Microsoft announces massive management shakeup dubbed 'One Microsoft'...

[DJ OD]

PC death throes? Microsoft announces massive management shakeup dubbed 'One Microsoft' amid slumping sales and Windows 8 flop

• CEO Steve Ballmer announced the unwieldy tech giant is headed 'in a bold new direction' as some herald the 'death of the PC'
  
• The company hopes to compete with their more nimble, trendsetting rivals Apple and Google
• President of Microsoft Office division Kurt DelBene will retire as part of the reorganization as other big wigs bite their nails over upcoming changes
  

Microsoft’s CEO announced a broad companywide shakeup just as many tech industry analysts are proclaiming the ‘death of the PC’ amid sharply declining personal computer sales and the tepid performance of the Windows 8 operating system.

Steve Ballmer said Thursday that the changes mean the company is ‘rallying behind a single strategy’ with an aim to take the unwieldy tech giant ‘in a bold new direction.'

While it has been widely anticipated, it's too early to tell how well the reorganization—the company’s largest in five years—will help Microsoft compete with more nimble rivals like Apple and Google.


'Bold new direction': CEO Steve Ballmer announced the largest overhaul the tech giant has seen in five years


Some insiders weren’t wholly optimistic.

‘You don't make massive, sweeping changes like this unless something is wrong,’ said Colin Gillis, an analyst at BGC Financial, pointing to Wednesday's reports of declining PC shipments around the world.

Worldwide shipments of personal computers fell 11 percent in the April-June period, according to data from research firms Gartner and IDC. Gartner Inc. said the PC industry is now experiencing the longest decline in its history, as shipments dropped for the fifth consecutive quarter.

Kurt DelBene, the former president of Microsoft Office, will retire. His departure follows that of gaming chief Don Mattrick, now CEO of Zynga, and Steven Sinofsky, formerly head of the Windows unit.

Microsoft's lackluster stock performance has amplified speculation that the company might consider replacing Steve Ballmer, who took over when co-founder Bill Gates stepped down as CEO 13 years ago.

Bold: Ballmer says it will be bold, but others wonder if the changes aren't just a scramble to catch up with rivals in a stalled corner of the tech market


Analysts have blamed a massive consumer migration to tablets and other mobile devices for the falloff. But many observers also believe Microsoft's Windows 8 operating system -which comes installed on most new PCs- has turned consumers off.

The company's new divisions include engineering, marketing and business development. Microsoft named veteran executive Julie Larson-Green head of its devices and studios engineering group, overseeing hardware development, games, music and entertainment. She had been promoted in November to lead all Windows software and hardware engineering after Steven Sinofsky, the president of its Windows and Windows Live operations, left the company shortly after the launch of Windows 8.
Terry Myerson will lead Microsoft's operating systems and engineering group, namely Windows. Qi Lu will head applications and services.

Ballmer stressed the company's focus on ‘one Microsoft’ in his memo. He said Microsoft will move forward operating as a cohesive company rather than a ‘collection of divisional strategies.’

‘Although we will deliver multiple devices and services to execute and monetize the strategy, the single core strategy will drive us to set shared goals for everything we do. We will see our product line holistically, not as a set of islands,’ Ballmer wrote.

The shake-up is being driven by competitive pressures as two of Microsoft's once much-smaller rivals, Apple and Google, have emerged as the technology trendsetters. In a world that increasingly revolves around mobile devices and Internet services, Microsoft has been scrambling to adapt to the upheaval. The company wants to ensure its relevance in the future while protecting the personal computer franchise that has always generated most of its revenue.
The changing of the guard has already been noted by Wall Street. Both Apple and Google boast market values higher than Microsoft, despite a surge in Microsoft's stock price during the past three months.





Outdated? Microsoft hopes to condense some of its more far flung arms into a more cohesive company dubbed by CEO Steve Ballmer 'One Microsoft' to compete with nimbler rivals Apple and Google



The reorganization could be Ballmer's attempt at placating shareholders with a dramatic overhaul that appears to borrow elements of Apple's and Google's set-ups. The winnowing of Microsoft's disparate divisions and Ballmer's rallying cry for ‘One Microsoft’ suggests the company is trying to make its products work together more seamlessly, much like Apple has been doing since the late Steve Jobs returned as that company's CEO in the late 1990s.

At the same time, Ballmer appears determined to eliminate bureaucracy in hopes of making Microsoft operate more like a nimble startup able to quickly innovate - a goal that Google CEO Larry Page set out to achieve when he took over leadership of that company two years ago.

Janney Capital Markets analyst Yun Kim said the reorganization helps align Microsoft's various divisions around its devices and services strategy, but he added that he's taking a ‘wait and see’ approach.

‘We continue to look for signs on how the company can leverage its success in the Xbox business to re-energize its current efforts in the tablet and smartphone markets,’ Kim wrote in a note to investors.

BGC Financial's Gillis noted that major reorganizations ‘can serve as a negative distraction for months before potentially offering benefits.’

Microsoft shares rose $1.01, or nearly 3 percent, to close at $35.71 on Thursday. The Redmond, Washington-based company's stock is up 32 percent since the start of the year, compared with a 17 percent increase in the Standard & Poor's 500 index.

More woes: In addition to its industry-wide woes, Microsoft's Windows 8 is widely seen as a flop and likely added to pressures leading up to the shakeup

Source

PC Sales may have slumped, but thats not due to "death of the PC", merely people don't want to keep buying news ones every five minutes, when software developers dictate.

My laptop is easily 3 years old, and I have no intention to change it. There is a chance that Windows 8 had an effect though, people thinking well I don't like the look of it, so I will stick with what I've got. Any completely alienating business users with an OS thats geared for touch.

I've said it so many times I'm even sick of hearing myself say it. Windows 8 UI Metro needed to be optional. They should have stuck with the standard UI for business users at least. Business users surely are the biggest customers, most replacing PC's after 3 years automatically. No of the new machines my company have bought have windows 8...

Oh and ridiulous pricing for the "surface" won't be helping.


DJ OD

[GTI]

The only bold new direction Microsoft could take is sacking Steve Ballmer, the most incompetent, gaff prone CEO the industry has ever seen.

[DJ OD]

The only bold new direction Microsoft could take is sacking Steve Ballmer, the most incompetent, gaff prone CEO the industry has ever seen.

You know what, I am inclined to agree. Was he already with the company when Gates was CEO? Like a mate, upgraded through the ranks? Surely if he was taken on from somewhere else, they should have fucked him off a long time ago.

It's his apparant arrogance that have led to a lot of their recent failings.

He looks like he should be in the Sopranos or something.


DJ OD

[Ashley]

Bill needs to come out of retirement and get his shit together.

[GTI]

The Top 10 Reasons Why Steve Ballmer has Failed as Microsoft’s CEO

Author: Steven Zolman

In talks with clients, industry analysts, company insiders, investors and others, everyone seems to agree that Steve Ballmer has done a terrible job as Microsoft’s CEO. Mr. Ballmer says he plans to retire in 2018, but with lukewarm support from the board, damaged credibility with partners, lost trust with employees, and constant outside criticism – it’s unclear if he can hold on that long.
While leading Microsoft through a time when some of the most innovative and spectacular technology advances occurred (e-readers, cloud computing, social networking, smartphones, tablets, and consumer stores just to name a few), Microsoft has failed to capture these and other major market opportunities, even though they were perhaps positioned better than any other company to do just that.

Years ago as disruptive upstarts, Microsoft pointed their collective finger at IBM and laughed, and yet has seemingly become what they once despised – protectors of the status quo. Microsoft also differentiated itself from Apple by being all about the software, yet with recent examples of the XBox and its new tablet “surface”, and not ruling out speculation of a Microsoft smartphone, Microsoft appears to have capitulated on that principle, and is starting to favor integrated solutions which combine the hardware and the software, and some would argue, following Apple and losing what is left of its soul in the process.
It’s been a rocky 12-year stretch for current Mr. Ballmer, and below, we will outline the Top 10 Reasons Why Steve Ballmer has Failed as Microsoft’s CEO:

1) Ballmer Has an Exceptionally Low Approval Rating. As of July 18, 2012, Microsoft’s CEO Steve Ballmer has a paltry 46% internal approval rating with *his own employees*. Compare that to other technology leaders and competitors like Tim Cook, CEO of Apple (97% Approval Rating), Mark Zuckerberg, CEO of Facebook (95% Approval Rating), Larry Page, CEO of Google (94% Approval Rating), Jeff Bezos, CEO of Amazon (83% Approval Rating), and even Larry Ellison, CEO of Oracle (81% Approval Rating), and it’s a wonder how he remains the CEO. Due to performance, and only lukewarm support from the board, employees have mainly lost confidence in Ballmer’s ability to execute, and therefore trust in Ballmer’s ability to lead.

2) Ballmer Has Led No Real Innovation. Microsoft isn’t innovating fast enough or aggressively enough. Office and Windows are clearly becoming less relevant. Once the business world’s de facto standard, both are under aggressive attack, and being replaced by cheap, easy-to-operate software, much of which is actually free as well as compatible. This is a big problem considering that, according to the Wall Street Journal, roughly 85% of Microsoft’s revenue (and an even higher percentage of profit) is coming from just two products: Windows and Office. This lack of innovation, partly due to Microsoft’s flawed company culture, has forced Microsoft to play defense by following faster, more innovative firms.

3) Ballmer Squandered Major Market Opportunities. What were the biggest market opportunities in the technology sector in the last dozen years? Just name them, and you will have a great list of the Ballmer’s missed opportunities. Search and online advertising, smart phones, tablets, social networking, mobile music, and e-readers are all great examples of where Microsoft was well positioned, but missed the major market opportunities. As a result, in many of those areas Microsoft is an industry laggard and is forced to play catch up, a situation in which Microsoft rarely excels.

4) Ballmer has Overseen Dismal Product Releases. In an effort to capture some of the major market opportunities listed above, Microsoft released products like the Kin to capture smartphone users. The Kin never caught on and was cancelled shortly after release. Microsoft also released the Zune music player, which waffled for years barely making any inroads against the iPod, and was just recently ‘discontinued’. While Microsoft Bing was (very) late to the game, it has also failed to gain any significant traction against Google, and is widely viewed as another in the long list of colossal Microsoft product failures. Windows Vista was probably the worst product release of all time for Microsoft, not just because it was a terrible product (and it was), but more so because it struck at the very core of Microsoft. It was released 5 years after XP, the longest span between major releases, and partly due to its dismal showing, was succeeded by Window 7 just 2 ½ years later. Windows is the lifeblood of Microsoft, and to have such a terrible product release like Vista dealt a serious blow to Microsoft’s (and Ballmer’s) credibility.

5) Ballmer has made horrible investments. In what can only be seen as an effort to attempt to compensate for Microsoft’s shortcomings in innovation, Ballmer has gambled with increasingly ill-conceived acquisitions.
a. aQuantive. Microsoft recently wrote off $6.2 billion of this $6.3 billion acquisition of this internet ad agency (initially designed to make aggressive inroads on Google’s dominance of online advertising after its 2007 acquisition of DoubleClick), making the investment nearly worthless, and demonstrating that Microsoft has failed to expand its online advertising business.
b. Skype. Microsoft paid $8.5 billion in cash for Skype. Apparently the fact that Skype was not profitable didn’t matter. Apparently, the fact that Skype is primarily used by consumers (and not businesses) to make ‘free’ computer calls to their friends and family didn’t matter either. Ballmer’s track record on acquisitions suggests to me that he often buys businesses that nobody else “must have”, making me question why a Cisco or Apple didn’t buy Skype.
c. Yammer. Microsoft recently paid $1.2 billion for Yammer. What is Yammer you might ask? Think of it as a private Facebook for Businesses. It’s probably too early to consider this a horrible investment, but many industry analysts characterize Yammer’s ascent as ‘mediocre’, and market analysts suggest that Yammer was valued at $600 million last fall when it raised $85 million in a venture offering. Microsoft may have purchased Yammer at its height due to recent infusion of capital from new investors.

6) Ballmer has accomplished nothing. What is Microsoft’s major contribution in the last 12 years? If you consider all the missed market opportunities, the failed investments and products Microsoft has killed (Zune, Kin, Windows CE, etc), Microsoft is basically the same company that Ballmer took over 12 years ago when former CEO and co-founder Bill Gates stepped aside. Microsoft offers Windows and Office, and is primarily driven by the PC. As the PC increasingly loses ground to tablets and smartphones, and as the continuing rise of iOS and Android diminishes the influence of Windows, so too does Microsoft’s influence diminish as a technology giant. If you consider Windows and Office the lifeblood of the company, the future isn’t very bright for Microsoft, but what’s even more disturbing is the absolute lack of concrete and meaningful accomplishments by its CEO over the last 12 years.

7) Ballmer has eroded shareholder value. Ballmer took over as CEO at Microsoft 12 years ago. At that time, Microsoft’s stock was trading at about $60/share. Microsoft’s stock now struggles to hover at around $30/share. If CEOs of public companies are ultimately measured on their equity returns to stockholders, how is this guy still employed? A 50% erosion of shareholder value in 12 years is what some people refer to when they speak about “the lost decade” at Microsoft, a moniker Ballmer vehemently disputes, but one he does little to defend against.

8) Ballmer Can’t Leverage His Cash. Despite making many horrible investments, despite significantly over-investing in R&D with really nothing much to show for it, Microsoft still has hoards of cash; over $58 billion in cash. With that much money in your war chest, one would think that Microsoft could simply capture new market opportunities by out-investing its competitors.
a. Over the last three years, Microsoft has spent $26 billion on research and development whereas Apple has spent just $5.54 billion. During that time, Apple has been able to produce products that are not only leaps and bounds ahead of anything Microsoft has come up with, they also carry with them a cultural phenomenon that demands a premium value.

9) Ballmer is a Maniac. If you’ve ever seen the guy do a presentation, you’ll know what I’m talking about. He turns into this crazed psycho, something like a cross between a Planet of the Apes extra, a solo mosh pit dancer, and Gallagher. Ballmer is infamous too for his temper, having reportedly had many obscenity laced screaming matches in his office with subordinates, even reportedly throwing a chair when Mark Lucovsky told him he was going to work for Google.
a. When compared to the competition, Ballmer looks like a circus show. Apple’s Steve Jobs was always cool, calm and collected when he did product release presentations. Oracle’s Larry Ellison is seemingly overflowing with confidence and swagger, always with a quippy one-liner that makes everyone laugh. Ballmer is just sweaty and disheveled and, well, a mess.

10) Ballmer can’t get Microsoft to compete (and win) with consumers. When you consider more consumer driven, and seemingly faster moving competitors, like Facebook, Google, Apple, and Amazon, Microsoft has gotten, is getting, and continues to get killed. Microsoft is still losing in search, barely able to dent Google’s market dominance. Despite a sizable head start using Yahoo’s core search technology, Bing has a mere 15% of the search market today. After many failed attempts, they are still not able to answer Apple’s dominance in consumer stores, music players, smartphones, and tablets. We will see how Microsoft’s new “Surface” does against iPad. Ballmer waited nearly four years to respond to the iPad and the “Surface” appears to be more ho-hum when it could have been jaw dropping. Microsoft continues to make stupid investments. Microsoft shelled out over $605 million for an 18% stake in the Barnes and Noble Nook e-reader and still has no real ability to compete with Amazon’s Kindle.

Source

[cyprus]

MS are still leaps and bounds ahead of anyone else in the Server OS market which if I'm not mistaken is a much bigger market than home users...

[muttleymacclad]

Windows 8 we all know about but the new having to pay £109 for Office or £79 per year is worse.

I've had people buy Windows 8 laptops and not liking them but actually hating them more when they realise they have to £109 (or £80 a year) ontop of what they already paid for a laptop which they don't really like.

I end up putting Open office on the machine eventually.

mml

[flumperino]

Barely mentioned these days, but MS also need to be wary of Linux. Ubuntu is really user-friendly these days, with programmes that you can install via the software centre, which is basically an app-store.

Plus Libre Office comes installed with the OS, and the functionality is similar to Excel/Word etc.

All free.

[macmilm]

One Microsoft... Xbox One... I see a pattern here !!

One Window? ;-)

[DJ OD]

It will be some bullshit like what M&S have done with it's contractors, one of which I work for...

http://www.cmlplc.com/about-us/one-team

***EDIT***

It doesn't work... Sure Tesco tried the same shit years ago and scrapped it.


DJ OD

[tombott]

MS are still leaps and bounds ahead of anyone else in the Server OS market which if I'm not mistaken is a much bigger market than home users...

Nonsense.
If you are serious about servers you won't be using M$.

[Goldberg]

Microsoft primarily make the Windows Operating system.

A few years ago we would all be upgrading our PC's on a very regular basis as it was needed in order to play the latest games, do more at the same time, be compatible with the latest bits of kit etc..
This would result in people buying new machines, most likely from a PC World/Currys/Dixons/Comet etc with a new copy of OEM Windows... Sure a lot of us would build our own, but the builders/modders would be a significantly less percentage than new purchases.

In that time more and more companies realised that they needed computers to be efficient, so they also purchased machines by the dozens and they came with Windows (more so than other OS).

So, what has now happened is this. PC's now are more than capable than doing anything the average user would ever need to do. New chips continue to come out, but can you always justify buying a new one when you know the current one is adequate? You just whack some more ram in or buy a new graphics card and you pretty much have a spanking new machine.
Companies who have computers don't need £2000 rigs to manage a spreadsheet, in fact most of them will find that Windows 98 and Office 2000 is still very good for what they need.

More people are on their mobiles/tablets also. The novelty of the PC has wore off, PC's are just no longer 'cool'.

This is why sales are falling, there is no need for the average punter to upgrade.

[GTI]

More people are on their mobiles/tablets also. The novelty of the PC has wore off, PC's are just no longer 'cool'.

I have all that, but still love my PC. With my 2 screens, good speakers, comfy leather chair, Flight yoke with throttle and peddles.. I feel like Capt Kirk

[Goldberg]

Haha, I don't have that luxury now... I have done in the past and that tower is sat in my Sisters bedroom back in 'Boro which she uses to check emails on...

Mac Mini as my 'server' and then I have an Atom Mini ITX box in a drawer which might come out to set up as a Mame box.. Might... That will be the same day the Raspberry Pi's come out..

[cyprus]

My PC definitely gets more play time than my games consoles and tablet. Probably due to the fact that I pirate EVERYTHING and it's just so much easier to do so from the PC.

[tombott]

Microsoft's biggest cash cow is Office, this is why you they release a new version every 2 - 3 years.
I reckon 95% of users use no more than 10% of the features in Office.
Where I work we are in the process of a PC replacement project.
The current 'rolling stock' is approaching 10 years old, they are P4 2.4ghz with 1.5 Gb of Ram. They run Windows XP with Office 2003, plus a number of other 3rd party apps (Philips SpeechExec, Oyez Forms etc). The PC's work well but are now getting to the stage where it's not cost effective to replace the IDE HD's or PSU's. They work perfectly, and at a decent enough pace. I imagine this sort of scenario is very common amongst small to medium sized businesses.
Now we are on the upgrade path, having Windows 8 forced upon us, but luckily found that Lenovo are shipping their PC's / laptop's with Windows 8.
However we will not be upgrading to Office 2013 (or whatever the fuck is now out).
It's utter pointless, Office 2000 and Office 2003 do everything we need as a firm. The user interface of Office 2007 > is not good for a business / secretarial enironment, much like the Metro UI is totally unsuitable for our needs.
Microsoft have lost their way big time, I stopped using their products back in 2004, and have never looked back.
In an ideal world we'd all move over to the ISO standard in interchangable document formats (ODF) and then we could all be platform independant. Well when small businesses stop developing their software in VB and using M$SQL but hey ho!
On a side note with Steam now running on Linux, and the up-coming arrival of the SteamBox I can see PC & M$ sales dropping even further.

[macmilm]

Haha, I don't have that luxury now... I have done in the past and that tower is sat in my Sisters bedroom back in 'Boro which she uses to check emails on...

Mac Mini as my 'server' and then I have an Atom Mini ITX box in a drawer which might come out to set up as a Mame box.. Might... That will be the same day the Raspberry Pi's come out..

Lost all respect for you now you have confessed to being one of Steve Jobs bitches (sheep) .... ;-)

[Goldberg]

Baaaaaaaaaaaaaaaah!