Clayton Christianson (of <i>The Innovator's Dilemma</i>) has a story about Digital, the minicomputer manufacturer that was the second largest computer company in the late 80's:<p>Their management used to be the darling of the tech press and they could do no wrong. In fact, they were excellent management. Then, when Sun workstations, and PCs appeared, customers switched to them, and Digital didn't make the transition. <i>The press blamed management.</i> But management was the same; it was doing just as good a job as before. The problem was the disruptive innovations are almost always fatal to incumbents.<p>So that's what's happening here. Microsoft rode a disruptive innovation, the PC, and now it's over. Can't really blame management for that.<p>It's worthwhile noting that Google has only been successful in one business (search+ads) - great though it is, they don't rake in comparable <i>revenue</i> with gmail (or other products).<p>Apple is an extraordinary exception in their success with PC's, then with iPods, and now with iPhones.
Someone linked to this post in the comments, which I'd never seen before. It's by the guy who wrote the Vista shutdown menu, and it's pretty depressing reading:<p><a href="http://moishelettvin.blogspot.com/2006/11/windows-shutdown-crapfest.html" rel="nofollow">http://moishelettvin.blogspot.com/2006/11/windows-shutdown-c...</a>
It's not fair to compare pre-antitrust Microsoft to post-antitrust Microsoft. They will never be allowed to be what they once were. What we're seeing now is the real Microsoft competing without most of their monopolistic advantages. That is a company producing mostly mediocre products & services that don't interoperate with non-Microsoft products & services all that well. When you're a monopoly that's a great business model. When you're just another player it's a disadvantage.<p>I also don't think it's fair to lay it all on Ballmer. Most of the current Microsoft flops were projects in development while Gates was CEO. I'm not sure they've ever really caught up after completely missing the boat on the Internet in the mid-90s. I envision most of the management structure at Microsoft as being comprised of a bunch of people who never really had to compete with outside forces other than deciding which company to buy and kill.
I'm kind of happy with Ballmer actually. He seems to be a fairly crazy person, which is the best that could happen for the rest of us.<p>The last thing you want is competent management at Microsoft.<p>This video says it all:<p><a href="http://www.youtube.com/watch?v=wvsboPUjrGc" rel="nofollow">http://www.youtube.com/watch?v=wvsboPUjrGc</a><p>I don't know what he's trying to prove but it sure didn't work for me.
10,000 million dollars on R&D next year alone is not an insignificant amount and an awful lot of fertilizer for a voracious tree that yields a lot of fruit other than apples.
Obligatory:<p>>What I meant [by saying Microsoft is dead] was not that Microsoft is suddenly going to stop making money, but that people at the leading edge of the software business no longer have to think about them.<p><a href="http://www.paulgraham.com/cliffsnotes.html" rel="nofollow">http://www.paulgraham.com/cliffsnotes.html</a>