Regarding this - http://minimsft.blogspot.com/2010/10/case-of-microsoft-downgrade-blues.html and some of the comments flying about, led me to think up the following.
While I definitely concur about Goldman Sachs' motives, I think that's a separate discussion.
The basis of what's coming out in their report however, I think is largely on-track.
Why Mini would be fighting it so much is anyone's guess. Where could such a reaction orginate from? As someone who worked at MS for a number of years, I think I can make an educated guess, based on what I've observed.
1) All the repeated daily (even hourly) exposure to all the code, technology, and people immersed in it, I think leads many Blue Badges to believe that on some level up (likely Mr. Ballmer and Mr. Gates) ... someone ... has a visionary master plan that leads and ties products, services, strategies, business deliverables and so forth, that will prove all the naysayers wrong (i.e. "this code is so cool, look at what it can do! we rule!!!! billg and steveb just know!!")
In many ways, it's almost like code is a religion at Microsoft, in that a lot of smart people suspend their ability to observe and see reality. If you don't worship at the alter of code, you're not really part of Microsoft.
Anyways back to that 'plan' ...
Years ago, that plan largely revolved around Windows (and eventually Office) and that master plan came from Bill Gates' head. It may not have been documented somewhere, but it was articulated on some level and executed upon. We can argue about whether it was ‘innovative’ or not (I think from a business perspective, it was pretty visionary of Gates to see tying the O/S and the Desktop GUI to the PC).
But that was then.
Today's products, services, etc. require a much more complex and integrated visionary master plan, but a plan nonetheless. That requires a lot of thinking, research and planning, but most important, it really requires an understanding of what one's products do (or can do).
Only the top executives (and perhaps the board of directors) know if such a thing exists and whether they are on track. Right now and for the last 10 years, I think the consensus has been that such a thing does not. I think most people (including those at MS) are finally finding out that Mr. Ballmer has been very good at keeping the company’s two main sources of revenue going, but that’s all.
And more crucially... I think people are finding out that really what he's been doing all along for the last 10 years is simply executing on the original plan.
The proof is the amount of money that's been spent and the poor results achieved in just about every other market/business. While I would agree that many of the technologies are in and of themselves cool, interesting, useful (perhaps even potentially profitable), as long as they are tied back to Windows and/or Office they will never be really successful (SQL Server is a perfect example - great technology, wonderful innovations. Will never be able to compete or ever be as successful against Oracle because it only functions on Windows.The entire mobile/digital platform is another).
So, how does this tie back to reactions from people who work there?
2) People there spend so much time with their noses and minds in code, that I think they get sucked into a mentality that since they view everything as code, so should everyone else, including their partners, competitors, market analysts, and yes their customers. And that view exists, even when said product or service or whatever goes wrong.
The problem is, not everyone wants to be a developer.
Many if not most customers don't see code.
They see a product or service as a solution to a problem.
If the product doesn't solve the problem, then it doesn't work.
Not everyone wants to spend time going into the Windows registry, or updating a config file. Not everyone thinks that they should have to constantly go into the Control Panel and check if a codec is correctly installed to view that file in Windows Media Player that worked a month ago – only to find out that it doesn’t, and the Microsoft overwrote the codec, and no longer supports it, and no longer gives a fuck whether it bothers you.
When a customer is paying to use a product or service (whether through money, but also time, energy, effort), said customer's experience is to expect things to work … correctly ... each and every time.
Why is that important?
So they can get on with their lives.
Customers don't live and breath code.
Customers aren't developers. People in general have things to do.
Given the breath of technology available on the Internet these days, some of these customers actually find themselves saying to themselves –
“I don’t need to turn to Microsoft or someone else.”
“I can do this myself.”
The customer then becomes a competitor.
Think I'm joking? This happened at IBM (SAP was founded by a number of ex-IBM employees).
I think one will find much of that both the old view (anger and turning to some competitor) and the new view (becoming a competitor itself) taking place.
....
Combine these two issues (poor or non-existant modern visionary plan beyond Windows and Office; and an inability to really see and measure the customer experience) and I'd say it's all finally catching up with Microsoft now.
The Goldman Sachs report is really the 'conventional wisdom of the market' finally catching up.
Time will tell what that will really mean to Microsoft's leadership, shareholders, employees, partners and so forth. But I'd say, unless the company's leadership suddenly pulls out this master visionary plan and shows they can act on it and deliver results (or perhaps someone comes in to truly re-invent the company, re-organize them and move in a new direction), well ... I think more layoffs will come, but I think things will go deeper than that.
Microsoft won't disappear (no one sitting on billions of dollars of cash just disappears), but really the decline started long ago and barring any sudden changes, they are on a path to irrelevance; and an inevitable end.
UPDATE: Looks like things are moving already (http://blog.seattlepi.com/microsoft/archives/224089.asp):
Microsoft employees must contribute to health care in 2013
Microsoft held a "surprise town hall" meeting this morning to discuss the "evolution" of its U.S. employee benefits, requiring Blue Badges to contribute to their health-care plans starting in 2013.
Personally I don't think private companies should be in the business of managing their employees' health coverage (through benefits), but that also is a separate subject of discussion.
For now, from a business perspective, I'd say this probably isn't the best way for Microsoft to be retaining Employees.
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