It was announced on August 23, 2013, that Steve Ballmer was stepping down at some point in the following year as CEO of Microsoft. A committee was formed to search for and interview candidates to replace Steve Ballmer. The revolting shareholders finally got their way: Ballmer is leaving.
Over the last few years, Microsoft has fumbled many opportunities that may have contributed to the atmosphere that led to Steve Ballmer’s upcoming departure. So let’s take a look at what went wrong: This post will be the first in a three-part series in which I look at what went wrong with Microsoft over the last few years and suggest some possible fixes. Let’s start by looking at how Microsoft dropped the ball with Windows 8, Windows Phone, and tablet devices.
What happened with Windows 8 from that announcement onwards made the problems with Windows Vista look amusing. Under the reign of Steven Sinofsky, Julie Larson-Green, and Tami Reller, the Windows client group stopped listening. This was the same sin that was blamed for the mess that was Windows Vista. The world screamed at Microsoft after the release of the Windows 8 Developer Preview. Comments on Microsoft blogs, on third-party blogs, and forums, as well as from the media, all said Microsoft had gone too far with the touch-first UI. Business wasn’t ready for this – they couldn’t replace every monitor, and the training and support costs of a split UI would be horrendous. Technically, Windows 8 felt incomplete, not having real ways to manage and deploy this new not-to-be-called-Metro UI.
Sales tanked. There was a nice pre-order boom thanks to huge one-time-only discounts. Consumers ordered the product but who knows if they installed it? I usually ignore the “we sold 20 million copies of Windows 7” claims because those claims probably include business purchases. In volume licensing you can only buy the latest version. The normal quarterly announcements about Windows licenses sales stopped. Something was very wrong.
I’d be interested in seeing activation numbers because these would measure actual deployments. Businesses might buy the latest version of Windows, but how many of those companies used their downgrade rights to deploy Windows XP or Windows 7? In my experience, enterprises are now deploying Windows 7 to replace the soon-to-be-unsupported Windows XP. In business, those (typically conservative) decision-makers see change as bad. Radical change is scary.
And Microsoft’s new message of “use touch first” and “Windows Store Apps good, desktop programs bad” is very scary.
Windows 8.1 has emerged out of the program codenamed as Blue. Some feedback was listened to, such as a manageable Start screen, a Start button (no menu!), and the ability to boot to desktop. Is this enough? Oddly for a new Microsoft operating system version, Windows 8.1 is a free upgrade for customers who own Windows 8. Is this an apology from Microsoft for the sins of the past?
PCs are no longer the number-one client device. They’ve been rapidly supplanted from the top position by the smartphone. Apple has won the brand war, and Google’s Android dominates the global market, now outselling every other OS 2:1 across all devices worldwide. But it could be worse – we could all be using Linux!
Ballmer completely missed the point of the iPhone. He was quoted saying: “…it doesn’t appeal to business customers because it doesn’t have a keyboard, which makes it not a very good email machine.” Speaking of on-phone keyboards, where is Blackberry/RIM now?
Years later an incomplete Windows Phone 7 was released on substandard hardware with no marketing effort. It suffered from what I call “The Curse of Zune,” a phenomenon in which features in Microsoft products work only in the United States. What about the other 6.7 billion potential customers? In the case of Windows Phone, it was a mild case because some features worked in some countries, but not in others. It’s a mess, to be honest. Why, oh why can’t I, living in Ireland, subscribe to podcasts in the Irish version of the Windows Phone Store? Licensing is the excuse on the Answers forum. It’s strange that Apple don’t have the same legal issues.
There is a smaller ecosystem on Windows Phone than on competitors. Essential apps are missing. Sure, there are substitutes, but they aren’t what customers want. Consumers want to be part of their social collective; we are communal beings by nature. The Microsoft solution was to acquire 35,000 additional employees in the form of Nokia. I guess Microsoft had no choice – Huawei, HTC, and Samsung sell almost no Windows Phone handsets, and Nokia was sending out signals that it could switch to Android after its Microsoft sponsorship agreement ended. That would have been the death knell for Windows Phone.
I work in the distribution business. We saw a shift in demand two years ago, in which retailers reduced orders for laptops (the preferred form of PC for the consumer) and started asking for more tablets. It wasn’t just the obvious iPad. They wanted products across the entire range, from iPad alternatives like the Samsung Tab right down to the $100 tablet with low-spec screen and short battery life. Soon we saw PC sales dip in the IDC reports.
We knew back in 2010 that Microsoft needed to get into tablets. Many commentators said back then that, even though it wasn’t perfect, Microsoft needed to release a version of Windows Phone onto the tablet. But no, Microsoft said tablets were PCs and told us instead to buy “slate PCs” that came with Windows 7, which was equipped with a primitive and unusable touch support. Time passed, Apple dominated, and eventually Windows 8 and the confusing Windows RT were released.
Windows RT, formerly known as Windows on ARM (WOA), is Windows but it isn’t. You cannot run x86 or x64 applications on it. That won’t confuse Joe or Jane Consumer in the store, not one bit. Oh wait, Jane and Joe have always simply bought Windows because it was compatible with the software they’ve always owned and used. Sorry! Windows RT has been a sales disaster. Manufacturers such as Asus, Dell, Samsung, and Lenovo have all abandoned ship, leaving Microsoft (including Nokia) as the sole manufacturer of Windows RT tablets.
Would this have happened if Windows Phone was rebranded and engineered to work on tablets? I can’t answer that for sure. I think Microsoft’s confused message of “tablets are PCs” and the hybridization of Windows hurt Microsoft’s presence in both the tablet and PC markets. You cannot be all things to all people. Consider how most people (and, yes, tech journalists, commentators, and IT pros are not like most people) use PCs and tablets. PCs are productivity devices and tablets are consumption devices. Why do we need a productivity OS on the tablet? Windows Phone was (sort of) ready in 2010, and would have given the consumer an easy decision: Get a consumption device or get a (real) PC.
Join me in part two, in which I continue my commentary on Microsoft’s recent failings that have led to the end of Steve Ballmer’s tenure as Microsoft CEO.