M$’s Lost Decade

Part of the mystery surrounding why M$ with all its $billions is stagnating in the OS department is solved in a recent article in Vanity Fair. According to M$’s own standards, being ridiculed in the popular press is a sure sign of the end-game where the technology is considered second or third rate:

  • “a management system known as “stack ranking”—a program that forces every unit to declare a certain percentage of employees as top performers, good performers, average, and poor—effectively crippled Microsoft’s ability to innovate. “Every current and former Microsoft employee I interviewed—every one—cited stack ranking as the most destructive process inside of Microsoft, something that drove out untold numbers of employees,” Eichenwald writes. “If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, 2 people were going to get a great review, 7 were going to get mediocre reviews, and 1 was going to get a terrible review,” says a former software developer. “It leads to employees focusing on competing with each other rather than competing with other companies.””
  • “Microsoft had a prototype e-reader ready to go in 1998, but when the technology group presented it to Bill Gates he promptly gave it a thumbs-down, saying it wasn’t right for Microsoft. “He didn’t like the user interface, because it didn’t look like Windows,” a programmer involved in the project recalls.”

So, M$ was locked in to resting on its laurels while the world moved on for a decade. M$ missed out on the web and mobile applications and their desktop/notebook share began to slide.

see Microsoft’s Downfall: Inside the Executive E-mails and Cannibalistic Culture That Felled a Tech Giant | Blogs | Vanity Fair.

About Robert Pogson

I am a retired teacher in Canada. I taught in the subject areas where I have worked for almost forty years: maths, physics, chemistry and computers. I love hunting, fishing, picking berries and mushrooms, too.
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37 Responses to M$’s Lost Decade

  1. kozmcrae says:

    Microsoft’s empire is weakening. FLOSS’s presence is becoming stronger day by day. Many of the parameters that defined Microsoft as a company are no longer true. Like holding 95% of the desktop market. Clinging to to those parameters like they are some kind of Holy Grail may soon be registered as a new mental condition.

    The process is slow but the day will come. For those who staunchly defend Microsoft as if it’s still 1995, you will come to the forum and everyone but those who believe like you do will be laughing at you. And no, there won’t be many of you.

    Whatever the reasons you defend Microsoft, you may want to reassess them from time to time.

  2. Clarence Moon, proving he does not read, wrote, “There should be some evidence of these machines in retail and they should be a major factor in retail advertising if their volume is so large. But nothing is there to hint of such a huge commerce.”

    If Walmart, and Dell and Lenovo are not significant enough evidence, then Clarence Moon is choosing to remain ignorant. Sad.

    Here, I found you an actual picture of a GNU/Linux notebook on a retail shelf at Walmart in Brazil: http://ztop.com.br/wp-content/uploads/2008/10/netbook_amd_local.jpg

    Here’s the Google Translation of the blog post from 2008 describing the adventure.

    Positivo Informatica makes millions of PCs per annum and they offer GNU/Linux even on PCs for business. Its products are sold in over 9,100 outlets. Beyond Positive Customer Service, has technical support network distributed throughout the country. Leader also in the area of educational technology, their solutions are present in about 8,600 schools, 2,300 private schools, more than 2,000 retail outlets throughout Brazil and are exported to over 40 countries

  3. Clarence Moon says:

    They sell them…

    But where and to whom, Mr. Pogson? You claim that 160,000,000 of these units are being sold somewhere, but they do not appear in retail stores, not even at the on-line sites in Asia that you reference. You show where some manufacturer’s outlet is offering to sell hardware that may be used for Linux computers, although they seem to say it can be used for Windows, too, and do not feature Linux as you hinted. That is far from showing that the devices are even being manufactured, much less sold at any volume.

    There should be some evidence of these machines in retail and they should be a major factor in retail advertising if their volume is so large. But nothing is there to hint of such a huge commerce.

  4. Clarence Moon wrote, “to order it from some mail order outlet in China”.

    What do you think the folks who order container-loads of these gadgets do with them? Hang them on the wall as ornaments? No. They sell them. All over the world retailers buy a bunch of these small cheap computers and sell them to the public. The Chinese manufacturer will put on whatever labels and logo you choose for a few dollars more. Presto! A house-brand computer!

    Here’s one being promoted: http://www.youtube.com/watch?v=MbL7rymDuE8 $85 with Android/Linux 4.0 from a factory with 500 employees.

  5. Clarence Moon says:

    If the only way to get one is to order it from some mail order outlet in China which doesn’t even promote it as a Linux unit, your notion of “selling well” is not very viable. You have to just face the fact that these things are not very common in the world’s commerce and not very popular among the world’s users.

  6. Clarence Moon wrote, of GNU/Linux netbooks, “Where do you find one, Mr. Pogson?”

    Sure, China has Linux mint 13.3inch cheap laptop/netbook/pc/ notebook for $220 by the container-load. Also, http://www.alibaba.com/product-gs/514874978/10_1_inch_netbook_EW_L04_.html I like that “OS: Up to you”. How refreshing.

  7. Clarence Moon says:

    They are still being produced and selling well.

    The only units I have seen anywhere are surplus EEE models from the 2008 production that were left unsold when the OEMs started offering XP. Where do you find one, Mr. Pogson?

  8. Clarence Moon wrote, “Microsoft cut their price for Windows on the XP version used for the netbooks from around $50 to around $15 to meet OEM needs.”

    That is M$’s choice. They could cut prices or lose share. They are losing share in a big way now that they are raising per-seat prices while the market is expanding into new regions. Much of emerging markets is very price-sensitive.

    In spite of paying OEMs to install XP, M$ never really managed to kill off GNU/Linux on netbooks. They are still being produced and selling well. It’s just that smart phones and tablets are sharing the market. The $billions forgone by M$ are just another cost of doing business for them but */Linux is thriving and will, in 2012, push M$ into the back seat. Just as Apple refuses to sell small cheap computers, M$ will not compete on price/performance and will be cut out of much of the market. There are folks like oldman and you who will pay whatever they ask so they won’t die off completely, but they will become a much smaller piece of IT.

  9. oldman wrote of me, “if he actually tried one.”

    I have tried one and made comments here from one. It’s a pain for typing and I would like a larger screen but it was snappy and effective. I expect an all-in-one monitor with external keyboard and mouse would be a better solution at a similar price. If market demands mean anything we will see cheap all-in-ones that work sooner or later. The ones I have seen on the market are way over-priced. Many tablets can have a keyboard plugged in which would solve 90% of the problem I had. For a younger person the small screen is no problem at all.

  10. oldman says:

    “So those 100 dollar machines do have a usage.”

    None of what you post has anything to do with the point that I was making. Robert Pogson claims that a cheap tablet can be used as a full substitute for a portable computer. I contend he would not be so quick to make such a claim (unless he decided to be intellectually dishonest) if he actually tried one.

  11. Clarence Moon says:

    That little project cost M$ $1billion to squelch GNU/Linux on a few million netbooks per annum

    Oh, pshaw, Mr. Pogson. Microsoft cut their price for Windows on the XP version used for the netbooks from around $50 to around $15 to meet OEM needs. Their incremental cost of production was zero, so they hardly lost any money at all. If they had not bowed to OEM pressure, they would have gotten nothing at all, so the revenues from the hundred million or so netbooks eventually sold gives them a billion or more overall.

    Perhaps some of the netbook purchasers would have opted for a full-scale notebook instead, but that is just speculation.

  12. oiaohm says:

    oldman I have used 100 dollar tablets as thin client machines. Must have a true HDMI port for decent sized monitor. Usb Ethernet and bluetooth keyboard and mouse. Not all sub 100 have HDMI. At 100 dollars screen is most likely 7 inch or smaller.

    HDMI touch screen in fact for one being used as Information Kiosk. Mind you its not a small screen its running a full interactive map and advertising. Yes the HDMI ports on them support touch HDMI devices.

    So those 100 dollar machines do have a usage. I have also warp mounted one as a price check machine. HDMI bigger screen camera on device used to read bar-code.

    The camera on them is not high res but its one of the best bar code readers you can get particularly at the price.

    A duel core 1ghz arm or higher machine there are a lot of uses for. Yes 100dollar USA tablets. have these specs.

    I would really say oldman get one yourself and see how they can be used. Particularly when it comes to inventory tracking. Photo of issues and other reporting usage.

    iphones lack the flexibility of the android devices. no hdmi no standard usb no usb to ethernet support is what I see when I look at a iphone making them basically worthless for a lot of usages.

    7 inch android device with embedded GPS units also be used to track things.

    oldman of course there usage option increases as there cpu power increases.

  13. oldman says:

    “Imagine what it would cost M$ to buy out all the new OEMs producing small cheap computers… ”

    You are very good a positing the advance of small cheap computers hot having used one.

    Go ahead Pog, I dare you. Go out purchase one of those $100.00 tablets, hook up a usb keyboard the way the Hamster says you can and try to use it instead of a desktop or even one of your dumpster dived thin clients.

    You will be singing a different tune.

  14. Phenom wrote, “Do you mean terrified as when XP swept the floor with Linux on netbooks?”

    Yes. That little project cost M$ $1billion to squelch GNU/Linux on a few million netbooks per annum. Imagine what it would cost M$ to buy out all the new OEMs producing small cheap computers… They cannot even buy out Nokia and RIM. The world is just not interested in what M$ has to offer. OEMs are better off working for themselves than for M$.

  15. Phenom says:

    Pog wrote: They were worried at $1K. They must be terrified at $100.

    Do you mean terrified as when XP swept the floor with Linux on netbooks?

  16. oldman says:

    “They must be terrified at $100.”

    Nope. a $100.00 piece of crap is not their market.

  17. Clarence Moon wrote, ” Microsoft has pretty much its traditional share of the cherry pie.”

    Not even close. In their heyday, ~2003, M$ had ~95%. Today they run around 86% (69.79% that other OS/81.4% non-mobile = 86%), according to Wikimedia. W3Schools has them less. That is heavily biased to the English-speaking world. They also over-report Apple’s MacOS by a factor of two. So they are down about 10% points and I think more because the rest of the world does not buy Macs but can afford GNU/Linux. That points to GNU/Linux = ~10%. Not bad for an OS that has few salesmen, although with Canonical and Dell, that’s changing. The smaller and cheaper PCs become, the less competitive on price that other OS becomes. They were worried at $1K. They must be terrified at $100.

  18. Clarence Moon says:

    Are you suggesting that 160 MILLION PCs per year are being sold in these thousand stores? Surely that would rate an article in the trade press! But not a whisper.

  19. Clarence Moon says:

    M$’s share of the pie is declinging.

    I am beginning to see where your analogy is at fault here, Mr. Pogson. You talk of share of “the” pie, but I am viewing things as a bunch of pies. If PC were cherries, Microsoft has pretty much its traditional share of the cherry pie. That is not to say that cherry pie is the only pie in town, though. There is rhubarb pies for smart phones and shoo-fly pies for tablets and Microsoft gets no more than a whiff of the aroma of those pies, certainly not a whole slice of either.

    That could change, of course, but as of the moment, their share of those pies is insignificant. Unless Nokia has some sort of major comeback with its Lumina line as some still think it can, Microsoft is never going to get much a slice of that pie. Of course they are getting a commission on sales by Samsung, HTC, LG, and some others, so the news is not all bad there.

    The shoo-fly pie is pretty much dominated by Apple and might even be more correctly termed “Apple pie” and, again, Microsoft has nothing from that pie on its plate today. Can Surface be leveraged to give them a tasty share? Maybe, maybe not, time will tell.

  20. Clarence Moon wrote, “So far there is nothing that can be seen.”

    So, Clarence denies the existence of 1K stores in China and India selling Ubuntu GNU/Linux on PCs? or huge sales in India and Brazil and Thailand?

    Where have you been hiding?

  21. Clarence Moon says:

    You mean like OEMs shipping GNU/Linux and noOS boxes all over the world…

    No, I mean finding some article somewhere in the trade press where it is noted that is actually happening. They talk about how OEMs are happy or sad about various Microsoft initiatives or how Apple has ordered 10 million or so display panels and any other news that affects the commerce of the device builders in Asia. But there is no mention of these 160 million units or of any of the considerations that must affect who, what, when and how much happens in their commerce.

    160 million units should leave a very large footprint on the earth, Mr. Pogson. So far there is nothing that can be seen.

  22. Clarence Moon, having less memory than I, wrote, “show the whereabouts of the 160 million PCs being manufactured annually that do not seem to show up in stores or get any mention in the trade press in regard to who might be selling them or what sort of business strategy is being employed by what manufacturer in order to obtain a larger share of that business segment.”

    You mean like OEMs shipping GNU/Linux and noOS boxes all over the world, or Apple shipping a few million MacOS boxes, or Dell and Canonical really working well together? M$’s share of the pie is declinging. Face it.

  23. Clarence Moon says:

    Q1 2012, revenue for client division: $4.6billion. Divide that by 50million and you get $90 per PC shipped with M$’s OS. So, $4.6billion translates to 50 million PCs, about 55% share of units shipped, far, far less than 90%

    There you go again, Mr. Pogson, citing one number about one thing from one source and another number about something else from a different source and coming up with a wrong conclusion. Hiding that nonsense in an identity equation is hardly going to fool anyone.

    Perhaps you were desperate to get something from the SEC filing onto the page, but their revenues of $4.6B is not associated with any volume statement in the SEC filing, so you whiff on that try, I say.

    My challenge to you, so far completely ignored and thus unanswered, is to show the whereabouts of the 160 million PCs being manufactured annually that do not seem to show up in stores or get any mention in the trade press in regard to who might be selling them or what sort of business strategy is being employed by what manufacturer in order to obtain a larger share of that business segment.

    Imagine, almost half of the world’s production going out the door into some vacuum without so much as a mention in the trade zines. Doesn’t that strike you as even a little odd? Where are all these machines, Mr. Pogson? 160,000,000 every year, just piling up somewhere! Surely someone would have complained about the space being used if nothing else.

  24. oldman says:

    “I expect is nym to disappear in the near future, soon to be replaced by another one.

    My, My, My.

    You make a big deal how your goal is you get your opponents to reveal their true nature.

    Yet here you reveal yourself quite well.

    Check that tinfoil hat and make sure that it is on tight lest you get effected by the ebil redmond empire

    …..

    ROFLMAO!

  25. kozmcrae says:

    The quality of Clarence Moon’s comments show that he is getting more desperate and lazy. He must be getting weary of pounding out the same line of BS day in and day out. I expect is nym to disappear in the near future, soon to be replaced by another one.

    If you were to take a head count of the defenders of the Microsoft Empire on this blog you’d find their numbers hardly vary from month to month even though their names change. Just an observation.

  26. Clarence Moon, lied and quoted out of context, “Well, their SEC filings don’t say anything about market share”.

    Let’s fill in his blanks:

    • more context: “Clarence Moon begs the question with “Microsoft Windows remains well above 90% in terms of unit sales of PC OS”.

      That’s not what their SEC filings state, nor the web stats. If the web stats reflect installed base then for them to decrease their current share at the rate they are the unit share of new PCs must be more like ~60%.”

    • IDC and others show ~90million PCs ship per quarter by OEMs, and
    • M$ boasts about selling 50million licences per quarter for M$’s desktop OS.

    From the SEC filing:
    Q1 2012, revenue for client division: $4.6billion. Divide that by 50million and you get $90 per PC shipped with M$’s OS. So, $4.6billion translates to 50 million PCs, about 55% share of units shipped, far, far less than 90%.

  27. Clarence Moon says:

    Net Application “marketshare” is based 76% of pay-per-click websites…

    Where on earth did you come up with that statistic, Mr. Heglund? Then you make the presumption that hard-nosed Linux users do not participate in such folly? Your voodoo is ever so much more exotic than that of Mr. Pogson!

    All of the Net Applications data comes from measuring traffic at sites whose owners pay Net Applications to keep track of user demographics. Presumably that information allows the site owners to better address their customer base and allow them to focus on who they should be trying to please. The answer that they get is that Linux PC users are a very small part of whatever market they are obtaining and mobile users are not much more.

    I think that they would come to the conclusion that they can, if needs be, ignore those users in favor of the vast majority who use either Windows or Apple PCs to access their sites. Beyond that, I do not see any value in the statistics. They do provide a rich ground for you Linux folk to grow your wild speculations, however!

    It is ever so much easier to just follow the money. “Look for Mr. Green!”, as the saying goes.

    If you do that, you are quickly brought back to earth and can see that there are many dollars (or euros or peso or yen or whatever) handed out for Windows and next to nothing handed out for Linux. It may be some solace for Linux fans to know that there are other freeloaders out and about using Linux, too, but it seems to me that doesn’t bode all that well for Linux’ future.

    At the moment, a number of commercial entities sell products or services that motivate them to provide some form of Linux ongoing development, but it is always a tail-chase wherein the Linux move comes after some action taken by commercial companies to add functions to Windows or OS X or Unix. How long will that go on and why?

  28. Clarence Moon says:

    >b>That’s not what their SEC filings state, nor the web stats.

    Well, their SEC filings don’t say anything about market share and web stats are so widely variant that they are worthless for predicting anything, Mr. Pogson. You have said so yourself on numerous occasions.

    The key word here is “sales”, in my opinion. Windows client OS sales are hovering around the $20B per year mark and Linux client OS sales seem to hover around zero in terms of sales. I cannot understand how this fact constantly eludes your thinking although it is obviously some sort of denial. It just doesn’t seem to matter though as to why you should even care.

    You are not in the PC OS business as a supplier, developer, retailer, or, even, user, based on your own words. So it becomes a purely academic issue here.

    Microsoft’s success is measure purely by the revenue it produces directly from the Windows products and the pull-through of its popular office automation products. A company with as little as 10% of Microsoft’s revenues from these sources is a member of the elite Fortune 500. That is a stunning success for Microsoft, considering their very humble beginnings in the 1980’s.

    The issue of users is somewhat immaterial to sales unless you can show a direct link to Linux usage affecting Microsoft sales volume. For any practical purpose, a PC sold today that ends up being used with Linux instead of Windows is actually sold with Windows and has its OS replaced with some version of Linux by the buyer. A very small percentage of PC units are purchased with no OS or are built from discrete parts purchases, of course, but the aggregation of all of these is less than a small fraction of the total and not worth Microsoft’s trouble to address.

  29. Chris Weig wrote, “Windows holds not a monopoly,” ignoring the fact that many OEMs “recommend” and many retailers only have shelf-space for that other OS. There are parts of the world that are free of Wintel so the monopoly is no longer global but it was and it is in USA/Canada/Europe.

  30. Mats Hagglund says:

    Once again: Net Application “marketshare” is based 76% of pay-per-click websites. Now you can image how many Linux-users will buy software, will do pay-per-clicks and be in those statistics.

    However, Linux got 1% of those outside pay-per-clicks (24%). Most of these are still commercial websites, perhaps less than 10% of statistics are based on social media, blogs etc…

    I’ll made a quess: the real global market share for Linux non-mobiles are about 4-5%. If you wanted to know mobiles you can check it e.g from here:

    http://wmpoweruser.com/latest-gartner-numbers-for-q1-2012-reveals-few-surprises/

    Q1 2012 – 56,1% for Android smartphone. 48,8% in 2011. We can say it very clearly than Android has some 50% +/- 3% now. If we summed all mobiles (tablets) too we may give about 45% for Android Linux.

    So clearly – in 2012 Android is the world number 1 OS. There will be at least 400 million new Android-devices during this year. Windows 7 is selling some 200 million licenses/year and perhaps 20 million smartphones and couple of million tablets. That’s all for Microsoft. Apple will sell about 250 million iPhone, iPad, Macs etc…

  31. Alex says:

    iLia, I used to work in a company with the curve bullshit. I know firsthand that it does not lead to “focusing on writing good software”. In fact, my manager told me on multiple occasions that I had to make myself “more visible”, i.e. stop writing code and start promoting myself with the upper management.

    Eventually, I left.

  32. Chris Weig says:

    Microsoft IS a monopoly.

    Please stop spreading lies. First of all, let’s work on your grammar / lexical issues. Microsoft could be a monopolist, but not a monopoly.

    But even so, it’s simply not true. Windows holds not a monopoly, but rather a natural monopoly. You probably are unable to understand the difference, but Windows (and MS-DOS before it) reached its position because it was advantageous to the market. You have to be blind to not realize that when Microsoft started out with MS-DOS there was lots of competition. Microsoft coming out a victor was not a given. But the unification and convergence towards MS-DOS / Windows was advantageous for all involved (except for Mr. Pogson).

    And the Depart of Justice’s beef never was with Microsoft’s natural monopoly in operating systems, but with bundled application software.

    So here we have once again a case where Linux evangelists don’t understand basic economic principles. But that doesn’t really matter since GNU/Linux is free (as in beer). And yet you still whine because you can’get your little foots in the doors of the market. Here’s a hint: Microsoft is not the one responsible for giving you choice. The OEMs are. Of course, for that you’d have to stop believing that Microsoft is bribing them and strangling them with immoral contracts. I think every OEM perfectly understands that putting Windows on his machines costs him license fees, and that putting GNU/Linux on his machines costs him nothing in fees. Unfortunately the burden’s on the OEM to make GNU/Linux work on his computers flawlessly, while Windows simply does work. Therefore it’d be a bad deal to trade one for the other.

  33. Clarence Moon begs the question with “Microsoft Windows remains well above 90% in terms of unit sales of PC OS”.

    That’s not what their SEC filings state, nor the web stats. If the web stats reflect installed base then for them to decrease their current share at the rate they are the unit share of new PCs must be more like ~60%.

    e.g. Wikimedia, June, 70.45%. A year ago, 80.08%. That’s -9.63 percentage points in one year. If we look at share of non-mobile OS, the numbers are 70% this year and last year 80%, down ~10 percentage points. On a global base of ~1500 million PCs and 360 million new ones they’ve gone from 1200million PCs to 1100million PCs even with the monopoly still working on some retail shelves. For that to happen they cannot be on more than 60% of PCs shipped.

  34. kozmcrae says:

    Clarence Moon wrote:

    “Remember, too, Linux is still sub-1% while Microsoft Windows remains well above 90% in terms of unit sales of PC OS. Let us see if Vanity Fair can outlast Microsoft.”

    Is that the best you can do Clarence? That old sub-1%, Windows above 90% line of BS. And you attack Vanity Fair by comparing it to Microsoft as if it’s some kind of beauty contest. Holy crap Clarence, you are more desperate than I thought.

    You are a joke Clarence. Another Cult of Microsoft member drops off the relevancy chart. Goodbye Clarence.

  35. lpbbear says:

    Quite the choice for comparing revenues. Some simple basic facts even a moron like you can understand….even though I am sure you or your other wacko Cult of Microsoft buddies will come up with even more bullshit to spread around in response.

    1. Vanity Fair is one magazine among MANY magazines available to consumers in book stores and on magazine stands. Its not even surprising their revenues might remain flat since it is NOT a monopoly in the world of magazine publishing.

    2. Microsoft IS a monopoly. There are almost zero other choices for consumers in computer retail outlets and on software shelves. Whats more surprising is given that fact how badly Microsoft has performed in that period. As a monopoly it really should be higher but I think consumers are tiring of the upgrade merrygoround and security problems.

    3. Linux has a much higher percentage than the BS Cult of Microsoft spin number of 1%. Despite number 2 above it actually may be higher than Apple at this point. Given Microsoft’s blatant panic attempt to use UEFI to forcibly limit choice among consumers my guess is that the percentage IS higher and may actually go higher as the crap known as UEFI blows up in Microsoft’s face from disgruntled consumers being unhappy with being told how they can and cannot use their own computer hardware.

    4. Recent numbers show Windows well below 90%. I’m not going to bother to point you towards those links. Being the friggin’ computer genius you are a simple Google will get you there.

    And the most obvious fact…..

    5. You’re a complete ahole with your head so far up your ass for so long the effect known as daylight is long forgotten in your tiny little bigoted corporate ass kissing brain.

  36. Clarence Moon says:

    Well, Mr. Pogson, I think you are being played as a fool by the Vanity Fair folk. If you look at VF’s revenues over the same period, they are flat whereas Microsoft’s have almost tripled.

    Remember, too, Linux is still sub-1% while Microsoft Windows remains well above 90% in terms of unit sales of PC OS. Let us see if Vanity Fair can outlast Microsoft.

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