groups are allowed to prey upon emerging teams, belittle their efforts, compete unfairly against them for resources, and over time hector them out of existence. It’s not an accident that almost all the executives in charge of Microsoft’s music, e-books, phone, online, search and tablet efforts over the past decade have left.”

MacDailyNews Take: That matches very closely what we hear frequently from people inside and outside Microsoft. It’s a morass of politics and petty jealousies.

Full article, in which Brass details some examples of how internal feuding at Microsoft killed or delayed products, here.

MacDailyNews Take: While we obviously disagree with Brass’ assessments of Microsoft’s past (they were never an innovator), we agree on his appraisal of Microsoft’s current situation and do not see much room for improvement in the future given the company’s current “leadership” (giggle). Even if a radical departure was made, the Microtanic would still take far too long to turn.

Excerpts from a BusinessWeek interview with Apple CEO 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.

Source: The Seed of Apple’s Innovation

Again, glasses up: May Steve Ballmer remain Microsoft CEO for as long as it takes!

[Thanks to MacDailyNews Readers “Mark H.,” “JES42” and “qka” for the heads up.]

59 Comments

  1. I’m not sure I agree with the assertion that Microsoft was never an innovator. Microsoft got its start with the Altair 8080 way back in the 70’s; it was an effort completely independent of the Apple I/II line of computers. When the Macintosh came out, Microsoft made Word and Excel exclusively for the Mac, at least initially. (This is easy to see; there’s no way Word or Excel could run on MS-DOS.) The early versions were actually a pleasure to use (probably because they didn’t have all the cruft that’s in more recent versions).

    Of course, the contracts that Sculley signed on, giving away the Toolbox, were definitely a blow to Apple. I would imagine that getting such stuff on the cheap (QDOS, later to become MS-DOS, and Apple’s Toolbox, and later the Internet Explorer debacle) probably helped establish the precedents needed for the pirate mentality that has permeated MS’s management for the last two decades.

  2. but excellent for cleaning bug goo from your car’s windshield.

    There’s a rum you can buy in France called St. James: it’s undrinkable unless cut down with juice or coke, but – if you’ve done several hundred miles driving through the German autobahn system in the height of summer – it will dissolve the bugs that have toasted onto your bonnet (hood as Americans would have it).

    And when I say dissolve, I mean dissolve.

  3. One day the world will express all its gratefullness to Steve Balmer, the man who brought the M$ dynosaur to ground!
    Long stay Ballmer as master of the dark side!

    If they fire him, i propose Zune Tang to take the head of the beleaguered M$.

  4. Excel started life as “Multiplan” Didn’t change the name to Excel until a year or two later. On the Mac you could get Word, Multiplan and File all on 400k disk. Those were the days, and yeah, back then when they had to program tight programs to get them on 400k disks – they were pretty good.

  5. Just read the whole thing over at NYT without MDN’s interruptions. A scathing indictment, there’s not much that needs to be added. MS shareholders should be afraid. Very afraid. The rest of us can live in hope of a day when MS Office is a distant and painful memory. Windows already falls into that category…

  6. M$ has reversed the recent trend of dropping revenue and profit so unfortunately it still as a lot of cash to mess around with.

    Their monopoly will still be good for a while. Most companies are entrenched in Windows and Office so the revenue from them will still continue.

    I can’t see M$ innovating anything in the future but I also can’t see them losing money for a while yet. Windows 7 looks like it has bought them more time.

    The future for PC makers looks more bleak though. There is minimal profit in the business unless you are Apple. Dell are in trouble, HP could soon be hit by the notebook competition.

    Apple are well positioned to take advantage of this. As they sell more Mac, their cost of goods goes down and they can price their products more competitively. Just like the iPod, Apple can squeeze the competition from the top down. This take time because PCs are not replaced as quickly as MP3 players but it is happening already for sure.

    At some point the base Macbook will drop down $50-100 in price and put even more pressure on the low cost market. No-one gets it other than Apple how to make a profitable business in the PC world.

  7. Micro$oftopoly knows none of these. Apple knows what it wants to build, what they want it to do and who will be using it. MBA’s, lawyers, accountants and sales people are not going to have what it takes.

    It’s vision- not girth that rules in the long run. Disruptive technologies and revolutionary thoughts/concepts rarely come out of guys who live in the corporate bubble and wear suits to work. Unfortunately, that’s who end up running most American businesses, organizations and governments. Notice the results?

    It’s not the conformists or the anarchists that end up doing the real changing of the world- it’s people who go their own way, follow a clear vision, act on their convictions and stick it out over the long haul. Those types don’t get MBAs at Ivy League Schools and then move into the gated communities of slumbertown with their country club memberships.

    Sadly, the death of America’s innovation kind of tracks the rise of the MBA in American enterprise and has killed or stunted countless bright prospected startups. Apple even came close to death at the hands of a succession of these types. It took Steve Job’s audacious methods to give Apple the swift kick in the ass and a couple of double down bets to change a bloated, complacent and inefficient company into the lean innovator that it is today.

  8. Just last night I showed up to make a PowerPoint presentation at a meeting. I plugged in a simple Windows formatted flash drive into the USB port on the Dell laptop connected to a small projector.

    I got maybe 12-14 various messages in little windows issuing notices and warnings and providing ‘information’ that only those world-class engineers at MS could possibly understand.

    It took exactly 25 minutes before I had a picture on the screen. By the time I started talking, the audience was ready for me to be finished.

    What crap.

  9. Wonder if Steve is reffering to Microsoft downfall everytime he plays Dylan’s Rolling Stone.

    “Once upon a time you dressed so fine
    You threw the bums a dime in your prime, didn’t you?
    People’d call, say, “Beware doll, you’re bound to fall”
    You thought they were all…. kidding you
    You used to laugh about
    Everybody that was hanging out
    Now you don’t talk so loud
    Now you don’t seem so proud”

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