Article: Microsoft's Creative Destruction

[welo]

Article from the New York Times from Feb 4th 2010

What happened? Unlike other companies, Microsoft never developed a true system for innovation. Some of my former colleagues argue that it actually developed a system to thwart innovation. Despite having one of the largest and best corporate laboratories in the world, and the luxury of not one but three chief technology officers, the company routinely manages to frustrate the efforts of its visionary thinkers.

A comment by Dick Bross who was vice president at Microsoft from 1997 to 2004.

http://www.nytimes.com/2010/02/04/opinion/04brass.html

As proud owner of a HP TC1100 tablet PC, one of the rare slate type tablet PCs available back then, I had always hoped MS would continue developing this platform. Windows Tablet PC edition kept improving with Vista (the tablet PC specific components only obviously), but no innovative hardware kept coming up.

Another example: When we were building the tablet PC in 2001, the vice president in charge of Office at the time decided he didn't like the concept. The tablet required a stylus, and he much preferred keyboards to pens and thought our efforts doomed. To guarantee they were, he refused to modify the popular Office applications to work properly with the tablet.

[...]

So once again, even though our tablet had the enthusiastic support of top management and had cost hundreds of millions to develop, it was essentially allowed to be sabotaged. To this day, you still can't use Office directly on a Tablet PC. And despite the certainty that an Apple tablet was coming this year, the tablet group at Microsoft was eliminated.

welo

[nikster]

I respect his frankness but I don't know - if I think about what kind of inventions Microsoft came up with over the years, next to nothing comes to mind. They made some minor improvements to Windows - Alt-Tab I believe came from there. The mouse wheel. Everything else they copied from the Mac. Not because they are bad people - just because they saw that this was the way to use computers, and they did their best to come as close as possible.

As Steve Jobs said in a 1994 interview, part of Microsoft's success in copying the Mac came from the fact that the Mac stagnated for a decade after 1984 - they had this amazing thing, and did nothing with it. No inventions from Apple during that period.

The corporate goal of Microsoft for almost as long as I can remember was pre-destined: Preserve the Windows (and later Office) monopoly. That makes Billions of Dollars. They never needed to invent their way out of anything, and they never did. Threats to the monopoly arose periodically, and Microsoft did a pretty good job of killing them off. Even though sometimes that meant stifling innovation.

[welo]

Isn't Mac OS X a UNIX based OS that was built on NextStep, a company bought in 1996? So much about copying.

But did MS ever be truly innovative? Cannot really answer that question. I wonder whether global companies that size can ever be... I guess it's more a question of buying the right startup company that came up with an innovative solution.

I never bothered to find out how Apple actually came up with their innovations during the last years (iPod etc).

And I wouldn't bet on Apple being the company that would NOT abuse their monopoly if they had a bigger market share. I mean look at what happened to the Apple clones in the mid-1990ies.

Interesting to hear the comment from Steve Jobs on the Mac stagnating - interestingly none of the Apple fan-boys during that period would admit to this...

If you are interested in another story of missed opportunities and bad company management, check out the Amiga story...

welo

[bendejo]

MS is too big for innovation -- Gates himself has been saying it for 10+ years now. MS keeps up with the innovations in technology by buying small companies where the concepts have already been developed. They can keep up with the changes themselves, adding new protocols and features, but any new concepts in computing will not be introduced by Microsoft, unless they put out something they bought elsewhere that hadn't been presented to the public yet.

I saw this article in NYT and it bothered me. I used to work in Silicon Valley and it brought back memories -- I'm glad to be far away from it. Personally, if I were running MS I wouldn't stand for this kind of <deleted> and this 'I don't believe in pens' manager would have walked the plank long ago. I have zero affection for Steve Jobs, but he would have put this clown in line (or tossed his arse out) long ago, but maybe Jobs doesn't play that active of a roll these days. Imagine, a whole product line in the crapper because of one manager's say-so.

The scuttlebutt about Google is that each employee gets one day a week to work on their own project. Yeah, this sounds cool, but when it comes to deciding which project actually gets pushed out to development I'd bet it's the same old corporate bs as anywhere else. Also, with that company so laden with PhD's I have little doubt more than the usual egotism and vanity is involved.

MS has been good at copying, though

They took the windowed concept from the Mac. They also took from them the cockamamie idea of incorporating the OS with the windowing system. They should have gone along with the XWindows concept of making the graphical user interface just another process on top of the OS itself, a much more elegant and efficient concept. IMO, of course.

MS developed a different font technology to get out of paying royalties to Adobe.

Jobs started Next after being tossed from Apple in the 1980s. I did development on the Next, it was definitely an innovation in its time. I was sorely peeved when he junked the company, and still am: you will still not see me buying any iCrap. I don't even want Quicktime on my system.

When Jobs re-joined Apple he had the company buy the NextStep OS, which, yes, was based on Unix. He made another bundle of $$.

There is more to this than you might guess. When Apple entered into the Mac era, one of the poobahs at the company was a Frenchman named Gassee. Remember how expensive the Mac was? That was his idea: an elite computer for the elite budget, where you can make more $$ selling less (I think there are a few bar girls who think the same way )

Story was that Gassee could talk the birds out of the trees, and that at meetings no one could out-talk him. There were rumors that he was an impetus for sacking Jobs.

Well, after leaving Apple himself he started a company called Be, which produced a new operating system. I'm not sure if the thing ever made it to market beyond beta releases, but they soaked up a lot of venture capital. Supposedly the Be system was being considered to be the basis for next Apple OS (this was late 1990s) but Jobs reappearance squashed that one, and I'm sure Jobs relished the payback. Legend has it Gassee was livid, occasionally even blowing his continental cool in public places, screaming at waiters etc.

[welo]

Why decide between Apple and MS and Google, cannot we hate ALL of them

Apple always had the same or an even worse attitude than MS when it came to patronizing the user and distributing their 'annoying' software (quicktime, itunes). Of course this is my personal opinion and such things are difficult to objectify.

IMHO they had the only advantage that their products were often more intuitive and innovative, and they had the better marketing and a less critical user base.

I had forgotten that Steve Jobs had founded Next, and didn't know that Gassee had founded Be (brief summary of BeOS' whereabouts at wikipedia).

In addition to your story on the rivalry between Jobs and Gassee...

In 1996, Apple Computer decided to abandon Copland, the project to rewrite and modernize the Macintosh operating system. BeOS had many of the features Apple sought, and around Christmas time they offered to buy Be for $120 million, later raising their bid to $200 million. However, despite estimates of Be's total worth at approximately $80 million,^{[citation needed]} Gassée held out for $400 million, and Apple balked. In a surprise move, Apple went on to purchase NeXT, the company their former CEO Steve Jobs had earlier left Apple to found, for $400 million. NeXTSTEP was used as the basis for their new operating system, Mac OS X

source: http://en.wikipedia.org/wiki/Jean-Louis_Ga...Be_Incorporated

So besides Steve Jobs questionable character, do you think OSX is not a worthy successor to NextStep or not?

welo

Edited February 8, 2010 by welo

[welo]

And here a list of Google's acquisitions, 59 companies so far...

http://en.wikipedia.org/wiki/List_of_acquisitions_by_Google

[bendejo]

Interesting tidbit there, thanks. I didn't realize the Be acquisition attempt had gone that far -- to me Be/Gassee scuttlebutt was on the same level as the media fame w_hores are now: the mere mention of the names cause immediate boredom. That holding out for $400 million sounds like he thought he had the same captivating influence he did when he worked there. That he was asking for the same amount Jobs later received could mean he had someone inside Apple tipping him off. I would guess that NextStep was considered more stable because it had been on the market for 2 major releases (or was it 3?) whereas Be was pretty nascent.

Probably all he has to show for it now is a DVD containing the code for something he doesn't understand: you'd be amazed at how clueless some of these execs can be when it comes to things technical. (My fave incident was when it was revealed that the CEO of Netscape didn't use email, it was all handled by his secretary -- man, he went ballistic when that one came out!) From what I can make from the wiki page it sounds like the business is treating Gassee like a leper.

Haven't touched NextStep since 1993, sold off my hardware within a few weeks of Jobs pulling the plug. I checked email using a Mac a few times in the past few years, that's about it, so can't comment on OSX, other than "keep that thing away from me!"

Sun Microsystems was another interesting one. A clueless CEO with a full-blown SiliValley megalomaniacal ego, a president who I wouldn't trust with a dog, and a sales force as shark-like as Oracle's. But that was back when they were making money. Admirable, though, is they put a lot into research just for the sake of research.

BTW, you know that ANYONE can edit a wiki page, right?

Edited February 9, 2010 by bendejo

[cdnvic]

Microsoft and Apple both made their biggest breakthroughs by ripping off windowing and the mouse from Xerox.

Great movie that dramatizes the early days of both companies:

http://www.imdb.com/title/tt0168122/

[quiksilva]

The upcoming Project Natal is fairly innovative, didn't M$ invent that? Or did they just buy the firm that did?

Edited February 9, 2010 by quiksilva

[welo]

Thanks for the movie tip. Just watched it the other day and it's worth seeing if you can relate to the Apple/MS rivalry or the history of the modern PC.

Not sure how came off better, Bill or Steve?

[cdnvic]

Well, Bill's far wealthier, but Steve gets the love. Odd because inside the industry he's known as a major jerk and Gates has donated billions with his charitable foundation. Even gates though, said he admired Jobs' taste and sense of style that he puts into Apple products.

[quiksilva]

I should also add that M$ innovation in the on-line space, namely Xbox Live, have been pretty darned innovative too. So much so that every other games console manufacturer, and other on-line services such as Steam have tried to copy them (and done a pretty poor job at it by comparison).

[nikster]

Jobs started Next after being tossed from Apple in the 1980s. I did development on the Next, it was definitely an innovation in its time. I was sorely peeved when he junked the company, and still am: you will still not see me buying any iCrap. I don't even want Quicktime on my system.

Do you know how silly this sounds? Just another bitter ex Silicon Valley employee with a grudge. Silicon Valley is full of these people, I saw that when I conducted job interviews there about 10 years ago. We were a heavily connected startup, but the people who showed up for engineering jobs were a circus. And out of 10 or so there were 2 with full blown conspiracy theories of how they were robbed of their rightful shares in company X by the evil management of those companies, and how they were actually the ones developing all the tech etc. Geek nut cases. Something probably unique to silicon valley.

Anyway, if you love NeXT I have good news for you: Apple is NeXT. When they purchased NeXT back when, the entire engineering dept. at Apple was gradually being replaced with NeXT people. They had the better technology, and they knew it. Then the CEO got replaced with Jobs. Haha - a takeover if I have ever seen one.

I remember from that time that Jobs actually got his CEO position back with some very bold maneuvering. Apple was down and out for the count, Amelio was (still) CEO, and Jobs was merely a board member with 1M shares of AAPL. AAPL was at an all time low at the time. Jobs then sold all of his shares except one - a public statement that he had no faith in the current management. Soon thereafter, Amelio was kicked out and Jobs was "interims" CEO, and later CEO.

Back then the 1M shares were worth I think $15M or so. With two splits in the meantime, right now those 1M shares would be 4M shares, and worth close to $1Bn. Steve Jobs did not do this for the money - even though the board is so scared of him leaving that they keep showering him with gifts and options, because if he were to quit, Apple stock would probably be cut in half or worse.

Sorry for the OT...

[nikster]

I should also add that M$ innovation in the on-line space, namely Xbox Live, have been pretty darned innovative too. So much so that every other games console manufacturer, and other on-line services such as Steam have tried to copy them (and done a pretty poor job at it by comparison).

It's something they did well. Not really a revolution of any kind, more like an evolution, and one they executed pretty well. It took them a while to do, but their competitors take even longer for these things - Sony is not going to invent anything new, and Nintendo is going a completely different direction.

Looking at Windows Mobile 7, the XBOX games functionality is the only thing that truly stands out. No other phone has this level of integration for games. I think it's their biggest asset. So the XBOX, despite losing money for ages, might after all be of strategic importance.

BTW I think I didn't post this here yet, in case you have any doubts where Microsoft makes its money, look at this graph:

[welo]

BTW I think I didn't post this here yet, in case you have any doubts where Microsoft makes its money, look at this graph:

Interesting. Always thought Office was the cash cow and Windows profits eaten by development costs. But 'profits by division' should indicate net profit, right? So Windows is actually doing a lot better than I thought. I assume the 'Windows' category include all tools shipped with Windows such as IE, Mail, Movie Maker, etc

[Crushdepth]

What happened? Unlike other companies, Microsoft never developed a true system for innovation.

They never had a *culture* of innovation and neither did Yahoo. Contrast with Google, which has put a fair amount of effort into encouraging a culture of innovation. Who is chasing who?

Microsoft is a dinosaur trying to evolve into a Monkey.