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  (Source: Microsoft)
Sources close to Microsoft unveil Mr. Elop's controversial vision to sell of Xbox, Bing units

Incoming Microsoft Corp. (MSFTexecutive vice president of devices Stephen Elop is considered a front-runner for the CEO job, with the departure of Steve Ballmer, who took over from company cofounder and long-time CEO Bill Gates in 2000.  His candidacy is sparking a fierce debate over his executive track record and what direction Microsoft should move in as it looks to adjust to the new reality of an increasing mobile-centric devices and software market.

I. A Strange Track Record

Depending on who you ask Mr. Elop is either a quiet genius at saving companies -- or a bizarre master of destroying them.

The Canadian executive grew up in Ontario and went to school at McMaster University in Hamilton, Canada, studying computer engineering and management.  Six years after his 1986 graduation, he scored his first major position as director of consulting at Lotus Software.  At Lotus he played an admittedly smaller role in big direction decisions.  But following an acquisition by International Business Machines Corp. (IBM) in 1995, he would soon move on to more influential roles.

Stephen Elop
Stephen Elop [Image Source: IBTimes]

Joining Boston Chicken (and Einstein Brothers Bagels), a rapidly growing fast-food franchise, he was appointed CIO.  He rode along until 1998 when the company's large debts led it to file for Chapter 11 bankruptcy protections.  Boston Chicken was subsequently acquired by McDonald's Corp. (MCD) and rebranded Boston Market.

Again, Mr. Elop jumped ship to another role, becoming an IT manager at Macromedia, a software firm who wrote the widely used Flash plugin and the Dreamweaver webpage development environment.  Mr. Elop ascend to CEO in 2005, and three months later the company was sold to a top web/graphics software firm Adobe Systems Inc. (ADBE) -- apparently Mr. Elop had learned a trick or two from the sales of Lotus and Boston Market.

Macromedia
Mr. Elop was CEO at Macromedia in 2005 and suprvised its sale to Adobe. [Image Source: Fotki]

But it is here that opinions diverge.  Some believed that Adobe had overpaid and that Stephen Elop had played a clever game by first stoking rumors of a possible Microsoft buyout, which in turn triggered a panicked bid from Adobe.  Indeed, Adobe paid $3.4B USD for Macromedia -- a 25 percent premium on share prices before the deal was announced.  While Macromedia was profitable [PDF], at the time investors were still quite wary with the fresh memory of the burst of the dot com bubble still in their rear view and this kind of premium for a software firm due to speculation about secret counterbids from another rival seemed downright "paranoid" to quote one analyst.

Others weren't as impressed with Mr. Elop's decision.  Adobe had a poorer reputation for customer service at the time and many were angered at the prospect of it gaining a virtual "monopoly" over key internet software.

Even as this debate raged on, Mr. Elop didn't take long to leave from his new position as president of worldwide operations at Adobe.  In 2007 he jumped ship to Juniper Networks, Inc. (JNPR) a Californian networking equipment manager.  He spent a quiet year there as COO.

Office Launch
Stephen Elop, at an Office 2010 launch event [Image Source: Microsoft]

Then he jumped to Microsoft, where he served as head of the business division, producing a number of successful, if controversial products, such as Office 2010, which continued to back the "ribbon" menu format, introduced in 2007 before his arrival.

II. Nokia Run -- A Trojan Horse or a Turnaround Wizard?

In 2011 he would make another surprise jump up the corporate ladder, becoming CEO of struggling Finnish phonemaker and telecommunications equipment firm Nokia Oyj. (HEX:NOK1V).  Many were wary of his ties to Microsoft and track record of being tied to firms who were acquired.

At the 2011 Mobile World Congress (MWC), the mobile industry's top trade show, Stephen Elop was asked outright by one member of the audience during a Q&A session whether he was a "Trojan horse".  Indeed if Mr. Elop's history didn't raise enough eyebrows, his subsequent decision to switch Nokia over to solely using Microsoft's Windows Phone platform certainly did.

Stephen
Some accuse Stephen Elop (right) of being a Trojan horse during his two year reign at Nokia. [Image Source: Reuters]

In the end he restored Nokia to profitability -- but also ended up orchestrating a sale of Nokia's devices unit to Microsoft for $7.2B USD.  Given that Nokia had a market cap of $32.84B USD in 2011, clearly Mr. Elop's cuts had taken a heavy toll on the phonemaker.

Again, here's where controversy take hold.  Some say that Mr. Elop indeed has proved that he was a Trojan horse on a clear mission to devalue Nokia, briefly restore it to profitability, and then pass it off to Microsoft as a vehicle for Windows Phone.  They cite a $25M USD payout Mr. Elop received as part of the purchase deal as "proof" of this alleged conspiracy.

Others contend that Nokia's aging Symbian "burning platform" left it in an uncompetitive position and that Mr. Elop performed admirably given the circumstances, and that Mr. Elop's past relationship with Microsoft was not a factor in his strategy.  They point out that the sale allowed Nokia to focus on the stable telecommunications market rather than dividing its focus.
 

Ford Motor Comp. (F) CEO Alan Mulally (left), former Nokia CEO Stephen Elop (center), and former Skype CEO Tony Bates are considred front runners for the CEO job. [Image Source: AP/Reuters]

Now even as he settles in to his position at Microsoft, some consider him a front-runner to be CEO at Microsoft.  One theory is that he might receive the position as a reward for his successful role as Trojan horse at Nokia.

III. Stephen Elop's Wild (Alleged) Plan for Microsoft

But a new report in Bloomberg is raising fresh questions -- not only about Mr. Elop's historical connections to major corporate acquisitions, but also regarding his fitness to lead Microsoft.

Bloomberg reports that Mr. Elop's proposed plan to Microsoft's CEO search group is to untie Microsoft's various software products -- most notably Office -- from Windows.  While Office is current available for Apple, Inc. (AAPL) Mac computers, Mr. Elop wants to offer full fledged versions of Office for the Apple iPad, tablets running Google Inc.'s (GOOG) Android, and notebook computers running Google's Chrome OS.  He'd pursue a similar approach for other products such as the Visual Studio development environment.

Windows 8
Windows sales have fallen, but should Microsoft kill the OS and focus on software?  That seems to be Mr. Elop's alleged vision. [Image Source: Reuters]

Furthermore, Mr. Elop reportedly wants to directly sell off some non-software, non-mobile devices business.  Bloomberg elaborates:

Besides emphasizing Office, Elop would be prepared to sell or shut down major businesses to sharpen the company’s focus, the people said. He would consider ending Microsoft’s costly effort to take on Google with its Bing search engine, and would also consider selling healthy businesses such as the Xbox game console if he determined they weren’t critical to the company’s strategy, the people said.

At Nokia, Elop cut 40,000 jobs and reduced operating expenses by 50 percent. While Microsoft doesn’t face the same cost constraints, Elop would probably impose job cuts and belt-tightening to create smaller teams, said the people.

Many nodded in approval of the thought of selling the money losing Bing.  But the idea of selling the Xbox business is much more controversial as it is a unit Microsoft has said is profitable, and at worst is accused of being a "break even" business by critics.

Bing losses
Maybe unloading Bing would be a good idea. [Image Source: Business Insider]

Between breaking an exclusivity -- an approach which to many, would be akin to Microsoft abandoning Windows, its core product -- and the plans to chop off other business units for the auction, the most prevalent reaction at the overall plan appears to be shock.  Some are asking -- is Microsoft "Trojan horsing" itself?

Of course, this report has not been confirmed, and even Bloomberg makes it clear that its sources said Mr. Elop had not finalized his proposed plan to the search committee.

Trojan Horse
Is Microsoft "Trojan horsing" itself? [Image Source: Venitism]

Microsoft's Frank Shaw mocked the report, stating, "We appreciate Bloomberg’s foray into fiction and look forward to future episodes."

However, top Windows blogger Paul Thurrott calls the report "credible" and actually agrees with Mr. Elop's (alleged) controversial plan.  Likewise Paul Ghaffari, manager of Microsoft co-founder Paul Allen's $15B USD portfolio (which includes $2B USD worth of Microsoft stock -- about a 0.6 percent stake) has backed a similar proposal for spinning off Xbox and Bing, a move he says would pump Microsoft's profits by 40 percent, by reducing operating expenses.

He comments:

The search business and even Xbox, which has been a very successful product, are detracting from that. We would want them to focus on their best competencies.  My view is there are some parts of that operation they should probably spin out, get rid of, to focus on the enterprise and focus on the cloud.

Sounds like true or not, some have the same idea Mr. Elop supposedly does for radically transforming Microsoft.

It's worth watching this one carefully, as Stephen Elop does have an uncanny knack for both scoring unlikely positions of power and for chopping up and packaging companies for sale.  Could Microsoft appoint Mr. Elop CEO?  And if it does, would he make the wild decision of leaving the struggling Windows platform to a slow death and unloading major portions of Microsoft's diverse hardware, software, and internet service empire?  We shall wait and see.

Sources: Bloomberg, FT



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he's crazy!!
By Captain Awesome on 11/8/2013 1:13:14 PM , Rating: 2
He's crazy! He wants to sell off half of Microsoft's business, and then make major changes to the other half. But really anything is better than the direction they were heading under Ballmer.




RE: he's crazy!!
By kleinma on 11/8/2013 2:50:02 PM , Rating: 4
Explain how xbox and bing is half of Microsoft's business please...

Considering they have products like Windows, Office, SharePoint, SQL Server, Visual Studio, Dynamics, System Center, Skype, Lumia, Surface, Azure, etc...

What? Haven't heard of some of those before?


RE: he's crazy!!
By Varun on 11/8/2013 3:24:28 PM , Rating: 2
People that think Ballmer didn't do a good job need to give their head a shake:

"In 2000, the year he replaced Gates as C.E.O.—the Microsoft founder stayed on as chairman until 2006—the firm made a net profit of $5.8 billion, on revenues of $23 billion. In the twelve months that ended in June of this year, it netted $21.9 billion, on revenues of $77.9 billion. Yes, that’s right: under Ballmer, Microsoft more than tripled its revenues and profits."

And he did that while at the same time being under severe scrutiny for monopolistic practices.

Does anyone ever think that Microsoft was behind the curve because they were a monopoly? Anything they did would be picked to death by regulators.

Google is now doing the same thing, and it will be curious if they run into the same types of regulatory issues.


RE: he's crazy!!
By Reclaimer77 on 11/8/2013 4:30:51 PM , Rating: 4
If it wasn't for the OS and office business that Gates built, Balmer would have ruined Microsoft.

We can count on one hand his successes that didn't involve standing on Gates shoulders.

And he even managed to screw up Windows. Seriously, all you have to do to ensure Windows dominance is release iterative versions and build on everything that's already great. How can you possibly F that up? Well he found a way with Windows 8.

Sure, Balmer did a "good" job, but for a company like Microsoft good isn't good enough.


RE: he's crazy!!
By Reclaimer77 on 11/8/2013 4:46:46 PM , Rating: 2
Two of the biggest head scratchers under Balmer:

1. Skype Purchase:

So they massively overpaid for Skype and nobody is sure why to this day. There appears to be no long term goal or strategy involved. It hasn't made them any money or gained them market presence.

1. Bing:

What's the point? Why exactly does Microsoft need a search engine again? All it's done is lost them billions of dollars since day one.


RE: he's crazy!!
By kleinma on 11/8/2013 5:17:38 PM , Rating: 2
Why does google need a search engine? Answer that question and you will answer your own...


RE: he's crazy!!
By YearOfTheDingo on 11/8/2013 6:17:44 PM , Rating: 2
Google search engine makes money. Lots and lots of money. Bing doesn't. The unit not only loses money on its own, it's also connected with the disastrous acquisition of aQuantive, which cost Microsoft $6 billion.

The failure to build a viable online business really dates to the original Microsoft Network (circa 1995). At some point you just got to admit that you can't do it. I would fork Bing along with MSN to Yahoo in return for some shares. Having someone else be a strong competitor to Google's online business is worth more strategically to Microsoft than the current futile effort.


RE: he's crazy!!
By inighthawki on 11/8/2013 10:32:54 PM , Rating: 5
Bing doesn't make money because it currently has a significantly smaller marketshare.

But remember that having your own search engine has more advantages than just a website that searches the internet and generate ad revenue. If you integrate it as a core service in other products, it becomes a pretty first class product that is hard to calculate the direct value of, since it's true value is a sum of the value it's added to other products.

Take for example visual studio. As an IDE it's really good, but it also adds value to Windows since people will invest more heavily in Windows development. The end result is that more copies of Windows are sold, yet Visual studio does not get credit for this improvement in sales, since it's pretty much impossible to calculate the direct impact.

The same holds true for products like Bing. Although Bing directly has lost money, it has been used to invest and improve other products. By how much? Maybe a lot, maybe almost nothing.

Google also provides similar functionality by extending their search engine to different apps, as well as Android integration. Microsoft could arguably have used Google as their primary service, but occasionally you run into licensing and legal conflicts while using a competitors products.


RE: he's crazy!!
By Reclaimer77 on 11/9/2013 9:18:07 AM , Rating: 1
Microsoft's core business is Windows. Yet they can't integrate everything into Windows because they'll get smacked with anti-trust accusations. If not here then certainly in the EU.

quote:
Although Bing directly has lost money, it has been used to invest and improve other products.


Like which ones? Even Windows Phone users prefer Google over Bing. Microsoft is desperate to state otherwise, but hard data shows the facts.


RE: he's crazy!!
By YearOfTheDingo on 11/9/2013 10:28:09 AM , Rating: 2
That's not the kind of integration end-users want anyway. They hate it, in fact. I have not met a single soul who actually likes the search integration in Ubuntu Dash.


RE: he's crazy!!
By kleinma on 11/9/2013 12:07:45 PM , Rating: 2
I am a windows phone user and I use bing, so thanks for speaking for me, but you couldn't be more wrong.


RE: he's crazy!!
By Reclaimer77 on 11/9/2013 2:55:33 PM , Rating: 1
Nobody is speaking for you. But you're just one person.


RE: he's crazy!!
By inighthawki on 11/9/2013 5:05:55 PM , Rating: 3
quote:
But you're just one person.
And so are you unless you cite a source that shows otherwise ;)

I for one have a windows phone and find that bing and google provide nearly similar enough results that I find the direct integration of bing as the search provider to be far more convenient than trying to find a google app or go to their website.


RE: he's crazy!!
By YearOfTheDingo on 11/9/2013 9:30:40 PM , Rating: 2
I'm a WP user and I'd readily confirm that Bing does a adequate job. It's doubtful many WP users goes through the trouble of using a different search engine. Then again, that's damning by faint praise. When you're a challenger you have to do better than the incumbent. Can you come up with any area where Bing does better than Google? The only thing I can think of is that there's less advertisement. But that's just a function of it being a failure from a business perspective.

And I have to say, Bing Map is a net negative on Nokia phones. It sucks and it always pops up when what I want is the Nokia app.


RE: he's crazy!!
By Reclaimer77 on 11/10/2013 9:19:53 AM , Rating: 2
I know Cortana is "on the way", whenever, but Windows Phone is severely lacking in online services integration. Bing isn't an essential part of the WP experience until they can integrate it in the way that Google Now integrates itself into Android.

I'm taking my gf to see the Thor movie today (yeah yeah laugh it up), here is what Google Now will do for me: includes the latest movie ratings from Rotten Tomatoes, helping me pick the right movie. It lets me purchase tickets through Fandango. It reminds me when I need to leave for the theater. And it displays my e-tickets for the movie once I arrive at the theater.

ALL through the Google Now "movies" card!

The lack of that kind of deep online service integration makes Bing and Windows Phone look stale by comparison. Cortana needs to come and come soon, and she better bring her A game.


RE: he's crazy!!
By althaz on 11/10/2013 5:04:12 PM , Rating: 2
This is the first post you've ever made on any subject that has been worth reading. Well done!


RE: he's crazy!!
By inighthawki on 11/9/2013 2:55:43 PM , Rating: 2
quote:
Like which ones?

Well Windows Phones search features are powered by bing. The web search, music search, visual search, voice search etc. Windows 8.1's universal search is now powered by the Bing backend. Xbox one is also powered by Bing.

All I'm trying to point out really is that Bing is more of a service that other products can leverage, and not so much of a standalone product. Most people think of it as just a web search engine, but it is used for more than that, and that it's hard to calculate the value of something like that, since it's more than just "how many people went to bing.com today versus google.com?"


RE: he's crazy!!
By YearOfTheDingo on 11/9/2013 10:14:54 AM , Rating: 2
"It's not a failure. It's part of our long-term strategy." That excuse is really sort of wearing thin. There is no obvious synergy between internet search and what Microsoft's core business. If there were, you wouldn't have to resort to an analogy to explain it.


RE: he's crazy!!
By Varun on 11/9/2013 4:24:01 PM , Rating: 3
I'd disagree completely. Under Balmer we've had the following billion dollar businesses (source ZDNet):
•Windows (which also, up until now, included Surface, which contributed $853 million to the total in fiscal 2013)
•Windows Server
•Windows Azure
•Office (client)
•Xbox
•SQL Server
•System Center (client and server both, so includes Windows Intune)
•SharePoint
•Visual Studio
•Dynamics (CRM and ERP)
•Online Advertising (search and display both)
•Office 365
•Client-access license (CAL) suites (formerly known as desktop access)
•Enterprise Services (including consulting)
•Enterprise communication business (Exchange plus Lync)

Gates laid the foundation for some of these, no doubt there, but under Ballmer there are some pretty big name pieces of the Microsoft revenue chart. SharePoint, Office 365, Enterprise communications, etc etc.

Windows Server, which was around in the days of Gates, grew to dominate the market under Ballmer. All of the cloud services were under Ballmer.

As much as people say Microsoft is always behind the curve, it's not true on cloud services. Amazon is their only real competition there and Microsoft has some excellent pieces now available, but they also expanded all of those cloud services to the consumer, which is something none of their competition has in place. AWS is not for the consumer, and Google's stuff is not for the enterprise.

I'm excited to see what a new CEO can bring to the company but I honestly doubt there will be any significant changes to the operations (especially since they've just announced the Devices and Services re-org). The CEO answers to the board, and the board is still going to be run by Gates and Ballmer.


RE: he's crazy!!
By rsmech on 11/9/2013 5:20:17 PM , Rating: 1
If there were no OS are Office there would be no Microsoft. Your point is silly.

If Google didn't have a search engine I'm sure they would be screwed up also.

Get over Windows 8, you still have 7. I didn't cry when I kept XP over Vista. I liked XP so if Vista didn't work for me I didn't cry all the time about how I didn't get what I wanted. Keep 7 and relax.


RE: he's crazy!!
By stm1185 on 11/11/2013 4:01:03 PM , Rating: 2
I want to see him sell off Xbox then see Samsung snatch it up and run wild with it.


Hmmm...
By Motoman on 11/8/2013 12:51:11 PM , Rating: 5
...back in the day, when MS first came out with Word, Excel, and Office, and it was clear they were leveraging their OS monopoly to unfair advantage over WordPerfect, Lotus, etc., I was certainly in favor of breaking up MS into an OS company and an office suite company.

That horse has long been dead though...Lotus, Quattro Pro, and many others did really just die - with a direct tie to the MS monopoly play - and there's no one that doesn't realize the current "Lotus Symphony" product from IBM has nothing to do with actual Lotus product, and is just a relabeling of OpenOffice. WordPerfect Office of course does still exist...and strangely still has a toehold in the legal industry, for whatever reason...but for all intents and purposes it's been a zombie at best for a very long time now.

MS killed off many businesses/business models by creating a massive bloat of an OS bundle...and by creating and nurturing a market expectation that an OS actually *was* the bundle - despite the fact that a browser, media player, etc. have nothing to do with actually being an OS. Those monopoly plays ultimately didn't hurt MS either.

But again...those wars seem to be over. Netscape, for example, is long dead and buried, one more victim of MS's monopolistic powers. Is there much point now?

And then to see a possible CEO candidate talking about splitting MS up, in a possibly similar fashion. Separate OS from Office. Hardware from software. Etc. While I, as a consumer, would actually like to see such things happen. I can't imaging that MS abdicating it's monopoly positions as being a good idea for MS. XBox and Office could certainly live on their own and probably flourish, as could Windows. Bing would probably die. And some kind of "enterprise" organization would flourish as well, with server and developer products under it's wing.

But all that decoupling of core businesses just doesn't seem to be in MS's best interests. I don't get it.




RE: Hmmm...
By michael67 on 11/8/2013 1:38:28 PM , Rating: 2
quote:
But all that decoupling of core businesses just doesn't seem to be in MS's best interests. I don't get it.

Sometimes it really can be for the better, as the parts can be worth more seperate, also huge company's mean more layers to get true before things are done.

I see it at my company, a lot of separate company's that worked more or less independent, got 15y ago merged and lost there independence, now 5 years a go they started decopeling them, and let them run independent, selling of whats not in there core businesses.

The only thing that is left centralized is part of the administration and the purchasing department so we get better deals on what buy.

Even do we still work often with sister companies and its preferred to do so, we are all now more or less independent companies, an a lot more flexible and profitable.

So yeah sometimes the part are worth more then the hole, and are better of on there own, or soled to a company that can use or integrate them better.


RE: Hmmm...
By kleinma on 11/8/2013 2:46:10 PM , Rating: 2
Splitting up a company, and selling off 2 product lines out of about 2 dozen product lines, doen't really equate to the same thing.

If Microsoft didn't have bing and xbox, they would still be microsoft through and through. Now you go splitting the OS and Office divisions up into two companies, or consumer and enterprise, then you are talking splitting up the company.

That said, xbox seems like a no brainer to keep around, they are transforming it into the PC in your living room, so that still very much fits within their consumer vision. Bing has been dead from the start (and I am someone who uses it) and always loses them money, so that would make more sense. Even though bing has small market share, it would be a shame to see google really become a total search monopoly. Then again, maybe that is what is needed to get some regulation on search.


RE: Hmmm...
By YearOfTheDingo on 11/8/2013 6:49:36 PM , Rating: 1
I don't think it's a no brainer. It's a legitimate question whether the Xbox is the best vehicle to reach the living-room content delivery market. The thing has been around for ten years and by and large we haven't seen a major breakout from its role as a gaming device. It's probably worth keeping since Microsoft has nothing else.


RE: Hmmm...
By kleinma on 11/9/2013 12:05:29 PM , Rating: 2
we haven't seen a major breakout from it's role as a gaming device? Really? We haven't seen that? Or you haven't because your eyes are shut?

For over a year, more people use xbox 360 online for non gaming purposes than for gaming.

http://latimesblogs.latimes.com/entertainmentnewsb...

The xbox one is exponentially more a media hub than a gaming console.

So, since you are so horribly wrong, I guess there is nothing else to say about your statement.


RE: Hmmm...
By YearOfTheDingo on 11/9/2013 9:41:18 PM , Rating: 2
Gamers using a device for purpose other than gaming is not what I'd call a breakout.


RE: Hmmm...
By Shadowself on 11/8/2013 3:31:01 PM , Rating: 4
quote:
...back in the day, when MS first came out with Word, Excel, and Office, and it was clear they were leveraging their OS monopoly to unfair advantage over WordPerfect, Lotus, etc., I was certainly in favor of breaking up MS into an OS company and an office suite company.
MS did nothing wrong with Word (the windowing version of which actually showed up first on the Mac, not Windows), Excel (the first version of which also showed up on the Mac before it showed up on DOS or Windows), or PowerPoint Microsoft bought PowerPoint (the early version was not internally developed).

Back in the day (20+ years ago) I predicted the big software war (after Microsoft had already stomped everyone as far as the desktop was concerned) was going to be productivity bundles. I was wrong as Microsoft put forth the best and broadest bundle (NOT including the OS) and the war never really happened as Microsoft never really had any competition. There was never any forced bundle buying as you could always buy DOS or Windows with or without the productivity applications and you could always buy the productivity applications with or without the OS.

What Microsoft DID get into trouble for (and triggered an Antitrust action from the U.S. Federal government) was creating two sets of APIs. One that was used only internally by Microsoft and was very efficient and optimized for Microsoft's products and a separate set that was open to outside developers that was demonstrably less efficient. When this was proven, Microsoft entered into a consent agreement with the U.S. Federal Government to stop those practices and never do it again. Virtually no one remembers this case as it did not get a lot of publicity. It also was several years before the case involving tying IE directly into the Windows OS.


RE: Hmmm...
By Solandri on 11/9/2013 2:09:33 PM , Rating: 2
quote:
Back in the day (20+ years ago) I predicted the big software war (after Microsoft had already stomped everyone as far as the desktop was concerned) was going to be productivity bundles. I was wrong as Microsoft put forth the best and broadest bundle (NOT including the OS) and the war never really happened as Microsoft never really had any competition.

The war happened, it just happened outside of consumers' eyes. At the time Microsoft was partnered with IBM in developing OS/2. They told all their developers OS/2 was going to be the GUI successor to DOS. So Lotus, WordPerfect, etc. got busy porting their office productivity apps to OS/2.

Then about a year later, Microsoft pulled the rug out from under them. They announced they were dissolving their partnership with IBM, and that the successor to DOS was going to be this GUI they'd been developing behind the curtains called Windows. Oh, and here are some shiny new office productivity apps to get you started - Word and Excel. The competitors OTOH had been busy developing OS/2 versions. It took them a year or more to come out with Windows versions, partly because of developing time. But also partly because of market uncertainty about whether to go with OS/2 or Windows - I think WordPerfect eschewed a Windows version for several years. By the time Windows emerged as the winner, Office was firmly entrenched.

I'm not sure if Microsoft did this deliberately, or if it was a fortuitous accident that the timing worked in their favor. But the net result was a bait and switch which put their competitors a year behind them, dooming them while catapulting Office to market dominance.


RE: Hmmm...
By superstition on 11/11/2013 4:37:31 PM , Rating: 2
quote:
I'm not sure if Microsoft did this deliberately

I have some nice real estate in Florida...

Of course it was deliberate. Those tactics are classic Bill Gates. You don't think he became the world's richest man due to a combination of fair play and goodwill, do you?

Apple already had an office suite with multitasking and the ability of the various programs to paste into each other, Lisa 7/7, and Microsoft managed to prevent them from leveraging it as well.


RE: Hmmm...
By SAN-Man on 11/8/2013 4:25:14 PM , Rating: 2
Microsoft has bee developing productivity software since day 1.

Their Windows monopoly came in the 90s, long after their productivity software was a "staple" product (mostly on Mac).

The other vendors had the same opportunities.

Microsoft isn't my favorite company but please, spare us your rewrite of history BS.


RE: Hmmm...
By amanojaku on 11/8/2013 4:51:52 PM , Rating: 4
quote:
and by creating and nurturing a market expectation that an OS actually *was* the bundle
I don't know if I would blame MS for this. Windows wasn't the first OS to include utilities and entertainment applications; UNIX variants came loaded with all sorts of non-OS things long before MS "bloated" Windows. Bloated is in quotes, because you don't have to install all the extra stuff, with the exception of Internet Explorer. And the stuff doesn't run unless you launch it, so the bloat mostly affected disk space.

And recall that most of the world is not technical: if the computer doesn't include a web browser, most people wouldn't know how to get one installed. Remember, there weren't any app stores back then. If it wasn't on a CD, people were helpless, and I don't remember seeing web browser CDs widely distributed other than AOL's.

Anyway, the average person doesn't know what an OS is. Apple released Mavericks, which is about as far from an OS as you can get without false advertising. How many OS features were added to Mavericks?

1) Timer coalescing
2) Multi-display improvements
3) App Nap
4) Compressed memory

How many non-OS (i.e. application or utility) features were added to Mavericks? 15 or more, including social networking integration, iBooks, and Maps. And yet, Mavericks is considered an OS, even though it doesn't even qualify as a dot-release. And the average user is cool with that bundle.

Windows 8 has many improvements over Windows 7, yet most people think it's worse due to two features: the Metro UI, and the lack of a Start Menu. Never mind the improved task manager, file explorer, networking capabilities (including Airplane mode and reduced network consumption if connected to mobile broadband), Hyper-V, Storage Spaces, video performance improvements... The only thing people talk about is how ugly it is, and the lack of apps, bundled or otherwise. Note the distinction between applications, which Windows has a lot of, and apps, which most people are interested in today.
quote:
And then to see a possible CEO candidate talking about splitting MS up, in a possibly similar fashion.
Regarding Elop, I have no respect for him as an executive. There are too many failures and not enough wins in his resume. However, I do agree with some of his ideas. MS screwed up by not offering Office for tablets. Let's face it: a tablet is the new PC form factor, and MS isn't selling enough tablets. MS could release Office for tablets and risk losing some desktop licenses, or it could let Apple, Google, etc... improve their own office suites and risk losing everything.

I still don't get Bing; search has never been successful for any company other than Google. Lycos, WebCrawler, AltaVista, Ask Jeeves... all dead or dying. Yahoo still exists largely because of its portal and web hosting.

Killing off or selling XBox is stupid. iPods weren't part of Apple's core business, either, until they started selling millions. Same for iPhones and iPads. Yet, Apple makes more money from music players, phones, and tablets than it does from its formerly-core business. Hence the name change from Apple Computer to Apple, Inc.

MS needs a similar strategy. Continue with Windows (desktop, server, and tablet), Office for all popular desktop and tablet operating systems, and entertainment devices like the Xbox. Killing off Zune and transferring its services to Xbox and Windows Phone was smart. The next step should be integrating the desktop, mobile device, and home entertainment device so that consumers can use software and data consistently across all three. It's working for Apple, and it's one of the few things Apple got right.

The other thing MS needs to continue pursuing is the manufacture of its own hardware. Acer, Dell, HP, etc... have made it pretty clear that they can't produce decent devices without being kicked in the ass. Like I said before, MS produced a tablet, and suddenly a bunch of decent Windows tablets come out from other manufacturers. They cried foul, being unwilling to admit that their products just weren't good enough and would never sell. Surface single-handedly reignited interest in Windows tablets. MS' close partnership with (manipulation of?) Nokia resulted in the best Windows phones to date. The Xbox got past the RROD to compete with the company that killed off Sega's hardware (Sony), and the MS/Sony duopoly are now challenging Nintendo's 30-year dominance. Heck, even MS keyboards and mice were once the best, prompting Logitech to step up its game.

Yeah, MS needs to streamline some operations, but it really needs to expand on others.


RE: Hmmm...
By greenchinesepuck on 11/10/2013 5:26:17 PM , Rating: 2
quote:
MS screwed up by not offering Office for tablets
That's total BS, full Office 2013 suite is now bundled with Surface 2 and works quite well, no speed issues, no lag, real fast and fluid PC experience on a tablet. Where are you taking your BS from? Apple Insider or something?


RE: Hmmm...
By Argon18 on 11/8/13, Rating: -1
RE: Hmmm...
By amanojaku on 11/8/2013 6:13:15 PM , Rating: 3
Our resident MS hater is at it again. Please explain how MS has a monopoly in anything, and an unfairly gained one at that. Last time I checked, there are alternatives to EVERYTHING MS sells. Those alternatives generally suck, and consumers agree. Most companies and individuals that try to move away find the alternatives to be much less functional, supported or cost effective.

Please reply with specific examples of "suffering" consumers and competition, and MS' unfair monopolistic tactics. Rhetoric is unwelcome.


RE: Hmmm...
By inighthawki on 11/8/2013 6:21:52 PM , Rating: 3
Monopoly is just a word dumb people through around in the context of companies like Microsoft and falsely associate "monopoly" with "high market share," completely oblivious to what the word actually means.


RE: Hmmm...
By croc on 11/8/2013 8:48:45 PM , Rating: 2
"just a word dumb people through around"

*snicker*


RE: Hmmm...
By inighthawki on 11/8/2013 10:20:05 PM , Rating: 2
oops :)


RE: Hmmm...
By Reclaimer77 on 11/9/2013 9:42:59 AM , Rating: 2
I would have been willing to hear his rational on how consumers or anything else has been harmed by Microsoft Windows.

But, of course, he didn't provide any lol.


RE: Hmmm...
By Cheesew1z69 on 11/9/2013 6:04:18 PM , Rating: 2
quote:
But, of course, he didn't provide any lol.
Because, drum roll please, he has none!


RE: Hmmm...
By ie5x on 11/11/2013 3:34:16 AM , Rating: 2
I remember Netscape as being a really slow and unintuitive browser. Even if I keep the IE-Windows integration advantage aside, to me Netscape wasn't much impressive as a standalone either.

I hated IE too, and then Firefox came along and saved the day for me.

Individual mileage would vary, but I think both of these browsers were bested as more sensible browsers came along.


RE: Hmmm...
By superstition on 11/11/2013 4:54:54 PM , Rating: 2
Netscape 1.x was average speed. 2.x was fast, but crash-prone. 3.x was slower and needed a lot more RAM but was more stable. 4.x was fast and the browser was more stable than Communicator (which was a bundle and used more RAM).

IE 4.01 goes down as a particularly poor browser, slow and unstable. 4.5 was definitely an improvement in stability, but it was still slower than Netscape.

Most of this testing was done on Macs, so results could have been quite different on Windows.

1.1N, 2.02, 3.04, and 4.08 stand out as being leaders in the field. After that, the browser died. Netscape was really always better than IE while it was being heavily developed.


The downsides of being a public company
By 91TTZ on 11/8/2013 2:53:53 PM , Rating: 3
Some of these "bizarre" moves are quite logical when you think about who is now in control of the company- investors. Investors often think in the short term and don't care about the long-term health of a company. Once investors wrestle control of a company they often steer it to sell itself or break it up and sell off its divisions.

Once this happens the you either need to be content with investors ripping apart your company and killing it for profit, or you can bite the bullet and take it private again. I'd be curious to see whether Gates and Ballmer sit silently on the sidelines or whether they'll make a power play to purchase the company and take it private.




RE: The downsides of being a public company
By mcnabney on 11/8/2013 2:58:47 PM , Rating: 2
MS is way too big to be taken private.


RE: The downsides of being a public company
By Flunk on 11/8/2013 3:36:09 PM , Rating: 2
Not if you totally run it into the ground first!


By retrospooty on 11/8/2013 11:55:46 PM , Rating: 2
MS isn't going anywhere... Virtually the whole business world runs off of their desktop OS, Office suite, and server OS's with zero competitors on the horizon.


RE: The downsides of being a public company
By Varun on 11/8/2013 3:26:38 PM , Rating: 2
I agree with you 100%. Services like Bing and Xbox have longer term goals than what investors want. They want instant profits now even if it means the company will go belly up in the future.

Look at KitKat. It's basically a 100% search app for Google now. How is Microsoft supposed to compete if it sells off the very businesses that compete against these players?


By Guspaz on 11/8/2013 6:10:34 PM , Rating: 2
Well, how long should they keep shovelling money after losing propositions? XBox products have been on the market for 12+ years now, and the division still haven't broken even (the total lifetime revenue from hardware/software/services has not yet surpassed the total money spent). They're also about to launch a new console, which typically digs the hole a lot deeper due to all that up-front investment...

As a platform, XBox has been very successful. But as a financial proposition, it's been an unmitigated disaster.


By rsmech on 11/9/2013 9:21:13 PM , Rating: 3
Can't mark you up but agree there is a difference on what a company wants and investors. Investors want bigger profits even if it means breaking apart a business for those higher returns. Dell was smart in the way that as a business they can make a profit and survive but they can't make the profits investors demand. Dell owners should make a comfortable living without the pressures that would be negative to company's future.


RE: The downsides of being a public company
By phatboye on 11/10/2013 5:51:07 AM , Rating: 2
KitKat isn't a company it is owned by Nestle, the largest food company in the world measured by revenue.


By Varun on 11/11/2013 12:32:44 AM , Rating: 2
LOL did you really just type that?

We're talking about tech here not candy. Please use your favorite search engine to search for "Android 4.4"


RE: The downsides of being a public company
By kleinma on 11/8/2013 5:24:48 PM , Rating: 2
Gates has no interest in returning to Microsoft. Zero. It will never happen. He already plans on reducing his stake in Microsoft to 0 by 2018. That is from being the biggest single shareholder now.

He is much, much more concerned with the ventures he has started since leaving Microsoft. He is not a Steve Jobs, he thinks that he accomplished his personal goal already with microsoft when he set out to put a PC in every home.

Besides, Gates would not be a good fit to lead Microsoft into the future anyway. The things he was brilliant for in terms of Microsoft's rise to dominance are no longer applicable in the market that exists today.


By superstition on 11/11/2013 5:53:49 PM , Rating: 2
A PC that runs a Microsoft OS and software, right? Personal computers were already in homes before even the IBM PC was released -- the Apple II, Commodore VIC-20, TRS-80/CoCo line, Atari 800, et cetera.


By 91TTZ on 11/12/2013 9:23:15 AM , Rating: 2
quote:
Besides, Gates would not be a good fit to lead Microsoft into the future anyway. The things he was brilliant for in terms of Microsoft's rise to dominance are no longer applicable in the market that exists today.


I disagree. I think that's narrow-minded thinking. Bill Gates is a brilliant industrialist. The things he was previously brilliant for are now outdated not because he has lost his vision but rather because he stepped down from an executive role 13 years ago... you just don't see him making any strategic decisions for the company any more (unless he had something to do with Ballmer's firing). But if you watch interviews with him it does seem like he intimately follows the industry and still follows Microsoft's long-term planning.

If you look at his vision when he was there it was obvious that he was able to clearly see the direction the industry was going to take years before it actually happened. Brilliant people can correctly anticipate and plan ahead while those less intelligent can only react when the conditions are upon them. He'd have no problem leading Microsoft again.

But I do agree with you that the desire isn't there to return. He's already accomplished his goal and feels that solving health problems in third world countries is a better use of his time and money.


I agree with Elop
By Tony Swash on 11/9/2013 5:50:02 AM , Rating: 1
Looks like Elop is proposing the sort of stuff I have been arguing Microsoft should do for a while. Ditch Bing, ditch Xbox, go all out for a first class touch based Office for iOS and Android. I would also ditch Windows Phone and Surface. The reason for dropping all those projects and products is that none of them are going to be a successful business. MS will never make any money selling Window Phone licenses, never make any money from Bing, never make money from selling Surface tablets, never make much money from selling Xbox. Why bother? None of those things help sell Office lisences, none help MS defend it's very profitable enterprise/server business. MS can earn a lot from Windows on the desktop for years to come but there will be no growth there and a long slow (maybe fast) decline of value in that business. In order to be a big successful business in the next decade MS must become a big successful business in mobile and it's not going to do that with Windows phone, Surface and the weird hybrid of Windows 8.




RE: I agree with Elop
By drycrust3 on 11/9/2013 12:16:51 PM , Rating: 2
quote:
Ditch Bing, ditch Xbox, go all out for a first class touch based Office for iOS and Android. I would also ditch Windows Phone and Surface.

One can equally argue there are reasons to keep each. The value of these products is they are future oriented. To loose them could mean Microsoft has to go through redeveloping part of their functionality later down the track.


RE: I agree with Elop
By Tony Swash on 11/9/2013 1:58:24 PM , Rating: 1
quote:
One can equally argue there are reasons to keep each. The value of these products is they are future oriented. To loose them could mean Microsoft has to go through redeveloping part of their functionality later down the track.


Why would it have to redevelop them later down the track? No company has to do everything and cover every market sector and trying to do so makes no sense. Let's take Bing as an example. Why should MS have it's own search engine? One reason might be defensive, to prevent Google using it's search monopoly to somehow shut out MS at some point in the future, or offensive, to try to take some of the profits made in the search sector mostly currently made by Google. But there is no chance of either of those strategies working, MS will never become anywhere near as strong as Google in search so why even bother, why waste the money, what advantage does having it's own search engine bring to MS? Same with Xbox, even if MS achieves a clear market share advantage in consoles what would it achieve for MS as a business? Consoles are a small market (compared to mobile devices or even the old PC market) based on razor thin margins, and with no profitable ecosystem opportunities attached. From Microsoft's point of view it just makes no sense, and is a huge distraction.

MS needs to focus on the small number of things it can do really well in the new tech terrain of the next decade, drop everything else and devote all it's resources to being great in a narrower field of activities.


RE: I agree with Elop
By greenchinesepuck on 11/10/2013 5:21:26 PM , Rating: 2
quote:
MS needs to focus on the small number of things it can do really well in the new tech terrain of the next decade, drop everything else and devote all it's resources to being great in a narrower field of activities.
You suggest MS to drop the new developing markets because they can't do good job in there yet. Ballmer suggests MS not to drop these markets but instead learn how the things are done in them.

Your scenario leads to MS retreating and eventually being killed off by Google and Apple. Sure for you as MS hater that's the best scenario.

Ballmer is however not an MS hater like yourself, hence his plan seems to be much better for company's future. He wants the company to learn to do business in new ways, more geared towards mobile ads-driven software, hardware and services model, very similar to what Google does now. Of course while learning to do business there MS will make some seriously dumb and funny mistakes like Surface RT for example. But those who don't even try to learn, those who are afraid to step in the new world and suffer a few painful falls before they learn to walk under totally new market conditions - these cowardly companies eventually die off, there is no other way, ever.

So I'm glad the company still listens to Ballmer and not to haters with hidden agenda like yourself.

If it's true about Elop and if the board is dumb enough to make him CEO in this case - MS is dead, I'd sell all my MS shares immediately after Elop is appointed CEO and starts to break up the company into pieces the way you suggest.

Well, we'll see soon if the board is as MS hating as you. Just wait a few more months Tony :P


RE: I agree with Elop
By Tony Swash on 11/10/2013 6:56:40 PM , Rating: 1
quote:
You suggest MS to drop the new developing markets because they can't do good job in there yet. Ballmer suggests MS not to drop these markets but instead learn how the things are done in them.


How long will it take Microsoft to 'learn' how to make a profit out of Bing? And if it ever does how much profit can it make at the cost of how many billions of investment?

How can Microsoft 'learn' how to make sizable profits from selling it's own gaming console when nobody selling gaming consoles makes profits in any quantity?

How can Microsoft 'learn' how to make money in any quantity from mobile phone OS licenses when it is competing with two huge incumbents in Android and iOS that are free? I cannot imagine any circumstances in which Microsoft can make sizeable profits from selling mobile device software licenses, can you?

I am just suggesting that dropping all those non-profit making lines of business, products that occupy a huge amount of Microsoft's time and capital, could improve and secure Microsofts business performance. Remember when Jobs came back to Apple, the first thing he did was was slash numerous projects, many very large and very high profile, and refocus Apple on it's core business. That's what Microsoft needs to do. In some ways Microsoft's sprawling and nonsensical product lines reminds me of Apple at it's worst in the 1990s. Unfortunately for Microsoft it's legacy products are still very profitable so it hasn't had, yet, a near death experience like the one Apple had and that may mean it won't bite the bullet and start the painful product amputations that are needed to prevent a continuing slide into irrelevance.


RE: I agree with Elop
By greenchinesepuck on 11/11/2013 1:07:29 AM , Rating: 2
quote:
How long will it take Microsoft to 'learn' how to make a profit out of Bing? And if it ever does how much profit can it make at the cost of how many billions of investment?
What's the point in giving up and leaving 100% of the search market to Google? Why would MS benefit from giving up and ceding all the potential market share in tablets and phones to Google? Isn't it better to try and put up a fight instead of immediately giving up just because they can't get profits immediately, like in the first year or so?
quote:
How can Microsoft 'learn' how to make sizable profits from selling it's own gaming console when nobody selling gaming consoles makes profits in any quantity?
If no one has any profits from consoles, then why would three big companies (Sony, MS and Nintendo) fight for dominance in console market for so many years? Are you saying that you, Tony, are the only smart guy here and these three big companies are all idiots?
quote:
How can Microsoft 'learn' how to make money in any quantity from mobile phone OS licenses when it is competing with two huge incumbents in Android and iOS that are free?
Why can't MS learn how to include their own OS for free with their own phones and tablets, just like Google and Apple do?
quote:
I cannot imagine any circumstances in which Microsoft can make sizeable profits from selling mobile device software licenses, can you?
No, I can't, and we both know they won't sell licenses for the mobile OS, this business model is dead from the start because Android is free, but why can't they sell their own devices with bundled free Windows instead? Their tablets are the beginning of that new era of MS selling DEVICES, not just SOFTWARE. Their purchase of Nokia clearly signals EVEN MORE about this. Did you even understand why they bought Nokia? Come on Tony, you can't be THAT dumb to not understand their motives about Nokia, now can you? ;)
quote:
dropping all those non-profit making lines of business, products that occupy a huge amount of Microsoft's time and capital, could improve and secure Microsoft's business performance
Well, what happens when desktop Windows is finally dead? Bringing Office for Windows down with it. This is inevitable, and you know it. What will they do then? If they invest in new lines of business like Xbox (which turns into powerful all purpose home entertainment hub, not just simple gaming-only device like 10 years ago), Surface, RT, Nokia phones, Bing - they MAY have a line of businesses integrated with each other and offering full suite of devices and services, not worse quality wise than Google's for example. Then they have some chance at surviving.

You, however, tell them "hey guys, don't worry about the future, don't invest in it, you have Windows that it profitable NOW - so focus JUST ON WINDOWS, do NOT invest in any future products that can't be profitable right NOW"

You know what? Jobs would kick you out of Apple if you were working there under him. He was investing for many many years in some expensive and quite risky projects, like iPod, iTunes, iPhone and iPad. There was no way he could predict these products would be hits or misses.

Now imagine smart ass Tony coming to Jobs's office and telling him "dude why waste $$$ on this stupid iPod when we have Macs, let's focus on MacOS man, this is THE way to get profits! froget about iPod, stop investing in the projects with uncertain future!"

He'd kick you out right there and I'd kick your stupid ass there second time if I were standing at the exit door hehe :P Seriously!


RE: I agree with Elop
By greenchinesepuck on 11/11/2013 1:28:16 AM , Rating: 2
quote:
How long will it take Microsoft to 'learn' how to make a profit out of Bing? And if it ever does how much profit can it make at the cost of how many billions of investment?
According to the same analysis of yours, Apple should sack everyone working on OS X, iWork, and iOS. After all, these three products are all given away for free. Apple has even warned that giving away the software is going to cut revenue by $0.9 billion. Software development at Apple is a money pit!!! Oh gosh!! :)))

Of course, nobody (except you Tony :P) would actually make such an argument, because they would recognize that even if OS X, iOS, and iWork are not monetized directly, they still provide value to Apple as a whole.

Situation with Bing is exactly the same.

Data-driven services are becoming integrated operating system features. The best shipping example of this is probably Google Now, on Android. Google Now integrates data from a range of sources—both personal data, such as appointments and historic searches, and public data, such as sports results, traffic, route finding, and so on—to provide useful and relevant information proactively.

So, for example, Google Now will tell you that you'll have to leave now to get to your next meeting on time, given the current traffic, or that the exchange rate is exactly £1.00 : $1.60 when you're in London on holiday, or that you'd better pack an umbrella because it's probably going to rain today.

Apple's Siri is similarly data-driven, though arguably substantially less integrated.

These kinds of integrated services are increasingly important parts of modern operating systems, especially on highly mobile (and highly personal) smartphones and tablets.

Microsoft doesn't yet have anything as extensive as Google Now or Siri in its operating systems, but the company has started down that same path. Windows 8.1 search feature uses Bing to provide meaningful, structured search results. Bing also powers a number of apps, such as News and Weather. Windows Phone has extensive localized search capabilities, as befits a smartphone platform.

As these services become richer and more important, Bing will, accordingly, become more important. This infrastructural role may not be immediately reflected on the balance sheet, but it's an essential strategic investment. Bing is embedded into Microsoft's products. It can't be yanked out and sold.

Here, your stupid analysis thoroughly debunked. Enjoy! haha


RE: I agree with Elop
By Tony Swash on 11/11/2013 1:04:17 PM , Rating: 2
Why does Microsoft have to be in the search business? Especially as they don't seem to be able to make any money from it. What unique advantages does Bing bring to any other Microsoft product?

As for consoles - all console maker are skating to where the puck was and not where it is going to be. Does anybody really think anymore that big powerful, dedicated computers permanently attached to TVs are the way to win the living room. After Chromecast and Apple TV? Console brans like Xbox and Playstation are lucky to sell 100 million devices over many years years, smart phones and tablets are close to selling that number in a month.

As for Microsoft making a transition to making healthy and substantial profits from selling integrated hardware, I fear they will find that fiendishly difficulty to carry off.

Your arguments about the threats to Microsoft's legacy business and the need to move beyond it are correct. Microsoft was a giant software company making huge markups selling vast amounts of costly software. Now in a matter of years the value of software has collapsed. Microsoft needs to innovate it's way out of it's impasses, it's just that Bing, Xbox, Windows 8 and Windows Phone are not the route to future success just millstones dragging the company down.


RE: I agree with Elop
By greenchinesepuck on 11/11/2013 1:47:40 PM , Rating: 2
quote:
Why does Microsoft have to be in the search business? Especially as they don't seem to be able to make any money from it. What unique advantages does Bing bring to any other Microsoft product?
Data-driven services are becoming integrated operating system features. The best shipping example of this is probably Google Now, on Android. Google Now integrates data from a range of sources—both personal data, such as appointments and historic searches, and public data, such as sports results, traffic, route finding, and so on—to provide useful and relevant information proactively.

So, for example, Google Now will tell you that you'll have to leave now to get to your next meeting on time, given the current traffic, or that the exchange rate is exactly £1.00 : $1.60 when you're in London on holiday, or that you'd better pack an umbrella because it's probably going to rain today.

Apple's Siri is similarly data-driven, though arguably substantially less integrated.

These kinds of integrated services are increasingly important parts of modern operating systems, especially on highly mobile (and highly personal) smartphones and tablets.

Microsoft doesn't yet have anything as extensive as Google Now or Siri in its operating systems, but the company has started down that same path. Windows 8.1 search feature uses Bing to provide meaningful, structured search results. Bing also powers a number of apps, such as News and Weather. Windows Phone has extensive localized search capabilities, as befits a smartphone platform.

As these services become richer and more important, Bing will, accordingly, become more important. This infrastructural role may not be immediately reflected on the balance sheet, but it's an essential strategic investment. Bing is embedded into Microsoft's products. It can't be yanked out and sold.

Did it answer your question, no? If not, what points you still don't understand?


RE: I agree with Elop
By Tony Swash on 11/9/2013 1:58:52 PM , Rating: 1
quote:
One can equally argue there are reasons to keep each. The value of these products is they are future oriented. To loose them could mean Microsoft has to go through redeveloping part of their functionality later down the track.


Why would it have to redevelop them later down the track? No company has to do everything and cover every market sector and trying to do so makes no sense. Let's take Bing as an example. Why should MS have it's own search engine? One reason might be defensive, to prevent Google using it's search monopoly to somehow shut out MS at some point in the future, or offensive, to try to take some of the profits made in the search sector mostly currently made by Google. But there is no chance of either of those strategies working, MS will never become anywhere near as strong as Google in search so why even bother, why waste the money, what advantage does having it's own search engine bring to MS? Same with Xbox, even if MS achieves a clear market share advantage in consoles what would it achieve for MS as a business? Consoles are a small market (compared to mobile devices or even the old PC market) based on razor thin margins, and with no profitable ecosystem opportunities attached. From Microsoft's point of view it just makes no sense, and is a huge distraction.

MS needs to focus on the small number of things it can do really well in the new tech terrain of the next decade, drop everything else and devote all it's resources to being great in a narrower field of activities.


RE: I agree with Elop
By greenchinesepuck on 11/11/2013 2:10:12 AM , Rating: 2
quote:
Why should MS have it's own search engine?


GUYS! IMPORTANT! Here's a nice debunking of Tony's myths:

http://arstechnica.com/information-technology/2013...

PLEASE read it and THINK about it. Tony pushes his Apple loving agenda as usual but this article is unbiased analysis of what is Bing and Xbox and how MS uses them, and most important, how MS WILL use them in the future.

DO NOT listen to cheap shots made by Tony, READ that SMART article instead! You won't regret it, I swear. Seriously.


RE: I agree with Elop
By retrospooty on 11/12/2013 7:50:57 AM , Rating: 2
"GUYS! IMPORTANT! Here's a nice debunking of Tony's myths:"

I am sorry, are you under the impression that anyone buys into anything Tony posts? LOL. OK, we will file this away under the "captain obvious" header.

That is the problem with being 100% biased 100% of the time... No-one gives a crap what you have to say.


Elop would make for a bad choice in CEO
By phatboye on 11/10/2013 5:24:22 AM , Rating: 2
While I really hate consoles in general it would be stupid if MS decided to sell of the Xbox line. XBox is a loss leader, even when the Xbox loses money for MS it gets developers to code specifically for direct-X. Which in turn means more games are made that only work on Windows and no other OS in the PC space. So the MS entertainment business is good for MS's bottom line, you'd have to be an idiot to sell off Xbox especially if it's making money for MS now and not losing it.

With the XBONE about to be released why would anyone want to invest in that platform if its furture is uncertain because of MS's possible choice of new CEO. ELop should have never announced he would consider selling off the entertainment unit at this point in time. Dumb move Elop.




By greenchinesepuck on 11/11/2013 1:12:40 AM , Rating: 2
quote:
Dumb move Elop
What move? He didn't say anything, it's some Bloomberg troll who said it. Don't mix Elop with that troll. We don't know what Elop REALLY thinks.


So confusing...
By lifewatcher on 11/8/2013 4:57:20 PM , Rating: 2
Google is claimed to have an interest selling as many androids as possible, so that the native search engine (Google) is used more often, thus generating revenue.

Microsoft is trying to step into the mobile space and I expect them to have similar goals - get a lot of Windows devices use the native Bing search engine. Except, now there are "serious" rumors about Microsoft losing Bing...

What am I missing?




RE: So confusing...
By Tony Swash on 11/9/2013 3:07:01 PM , Rating: 1
quote:
Google is claimed to have an interest selling as many androids as possible, so that the native search engine (Google) is used more often, thus generating revenue. Microsoft is trying to step into the mobile space and I expect them to have similar goals - get a lot of Windows devices use the native Bing search engine. Except, now there are "serious" rumors about Microsoft losing Bing... What am I missing?


Google makes a huge profit from it's search business, Microsoft makes a huge loss.


By ResStellarum on 11/9/2013 8:48:48 AM , Rating: 3
quote:
They cite a $25M USD payout Mr. Elop received as part of the purchase deal as "proof" of this alleged conspiracy.

That 25 MIL payoff was a clause in his contract that stated, if he sold the company off to Microsoft, and stabilised the shareprice (however brief), he would be entitled to it.

What a crazy CEO contract clause. It was obviously in his interest to go Windows Phone exclusive, devalue the company, and finally, sell it to Microsoft - all at the expensive of Nokia. The board members who dreamt that up should be shot. If I was a Nokia shareholder, I'd be furious.




By Shadowself on 11/8/2013 3:17:25 PM , Rating: 2
So Elop wants to start down the path that Judge Thomas Penfield Jackson wanted to pursue.

I know the exact dividing lines are different, but if Elop has his way who knows how many chunks will be broken off and divested?




Alan Mulally
By SunLord on 11/9/2013 5:37:56 AM , Rating: 2
While Elop is a proven hatchet man thanks to Nokia we have no way of know what Alan Mulally would do to fix Microsoft but given what he's done with Ford he might break up Microsoft into several subsidiaries and a holding company. Xbox Entertainment, Search Mobile systems, and Windows Office




Profitability??
By ResStellarum on 11/9/2013 8:15:09 AM , Rating: 2
quote:
In the end he restored Nokia to profitability

Not the device unit. Quite the opposite in fact. Ever since his burning platform speech, the smartphone unit has never made a profit.

The only parts of Nokia that are profitable are the NSN, mapping, and of course the patents. Ever since Elop dropped Symbian, their smartphone marketshare and profits have continuously nosedived.




DT seeks new editor?
By Wererat on 11/12/2013 1:12:25 PM , Rating: 2
"Candiate"?

What do you guys pay telecommuting editors, part-time?




Sorry
By random2 on 11/14/2013 2:17:03 AM , Rating: 2


Headline:

Is Microsoft Trojan Horsing Itself? CEO Candiate Elop Reportedly Wants to Break up Company

- Change Candiate to Candidate.

Subheading:

Sources close to Microsoft unveil Mr. Elop's controversial vision to sell of Xbox, Bing units

- Change of to off.

That's as far as I got in the article. I'm afraid to read the rest.




Windows Phone and Symbian were about the same
By BifurcatedBoat on 11/8/13, Rating: -1
By kleinma on 11/8/2013 5:27:18 PM , Rating: 2
Yeah, because it is really easy to look at something that didn't happen and make up a success story about it.

I mean let's face it, if JFK never got assassinaed, 9/11 would never have happened. See how that works?


RE: Windows Phone and Symbian were about the same
By Murloc on 11/8/2013 6:55:22 PM , Rating: 2
windows phone is gaining marketshare in Europe though, it has already surpassed iOS in Italy.


By ResStellarum on 11/9/2013 7:47:48 PM , Rating: 2
quote:
windows phone is gaining marketshare in Europe though, it has already surpassed iOS in Italy.

WP's marketshare has decreased in Italy, as well as other regions. Of course it's also gained in places like the UK. Overall though, it's about 3.5% worldwide and hasn't really moved significantly despite Nokia selling 520's at a loss in asia to gain marketshare in the low end.


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