[latch]

That might be one of the mistakes, but it isn't the start of the problem. Tangibly, it's either United States v. Microsoft Corporation or Longhorn / Vista.

Intangibly, it's the attitude that permeated the company that said "we are right because we are Microsoft." There were few people you could talk to who'd think you had anything to offer someone who worked at Microsoft. You still see this today around products like Bing, IE, Xbox and Azure (I know the last 2 are popular, but the xbox has been a loss leader (and what it's leading too isn't clear yet) and Azure, like everyone else, is being crushed by Amazon (it really is, they spend a ton more money and get a fraction of the market (that's Bing-style success!))

I remember a story from the only time I was on their campus. An employee (I remember his name) was telling me how they wanted to make IIS great, so they hired an expert Apache consultant to learn more about apache. I'm listening, thinking "wow, this is great, they're really interested in bettering themselves." He then proudly went on to tell me how the Apache expert had an amusingly outdated understanding of IIS and by the end of the gig they'd convinced him of how great IIS was. They'd literally rather pay people to tell them how great they are, then admit they might have something to learn.

This perfectly encapsulated my time as a .NET developer. Lucky this was at the start of an MVP conference, so I took the hint, skipped most of the conference and visited Seattle (oh, but I did attend 1 talk where the speaker said Visual Studio would add a color picker and people applauded him).

[bambax]

This rings true. I had some relations with Microsoft last year and it's incredible how inward-looking they are. They spend most of the time telling you how great everything Microsoft-like is or will be, and don't seem to be well aware of the outside world.

They know there are things like iPhones and Android devices, but they appear truly baffled that anyone would want one. They think it's some kind of conspiratory rebellion, that the world uses those out of spite for Microsoft.

[HillRat]

Yeah, the coldest summer I ever spent in Seattle was hauling an iPad around meetings at Redmond. One L69 had this very pointed way of staring at the tablet, then at the big red clock, then back again. Keep in mind, I was part of a team coming in as a prospective customer. Just very weird.

I still have hopes for Nadella -- maybe just because I'm an old Sun warhorse -- but it's going to require a big rethink of MSFT, which right now is basically just a cash pile in search of a market. Changing the burn rate is just playing at the margins (layoffs are not a strategy), and if there's a big plan underlying the Mojang acquisition it's incomprehensible to me on both strategic and financial levels. Likewise, mass-producing Perceptive Pixel displays, while undoubtedly cool, is both fiendishly difficult (PP was basically a garage manufactory, so this is a software company figuring out how to scale up a product that has never been mass-produced) and not something that can push market dominance. Buying Nokia kept MSFT in the mobile space at a very high price, but really only purchased time and space, not a turnkey strategy.

Having said all that, it seems to me that there are two companies on the auction block right now that could give Redmond the germ of a strategy. Both Xamarin and Unity would fit very comfortably in what is arguably MSFT's wheelhouse -- software development tools -- while giving the company a way to seamlessly increase their mobile app ecosystem.

[ScottBurson]

> the coldest summer I ever spent in Seattle was hauling an iPad around meetings at Redmond

> [from the article] “[Ballmer's] view was that anyone in the company who used the iPhone was a traitor,” says this person. “His dad worked for Ford, and that meant you had Ford in your garage.”

This attitude drives me nuts. The best thing Ford and GM could have done in 1985 would have been to buy Civics and Corollas for 10% of their employees so they could see for themselves what was so good about them. But no, instead they had this adolescent "be true to your school" thing going on.

The same clearly applies to Microsoft. I hope Nadella gets that business is not a repeat of high school.

[throwawaymsft]

Beautifully put. Used to work there and the inner navel gazing was painful. People assumed loyalty meant blindly ignoring competing products under the guise of "dogfooding". They would dismiss competitive products almost in disbelief that people would use them (without ever have tried!).

[redler]

With most companies, the center of gravity is obviously on the customer side. The customer, and the market, is ultimately the boss. With the customer lies the product/market fit, the fickle and life-giving revenue stream, the demand that drives features and product and ultimately existential corporate strategy.

But when you achieve the dominance and size and cash hoard of Microsoft, that center of gravity shifts -- the company becomes so powerful and massive that it generates its own gravity. There is the luxury of a cushion so large that it recedes to infinity, distorting strategy to the point where the necessity of its convergence with the customer may no longer be explicitly contemplated. The wooing of the customer is supplanted by an eternal dance of indoctrinated partners in the ecosystem ballroom. The objective financial success of the arrangement trumpets it to become ever more like itself, unfettered and unfed by the market forces and demand that anneal smaller and more nimble competitors.

And so, numbly disconnected from the healthy signals of the natural customer-centric gravitational pull, this dominant entity finally reaches the ballistic apex of its trajectory, unpowered by the thrust of customer focus, and begins its gradual descent. Maybe the law of large numbers, with respect to enterprise growth, is really more of an inward-looking organizational behavior problem than one of stock market psychology.

[curiousDog]

Just curious, do you work for Microsoft? Last I heard, Azure was doing pretty well, considering Office 365, TFS and a host of other internal services are hosted on it. They seem to be the most formidable competition to AWS right now (and I believe that, I tried all GCE, AWS and Azure over the weekend and while AWS was the best, Azure was a close second while GCE was just slow and buggy).

[latch]

No, I don't. Also, my view of Azure pretty much comes from experience with it long ago and a year-old Gartner analysis [1]. I can easily accept that Azure is very different than it used to be. I can also easily accept that it's doing better against AWS than anyone else.

But I'd need hard numbers to refute that Gartner analysis. Spending 50% more than your competitor and having a market share less than 1/5 (probably a lot more, since the 1/5 is 15 providers combined), is something I struggle to call "success". I'd be less harsh if this didn't fit a pattern. And I know spending more and having less is the price that challengers face, but again, not being an incumbent (and failing to mount a real challenge) is a pattern we've seen before.

[1] http://readwrite.com/2013/08/21/gartner-aws-now-5-times-the-...

[curiousDog]

Ah, I believe this is what I came across and is more recent: http://www.fool.com/investing/general/2014/06/05/heres-why-m...

[jsolson]

I'd be curious to know what issues you ran into with GCE. I work on the team, and external reports of performance or stability issues are helpful.

[trentnelson]

IIS has a fundamentally technically superior architecture to Apache, thanks to Windows having a technically superior architecture for doing high performance multi-threaded asynchronous I/O (overlapped I/O and I/O completion ports).