At this point one must ask if Microsoft is still a software platform company - whether their products form a substrate where an ecosystem can form and build a coherent software environment for the users of their platform.
Microsoft used to be the Windows company (after being the BASIC company, then the DOS company). Then it became the Office company. Now it’s SharePoint and Office365 and Azure, a utility. Windows is a relatively small part. Office is both desktop and web (and spacecraft, where they have two versions of Outlook and none of them works). If you are confused at this point, so am I. There is no vision as to what Microsoft is. If Satya Nadella knows what Microsoft is, he isn’t communicating it properly. It’s not Azure, because there is also Office and Windows. And on-prem server products. And a line of hardware products. And stores (do they still exist?).
MS has never been a software platform company. That's the fundamental reason behind the issue the article talks about.
MS has always been a software application company. Windows was never anything more than a way to sell MS applications--and Windows 3.0 and later wouldn't even have existed in the first place if IBM hadn't dawdled so long over OS/2. Even in the MS-DOS days, when MS was reaping the benefits of IBM's previous bonehead decision to hand the PC OS market to them, MS was selling Office applications--on the Macintosh.
The basic Windows API, in all of its many incarnations, has always been a second-class citizen; MS Office applications have always done their own things that other Windows applications couldn't do without using undocumented features that MS could change at any time (and often did). One could argue that the only reason MS even allowed third-party Windows developers to exist was so that they would, in the words of one of PG's essays, do market research for MS. When a third-party dev came up with something that got enough traction, MS would simply incorporate it into their apps.
Microsoft was a language company at the start - they had a huge share in 8-bit computers and their BASIC made into the ROMs of almost every computer sold in the 70s and 80s. Then they branched out to applications, with little success (I remember Multiplan on CP/M, DOS, and Mac). When they started selling PC-DOS and MS-DOS they had no applications play to speak of. Office only came much later, and the apps that appeared for Mac, Word and Excel, were ported to Windows starting on Windows 2. Word for DOS struggled in the market and never reached a significant share.
> Office only came much later
In the sense of being marketed as a single integrated package, yes, I agree. I was using the term loosely to refer to the apps themselves (Word & Excel were the first two, as you note, the others came after).
How do you reconcile this with their history of bending over backwards to achieve backwards compatibility for third parties?
Because their strategy for getting their applications in front of everyone has always been to get Windows in front of everyone, and that meant having to support third party applications that they chose not to try to incorporate into their own apps, but which got enough usage that not supporting them would mean losing those Windows desktops, and thus losing those users of the MS applications that were on every Windows desktop.
It's quite possible that this attributes too much intentional strategy to MS, and also treats them as a single entity with a single strategy more than they deserve. The MS internal teams that were bending over backwards to maintain backwards compatibility were not the same as the teams that were churning out new APIs, building Azure, etc., and quite likely had very different incentives.
This makes sense, because even in the best times Windows was not the biggest money maker for Microsoft, it was Office. So MS was never fully behind Windows, it was only the means to an end, which was selling the most software for enterprises.
Ironically, Office was the original poster child for Microsoft reinventing it's own widget toolkits, even back when Microsoft had a coherent visual design and developer story.
Microsoft has always had a broad vision of itself as a technology company; I feel it's perfectly fine to not be able to describe Microsoft in one sentence without using platitudes like "empower every person on Earth to achieve more" or "put a computer in every home and every office" (both paraphrases of actual MSFT company mission statements), and I suspect many other current and former Microsoft employees would feel the same way.
IMO Microsoft's best long-lived products have always been both finished solutions to your problems and platforms to help you develop more solutions, and Microsoft leadership has always recognized this. Examples: Windows. Office. Dynamics (their Salesforce competitor).
But even if a product doesn't meet that "why not both?" ideal, there is always going to be room for it at Microsoft, as long as it is not only a good or at least mediocre product by itself, but also works to sell you on the whole Microsoft ecosystem. Sometimes that is a bad thing (see all the Windows adware for Bing, Copilot, and M365). But that at least is where Microsoft remains consistent.
> "put a computer in every home and every office"
That was such an amazing mission statement. It was a real measurable goal, and progress towards it was quantifiable. And Microsoft actually did it! That mission statement drove actual strategies (lower costs, don't complete with Apple on the high end, force OEMs to compete against each other on price, etc) that resulted in its ultimate fulfillment.
Nadella thought he could take the reins and start yelling “Cloud! Cloud! Cloud!” and that would be successful. He doesn’t have a strategy and now that’s becoming apparent.
He had a strategy and it worked very well. But every strategy must be updated. It's basic BCG matrix stuff every MBA graduate knows by heart: sooner or later your star product becomes a cash cow and then a dog. To keep your company growing, you need to identify your next potential stars among question marks, boost them with cash from the cash cows, put competent managers in charge and remove those who get in the way.
Gates did this with Windows, Office, XBox among other things. Ballmer failed to do this this with Windows Phone. Nadella did it with Azure, but he needs to do it once again with AI. You can see that he's pushing hard with Copilots everywhere, what's missing is a manager that has a coherent vision of what AI at MS should look like. ScottGu is in charge of both Azure and AI at MS, but I don't know if he can deliver.
I agree with most of that. To be charitable to Nadella, at the time he first came into the role, Microsoft needed someone yelling "Cloud! Cloud! Cloud!" because the company was certainly behind folks like AWS. But for a long time he basically stopped there. Office migrated to the cloud and they pushed out Azure. Then he went on the AI rant and they decided that putting AI into everything, whether customers wanted it or not, was "the next thing." But now we're learning that Azure is a steaming pile of crap with customers leaving, and this article about GUI strategy shows they don't have an application development strategy. Everybody is fed up with Windows. Everybody is fed up with all the numerous "CoPilots." You actually have regular people investigating moving off Windows to Linux desktops. The one thing that Microsoft did exceptionally well through the 1990s and early 2000s was keep enterprises and app developers moving in the same direction. They bent over backwards to keep old Windows 3.1 applications running even on Win32 systems. That all ensured that nobody questioned whether they would work with Microsoft. They were the default and they commanded huge market power because of it. But that's all changed, and they have nothing to replace it. With everybody starting to ask questions that Nadella doesn't have answers for, it's going in a bad direction. Nadella needs to call his EVPs to account and force them to make some hard decisions about what lives or dies and then pressure test the resulting strategy with his customers, both old customers and potential customers. Surely, cloud and AI are a part of that future strategy, but he needs to figure out the rest of it.
Cloud is now massively larger than any other part of Microsoft. It's why he became the CEO in the first place.
He maybe never had a strategy for Windows but he wasn't hired to have a strategy for Windows.
Nadella took the reins in 2014 and the stock has 10x’d since then. In the same timeframe, the sp500 has 2.5x’d. Sounds pretty successful to me?
In theory, the market should be pricing in based on future potential. As it has become increasingly clear this past decade, the market is not rational.
In a bubble, everyone looks like they’re doing well. Don’t confuse that with an actual strategy.
But I compared it to sp500. Even QQQ only 6x’d in that timeframe.
Which bubble are you talking about? Even if you remove everything after January 1 2020, it’s still up 4x since nadella took over. And that follows a decade of stagnation under Balmer.
What numbers do you know of that show that Microsoft hasn’t been successful since nadella took charge?
Complain all you want about the products, but the stock under nadella has been a success.
Sure, but how much of that had to do with the design and implementation of Windows? You know, the OS that runs half of the modern economy. Microsoft is just milking it without a coherent vision.
Maybe financially MS is successful but at the cost of flagship product becoming adware and people fleeing slowly away
Cloud was taking off at the same time. Anybody in his spot would have been successful.
Stock price going up is not the success criterion for a business. Making money is. And Microsoft's decisions are undermining their ability to make money in the future, which makes them bad decisions even if the stock price has gone up or if they make more money in the short term.
> Stock price going up is not the success criterion for a business. Making money is.
Microsoft’s net income is up roughly 5.4x from ~$22B in 2014 to $119B today. Profit margin also expanded, from ~25% net margins in 2014 to over 36% today.
If the market agreed, the stock wouldn’t go up.
If your only metric is stock price, yes. That’s the value proposition of enshittification.