Microsoft’s downfall: Inside the executive e-mails and cannibalistic culture that fueled Microsoft’s lost decade

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.

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42 Comments

  1. 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!”

  2. 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.

  3. 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.

  4. 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.

  5. 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.

  6. 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.

    1. 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.

      1. 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.

        1. 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!

      2. 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?

  7. “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.

    1. 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.

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