Tag: microsoft

Deconstructing Satya. Episode II. The Empire Strikes Back.

Last week before the news broke, I warned Microsoft employees, all of them, to “get to work on your resume.” Change was coming, major change, and that always always always begins with a bloodletting.

Indeed, as others were decrying the word count of Satya Nadella’s “bold ambition” manifesto — signifying nothing, given it took Steve Jobs 1700 words to tell us he wasn’t going to use Flash on the iPhone — I read each word, every sentence. Nadella’s near-term intentions were obvious.

What was not clear, however, not until now, is how deeply divisive the Nokia purchase remains within the corridors of Microsoft’s ruling elite.  

This Deal Is Getting Worse All The Time

Despite the corporate-speak, despite the strategic shift toward “productivity and platforms,” Nadella’s manifesto message last week was undeniable. Job cuts. Thus, I wrote:

“Big layoffs by Christmas.”

But Nadella kept hinting, so I followed that with…

“Big layoffs by Thanksgiving.”

But Nadella hinted further, so I followed that with…

“Big layoffs by Labor Day.” 

In fact, the big cuts came only a few days later. Points for swift action, I suppose.

Nadella’s willingness to act fast, to re-make Microsoft, hack away at the extraneous and transform the company into “the productivity and platform company for the mobile-first and cloud-first world” appears to be exactly what the company needs.

But when you gut a $7.2 billion acquisition, which the company only closed on this past April, and fire 18,000 people, then you haven’t leapt from a burning platform, you’ve set the platform ablaze. There is no going back, no do-overs for Mr. Nadella. He is about to set the company on a ten year course, possibly longer, and though Microsoft possesses a rather stunning array of assets, what’s most stunning is the company still has virtually zero response to the iPhone, the iPad and Android. In 2014.

Competing in a mobile-first, cloud-first world — with no mobile device the world actually wants — seems less like corporate bumbling at this point and more like French royalty certain the barbarians will forever remain outside the gate.

Sadly, more than 18,000 will soon join those barbarians.

That Was Never A Condition Of Our Agreement

Nadella’s follow-up email to staff announcing major cuts is mercifully shorter than his bold ambition manifesto, though similarly riddled with the kind of corporate-speak analysts with expense accounts use on marketing managers with a too large budget.

My thoughts on Nadella’s latest message are below, in bold italic.

From: Satya Nadella
To: All Employees
Date: July 17, 2014 at 5:00 a.m. PT

5am! Leading is hard. 

Subject: Starting to Evolve Our Organization and Culture

“Starting to Evolve.” Catch that? This is just the start.

Last week in my email to you I synthesized our strategic direction as a productivity and platform company.

And now I’m gonna need those TPS reports.

Having a clear focus is the start of the journey, not the end. The more difficult steps are creating the organization and culture to bring our ambitions to life. Today I’ll share more on how we’re moving forward. On July 22, during our public earnings call, I’ll share further specifics on where we are focusing our innovation investments.

This reads like a draft memo from the assistant to the regional manager. No excuses here. 

The first step to building the right organization for our ambitions is to realign our workforce. With this in mind, we will begin to reduce the size of our overall workforce by up to 18,000 jobs in the next year.

Nokia is dead. Godspeed all you Nokians. 

Of that total, our work toward synergies and strategic alignment on Nokia Devices and Services is expected to account for about 12,500 jobs, comprising both professional and factory workers.

12,500

In his “bold ambition” email to employees, only days before this, Nadella stated “first party hardware” would form part of the core Microsoft vision. He said this four times! 

    1. Our cloud OS infrastructure, device OS and first-party hardware will all build around this core focus and enable broad ecosystems.
    2. Our Windows device OS and first-party hardware will set the bar for productivity experiences.
    3. Our first-party devices will light up digital work and life.
    4. We will build first-party hardware to stimulate more demand for the entire Windows ecosystem.

[emphasis added]

Now, days later, he guts Nokia, kills off the very popular Asha hybrid phone line and halts development of the AOSP-led Nokia X.  

I suspect Mr. Nadella believes the smartphone wars are lost, despite whatever else the company may tell us. They are no longer worth fighting for. 

Prediction: Microsoft will focus its mobile hardware efforts not on Windows Phone but on Surface, on new mobile gaming devices, and new mobile “productivity” devices; anything and everything that might help them uncover that next great mobile computing inflection point. Smartphones are lost to them. 

We are moving now to start reducing the first 13,000 positions, and the vast majority of employees whose jobs will be eliminated will be notified over the next six months.

13,000 from the 18,000? 12,500 from Nokia plus 500 from elsewhere? Where does this number come from?

Nadella needs to be straightforward here. So far, he’s failed. 

It’s important to note that while we are eliminating roles in some areas, we are adding roles in certain other strategic areas.

Nowhere near 18,000, however. Thus, it would be best if not said at all.

My promise to you is that we will go through this process in the most thoughtful and transparent way possible.

Your own email appears poorly thought out and lacking transparency!

We will offer severance to all employees impacted by these changes, as well as job transition help in many locations, and everyone can expect to be treated with the respect they deserve for their contributions to this company.

Forget them. Move forward. 

Later today your Senior Leadership Team member will share more on what to expect in your organization.

How bureaucratic is this company?

Our workforce reductions are mainly driven by two outcomes: work simplification as well as Nokia Devices and Services integration synergies and strategic alignment.

That’s three, maybe four outcomes, not two. Can Nadella really not trust anyone to review and edit his emails? 

Fact: Nearly every single Nokia device over the next several years will be replaced by an Android, perhaps a few by iPhones, not Windows Phone (in any form).  

My prediction that the remaining “Nokia” employees will focus mostly on new mobile productivity devices and new mobile gaming devices, not smartphones, stands. Nadella just isn’t ready to tell us this, not yet. Perhaps, he’s not come to terms with it himself. 

First, we will simplify the way we work to drive greater accountability, become more agile and move faster.

Perhaps given your size, strengths and history, being inflexible and moving slower, and with less accountability (e.g. investor input), would be the best strategy?

Yes, I am serious. Agility and speed are never the strengths of behemoths. 

Perhaps You Think You Are Being Treated Unfairly

As part of modernizing our engineering processes the expectations we have from each of our disciplines will change. In addition, we plan to have fewer layers of management, both top down and sideways, to accelerate the flow of information and decision making. This includes flattening organizations and increasing the span of control of people managers.

Sideways layers of management? Sideways layers!  

In addition, our business processes and support models will be more lean and efficient with greater trust between teams. The overall result of these changes will be more productive, impactful teams across Microsoft.

Question: How dysfunctional is this company?

These changes will affect both the Microsoft workforce and our vendor staff. Each organization is starting at different points and moving at different paces.

Answer: Appreciably dysfunctional. 

Second, we are working to integrate the Nokia Devices and Services teams into Microsoft. We will realize the synergies to which we committed when we announced the acquisition last September. The first-party phone portfolio will align to Microsoft’s strategic direction. To win in the higher price tiers, we will focus on breakthrough innovation that expresses and enlivens Microsoft’s digital work and digital life experiences. In addition, we plan to shift select Nokia X product designs to become Lumia products running Windows. This builds on our success in the affordable smartphone space and aligns with our focus on Windows Universal Apps.

Integrate Nokia into Microsoft? Realize the synergies committed to last September? Align the first party phone portfolio to Microsoft’s strategic direction? To win the higher price tiers? Which builds on Microsoft’s success in the affordable smartphone space?

We can’t possibly divine what these words mean because Nadella does not know the way forward in mobile. That’s a problem. 

Making these decisions to change are difficult, but necessary. I want to invite you to my monthly Q&A event tomorrow. I hope you can join, and I hope you will ask any question that’s on your mind. Thank you for your support as we start to take steps forward in evolving our organization and culture.

Satya

It Is Your Destiny

Last week, I praised Nadella for his bold, borderline revolutionary statements. A few days later he morphs into a parody of his predecessor.

I give him a pass. This time.

When it comes to massive corporate downsizing, we always say there’s a right way to do these things but there’s never a right way to do these things. That said, it seems clear Nadella hasn’t yet figured out exactly what Microsoft should do in mobile and that’s a problem for which no one will give him a pass.

The Smartphone Is Not Merging With the PC

Behold the pot, bathtub and swimming pool. They all contain water. They are the same. ~ Horace Dediu (@asymco)

On July 9, 2014, Walt Mossberg published an article entitled: “How the PC Is Merging With the Smartphone.”

(I)n the past month, it has become clear that a serious effort has begun to merge the smartphone and the PC. ~ Walt Mossberg

To “merge” means:

    merge |mərj| verb “combine or cause to combine to form a single entity”

[pullquote]Writing is easy. All you have to do is cross out the wrong words. ~ Mark Twain[/pullquote]

I respectfully, but vehemently, disagree with Mr. Mossberg’s observation that the smartphone and the PC are merging. Not only aren’t they merging but they — and their underlying design philosophies — are diverging.

Starting Far Apart

Apple, Google and Microsoft are three of the largest players in personal computing. However, their design philosophies start from very different places.

Apple, Google, and Microsoft each offer all three things: devices, services, and platforms. But each has a different starting point. With Apple it’s the device. With Microsoft it’s the platform. With Google it’s the services. ~ John Gruber

Apple, Google and Microsoft not only start from different places, they are also headed in three very different directions.

Moving Further Apart

Google wants you signed into Google services on all your devices, from phones to tablets to PCs. ~ John Gruber

Google may well be offering one experience at the services layer, but that is not the same as merging the smartphone and the PC and it is not at all the same as what Apple and Microsoft are doing.

Microsoft wants you to run Windows on all your devices, from phones to tablets to PCs. ~ John Gruber

Microsoft may well WANT to run a single Windows operating system on all of your devices, but so far their efforts to create one operating system that runs on phones, tablets, and desktops has actually caused Windows to splinter into three operating systems: one for the phone (Windows Phone 8); one for the tablet (Metro) and one for the desktop (Windows 8). Calling them all by one name does not make them all one thing.

[pullquote]There is nothing so useless as doing efficiently that which should not be done at all. ~ Peter Drucker[/pullquote]

Further, while Microsoft may well be attempting to merge the tablet and the PC at the hardware layer 1) that is not the same as merging the smartphone and the PC; 2) the paltry sales numbers for their 2-in-1 devices weigh against, not for, the proposition that merging is the way of the future; and 3) Microsoft’s efforts are not at all the same as what Apple and Google are doing.

Apple wants you to buy iPhones, iPads, and Macs. ~ John Gruber

Apple is not merging anywhere — not at the services layer, not at the operating system layer, and most especially not at the hardware layer.

(Apple chief of design, Jony) Ive demands that the hardware be true to itself—its purpose, its materials, the way it looks, and the way it feels. ~ John Siracusa

Not only aren’t iPhones and Macs merging, but Apple’s continuity features allow Apple to draw bright lines between their phone, their tablet and and their desktop offerings.

Apple’s vision is about harnessing the uniqueness of each device rather than converging them ~ Ben Bajarin (@BenBajarin)

Further, what Apple is doing is not at all the same as what Google and Microsoft are doing.

Whatever This Is, It’s Not Merging

  1. A gardener uses a trowel when he gardens and a shovel when he digs. He doesn’t think, “Hey, the trowel and the shovel are merging because they both dig holes!”
  2. A homeowner uses a watering can to water the flowers in her home and a hose to water the flowers on her porch. She doesn’t think, “Hey, the watering can and the hose are merging because they both water flowers!”
  3. A restaurant employee washes the floor with water from a bucket and washes dishes with water in a sink. He doesn’t think, “Hey, the bucket and the sink are merging because they both do washing!”

Semantics

The beginning of wisdom is a definition of terms. ~ Socrates

Is this just a question of semantics? Well, even if it was, semantics matters. Semantics is: “The branch of linguistics and logic concerned with meaning.”

A definition is the enclosing a wilderness of idea within a wall of words. ~ Samuel Butler

However, this isn’t just semantics. This is a distinction with a difference.

The difference between the right word and the almost right word is the difference between lightning and a lightning bug. ~ Mark Twain

Nothing Is Merging

[pullquote]You cannot step into the same river twice. ~ Heraclitus[/pullquote]

Apple is improving the workflow between its devices. Workflow is, by definition, a flow. Saying that workflow is “merging” is like saying that a river is a lake. The improved workflow between Apple’s devices allows those devices to be true to themselves and to grow ever more distinct, one from the other. At Apple, the smartphone and the PC are not merging.

Google is improving its services. It wants you to think of phones, tablets and PCs as portals used to peer into the Cloud — the Google Cloud that is — where all your content and apps, reside. Google may not care which portal you use, but they have no interest in merging those portals. At Google, the smartphone and the PC are not merging.

[pullquote]Facts do not cease to exist because they are ignored. ~ Aldous Huxley[/pullquote]

Microsoft is improving nothing. They are forcing the merger of the tablet and the PC because their Windows’ business model demands it. They have not learned — or more likely, they refuse to acknowledge — that the mouse driven user input suitable for the desktop is unsuitable for, and incompatible with, the touch driven user input of the tablet. At Microsoft, the smartphone and the PC are not merging.

AxeBlade
Caption: Leaked image of the Microsoft Windows 8.1 Pro Surface Axe/Razor 2-in-1 Hybrid Shaving Combo Device.

Diverging

Microsoft’s muddled personal computing design is going nowhere, but the design philosophies of Google and Apple are unique and they are rapidly diverging, rather than merging.

Normally, in mature markets, products grow closer and closer to one another as each competitor borrows the best ideas of the other and incorporates them into their own product or service. That has happened with Mac and Windows over the past thirty years and with iOS, Android and Windows Phone over the past seven years. However, Apple and Google are now rapidly moving in opposite directions.

Apple is pushing all of the value down into their devices. Google is pushing all the value up into their services. This is going to have dramatic, long-term, consequences.

Google will almost certainly excel wherever machine learning matters most: maps, voice translation, predictive services and who knows what else.

Apple will almost certainly excel at any task that requires rich applications and with any entity or institution (education, business, government) that inhabits the “long tail” of app creation (i.e., specialized or proprietary apps) and demands robust security and privacy.

Suggesting that the smartphone is merging with the PC obscures this reality. It implies that the overall approaches of Apple, Google and Microsoft are drawing closer together when, in fact, they are not.

Henry Ford said:

The competitor to be feared is one who never bothers about you at all, but goes on making his own business better all the time.

I get the feeling that both Google AND Apple fit into this category of business. Each feels that they know best and each is moving on without much regard for the what the other is doing. Focusing on merging is a distraction. What we need to be focusing on is what is emerging from these two great titans of tech.

Woof

A dog goes into a newspaper to place an advertisement.

“What do you want your ad to say?” asks the newspaper clerk.

“Woof Woof Woof. Woof Woof Woof. Woof Woof Woof,” says the dog.

The newspaper clerk adds up the words and says, “Okay, that’s nine words. We charge the same for up to ten words. You could add another ‘woof’ for no extra money.”

The dog says, “But that wouldn’t make any sense.”

Walt Mossberg is not just a good tech writer, he’s one of the very best there is. However, on this one occasion, I believe he added one “woof” too many.

Deconstructing Satya

Last week, Microsoft CEO Satya Nadella laid bare his vision for the tech giant. It is borderline revolutionary.

From its early days, Microsoft has focused on using software and computing to empower people and businesses around the world. Nadella still clings to this laudable vision. However, he has now fundamentally flipped the seat of power, even as he fears to let go of all Microsoft has amassed over the decades.

Just as America’s Constitution enumerated inalienable rights all its people are endowed with, forever empowering even a single individual against the full force of the government, in a similar manner Nadella has positioned the user above all else.

This is radical. For Microsoft, it’s nearly unthinkable.

Nadella does not simply place emphasis on users instead of PCs, on productivity instead of Windows. He changes the equation of the software behemoth going forward.  This could set Microsoft apart from all others.

The most user-friendly tech company in the world, Apple, emphasizes ecosystem over device, lock-in over empowerment. Google takes from its own users when they are not looking. Amazon confounds its customers with Prime service, making it nearly impossible to ever fully know the actual price — or value — of any single item.

Nadella is positioning Microsoft on the side of the user. Security, privacy, productivity, empowerment. I believe this will have a profound and lasting impact on the company and its customers forever. This call to great and permanent and never ending change is buried inside Nadella’s 3,500 word memo to Microsoft staff. I understand if you choose not to read (any/all of) it.

My analysis of his manifesto is below, in bold italic.

Nadella word cloud

Satya

From: Satya Nadella

To: All Employees

Date: July 10, 2014 at 6:00 a.m. PT

Subject: Starting FY15 – Bold Ambition & Our Core

Team,
As we start FY15, I want to thank you for all of your contributions this past year. I’m proud of what we collectively achieved even as we drove significant changes in our business and organization. It’s energizing to feel the momentum and enthusiasm building.

This is all wrong. Platitudes, corporate management speak and 3,500 words are absolutely the wrong way to begin a discussion about “significant changes” and “enthusiasm building.” That within the first paragraph we are twice reminded FY15 has commenced, all I can think is Nadella is too steeped in the pre-existing conditions of Microsoft to achieve anything great, let alone revolutionary. 

The day I took on my new role I said that our industry does not respect tradition – it only respects innovation. I also said that in order to accelerate our innovation, we must rediscover our soul – our unique core. We must all understand and embrace what only Microsoft can contribute to the world and how we can once again change the world. I consider the job before us to be bolder and more ambitious than anything we have ever done.

“What only Microsoft” can do should be plastered across every meeting room in Redmond. Nadella mimics Tim Cook’s penchant for “change the world” pablum but to be fair, very few companies really can. Microsoft is one. Kudos to Nadella for not shying away from this. 

We’ll use the month of July to have a dialogue about this bold ambition and our core focus.

The very corporate nonsense-speak that turned me into a freelancer.

Today I want to synthesize the strategic direction and massive opportunity I’ve been discussing for the past few months and the fundamental cultural changes required to deliver on it.

Means nothing.

On July 22, we’ll announce our earnings results for the past quarter and I’ll say more then on what we are doing in FY15 to focus on our core. Over the course of July, the Senior Leadership Team and I will share more on the engineering and organization changes we believe are needed. Then, at MGX and //oneweek, we’ll come together to build on all of this, learn from each other and put our ideas into action.

Rigid, bureaucratic and enslaved to artificial dates. 

We live in a mobile-first and cloud-first world. Computing is ubiquitous and experiences span devices and exhibit ambient intelligence. Billions of sensors, screens and devices – in conference rooms, living rooms, cities, cars, phones, PCs – are forming a vast network and streams of data that simply disappear into the background of our lives. This computing power will digitize nearly everything around us and will derive insights from all of the data being generated by interactions among people and between people and machines. We are moving from a world where computing power was scarce to a place where it now is almost limitless, and where the true scarce commodity is increasingly human attention.

This is brilliant. Better, it launches the long, painful slog of fully re-positioning Microsoft away from PCs, away from Windows, away from Office, away from its past, which now binds it, and onto a future of screens, data and insight.

The only company at present that can challenge a fully engaged Microsoft in this is Google. 

In this new world, there will soon be more than 3 billion people with Internet-connected devices – from a farmer in a remote part of the world with a smartphone, to a professional power user with multiple devices powered by cloud service-based apps spanning work and life.

Microsoft will be the anti-Apple, delivering services and value to all, not just the world’s 10%. 

The combination of many devices and cloud services used for generating and consuming data creates a unique opportunity for us. Our customers and society expect us to maximize the value of technology while also preserving the values that are timeless.

Means nothing. Wasting employee’s time.

We will create more natural human-computing interfaces that empower all individuals. We will develop and deploy secure platforms and infrastructure that enable all industries. And we will strike the right balance between using data to create intelligent, personal experiences, while maintaining security and privacy. By doing all of this, we will have the broadest impact. 

Preach! Only Google can challenge Microsoft in delivering services to all. But, only Microsoft can deliver these services and effectively protect individual privacy. 

Mobile First Cloud First

Microsoft was founded on the belief that technology creates opportunities for people and organizations to express and achieve their dreams by putting a PC on every desk and in every home.

Microsoft’s business practices rightly angered many of us. But their efforts also helped deliver us directly to this future. We should be thankful for that. 

More recently, we have described ourselves as a “devices and services” company. While the devices and services description was helpful in starting our transformation, we now need to hone in on our unique strategy.

I am not Steve Ballmer.

At our core, Microsoft is the productivity and platform company for the mobile-first and cloud-first world. We will reinvent productivity to empower every person and every organization on the planet to do more and achieve more.

Wow. This is a truly revolutionary message and within Microsoft’s skill set to make happen. I will be happy if Microsoft simply comes close to this vision, as it is glorious: “empower every person and every organization on the planet to do more and achieve more.” 

We think about productivity for people, teams and the business processes of entire organizations as one interconnected digital substrate. We also think about interconnected platforms for individuals, IT and developers. This comprehensive view enables us to solve the more complex, nuanced and real-world day-to-day challenges in an increasingly digital world. It also opens the door to massive growth opportunity – technology spend as a total percentage of GDP will grow with the digitization of nearly everything in life and work.

I think this is wrong. Backwards, in fact. It’s not about an “interconnected digital substrate,” a nonsense phrase, but about building a product that truly empowers that one person. If it empowers one, it will empower millions. Apple has taught us this. Microsoft has yet to learn this. 

We have a rich heritage and a unique capability around building productivity experiences and platforms. We help people get stuff done. Stuff like term papers, recipes and budgets. Stuff like chatting with friends and family across the world. Stuff like painting, writing poetry and expressing ideas. Stuff like running a Formula 1 racing team or keeping an entire city running. Stuff like building a game with a spark of your imagination and remixing it with the world. And stuff like helping build a vaccine for HIV, and giving a voice to the voiceless. This is an incredible foundation from which to grow. 

Nice reminder for the troops and the public. 

At our core, Microsoft is the productivity and platform company for the mobile-first and cloud-first world. We will reinvent productivity to empower every person and every organization on the planet to do more and achieve more.

Repeating this is not productive.

Microsoft has a unique ability to harmonize the world’s devices, apps, docs, data and social networks in digital work and life experiences so that people are at the center and are empowered to do more and achieve more with what is becoming an increasingly scarce commodity – time!

It took far too much time to get here, but Nadella has shrewdly set in motion not only Microsoft’s mission, but its marketing message as well, which is almost as important.

Microsoft will save us time. 

Productivity for us goes well beyond documents, spreadsheets and slides. We will reinvent productivity for people who are swimming in a growing sea of devices, apps, data and social networks. We will build the solutions that address the productivity needs of groups and entire organizations as well as individuals by putting them at the center of their computing experiences. We will shift the meaning of productivity beyond solely producing something to include empowering people with new insights. We will build tools to be more predictive, personal and helpful.

The deconstruction of Word, Excel et al shall commence starting now. 

We will enable organizations to move from automated business processes to intelligent business processes. Every experience Microsoft builds will understand the rich context of an individual at work and in life to help them organize and accomplish things with ease.

This will be tricky. Even in a data driven, always-on world, people vigilantly maintain different lives: work, home, and those known only between the person and her browser history. Nadella wants to create a whole where I believe people want to maintain separate, if porous, fiefdoms. 

Productive people and organizations are the primary drivers of individual fulfilment and economic growth and we need to do everything to make the experiences and platforms that enable this ubiquitous.

I love how Nadella and Microsoft are the anti-Apple. Steve Jobs was famous for talking about computers and creativity whereas Microsoft is now focused on computers and productivity. Both are worthy visions: Apple is more likely to garner passionate adherents, Microsoft is more likely to lift up all boats. 

Users Not Consumers

We will think of every user as a potential “dual user” – people who will use technology for their work or school and also deeply use it in their personal digital life. They strive to get stuff done with technology, demanding new cloud-powered applications, extensively using time and calendar management, advanced expression, collaboration, meeting, search and research services, all with better security and privacy control.

Privacy, privacy, security.

Wise of Microsoft to attack Google’s Achilles Heel. Obviously, we embrace the many benefits that accrue as our data, all of it, flows between many clouds and many screens.

We will want to know, however, that some data will remain forever cordoned off to all but exactly whom we wish and when. Only Microsoft can deliver this — Google’s business model is almost in direct opposition to it and Apple refuses to embrace Microsoft scale.

Warning, Mr. Nadella: do not abdicate user privacy. Do not screw this up. 

Microsoft will push into all corners of the globe to empower every individual as a dual user – starting with the soon to be 3 billion people with Internet-connected devices. And we will do so with a platform mindset. Developers and partners will thrive by creatively extending Microsoft experiences for every individual and business on the planet.

None of this sounds even remotely appealing. Platforms empower the maker, not the user. That’s why every company in tech talks platforms.

“Microsoft experiences” sounds no better than, say, a visit to the dentist. 

Across Microsoft, we will obsess over reinventing productivity and platforms. We will relentlessly focus on and build great digital work and life experiences with specific focus on dual use.

Nadella has hitched his future to a belief in “dual use.” That is, our work and home lives meld into one interconnected digital sphere. I think this is wrong and will be his undoing.

Microsoft Everywhere

Our cloud OS infrastructure, device OS and first-party hardware will all build around this core focus and enable broad ecosystems. Microsoft will light up digital work and life experiences in the most personal, intelligent, open and empowering ways.

Key words: “first-party hardware.” Surface, Lumia, Xbox — these are only the start of Nadella’s hardware ambitions. Ballmer must be pleased. 

Developers and partners will thrive by creatively extending Microsoft experiences for every individual and business on the planet.

Requisite acknowledgement of developers and partners now out of the way… 

We will deliver digital work and life experiences that are reinvented for the mobile-first and cloud-first world. First and foremost, these experiences will shine for productivity. As a result, people will meet and collaborate more easily and effectively. They will express ideas in new ways. They will experience the magic of ambient intelligence with Delve and Cortana.

This is the future we expect and I am looking forward to Microsoft’s implementation of “ambient intelligence.”

It’s easy to believe Microsoft will be unable to match Google Now and other iterations of Google’s ambient intelligence capabilities. It’s nearly as easy to believe Microsoft won’t be able to deliver a service as simple to use as Apple’s Siri. These are legitimate concerns. That said, Bing, Yammer, Office, Exchange, Skype, Lumia, and the reach of Microsoft’s cloud infrastructure are critical resources to be tapped, and will help guide users in all facets of their digital life. 

Moreover, for the shareholders, ambient intelligence will be a business revolution, and in this, Microsoft is far ahead of the pack. 

They will ask questions naturally and have them answered with insight from Power Q&A. They will conquer language barriers and change the world with Skype translator. Apps will be designed as dual use with the intelligence to partition data between work and life and with the respect for each person’s privacy choices. All of these apps will be explicitly engineered so anybody can find, try and then buy them in friction-free ways.  They will be built for other ecosystems so as people move from device to device, so will their content and the richness of their services – it’s one way we keep people, not devices, at the center.

I hope you succeed at this. Right now, these remain mere words.

This transformation is well underway as we moved Office from the desktop to a service with Office 365 and our solutions from individual productivity to group productivity tools – both to the delight of our customers.

Please ban the use of the word ‘delight’.

We’ll push forward and evolve the world-class productivity, collaboration and business process tools people know and love today, including Skype, OneDrive, OneNote, Outlook, Word, Excel, PowerPoint, Bing and Dynamics. 

The next revolution will be in the office, not in the home. In this, new Microsoft still acts like old Microsoft. 

Increasingly, all of these experiences will become more connected to each other, more contextual and more personal. For example, today the Cortana app on my Windows Phone merges data from highway sensors and my own calendar and simply reminds me to leave work to make it to my daughter’s recital on time. In the future, it will be even more intelligent as a personal assistant who takes notes, books meetings and understands if my question about the weather is to determine my clothes for the day or is intended to start a complex task like booking a family vacation. Microsoft experiences will be unique as they will reason over information from work and life and keep a user in control of their privacy.

Dear tech bloggers: the ‘Microsoft is doomed’ stories are just stupid. 

The Cloud Everywhere

Our cloud OS represents the largest opportunity given we are working from a position of strength. With Azure, we are one of very few cloud vendors that runs at hyper-scale. The combination of Azure and Windows Server makes us the only company with a public, private and hybrid cloud platform that can power modern business. We will transform the return on IT investment by enabling enterprises to combine their existing datacenters and our public cloud into one cohesive infrastructure backplane. We will enable our customers to use our Cloud OS to accelerate their businesses and power all of their data and application needs. 

The cloud will be where nearly all our data and all the intelligence connected to that data resides. But not all. We will use our mobile devices to store and share data and content which we dare not send via the cloud.

That said, the cloud will be paramount, and Mr. Nadella is wise to focus so much attention upon Microsoft’s capabilities here.

His statement also reminds us Nadella is a techie and he understands how to fully leverage the breadth of Microsoft’s infrastructure. I wish his statement, however, wasn’t so buried underneath enterprise-speak. How will this cloud benefit me — not me at work, not me doing work. Simply, me. 

Beyond back-end cloud infrastructure, our cloud will also enable richer employee experiences. For example, with our new Enterprise Mobility Suite, we now enable IT organizations to manage and secure the Windows, iOS and Android devices that their employees use, while keeping their companies secure. We are also making it easy for organizations to securely adopt SaaS applications (both our own and third-party apps) and seamlessly integrate them with their existing security and management infrastructure. We will continue to innovate with higher level services like identity and directory services, rich data storage and analytics services, machine learning services, media services, web and mobile backend services, developer productivity services, and many more.

Nadella may talk of “dual use” and of the merging of work and home. Microsoft remains, however, a work company.  

Our cloud OS will also run all of Microsoft’s digital work and life experiences, and we will continue to grow our datacenter footprint globally. Every Microsoft digital work and life experience will also provide third-party extensibility and enable a rich developer ecosystem around our cloud OS. This will enable customers and partners to further customize and extend our solutions, achieving even more value.


Cloud “APIs,” essentially, could revolutionize how we create, manipulate and benefit from data. Microsoft should be a leader in this, and it will propel tremendous business value. 

Hardware Everywhere

Our Windows device OS and first-party hardware will set the bar for productivity experiences.

Again, that phrase “first-party hardware.”

Microsoft is (now) a hardware company. But a good one? Can an applications, services and infrastructure company also do great hardware? I have my doubts. I welcome being proven wrong. 

Windows will deliver the most rich and consistent user experience for digital work and life scenarios on screens of all sizes – from phones, tablets and laptops to TVs and giant 82 inch PPI boards.

Does anyone believe this will ever be so?

We will invest so that Windows is the most secure, manageable and capable OS for the needs of a modern workforce and IT.

Nadella will not cede one organization to Google Docs and not allow a single corporation to let iPhone, iPad or BYOD to loosen its grip on the enterprise. This will be a bloody fight. I can’t wait.  

Windows will create a broad developer opportunity by enabling Universal Windows Applications to run across all device targets. Windows will evolve to include new input/output methods like speech, pen and gesture and ultimately power more personal computing experiences. 

Multi-mode inputs will absolutely create more personal computing experiences. The burden of proof that these should — or even can — be offered by Microsoft is quite high, however.

Very, very few humans use speech, pen or gestures to interact with Microsoft products or applications. Microsoft has repeatedly failed to lead the world in this. 

Our first-party devices will light up digital work and life. Surface Pro 3 is a great example – it is the world’s best productivity tablet.

No.

In addition, we will build first-party hardware to stimulate more demand for the entire Windows ecosystem. That means at times we’ll develop new categories like we did with Surface. It also means we will responsibly make the market for Windows Phone, which is our goal with the Nokia devices and services acquisition.

Being deliberately inexplicable is not productive, Mr. Nadella. What exactly is “responsibly make the market?” You intend to be a hardware company, in direct competition with many of your very best partners. Say so. 

I also want to share some additional thoughts on Xbox and its importance to Microsoft. As a large company, I think it’s critical to define the core, but it’s important to make smart choices on other businesses in which we can have fundamental impact and success. The single biggest digital life category, measured in both time and money spent, in a mobile-first world is gaming. We are fortunate to have Xbox in our family to go after this opportunity with unique and bold innovation. Microsoft will continue to vigorously innovate and delight gamers with Xbox. Xbox is one of the most-revered consumer brands, with a growing online community and service, and a raving fan base. We also benefit from many technologies flowing from our gaming efforts into our productivity efforts – core graphics and NUI in Windows, speech recognition in Skype, camera technology in Kinect for Windows, Azure cloud enhancements for GPU simulation and many more. Bottom line, we will continue to innovate and grow our fan base with Xbox while also creating additive business value for Microsoft.

Brilliant. Nadella has scuttled all rumors about Microsoft abandoning Xbox. He has reminded analysts gaming is a primary driver behind mobile and while Microsoft lags in mobile it is a leader in gaming. Nadella also reminds us in our new age of data, collaboration and ideas, “gaming” will become a crucial component of productivity.

While today many people define mobile by devices, Microsoft defines it by experiences. We’re really in the infant stages of the mobile-first world. In the next few years we will see many more new categories evolve and experiences emerge that span a variety of devices of all screen sizes. Microsoft will be on the forefront of this innovation with a particular focus on dual users and their needs across work and life.
 Microsoft will continue to vigorously innovate and delight gamers with Xbox.

My take: Microsoft to acquire Zynga. That’s just for starters. 

Our ambitions are bold and so must be our desire to change and evolve our culture.
I truly believe that we spend far too much time at work for it not to drive personal meaning and satisfaction. Together we have the opportunity to create technology that impacts the planet.

Good, lord, this memo is just ridiculously long. 

I’ve Seen All Good People

Nothing is off the table in how we think about shifting our culture to deliver on this core strategy. Organizations will change. Mergers and acquisitions will occur. Job responsibilities will evolve. New partnerships will be formed. Tired traditions will be questioned. Our priorities will be adjusted. New skills will be built. New ideas will be heard. New hires will be made. Processes will be simplified. And if you want to thrive at Microsoft and make a world impact, you and your team must add numerous more changes to this list that you will be enthusiastic about driving.

If you are not a star, I strongly advise you to get to work on your resume. 

I am committed to making Microsoft the best place for smart, curious, ambitious people to do their best work.

If you are a star, I strongly advise you to get to work on your resume. 

First, we will obsess over our customers. Obsessing over our customers is everybody’s job. I’m looking to the engineering teams to build the experiences our customers love. I’m looking to the sales and marketing organizations to showcase our unique value propositions and drive customer usage first and foremost.
 In order to deliver the experiences our customers need for the mobile-first and cloud-first world, we will modernize our engineering processes to be customer-obsessed, data-driven, speed-oriented and quality-focused. We will be more effective in predicting and understanding what our customers need and more nimble in adjusting to information we get from the market. We will streamline the engineering process and reduce the amount of time and energy it takes to get things done. You can expect to have fewer processes but more focused and measurable outcomes. You will see fewer people get involved in decisions and more emphasis on accountability. Further, you will see investments in two new or combined functions: Data and Applied Science and Software Engineering. Each engineering group will have Data and Applied Science resources that will focus on measurable outcomes for our products and predictive analysis of market trends, which will allow us to innovate more effectively. Software Engineering will evolve so that information can travel more quickly, with fewer breakpoints between the envisioning of a product or service and a quality delivery to customers. In making these changes we are getting closer to the customer and pushing more accountability throughout the organization.

We should not be surprised when thousands of Microsoft staff are shown the door.

Second, we know the changes above will bring on the need for new training, learning and experimentation.

That’s you, old, middle management gatekeepers.

Over the next six months you will see new investments in our workforce, such as enhanced training and development and more opportunities to test new ideas and incubate new projects.

Big layoffs by Christmas.

I have also heard from many of you that changing jobs is challenging. We will change the process and mindset so you can more seamlessly move around the company to roles where you can have the most impact and personal growth. All of this, too, comes with accountability and the need to deliver great work for customers, but it is clear that investing in future learning and growth has great benefit for everyone.  

I suspect Microsoft will soon become the GE of personal computing. Massive, always in flux, possessing an agile bureaucracy, driven less by product or business model and more by shrewdly financing initiatives which it can dominate.  

I am committed to making Microsoft the best place for smart, curious, ambitious people to do their best work.

Why hasn’t it been?

Finally

Yes!

every team across Microsoft must find ways to simplify and move faster, more efficiently. We will increase the fluidity of information and ideas by taking actions to flatten the organization and develop leaner business processes.

See note above re: resumes.

Culture change means we will do things differently. Often people think that means everyone other than them. In reality, it means all of us taking a new approach and working together to make Microsoft better. To this end, I’ve asked each member of the Senior Leadership Team to evaluate opportunities to advance their innovation processes and simplify their operations and how they work. We will share more on this throughout July.

Big layoffs by Thanksgiving.

A few months ago on a call with investors I quoted Nietzsche and said that we must have “courage in the face of reality.” Even more important, we must have courage in the face of opportunity.

+1 for quoting Nietzsche. -2 for quoting Nietzsche 3,000 words in. 

We have clarity in purpose to empower every individual and organization to do more and achieve more. We have the right capabilities to reinvent productivity and platforms for the mobile-first and cloud-first world. Now, we must build the right culture to take advantage of our huge opportunity. And culture change starts with one individual at a time.

Validate why you, ye lowly programmer, should continue to be employed by Microsoft. 

Rainer Maria Rilke’s words say it best: “The future enters into us, in order to transform itself in us, long before it happens.”

Want to get on Nadella’s good side? He obviously has a penchant for early 20th century German writers.

We must each have the courage to transform as individuals. We must ask ourselves, what idea can I bring to life? What insight can I illuminate? What individual life could I change? What customer can I delight? What new skill could I learn? What team could I help build? What orthodoxy should I question?

Big layoffs by Labor Day. 

With the courage to transform individually, we will collectively transform this company and seize the great opportunity ahead.

I wish you well, Mr. Nadella, and all of you (still) at Microsoft. 

The Smartphone Is The Computer

I have spent the past three weeks in Detroit, a city possessing a rich history and an unremitting present. The vagaries of Silicon Valley count for little here. When I heard a young man ask — for real — if the Samsung Galaxy S5 was an iPhone or an Android, I knew there was much to glean if I simply put my smartphone down and listened.

Here then are my thoughts, insights and observations from the past one score and one day…

There are no smartphone wars. Rather, just amazing, affordable and truly expansive opportunity. Android versus iPhone means nothing to nearly everyone I speak with.

It is hard to overstate just how much television will be disrupted by the combination of children, tablets and YouTube. Free, always accessible content uniquely tailored to their own self-driven interests, available from any location is now possible — and the young will accept nothing less.

Facebook, not smartphones, not telcos, not automobiles, not Disney or ESPN, is connecting the world. Facebook is the new oil. If there is any ‘next Steve Jobs,’ it is Mark Zuckerberg. For whatever confluence of reasons, Zuckerberg divined the power of social media from the start, just as Jobs did with computing. No matter how rich, no matter how many struggles, I expect Zuckerberg to devote the remainder of his life to Facebook and all it represents.

There is middling outrage over the Facebook ‘user emotion’ study. As for me, this represents little more than A/B testing. In fact, I’m more angry over the iPhone keyboard. It’s so terrible. Is this some sort of secret Apple study? I mean, what other possible reason could there be?

Sheryl Sandberg

I am in the place where cars and mass production altered the course of humanity. Now, it is smartphones, social media, mapping, and code; these are re-making the planet as much as the automobile did in the 20th century. We are at the start of a new future. That’s just awesome.

I was often asked the best way to become a professional writer. It’s such an easy question to answer.

Marry well.

Oh, and should you be so fortunate to have an opportunity to write about what you love, for an organization with no concern for page views and provocation, as I am at Tech.pinions, then do not fritter away such a blessing.

I first learned about the SCiO from Techpinions. Point this device at a piece of fruit for example, and it will tell you what it is and even provide data on its composition, such as how much fat and carbs the item contains. Every single time I read more about this device, I think it is absolute magic. I told so many people about it that I now desperately hope it works as advertised.

scio2

I have nothing but good things to say about the Amazon Fire Phone. Yet, I can’t possibly recommend it to anyone. Why would I? In the US, at least, there is almost no reason to recommend any smartphone other than the iPhone or the Samsung Galaxy.

Microsoft’s Windows Phone faces a similar fate as Amazon’s Fire. Fair or not, can you imagine any outcome for Windows Phone other than failure? How does Microsoft start over? What amazing technologies, hardware and combination of services can they possibly deliver to make the world care about a device that is not iPhone or Android? I do not have the answers.

jeff_bezos_fire_phone

If I were in charge of Microsoft I would simply continue to make quality devices, offering great Nokia design, great Nokia imaging, incorporating Skype, OneDrive, HERE, Office and other Microsoft-owned products and services. Plodding along, hoping more and more Android vendors exit the business, picking up the scraps, all while leveraging my enterprise install base and security, identity and productivity tools, hoping users discover my superior value.

It won’t help. The smartphone market is lost to Microsoft.

The screen market, however, is barely in its infancy. Microsoft should forget smartphones and focus instead on screens. Screens will become like power outlets, we only notice them when they cannot be found.

Perhaps no company — not Apple, not even Google — possesses the breadth of services Microsoft offers. The problem, of course, is these services are not exposed for all the world to use. They are locked inside unwanted PCs, shoved inside tablet abominations, buried beneath the content we actually seek from our Xbox systems, sold mostly to IT directors, attached to products and platforms we do not need, and hidden behind an incomprehensible UI. Microsoft has built an anti-moat around its services, not locking us in but keeping everyone out.

azure1

The World Cup has introduced to millions the joys of live sports streamed to our smartphones and tablets. This is so in Detroit and around the country. It has never been more clear we all want to watch what we want to watch when we want to watch it where we want to watch it and on the device we want to watch it on. This is simple, obvious and unstoppable. It’s only a matter of time before we have a difficult time explaining to our progeny how it ever could have been anything else.

tim-cook-attends-pride-event

Last week, Apple CEO Tim Cook very happily took part in the San Francisco Pride Parade. Also, Hobby Lobby successfully won the right to provide only certain forms of contraception for its employees. What do these have in common?

Values equal profits.

Companies are publicly declaring their values, even going to court to defend and promote their values. This is only start. The technologies of Silicon Valley are breaking down barriers, bringing corporations to their knees and empowering individuals and groups around the world. With smartphones in hand, with continuous, real time, location-aware connectivity always available, we become our own corporations — with Uber, AirBnB and others merely pointing the way. We will work for ourselves and we will live by our values.

This is good. But it will be messy. Very messy.

CSC_0100SM

Hype aside, can you envision a situation where you use Bitcoin over, say, your iPhone ‘wallet’ linked to your secure iTunes payment data? iPhone offers ease of use and peace of mind. That’s a powerful combination. Still worse for Bitcoin, is that it is essentially digital cash in a world addicted to easy credit. Learn about the blockchain. Bitcoin itself is merely a bystander.

Given Android’s headstart in wearables, it’s hard to see Apple winning any wearable app wars. Given the limitations of its market reach, it’s similarly difficult to see Apple winning the “smart home” market without buying its way in. Sonos would be a good start.

Smartphones are borderline magical. That said, the iPhone 5s battery and the HTC One (M8) camera are embarrassingly bad.

In the past week, I’ve rented two movies from iTunes. I failed to finish both in the first sitting and was not able to watch either until after 24 hours later. iTunes refused, insisting the rental period had expired. This was true, though did not mitigate my anger. I may abandon iTunes rentals altogether. The lure of non-legal downloading is strong.

marissam

How much of Yahoo’s Alibaba riches is Marissa Mayer prepared to spend to get us to visit Yahoo? I suspect all of it. Nowhere I go does Yahoo seem to matter.

Idle prediction: Apple will not kill off the iPhone 5/c/s form factor this year, nor will Apple offer three simultaneous iPhone form factors. Yes, that means I am predicting only one large-display iPhone.

Not a prediction, just a thought experiment: In 2024, when a chid is born, they will be assigned either an Android or an iPhone. This will control everything.

There will be over 1 billion (American) Android activations this year, and several hundred million (Chinese) Android (AOSP) activations. Android is a stunning success story. All those involved in Android have long since earned our respect. That said, some analysts, bloggers and even industry insiders still have not grasped the obvious: Smartphones are the first screen. Smartphones are the primary computer.

Meg-Whitman-CEO-at-HP

The CEO of Yahoo is female. The CEO of HP is female. The #2 at Facebook is female. A man runs Android, the world’s most popular OS. He is from India. The CEO of Microsoft is from India. The tech sector points the way forward not only with its products.

Be smart. Work hard. That’s true everywhere.

Microsoft Is The Very Antithesis Of Strategy

Thus the highest form of generalship is to balk the enemy’s plans; the next best is to prevent the junction of the enemy’s forces; the next in order is to attack the enemy’s army in the field; and the worst policy of all is to besiege walled cities. ~ Sun Tzu, The Art Of War

Microsoft could learn much from Sun Tzu. Over the past fifteen to twenty years, Microsoft has engaged in the very worst kind of generalship. Microsoft has allowed their competitors to join forces and successfully scheme against them. Microsoft has responded to the successes of their competitors by forswearing their strongest weapons, abandoning their strongest defensive positions and rushing to attack their competitors wherever they may be, even if those battlefields were located where Microsoft was at its weakest and their competitors were are at their strongest. When these attacks inevitably failed, Microsoft resorted to wars of attrition. Yet in these wars of attrition, it was Microsoft, not their opponents, who suffered most, taking disproportionally greater losses than they inflicted.

There are some roads not to follow; some troops not to strike; some cities not to assault; and some ground which should not be contested. ~ Sun Tzu

Microsoft’s approach is the very antithesis of a strategy. Here are five principles of war. See how Microsoft violates them over and over again.

Principle #1: Concentration

The principles of war, not merely one principle, can be condensed into a single word – ‘concentration’. But for truth this needs to be amplified as the ‘concentration of strength against weakness’. ~ B. H. Liddell Hart

Microsoft’s strategy over the past two decades has been the very opposite of concentration. Instead of acting, they react — lashing out in multiple, uncoordinated directions. A good strategy forces the opponent to compete on a battlefield where they have no chance of winning. Microsoft does the opposite. They pick fights they don’t need to fight, and they fight those battles on their opponent’s home turf, where their opponent is at their very best and Microsoft is at its very weakest.

Principle #2: Avoid Frontal Assaults

From the beginning of organized warfare, frontal attacks against prepared defenses have usually failed, a fact written large in military history for all generals to see. ~ Bevin Alexander, How Great Generals Win

The essence of strategy is to play to your strengths while taking advantage on your opponent’s weaknesses. Microsoft routinely flips this on its head, going out of its way to fight on battlefields of its opponent’s choosing — battlefields that emphasize the strengths of Microsoft’s opponent’s and minimize Microsoft’s own strengths.

It is a military axiom not to advance uphill against the enemy, nor to oppose him when he comes downhill. ~ Sun Tzu, The Art of War

In military terms, Microsoft does not just seek out the enemy — they look for them on the highest, most fortified hill, bristling with weapons — then they march straight at ’em.

To refrain from intercepting an enemy whose banners are in perfect order, to refrain from attacking an army drawn up in calm and confident array:–this is the art of studying circumstances. ~ Sun Tzu, The Art of War

Contrary to the art of war, Microsoft just LOVES to make frontal assaults against the enemy while their banners are in perfect order.

The Spartans do not ask how many the enemies are but where they are. ~ Agis Ii, King Of Sparta

One may admire the bravado, the daring, and the courage of both the Spartans and Microsoft, but attacking the enemy where the enemy is strongest was not, is not and never will be sound strategy.

So in war, the way is to avoid what is strong and to strike at what is weak. ~ Sun Tzu, The Art of War

Example #1: iPod

In 2001, Apple introduced the iPod. By 2004, it was a smash success. Microsoft reacted, rather than acted. Instead of asking themselves WHY they needed to enter the MP3 market or even WHETHER they needed to enter the MP3 market, they attacked — first with their software licensed PlaysForSure, and later with their own Zune branded hardware.

From a strategic standpoint, Microsoft’s move to create the Zune was inane and bordering on the insane. Its strategy:

1) Obliged Microsoft to betray its existing allies (hardware manufacturing partners);
2) Required Microsoft to abandon its greatest and most powerful weapon (licensing software to hardware manufacturers);
3) Compelled Microsoft to fight with unfamiliar weapons (hardware);
4) Forced Microsoft to fight on the battlefield of its opponent’s choosing and where its opponent could could leverage its strongest assets (integrated software and hardware).

Therefore, those skilled in war bring the enemy to the field of battle and are not brought there by him. – Sun Tzu

It’s the equivalent of a lion — the king of his domain — abandoning the land in order to fight a shark at sea. What madness! It was a strategy that favored Apple and handicapped Microsoft in every meaningful way. It was, in fact, not a strategy at all but the abandonment of strategy. Instead of pitting their strength against their opponent’s weakness, Microsoft pitted their weakness against Apple’s strength. Microsoft’s defeat was virtually guaranteed.

Example #2: Bing

Google was founded in 1998 and soon became a very real threat to Microsoft. A response by Microsoft was appropriate and called for…but not the response Microsoft made. As usual, Microsoft went right at ’em by challenging Google where Google was strongest and where Microsoft was nonexistent — in search.

Let’s examine this from a strategic perspective:

  1. Attack opponent where opponent is strongest. Check.
  2. Attack opponent with a weapon with which you have little or no expertise (search engine/machine language). ((Of course, Microsoft has plenty of experience and expertise in search now, but at a tremendous price in both money and in time. Lost money, Microsoft can afford. Lost time, not so much.)) Check.
  3. Attack opponent where they live, thus guaranteeing that they will they will be inspired to fight with desperation in order to ensure their very survival. Check.
  4. Attack where even success gains you little or nothing. Check.

Do not throw your weight into a stroke whilst your opponent is on guard – whilst he is well placed to parry or evade it. The experience of history shows that, save against a much inferior opponent, no effective stroke is possible until his power of resistance or evasion is paralysed. ~ B. H. Liddell Hart, Strategy

Unsurprisingly, Microsoft’s search engine efforts haven’t significantly hurt Google. Worse still, they’ve actually HELPED Google. When Microsoft pitted Bing against Google Search, they created a legitimate, albeit ineffective, competitor. And that, in turn, meant Google was not a monopoly in search and not subject to government anti-trust and anti-monopoly oversight.

As when snow is squeezed into a snowball, direct pressure has always the tendency to harden and consolidate the resistance of an opponent, and the more compact it becomes the more difficult it is to melt. ~ B. H. Liddell Hart

I will readily concede that Bing has served, and continues to serve, Microsoft well on the back end. But on the back end is where it should have remained. By attacking Google directly where Google was strongest, Microsoft has lost billions upon billions of dollars and the result has been to make Google Search more, not less, secure.

Summary

Great generals know a direct attack, on the other hand, consolidates an enemy’s defenses and, even if he is defeated, merely forces him back on his reserves and his supplies. ~ Bevin Alexander, How Great Generals Win

Over the past 20 years, Microsoft’s only stratagem has been to directly assault their competitors where their competitors are strongest. This bull-headed non-strategy was formed in the late nineties when Microsoft truly did have overwhelming superiority. Back then, what Microsoft wanted, Microsoft took.

It is the rule in war, if our forces are ten to the enemy’s one, to surround him; if five to one, to attack him; if twice as numerous, to divide our army into two. If equally matched, we can offer battle; if slightly inferior in numbers, we can avoid the enemy; if quite unequal in every way, we can flee from him. ~ Sun Tzu, The Art of War

It’s not the late nineties anymore and Microsoft no longer outnumbers their competitors ten to one — or outnumbers them at all — but they still act as if they do. When one is outnumbered, one should flee, not fight. It may not sound like the noble thing to do, but it’s very sound strategy.

STRATEGY Definition on Blackboard (business marketing planning)

Principle #3: Never Reinforce Failure

A general must never reinforce failure. ~ Clausewitz ((Excerpt From: Charles River Editors. “The Top 5 Greatest Generals: Alexander the Great, Hannibal, Julius Caesar, Genghis Khan, and Napoleon Bonaparte.”))

One of the myths that surrounds Microsoft is they “get it right on the third try”. I heard a pundit say this just last week in regard to the Microsoft Surface.

Really?

When was the last time Microsoft “got it right” on the third iteration? Or any subsequent iteration? The last time I recall Microsoft out-iterating an opponent was with Netscape, which was some 15 years ago. Or perhaps one could be thinking of the Xbox ((I would argue Xbox is a tactical master stroke but a strategic blunder — but that is an argument for another day.)) where Microsoft went five billion dollars in the red before even starting to make a return. However, those long ago victories can provide Microsoft with little solace today. Microsoft is no longer the 900-pound guerrilla it was a decade ago. And I think it is fair to say Apple is no Netscape and Google is no Sony PlayStation 2.

Do not renew an attack along the same line (or in the same form) after it has once failed. ~ B. H. Liddell Hart, Strategy

With products like Windows Phone 7 (now 8), Surface, and Windows 8, Microsoft is not iterating faster and catching up to their opponents. Far from it. They’re falling farther and farther behind. And it doesn’t matter anyway because the race they’r running in is already over.

Once a problem is solved, you compete by rethinking the problem, not making a slightly better version of the current solution. ~ Benedict Evans (@BenedictEvans)

Windows Phone 8 is an attempt to solve a problem that has already been solved by Apple’s iOS and Google’s Android. Surface is an attempt to pretend Apple didn’t solve the tablet problem when they introduced the iPad. Windows 8 is an attempt to ignore their decade-long failure to transplant a desktop operating user interface onto a tablet form factor.

Great generals do not repeat what has failed before. ~ Bevin Alexander, How Great Generals Win

Microsoft is not re-thinking the problem. They are simply failing at the same thing, in the same way, over and over again.

Principle #4: Avoid Sieges

The rule is, not to besiege walled cities if it can possibly be avoided. ~ Sun Tzu, The Art Of War

Microsoft simply does not quit. When they fail to win in the open field, they settle in for a long, drawn out siege. Yet when has this strategy ever worked for Microsoft? When, in recent history, has Microsoft ever overcome simply by carrying on?

These sieges have only led to Microsoft growing progressively weaker while their competitors grow ever stronger. It’s the exact opposite effect that the strategy is supposed to accomplish.

You may admire Microsoft’s doggedness — I do — and you may admire their perseverance — I do — but you simply cannot admire their strategy. Persistence is one thing. Pigheaded stubbornness is another thing altogether.

Attrition is a two-edged weapon and, even when skillfully wielded, puts a strain on the users. ~ B.H. Liddel Hart, Strategy

Attrition is a long, slow, arduous and costly grind. It should only be used as a last resort. And its use makes no sense at all when it costs the aggressor more than it costs the besieged. That way lies only exhaustion, collapse and defeat.

To adopt the method of attrition is not only a confession of stupidity, but a waste of strength, endangering both the chances during the combat and the profit of victory. ~ B. H. Liddell Hart

Principle #5: Keep Your Object Always In Mind

Keep your object always in mind, while adapting your plan to circumstances. Realize that there are more ways than one of gaining an object, but take heed that every objective should bear on the object. And in considering possible objectives weigh their possibility of attainment with their service to the object if attained – to wander down a sidetrack is bad, but to reach a dead end is worse. ~ B. H. Liddell Hart, Strategy

Microsoft should take the above paragraph and pin it to every door, in every office in Redmond…

…except first, of course, they should identify what their object is.

Microsoft Has No Vision, No Mission, No Object To Guide Them

Everything wrong with Microsoft’s strategy comes down to this:

[pullquote]A person who aims at nothing is sure to hit it.[/pullquote]

Microsoft doesn’t know what their objective is.

Without that compass, without that “north star” to guide them, Microsoft is like a rudderless ship, subject to the pull and sway of every wind and every current.

Manage The Top Line

Somebody once told me, “Manage the top line, and the bottom line will follow.” What’s the top line? It’s things like, why are we doing this in the first place? What’s our strategy? What are customers saying? How responsive are we? Do we have the best products and the best people? Those are the kind of questions you have to focus on. ~ Steve Jobs

Does Microsoft ask itself such questions? If so, their actions certainly don’t reflect it.

In fact, I double-dog dare you to articulate Microsoft’s vision or its mission. The following is the best I could discover. I like the passion expressed, but I assure you, it’s not nearly specific enough to act as the guidance Microsoft so desperately needs:

We are obsessed with empowering people to do more and be more. ~ @Satyanadella (5/20/14)

Microsoft Needs To Re-Define Itself

— Microsoft has forgotten what they are good at.
— Microsoft has forgotten what business they are in.
— Microsoft has forgotten who they are.

In Nadella, Microsoft has a new CEO whom I admire. However, if he has a new vision for Microsoft, he has not yet clearly articulated it — and he needs to do just that.

Whenever anything is being accomplished, it is being done, I have learned, by a monomaniac with a mission. ~ Peter Drucker

Microsoft must redefine itself — must reset their vision. And then then need to shout that vision from the rooftops.

The very essence of leadership is you have to have a vision. It’s got to be a vision you articulate clearly and forcefully on every occasion.  You can’t blow an uncertain trumpet. ~ Theodore Hesburgh

Conclusion

Dead battles, like dead generals, hold the military mind in their dead grip…. ~ Barbara Tuchman, The Guns of August

Past triumphs and past glories seem to hold Microsoft in their dead grip too. Microsoft is still fighting yesterday’s wars with yesterday’s no-longer-existing weapons. They need to acknowledge reality as it is and change their strategy accordingly.

The only thing harder than getting a new idea into the military mind is to get an old one out. ~ B. H. Liddell Hart

In my Insider’s article (subscription required) , I’ll talk about the strategy that Microsoft could — but almost certainly will not — follow.

Career Decision

The One Where Brian Is Wrong About Everything

Please allow me to introduce myself…

You likely don’t care and would not believe the volume of blog posts, research reports, technical writings and analyst studies I sift through on a daily basis.

This is necessary both to stay informed and to re-evaluate my opinions as new facts emerge. I refuse to let my initial reactions to the latest rumors cement my long term perspective. Though I consider my views well-informed, reasoned and likely to be proven true in the due course of time, my peers disagree.

For your reading pleasure, below are opinions I hold that currently run counter to conventional wisdom.

Who’s side are you on?

Sympathy For The Devil

Unlike all of Silicon Valley, it seems, I applaud the EU’s ruling that affirms an individual’s “right to be forgotten.” I expect this ruling to become the global norm by the end of the decade. Technology should be empowering and liberating. Of course, I should be able to require Google, Facebook et al to obliterate any digital data on me they possess. Everyone should.

I consider Apple’s iMessage – SMS “bug” to be a sure sign of corporate hubris. The absolute worst trait any large company can have is hubris.

I love that Microsoft is sticking to its vision despite the doomsayers. Surface Pro 3 is meant to be both iPad and MacBook. Comparing it to just one device is skating to where the puck never was.

Yet, industry analysts seem universally opposed to the very idea of the Surface. They are wrong. The market for paid software licenses is, to quote Bob Dylan, rapidly fading. Microsoft should not even consider reigniting the licensing ecosystem of its glory days. Such a strategy will fail, miserably. iOS, OS X, Android, Chrome and Linux are now good enough and are cheaper and readily available. Microsoft must create its own devices for a bold new world even as its OEMs fall to pieces. The Surface Pro 3 has the potential to become the device we all really crave: both a tablet and a laptop.

Someone — anyone — says the word ‘grok’ and my brain instantly screams: poseur! I cannot turn this off. I refuse to believe this is wrong.

This recent New York Times piece that glowingly praises a smartphone app, backed by VCs, that sends under-employed Americans on a mad scurry to fetch groceries for harried tech warriors is, I suspect, that singular article we will all point to ten years from now as the glaring, obvious symbol of the last bubble.

Think about an iPhone 6. Go on. If it’s not a larger form factor, why do you even care? Odds are very high you don’t. I have to assume Apple knows this. No iPhone phablet this year and iPhone’s market share will plummet.

I can’t fault a Samsung lawyer for calling Apple “jihadists” considering the Steve Jobs “holy war” email.

But Then My Homework Was Never Quite Like This

Your assignment, dear reader, is to map the decision-making tree that led the Microsoft Corporation to offer the Surface keyboard as a separate item. I bet you fail. It is inexplicable.

Fitbit hires design icon Tory Burch. Intel partners with Barneys. Apple hires Burberry’s Angela Ahrendts. Rumors say Apple is dangling billions in front of cultural trendsetters Jimmy Iovine and Dr Dre. I think this is wise. Fashion boasts, fashion beguiles, fashion demands. Value and quality speak softly. It’s a big, noisy world out there.

Get a drone with a camera. Link it to your Oculus Rift glasses. Experience the world about you in profoundly new and different ways. Now, stream and share all you see and hear — on Facebook, of course. That’s Zuckerberg’s strategy.

One app, one task, one screen is a core value of iOS. If the new iPad allows two apps running on a screen, as rumors suggest, then we immediately know two things: 1) Apple is legitimately nervous about both Samsung and Surface, and 2) Apple intends to launch an assault on the enterprise. Smart and smarter. 

I have serious doubts Tesla can ever build a car the 95% can afford.

We are all rock stars with our cool mobile phones.

kurt

Still Crazy After All These Years

The Samsung Galaxy Gear 2 is pretty. It’s also quite functional — provided you own a Samsung Galaxy. I think the bad reviews are all wrong.

I think a co-branded Mickey Mouse “iWatch” would be awesome.

Within ten years, schools and HR departments will have us wear Oculus Rift or a similar device to experience how others feel, think, and react differently to the very same people, words and actions.

The GoPro IPO, the rise of wearables, the Internet of Things, the budding Maker ecosystem. Hardware is eating the world, not software. 

The best part of an iPhone phablet is it will create radically new experiences and app types. This Opera graphic reveals that phablet use is starkly different from smartphone and tablet use. No, I do not believe this is primarily driven by current phablet demographics. Rather, form factor.

phablet usage

I predict by 2017, apps will be made first for China for iPhone. Then for iPhone for America. Then Android. Then iPad. Then AOSP. Then Windows Phone. Then X or other.

Rhymin and Stealin

Dollar for dollar, there may be no better value in smartphones than the Lumia 630. And if I’m wrong, it’s because the Lumia 520, available for about $70, may be an even better value still. The Moto X and Moto E may prove me wrong yet again. Amazing, amazing technological evolution.

In 1997, Microsoft loaned Apple $150 million. Apple now has 1000X that just in cash. Also, one of these men is on the cusp of being a billionaire. No one saw either of those coming. We were all wrong.

dre

Apple hardware is beautiful, understated, austere. Beats hardware is big, bold, gaudy. I have to believe an Apple – Beats acquisition horrifies Jony Ive.

It’s hard to overstate how much Google must fear Facebook. Facebook has over 1 billion users, mostly on mobile. Hundreds of millions voluntarily give Facebook highly personal information about themselves every single day, sometimes multiple times per day. This is not the same as unknowingly handing over select personal information to Google bots. By the decade’s end, search will be nothing more than a ‘signal’ for Facebook’s massive knowledge engine.

The other day, Yahoo flashed a pop-up on my screen asking me if I wanted to make Yahoo my default search engine. This made me laugh.

I believe Yahoo is on the cusp of what could be its worst-run, costliest period ever — and that, dear reader, is saying something. In her tenure as Yahoo CEO, Marissa Mayer has proven without a doubt her greatest strength is spending money. Sadly, her signal weakness is getting a return on said spending. If you are an investor, it’s time to storm the gates, else those Alibaba lotto winnings will be gone — fast.  

Am I wrong? Share your thoughts.

Microsoft Is At War With Itself

On Tuesday, May 20, Microsoft held an event to unveil the Surface Pro 3 Tablet. You can view the webcast here. ((Ironically, the video stream provided by Microsoft is in Adobe Flash, so if you’re on a mobile device, you’re out of luck.)) NOTE: The quotes, below, are time stamped so you can locate them on the video.

I am breaking my coverage of the Microsoft Surface Tablet Event into two separate articles. Today, I will review the six minute introduction given by Microsoft CEO, Satya Nadella. In my opinion, Nadella’s statements were very revealing but not in the way he might have wished. Once we look “beneath the Surface” or “behind the curtain,” we can see that the contradictions inherent within Microsoft’s overall strategy force it to war with its customers, its partners and itself.

Tomorrow, in my Insider Article (subscription required), (now available, here) I will turn my attention to the specifics of why Microsoft’s grand strategy is self-contradictory and self-defeating. In essence, Microsoft is playing a game of Roshambo (rock, paper, scissors) and wants to simultaneously throw the rock, the paper and the scissors — with wholly predictable results.

Microsoft’s Mission?

    01:53: “It starts for us with this obsession of empowering every individual and organization to do more and be more. That is what we at Microsoft are all about. This is what is the unifying theme for the company across everything that we do. We want products and technologies that enable people to dream and get stuff done, we want products and technologies that enable people to be able to get more out of every moment of their life. that’s the mission we are on.”

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The good news is Satya Nadella seems to be able to articulate Microsoft’s vision better than Steve Ballmer ever did.

The bad news is the vision Nadella articulated wasn’t very compelling. I’m willing to give Nadella and Microsoft a pass on this because, if we are grading on a curve, very few companies have compelling visions. Not everyone, however, graded on a curve:

Ugh. Can someone please get Microsoft a new mission statement? Classic best-to-worst. ~ Ben Thompson (@monkbent)

It will be awfully hard for Microsoft to ever again create a mission statement as great as “A computer on every desk and in every home.” ((Bill Gates, Microsoft chairman and chief executive officer, 1980)) but merely saying Microsoft’s Mission is to create products and technologies that enable people to dream and get stuff done won’t cut it in the long run.

Competing Against Customers?

      00:45: “Our cloud enables everyone on every device.”

03:09: “(T)hat’s what has led us to build the ubiquitous software products that we’ve built today.”

These statements raise more questions than they answer. If Microsoft wants to be on every device, if they want to have ubiquitous software, then does it make sense for them to build hardware too? Isn’t it an inherent conflict of interest to ask other companies to use your cloud services on their devices while simultaneously trying to replace their devices with your own?

Gemini sisters fighting on a white background

Competing Against Partners?

    04:55 “We’re not interested in competing with our OEMs ((OEM = Original Equipment Manufacturers))when it comes to hardware.”

Really? You sure have a funny way of showing it.

Nadella says that Microsoft isn’t interested in competing with its OEMs when it comes to hardware, a stance I don’t really understand. ~ Harry McCracken (@harrymccracken)

If Microsoft is not interested in competing with their OEMs — then why are they doing it? The Surface Tablet competes directly with Microsoft’s own (so-called) hardware partners. And what hardware company in their right mind wants to license software from Microsoft in order to build hardware that then has to compete against Microsoft-branded, and Microsoft software-integrated, hardware?

The hardest thing to explain is the glaringly evident which everybody had decided not to see. ~ Ayn Rand

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Why Hardware?

    04:05 “The question that needs to be asked and answered is why hardware?

I give Nadella full credit for asking the exact right question. I can’t, however, give him full marks for actually answering the question.

    …We are not building hardware for hardware’s sake. We want to build experiences that bring together all the capabilities of our company…to build these mobile first productivity experiences. That’s the mission.”

Hmm. Not really answering the question of “why hardware” just yet.

    …In fact our goal is to create new categories and spark new demand for our entire ecosystem. That’s what inspires us and motivates us with what we’re doing in our devices and hardware.

Hmm. Microsoft wants to create new categories and spark new demand. Sounds good, as far as it goes. But honestly, what company doesn’t want to create new categories and spark new demand? The real question then is: “What category is the Surface Tablet creating and does that category deserve to exist?”

    05:30 Can we design and build a device that takes the best of the tablet and the laptop and enables any individual to be able to read and to be able to create and write; allows you to watch a movie and make a movie; enjoy art and create art — that’s the device we want to create.

PcTabletPhone
CAPTION: The Surface Hybrid seeks to create a new category between the PC and the Tablet

Now the picture is coming into focus. Microsoft doesn’t believe tablets are always good enough. Microsoft doesn’t believe notebooks are always good enough. What people really want, what people really need, according to Satya Nadella, is a hybrid computer — like the Surface Tablet — that’s the best of both worlds. A device both a tablet AND a PC — one device that can do it all.

It is not the writer’s task to answer questions but to question answers. ~ Edward Abbey

However, if Microsoft’s answer to the question: “Why Hardware?” is “New Category Creation”, that begets a whole new set of questions:

  1. If the hybrid category is so compelling, so wanted, so needed, then why couldn’t Microsoft’s hardware partners have taken the Windows 8 operating system, applied their hardware designs to it, and created the hybrid category on their own?
  2. Not every category deserves to exist. What makes Microsoft think the hybrid is deserving of being a category of its own?
  3. Creating a category is hard. Creating a category in hardware, which is outside of Microsoft’s core skill set, is harder still. Aside from “sparking new demand”, is there another, more obvious reason why Microsoft feels the need to create this new category?

Tomorrow?

The only interesting answers are those which destroy the questions. ~ Susan Sontag

Tomorrow, I take a deep dive into those questions and many more as well. Here’s a hint as to what we’ll be finding:

In business, as in Roshambo, you can never beat your competitors if you’re always beating yourself first.

playing

Microsoft: Point and Counter-Point

On April 10, I wrote: Say Goodbye To Microsoft. On April 17, I wrote Say Hello To Microsoft 2.0. The two articles, when taken as a whole, argued that:

1. In the beginning, Microsoft’s business model was simple — create the personal computing operating system (Windows) and license it to as many hardware manufacturers as possible.

2. Microsoft’s vision was equally clear:

A computer on every desk and in every home. ~ Bill Gates, Microsoft chairman and chief executive officer, 1980

3. By the turn of the century, Microsoft’s singular vision and simple, yet powerful, business model had virtually achieved its audacious goal of putting a computer on ever desk and in every home and having Microsoft’s Windows operating system running on each of those computers.

4. Ironically, having achieved the seemingly impossible, Microsoft was left without a goal to power them and without a vision to guide them. They drifted from product line to product line and from business model to business model.

5. Microsoft long knew the Mobile Wars were coming but when the revolution finally arrived, the mobile wars were fought with weapons so unfamiliar to Microsoft, and the front lines shifted so quickly and so decisively, that the wars were all but over before Microsoft was able rearm themselves.

  1. By the time Windows Phone 7 was released in October 21, 2010, ((Windows Phone 7 came out seven months AFTER Apple started selling the iPad. In other words, Apple had started the next revolution in computing before Microsoft even fired a single shot in the nearly completed smartphone revolution.)) Apple’s iOS had already sewn up the premium end of the smartphone market and Google’s Android had already locked down the low end.
  2. By the time Windows 8 and Microsoft’s Surface tablet was released in the Fall of 2012, millions upon millions of iOS and Android tablets were already in the hands of consumers, and businesses and educational institutional buyers had already adopted iOS as their preferred tablet operating system. By the time Microsoft entered the fray, they found themselves fighting a war already over.

6. In a matter of only a few, short years, Microsoft went from being the only relevant company in computing to a company that was completely irrelevant in mobile computing.

7. Microsoft’s board, which sat idly by for over a decade, finally acted by forcing Steve Ballmer out and naming Satya Nadella as their new CEO.

8. It’s still early days, but it appears Satya Nadella is realigning Microsoft around a horizontal business strategy which strives to sell services in the Cloud layer resting atop today’s modern personal computer (phone, tablet, notebook, desktop) operating systems and to sell those services to every type of personal computer maker and user.

9. If Satya Nadella is truly moving Microsoft to a horizontal-first model, then it logically follows Microsoft will want to jettison unprofitable vertical hardware projects like the Surface tablet and the Nokia phone lines and demote the importance of vertical software offerings like Windows 8 and Windows Phone 8.

Push Back

The truth will set you free, but first it will piss you off. ~ Gloria Steinem

My twin articles produced some extremely thoughtful and thought provoking responses. So I decided to give one reader — RATIONAL GEEK — a chance to respond which, in turn, allowed me to refine my original thinking on the matters discussed above.

Debate

Microsoft’s Functional Re-Organization

KIRK’S TAKE:

Microsoft’s divisional organization may have been dysfunctional but, in my opinion, Steve Ballmer’s attempt to move Microsoft to a functional organization was a disaster waiting to happen.

First, Microsoft’s culture and product lines were simply incompatible with the goals of a functional organization.

Second, making a transition from a divisional organization to a functional organization in these perilous times is like changing the proverbial horse in the middle of the river — or perhaps more like changing the proverbial horse while plunging over a waterfall.

Satya Nadella’s recent job reassignments indicate to me he is starting to undo some of the reorganization that began during Steve Ballmer’s final days. Frankly, I’d like to see Nadella, like a new broom, sweep some people clean out of Microsoft. But — as I was recently reminded by Ben Thompson of Stratechery fame — Microsoft “fires” gently.

RATIONAL GEEK’S REBUTTAL:

In what way is Nadella undoing the reorganization? I don’t see it.

The One Microsoft reorganization is important because the old Microsoft would have powerful groups like Windows, Office and Enterprise hunker down and protect their operating margins at the expense of collaborating towards a common goal. One Microsoft is an attempt to “align the wheels”.

Everything they do is now with a common goal in mind.

We will see our product line holistically, not as a set of islands. We will allocate resources and build devices and services that provide compelling, integrated experiences across the many screens in our lives, with maximum return to shareholders. All parts of the company will share and contribute to the success of core offerings, like Windows, Windows Phone, Xbox, Surface, Office 365 and our EA offer, Bing, Skype, Dynamics, Azure and our servers. All parts of the company will contribute to activating high-value experiences for our customers. ~ Steve Ballmer

The old organizational structure was once one of Microsoft’s biggest criticism. In-fighting everywhere resulting in counter productive disconnects. We’ve all seen this amusing org chart comparison right?

The important takeaway is Microsoft recognizes their sacred cows of the past are no longer sacred. They’ll need to look beyond them towards cloud, devices and services to compete in the future.

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Microsoft’s Surface Tablet

KIRK’S TAKE:

I think Microsoft should recognize the Surface Tablet for the disaster it is and drop it like a hot coal.

Surface business worsening? Q2: Surface lost $40 million on sales of $890 million. Q3: Surface lost $45 million on sales of $494 million. ~ Peter Bright (@DrPizza)

First, while it’s very true a few people definitely DO desire and desperately DO need a hybrid device — something between the tablet and the notebook — those road warriors are far fewer than Microsoft thinks (thought?).

Apple is right to shun the MSFT hybridization/bastardization. ~ Jean-Louis Gassée (@gassee)

For example, some people find hybrid utensils such as the spork and knock useful. However, the vast majority of utensil users stick with more traditional categories like spoons, forks and knives. Similarly, while the Surface and other hybrid tablets are extremely useful for some, the vast majority of users will stick to using phones, tablets and notebooks to satisfy their computing needs.

Second, Microsoft’s Surface tablet is in direct competition with Microsoft’s tablet manufacturing partners. How can people not see this is a bad idea? Let me illustrate what a god-awful strategy this is through the use of an equally god-awful joke:

Two Eskimos, sitting in a kayak, were chilly so they lit a fire in the craft. Unsurprisingly it sank, proving once again you can’t have your kayak and heat it too.

Microsoft needs to acknowledge reality and admit they can’t license their software to hardware manufacturers while simultaneously competing directly against those manufacturers too.

What you can expect from Microsoft is courage in the face of reality. ~ Satya Nadella

Third, I reject — and more importantly the market rejects — the entire concept of using the Microsoft Surface tablet as a “showcase” device.

Microsoft didn’t write off 900 million dollars on the Surface last year because they were trying to make the Surface their “showcase” device. Microsoft was all in with the Surface tablet.

One might argue Google’s Nexus devices are a successful example of how to do a showcase device right. One might argue that if one wanted to be wrong.

The concept of a Showcase device DOES NOT work. It’s been a great big zero for Google, it’s been far worse than a great big zero for Microsoft and it will forever and ever continue to be a losing strategy for anyone foolish enough to employ it.

Fourth and finally, while I agree the Surface tablet demonstrates Microsoft’s commitment to Windows 8’s dual OS (desktop and tablet touch) philosophy, I vehemently disagree with the notion a hybrid OS is something Microsoft SHOULD be making a commitment to. The philosophy behind Windows 8 is deeply flawed and it’s not going to be fixed by “committing” to it. On the contrary, the first thing Microsoft needs to do is to abandon, not commit to, the Frankenstein’s monster that is Windows 8.

It is better to run back than run the wrong way. ~ Proverbs

RATIONAL GEEK’S REBUTTAL:

There’s no denying the $900 million dollar loss is a good indicator people didn’t want what Surface, version 1, had to offer. I do however think it is not accurate to then conclude people are rejecting the idea of a converged device — one that is a tablet and can also potentially replace your laptop/desktop. I think the failure to sell has more to do with the painful transition from old style Windows to the new hybrid Windows 8. We are already seeing many small but significant improvements in Windows 8.1 that helps the two modes blend more seamlessly. This stuff happens. The first version tends to be rough around the edges but through iteration we begin to see a more polished product.

EDIT: This just in! Gartner’s latest report shows “hybrid PCs” are on the rise as iPad sales slow down.

This is notable because with all the talk of a declining PC market – if you combine hybrid PCs with traditional PCs, that segment is actually trending upward for 2014. No, this is not worthy of a victory lap just yet but it may be the beginning of a bright future for hybrid PCs.

I confess I am a bit biased, but not blindly. My bias is based on reality. My primary PC is a Surface Pro 2. It connects to a 27″ monitor, mouse and full sized keyboard when I’m at my desk. On the go, it’s just the Surface Pro 2 and a Type Cover. It easily morphs into a tablet when I want one – giving me a great touch experience – AND a laptop when I need it with full desktop support. Who else might be interested in a device that fits this flow? Possibly anyone carrying around an 11″ MacBook Air AND an iPad. Oh! and add to that everyone trying desperately to turn their iPads into laptops with various 3rd party keyboards. That’s no small market.

Regarding Surface itself, we should consider the state of the Windows OEM market at the time Windows 8 launched. Most had no idea what to make of Windows 8. It was new and confusing and expensive to include a touchscreen for their mainstream offerings. They weren’t sold. Left to their own devices, it’s not hard to imagine them abandoning the concept altogether.

Microsoft producing Surface did a couple of important things. One, it showed without a doubt their commitment to Windows 8. There was no hedging. This was their idea of a device that fully embraced the concept of Windows 8. If Microsoft didn’t believe in it then neither should their partners. Two, it represented *one* form factor but left the door wide open for OEMs to build and fill in the rest. You probably won’t see a Surface Ultrabook or a Surface desktop and everything else in between any time soon.

This is somewhere in the middle of old Microsoft where OEMs built the entire range of devices and Apple who builds all their devices. Understandably, Apple’s hardware selection is limited because they can’t make them all. For example, there is no 17″ MacBook Pro but I bet many would love there to be. Microsoft’s new approach is effectively the best of both worlds. They can produce a showcase lineup – though limited – and rely on their partners to build everything else.

Lumia+Surface+Xbox = Microsoft sells several billion dollars worth of hardware per quarter now. ~ Alex Wilhelm (@alex)

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EDIT: Two hundred million IT workers want Windows tablets. ~ Forrester

Microsoft’s Nokia Phone

A reminder: Microsoft now is the world’s biggest software company, and 2nd biggest phone maker by sales. ~ Shira Ovide (@ShiraOvide)

KIRK’S TAKE:

I don’t think Microsoft should be making phone hardware any more than I think they should be making tablet hardware (See “Microsoft’s Surface Tablet”, above). Unsurprisingly then, I think Microsoft’s acquisition of Nokia — which was just completed this week — was a huge mistake.

I would like to blame Ballmer for the monstrously confused and strategically backwards Nokia purchase. It was, after all, done on his initiative.

But the Microsoft board has to take the lion’s share of the blame. Apparently, the board didn’t agree with Ballmer’s pursuit of Nokia — but they let the purchase go through anyway, even as they were forcing Ballmer out the door. What the heck were they thinking?

The best thing — perhaps the only thing — the Microsoft board did on Microsoft’s behalf in the past ten years was to replace Ballmer with Satya Nadella. The second best thing they could do now would be to resign, en masse, in order to allow Nadella to get on with the job of fixing the mess they allowed Ballmer to make.

Please understand, the purchased portion of Nokia is still capable of making great products. But that is irrelevant. What is relevant is having one consistent business strategy. Microsoft can’t expect phone manufacturers to make Windows 8 Phones if Microsoft is making them too. It’s just common sense.

Further, you can’t justify the purchase of Nokia by pointing out Windows 8 phone sales are bad. This is tortured logic. If third party Windows 8 phone manufacturers are having trouble selling their wares now, how the hell is that situation going to be improved by having Microsoft compete against them too?

Reports indicate Satya Nadella originally opposed the idea of purchasing Nokia but later agreed it was the right thing to do. I take this as a good sign. I don’t think Nadella truly changed his mind. Instead, I’m hoping Nalella still thinks the purchase of Nokia is a mistake — but he was politic enough to know the Nokia acquisition was going ahead whether he was on board or not and he choose to climb on board rather than risk being left standing at the dock.

RATIONAL GEEK’S REBUTTAL:

This one is interesting because if the circumstances were different, i.e. Windows Phone was not dominated by Nokia and was getting traction with other OEMs, I would agree. But because the exact opposite is true, Nokia is too important to be left out of Microsoft’s control. Microsoft has recently announced WP will be free of charge. This should help entice more OEMs to build Windows Phones. Carriers have incentive to see a 3rd platform emerge and OEMs do as well. The fact Microsoft is now making WP free is a great example of OEMs benefiting from this competition.

Also, I wouldn’t compare Microsoft’s Zune to their current foray into hardware. Side note – the Zune was pretty great! 🙂 The big difference is the MP3 player market was a dead end. Apple completely dominated it and by the time Zune came along people were already transitioning away from dedicated players to their phones.

Unlike the MP3 player, no one would dare say the mobile phone market is a dead end. This space is full of potential – and it keeps growing!

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Cash Cows

KIRK’S TAKE

Microsoft has two cash cows — Windows and Office — that are NOT fully aligned with Microsoft’s new horizontal strategy.

In my opinion, Microsoft should milk those cash cows for all they’re worth. However — and here’s where it gets hard — they should always, always, always favor their new horizontal strategy over their cash cows whenever conflicts inevitably arise. For example, they should release Office for iPad, regardless of how it affects the sales of Windows licenses, Surface tablets, etc.

Oh wait…Microsoft just did that!

Tim Cook says he’s happy to have Office on the iPad. “If it had been done earlier it would have been even better for Microsoft, frankly.” ~ Harry McCracken (@harrymccracken)

And Microsoft should give up the notion that they’re going to be able to make a profit from licensing mobile operating system software.

Oh wait…Microsoft just did that too!

These are, in my opinion, signs that things are changing at Microsoft and changing in a very positive way.

Ideals may tell us something important about what we would like to be. But compromises tell us who we are. ~ Avishai Margalit

RATIONAL GEEK’S REBUTTAL:

I think we mostly agree here. Microsoft should definitely continue to milk their cows except I don’t think abandoning Windows and Office should be part of the goal. The strategy to move to the cloud should not require they abandon Office and Windows. In fact, the ultimate goal for Microsoft would be for people to continue using Office and Windows while leveraging Microsoft’s cloud and services. The key difference here is it is not “all or nothing”. Microsoft understands the current reality. There will be a mix of users on different devices and platforms and Microsoft wants to be a part of their flow. But their goal should still be people will get the best experience using all of Microsoft.

In the world of ubiquitous computing, we want Windows to be ubiquitous but that doesn’t mean one price or one business model. It’s actually a market expansion opportunity and that’s how we’ll execute on it. ~ Satya Nadella

Microsoft’s Universal Apps

KIRK’S TAKE:

Microsoft has announced Metro and RT apps will run across the phone, tablet, PC and even Xbox form factor. I am DEEPLY suspicious of the concept of Universal Apps. It sounds as if Microsoft has done a wonderful job with them but this “write almost only once and run almost everywhere” concept has been the Holy Grail — desired by all, found by none — of personal computing ever since there were two or more form factors or two or more operating systems to choose from.

I am willing to wait and learn but I am not willing to give Microsoft the benefit of the doubt. They can’t just tell me universal apps can be done. They have to show me they can be done.

RATIONAL GEEK’s REBUTTAL:

Yes I’m old enough to remember Java’s promise a long time ago. I think one of the big challenges for Java was it depended on Virtual Machines installed on various platforms, i.e. Windows, Mac, Unix, Linux etc. The same Java code would need to be interpreted and translated to each operating system’s specific language. I don’t think it’s unreasonable to say this model had many variables working against it. Contrast this to Windows RT. You are no longer dealing with multiple operating systems. There is only one – Windows. The universal app developer should be able to leverage the bulk of their code while focusing on adapting their User Interface to various form factors.

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Microsoft’s Muddled Thinking

KIRK’S TAKE:

In my opinion, having a horizontal business model that emphasizes services in the cloud AND having a hardware business model that sells Surface tablets and Nokia phones AND having a proprietary operating system model that licenses software and tries to create operating system lock-in, is muddled thinking. A company should have only one, not multiple, business models.

The response I often get when I suggest Microsoft has to choose one business model or another is: “Why? Why can’t Microsoft do it all? In fact, it’s Microsoft’s ability to do it all that makes them unique; that gives them a competitive edge.”

I’m sorry, but that kind of thinking is not just wrong, it’s dangerously wrong.

There is nothing worse than a sharp image of a fuzzy concept. ~ Ansel Adams

A company’s products are like the wheels of a car. They support the vehicle and enable it to speed ahead. A business model aligns the “wheels” of a company. If they’re not aligned, the vehicle will shimmy and shudder and run inefficiently.

Having multiple business models that prioritize different things is like pointing the wheels of your car in four different directions and expecting that to make your car go faster. What’s going to happen instead is you’re going to get a lot of wheel spinning, a lot of rubber burning, a lot of noise, a lot of smoke, a lot of engine wear and tear and not a lot of traction. In other words, you’re going to get the old Microsoft.

Satya Nadella has said “It’s gold rush time” in the cloud and SaaS markets. There are just a couple of companies positioned to capitalize on the dual opportunity of SaaS and infrastructure services and Microsoft is one of them.

Well, there are two ways to make money in a gold rush. You can pan for gold or you can sell the pans to the gold miners. This is the key — YOU CAN’T DO BOTH.

Microsoft is a big company but it’s not now, nor was it ever, so big that it could ignore the laws of business. If it wants to be good at any one thing, then it has to stop trying to be good at multiple things.

RATIONAL GEEK’S REBUTTAL:

I look at all of this in the context of ecosystems. The ecosystem story is important – maybe the most important. Microsoft, Google and Apple are all working very hard to keep users in their world. I think it would be quite compelling if Microsoft is uniquely capable of offering users the ability to buy an app on the phone once and download a version on a tablet and PC for free – or in any order therein. This is a value proposition easy to understand. With respect to apps, Google’s Android ecosystem starts at the phone and ends at the tablet. Same with Apple and iOS. With Windows RT, Microsoft can complete the circle.

I’d also like to note that competing ecosystems can be hostile. Take Apple for example. Their move to drop Google Maps from iOS and use Bing as Siri’s default search engine is a good example of why relying on another platform to deliver your services can be risky. Then there’s Google who’s still denying Microsoft any native Youtube application for Windows Phone. It would be wise for Microsoft to take necessary steps to control as much of its destiny as possible.

Microsoft’s Satya Nadella

Satya Nadella has really impressed me. The tone at Microsoft has completely changed since he’s taken charge and he’s saying all the right things.

In particular, Nadella has said Microsoft needs to “ask the hard questions” and have the “courage to face reality.” To many, these seem like mere platitudes. To me, they are an accurate diagnosis of what ails Microsoft and a prescription for how to fix it.

images-93

Your Turn…

One of the quickest ways to find out if you are wrong is to state what you believe. ~ Penn Jillette

I want to thank Rational Greek for helping me with this point/counterpoint experiment. He went above and beyond the call of duty. Truth be told, I’m not sure I agree with a single word he’s written (and I think the feeling is mutual – he doest agree with a single word of what I’ve said) but I do deeply respect his arguments. They were rational and well thought through. They were just built upon a different set of premisses than my own.

Fencing with Rational Geek has helped me to hone my arguments and further clarify my thinking on the future of Microsoft.

The aim of an argument or discussion should not be victory, but progress. ~ Joseph Joubert

You’ve heard from me and you’ve heard from Rational Geek. Now it’s your turn. What do you think is going to happen to Microsoft? Let us know in the comments, below.

The point of seeing both sides isn’t to hover between them but to be able to come down on the right side with the right degree of conviction. ~ Julian Baggini

Nokia Has Fallen. America Wins The Smartphone Wars.

Nokia has fallen. Not even the name will remain. America’s victory in the smartphone wars is complete — for now.

Last week’s news from the front lines of the smartphone wars illuminates the scope of America’s rapid mobile ascendency.

From Microsoft:

“Microsoft acquires Nokia’s smartphone and mobile phone businesses, its design team, most of its manufacturing and assembly facilities and operations, and sales and marketing support.”

From Facebook:

Mobile active users are 1.01 billion as of March 31, 2014, an increase of 34% year-over-year.

From Apple:

“We sold almost 44 million iPhones, setting a new March-quarter record.”  

And the week before, from Google:

Q1 2014 earnings totaled $15.4 billion in revenue, a 19% increase over the previous year’s $12.95 billion. Oh, and their Android platform is on nearly 80% of every smartphone in the world.

Designed By Apple And Google And Microsoft In America

iOS, Android and Windows Phone – American designed, American-led operating platforms all – account for nearly 98% of the global smartphone market, a truly stunning statistic. There appears no line on the horizon.

smartphone market share

As the world rushes to replace their mobile phones with smartphones, even Microsoft, now a distant third, is well positioned to fully capitalize on mobile. Their takeover of Nokia includes the company’s very popular Asha brand of hybrid smartphones/featurephones, as well as Nokia’s traditional handset business, which still ships more than 200 million devices a year. (Second only to Samsung)

Should America celebrate these results?

Yes.

Should the rest of the world take bold, perhaps costly action to limit the continued rise of America’s mobile dominance?

Probably they should try.

The Pivot To Mobile

How did America so convincingly win the smartphone wars? First and foremost by attracting, developing, retaining, and fully incentivizing the best and brightest.

Vision and execution are also paramount. Consider:

  • Apple’s relentless pursuit of optimizing hardware while simultaneously improving upon and expanding the modes of interaction with that hardware.
  • Google encourages, captures and then attempts to make sense of (and profit from) the multiple data streams we generate.
  • Facebook seeks to connect the world on a fully human level.
  • Microsoft has spent the past four decades making computer applications more empowering and productive.

Also, and despite their vast size, these companies move with speed. Witness Facebook’s head-turning pivot to mobile. I think Mark Zuckerberg should be hailed for this accomplishment.

facebook pivots to mobile

Weaknesses Along The Front Lines

Are there weaknesses in America’s smartphone leadership? Several, in fact.

Apple

iTunes is the center of Apple. It’s what locks us in, it’s what helps lure new customers. iTunes revenues are falling on a per-user basis. If iTunes spending falls on a per-user basis, I believe hardware margins will follow suit. Apple is optimized for hardware margins. The iTunes trend line thus appears ominous.

Revenue-per-iTunes-account

Google

Google still does not have an effective messaging strategy. This is confounding. There may be no more important mini-platform in the near term than messaging. Facebook, of course, battered its way into this critical market, dropping $20 billion on Instagram and WhatsApp in a single year. Google will almost certainly need to do the same. Larry Page has the wherewithal to follow suit — does he have the necessary humility? I am not convinced.

Google’s primary response to date, requiring SMS and messaging to default to Google’s Hangouts service, seems a rather anemic response.

Facebook

Though it claims over a billion mobile users, Facebook has no smartphone platform. This perpetually locks them out from critical user, usage and location data. That Facebook is now looking to buy its way into the wearables market, which potentially delivers incredible amounts of user data, should be no surprise.

That said, what will Mark Zuckerberg do when the ‘monopoly’ money runs out? Successful businesses aren’t sustained on buying up others’ creations.

Microsoft

Despite the well reviewed Windows Phone 8.1 OS, Microsoft has yet to reveal it can create a thriving mobile-first business.

Manufacturing

Microsoft’s purchase of Nokia notwithstanding, the vast majority of manufacturing of every piece of smartphone hardware is outsourced. The case has been made that regular interaction with new materials and new manufacturing processes will lead to those companies (and nations) becoming the primary source of innovation, thus trumping Apple, Google et al. This idea has not been borne out and I suspect it never will. Shedding our manufacturing abilities has no doubt damaged America’s middle class, but not its technology leadership.

Money and the Snowden factor

Smartphone platforms almost certainly contribute to a nation’s economic well-being and security. Smartphones link people, telecommunications and banking, holds our most personal information, tracks our movements, manages our identity, logs our purchases, connects us to first responders, and provides vital access to news, cultural and learning resources. We have to assume larger nations in particular are keenly incentivized to repel America’s technological reach. This is especially true in a post-Edward Snowden environment.

It’s not simply a matter of geopolitics, of course. Real money is at stake. Google and Facebook are effectively banned in China — and the in-country alternatives are now worth billions.

Over 90 million smartphones sell in China every quarter. China may decide to lock out Apple and Microsoft — or demand unreasonable ‘rents’. If China creates barriers to Apple, for example, or perhaps does all it can to promote or subsidize homegrown companies such as Xiaomi, then certainly Apple’s growth potential will be diminished.

I would also not be surprised if government sponsored firms in India or Indonesia, for example, purchase BlackBerry or commit significant resources to improving the open source version of Android (AOSP), which is free of all Google services. Success by any means necessary.

smartphone sales by country

Why This Matters

Smartphones are the next great phase in computing’s decades long remaking of work, play, learning, commerce, creativity and connectivity around the planet. They connect us with nearly everything. America is in the lead now. Americans may wish to celebrate this. To remain at the top, however, will demand vigilance, daring and vision.

Each phase of the computing revolution appears to come faster than the one before. The smartphone wars will soon be the technology revolution of the past.

Say Hello To Microsoft 2.0

Last week I said goodbye to Microsoft. This week I say hello to Microsoft 2.0. But before we look at where I think Microsoft is headed, let’s take a quick look at where they’re coming from.

The further back you look, the further forward you can see. ~ Winston Churchill

Microsoft 1.0 had one of the most successful business models of all time. But no matter how successful Microsoft became, management seemingly could not abide the thought of any other technology company sharing the spotlight of success.

  1. If a competitor was being successful with customers Microsoft wasn’t addressing, Microsoft had to have those customers as well.
  2. If a competitor was being successful in a market where Microsoft didn’t compete, Microsoft felt compelled to compete there as well.
  3. Most damning of all, if a competitor’s success could be attributed to its business model, Microsoft felt compelled to assimilate that business model and make it their own.

Microsoft wasn’t setting their own agenda. Instead, they were letting the successes of their competitor’s set the agenda.

Next to knowing when to seize an opportunity, the next important thing is to know when to forego an advantage. ~ Benjamin Disraeli

[pullquote]Thinking that adding another business model will make your company stronger is like thinking that adding another iceberg would have made the Titanic more seaworthy[/pullquote]

No company can satisfy every customer. No company can satisfy every market. And as for simultaneously employing different business models, thinking that adding another business model will make your company stronger is like thinking that adding another iceberg would have made the Titanic more seaworthy. ((Inspired by Chet Hurley))

iPod

As an example, look at how Microsoft responded to the success of the iPod.

In 2001, Apple introduced the iPod to mostly tepid reviews. However, approximately two years later, Apple added iTunes integration. The iPod’s popularity skyrocketed, becoming the vehicle that both saved Apple from the technology graveyard and later propelled Apple to technology greatness.

Now what does any of this have to do with Microsoft?

Absolutely nothing.

And that’s the point.

The iPod was no threat to Microsoft’s overall business strategy. In fact, when iTunes came to Windows, the iPod STRENGTHENED the Windows ecosystem.

However, the iPod’s success drove Microsoft mad with envy. Like a spiteful neighbor, Microsoft couldn’t stand to see Apple enjoying any success, even in an area where Microsoft didn’t compete and had no compelling reason to compete. Without ever clearly addressing the question of “why” they needed to respond to the iPod, Microsoft decided that it had to crush the iPod with a competing product of its own.

At first, Microsoft came out with their own MP3 software layer called “Plays-for-Sure” and licensed it to their hardware partners. When that failed to make a dent in the iPod’s success, Microsoft abandoned its traditional licensing business model (and their so-called hardware “partners”) and, with the Zune, adopted a vertical business model — the very same vertical business model that Apple had been honing and perfecting for over thirty years.

The Zune experiment was a dismal failure. Are we surprised? The goal of strategy is to make our opponents play to our strengths — to play our game on our home field. Microsoft did exactly the opposite. NO ONE does vertical technology like Apple. Apple lives and breathes vertical. Yet Microsoft — with virtually no experience in using a vertical business model — challenged Apple where Apple was strongest; where Apple had an inherent advantage; where Apple held the home field advantage.

It was a bloodbath. Not only did the Zune fail, it failed so spectacularly that it became the poster child for how NOT to compete with Apple ((The iPod remained the poster child for how not to compete with Apple until 2007, when Steve Jobs famously introduced the iPhone and Steve Ballmer famously responded by laughing at it.)).

If you can’t imitate him, don’t copy him. ~ Yogi Berra

Multiple Business Models

If you don’t know where you’re going, you might not get there. ~ Yogi Berra

Business models are not cords of wood that can be stacked up, one upon the other. You do not grow better by adding a new business model; you grow confused. You do not become bigger by adding a new business model; you become bloated. You do not become stronger by adding multiple business models, you become stranger.

MBM
FAKE CAPTION: The Simplest Known Explanation Of Microsoft 1.0’s Conflicting Business Models

A good business model — like a good argument — should be consistent, self-supporting and contain no inherent contradictions. You can tell when you have a good business model by how little internal friction it causes. You can tell when you have a bad business model by how your company always seems to be at war with itself.

To arrive at a contradiction is to confess an error in one’s thinking; to maintain a contradiction is to abdicate one’s mind and to evict oneself from the realm of reality. ~ Ayn Rand

Say Hello To Microsoft 2.0

With the changeover from Steve Ballmer to Satya Nadella, Microsoft has entered into a new era.

We can’t quite be sure yet exactly WHERE the good ship Microsoft is headed, but we can be very sure that Microsoft’s new Captain, Satya Nadella, is steering Microsoft in a radically different direction.

Microsoft is no longer pretending that its Office software suite will help it sell more Surface tablets. They have accepted the reality that Office should be untethered from their Windows operating system and from their Surface tablets so that it can be free to reside on Microsoft devices, Apple devices, Google Chrome devices…and as many other personal computing devices as possible.

It’s but little good you’ll do a-watering the last year’s crops. ~ Eliot Adam Bede

Microsoft is also no longer pretending that they can make a profit from selling mobile operating systems. They have accepted as reality the fact that Apple’s bundled hardware/operating system model and Google’s freemium operating system model have reduced the price of mobile operating systems to zero.

Face reality as it is, not as it was or as you wish it to be. ~ Jack Welch

Free

Microsoft offering free Windows on phones and tablets is nontrivial. This is a big move, as it changes their business model entirely. ~ Aaron Levie (@levie)

Month’s back I stated Microsoft needed its “hell freezes over moment.” I wonder if giving Windows software on smaller screens for free is it. ~ Ben Bajarin (@BenBajarin)

For a company which has been too long stuck in the fog of Redmond, it’s a remarkable turnaround. ~ Kontra (@counternotions)

Microsoft is re-inventing its business model which is the same as saying Microsoft is re-inventing themselves.

Say goodbye to Microsoft 1.0. Say hello to Microsoft 2.0.

Entrepreneurship is essentially identifying the path that everyone takes; and choosing a different, better way. ~ Sheldon Adelson

Horizontal

A coming together, a cloud for everyone and for every device; the first step on a journey. ~ Satya Nadella

Microsoft is going to a horizontal business model with a services layer above device platforms that isn’t dependent on any one operating system and provides Cloud services to all operating systems. Microsoft 1.0 was about Windows on every computer. Microsoft 2.0 is about MICROSOFT on every computer. It’s a subtle distinction with huge implications.

Horizontal business models thrive on cooperation and abhor confrontation with their vertical partners. Microsoft 2.0 — and its horizontal business model — wants its products to run almost everywhere, therefore it wants to be friendly with almost everyone.

Before Microsoft moved to a horizontal business model, try to imagine the following Twitter exchange taking place:

Welcome to the #iPad and @AppStore! @satyanadella and Office for iPad ~ Tim Cook (@tim_cook)

Thanks @tim_cook, excited to bring the magic of @Office to iPad customers #cloud4mobile ~ Satya Nadella (@satyanadella)

Or try to imagine John Gruber being on-screen at Microsoft’s Build conference:

This is odd/interesting. MS highlighting Apple watcher @gruber’s Vesper as an Azure developer/customer #bldwin ~ Mary Jo Foley (@maryjofoley)

jobs_macworld_1997In my opinion, John Gruber on screen at Microsoft’s Build Conference in 2014 is the poor man’s equivalent of when Bill Gates towered over Steve Jobs at Macworld in 1997.

Sometimes I’ve believed as many as six impossible things before breakfast. ~ Lewis Carroll

We didn’t know it then, but in 1997 Steve Jobs had just stooped to conquer — he had just conceded the PC wars to Microsoft thereby setting the table for his later post-PC triumphs. I think Microsoft — on a lesser scale — is doing the same today. They’ve conceded the post-PC wars…because they want to win the next war – the war for the Cloud.

Horizontal v. Horizontal

When you have a Horizontal business model, Verticals (like Apple) are not your enemies, they’re your friends. Your enemies are other horizontal business models competing in the same space as you. Hmm, who else do we know who has a Horizontal business model and competes in the Cloud?

Microsoft is clearly gunning for Android more than Apple now. ~ Matt Rosoff (@MattRosoff)

Legacy Business Models

Even if I’m right and Microsoft is trying to move toward a pure horizontal business model, they are still burdened with several dysfunctional legacy business models. I expect Satya Nadella to employ a two-pronged strategy to rid himself of these cancerous business models:

1) Unprofitable strategies (like Windows RT, the Surface tablet, Windows Phone 8, buying Nokia, moving to a functional organization) will be undone. This will take some doing but the process has already begun.

2) Profitable strategies (like the cash cows of Windows and Office) will be milked until they’re “udderly” dry. Then those cash cows will be put out to pasture while Microsoft moves on to the next great thing.

If I were running Apple, I would milk the Macintosh for all it’s worth and get busy on the next great thing. ~ Steve Jobs [Observation made before returning to Apple]

Part of me feels, at times, that Microsoft’s base case for mobile is to wait it out until the next disruption hits the reset button. ~ Ben Bajarin (@BenBajarin)

The End…Or Is It The Beginning?

Success wayIt’s still early days for Microsoft 2.0.

Lots of good stuff at the Build keynote, but it feels like Microsoft is still in the fairly early stages of a years-long transition. ~ Harry McCracken (@harrymccracken)

Any prediction would be premature.

Never make forecasts, especially about the future. ~ Samuel Goldwyn

With Microsoft’s bankroll, there’s still time to make the transition from Windows everywhere to Microsoft everywhere.

It’s never too late to be what you might have been. ~ Mary Ann Evans (under the pen name, ‘George Eliot’)

Microsoft 2.0 is very, very late to the game. Or maybe I’ve been looking at this all wrong. Maybe Microsoft is very late to the post-PC game but very early to the Cloud game. If so, then Microsoft 2.0 may have been well worth the wait after all.

If a girl looks swell when she meets you, who gives a damn if she’s late? Nobody. ~ J. D. Salinger, The Catcher in the Rye

Say Goodbye To Microsoft

In the beginning, Microsoft’s business model was simple. They made the Windows operating system and licensed it to manufacturers, who then put it on their various computing machines. In the mid-nineties, Windows gained critical mass with businesses which, in turn, led to the adoption of the Windows operating system by consumers. The PC OS Wars were not just won by Microsoft, they were decisively won by Microsoft. Every other company that made competing PC operating systems was annihilated, save Apple, which only held on by the skin of their teeth.

Microsoft’s original audacious vision was a computer on every desk. (Importantly, that vision later became corrupted and transformed into “Windows” on every desk.) By the turn of the century, Microsoft had, for all intents and purposes, accomplished their mission. Now what?

A company that feels it has reached its goal will quickly stagnate and lose its vitality. ~ Ingvar Kamprad

When Money Is Your Guide, You Are Lost

Steve Ballmer has often said his goal was to make money. And he did. But making money is the means, not the ends.

Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver. ~ Ayn Rand

I’m a HUGE fan of companies making money. Money is the way one keeps score. But money is not the game. And the game’s the thing.

To fulfill a dream, to be allowed to sweat over lonely labor, to be given a chance to create, is the meat and potatoes of life. The money is the gravy. ~ Bette Davis

A business that makes nothing but money is a poor kind of business. ~ Henry Ford

There are people around here who start companies just to make money, but the great companies, well, that’s not what they’re about. ~ Steve Jobs

Money is a great incentive, but when it becomes your main incentive, it attracts the wrong kind of people.

You cannot motivate the best people with money. Money is just a way to keep score. The best people in any field are motivated by passion. ~ Eric S. Raymond

If a company values profits more than its vision, it will first lose its vision and then, ironically, it will lose its profits too. Money is an excellent servant but it is a terrible master.

Microsoft’s Lost Decade

Microsoft desperately tried to get into phones, tablets, watches and TVs but they missed and they missed badly. This is where their subtle shift from “a computer running a Microsoft operating system on every desk” to “a computer running Windows on every desk” came back to haunt them.

Where it is a duty to worship the sun it is pretty sure to be a crime to examine the laws of heat. ~ John Viscount Morley

At Microsoft, Windows was the Sun and anyone who espoused anything else was a heretic that had to be hunted down and eliminated.

Rather than try to create an operating system right for the various emerging form factors, Microsoft insisted — over and over and over again — on trying to shoehorn Windows onto every form factor. The results were disastrous.

The Mobile Wars Were Over Before Microsoft Even Entered The Fray

iOS and Android won the mobile OS wars as decisively as Microsoft had won the PC OS wars.

First, iOS and Android got out to a huge lead long before Microsoft was able to respond with Windows Phone 7 (then 8) and Windows RT and Windows 8.

Second, Google undercut Microsoft’s licensing model by giving their Android OS away for free.

MicroChartMicrosoft – like World War II Japanese soldiers stranded on deserted islands – continued to pretend the war was ongoing while everyone else went about the business of post-war reconstruction. Not only had Microsoft lost the post-PC wars, but their insistence the world was still fighting the PC wars jeopardized their possibilities in the post-post-PC world, as well.

Microsoft’s Anti-Strategy

Strategy is about choices, about making the hard decisions and about focus. Microsoft’s response to iOS and Android might be described as an anti-strategy. They chose not to choose, they decided not to decide, they focused on everything (which is to say that they focused on nothing).

  1. Microsoft wanted to be Google so they created Bing
  2. Microsoft wanted to be Microsoft so they licensed their OS software
  3. Microsoft wanted to be a monopoly so they ported their desktop OS to tablets
  4. Microsoft wanted to be iOS so they created Windows Phone 7, then 8
  5. Microsoft wanted to be in tablets so the created Windows RT
  6. Microsoft wanted to be the iPad so they created the Surface
  7. Microsoft wanted to be Apple so they restructured their company along functional lines
  8. Microsoft wanted to be the iPhone so they bought Nokia

Be yourself. The world worships the original. ~ Ingrid Bergman

The secret of change is to focus all of your energy, not on fighting the old, but on building the new.

The key to success is to focus our conscious mind on things we desire, not things we fear. ~ Brian Tracy

We believe in saying no to thousands of projects so that we can really focus on the few that are truly important and meaningful to us. ~ Tim Cook, Acting Apple CEO, January 2009 FQ1 2009 Earnings Call

Microsoft didn’t play to their strengths. Instead, they entered every game and tried to compete everywhere.

If you don’t have a competitive advantage, don’t compete. ~ Jack Welch

Microsoft didn’t want to narrow its options. Instead, they wanted to be everything to everybody. They didn’t want to be anything in particular so they produced nothing anybody particularly wanted.

VegiHam

CAPTION: The very epitome of a Microsoft product — chicken-flavored vegetable ham.

Conclusion

Honest criticism is hard to take, particularly from a relative, a friend, an acquaintance, or a stranger. ~ Franklin P. Jones

The recipe that made Microsoft dominant is not the recipe that will make them relevant again. Say goodbye to Microsoft…

Bye

…the new Microsoft has arrived.

Next week, I’ll look at Microsoft’s new strategy and analyze its potential and its potential pitfalls. (SPOILER ALERT: So far, I like what I’m seeing.)

Do not go where the path may lead, go instead where there is no path and leave a trail. ~ Ralph Waldo Emerson

Panic Inside Apple and Cheers for Satya

The blogosphere has suddenly discovered the incredible array of products, tools and services Microsoft has long possessed. Better late than never, I suppose. Fact is, their realization of the obvious is in large part due to the accessible dynamism and well-regarded tech cred of Microsoft’s new CEO, Satya Nadella.

Nadella’s hire makes for a great story on many levels. I will get to those in time. The more important story however, is the potential trouble brewing inside Apple.

Yes, Apple is the richest tech company in the world. Its laptops, smartphones and tablets are the established market leaders. But as we learned last week, from still another Apple-Samsung court case, Apple is clearly in the throes of that great ontological concern sure to stricken all those with immense wealth and power: Who am I? 

The very question could prove debilitating.

Since being named CEO, Nadella has rallied the troops, made the necessary overtures to developers, appeased the critics, silenced the doubters and taken rather bold, once unthinkable actions to ensure Microsoft has a prosperous future in mobile, in the cloud, in homes and businesses, on Apple, the web, and the Internet of Things. Not a bad two months.

The talk about Apple? There’s still no large display iPhone and the iPhone 5c is still unwanted.

All Our Yesterdays

Thanks to Apple’s ongoing “holy war” against Google — and the court documents that are now public — we learned last week what we already suspected:

  1. Samsung’s ads attacking Apple users are particularly powerful.
  2. The market for smartphones costing less than $300 is growing like mad — and this greatly concerns Apple.
  3. The market for smartphones with displays larger than the iPhone 5 and 5s is growing like mad — and this greatly concerns Apple.

iphone-4-5-inch-displays-1

We learned something else, however. Something I had not previously considered — there is dissension among the upper ranks of Apple.

Apple is struggling to understand the bounds between margins and market share and how best to maintain the profit stranglehold its iPhone franchise has on the industry.

If Apple doesn’t know, this game just got really interesting.

Guess what? Apple doesn’t know.

The iPhone 5c has made that painfully clear.

With iPhone sales growth rapidly decelerating, SVP Phil Schiller is rightly worried “customers want what we don’t have.”

What Apple doesn’t have of course, is two things: an iPhone under $300 and an iPhone with a larger Lumia 1520-like display — the two areas where most of the smartphone growth is coming from.

Expect a larger display iPhone this year.

The low cost iPhone was supposed to be here already: the iPhone 5c.

Someone at Apple clearly blinked.

Given Phil Schiller’s exhortations for a low cost device, my suspicion is Schiller is now on the opposite side of Jony Ive and possibly even Tim Cook. Given the early growing pains of iCloud, perhaps Eddy Cue also was opposed to a low cost iPhone. They really needed to have decided all that before launching 5c.

Tomorrow and Tomorrow and Tomorrow

The iPhone 5c was meant to be the “low cost” iPhone but has failed at this one job. It’s almost comically overpriced. I’m now convinced internal divisions, corporate concerns over margins, branding and sourcing all forced Apple to blink and price the 5c far higher than it ever should have been.

As I wrote in a previous Insiders post (subscription required):

Apple’s iPhone 5c has been a striking failure, however, selling far fewer devices than Apple expected, likely dampening overall iPhone sales, and, if well-placed rumors are correct, very soon to be no longer of this world.

It all began, of course, with so much promise. The iPhone 5c — aka the “cheap iPhone” — was, we were convinced, going to be the aggressively priced new iPhone, ready to dismantle Android throughout the developing world, possibly beyond. It would (quickly) add tens of millions, ultimately hundreds of millions of new users into the Apple/iOS ecosystem.

Based on the court documents we saw last week, which make clear many inside Apple understood the pressing threat from the low end, such a low priced device was commissioned. Only…Apple doesn’t do low end.

But it must.

But Apple doesn’t do low end.

The end result: a failed product, at least. Given Apple’s strengths, that’s easy to recover from. If there are splits within Apple’s executive ranks, however, that could prove a lasting harm.

The iPhone 5c should not exist unless it’s priced at about $300 or so. The forces within Apple demanding such a device obviously clashed with the forces that demanded margins — and brand equity — trump new users.

I confess I find this fascinating.

I find it even more intriguing now that the giant, bloated, aging Microsoft has been rather stunningly re-energized.

In my earlier Insiders post on the iPhone 5c, I was troubled with the question, ‘why’. Why did the 5c happen and how?

Explain this: A 16gig 5c retails for $549. A 16gig 5s retails for $649. Why?

For that extra $100, the iPhone 5s buyer receives the following additional hardware, services and benefits:

  • A7
  • M7
  • TouchID sensor
  • Lighter weight
  • True Tone flash and larger 8 MP sensor
  • Slo-mo video
  • Enhanced imaging features

I stated then Apple had foolishly devalued its hardware by making a mere $100 price differential between iPhone 5s and iPhone 5c:

The most egregious, most confounding failure of the 5c, and the one I think will haunt Apple, is that the 5c effectively declares to all the world that one or all iPhones are radically overpriced. I am at a loss to understand how Apple allowed this to happen.

Now I know. Internal divisions. The 5c is a fine product, one explicitly designed to bring millions more into the iOS ecosystem. Only, the counter-forces decided another piece of beautiful, functional Apple hardware could not be priced with other ‘mid-tier’ devices.

That’s just not Apple.

Full Of Sound And Fury

The iPhone still accounts for the majority of the Apple’s revenues. The focus then is on building out the iPhone base, maximizing its profit potential, surrounding it with more and more devices, services and accessories to ensure lock-in. This is Tim Cook’s wheelhouse.

You can brand Cook as not being a ‘product guy’ like Steve Jobs, or not a true techie like Satya Nadella, but there is probably no one better suited for growing Apple and the iPhone business.

iphone revenues

With Cook in charge, and given his keen ability to scale manufacturing and optimize profits, expect the iPhone to be the center of the Apple universe for years to come, probably through at least this decade.

Apple wearables will require the iPhone. CarPlay will require the iPhone. New Apple accessories will be optimized for the iPhone. iBeacons will work best with the iPhone. New forms of peer-to-peer and point-to-point sharing, via the iPhone, will be rolled out over the months and years.

This is all very wise.

But I confess the failure of Apple to deliver a low cost iPhone, when so many obviously want one, when its top execs understand the potential for one, does make me question Cook’s ability to guide Apple toward the post-iPhone revolution.

Unfair? Perhaps. Even if I’m right, given I expect iPhones — smartphones, in general — to be our primary mode of computing and connectivity through this decade, Apple likely won’t feel the least bit of pain.

We are, after all, still well into the evolutionary phase of smartphone and tablet computing. This year’s iPhone, this year’s iPad, will be better than last year’s. Next year’s will be better still. And so on and so on. But a revolutionary new product? One that can live outside of the iPhone or iTunes sphere? Do not expect any such breakthrough product or service anytime in the near future from Apple. Apple is on a very direct course, set by Tim Cook, with its mission being to ensure the iPhone continues to print money. A low cost iPhone would have threatened the vision Cook holds for Apple’s future. It’s a vision I believe is almost guaranteed to succeed yet also highly predictable.

At Microsoft meanwhile, everything is in flux.

Which brings me back to Satya Nadella. He has the benefit of knowing his core moneymakers are nearing the end of their life. Tim Cook is not yet aware of such horrors.

When that day does come, I cannot say if he will still be the best person to lead Apple.

Rebuttal: 10 Reasons To Not Buy A Windows Tablet

ZDNet posted an article entitled: 10 Reasons To Buy A Windows Tablet Instead Of The iPad Or Android.

[pullquote]If you haven’t got anything good to say about anyone, come sit by me. ~ Alice Roosevelt Longworth[/pullquote]

The ZDNet article proves to me you’re never too old to learn something stupid. The justifications used to support the proposition one should buy a Microsoft tablet are as stupid as they get.

Let’s review, shall we?

1) It’s all about choice

    “Having options available is always a good thing…”

That just ain’t so. Options don’t matter unless they’re GOOD options or, more specifically, unless they’re better than the options already available. Benedict Evans is fond of saying that some people suffer from “Technology Tourette’s” — a baffling disease that causes some technology enthusiasts to grow neck beards and shout out random tech memes like “Open!” and “Choice!” at inappropriate times. That seems to be what’s occurring here.

Choice is not an end, it’s a means and it’s the quality of one’s choices — not just the availability of choice — that matters. If you demonstrate Windows tablets are better, fine. But just claiming they’re different from what’s already available doesn’t cut it as an argument.

2) Plug it in

    “Windows tablets are full PCs. Most can do anything that their bigger siblings can do, and that includes letting owners plug peripherals in to do stuff.”

[pullquote]When it’s three o’clock in Cupertino, it’s still 1995 in Redmond.[/pullquote]

That argument is like a marshmallow — easy to chew, but hard to swallow. ((Inspired by Alberto Nikas))

First, most everything listed in the article can now be done wirelessly — no cables required.

Second, didn’t Microsoft just spend the last decade stirring up apathy about the wonders of having a full PC on a tablet? How’d that work out for them?

Third, didn’t the iPad become a computing phenomenon without all those cables?

160_F_31117682_7sZOFRNgAwbAjqfA4bMyMcFR9KPkmkekMicrosoft claiming their tablets are equipped with the full PC experience is like a hooker claiming she is equipped with a chastity belt. It’s neither a feature nor a benefit.

3) Keeps getting better

    “Windows 8 wasn’t that great on tablets when first introduced, but that’s a thing of the past.”

I think we can agree. The past is over. ~ George W. Bush

That reminds me of a joke:

Morty comes home to find his wife and his best friend, Lou, naked together in bed. Just as Morty is about to open his mouth, Lou jumps out of the bed and says, “Before you say anything, old pal, what are you going to believe, me or your lying eyes?” ((Plato and a Platypus Walk Into a Bar, Thomas Cathcart & Daniel Klein ))

So who are you going to believe, ZDNet or your lying eyes?

Apparently the Windows 8 design team believe if two wrongs don’t make a right, try three…or four…or five…

  1. Saying Windows 8 is getting better on tablets is like saying one’s rash isn’t as noticeable anymore (although it still itches like crazy).
  2. Windows 8 is so bad that if it had been introduced 2,000 years ago, it would have been stoned.
  3. Windows 8 is so bad that if it were your lover it would give you an anticlimax. ((Inspired by Scott Roeben))

And Windows RT (also known as “I-have-no-idea-what-they’re-calling-it-now?”)? Well, that reminds me of another joke.

Q: What do you call a dog with no legs?
A: It doesn’t matter because it’s not going to come anyway.

It doesn’t matter what you call Windows RT because it’s a dog and its got no legs.

4) Double duty

    “Many tablets are available in hybrid form, a slate (screen) that plugs into a dock that turns it into a laptop. These are tablets when you want one and laptops when you need one, as Microsoft is fond of telling us.”

Double “doody” devices are a great problem, masquerading as a great good.

If you’re on a camping trip, you might want to use a Swiss Army knife. But if you’re at home, you won’t ever use it to carve the turkey, open a can or a bottle of wine. You’ll have better tools available.

Similarly, if you’re a road warrior, you may want a two-in-one. Like the Swiss Army knife, it’s a convenient, but compromised, tool. If sales totals mean anything to you — and they certainly mean something to the rest of the world — it appears that even most road warriors would prefer to carry both a tablet and a notebook rather than endure the compromises inherent in a hybrid computing device.

I think well-known-tech-reviewer, Abraham Lincoln, may have best summed up the problem with hybrids:

If this is coffee, please bring me some tea; but if this is tea, please bring me some coffee. ~ Abraham Lincoln

5) Then there’s Office…

    “A lot has been said about the need for Microsoft Office on tablets, and while there are decent alternatives to Office on the other tablet platforms, there’s no solution as complete as the genuine article.”

First, many — nay most — do not need to use Office.

Second, there are numerous Office alternatives available.

Third, if you need to use Office, you’ll be much happier using a notebook than a tablet. Office is not optimized for touch.

Fourth, Microsoft is soon going to bring Office to the iPad.

So what was the point ZDNet was trying to make?

6) Do some real work

    “You hear a lot of discussion about what constitutes real work, and while I can do my work on any tablet, some need Windows.”

ZDNet conflates two arguments here. If you need to use Windows, then by all means, buy a Windows machine. (Although some contend “The Best Windows PC Is An Apple Mac.”) However, Windows desktop programs aren’t optimized for touch, so a notebook would probably be more appropriate than a tablet.

If you really need to know if your computer is doing “real work,” then first you have to know what the definition of “work” is and even before that, you need to know what the definition of “definition” is.

“Definition” is “an exact statement or description of the nature, scope, or meaning of something.”

You use a definition to define an object. You do not use an object to define a definition.

Defining “real work” by comparing it to what one can do on a PC or Windows tablet is the same argument — and the same erroneous argument — PC aficionado’s used to make when they contended tablets weren’t “real” computers. They looked at their PCs, listed all of its attributes and then excluded from the definition of computing anything that didn’t have all of those attributes. This is akin to looking at a cow and claiming anything that doesn’t have all of the characteristics of a cow isn’t a mammal.

“Work” is an “activity involving mental or physical effort done in order to achieve a purpose or result.”

The “purpose or result” is defined by the user, not by the tool. It’s the user, not Microsoft, who gets to define whether the tool does the “real work” or not and the fact 95% of all Enterprise software on tablets runs on iOS should put to rest Microsoft’s pompous contention that non-Window’s tablets don’t do “real work.”

Unbelievably, here’s the screenshot that ZDNet used as support for their claim one can do “real work” on a Windows tablet.

06-real-work

Yikes! If that’s what ZDNet means by “real work”, you can keep it. ZDNet couldn’t have parodied their argument better if they’d tried.

PedalSkatesI suspect if Microsoft had been in the bicycle business at the turn of the last century, they would have offered “pedal skates” as their alternative to Apple’s roller skates, all the while claiming their pedal skates were “real” bicycles because they had “real” tires.

Sigh. It’s a “tired” argument that falls flat. ((There’s probably a RIM joke in there somewhere too.))

7) Lots of apps

Well, that’s just a damn lie. App support for Windows 8 is third of three, so it’s a reason NOT to buy a Windows tablet, not a reason TO buy a Windows Tablet.

One could contend Windows apps are “good enough.” One could contend it, but it still wouldn’t make it so. There are not only huge holes in the Windows lineup, but the apps that are available are often mere shadows of the originals – unoptimized for touch or poorly implemented copycats.

Windows 8 has less apps, the apps it has are less useful and Microsoft is porting its own apps to Apple devices. So how exactly are “apps” a reason to buy Windows tablets?

Microsoft app not only in the Mac App Store, but featured as Editor’s Choice. Different era, I know. Still weird. ~ MG Siegler (@parislemon)

BjB-ZruIEAE-DCu

The above ad came out yesterday. Notice anything missing? (Hint: It’s Windows 8.)

8) Run any browser you want

Geez, that’s some awfully weak sauce. Let’s tease out the reality.

First, most users don’t care about multiple browsers on their mobile devices.

Second, most browsers are optimized for their mobile devices. (Tip o’ the hat to @jseths)

Third, the browsers available on Window 8 are not touch enabled. Which kind of puts a serious crimp in the entire contention Windows 8 tablets come with multiple browsers.

Fourth, even the browser users are pulling out of Windows 8.

Fifth, if multiple non-touch optimized browsers are what you really want on your tablet then by all means the two of you should go out and buy a Windows tablet.

Regarding Firefox Metro, you can complain when devs don’t support Metro, but when they do and see no usage, hard to complain if they kill it. ~ Paul Thurrott (@thurrott)

9) Multi-tasking on the screen

    “Those who do two things at once on an iPad or most Android tablets are all too familiar with having to swap between the two app screens. Bouncing back and forth is OK, but it would be much better to have the two apps displayed side-by-side on the tablet screen. Windows tablets have you covered in this regard, as snap view lets you put two apps up at once.”

Well, on the one hand, many apps do not work with snap view. On the other hand, I really like snap view and if it’s a big plus for you, have at it on your Windows tablet. However, I strongly suspect that design-wise, mobile is made for full screen use. As the world-famous designer, Dieter Rams put it: “Less, but better.”

I’m comfortable letting the market act as the judge and jury on this one.

10) Long-term viability

    “Companies come, and companies go, and that’s especially true in the mobile space. Buying into a mobile platform with any device is making a leap of faith that the platform and the company behind it will be around for the long haul.That’s not a concern with a Windows tablet, as Microsoft is certain to be around for a long time.”

[pullquote]He’s a very competitive competitor, that’s the sort of competitor he is. ~ Dorian Williams, horse show commentator[/pullquote]

Whoa, whoa and whoa!

What a bizarre argument. First, saying Microsoft will be around in the long run is not the same thing as saying Windows 8 will be around in the long run.

Innovation is a process. Innovativeness as an attribute of a company is a measure of its processes not its assets. ~ Horace Dediu (@asymco)

Second, saying Microsoft is committed to Windows 8 tablets is not the same as saying Windows 8 tablets will be around in the long run. I’m pretty sure IBM was committed to OS/2, Palm was committed to WebOS, and RIM was committed to Blackberry. The crucial question is not whether Microsoft is committed to Windows 8 but whether the developers are committed and the answer to that question is a resounding “no.”

Guardian: Firefox on Windows 8 Metro only had 1,000 daily users. ~ Charles Arthur (@charlesarthur)

(Perhaps it’s not so much developers are rats deserting a sinking ship as they are ships deserting a sinking rat.)

[pullquote]Microsoft is like the guy at the party who gives everybody cocaine and still nobody likes him. ((Inspired by Jim Samuels))[/pullquote]

Firefox says Windows 8 is a black hole, kills its Metro app ~ Sameer Singh (@sameer_singh17)

Mozilla pulls the plug on ‘Metro’ mode Firefox browser for Windows 8. Windows 8 isn’t a failure? You’re kidding right? ~ Bhaskar Bhat (@bhaskarsb)

Windows Tablets have long-term viability? Au contraire. Windows 8 has the life expectancy of a small boy about to look into a gas tank with a lighted match. ((Inspired by Fred Allen))

Conclusion

There are two kinds of writer: those that make you think, and those that make you wonder. ~ Brian Aldiss

This article makes me wonder what the writer was thinking. Let me put it this way. If this author had been the Captain of the Titanic, he’d deny the ship had hit an iceberg and say they were only stopping to pick up some ice.

[pullquote]Everything happens for a reason. Sometimes the reason is that you’re stupid and make bad decisions. ~ Parody Bill Murray (@BiIIMurray)[/pullquote]

The fundamental problem with Windows 8 hasn’t changed: you’re still working in two operating systems at once. And it can’t be “fixed,” it can only be undone.

If you board the wrong train, it is no use running along the corridor in the other direction. ~ Dietrich Bonhoeffer

This is the ultimate strategy tax. The visionary starts with a clean sheet of paper, and re-imagines the world. ((Malcolm Gladwell)). The last thing Microsoft wanted to do was to start anew. They wanted to leverage their existing desktop Windows monopoly. Instead, Windows 8 is an anchor so big it’s sinking not only Microsoft’s mobile hopes but their desktop franchise as well.

Which reminds me of one last joke:

      A magician is working on a cruise ship, but there is one problem. The captain’s parrot watches every show he does, and after figuring out the tricks, the parrot has started yelling out the secrets of how the tricks are done.
The bird says, “Look, it’s not the same hat!” or “Hey! He’s hiding the flowers under the table!”
The magician is enraged. But it’s the captain’s parrot, so he can’t do anything about it.

One day on a long cruise, there is an accident. The boat crashes and sinks. The magician and the parrot find them themselves clinging to the same plank of wood in the middle of the ocean. For days neither says anything. Finally, after a week, with no hope in sight, the parrot says, “Okay, I give up. Where’s the boat?”

[pullquote]Anyone can win, unless there happens to be a second entry. ~ George Ade[/pullquote]

There is no boat. And there is no salvaging of Windows 8 either. You can “parrot” Microsoft’s PR all you want, but it’s like they say:

Those who get too big for their britches will be exposed in the end.

Who Won The Mobile Tech Olympics?

Business is a combination of war and sport. ~ André Maurois

The Long Summer Of The Microsoft Monopoly Olympics

Computing was pretty simple for the last 15 years: PC plus a browser. Both are splintering now. ~ Benedict Evans (@BenedictEvans)

Once upon a time — long, long ago in 2006 — the Personal Computing Olympics used to be oh-so-simple. First off, you weren’t even invited to the games unless you were bosom buddies with Microsoft. And almost everybody who attended got a medal (but Microsoft took home most of the Gold, if you know what I mean). It was the long summer of Microsoft and we thought that it would never end.

Then along came Mobile. Mobile changed the game as radically as if the Olympics had switched from Summer Games to Winter Games. The world of computing was turned on its head and it would never be the same. Oh, Microsoft tried to play in the new Mobile Winter Olympics, but they were ill prepared. Surprisingly in foresight, but unsurprisingly in hindsight, the new Winter games left them cold.

One Olympics, Two Champions

So much for the old Olympics and the former Olympian. Let’s turn our attention to the New Mobile Winter Olympics and the question of who won them. The answer? Well, it depends upon the question you ask.

It is not the answer that enlightens, but the question. ~ Eugene Ionesco

You see, the Tech Olympics — just like the real Olympics — are divided into two very different types of games:

    1) Subjective Games that are judged by a panel of judges — like Ice Dancing and Half-Pipe; or

    2) Objective Games that are determined by clocks, tape measurers and other quantifiable metrics — like Speed Skating, Downhill Slalom and Ski Jumping.

So who won the Tech Olympics — just like who won the real Olympics — depends on how you score the games. Are you judging based on how the market responded or how the press responded or are you judging based upon objective measurements? Two very different ways to measure. Two very different types of winners.

The Subjective Olympics

And the medalists in the Subjective Olympics are:

Gold: The Google and Android twins walked off with the Couples’ Gold Medal. The Judges raved about their mobile acumen and no one else even came close to matching their exquisite market share.

Silver: Samsung came in a very strong second for the Silver Medal. Some argued that they should have won it all, but Samsung was all strength, no subtlety; all power, no grace. Four years ago, no one even expected that Samsung would be at the games, so they should be grateful just to be standing on the (Android) platform.

Bronze: And the Bronze goes to Amazon, of course. True, Amazon did not have a particularly productive Olympics. They over-performed in revenue, but under-performed in profits. But none of that really mattered to the Judges. Amazon’s coach was brilliant, their business model dazzling and their potential awe-inspiring. The Judges awarded the Bronze to Amazon not on merit but because it was clear to them that Amazon was destined for greatness.

Off The Podium: Apple? As if! Pushed off the podium altogether. All sorts of glitzy performances, but they only entered a few, select events, they had the smallest team at the Olympic Village and they could muster only a paltry market share, to boot. On the whole, a most disappointing performance.

Oh, it was true enough that Apple had its fanatical, cult-like following, but Apple’s fan base was oh-so-tiny in comparison to the other contestants and it was full of pretentious baristas and other obnoxious types. Apple simply didn’t fit the Judge’s image of what it takes to make a champion.

The Objective Olympics

The medalists for the Objective Olympics were a different story altogether. Let’s do them in reverse order:

Disqualified of Did Not Finish: Sony, Panasonic, Sharp, BlackBerry, Palm, Dell, and far too many others to list. Some started too soon, some failed to finish, some did both.

Shut Out: Microsoft talked a big game, but they finished with no medals. However, they vowed to win the next Olympics, for whatever that’s worth.

Bronze: The Bronze? No winner. The podium remains empty.

Silver: Samsung of course, with a strong showing. 309 million units, which represented 39.5% of total Android shipments in 2013.

Gold: In a surprise to absolutely no one who was paying any attention and to absolutely everyone who wasn’t — the Gold went to Apple. And it wasn’t even close.

Scoring The Objective Olympics

[pullquote]I like long walks, especially when they are taken by people who annoy me. ~ Fred Allen[/pullquote]

“Apple!” cried the outraged Subjective Olympic judges. “Apple, the winner? And no medal for Google and Android? Impossible. Outrageous. Unheard of! The fix is in!

“Well, you see,” the Objective Judges calmly explained to their irate brethren over and over again, “in the Objective Olympics, we judge things by objective criteria and Apple walked away with them all — save one.

1) Apple gained mobile phone share. ((Gartner: Apple gained mobile phone share as smartphones overtook feature phone sales in 2013))

2) Apple dominated mobile platforms. ((Apple’s control of the app economy stronger than you know;
—
The Smartphone App Wars Are Over, and Apple Won))

The Smartphone App Wars Are Over and Apple Won” Yep. If you care about have the best/newest. Ben Thompson (@monkbent)

3) Apple dominated profits. Their profits went UP from 78% to 87.4% in 2013. And just to give you an idea of how much Apple dominated, iTunes — which is their “loss leader” — grossed half as much ($17.5B) as all of Google combined. ((Mobile phone market hits ‘the great moderation’;
—
Including hardware, iTunes grossed about $175b in 2013))

Market share is the right metric for Android’s business model. Revenue is right for iOS’. The two aren’t mutually exclusive. ~ @mtabini ((via ArrAySee @ArrAySee))

4) Apple INCREASED their Enterprise dominance. Apple’s iPad took 91% market share of enterprise devices. iOS took 73% overall. ((Apple’s iPad takes 91.4% share of enterprise tablets; iOS takes 73% share overall
—
Apple maintains enterprise dominance; Windows Phone lags
—
iOS Dominates Enterprise Market with 73% of Mobile Device Activations))

5) Apple dominated brand loyalty. iPhone owners have “blind loyalty” and will buy anything Apple makes. 78% of UK iPhone owners ‘couldn’t imagine having a different type of phone now. ((Study: iPhone owners have ‘blind loyalty’ and will buy anything Apple makes
—
78% of UK iPhone owners ‘couldn’t imagine having a different type of phone now))

Two Different Ways To Judge, Two Different Types Of Olympians

“What, what, what,” sputtered the flustered Subjective Judges. “If the facts favor Apple, then the facts must be Apple Fanbois!”

Yeah, they kinda are.

[pullquote]Android’s increased market share HAS NOT come at any cost to Apple’s iOS[/pullquote]

It’s been apparent for years that Apple was taking the high end of both phones and tablets and that Android was taking almost all of the rest. What HAS NOT been apparent to many is that Android’s increased market share HAS NOT come at any cost to Apple’s iOS. As noted, above, despite Android’s massive increase in market share, Apple’s numbers in platform, profits, Enterprise and customer loyalty all went UP.

Did you hear about the guy that lost his left arm and leg in a car crash? 
He’s all right now.

Did you hear about the company that lost all the profitless market share they weren’t ever competing for? They’re all right now too.

In Olympic terms, Apple didn’t enter the most events, Apple didn’t win the most medals, Apple didn’t win any medals in any event that they didn’t enter, Apple didn’t win any bronze or silver medals, but Apple kept its eyes on the prize and they took home the Gold in every event that they participated in.

Market share is the right metric for Android’s business model. Revenue is right for iOS’s. The two aren’t mutually exclusive. Not that hard. ~ Marco Tabini (@mtabini)

Using market share alone as the one and only measure for who won and who lost the Mobile Tech Olympics borders on the delusional.

[pullquote]Life’s hard. It’s even harder when you’re stupid. ~ John Wayne[/pullquote]

  1. It’s like awarding the Gold Medal to the hockey team that had the most shots instead of the most goals;
  2. It’s like awarding the Gold Medal to the speed skating team that had the most players instead of the fastest time;
  3. It’s like awarding the Gold Medal to the curling team that threw the most stones instead of to the team with the stones closest to the center of the target.

Never underestimate our ability to ignore the obvious. ~ Po Bronson

The Next Olympics

So what happens at the next Olympics? Well, like former president George Bush, I have opinions.

I have opinions of my own, strong opinions, but I don’t always agree with them. ~ George W. Bush

I’ll save my analysis of the future of Blackberry, Apple, Chinese Android, Samsung Android, Nokia Android, Microsoft Windows Phone and Google for next time.

Post-Script: Join me on Twitter @johnkirk.

Windows 8 In Hindsight

On September 13, 2011, Zach Epstein, explained to us us why Windows 8 was the dawning of a new age. And on February 9, 2014, Paul Thurrott explained to us why the sun was prematurely setting on that age.

[pullquote]Calling Windows 8 a “software design” is like calling bald a hair color.[/pullquote]

Between those two dates, a flood of virtual ink was spilled arguing both for and against the existence of Windows 8. But in the end it all comes down to this: Windows 8 was a failure of design.

Good Design Is Less Design

    Zach Epstein:

    PCs are not going away. They will continue to be the primary means of computing for business and consumers alike. Tablets are not going away, either. They will continue to provide a much more intuitive way to interact with a consumer electronics device. Microsoft’s vision, however, unifies these devices.

    One platform to rule them all. The technology exists to enable users to carry a single device that is as portable and usable as a tablet, but also as powerful and capable as a PC.

LESSON #1: Just because you CAN doesn’t mean you SHOULD.

Nerds tend to focus on what they CAN do and often forget what they SHOULD be doing. More is not always more. And in design, less is always more.

[A]s designers and engineers in general, we’re guilty of designing for ourselves too often. ~ Bill Moggridge

If nerds (and I am one) were in charge of the ballet, they wold note that all the ballerinas were always on their toes and they would “solve” that problem by hiring taller ballerinas.

If nerds were in charge of a Japanese Restaurant, they would offer the option of ordering Sushi medium and well-done.

You think I’m exaggerating , right? But Microsoft’s has both a trackpad and a touch screen. A nerd doesn’t see that as a problem. And that’s the problem.

I think a nerd is a person who uses the telephone to talk to other people about telephones. And a computer nerd therefore is somebody who uses a computer in order to use a computer. ~ Douglas Adams

Good Design Solves Problems

    Zach Epstein

    Apple paved the way but Microsoft will get there first with Windows 8. A tablet that can be as fluid and user friendly as the iPad but as capable as a Windows laptop. A tablet that can boot in under 10 seconds and fire up a full-scale version of Adobe Dreamweaver a few moments later. A tablet that can be slipped into a dock to instantly become a fully capable touch-enabled laptop computer. This is Microsoft’s vision with Windows 8, and this is what it will deliver.

LESSON #2: Windows 8 Is A Solution Looking For A Problem.

Mark Wilson of Fastcode is spot on in his criticism of Windows 8:

    Metro solves the problem of, “How do you map the same interface to disparate devices?” Okay. But is that a real problem for consumers? I don’t think so.

    [pullquote]A phone interface matching a laptop interface is about as important as socks matching underwear.[/pullquote]

    The consumer design problem is, “How do I make this device as intuitive as possible?” or “How can I streamline the process of getting someone the file he wants?” People care about speed, efficiency, clarity, and delight. But a phone interface matching a laptop interface is about as important as socks matching underwear.

Good Design Is Not Easy Or Intuitive

    Paul Thurrott:

    When critics described Windows 8.1 as a step backwards, I disagreed: Responding to customer complaints is never wrong, I argued….

LESSON #3: The Customer Is Not Qualified To Be The Designer.

Non-designers routinely argue that the customer is best-positioned to select the features which should be included in a product design. That’s ridiculous. The customer knows where he wants to go but asking him to design the vehicle that gets him there is as stupid as asking astronauts to design the space shuttle. They’re not qualified and it is not their job.

When I was growing up, a guy across the street had a Volkswagen Bug. He really wanted to make it into a Porsche. He spent all his spare money and time accessorizing this VW, making it look and sound loud. By the time he was done, he did not have a Porsche. He had a loud, ugly VW. ~ Steve Jobs

The product should not be defined by the customer, is should be defined by the designer from the point of view of the customer. That’s a subtle but oh-so-crucial distinction.

Some people say, “Give the customers what they want.” But that’s not my approach. Our job is to figure out what they’re going to want before they do. I think Henry Ford once said, “If I’d asked customers what they wanted, they would have told me, ‘A faster horse!’” People don’t know what they want until you show it to them. That’s why I never rely on market research. Our task is to read things that are not yet on the page. ~ Steve Jobs

Good Design Is True To Itself

    Paul Thurott:

    [pullquote]If you can find something everyone agrees on, it’s wrong. ~ Mo Udall[/pullquote]

    Microsoft has simply fallen into an all-too-familiar trap of trying to please everyone, and creating a product that is ultimately not ideal for anyone.

About one-fifth of the people are against everything all the time. ~ Robert F. Kennedy

LESSON #4: When You Try To Please Everyone, You Please No One.

Please all, and you will please none. ~ Aesop, “The Man, the Boy, and the Donkey”

Design Means Making Hard Choices

    Paul Thurott:

    If you look back over the decades at the many high-level complaints that have been leveled at Windows, one in particular sticks out: Unlike Mac OS, in particular, Windows has always attempted to satisfy every possible customer need, and as such it often provides multiple ways to accomplish the same thing.

LESSON #5: Offering Multiple Options Is The Opposite Of Good Design.

[pullquote]When you have to make a choice and don’t make it, that is in itself a choice. ~ William James[/pullquote]

Nerds want options. Normals want solutions.

“When you first start off trying to solve a problem, the first solutions you come up with are very complex, and most people stop there. But if you keep going, and live with the problem and peel more layers of the onion off, you can oftentimes arrive at some very elegant and simple solutions. Most people just don’t put in the time or energy to get there.” ~ Steve Jobs

Perfection is finally attained not when there is no longer anything to add but when there is no longer anything to take away…. ~ Antoine De Saint-exupery

When designing an interface, remember that the user of that interface has spent orders of magnitude less time thinking about it than you. ~ Steve Holt! (@steve_holt)

Design Matters

    Paul Thurrott:

    The reason this happened is that while Sinofsky had the maniacal power and force of will of a Steve Jobs, he lacked Jobs’ best gift: An innate understanding of good design. Windows 8 is not well-designed. It’s a mess.

It’s easy (and fun!) to lay the blame for Window 8 at Sinofky’s feet. Try this one on for size:

Sinofsky had the Midas touch. Everything he touched turned into a muffler.

Funny? Yes. Fair? Absolutely not.

Sinofsky — like everyone who worked at Microsoft — was handicapped because he had to start the design of Windows 8 with Windows in mind. That’s exactly the wrong way to do it.

Good design starts anew and that was never going to happen at Microsoft. Sinofsky and whoever was tasked with creating Windows 8 was going to start their design from the existing foundation of Windows and trying to integrate a mouse input operating system with a touch driven operating system was doomed from the start.

LESSON #6: Design Is Where You Start, Not Where You End.

The visionary starts with a clean sheet of paper, and re-imagines the world. ~ Malcolm Gladwell

Compare where Sinofsky was starting with this quote from Jonny Ive:

    When we’re designing a new product, we not only need to start with a blank slate, but we also need to start with the client’s perspective and work our way backwards. What does the client want. More importantly, what does the client need?

Design makes what is complex feel simpler, and makes what is simpler feel richer. ~ johnmaeda (@johnmaeda)

Conclusion

    Paul Thurrott:

    God knows, Microsoft tries. It’s a wonderful observer and follower.

Say what now?

LESSON #6: Windows 8 Was Both Late And Not Great.

With Windows 8, Microsoft was the very opposite of a wonderful observer and follower. They were late to the party and they came to a formal wearing a clown outfit, including bells and whistles.

Apple SHOWED Microsoft how modern phones were done. Apple SHOWED Microsoft how modern tablets were done. If you want to look at a fast follower, look at Google. If you want to look at a good copier, look at Samsung.

The wise learn many things from their enemies. ~ Aristophanes

If you want to look at someone who arrived late and still got it all wrong, look at Windows 8.

Human beings, who are almost unique in having the ability to learn from the experience of others, are also remarkable for their apparent disinclination to do so. ~ Douglas Adams

Why Does Tim Cook Even Bother?

Now that the world no longer has Steve Ballmer to kick around, I think it’s time we direct our focus toward Apple’s Tim Cook. After all, just like Ballmer, Cook had to follow a legendary, visionary founder. Just like Ballmer, Cook is an operations guy, skilled in maximizing profits, growing a company, making sure the trains run on time. Like Ballmer, Cook’s more top-line than techie.

The biggest difference between the two men: Ballmer is worth billions whereas Tim Cook, late to Apple, is worth mere tens of millions.

Is this fair? Probably not, though also scarcely relevant. Regardless of the scope of Steve Ballmer’s fortunes, Tim Cook has enough money to live exceedingly well for the rest of his life. Which begs the question: why does he do it? Why does Tim Cook continue to lead Apple, with all its complexities, all its obligations, when he could retire — and perhaps pursue his other passions, or offer his time to the needy?

I find it fascinating that Cook — and so many others who have so much money — continue to give so much of themselves to a business. Does merely wondering this reveal I am destined to never lead a giant, highly profitable corporation?

Like so much about the murky Mr. Cook, his actual net worth is difficult to determine. The vast majority of his money is, unsurprisingly, linked to Apple stock awards which vest piecemeal over ten years. By the end of 2015, however, and based upon the various sources I reviewed, I will ballpark Cook’s wealth at about $250 million. Imagine you hit the Lotto this week and cleared $250 million. Would you still work? Really?

Break it down:

  1. $50 million for your children
  2. $25 million to charities (10%)
  3. $25 million to your alma mater (you are generous, after all)
  4. $50 million to family, relations, friends (you are very generous, after all)

That still leaves you (and your spouse) with $100 million in cash. If you’re, say, 40, and live to 90, you have $2 million to spend every single year for the rest of your life, however you wish — not including appreciable interest and investment returns.

Would you continue at your job, with all its stresses and demands, its long hours, and limiting focus?

Why does Cook? Why did Steve Ballmer? Why do Marissa Mayer, Susan Wojcicki, and so many other smart, talented and extremely rich men and women continue? Is there really so much joy, so much power, glory and opportunity from running Yahoo, YouTube, Microsoft or Apple?

Tim Cook has said that “money is not a motivator for me.” No doubt that is mostly true. What does motivate him? The morning meeting with the lawyers over the next patent suit? Responding to customer complaints over iCloud or email? Reviewing highly complex procurement contracts? Testing the iWatch 18 months before its launch? Firing Scott Forstall? Firing John Browett? Interviewing candidates to replace him? Talking with Walt Mossberg? Meeting with the CFO to decide when to buy back the next chunk of the company? Having to sit through that meeting where they discuss how the HVAC plans aren’t up to code on the new headquarters and then being interrupted because PR is upset that so many of the Apple faithful are inquiring about the allegations that Steve Jobs and Eric Schmidt conspired to keep engineering salaries in check?

It all seems so exhausting.

Tim Cook will both never be Steve Jobs and always compared to Steve Jobs. That also seems an unnecessary burden.

So, why?

I really do not know. But, here’s a clue. When Microsoft named Satya Nadella its next CEO, Steve Ballmer emailed everyone at the company:

Microsoft is one of the great companies in the world. I love this company. I love the bigness and boldness of what we do. I love the way we partner with other companies to come together to change the world. I love the breadth and the diversity of all of the customers we empower, from students in the classroom to consumers to small businesses to governments to the largest enterprises. Above all, I love the spirit of this place, the passion, and the perseverance, which has been the cornerstone of our culture from the very beginning.

Have you said the equivalent proud, beaming, loving words to your own child? Do so, now.

Ballmer has billions of dollars — billions! Why even care? That said, I am pleased he does, and that many others, particularly in tech, care just as deeply.

On the occasion of Facebook’s tenth anniversary — yes, the social network is years older than iPhone — Mark Zuckerberg shared his thoughts:

When I reflect on the last 10 years, one question I ask myself is: why were we the ones to build this? We were just students. We had way fewer resources than big companies. If they had focused on this problem, they could have done it.

The only answer I can think of is: we just cared more.

While some doubted that connecting the world was actually important, we were building. While others doubted that this would be sustainable, you were forming lasting connections.

We just cared more about connecting the world than anyone else. And we still do today.

He cared and continues to care.

If I had Mark Zuckerberg money, I would still write, every single day, exactly as I do now. Only, the money would almost certainly alter the pattern of my days. I would never again work for a company, nor for an editor, nor ever look for work. Would my writing then improve? Would the subject matter change? Alas, I will probably never know. I do know, however, that whatever it is beyond money that motivates the Cooks, Zuckerbergs, Ballmers, and Mayers of the world, we are almost certainly the better for it.

On a regular basis, I hear someone mock Apple or disparage Microsoft. Mere Internet flotsam, signifying nothing. The fact is, these companies have enhanced our lives, our work, creativity, play, learning, and connections with one another. We are fortunate that their leaders give so much of themselves, even when they have every reason not to.

The Death Of iPhone. The Death Of Android. The Rebirth Of Facebook.

Well, that was a heckuva week.

Google sells Motorola for billions less than they paid for it. Apple sells millions fewer iPhones than nearly everyone expected, then directs guidance lower. Facebook becomes a mobile first company, for real this time. Amazon investors prove they don’t quite have unlimited patience. Yahoo remains last decade’s news. Microsoft probably has a new CEO, one with zero connection to Nokia. Oh, and they now make better commercials than Apple.

Anything else?

What we learned from last week’s machinations is that everything we think we know about the smartphone wars is completely, utterly false — or  worse, meaningless. Barely a fortnight ago, on this very site, I told you: “The smartphone wars are not over.” Nothing has been settled, least not the future. After last week’s fun-bumpy-tweet-filled ride, does anyone still dispute this?

Know this: The current market for smartphones, and all they are subsuming, transforming, re-making, inspiring — which is in fact all of the things — is itself under threat, betrayed by its own relentless innovation and rapid success. Yet, far too many analysts and bloggers stubbornly cling to the fiction that somehow, smartphones can alter every market they touch while continuing on a merry upward slope unscathed by their own destructive deeds.

The most basic assumptions about this market are nothing more than faith-based analyst alchemy.

Time now to kill the dominant fictions in the smartphone wars.

The Death of iPhone

Fiction: Apple owns the high-end of the smartphone market.   

If you are making assumptions re iPhone (or Android) sales growth based on an imaginary perceived share of a market that is already on the cusp of disrupting itself, then you are making faith-based decisions. It’s that simple.

As I wrote months before last week’s earnings announcement, if Steve Jobs was alive he would never approve the iPhone 5c. The 5c is a rare self-inflicted wound, the elevation of profits over values. Only, that is not the cause of Apple’s weakness in their iPhone business. The trouble is the smartphone market itself, which I am beginning to suspect does not actually exist. Bear with me.

The persistent belief among analysts that  as much as 90% of the current mobile phone market (nearly 5 billion users) will transition to smartphones is a religious ideal, nothing more. Repeat after me: There is no total addressable market (TAM) for smartphones. The very concept is a fiction. Indeed, we may already be within months of Peak iPhone, a year or two from Peak Smartphone. For billions of people, voice, robust SMS/MMS services, and perhaps some form of digital identity is more than they will ever need. What can Apple provide them? Even at, say, $300, nearly everyone on this planet cannot afford and will never need an iPhone.

It gets worse.

I carry my smartphone with me all the time and use it for far more than I can list here. For the majority of that time, however, I don’t actually need a “smartphone”. What I really need is something like a credit card-sized piece of glass that supports rare but necessary voice calling, possibly video calling, can display a virtual keyboard for texting, and includes a mag-stripe (and/or chip) for payments. Create this and the smartphone market is gone, reduced to the equivalent of the dusty home desktop PC. Given the rapidity of innovation in this market, I should reasonably expect to have my (truly) smart card by no later than mid 2016. No iPhone necessary — in barely two years.

Tim Cook must know this. This is likely one reason why Apple stockpiles so much cash. When you’re dependent upon a single product line, iPhone, for about 60% of your revenue, and that market may vanish in a few years, then your focus necessarily shifts to maximizing profits of that product line and funneling those profits into entirely new offerings.

Apple doesn’t release many new products. I suspect that is about to change in a very big way. Expect to see several new products and product lines from the company over the next year alone. Some designed for nothing more than padding iPhone margins. Others, desperately in search of that next big thing.

The Death of Android

Fiction: Android is unassailable

Google cut itself free from the anchor that was Motorola. They strong-armed Samsung into more closely following the sanctioned Google Android playbook. Wise moves.

I sense fear.

Yes, Android dominates smartphone market share. Look closer. What many call ‘Google-free’ Android, AOSP, now garners a solid second place — and is growing at a rate much faster than ‘real’ Android.

smartphone OS

AOSP is the “open-source software stack for a wide array of mobile devices with different form factors.” It can power Amazon’s Kindle line, or smartphones made for use in China, for example, where Google search, map, Play and other services are not terribly popular and not welcome by the government.

Does this matter?

Absolutely. Google no doubt believes that AOSP is a necessary sacrifice. It’s availability ensures the rapid spread of the  “Android” template and prevents iPhone or Windows Phone, for example, from garnering another new user. It seeds the future for ‘real’ Android — and it is hoped, heavy usage of those most profitable Google services. Except, this is false.

The fact is, the rapid, global embrace of smartphones has altered the entire value proposition of web search and web services — Google’s bread and butter. AOSP may presently be little more than Android without the Google, but it could ultimately become a fully-fledged ecosystem alternative in its own right, one that directly competes against Google on everything that matters to them, and not just in China, but in Japan, South Korea, Brazil, USA, everywhere.

Thus, while I suspect last week’s moves by Google signal the company’s preparations to launch an assault on the Chinese market, it may already be too late. The world’s biggest market for data and smartphones can do just fine without Google. Which means: everyone can.

It gets worse.

Extremely popular mobile services may now have a vested interest in supporting AOSP’s growth. Popular social messaging apps such as Line, WeChat or WhatsApp no doubt noticed that Google made its Hangouts service the default messaging app for Android Kitkat. They won’t sit still for such bullying. What’s to stop them from integrating their service and AOSP and offering a low-end smartphone in the developing world?

In the short-term, perhaps none of this happens. In fact, I expect Google to best Apple as the world’s most valuable tech company, possibly within a few weeks. Save the celebrations. Google’s value arises strictly from it’s ability to capture more of our habits, more of our actions, and monetize them across a near-endless supply of strangers and brands. What we are learning, however, is that despite the rapid spread of Android in all its forms, there are effective alternatives to Google services across every smartphone platform — even its own. Little wonder, then, that Google is moving quickly into moonshots, driverless cars, the connected home, consumer hardware, health and more. Such moves are driven by fear, even if they are shrouded in boilerplate Silicon Valley boasting.

The Rebirth of Facebook

Fiction: Unbundling Will Kill Facebook

Like that persistent meme that teens are abandoning Facebook, the idea that Facebook is being unbundled to death — via messaging apps, social picture apps, Christian dating sites and the like — is simply false. Facebook is benefitting from the unbundling trend.

In fact, after badly stumbling on mobile, after the laughable dung heap that was Facebook Home, the brief marriage to HTML5, and the spats with Apple and Google, Facebook is doing better than ever. More than half its revenues now comes via mobile — no smartphone OS necessary.

This is in large part because the company is embracing the unbundling strategy, shrewdly leveraging its billion users and their extant Facebook identity and eagerness to share everything. That some people want to share only some aspects of their lives with only some others at some times and places, via text or image or video, is fine — every 1 and every 0 feeds the growing Facebook engine.

Let a thousand apps bloom. Facebook will be there.

Barely a year ago, analysts were convinced Facebook was doomed given its utter dependence upon iOS and Android. Now, a case can be made that smartphones, once thought as the device to bring the developing world into the global sphere of the Internet, is already on the cusp of being disrupted. In this new world, it is Facebook (and our Facebook ID) that will connect us all to one another.

The Dogs of War

What I think last week’s official numbers and clever machinations reveal is that the “smartphone” market, which most still believe is a pitched battle between iOS profit share and Android market share, is, in fact, merely the initial wave in a coming tsunami, one that will deliver highly personal, nearly ubiquitous and ever-engaging computing and connectivity to all who want it and nearly all who do not, and in forms we have yet to imagine. Hardware profits and OS marketshare, be damned.

The smartphone itself may be no more than a fleeting, ten-year-blip in computing history. There will be no 30th anniversary for the iPhone. Android will betray its maker. Owning your own smartphone ecosystem does not matter. Everything is in flux. My verse is the destruction of everything — and the great tech companies of our day happily, foolishly oblige.

As Jim Morrison said, “no one here gets out alive.”

Unified OS Advocates Are Out Of “Touch” With Reality

Last week, Phil Schiller, Craig Federighi and Bud Tribble were interviewed as part of the Mac’s 30th anniversary. They — in no uncertain terms — slammed the door shut on the idea that Apple was planning on merging iOS (the operating system for their phones and tablets) with OS X (the operating system for their notebooks and desktops).

“We don’t waste time thinking, ‘But it should be one [interface]!’ How do you make these [operating systems] merge together?’ What a waste of energy that would be,” Schiller said.

“To say [OS X and iOS] should be the same, independent of their purpose? Let’s just converge, for the sake of convergence? [It’s] absolutely a nongoal,” Federighi said.

“And that”, I thought to myself, “finally puts an end to that discussion.”

Boy, was I wrong.

The Loyal Opposition

Brian S. Hall makes an impassioned case for operating system unification, right here at Tech.Pinions:

I want my various “computers”…to essentially operate as similarly as possible, preferably with a unified user interface and application set across all.

It’s troubling to me that the world’s biggest computer company (Apple) can’t seem to make this work. When I hear Apple execs mocking Microsoft’s UI strategy I think it’s an opportunity lost.

(I)t bothers me that it is Apple which seems so determined to accept multiple OSes across multiple form factors. Here’s a case, frankly, where I hope Microsoft wins.

Kyle Russell, of Business Insider, reviews the various operating system comments made by the Apple executives and comes to a similar conclusion, here:

As much as a well-executed touchscreen MacBook could make for an amazing device — maybe even “redefine laptop computing” — it seems that Apple doesn’t want people to get caught up on the idea, even if it is true.

(Emphasis added)

Do you fully grasp what both of these commentators are implying? It’s not, they contend, that Apple CANNOT create a unified operating system, it’s simply that Apple REFUSES to do so. If only Apple would not be so gol’ darn stubborn and get on the unified operating system bandwagon, Apple could not only make a device that would run on a unified operating system but they could make a unified device that would be totally AWESOME!

Bull hockey

[pullquote]A word to the wise is infuriating. ~ Unknown Source[/pullquote]

I VEHEMENTLY disagree. Operating system unification is not a “lost opportunity.” It’s not an “opportunity” at all. It’s a disaster because A TOUCH OPERATING SYSTEM IS WHOLLY INCOMPATIBLE WITH A DESKTOP OPERATING SYSTEM.

We have at least the courage of our convictions to say we don’t think this is part of what makes a great product; we’re going to leave it out. Some people are going to not like that… ~ Steve Jobs

The Interview

Metaphors Matter

“An incredible amount of thought and creativity went into the original Mac metaphor,” Tribble said.

A Tool Should Work The Way We Think, Not Make Us Think About The Way It Works

(T)he underlying principles behind them—that the Mac should be easily approachable and learnable by just looking at it, that it should bend to the will of the person and not bend the person’s will to the technology—those underlying threads also apply to our other products.

One Size Does Not Fit All

And I think what we are focused on is delivering the tailored, optimal experience for those kinds of ways that you work, without trying to take a one-size-fits-all solution to it.

No Touch Screens on Notebooks or Desktops

“It’s obvious and easy enough to slap a touchscreen on a piece of hardware, but is that a good experience?” Federighi said. “We believe, no.” ((Dr. Drang (@drdrang) has a thoughtful essay, here, on why touch screens WOULD work on notebooks and desktops. MY TAKE: This issue confused me for a while. It was clear to me that the input methods for notebooks and desktops were, and should remain, distinct from those of phones and tablets. On the other hand, it was also clear that phones and tablets were training us all to touch our computing screens. Ultimately, I concluded that metaphor mattered most. Using touch on a machine designed for a desktop metaphor only works SOME of the time and would ultimately cause confusion in the user’s mind. Better to make a clean break and have users to gestures on a touchpad, instead.))

The Personal Computer Has Been Honed To Work With A Keyboard And Mice; The Tablet Has Been Honed To Work With Your Finger

“This device,” Federighi said, pointing at a MacBook Air screen, “has been honed over 30 years to be optimal” for keyboards and mice. Schiller and Federighi both made clear that Apple believes that competitors who try to attach a touchscreen to a PC or a clamshell keyboard onto a tablet are barking up the wrong tree.

“The reason OS X has a different interface than iOS isn’t because one came after the other or because this one’s old and this one’s new,” Federighi said. Instead, it’s because using a mouse and keyboard just isn’t the same as tapping with your finger.”

The Metaphysics

Aristotle drew a distinction between essential and accidental properties. The way he put it is that essential properties are those without which a thing wouldn’t be what it is, and accidental properties are those that determine how a thing is, but not what it is.

Touch is ACCIDENTAL to a Personal Computer. It may enhance its usefulness but it doesn’t change the essence of what it is. Touch is ESSENTIAL to a Tablet. It’s the essence of what it is.

Pixel specific input is ANATHEMA to a Tablet. It destroys its very essence. A Touch device can literally not work with pixel sized input targets. But pixel specific input is ESSENTIAL to a Personal Computer. A Personal Computer can literally not operate without it.

A touch input metaphor and a pixel input metaphor not only should be, but MUST be, wholly different and wholly incompatible with one another. It’s not just that they do not comfortably co-exist within one form factor, it’s also that they do not comfortably co-exist within our minds eye.

In plain words, it’s no accident that the operating systems for tablets and notebooks are distinctly different from one another. On the contrary, their differences — their incompatibilities — are the essence of what makes them what they are.

Motorcycle-Motorcar ((Why Motorcar instead of car or automobile? Because I like alliteration, that’s why.)) Metaphor

A car and a motorcycle are both motor vehicles but they employ two very different user interfaces.

On a car:
— You use your left hand to steer;
— You use your right hand to shift gears; ((At least, you did before automatic transmissions came into vogue.))
— You use your right foot to accelerate and brake; and
— You use your left foot to keep time with the radio.

On a motorcycle:
— You use your left hand to work the clutch;
— You use your left foot to shift the gears;
— You use your right hand to work the front wheel brake; and
— You use your right foot to work the back wheel brake.

[pullquote]The mythical unified operating system is an insoluble problem, masquerading as a great good.[/pullquote]

You could put a hand brake on a car or a steering wheel on a motorcycle or a foot clutch on a car or a stick shift on a motorcycle — but none of those additions would make much sense. All would be confusing and most would be dangerous as all get out.

Unifying the features of a motorcycle and a car or a tablet and a desktop is not the goal. User understanding and usability IS the goal.

The Theory In Practice

That’s the theory. So what’s the reality?

Experience without theory is blind, but theory without experience is mere intellectual play. ~ Kant

The Tablet — Sans Desktop Interface — Is A Runaway Success

The iPad — and all the derivative tablets within the Android operating system — have only one operating system and only one input (touch) and they are fantastically successful.

By the end of 2014 the install base of tablets will be just over half that of PCs. ~ Ben Bajarin (@BenBajarin)

Take a deep breath and re-read that again. It only took FOUR YEARS for install base of tablets to reach half of that of Personal Computers!

BdBCOqcIMAAF4sY

If the tablet is only half-a loaf — if the unified operating system is the Holy Grail of computing — then why has the tablet been SO successful and why has Microsoft’s 2-in-1 effort been such an abject failure?

The failure of Apple critics is not that they don’t understand that Apple’s iPad/iPhone are selling. It is that they don’t understand why. ~ Ben Bajarin (@BenBajarin)

Today

The Surface 2-In-1 Approach Is A Train Wreck

Design makes what is complex feel simpler, and makes what is simpler feel richer.

[pullquote]Microsoft’s Windows 8 operating system is as pure as the driven slush.[/pullquote]

Ask yourself this question: “Is Windows 8’s 2-in-1 user interface simpler?” Heck no, Why, Microsoft can’t even get their own flagship apps to work well on Windows 8.

I’m really not sure that there’s a worse app to use with Windows 8 tablets than Outlook. The idea that MS thinks this is acceptable is crazy. ~ Ian Betteridge (@ianbetteridge)

When Steve Jobs introduced the iPad in 2010, he asked “Is there room for a third category of device (between the phone and the notebook)?” Now Microsoft is trying to introduce yet another category between the tablet and the notebook. If it is to succeed, then it must pass the same litmus test that Steve Jobs proposed for the iPad:

The bar’s pretty high. In order to really create a new category of devices, those devices are going to have to be far better at doing some key tasks. Better than a laptop. Better than a smartphone. (Author’s note: And better than a tablet.)

[pullquote]You can’t sit on two horses with one behind. ~ Yiddish proverb[/pullquote]

Now let me ask you this: What tasks is the Surface FAR better at?

The Surface, which is the embodiment of combining two operating systems into one, has failed and failed miserably.

Conclusion

It turns out that Apple had long-ago asked — and long-ago definitively answered — the question of whether they would be combining a tablet with a notebook. And that answer was “Yes”:

QUESTION: “What would happen if a MacBook met an iPad?”

ANSWER: The MacBook Air. ((New MacBook Air announcement))

[pullquote]Microsofts strategy and products will appeal to millions while Google and Apple’s will appeal to billions. ~ Ben Bajarin (@BenBajarin)[/pullquote]

Tablet and notebook interfaces are not combining because it simply won’t work. Great products are not defined by the absence of weakness, but rather, by the presence of clear strengths.

In 2007, when the iPhone was introduced, Steve Jobs famously said:

(A)re you getting it? These are not three separate devices, this is one device, and we are calling it iPhone.

When it comes to phones, tablets and notebook/desktops, we can reverse that and paraphrase Steve Jobs by saying:

Are you getting it? This is not one device. These are three separate devices, and we’re calling them the smartphone, tablet and notebook/desktop.

Phil Schiller put it this way:

“It’s not an either/or,” Schiller said. “It’s a world where you’re going to have a phone, a tablet, a computer, you don’t have to choose. And so what’s more important is how you seamlessly move between them all…. It’s not like this is a laptop person and that’s a tablet person. It doesn’t have to be that way.”

Postmortem

Wise men profit more from fools than fools from wise men; for the wise men shun the mistakes of fools, but fools do not imitate the successes of the wise. ~ Cato the Elder

[pullquote]It is hard to get to the summit, harder to stay on it, but hardest to come down. ~ Aleksander Fredro[/pullquote]

Apple showed Microsoft the way to do tablets right, but Microsoft refused to follow Apple’s example because they knew that it would mean the end of their existing Window’s monopoly.

Many are stubborn in pursuit of the path they have chosen, few in pursuit of the goal. ~ Friedrich Nietzsche

Microsoft thinks they’re in the Windows business. They’ve forgotten their mission, their purpose. They’ve forgotten that they’re in the computing business.

ctrl-alt-delMicrosoft should Control-Alt-Delete their attempts at a unified operating system, but I don’t think there’s any chance that that will happen. Based on the statements coming out of Redmond, Microsoft is doubling-down on their current strategy which, in my opinion, is a tragic mistake. Besides, asking Microsoft to fix what’s wrong with Windows 8 is like making them the detective in a crime movie where they’re also the murderer.

Yogi Berra once famously said:

It’s not over until it’s over.

It’s over.