Bloomberg:
Nadella’s turnaround over the five years since he replaced Steve Ballmer as CEO has been nothing short of historic. The company had been universally viewed as spiraling toward obsolescence, having missed almost every significant computing trend of the 2000s—mobile phones, search engines, social networking—while letting its main source of revenue, Windows, the operating system that comes preloaded on PCs, stagnate.
Nadella’s peers say Microsoft’s resurgence is as terrifying as it is impressive. When asked what threat a renewed Microsoft poses to the tech universe, the CEO of a rival software company, who requested anonymity to speak more candidly, begins humming Darth Vader’s Imperial March theme from Star Wars. Put another way: The Empire has struck back.
Regardless of what you think of Microsoft, its “resurrection” under the guidance of Satya Nadella is remarkable. My favorite part of the story is how ignorant the writers are. They say, “Nadella appears irritated by questions about the company’s ascendancy. “I would be disgusted if somebody ever celebrated our market cap,” he tells Bloomberg Businessweek. He insists the valuation—which passed $1 trillion on April 25 and is up more than 230 percent since his watch began in February 2014…”
having missed almost every significant computing trend of the 2000s—mobile phones, search engines, social networking
Okay, that part’s just nonsense, though (though not the overall conclusion about Nadella’s leadership or the change in MS’s position in the market).
Microsoft’s job isn’t to chase trends any more than Apple’s is – it’s to make money, and that means doing the things that it’s good at in a way that makes it money.
OSes, business services (O365 and the like) and computing services (Azure).
(For the same reason, I don’t take the blather about “the tech universe” seriously.
“Things using computers!!!” might get all called “tech” by people who chase stock trends and by randos, but it’s not one giant blob.)
True, it’s not Microsoft’s job to “chase trends.” (Where by “trends” we mean incredibly successful products.) But Microsoft itself apparently thought that was its job — it flushed amazing tens of billions down the toilet on PlaysForSure, Zune, Window Mobile, Windows ME, Windows Phone, Lumia, various “slate” products, Bing, Bing Maps, Band, and I don’t even remember what else. It also blew something like $9 billion forcing Xbox into relevance in game consoles: money that it couldn’t conceivably recover from that product in a century.
One of Nadella’s great virtues is that he’s stopped the company from continuing along those lines. He’s woken it up from the fantasy that what it did to Mac with Windows, it should be able to do to any company’s successful products.
I wish market share equally reflected to the quality of product from a company. The higher the market share, the better the quality their products are. This seems to have held true for Apple over the past 20 years, but with Microsoft, it has not. Whether they sell phones, tablets, or cloud services, the underlying OS is basically the same garbage from 1995. They know it, we know it, and even Wall Street knows it. Com’on Ctrl+Alt+Delete, still, in 2019!!!!
So why do Fortune 500’s and Mom & Pop Shop’s still buy into MS? Inertia.
I use both Mac & PC in my daily work and 10 times out of 10 prefer to use the Mac ecosystem, period.
Microsoft once had a Future Vision for computing they shared 10 years ago, way back in 2009. What the hell happened to that Vision?
If that existed today, MS would easily be worth a $1tr market cap.
Microtrends, sure. But the trends above were huge and MS absolutely missed them. Remember Windows Mobile? Preceded iOS and Android, but because Ballmer was myopically focused on Windows, they blew a chance to be a significant mobile OS. Note that there are no Windows phones now.
Search – Google ate their lunch but they ate everyone’s lunch on search. Unllike most markets, I think search only really has room for one dominant player.
Social… I think is a weird one. MS missed it, yes, but it’s not really part of their core mission. What they have kind of missed is business social – Slack, Zoom etc. See the April 30th post on Stratechery for some thoughts there.
This. Add The Danger Hiptop/T-Mobile Sidekick to that list, to name but one other product that Microsoft ate and shat out without much apparent thought.
It’s easy to forget now how ridiculously managed the company was under Ballmer and Gates. They not only squandered resources on acquisitions they didn’t have the internal culture to develop; they acquired and destroyed some genuinely good products (see above) in the process.
Damn right they chased trends. Good for Nadella for putting a stop to that foolishness.
And Wall Street loved them. (All those acquisitions generated a lot of brokerage fees.)
As I remember it, Microsoft’s “vision” was largely depicted in “home of the future” exhibits (with products that didn’t exist) and CG simulations of proposed products that they were hoping someone else would actually build. They were kings of notionware, writ large.
I don’t believe the company ever had much vision for the future of any kind. They only seemed to have a single strategy for trying to leverage Windows everywhere, without genuinely thinking about how it might realistically work on anything but a PC.
Satya Nadella is the best CEO in tech.
That was true 10-15 years ago. Not now.
Another reason to praise Nadella’s intelligent management. A polar opposite to years of Ballmer’s sales-gorilla chest-beating.