Monday
May312010
Microsoft after 10 Years with CEO Ballmer
Monday, May 31, 2010 at 6:36AM
It has been ten years since Steve Ballmer has taken the reins at Microsoft and Bill Gates, the firms former CEO, left the firm to pursue his philanthropic pursuits. Microsoft in those ten years since Gate's departure has changed a lot.
Microsoft has lost its innovative edge. As Austin Power's once said, they have lost their mojo. Under the leadership of Gates, Microsoft was one of the most feared firms in the tech world. In the mid-90's, when Gates realized that the Internet was gaining popularity, he put the death blows to then Netscape to take the lead in the Internet Browser space. Gates was responsible for the very successful Windows XP Workstation franchise, which most of the Fortune 500 still run today. Those firms are facing end-of-support issues as Microsoft tries to lure those firms onto the newer Vista or Windows 7 platform for desktop and laptop computers.
Several blunders have occurred under Ballmer's watch. Recently, Ballmer failed to woo Yahoo into a strategic partnership. In addition, Windows Vista was not a successful product launch for the software giant by any measure. Many in the technology field say that Windows 7 is not all that compelling of an upgrade either, but concede that the performance of the OS is better than that of Windows Vista.
Farhad Manjoo wrote a piece in the Jun 2010 issue of Fastcompany Magazine where he describes Ballmer's leadership of the firm as directionless. Manjoo goes on to write that Ballmer seems more concerned with his employees use of iPhones (versus a Windows Mobile Phone) and his employees use of Google over Bing. Evidently Ballmer has been known to put the phones on the floor and motion like he is going to stomp on them.
But all is not doom and gloom for Microsoft. For fiscal year 2009, Microsoft reported just over $6 billion in cash and over $25 billion in short term investments. In contrast, they only reported $3.5 billion in short term debt. So from a cash perspective, they are doing quite well.
But interestingly enough, Apple has no short or long term debt on their balance sheet and has $5.2 billion in cash and $18.2 billion in short term investments for FY 2009. Also, quite a healthy financial position to be in. Apple has also just announced that they have sold 2 million iPods in 60 days in the United States and the devices just went on sale over in Europe this past Friday.
Manjoo raises a good point that Microsoft's, and Gate's, original mission statement back in 1975 was "A computer on every desk and in every home, all running Microsoft software". Clearly Microsoft holds the dominant market share of desktop operating systems, and server operating systems for that matter, but there are other firms chipping away at the lead. Apple, Google, Oracle, and Red Hat all are chipping away at segments of Microsoft's business.
I agree with Manjoo's assertion that it is perhaps time for Gates to come back to the helm at Microsoft and reinvigorate the bright and talented people employed there. Microsoft has lost the luster and allure in the market place that it once had, but I am sure there is some innovation that could come out of Redmond with the right leadership. After all, look what happened down the way in Cupertino in 1996 when Steve Jobs came back to Apple (when Apple purchased NeXT for $429 Million). Apple has been on a meteoric rise since he slashed some projects and focused the firm on innovative products and services that consumers, at least so far, are willing to pay for. Microsoft may want to borrow a page from Apple's playbook. I am intrigued as to what innovation may come from the two firms if this were to occur.
Microsoft has lost its innovative edge. As Austin Power's once said, they have lost their mojo. Under the leadership of Gates, Microsoft was one of the most feared firms in the tech world. In the mid-90's, when Gates realized that the Internet was gaining popularity, he put the death blows to then Netscape to take the lead in the Internet Browser space. Gates was responsible for the very successful Windows XP Workstation franchise, which most of the Fortune 500 still run today. Those firms are facing end-of-support issues as Microsoft tries to lure those firms onto the newer Vista or Windows 7 platform for desktop and laptop computers.
Several blunders have occurred under Ballmer's watch. Recently, Ballmer failed to woo Yahoo into a strategic partnership. In addition, Windows Vista was not a successful product launch for the software giant by any measure. Many in the technology field say that Windows 7 is not all that compelling of an upgrade either, but concede that the performance of the OS is better than that of Windows Vista.
Farhad Manjoo wrote a piece in the Jun 2010 issue of Fastcompany Magazine where he describes Ballmer's leadership of the firm as directionless. Manjoo goes on to write that Ballmer seems more concerned with his employees use of iPhones (versus a Windows Mobile Phone) and his employees use of Google over Bing. Evidently Ballmer has been known to put the phones on the floor and motion like he is going to stomp on them.
But all is not doom and gloom for Microsoft. For fiscal year 2009, Microsoft reported just over $6 billion in cash and over $25 billion in short term investments. In contrast, they only reported $3.5 billion in short term debt. So from a cash perspective, they are doing quite well.
But interestingly enough, Apple has no short or long term debt on their balance sheet and has $5.2 billion in cash and $18.2 billion in short term investments for FY 2009. Also, quite a healthy financial position to be in. Apple has also just announced that they have sold 2 million iPods in 60 days in the United States and the devices just went on sale over in Europe this past Friday.
Manjoo raises a good point that Microsoft's, and Gate's, original mission statement back in 1975 was "A computer on every desk and in every home, all running Microsoft software". Clearly Microsoft holds the dominant market share of desktop operating systems, and server operating systems for that matter, but there are other firms chipping away at the lead. Apple, Google, Oracle, and Red Hat all are chipping away at segments of Microsoft's business.
I agree with Manjoo's assertion that it is perhaps time for Gates to come back to the helm at Microsoft and reinvigorate the bright and talented people employed there. Microsoft has lost the luster and allure in the market place that it once had, but I am sure there is some innovation that could come out of Redmond with the right leadership. After all, look what happened down the way in Cupertino in 1996 when Steve Jobs came back to Apple (when Apple purchased NeXT for $429 Million). Apple has been on a meteoric rise since he slashed some projects and focused the firm on innovative products and services that consumers, at least so far, are willing to pay for. Microsoft may want to borrow a page from Apple's playbook. I am intrigued as to what innovation may come from the two firms if this were to occur.
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