Home opinion-and-analysis Open Sauce Ballmer and the downward spiral of Microsoft

Two months ago, Steve Ballmer was described as the worst chief executive of a public company in the US. That compliment came from Forbes.

Now we have Vanity Fair describing the man, who has come to be known as Monkey Boy, as being responsible for a "lost decade" at the company, one in which it has progressively gone downhill due to policies adopted during that period.

The article is an interesting six-page (yes, you need patience) read; Microsoft is one of the most important companies worldwide given that its demise, rather than that of any other technology company, would impact on more people. It still controls most of the world's desktop PCs even though its fortunes are on a downward slide.

Thus we all have to bother about Microsoft, even us non-Windows users, those who are aware that company is a marketing unit first, and a technology firm second.

There are many reasons cited by the Vanity Fair writer Kurt Eichenwald for the current state of the company. The most telling fact in his story is this: the iPhone brings in more money than the whole of Microsoft. In the March quarter, the iPhone recorded sales of $US22.7 billion. For Microsoft Corporation, the figure was $17.4 billion.

In essence, Microsoft was unwilling over the last 12 years, since Ballmer took over as CEO, to give new technologies a gestation period without demanding that they prove their worth in dollar terms. Technology companies come up with a great many ideas, 90 per cent of which prove to be ghosts in the dark. The 10 per cent that do succeed make the big bucks.

But it all takes time. And, from Eichenwald's article, it looks like Ballmer is always in a big hurry - though he does not appear to have a clue about his destination.

Microsoft co-founder Bill Gates himself was more of a marketing man than a technology person; he was interested in the money and did not mind selling mediocre products that he convinced himself were the best. None of his minions ever dared to contradict him.

That culture has been taken to its logical extension by Ballmer. Some technologies like the e-book were looked at by Microsoft in 1998, well before other companies did; yet Gates did not have the patience to give developers their head to go off and create the right kind of hardware for such a product. No time was given for consolidation of the product because it did not look like a Windows product. It had to immediately have a business plan, a projected profit and loss statement.

This is a surprising development because it indicates that Microsoft did not learn from its own history of never getting anything right except on the third try.

And then, Eichenwald writes, there was the stack ranking system for evaluating its workers. When a given group was evaluated, there was a predetermined outcome. Some people had to get lower rankings than others, the evaluation wasn't objective. Which meant that some people just could not progress in career terms.

People, in short, became dispensable. If you were in good with your manager, you got ahead. The incompetent were encouraged by this, the competent (read less mainstream types) were discouraged.

Incompetent managers rank people based on input; competent managers look at output. The former class will deem the lack of a polite "good morning" as a negative; the latter does not object to being ignored if the employee who walks by ignoring them is one of the more productive ones in the department.

And as the ranks of incompetent ballooned, the bureaucracy got worse. Getting a product off a plan and into production took longer and longer. This would kill any technology company.



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Sam Varghese

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A professional journalist with decades of experience, Sam for nine years used DOS and then Windows, which led him to start experimenting with GNU/Linux in 1998. Since then he has written widely about the use of both free and open source software, and the people behind the code. His personal blog is titled Irregular Expression.






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