It was just back in early March that Steve Ballmer gave his “for the cloud, we are all in” speech at the University of Washington and sent an email along those same lines to all Microsoft employees.
Like many, I had more or less given up on Microsoft but thought that maybe the release of Windows 7 and a realization by the company that they really needed to do something different might change things. In addition, many Microsoft executives that I spoke to or saw present were being very honest about their shortcomings and lack of answers in areas like mobile computing and security. (Even Ballmer admitted yesterday that Microsoft was now “number five” in the mobile race.) So for a time I was open to thinking that maybe Microsoft in general, and Steve Ballmer in particular, was waking up.
Ballmer is infamous for his ham-handed antics as a CEO in the past and some of these are documented on YouTube. His head-in-the-sand stubborn attitude was shown also in his home where he reportedly doesn’t allow his family to have devices like the iPhone or use Google search. But at his U of Washington speech he seemed like he had lost a few pounds, was wearing glasses that made him look smart and, well, I thought… maybe.
In just two short months Mr. Ballmer has made it clear that he is beyond repair or reform as a failing technology company CEO. His inability to see the changing technology world around him will drive Microsoft ever lower in the food chain.
Ballmer doesn’t seem to understand mobile computing and the fact that it is fundamentally part of the cloud. My guess is that this stems from a view that is still rooted in the idea of a PC that uses the cloud rather than being inside the cloud itself. This is a very big problem if you are a technologist and responsible for the direction of a company like Microsoft. It means you see everything through a lens that distorts what is going on in the market.
Even Ozzie, another ray of hope introduced into the Microsoft darkness some time ago, appears to have a mistaken view of Android versus Chrome because he underestimates the power and potential of the mobile platform when combined with the cloud.
What Microsoft will have left are updated versions and upgrades to their declining (but still very large) franchise like Office, enterprise development and productivity applications. The company will remain important by virtue of their size and its tendrils in areas including gaming and smart cars.
Steve Ballmer seems to be unable to strike out no matter how many large technology industry shifts the company misses. Ballmer was recently able to make the statement that Microsoft “missed the whole cycle” in mobile computing as if it was a minor thing. Ballmer goes so far back at Microsoft that he is unlikely to be replaced. But after so many profound misses, the only chance Microsoft has is to do something akin to what IBM did when they brought in Lou Gerstner.
On the plus side, this is very good news for Google and Apple, who will continue to be competing with a giant that can’t see.
[Disclosure: The R2 model portfolio has long positions in both Apple and Google at the time of this writing. The author has a position in Apple.]
{ 1 comment }
Deutsche Bank says multiple checks around the launch of Great Plains 2010 (~60% of Dynamics) show progress, but not enough to warrant significant near-term share gains. They see the product roadmap and customer participation levels as underwhelming compared to SaaS leaders. They think the growth strategy of hybrid deployments around legacy acquisitions is slowing R&D cycles and growth. Firm says checks also show the company has stepped up promotions with mixed results. Overall, they view these as positive data points for CRM, RNOW, INTU and N. Firm raises their tgt on CRM to $120 from $110 and INTU to $50 from $47.
Comments on this entry are closed.