Photo: Ellis Hamburger, Business Insider
Microsoft is under fire again thanks to a big Vanity Fair story titled “Microsoft’s Lost Decade.”The primary target of Vanity Fair’s story is Steve Ballmer. Reporter Kurt Eichenwald says, “Ballmer’s key business philosophy for Microsoft was so antiquated as to be irrelevant. The Microsoft CEO used to proclaim that it would not be first to cool, but would be first to profit — in other words, it would be the first to make money by selling its own version of new technologies.”
This strategy worked for Microsoft when in the eighties and nineties. It didn’t invent graphical interfaces, but Windows eventually became the dominant operating system. It didn’t invent productivity software like Office, but eventually Office became dominant. It wasn’t the first with a web browser, but ultimately Internet Explorer won.
Last decade it tried the same game plan, but it no longer worked. The Zune didn’t beat the iPod. Bing hasn’t beaten Google. Windows Phones are in last place. And odds are the Surface won’t beat the iPad.
As a result, Microsoft missed the major trends in personal computing while Ballmer has been CEO. That’s why Vanity Fair calls it Microsoft’s “Lost Decade.”
Forbes asked Ballmer how he felt about the accusation. Here’s what he said:
It’s not been a lost decade for me! I mean, look, ultimately progress is measured sort of through the eyes of our users. More than our investors or our P&L or anything else, it’s through the eyes of our users. We have 1.3 billion people using PCs today. There was a time in the ’90s when we were sure there would never be 100 million PCs sold a year. Now there will be 375 million sold this year alone. So, is it a lost decade?
The stock market has always had its own meter. Sometimes it’s ahead of itself, sometimes it’s behind itself. A broken watch is right twice a day. Ultimately all Microsoft can do is focus in on doing exciting products, which with Windows 8, with Office 15, with Surface, with the new PPI technology, with what we’re doing with Skype, where we’re going with Bing and Windows Phone and Xbox. We think we’ve got the most exciting stuff we’ve ever had. Number two is how do we do from a profitability standpoint. If we deliver exciting products and we make more money, eventually that will translate into rewards for our shareholders.
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