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8/26/2013
09:06 AM
Mike Feibus
Mike Feibus
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Ballmer Is Off The Matrix

Microsoft's outgoing CEO couldn't see the desktop for the tiles.

It should come as no surprise that Steve Ballmer is out as Microsoft CEO. The company's vision for client computing is miserably off base, and that's on him. How could he have blessed such a misguided strategy for client devices?

On Ballmer's watch, Microsoft rolled out Windows 8, a product that is destined to go down as one of the most colossal missteps in computing history. I wouldn't be surprised to see it morph one day into a verb for undermining your own product. Like, for example, "the way they eight their core product like that, it's no wonder they went belly up."

Any first-year b-school student would tell you that Microsoft disregarded the basic tenets of business expansion with Windows 8. If you want to grow your business, you've got two logical options: Extend the reach of your existing products into new markets, or develop new products for your existing customers.

There's a simple two-by-two matrix to guide such decisions. You can make one for yourself by drawing a cross inside a square so that there are four quadrants. Label the two columns "new customers" and "existing customers" and the two rows "new products" and "existing products." Expand your business from the "existing products/existing customers" square to either extend current or develop new products. The square at the far end of the two-by-two matrix – "new products/new customers" – is better left for the start-ups.

[ Microsoft's mobile group can't pause for a new CEO. See Microsoft's Big Risk As Ballmer Departs: Windows Phone. ]

Maybe Keanu Reeves' character Neo might see how Windows 8 fits into the matrix. But here in this dimension, there's no option for taking an existing product with a large stable of existing customers -- the cushiest square on the board -- and essentially upending it by transforming it into a new product.

A common ploy in the software world is to get existing customers to pony up again for existing products by making and selling new-and-improved versions. That's what Microsoft had done through Windows 7. And it's what the industry expected the company to do with Windows 8.

This is a whole lot easier to grasp if we set aside the Windows numbering scheme for a moment. The existing product is the Desktop, and the new product is the Start Page. Shortly after the iPad came out in 2010, whispers were circulating that Microsoft was developing touch for Windows 8. Many industry participants were excited. They took that to mean that the software giant would be adding touch capability to the desktop.

They expected the company to update the menu structure so that it was more finger-friendly. And they expected to see gesture equivalents for mouse and keyboard commands. And they hoped to see some APIs so that hardware vendors and app developers could run with it.

No such luck, though. Instead of upgrading the desktop, Microsoft spent most of its efforts on the Modern UI and relegated our beloved desktop environment to a tile on the Start page.

So why did Ballmer embrace such an ill-fated direction? It's certainly possible that the Windows 8 nomenclature fogged his vision, and he just assumed that we'd all automatically upgrade from Windows 7.

More likely, he got caught up in the one Microsoft vision. It must have been intoxicating to think of a wide swath of products, all with a universal UI and programming model. But it shouldn't have been so intoxicating that he couldn't see that it was a really bad idea to upend the PC -- the market where Microsoft actually has a presence -- so that it would play nice with products in markets in which Microsoft barely registers.

Maybe if Ballmer directed the company to approach the problem from the other side of the fence -- force Windows phones and tablets to adapt to the PC desktop -- everyone might be better off, huh?

As it happens, it's too late for Ballmer. Sadly, he was so close to the product that he couldn't see the desktop for the tiles.

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David F. Carr
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David F. Carr,
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8/26/2013 | 1:46:08 PM
re: Ballmer Is Off The Matrix
Will no one step forward to say a good word for Ballmer? He must have done something right, somewhere along the line ... right?
VFanRJ
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VFanRJ,
User Rank: Apprentice
8/26/2013 | 4:38:44 PM
re: Ballmer Is Off The Matrix
One? There 16B+ George Washingtons that confirm that Steve is one of the best executives around. You don't build that kind of a following being a slouch.
jries921
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jries921,
User Rank: Ninja
8/26/2013 | 5:39:46 PM
re: Ballmer Is Off The Matrix
That was inherited. Ballmer may have helped to build the MS empire, but Bill Gates was in charge. It would have taken a truly horrible CEO to turn MS into a money loser and that does not appear to be Ballmer.

About the only good I can think to say about Ballmer is that he's passionate about MS and its products; his problems are that he's never really adjusted to the fact that MS no longer has the ability to dictate to the market that it had in 1998; and he seems to have no idea how to shed the bully image MS developed under Gates.

That and he doesn't have the knowledge to understand and arbitrate technical issues, as Gates could; that is to say, he really doesn't understand what he's selling (no conflict with the above; one can be passionate about what one does not understand).
Michael Endler
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Michael Endler,
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8/26/2013 | 6:24:13 PM
re: Ballmer Is Off The Matrix
I think that's fair. In the handful of interviews he's given since making the announcement, he's conceded that he didn't always give due attention to products that he "didn't get." Tablets fall squarely in that category, in a variety of ways. Ballmer deserves credit for growing Microsoft's server business, and the next CEO will appreciate some of the groundwork Ballmer laid with Office 365, Windows Azure and a few other pieces. But the next CEO will also probably wish that Ballmer had laid some of this groundwork a few years earlier. Ballmer is clearly a smart guy, but this was the wrong job at the wrong time, as his continual missteps over the years attest.
RobPreston
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RobPreston,
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8/26/2013 | 6:30:17 PM
re: Ballmer Is Off The Matrix
Not every omni-competent CEO has the chops to arbitrate technical issues. Cisco's John Chambers comes to mind. We need to give Ballmer some credit for doing more than milk the cash cows. For one (big) thing, he has rallied employees and partners around cloud computing, much like Gates did (around the Internet more broadly) more than a decade ago. It's still early days in the cloud, but Ballmer has laid the groundwork at Microsoft. Ballmer certainly has made some big mistakes; so did Bill Gates in his day. All big companies, especially in technology, need a change of leadership after a certain period of time to keep things fresh. But don't underestimate Ballmer as a first-class marketer, as an energizing, thoughtful leader, and someone who knew his weaknesses and hired/promoted people to compensate for them. And, from all that I could see, he's a good man. Lots of companies should be so lucky.
Thomas Claburn
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Thomas Claburn,
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8/26/2013 | 7:49:41 PM
re: Ballmer Is Off The Matrix
Ballmer deserves credit for generating returns for investors, but Microsoft's present situation suggests that a focus on short-term shareholder value can be detrimental in the long-run. Jeff Bezo's insistence on reinvesting revenue at the expense of immediate returns offers an alternative management path.
DDURBIN1
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DDURBIN1,
User Rank: Ninja
9/3/2013 | 5:23:47 PM
re: Ballmer Is Off The Matrix
You can also add reduced R&D as a percentage of revenue under Ballmer verses Gates which follows right along with short term thinking.
DDURBIN1
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DDURBIN1,
User Rank: Ninja
9/3/2013 | 5:26:06 PM
re: Ballmer Is Off The Matrix
P.T. Barnum comes to mind. Marketing leader yes, CEO of a tech company no.
TerryB
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TerryB,
User Rank: Ninja
8/26/2013 | 4:45:19 PM
re: Ballmer Is Off The Matrix
My wife's cousin's husband has worked for MS for many years in the Dallas area, dating back to when Bill was still around. It remains a good company to work for, they treat their people well.
Ballmer was never a technologist, he was always a business guy. If Gates didn't have Ballmer when MS began it's meteoric growth, unlikely they would be the company they are today. Someone had to be the "bad guy", the one that focused on the financial side of the business, and he filled that role well.
Don't forget, Gates is still on board of directors, if he had strong reservations about Win 8 path it would not exist in the form it is. But buck stops at top, so it becomes Ballmer's failed vision when he was never the vision guy in first place.
MFeibus
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MFeibus,
User Rank: Strategist
8/26/2013 | 5:00:09 PM
re: Ballmer Is Off The Matrix
Exactly, Terry. There's a lot of good to say about Ballmer. In my book, he'll always be one of the industry's great pitch men. And when it comes to rallying the troops, I've no doubt he'd be as effective in a locker room as he is in a conference ballroom.

There are plenty of good coaches in football that get the boot because the team is going in a bad direction. And like you said, the buck stops at the top.
jries921
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jries921,
User Rank: Ninja
8/26/2013 | 5:43:11 PM
re: Ballmer Is Off The Matrix
Gates is not only on the Board of Directors; he's the Chairman and carries massive clout as the founder of the company. I've no doubt that if Gates had wanted Ballmer gone before now, it would have happened.

Gates is King; Ballmer is Prime Minister.
Michael Endler
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Michael Endler,
User Rank: Author
8/26/2013 | 6:26:30 PM
re: Ballmer Is Off The Matrix
Was your wife's cousin's husband measured with stack ranking? If people feel treated well under that sort of managerial system, I'm genuinely curious to hear more about why they like it. It's a fairly maligned aspect of the Ballmer culture.
TerryB
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TerryB,
User Rank: Ninja
8/27/2013 | 4:42:22 PM
re: Ballmer Is Off The Matrix
He is an outstanding talent, those people do well in any ranking system. It's only the bottom dwellers that have to worry about performance based systems. GE has been getting rid of it's lowest 10% for a long time now, it's nothing new.
He works in enterprise support area. At first it was Exchange support, now he (helps) manage the big picture of enterprise support.
Michael Endler
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Michael Endler,
User Rank: Author
8/27/2013 | 9:10:54 PM
re: Ballmer Is Off The Matrix
Thanks for following up. I'm glad it's worked out for him. I agree to an extent; for most truly superlative talents, a "cream rises" ranking system can work.

I'm still skeptical of stacked ranking, though. A term like "bottom dwellers" sounds like a generalization to me, especially since some groups at Microsoft are comprised almost entirely of people with PhDs. Not that people with advanced degrees can't be lousy workers-- but if nine people score perfectly on a test and you miss only one question, would it be fair to fire you as the "bottom" performer? Seems like some of this stuff should be considered in relative terms, rather than measured by an absolutely scale. Also, managers - even at great companies like Microsoft - don't always invest in the right performance metrics, or the right way of measuring them. I wonder if many perceived "bottom feeders" have been driven out by stack ranking, only to prove after moving somewhere else that they have much to contribute.
TerryB
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TerryB,
User Rank: Ninja
8/28/2013 | 4:53:12 PM
re: Ballmer Is Off The Matrix
I don't disagree with you, Michael. Only large, popular companies can get away with this stuff. These large companies probably have a turnover rate higher than 10% annually anyway, they are always hiring and firing somebody. This is a misguided attempt to make sure they are firing the lowest performing 10%.
My best friend works for GE Aircraft Engines in Cinci. He has industrial engineering degree (Ohio State) and works in logistics area for them. He had to pursue advanced degrees, all the way up to PhD level, to make sure he stayed off their 10% radar.
That is why I've always enjoyed working for mid size biz units who don't play those games. We will go years without hiring or firing anyone, you can't hide at small companies.
Shane M. O'Neill
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Shane M. O'Neill,
User Rank: Author
8/26/2013 | 11:01:16 PM
re: Ballmer Is Off The Matrix
Perhaps in 1999 Gates didn't think the company needed a visionary. So he tapped a numbers guy to hold steady and keep the company above the fray. Problem is the numbers guy stayed for 13 years.
Somedude8
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Somedude8,
User Rank: Ninja
8/26/2013 | 5:11:56 PM
re: Ballmer Is Off The Matrix
"Windows 8, a product that is destined to go down as one of the most colossal missteps in computing history."
Huh? Everyone I know that uses it thinks its fine.
IT-security-gladiator
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IT-security-gladiator,
User Rank: Strategist
8/26/2013 | 5:29:45 PM
re: Ballmer Is Off The Matrix
Everyone I know that uses it thinks its fine?

So you know 1 person?

I live in Asia where there are billions of people and I come into
contact with hundreds every week.

So far I have not even seen one MicroKlunk 8 anything:

That list includes:

Desktop 8's
laptop 8's
Reboot-A-Phone 8's
Shablet 8's

Nice try Shill.

Hey I have a question for you:
Now that Balmer is gone who is going to sign your Troll checks from Redmond?
ANON1238069211759
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ANON1238069211759,
User Rank: Apprentice
8/26/2013 | 5:41:33 PM
re: Ballmer Is Off The Matrix
Maybe the people in Asia, where you live, haven't been able to steal the Windows 8 serial keys yet. rofl.
Somedude8
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Somedude8,
User Rank: Ninja
9/9/2013 | 5:48:06 PM
re: Ballmer Is Off The Matrix
Sorry, I guess Orange County CA isn't quite up to China standards yet.
wht
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wht,
User Rank: Strategist
8/26/2013 | 6:03:55 PM
re: Ballmer Is Off The Matrix
Our company is successfully using Windows 8 and 8 Phones, and have been for a year, starting with the BETA version in the IT dept. In use on Ultrabooks, notebooks, 1 Surface Pro (more to come), and Desktops. Only a few have touch screens, the rest use a KB and mouse. User acceptance has been great. Some users jumped from XP, most from Windows 7. Note to Windows 8 haters...read the help and tutorial screens, and one of the KB tip guides and you won't be such a loser trying to understand Windows 8.
rradina
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rradina,
User Rank: Ninja
8/26/2013 | 7:02:50 PM
re: Ballmer Is Off The Matrix
Defining a "loser" by their lack of Windows 8 understanding is simply identifying typical consumers that vehemently thank Tivo for eliminating those wretched 12:00am-flashing devices from their living room. The VCR was not a colossal failure (in fact quite the opposite) but when faced with a choice between a modern DVR and a VCR, the "losers" choose the DVR.

Windows 8 is a very misunderstood OS -- both by consumers and by Microsoft. Balmer was green with envy when Apple created ONE product and surpassed Microsoft's earnings. He wasn't wrong for his devices and services strategy. However, his execution was and continues to be extremely poor.

Rather than designing Windows 8 to FORCE the devices and services strategy down the throats of customers, it would have gone down as one of the best OSes in history had it simply allowed folks to use it the way best-suited their hardware and their needs. For some that would have been nothing more than a faster Windows 7. For others, it would have been the current hybrid of both worlds. For others, it would have been a touch only experience.

The second part of poor execution is denying there's a problem and fixing it -- as soon as possible. Why has it taken a year to give folks a start button? Why has it taken a year to complete the modern control panel applets? Why has it taken a year to fix the discontinuity caused when a desktop program transitions to a modern program or vice-versa? Why did touch applications force us to get rid of the "Windowed" concept of Windows? Why hasn't Windows Phone 8 gone through more revisions to achieve feature-parity with Android and iOS. For that matter, why hasn't it surpassed them? Granted, what WP8 is missing may not be that significant but why make excuses for it? Why not just be the operating system powerhouse and blow them away with features?
Michael Endler
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Michael Endler,
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8/26/2013 | 6:43:54 PM
re: Ballmer Is Off The Matrix
Different conversation, I think. Your anecdotal experience merely suggests that for some people, Windows 8 is a good product. That's different than talking about the product's success overall.

Mike Feibus's point isn't about one person's experience, or even one company's experience; it's about the aggregate attitude toward Win8, as measured by data. By almost every standard to which the public has access, Windows 8 has been a poor performer, even if you adjust for circumstances (e.g. Windows 7 had the advantage of following Windows Vista, whereas Windows 8 had the misfortune of following the wildly popular Windows 7). If you throw in the Surface write-down, lost marketing dollars, and all the rest, Windows 8 has been an objective failure. If Windows 8.1 doesn't turn around the OS's trajectory in a major way, "colossal misstep" won't be an unwarranted label.

That's not to say Windows 8.1 won't make necessary adjustments, or that Win 8 doesn't meet some people's needs, even in its current form. I think you can also argue that some people who think Windows 8 is garbage could actually benefit from it, if they'd only learn how to use it.

But a lot of informed people don't like the OS, sales have been dreadful, and usage share among those who have adopted the OS is pretty poor. That Windows 8 has failed isn't a matter of opinion. It also isn't necessarily a dismissal of the OS's merits. Rather, that Windows 8 has failed is simply a statement of the facts.
WKash
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WKash,
User Rank: Author
8/27/2013 | 8:59:50 PM
re: Ballmer Is Off The Matrix
Sadly for Microsoft, while Windows 8 did try to bring needed uniformity to the desktop/laptop, tablet, smartphone continuum, it was hopelessly too late, and all the more doomed, given Microsoft's failure in the mobile market. The marketplace had already made iOS or Android the platforms of choice. But perhaps another factor cementing Windows8's fate is the degree to which corporate and government IT shops are also recasting their operations into the cloud, and looking at the savings potential of adopting alternative licensing options. One imagines had Windows7, with all of its improvement, been released in today's environment, it would still have faced a disintegrating marketplace.
DAVIDINIL
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DAVIDINIL,
User Rank: Strategist
8/26/2013 | 9:54:53 PM
re: Ballmer Is Off The Matrix
I know of no-one that thinks Win 8 is anything better than a so-so OS. Contrast that w/ Win 7, where the reviews by IT Pro's and everyday consumers I know were overwhelmingly positive. Even my mother didn't need to read how-to's and KB's to figure out Win 7. Sure this is anecdotal evidence, but lots of anecdotes add up to a trend. When professional IT people need to read manuals to understand how perform basic tasks in the OS, it's a problem.

But let's assume that Win 8 is technically awesome. What good does that do it when nobody wants to use it?
jries921
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jries921,
User Rank: Ninja
8/26/2013 | 5:45:54 PM
re: Ballmer Is Off The Matrix
I do wonder if Ballmer's departure is truly voluntary, coming on the heels of the reported struggles of both MS' new tablet business and Windows 8. I was very surprised that Ballmer survived Vista, so the current troubles may have been the last straw.
wht
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wht,
User Rank: Strategist
8/26/2013 | 6:04:44 PM
re: Ballmer Is Off The Matrix
We'll possible never know, and it's really none of your damn business anyways.
jries921
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jries921,
User Rank: Ninja
8/27/2013 | 5:55:33 PM
re: Ballmer Is Off The Matrix
Perhaps not, but people speculate about all sorts of things that are "none of their business".
ANON1242905689517
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ANON1242905689517,
User Rank: Apprentice
8/26/2013 | 7:42:19 PM
re: Ballmer Is Off The Matrix
When the Tablet PC came out in 2002, Gates' last effort, it was exciting - I founded a company on handwriting and touch on Windows. I got invited to meetings in Redmond to see the "new developments" in Vista and how it touch and handwritning improved and to see the new proto types - some meetings were only 10 people.

I was livid when I saw Vista - I went on a rant about how inadequate Vista was, the version we had didn't even solve the common problem of choosing a set of files in a folder with a pen!! The solution was eventually "slapped into Vista" the infantile check boxes (could have used the pen button or pen awareness to select multiple files)

I never got invited back.

It is also known that you never make the salesmen the CEO of a company - because they chase ideas and have no way of figuring out how to actually have a consistent message to make them profitable.

Its just business but I should be retiring wealthy and would be if someone other than Ballmer had run the show, at least it wouldn't have been worse.
Palpatine
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Palpatine,
User Rank: Apprentice
8/27/2013 | 6:35:15 AM
re: Ballmer Is Off The Matrix
That is exactly the point. Vista killed MS. It should be light, modular and efficient, to boost ultramobile market: it eventually was the opposite!
CE was let dying, Phone, Kin and Zune were horrible failures, desktop version with Vista gone after selling more and more powerful PCs, not to open new markets.
UMPC died, XP tablets died, even netbooks (super heavyweight of the ultraportable market) needed to install xp until 7 come out with some fixes to the disaster of Vista inefficiencies.
That's why Java OS and Linux took over set top box and feature phone markets, MS got marginalized even in mobile/embedded professional market, and everyone jumped on the iOS/Android bandwagon.
Next battle is cloud and online advertising/search/social: no wonder that MS being marginalized in providing the OS to access those services (already behind Linux... sorry, Android, and with such sales even iOS is a treat!) is tremendously disadvantaged compared to its situation a few years ago, while it slumbered trying to fight the change and release an heavier and heavier Longhorn kernel to force new hardware down the throats of users!
Not even MS can disgruntle the ultramobile world for more than a decade.
W8 is the final insult, the funny part it shots to the heart (calling it "legacy") the desktop that is the last MS strategic asset... and it got what it deserved, as everyone involved in this madness is now fired.
cbabcock
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cbabcock,
User Rank: Strategist
8/27/2013 | 12:48:09 AM
re: Ballmer Is Off The Matrix
Agree with rradina below that Windows 8 has too much Apple envy in it. Ballmer seemed to think he could reconstitute the consumer side of the business by adding the touchscreen user interface to Windows. He tried hard at a Churchill Club dinner in Santa Clara last year to convince the audience that Windows 8 was the answer to all problems -- the need for renewed sales of Windows, the need for an entry in the tablet market, etc.Trying to mimic the success of another company is a sure way to misdirect and water down your own franchise.To some extent, Microsoft had to realize that some consumers had left Windows behind and figure out the strengths of the remaining position, which is still a great business. The legacy Windows business could be added to the new strengths in the data center. Sometimes an organized retreat is better than a rout.. .
rradina
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rradina,
User Rank: Ninja
8/27/2013 | 2:43:06 AM
re: Ballmer Is Off The Matrix
Well, I think he could have reconstituted the consumer side of business by "adding" a touch screen interface to Windows. However, that's not what they did. They didn't just add, they replaced the primary UI with something that was/is promising but needs a lot of polish and new software.

The new software part is a catch 22 and I think it's why Microsoft forced the touch UI down our throats. If it was just an option, they feared the lack of software would have most folks disabling it/ignoring it to never return. Without demand, there's no incentive for developers to write modern UI software.

Let's examine what Microsoft's done by using a car's steering wheel as an example. What if one day BMW decided to install a Kinnect motion controller as a "modern" steering wheel. For backward compatibility, they also still provided the regular steering wheel. The sales guy says it's the best of both worlds because the driver gets to choose. While true, they fail to mention that some operations are now only possible by using Kinnect "air gestures". Although the transition between the regular steering wheel and "air gesture" driving mode is relatively easy (once you learn that waving your hand at the rearview mirror causes the wheel to disappear into the dash), drivers are forced to use BOTH interfaces when perhaps they want to consistently use just one. For instance, the turn signal is now ONLY activated with air gestures. This is fine if I want to completely drive with air gestures but if the roads are wet, perhaps I'm more comfortable using the regular steering wheel. Unfortunately when I need to make a turn, I now have to wave the regular steering wheel into the dash, make my air gesture turn signal and then restore the steering wheel to make my turn. The first time someone learns this is what they have to do, they'll hate it and blast BMW for ruining an otherwise superb car with this ridiculous hybrid that sometimes forces me to dangerously switch contexts.

OK -- let's return from metaphor land. The other thing Microsoft should have done is build a kick-ass version of Office for touch and released it at the same time as Windows 8. That would have been a sure way to guarantee the modern UI gained traction and developer interest and you didn't kick your current user base in the privates.
Palpatine
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Palpatine,
User Rank: Apprentice
8/27/2013 | 6:27:51 AM
re: Ballmer Is Off The Matrix
I could not agree more, Mike, well said.
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