-Event @ MSFT

Much ado about little seems to be round the latest delay that keeps Microsoft from releasing Vista, its who-in-the-market-is-waiting-for operating system. The novelty this time is about being able to glimpse at the communications (even thought process) several Vista-related constituencies have on the Mini-MSFT blog--see the second part here.

From a customer perspective, I suppose, the impact is minimal. Why should it matter a few-month delay more than an already multi-year one? What is there that people want to capitalize on and only Vista enables them to do so? Enterprise customers will get their hands in the software this year still, yet their upgrade cycle is somehow independent of the release schedule of software providers. And, yes, the home users may get some back-to-school/holiday purchase plans redrawn, but it's not to say they'll have that much of a different alternative, financially speaking for Microsoft at least.

This delay could be more complicated for Microsoft hardware OEM partners, but even those are grown-ups with their own histories of mishaps.

More noticeable effects are likely to occur on a couple of fronts though. One is a short to medium term hit MSFT will take in the financial markets. MSFT stock has been between $22 and $28 for the most part of the last 6 years, so now it has some room to slide from $27. The other is with Microsoft's own employees who seem to be ever more confused as to what the direction of their company is. The rank and file are unhappy about the slow growth, whereas the executives have been in a state of prolonged denial. The problem with the former is their resistance to becoming more like, let us say, IBM employees; the latter seem to have run out of ideas with real impact on the markets and their own employees. Elsewhere on this blog, I even dared make a suggestion for what Microsoft might want to do--in essence a clear separation between applications/infrastructures for home and enterprise customers, respectively.

I consider Vista's delay just one more symptom, alas one of the highest visibility, of the problems companies in general and Microsoft in particular face. This is to say nothing about the novelty Microsoft has been trying to pull off: to have a major redoing of a multi-million line of code piece of software every few years...

Per chance you have not visited Mini-MSFT lately, here are my favorite three comments about the market delay of Vista:
First, calling it an operating system is a misnomer. It is a bloated 'user experience' that has no relationship to an operating system.

Second, XP ('ancient' 'years old') is the first stable general market OS you folks have produced. Yes, NT was a decent product and 2000 was fine and started the transition to the general market but XP is still good enough based on your history. And I have no incentive to rush to Vista.

You produce bloatware. And all indications are that the Vista bloat will follow Moore's law once again.

You aren't producing operating systems you are following a business plan. And you do that very well in a totally selfish and proprietary manner that has had its obvious success.

But, I really wish you'd quit calling yourself something you aren't.

I have used 2 stable OS's in my long life--CP/M on the 88 series and OS/2 w. 386. And I have used a reasonably stable x86 product with XP.

I guess you might call me a MS basher but I am also a realist. I have no incentive to be a masochist and run an alternative OS. But, the cost is all the crap MS makes me use a better processor and more memory than my 'real' applications require.

I run the applications that I want to use and they are on the MS platform. But I can live without the 'enhanced user experience' that you are selling. As a long time (retired) consultant and programmer to industry, I'd have no qualm in telling any former client to wait and wait whether Vista shipped tomorrow or in the next decade.

You are very accurate in one area--you folks are really full of yourselves.

I think this is all a huge laugh. I recall Bill's comments back in DOS days about a bloated, decisionless IBM that he was out to take down. He should have read Pogo rather than computer journals--we have met the enemy and he is us.

I'm just a simple sysadmin that has to install and maintain Windows but I agree that the direction the OS has taken with Vista/Longhorn is several steps backward. It appears that MS is losing sight of exactly what Windows is used for.

Basically it's just a tool; for business and for entertainment. Adding eye-candy doesn't improve the mix; it makes it more difficult to support and more expensive to re-train.

Yes, MS needs to correct the Windows team problem, but it also needs to reconnect with the users.

If anyone needs to see some good examples of what NOT to do with a good OS, slide over to the V/LH beta newsgroups and read what's being posted. It's quite an eye-opener.

And now, the third, which reminds me an entry into the Ideas Lab section of this blog, about Agile software development:

It dawned on me during the commute over the 520 bridge: I'm irritated with all the recent sh*t-flinging at the company, but I don't think Vista inherently sucks. I think it is just too ambitious a project. Just like WTT (WDK for external folks) What a piece of garbage WTT continues to be. I can't even get my daily stress runs to count in the stats pages lol!

Anyway, these big projects look great on paper, but when it comes time to implement, it quickly becomes a crap-fest due to the complexity. As a low level employee, I can't even fathom how you could possibly manage all this properly. Is there a comparable software project out there of this complexity? I doubt there is anything that matches the lines of code...

I think Windows should trim down the release cycle and become more like NASA. Instead of flying men to the moon, just do smaller, manageable projects here and there. A probe one year, a rover the next. Makes the news; gets the budget dollars flowing; keeps people excited.

We can do this with Windows. We did some awesome stuff with XP SP2. OCA hits went down big time. Games started working again. Data execution prevention opt-in improved security. Ok not the most glamourous examples, but I hope you get the idea: we made stuff really work.

Why not have Windows be a real subscription service? In order to download the next new feature, you have to subscribe and activate your copy. Don't want Windows Parental controls? Don't subscribe. Don't want Media player eleventeen? Don't subscribe... Don't want LDDM/avalon/glass? Don't subscribe.
In the third comment, I think the anonymous Microsoft employee is onto something. Except that the process s/he is describing cannot be applied to all product lines at her/his company. And I would contrast the process advocated by this employee with the observation KenP made about what appears to be (driving) the current process: You aren't producing operating systems you are following a business plan. And this is only to show how far the far-between is.


fCh said...

If 60% Of Windows Vista Code To Be Rewritten is true, Vista is more of a Humpty Dumpty than I was prepared to consider.

fCh said...

I wrote: MSFT stock has been between $22 and $28 for the most part of the last 6 years, so now it has some room to slide from $27. Such a statement becomes harder to sustain in face of the recent feature on MSFT by Barron's, available here: .
In the light of this article, MSFT won't be likely to fall, but slowly grow from $27. While it seems to prove my point, that Vista's delay doesn't matter as much as it's being heard it would, I wonder whether Savitz based his conclusions on momentum/herd instinct or cool-headed analysis indicating people really need Vista and Office.

Anonymous said...

No fCh, in the light of the recent drop, you were right to predict a slide in MSFT share price. Keep writing so that I can keep on reading. THKS!

DJ US Tech Stocks Higher As Microsoft Shares Tumble

By Michael Paige

Microsoft Corp.'s (MSFT) stock sank as much as 13% on Friday as investors expressed their disappointment at the software giant's quarterly results and financial forecast, with tech stocks taking the cue to trade lower overall.

Microsoft said both its profit and revenue rose yet still came up short of Wall Street expectations. What's more, the company's forecast for the current quarter and year lagged. The stock sank as low as $23.60 in the wake of the news, setting a 52-week low, and fell $3, or 11%, recently to $24.25 in morning trading.

Overall, the tech-rich Nasdaq Composite Index fell 12.74 points to 2332, while the Philadelphia Semiconductor Index remains flat at 520 points.

Among other shares moving in the wake of quarterly results, were those of Gateway Inc. (GTW), which fell 6.8% recently to $2.17.

On a brighter note, antivirus and security software maker McAfee Inc. (MFE) saw its stock climb 7% to $26.29 on its results.

Among the most actively traded stocks, Intel Corp. (INTC) was flat at $20.08, JDS Uniphase Corp. (JDSU) rose 2 cents to $3.52, Dell Inc. (DELL) added 41 cents to $26.35, and Apple Computer Inc. (AAPL) gained $1.53 to $70.89.

Oracle Corp.'s shares (ORCL) lost a penny to $14.92.

Anonymous said...

Guide to Ballmerisms:

“There has been a very strong reaction to our revenue and earnings figures.”

Translation: the market gave us the biggest vote of non-confidence in 5 years

“I want to provide some context for what we announced yesterday and let you know why I believe more strongly than ever that Microsoft is well positioned for sustained, robust growth in the years ahead.”

Translation: I need to do some damage control and atleast try and bullshit that yesterday wasn’t a total fuckup and condemnation of my leadership.

“In addition, we returned $5.8 billion in cash to shareholders through our stock repurchase program and through dividends.”

Translation: We managed to bilk shareholders out of another $5B of their cash to pay our insiders all why bs’g them into thinking we’re doing something positive for them. How smart is that?

“Home and Entertainment, Mobile and Embedded, and Business Solutions all turned in stellar quarters. Taken together, these businesses show a combined revenue growth rate of 68 percent year over year.”

Translation: Sure, they all went from a profit last Q to a loss this Q, but at least they’re masking our inability to grow the top line.

“All of this propels us toward the next wave of blockbuster releases.”

Translation: having badly blown all of our development schedules, we’re finally near shipping what we should have shipped at least two of so far this decade.

“We’ve always taken a long-term approach, striving to solve the hardest problems in computing and working to realize huge new opportunities in vast new markets through investments in innovation across the broad spectrum of human endeavor.”

Translation: We've always been slow as shit and can’t make anything pay off in any reasonable timeframe but if we can just keep bullshitting people that our “big bets” are “big money makers”, maybe we'll wake up and OSS and GOOG will be gone and this will have just been a bad dream.

“I believe that now is not the time to scale back the scope of our ambition or the scale of our investment. While our opportunities are greater than ever, we also face new competitors, faster-moving markets and new customer demands.”

Translation: while we’ve been preoccupied with all of our losing big bets, we took our eye completely off the ball in our core groups and now these too are now at serious risk.

“So what accounts for the negative reaction that we’ve seen from analysts and investors?”

Translation: I know it’s my/our 5 year long track record and pathetic bungling of the news but let’s at least try and deflect the blame to those pesky shortsighted analysts/investors. Sure, we're the 6th worst performer in the DOW since 1998, but how shortsighted are these folks? Don't they remember that we used to be great?

“These investments will continue.”

Translation: we’ll never drive meaningful earnings growth. In fact, we’ve simply given up trying.

“The bottom-line result of these investments created a shift in our near-term profitability that was a surprise. The change in our stock price reflects this.”

Translation: we fucked up and unfortunately, the street didn’t excuse it this time.

“But I’ve never been more confident that we are making the right investments.”

Translation: Of course, I was the same person who said we’d win the DOJ affair, that Xbox, MSN, MBS, etc. would have paid off big time by now, that Vista would be great “bet on it” and [two years ago] that the “stock was the best poised since 1998 to appreciate”. So you might not want to take that to the bank - you know none of our senior insiders will be.

“When you look across the array of businesses we are building, it is clear that we are in a position that no other company can match.”

Translation: No other large cap tech company has managed to totally underwhelm the market as much as we have over the past 3 years. Of course, no one wants to because in any other public company, the management team would be gone. But hey, we're in a class or our own.

“These investments reflect our blueprint for translating today’s investments into tomorrow’s growth. “

Translation: our idea of investment doesn't really follow the classical business definition. Basically, when we get a whim or just decide we have to be in a market, we don't waste time with all that analysis/strategy/pyaback analysis crap. Instead, we just spend as we go, often $5-10B over a 5-10 yr period, with no plan whatsoever. Then, we simply write off all that prior investment and pat ourselves on the back for creating profitability on an ongoing basis – well, at least that's the plan assuming we can ever get one of these losers to sustained profitability.

“The reaction to yesterday’s news is a lesson that the entire leadership team at Microsoft will learn from.”

Translation: We're not totally stupid. Why, every time our actions have shaved $30B off the company's market cap - 11 times on my watch as CEO so far - we've learned something. Not enough to avoid further incidents of course, but something nevertheless. Doesn't that count for something?