Linked by Thom Holwerda on Tue 9th Oct 2012 22:01 UTC
Microsoft Steve Ballmer's annual letter to shareholders makes it very clear Microsoft is at a point of no return - and in the middle of a transition into a hardware company. "This is a significant shift, both in what we do and how we see ourselves - as a devices and services company. It impacts how we run the company, how we develop new experiences, and how we take products to market for both consumers and businesses." Line. Sand.
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RE[2]: In plain English
by MollyC on Wed 10th Oct 2012 21:02 UTC in reply to "RE: In plain English"
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It's not so ridiculous that Apple makes more money despite having fewer employees when you stop to think about the average salary of Apple's direct AND indirect employees. The majority of Apple's employees (adding up both their direct and indirect workforce) work for just above slave wages. Only a very small percentage of Microsoft's total (direct and indirect) workforce work for such wages.

Besides that, look at companies like Sony, Yamaha, and the like. Sony makes consumer electronics, computers, movies, music CDs, life insurance, banks, magazines, and on and on and on. Yamaha is so diverse that they make everything from motorcycles to saxaphones. Those two companies have more direct and indierect employees than Apple and Microsoft combined, by far, yet make less money than either.

I'm also reminded of the AOL/TimeWarner deal, which was actually AOL buying Time Warner, despite AOL being a simple online service and Time Warner being involved in magazines, TV networks, movies, video games, etc. Time Warner had way more assets and employees than AOL, yet AOL made more profit and had way higher marketcap value at the time.

Which is to say that generally the whole system is out of whack, kind of. ;)

Reply Parent Score: 3

RE[3]: In plain English
by galvanash on Wed 10th Oct 2012 21:51 in reply to "RE[2]: In plain English"
galvanash Member since:

It's not so ridiculous that Apple makes more money despite having fewer employees when you stop to think about the average salary of Apple's direct AND indirect employees.

I realize that it is not a completely uncommon phenomena. What I mean is that it is ridiculous to Microsoft's board - in the sense that a little over 15 years ago Apple was essentially roadkill that MS was throwing chump-change to in order to keep afloat. 7 years ago they start showing substantial signs of life and begin growing rapidly, and now they have essentially passed Microsoft up. The MS board is essentially asking themselves what the f*ck happened?

I just mean if you are Microsoft you have to be questioning your business strategy right about now... What they have been doing for the last 5 years may be considered by some to be "working", but it isn't, by any reasonable definition, working as well as what Apple is doing.

Microsoft could choose to stay the course, but if they do that they will not in any way affect Apple's trajectory- they simply have not, up to this point made any real effort to play in Apple's pool so to speak. They are both tech companies, but they hardly compete with each other because in most markets they are separated by a layer of ineffectual OEMs, and so far in the few examples where that hasn't been the case (Zune) Microsoft lost badly.

I think the reality is that Microsoft has to become a vertically integrated device maker in order to control their own destiny. As it is now they are putting their future in the hands of their OEMs - and they all have butter fingers. No matter how crazy and self destructive some people think it sounds, there really isn't another viable course for them.

When Apple introduced the original iPhone, Steve Jobs dropped a quote from Alan Kay during his presentation:

People who are really serious about software should make their own hardware.

I don't think many people took it seriously when he said it, but in hindsight that was a very prophetic statement. I think Microsoft has no choice but to take that advice.

Edited 2012-10-10 21:56 UTC

Reply Parent Score: 2