Microsoft brain drain?

$25 , oops – read oracle as ‘Apple’

oh, and if you guys didn’t notice, the server and tools(Windows servers, sql server and visual studio) division had a profit of $980 million.

@seshadri

It’s not about profit, it’s about growth, and MS has none. It’s cold outside and they just stepped out of the pool.

Please digg our service if you get a chance.
http://digg.com/tech_news/BeerCo_Software_offers_qualified_remote_employees_for_only_4_995_per_month

Next week I am releasing a new service that supports IBM tomcat/websphere customers at half the cost per incident on both enterprise and community editions. I’ll repost a digg link when that is set up too.

Microsoft execs?
A dime a dozen. I heard the whole story behind Jim Alchin’s departure from insiders. I bet Scoble doesn’t dare publish that.

“It’s not about profit, it’s about growth, and MS has none. ”

There has been a 8-11% growth pretty much every quarter. Specifically, this quarter except the online business all other have had growth (The revenue in the Home & Entertainment business has come down but so has the losses)

“and they just stepped out of the pool”
Yeah, it’s been just 30 years since they started doing business.

@29
http://investors.redhat.com/phoenix.zhtml?c=67156&p=irol-newsArticle&ID=909412&highlight= # 52% revenue growth, # 6th consecutive quarter adding more than 10,000 new customers, # 18th consecutive quarter of sequential growth in total revenue, If you think RHAT is something check out google.
Yawn. Besides their market of new users has been practically depleted. They are desperately turning to piracy curbing to generate new revenue. WGN ect… wouldn’t have entered their thoughts when all was good and Leno was announcing the Win95 release. It’s all down hill from here baby.

Zune, oragami, big top, ect…
It’s like they hit the other side of the mountain, and it’s pam coated teflon. They’re trying to hook in, but nothing’s anchoring. Hell, I would leave MS too if I was an exec there.

“It’s all down hill from here baby.”
YAWN. iS this ‘down hill’ the same as the one that’s been predicted for about 20 years now?

“10,000 new customers”
Hey, Isn’t oracle one of these? Wait, no..they aren’t..they decided to do their own stuff. That’s uphill, i’ve to admit…

MS is out of steam. They’re deeply invested in projects that will not return any income, and they’ve lost a lot of investor confidence.

I know that MS can survive for YEARs on their liquid assets alone, on life support. That’s not going to attract very good people though.

With Gates gone, and from what I’ve seen of the company, I would bet against them in the next 10 years. The same way some bet against Commodore, despite the success of their machines in the 80s.

BTW, those sales numbers from MS are complete voodoo. Deferred sales ect…. They are using different accounting schemes to boost earnings reports, similarly to what we saw with Enron.

The infrastructure at the company is so huge, that a slight decrease in sales, even if they are not reported to the public because of accounts shifting could start to eat away at the pot of gold. And it will.

Robert – I’m curious. What would Microsoft have to do to show that Windows Vista was successful? As in – a year from now, what number would we have to show for you to say Windows Vista (and Microsoft) are in great shape?

I have a feeling that Windows Vista could sell some insanely high number of copies and we would still see blogposts from Paul Graham saying how he doesn’t see anyone using Windows and therefore Microsoft is dead.

I’m annoyed because we’ve just shown a ‘knock the ball out of the park’ quarter and you still have a negative post !

lol @ “double accounting”. Interesting how random Scoble commenters seem to know more about eranings reports than the experts.

Bottom line, the guys had a great quarter. Shrug it off, deal with it. Don’t worry though, MS will die some day, just not this quarter…maybe next quarter. Keep hope alive though!

SKC: Microsoft — even if it does everything wrong for the next 100 years — will survive 100 years simply on momentum. This is not a company that will die in my lifetime. When we say it’s “dead” we mean it isn’t living up to its potential. An organization with the resources of Microsoft’s should be doing far more.

http://www.roughtype.com/archives/2007/04/microsoft_is_de.php has a good overview.

Vista and Office 2k7 were already baked into the expectations, and MS still beat those expectations. I know it’s very painful for you, but them’s the facts.

And a 60 Billion dollar company increasing earnings by 12% is great.

However, they didn’t do it on anything even remotely new. They did it on their core products. Which isn’t bad, and perhaps a sign that they should seriously consider sharpening their focus. But Live and the entire entertainment division lost rather a lot of money. In fact, Microsoft seriously reduced marketing of the Xbox so the loss would be less. I have for a long time advocated that Microsoft stop trying to compete in every possible market, and focus on the things they do best.

What did they make money on?

Windows and Office.

What are the only two things they consistently execute on?

Windows and Office.

Just because online advertising is big, that doesn’t mean you have to be in it. Sometimes, in fact, it IS smarter to leave money on the table. Apple and Google both leave money on the table regularly. They say “There’s a lot of money there, but those are not segments we are going to get into, because they don’t make sense for us.”

Microsoft can’t even figure out what to NAME Live or whatever it is today. The entire thing reeks of “Ozzie likes intarweb stuff, so now we do more intarweb stuff” But Microsoft cannot comprehend working with someone else, they have to own everything. So Google dominates search. Big deal.

Just because you theoretically COULD make a ton of money from something doesn’t mean you will, or even you should. But Microsoft Sr. Leadership is trying to win every battle in every theater. They are now up to, with the latest hiring push, what 70K employees?

Yet the only thing they did well were the two things they always do well in.

Hmm.

Your spin, “They made money in what they’ve made money in for 20 years, everything else tanked” is arguably true, but extremely deceptive, as “everything else” sounds like the majority of the company, when that “everything else” is extremely small (employee-wise). But you already know that, yet you spun anyway. Your usual M.O.

Consider the HUGE push Microsoft has been making behind online and the Xbox, and at least initially, the Zune. Now tell me how the fact that none of those are making money is good. I await how you spin that.

The fact is, NOBODY expected Xbox, Zune, or Live to make money this quarter, so please put away that strawman, it won’t fly with anyone except those who are predisposed to dismiss anything good MS does (i.e. those of your ilk).

Yet if the iPhone isn’t instantly profitable from day one, I’m sure you’ll be crowing how Apple is TEHSUCK!!! Please. There’s no excuse for Live losing money, or the Zune. Considering Xbox Live has been around for a few years, and the fact that the Xbox 360 has been around for a year, they should have, at the very least, come far closer to breaking even, if not a small profit.

But outside of Windows and Office, Microsoft tanked it on their big PR items. That’s not good, and shows a real execution problem.

Your post is really reaching to try to spin these earnings as bad. Smacks of desperation, bitterness, sour grapes, etc.

Making money is always good. That’s a company’s job. But when your “new exciting” pushes tank, and you would have been in serious trouble had you not had new products in both, then that’s a sign of problems.

Robert – I’m curious. What would Microsoft have to do to show that Windows Vista was successful? As in – a year from now, what number would we have to show for you to say Windows Vista (and Microsoft) are in great shape?

Dunno about Robert, but Vista is going to be a success on a few levels, even if most of it is playing catch-up. If you use Windows, for whatever reason, it’s better enough than XP, even if it is MORE annoying than XP, to seriously consider upgrading.

I’m annoyed because we’ve just shown a ‘knock the ball out of the park’ quarter and you still have a negative post !

No, you had a “our core business did really well and our new core business releases saved our ass” quarter. Had Live and Entertainment shown a solid profit, then you would have had an out of the ballpark quarter. When a rather, (according to Microsoft Execs) important part of your business is still losing money, then you did not in fact, knock it out of the ballpark. But it was a solid triple.

Microsoft’s non-office, non-windows initiatives are not doing well at all, and that is not a good sign.

Personally, i’d love to see Microsoft refocus on the things they DO well, and perhaps start firing all the NIH addicts running the company. I think a Microsoft that had focus, and didn’t view the entire world as the enemy would be a hell of a company on every level. But they still aren’t done making the IBM mistake yet.

@John C Welch “What did they make money on?

Windows and Office
”

Err, not to nitpick, but server and tools seems to be coming along rather nicely…at nearly a billion in pure profit for the quarter, we can probably stop saying they only have two cash cows. I’d say they’ve now grown to three.

@40, I was about to say that.

Note that Server and Tools haven’t had major releases for about 2 years now – VS,SQL 2005 and Win2K3 were the last ones.

Beer, it’s alot easier for Red Hat to have 52% growth (or whatever) than Microsoft. Microsoft is a 5 billion per quarter company; such a company having 10-12% growth if GOOD. No way in hell Red Hat would have 52% growth were they a 5 billion per quarter company.

Welch, here’s a clue for you: the longer your post is, the less likely one will bother to slog through it. BTW, Microsoft is making huge money in servers and tools (i.e. not just Windows and Office), despite your refusal to acknowledge it.

@29,

Chris,

I would be interested to know why Jim Allchin left MS. Could you post a little here? I’m sure many people would be interested to know.

Scoble was right when he stated that MS isn’t dead, they are just not living up to their potential. I agree.

MS needs to do what Apple did; a complete rewrite of their OS from the kernel up. MS worries about legacy, legacy, legacy. Legacy will not get you more and more users. Innovation does. Love it or hate it, Mac OS X is the best thing to happen to personal computers. While I prefer Linux on my own computers, I’ve been toying with the idea of getting a Mac and seeing what all the hype is about. If I don’t like it for some reason, I can give it to my kid.

I used to like MS, but not any more. They are not innovators. They embrace DRM, they embrace and extend other people’s technologies. They are a declared monopoly. They are stagnant and the only thing that keeps them alive is their enterprise sales of Windows server, Office, and their database.

Active directory, for example, is really just a horrible implementation of LDAP. Novell did it so much better. *nix does LDAP so much better as well.

MS is king because it is easy to use and ships with almost every computer sold. We are seeing this change slowly, but as we all learned as kids watching/reading The Tortoise and the Hare, “slow and steady wins the race”, and Linux is slowly and steadily eroding MS not only on the desktop, but very much so in the server space. You can quote to me all you want about people buying Windows software for the enterprise, but for everyone MS sells, there are an equal number (and climbing) installing open source equivalents.

MS needs to spend the money on a complete rewrite of it OS and make sure that vendors and products have drivers for the new OS. I don’t ever really recall my kool-aid-drinking Apple friends having much trouble with device drivers when OS X hit the market. Vista, on the other hand, is a nightmare. Not everyone has the money to drop on new printers and scanners, and whatever.

Rewrite, MS. It’s not like you don’t have the money.

“a complete rewrite of their OS from the kernel up”
This was the exact reason for the VISTA delay. It’s so easy to under estimate the complexity of writing software…

“Linux is slowly and steadily eroding MS not only on the desktop, but very much so in the server space”
At the rate of .1% per year it will be an all Linux game in about 900 years

Any relation to Ren Hoek?

@45,

You really have no clue, do you?

You’re obviously a MS fanboy, and that’s fine, but you need to grasp reality before you spout off percentages and non-truths.

Let me address your arguments…

I fully understand the complexity of software. I’m in the industry. MS has the money and the resources to pull it off within a couple of years — and easily, too. They just have to want to do the right thing. Vista is a horrible excuse for an OS.

You are a typical person looking out from the MS camp at Linux. You really have no clue just how big the Linux server market is or how large the existing deployments are in actuality. They are huge and numerous. Just because Linux has not broken that much ground on the desktop is not an accurate barometer.

You need to understand that most of the Internet infrastructure is *nix based in one way or another. Yes, MS has a large chunk of the server market, but nowhere near what *nix has and is getting.

Let’s see…

- Over 95% of all DNS/BIND servers are *nix based.
- Over 80% of all Web servers run Apache on *nix.
- Cisco routers run IOS, loosely based on *nix.
- Juniper routers run a variant of FreeBSD.
- Over 95% of all mail servers are Sendmail, Exim, or Postfix.

Europe, Africa, and South America are embracing Linux in major ways. City after city, school system after school system, government after government — all switching over to Linux.

Like I stated earlier, MS is still king of the desktop, but people are tired of the DRM, the rip-off license costs, the limitations of those licenses, and the money for initial deployments.

The US is still largely MS friendly. The rest of the world is seeing the light. You need to understand that freedom is more important than innovation at first. There is not way developing countries and poor cities/areas can afford what MS is charging for their software. No way. MS, in response, is now going to sell Windows in some markets for as little as $e dollars (China/India). You know why? They are trying to compete with Linux. It will get a few buyers, but it will fail. The world is slowly sliding socialist in it’s political leanings. As the years roll along, more and more countries are opposed to capitalism as the US sees it and pushes it. This is good. I’m all for socialism. South America only has a couple of non-socialist governments. Brazil is Linux only in all governments and schools now. Argentina is going that way. Cuba is switching over to Linux in a major way.

It’s OK to like MS, but they are no longer in control of the way people use computers. People are demanding Linux now from OEMs. You stated 900 years. What bunk. Within 10 years, MS will be just another computer company in a sea of *nix companies in a largely socialist world. You cannot just look at the geek aspect, you also have to look at politics and the reaons people are switching.

I meant to say for as little as $3 dollars above.

@47, My point is – what you are saying is not new. The anti-MS camp has been saying this for atleast 7-8 years now. Yet, there is no visible change in the OS market share one way or the other. If anything, Windows has gotten a bigger chunk in the server space.

What facts/arguments you have to prove that it *really is time up* for windows now? Particularly on the desktop? (It’s getting like an earthquake prediction. If i say that “there will be an earthquake in 3 months” you will not be able to prove me wrong. But if i kept saying that for 10 years nobody is gonna believe me.)

Besides, what has Linux(Linux not Unix) contributed to the common man so far? Apart from being free and Anti-MS what other selling points does linux has?

The other player in the space -Mac- has set standards for UI, elegance and design.

@49,

You are right about a couple of things. The free software crowd has been making predictions that have not come to fruition in the past, but as you can plainly see, things are changing. Even if I’m wrong about Linux gaining in popularity, which I am not, since I read news from around the world daily, MS is still in trouble.

The problem, you state, is that *nix has not offered the average man anything to write home about. This is not true. You are looking specifically at an innovation data point, not the big picture.

*nix set the standards for many things. Windows is in no way near as stable an OS as FreeBSD, for example. Windows is in no way as secure as, say, OpenBSD. Linux offers the common man a free (as in freedom and in beer) OS platform from which to access and control data. Ubuntu, for example, has largely come out of nowhere, is stable, attractive, easy to use, and best of all, free. It supports all of the software the average joe will use. Again, please remember that 99% of the people out there are not geeks. All they need is a browser, Flash, printer support, and an office suite.

What you fail to grasp is this… the free software movement values freedom over innovation. Yes, we copy ideas, but we remain free. As Ricahrd Stallman has so eloquently put it, freedom first, innovation second.

MS cannot compete with free (price) or the attractiveness of freedom. I notice you conveniently avoided discussing the political ramifications of the world and where it is heading.

Look at our own government. Vista has been banned from almost all government networks, and not only here. The UK, Israel, you name it.

All of these countries are moving to Linux. The UK is in the process of moving several dozen cities’ police forces to Linux with OpenOffice. It just makes more sense because the cost of Windows is astronomical what with licenses, virus/worm/spyware, etc. Linux is far easier to lock down and make secure than Windows. Again, the average business does not even use most of what MS has to offer. Most office suite users use less than 10% of that Office offers.

It may take awhile, but free software is on the rise, whether you or anyone else likes it or not.

Your name sounds Indian. Look at your own country. India has the second largest population in the world. Those people need to be online and learning. They deserve freedom to innovate and join the 21st century. Windows doesn’t allow this freedom. China is moving to Linux in record numbers.

@39 “here’s no excuse for Live losing money, or the Zune. Considering Xbox Live has been around for a few years, and the fact that the Xbox 360 has been around for a year, they should have, at the very least, come far closer to breaking even, if not a small profit.”

Someone remind me how long Amazon went before they turned a profit?

@43 “I would be interested to know why Jim Allchin left MS. Could you post a little here? I’m sure many people would be interested to know.”

Could it be nothing more than the fact that he had more money than he knew what to do with and the fact that he had some personal health issues he was dealing with and simply wanted to enjoy life a little. Perhaps devote more of his time to the Prostate Cancer Foundation?> You think that could be even REMOTELY possible?