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Microsoft Said to Be Preparing to Make Satya Nadella CEO

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Re: Microsoft Said to Be Preparing to Make Satya Nadella CEO

#121

Post by chc »

cwp wrote: post #111
chc wrote: post #38

Earlier quoted context omitted.

I think the unspoken logic here is that Microsoft is already doing great in the enterprise and poorly on devices, so hiring somebody with the same distribution of strengths and weaknesses will just exacerbate the weaknesses without helping the strengths all that much (since they're already strong there).

The observation that Satya's division is doing well is an argument against him?

As much as saying "I think this person should keep doing what he's doing because he's really good at it" can be said to be speaking against someone.

This isn't my own opinion, mind you. I don't know enough about this whole issue to have an opinion of my own. I'm just explaining where I think the disconnect is. I think the people who don't like the choice of Satya dislike it because they feel Satya is doing as well as he can do in his current position, and Microsoft needs to bring in a different skill set in order to make the company good in areas where it isn't already.

Re: Microsoft Said to Be Preparing to Make Satya Nadella CEO

#122

Post by dredmorbius »

gtirloni wrote: post #99
dredmorbius wrote: post #53

Earlier quoted context omitted.

Quite. The biggest lock-ins are from Office formats, and Active Directory integration with network and communications services. Crack either of those and the bulwark starts to crumble rapidly.

I will agree with Office but I've a hard time seeing AD disrupted by anything else. The alternatives aren't better and/or are a support nightmare. And with Office, it seems the Office 365 offering with the web clients has a very good shot at technically beating Google Apps... if they can sell it efficiently is another matter.

I'm not saying that AD is easy to disrupt (the primary challenge is that there's no one clearly superior replacement), but that if you crack it, a massive benefit / bonus of Microsoft's product line is voided.

Re: Microsoft Said to Be Preparing to Make Satya Nadella CEO

#123

Post by exelius »

blah32497 wrote: post #72
exelius wrote: post #67

Earlier quoted context omitted.

Microsoft really isn't a consumer company: they make all their profit from enterprise software. Ballmer's biggest mistake was trying to convince an elephant to become a mouse. What he left was a mess that needs a lot of cleaning up. It doesn't help that he reorganized the company 6 months ago, effectively preventing his successor from making any substantial changes from the Ballmer way. Given the number of people tha…

"Microsoft really isn't a consumer company" yeah, except the video game market and the whole hardware market... It's definitely the most obvious area for growth that they have available. The enterprise market is more or less saturated by them already. They're sorta trying to push their cloud solution, but they're late to that game. They aren't going to sell a whole bunch more of MS Office... It's a segment that will…

What market? I know I'll probably get crucified for saying this, but video games are only a good business if you're making the games themselves. The hardware is low margin, and you don't really make it up on the licensing anymore either since gamers have so many platforms to choose from. Worse still, you can't form a dominant platform through the methods Microsoft traditionally uses: you have to convince consumers directly. And video games are just a "good" business, never a great one: they are very risky and the maximum payout is limited. EA and Activision both made about $5 billion in revenue. Combined they made as much as half of the Server and Tools business (and at much lower margins.)

Microsoft's core strength is licensing software to businesses. Hardware and game consoles are a foray into a high-risk, low-margin business (well, low margin relative to software.) By contrast, Microsoft's operating margin on enterprise software is close to 50%. The margin on their entertainment and devices division is currently less than 1%. Comparables would say that a good margin in a hardware business like that is 10-20%.

Worse still, selling consumer electronics and media properties to consumers requires a sales channel that Microsoft has still not mastered. Windows and enterprise software are sold through a reseller model: Microsoft makes products and advertises them to a network of people who have discovered they can make a living selling and implementing Microsoft software (be they PC OEMs or consultants.) They have never been good at consumer marketing or retail sales. They've never had that "cool" brand image you need to succeed there, and the amount of money you have to spend on marketing is insane compared to their more profitable cash cow.

There's still plenty of room for them to innovate in the enterprise space too. Oracle and SAP suck donkey balls to use and Microsoft is actually really good at delivering rock-solid enterprise software with a good blend of usability and power. I just fear that if any new CEO focuses too much on the consumer side of the business, there are a lot of much more profitable options on the enterprise side.

The consumer side is a huge distraction to Microsoft, one that has produced a lot of red ink but never really any profit. Look at their historical results since, well, ever, and you'll see that the consumer products consistently lose money while the enterprise software keeps growing margins and top line.

Re: Microsoft Said to Be Preparing to Make Satya Nadella CEO

#124

Post by r00fus »

rbanffy wrote: post #101
r00fus wrote: post #91

Earlier quoted context omitted.

That sounds like an opportunity to me. Get real cloud-based software solutions that compete with Google SaaS officeware, but tie it into desktop office in a way that synergizes without forcing people to subscribe or upgrade. Apple is good at the monetization angle of this. There's no reason Microsoft couldn't do the same (except with software, not hardware). Example: 90% of the time I'm on a webex/gotomeeting, I'm lo…

> Why can't Microsoft make that kind of sharing easier? Remember you are not their client. Your CTO/CIO/CEO are. It's not you they need to make happy and they won't even try.

> Remember you are not their client. Your CTO/CIO/CEO are. It's not you they need to make happy and they won't even try.

That kind of attitude doesn't work anymore. The Enterprise Architect does get listened to these days, because software is key to the health of the company's operations.

We're not in the days where downtime means you get an extra cup of coffee or the day off. Downtime could mean you go out of business.

Re: Microsoft Said to Be Preparing to Make Satya Nadella CEO

#125

Post by mikeash »

pnathan wrote: post #115
mikeash wrote: post #76

Earlier quoted context omitted.

The thing is, the "PC market" is rather artificially defined to be that market in which Microsoft dominates. If you take the generic concept of "personal computer", what people were using those for five or ten years ago, people are now often using smartphones and tablets. Due to how the market is segmented for analysis, this isn't counted against Microsoft, but the money doesn't care how we segment it. The PC, in the…

Yes and no. There is a rather large market for the machines people do business with.

Those won't remain PCs forever. "Post-PC" devices are already making substantial inroads, just to a much smaller degree so far. How many business laptops meant for field use have been replaced with smartphones and tablets because all they're used for is reading e-mails and viewing maps and such?

There's no doubt that MS can coast for a long time on PCs, but if they do, they're never going to dominate they way they did in the 90s, and they will eventually go away.

Re: Microsoft Said to Be Preparing to Make Satya Nadella CEO

#126

Post by gtirloni »

dredmorbius wrote: post #122
gtirloni wrote: post #99

Earlier quoted context omitted.

I will agree with Office but I've a hard time seeing AD disrupted by anything else. The alternatives aren't better and/or are a support nightmare. And with Office, it seems the Office 365 offering with the web clients has a very good shot at technically beating Google Apps... if they can sell it efficiently is another matter.

I'm not saying that AD is easy to disrupt (the primary challenge is that there's no one clearly superior replacement), but that if you crack it, a massive benefit / bonus of Microsoft's product line is voided.

I got it now, thanks for the clarification. And I agree.

Re: Microsoft Said to Be Preparing to Make Satya Nadella CEO

#127

Post by gtirloni »

cwp wrote: post #110
gtirloni wrote: post #98

Earlier quoted context omitted.

I always thought the amount FB/GOOG spend on servers is a tiny fraction, when compared to the sum of what all the other companies in the world spend. Do you have a source where I can verify this claim that Dell/HP are having a hard with their server divisions because FB/GOOG isn't buying from them? This is a honest question as I often am not aware of the whole picture (and have a hard time picking the right sources f…

The GP isn't arguing that Dell/HP are hurting because they lost their biggest customers. It argues that they're at risk of losing many customers in the future, because enterprise IT departments will emulate Facebook and Google.

If that is his argument, then I think it's wrong. Small and medium business will never do that for sure. They don't have the knowledge, resources or anything. The ROI is nonexistent for them.

Even for big corporation, what would be a good number of servers for them to reach a critical mass where it is worth keeping all those HW engineers and increased support staff? They want to sign a contract, get regular supported servers, with warranty, etc, and focus on their core business. They get it from the regular folks of HP, Dell, IBM, etc.

Of course there are exceptions but are they numerous enough to say Dell and HP are doomed? I hardly think so. Corporations in HPC market might take a stab at creating something like this. The folks running app/DB/web/whatnot servers for ERP, financial, etc applications?

Anyway, I feel like the OP is exaggerating a bit.

Re: Microsoft Said to Be Preparing to Make Satya Nadella CEO

#128

Post by sytelus »

Satya is no Steve Jobs or Larry Page. He is typical corporate ladder climber who took 22 years in the company to get to where he is. Before you credit with all the profits in server & tools, make a note that he was in Bing and did not had any major impact in direction or turnaround. Microsoft divisions are setup in such a way that if you put a monkey on the top (or even Steve Ballmer, for that matter) for a year or two, it will still make same amount of profits because of licensing deals. Satya also hasn't brought anything dramatic or revolutionary in his current job. Azure is still irrelevant and Dev Tools still has little impact on Windows or vice versa.

So Satya would be your choice if you want "stability", no fear of any dramatic changes and "easy as she goes" attitude. Honestly that is the least what Microsoft needs right now. Microsoft is currently pretty much in same situation as Apple was when Steve Jobs arrived. I know, I know, I see you jumping off your chairs quoting last quarterly results and telling me it is far from bankruptcy like was Apple. But have noticed a chart of PC sales for last 3 years? Have you noticed a giant slump in Office that is only matter of time to eat away the growth in server and tools?

In any case, I really think Micosoft needs a bold bet, not someone conservative. It needs someone who would come in and say, this size of 100K employees is bullshit, who has courage to remove about 60% of crud that has been accumulated in form of MBAs, PMs, "Business Managers", GMs and their 13+ levels of hierarchy. Someone who would have balls to say managers are overhead, less important and there needs to be 30 reports per manager (instead of current 3-7). Someone who can personally deeply dive in to products and send out "30 things to fix and improve" every Friday night. Someone who will go to end of the Earth to get the best talent in industry. Someone who insist on best customer experience and signs off his/her name on each product release saying that he personally has tested and used every customer facing aspect of the product and is happy with it. Someone who would never let crapeware like Windows 8 get through the door. Someone who insist on same OS for Phone and Tablets. Someone who would not hesitate to move org charts if things don't work out as intended.

As far as I'm aware Satya is neither of these. He is your regular MBA with tech experience who can keep the ship steady in good weather.

Re: Microsoft Said to Be Preparing to Make Satya Nadella CEO

#129

Post by ct »

The biggest priority for new CEO is to get the two major divisions OS and Devs on the same page instead of bickering and reinventing the UI several times over from other groups. Secondly, he needs to put focus on UI design and usability instead of having engineering lead the way.

Re: Microsoft Said to Be Preparing to Make Satya Nadella CEO

#130

Post by pnathan »

mikeash wrote: post #125
pnathan wrote: post #115

Earlier quoted context omitted.

Yes and no. There is a rather large market for the machines people do business with.

Those won't remain PCs forever. "Post-PC" devices are already making substantial inroads, just to a much smaller degree so far . How many business laptops meant for field use have been replaced with smartphones and tablets because all they're used for is reading e-mails and viewing maps and such? There's no doubt that MS can coast for a long time on PCs, but if they do, they're never going to dominate they way they d…

You are absolutely right. But I'm pretty sure (crystal ball time) the post-PC device looks a good deal closer to a Surface Pro than an iPad.

That concept of keyboard + mouse + touch screen is really good; you need a way to have custom line of business apps developed for it. Apps need to be easily installable on it. It needs to have integration capabilities with oddish hardware. App state needs to be 'sane' and persist extant data without wrecking it due to swapping out of memory.

IOW, the capability lineup looks a lot like a PC on someone's desk, even though the form factor might reflow to be a tablet placed in a dock with attached bluetooth keyboard/mouse.

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