david 15 Jun 06

2 years…ha…it’ll take two years to tell all of the ms employees of the change…

Splashman 15 Jun 06

Lay off 20% of their workforce?

A line from Wayne’s World comes to mind. Something about monkeys, was it?

At any rate, I can think of a gazillion things that “should” happen, and never, ever will.

Luis 15 Jun 06

Nothing will change. MS will still rule the computer world and Gates will still be filthy-ass rich!

Eddie 15 Jun 06

They say two years now- but that will be plagued with delays and setbacks.

“Security problems prevent release of Gates: MS reports today that Bill Gates is having problems turning in his employee badge at the security office, further delaying his exit from the company. Bill hopes to be released sometime before the 2008 holiday buying season.”

Randy Peterman 15 Jun 06

What is interesting is that Microsoft appears to be doing something that EVERY larger company should be doing: montoring/discipling. When Steve Jobs kicks it, retires or is ushered away by ‘the others’ who will take his place? Microsoft has a plan, it may not be what you and I think is great for the future of the company but it is really, really important that you take a look at this approach. Hiring outside requires further training to understand things.

This is Willy Wonka style, and it is important to understand.

Randy Peterman 15 Jun 06

Sorry, it should have read ‘mentoring’ not ‘montoring’

Steve T 15 Jun 06

20% workforce cuts? So that’s the logical conclusion of Getting Real? Just assuming a successful company is too big and needs to lay off lots of employees?

Mike Rundle 15 Jun 06

Steve, depends on what you consider successful. I think success would be if people idolized Gates and Microsoft for putting out quality products and tight software, and not because they’re “the market leader” or “Gates has billions in his bank account”, but *quality* and *Microsoft software* will never go together.

I think 20% workforce cuts are fine. Huge corporations reward mediocrity, so if you get rid of the 20% who are below mediocre, that’s a pretty good start right there.

Elaine 15 Jun 06

“The next thing Microsoft should do is lay off 20% of their workforce”

Yeah, that’ll be fabulous for the Washington state economy. [/sarcasm]

OTOH, then maybe all the Californians will go home. (I say that as a transplant myself.)

I wasn’t here then, but I’ve heard stories about massive layoffs at Boeing back in the 80s (?): “will the last one to leave Seattle turn off the lights?” and such.

I don’t know what the answer is, exactly, but I’m doubting that it’s massive unemployment.

ps: @Eddie: too funny. :)

Edmundo 15 Jun 06

Well, it is being run by that lunatic we all know as Steve Ballmer… he’s more harmful than Gates.

Coming soon: “I am going to f@k1nG kill 37signals!” - Steve Ballmer

Emily 15 Jun 06

Do we know how Microsoft makes it money? Is this information public anywhere?

I’m frankly concerned about Microsoft. This whole Google spreadsheet thing, their bloated, buggy, and non-intuitive software, their buggy and hole-laden OS, their development platform losing to open source, their constant catch-up mentality…what’s left for them? Where are they making all their money right now and how vulnerable are those things?

Is it the OS? Office? Exchange? Where?

Where will their sweet spot be in the next 10 years? Will they move in new directions to these devices they talk about? Smart Homes?

It’s all very interesting.

Tom 15 Jun 06

I predict that the layoff prediction will turn out wrong.

Microsoft, like most public companies, knows that their shareholders are looking for growth. They’re not going to grow in the desktop OS space, so they’re going to have to enter new markets while simultaneously keeping a foothold in their existing markets.

You don’t do that by laying people off. You do that by having your executives find markets that you can do well at, and putting people to work on making products to compete there. You often need to hire people with different expertise, if you’re going to enter a market you don’t currently have a lot of fluency in.

And yes, you’re going to make some wrong decisions sometimes. If you don’t make wrong decisions, that probably means you’re not taking any chances. No risk means no reward. They’re going to release some flops and that’s perfectly normal.

The obvious markets they’re concentrating on, and the whole reason they got Ray Ozzie from Groove, are web-based products and services. Expect to see the Live team grow. Expect to see them continuing to hire for XBox. Expect them to hire for products they haven’t even announced yet. Do not expect layoffs.

Mike Swimm 15 Jun 06

“The next thing Microsoft should do is lay off 20% of their workforce and cut their product line by 25% (for starters).”

That seems like a pretty arbitrary figure. What products would you cut if you could Jason?

Like them or not MS is a phenomenally successful company. One could argue that they are doing extremely well with their current game plan. I know a lot of people who work for MS, they are well paid and love their jobs.

That being said I would rather gnaw my own arm off than use Windows all day.

Emily 15 Jun 06

Oh…I forgot XBox…Yes.

….and my comments are in no way derogatory to the people who work there. I know some of the smartest minds are over there, but is seems as a company they are slow to change, innovate, and are sitting on some revenue sources that seem vulneralble to me.

Anonymous Coward 15 Jun 06

What products would you cut if you could Jason?

MS only has a couple of profitable product lines. Office and Windows mainly. The rest *lose money*. I’d cut a good portion of those and light a fire.

I know a lot of people who work for MS, they are well paid and love their jobs.

Bingo. Unless they are working on Windows of Office then their projects are losing money for Microsoft. They are getting paid to lose money for Microsoft. That’s an empire mentality and it leads to complacency. Most of MS is complacent. They’ve been able to ride it for a long time, but things are changing *quickly* now.

Phil 15 Jun 06

With enough cash on hand to pay their workforce for years even if they never made another dime, any kind of layoff would be purely meanspirited.

Cut their product line? Why when they are making money? Sure 37signals who now has 6 products (with more on the way), a framework, books, conferences, and a blog are not suggesting focusing on less things?

Anonymous Coward 15 Jun 06

Cut their product line? Why when they are making money?

Phil, the majority of Microsoft’s products don’t make money. Windows and Office funds the company. Windows and Office are covering up for a lot of misses.

J 15 Jun 06

With enough cash on hand to pay their workforce for years even if they never made another dime, any kind of layoff would be purely meanspirited.

That’s horrible business. Just paying and paying and paying because you can. You need to make sure your assets are adding value and generating revenue, not just sitting there. It would be mean spirited of Microsoft to bilk their investors out of profits by just paying and paying and paying for no return.

jerry 15 Jun 06

I think it went more like this: “My man Bobby Scoble is gone? F**k it, I’m outta’ here.”

Dave Churchville 15 Jun 06

I agree that growth is more likely than shrinkage for Microsoft’s future. Layoffs are not happening.

Huge public companies with flat stock need growth. XBox and other projects, although currently money losers, are still the best path to growth for MS - new markets.

I think just about everyone who wanted a copy now has MS Office and Windows. So what do you do for growth? Create a new OS plaftom (Vista), and get developers busy again cranking out new product versions, which then drive upgrades to Vista. And while you’re at it, better upgrade to Office 2007.

Actually, the same could be said of Google: Ad revenue clearly is paying for all of the other distracting projects with no clear goals or revenue streams. Free spreadsheets? No thanks. How about fixing click-fraud before all your advertisers desert you?

beto 15 Jun 06

When Steve Jobs kicks it, retires or is ushered away by �the others� who will take his place?

Right on. Apple probably has some plan about it in the works, specially considering Steve’s recent brush with cancer. But Apple’s image has also given the impression that all of their current success, plans and strategies come exclusively straight from Mr. Jobs The Charismatic Visionary Leader. In fact, at times it seems as if he actually is Apple Computer, Inc.

Has anyone here read Built To Last? There is a whole chapter in that book dedicated to the strengths, weaknesses and perils of companies featuring what they call charismatic leaders, and Steve Jobs definitely is one of them.

street 15 Jun 06

“predict major layoffs within 12-18 months.”

Reeeeeaally? Here’s a prediction for you…

In less than a year from now, as copycat services start to flood the market, you sell your apps to somebody big where they’ll be assimilated into some big package. You’ll get what seems like an absurd amount of cash for it but I suspect you wont take the VP position they offer you. No, instead you’ll be the next Paul Graham and milk the Getting Real concept to death through articles and high profile consulting work. Eventually Bill, nearing his two year promise, will call upon you to save Microsoft and help them to.. Get Real. You’ll cut the workforce by 20% and the product line by 25%, despite the fact that the company has billions in cash on hand and all of its product lines are profitable. You will champion the resurection of Microsoft Bob, but your crowning acheivment will be the release of Office 2009, which consists of notepad, calculator, address book, and paint.

bleh 15 Jun 06

a mass exodus of microsoft employees could significantly change the web application environment. despite how things are done at the top, a lot of MS employees really are very smart, cool people who get it.

if 5-10,000 of them leave at once, i wouldn’t be surprised if there were 300+ new ex-microsoftie startups.

Mike Doan 15 Jun 06

…the majority of Microsoft�s products don�t make money.

This statement is simply not true. The majority of their products do make money.

Their annual report (as filed with the Securities and Exchange Commission on Form 10-K) for the year ended June 30, 2005, report that they had $541 million in operating loss from products in the following segments: 1) home and entertainment, 2) mobile and embedded devices, 3) business solutions.

So their losses are made of things like xboxes, mice, keyboards, business-related software, mobile devices, embedded operating systems for mobile devices. You can find a complete list in the filing under Part II, Item 8 of the filing.

They made $21 Billion on everything else which includes a lot more than Office and Windows.

Windows and Office funds the company. Windows and Office are covering up for a lot of misses.

So what? That’s like criticising 37s becuase the success of basecamp allows to create other web apps. Sure there are “misses” but show me a company that hasn’t failed in some fashion. When you have $71 billion in cash like MS does, why not spend some money venturing into new areas?

Mike Doan 15 Jun 06

Has anyone here read Built To Last? There is a whole chapter in that book dedicated to the strengths, weaknesses and perils of companies featuring what they call charismatic leaders, and Steve Jobs definitely is one of them.

Jim Collins, the author of Built To Last, is not a fan of Superstar CEOs. It seems like most of them do more harm than good for a company, look at Ellis (Oracle’s CEO). I wouldn’t lump Jobs or Gates into the category of Superstar CEO; they are, for sure, famous CEOs, but their not racing their multi-million dollar yatch, or hosting a “who-wants-to-be-my-apprentice” gameshow.

Anonymous Coward 15 Jun 06

When you have $71 billion in cash like MS does, why not spend some money venturing into new areas?

It’s amazing how big a blind spot 60,000 people and $71 billion can create. MS ignored Google until Google kicked their ass in search and online advertising. Now MS is chasing Google. That’s right, a company of 60,000 people and $71 billion in cash IS LOSING to a smaller company with less cash.

It’s not about the people or the cash. It’s about the vision, the hunger, the passion, and the willingness to do things differently and better. MS is incapable of different and better at this point. They are way too big and way too slow. I think that’s the point of this post. A slimmer MS would be a better MS.

Dave Churchville 15 Jun 06

It�s amazing how big a blind spot 60,000 people and $71 billion can create. MS ignored Google until Google kicked their ass in search and online advertising. Now MS is chasing Google. That�s right, a company of 60,000 people and $71 billion in cash IS LOSING to a smaller company with less cash.

It�s not about the people or the cash. It�s about the vision, the hunger, the passion, and the willingness to do things differently and better. MS is incapable of different and better at this point. They are way too big and way too slow. I think that�s the point of this post. A slimmer MS would be a better MS.

That sounds eerily like the conventional wisdom circa 1994 when Netscape ruled the newfangled Internet world.

It took a couple of years for MS to figure it out, but then, well, damn.

I never say “incapabale” when it comes to any company with 71 billion in cash. Maybe they’ll subdivide on their own instead of as the result of a legal judgement.

What do you think? Four new Baby-Bills?

OS division, Office products division, Entertainment division, Web Services division?

FredS 15 Jun 06

MS didn’t ignore Google. They just couldn’t come up with something better. No one can.

CR 15 Jun 06

I know a number of people, who have run their fairly large companies into the ground by trying to implement the Built to Last philosophies.

As an entrepreneur, I enjoyed reading it and found its logical approach to identifying common characteristics that contribute to sustainable success very interesting. Much of the book’s advice makes a lot of sense; however, after watching the demise of so many who tried to implement the Built to Last ideals, I now recommend immediately “getting off the bus” when your employer starts giving copies out to all employees.

Mike Doan 15 Jun 06

That�s right, a company of 60,000 people and $71 billion in cash IS LOSING to a smaller company with less cash.

I never said that having $71B in cash equates to winning in every market they enter into, or gives them the foresight to enter into profitable and expanding markets, but it does give them the opportunity to enter into virtually any market they choose. The more chances you take, the more likely you will fail at some; hence, your quibble about their “misses”.

They are way too big and way too slow….A slimmer MS would be a better MS.

There will always be smaller and nimbler companies. MS could cut their workforce to 50% and product lines by 50% and this will still be true (I don’t agree with JF, by the way).

I think its a mistake to expect MS to be innovative. You’re right, MS is too big and too slow, but they have the cash to buy smaller but more innovative companies.

Microsoft Sharepoint - Basecamp Version, anyone?

Chris 15 Jun 06

I think it went more like this: �My man Bobby Scoble is gone? F**k it, I�m outta� here.� - Very nice quote Jerry!

Don’t take Jasons words and twist them in a knot here. Sure Microsoft will need to lay people off….it’s capitalism. Only in America will you find a company that could be at a $500million loss and in turn around and become profitable in a year. Look at the changes GM and Ford are making.

My problem with Microsoft is they either try to compete with everyone or build software to please everyone. In the end you wind up with a bloated product because it’s made for everyone to do everything. There’s 60,000 people who work for the company. A legal team of over 900 people. I’m sure there is 20,000 managers. That’s what you get when you try to make software to please everyone.

Apple software does not try to be everything. 37 Signals software does not try to please everyone. It’s all about saying no sometimes and I think Microsoft has a very hard time doing that.

filmnut 15 Jun 06

Read my lips: Microsoft, as we know it, won’t exist in two years.

They’re past the point of no return.

They’re dead in the water.

nhoj 15 Jun 06

Read my lips: Microsoft, as we know it, won�t exist in two years.

They�re past the point of no return.

They�re dead in the water.

I fail to see how a company that had 43 billion a few years back, and 71 billion now is dead in the water…besides, as long as PC’s are made, they will make money…Royalties for the C:\ trademark thing will keep them in business for a long, long time.

While they would be more effective modeling Google’s small team mentality, that isn’t the only way to run a business successfully.

Ethan 15 Jun 06

good bye bill

Erik 15 Jun 06

Not only does this blog post show the ineptness of usability and design ( i cant stand having to scroll to the left to read a post) at MS but points to the problems getting VISTA to ship.
Looks like MS needs a couple of copies of “Getting Real”.

Brian 15 Jun 06

2 years? I thought they were announcing the new ship date for Blista…err…I mean Vista.

filmnut 15 Jun 06

nhoj: the key phrase, “as we know it.”

No one doubts they will be around in 50 years, but not as an indispensable company with indispensable products.

They are no longer bullet-proof. They have become dispensable.

J 15 Jun 06

They are no longer bullet-proof. They have become dispensable.

That is so key and so right. You don’t *need* MS anymore like you needed MS 5 years ago. Times are changing. And MS needs to change. 60,000 employees is a lot of people to change with. Changing with less people is easier and more effective.

FredS 16 Jun 06

Of course you don’t need Microsoft. But most people do. Excuse them for being incredibly successful appealing to businesses and casual users instead ajax-obsessed Mac nerds.

Alex 16 Jun 06

I like Windows. I like Office. What’s next is primarily the same old stuff. I doubt they will lay off as much as Jason says, because they don’t need to.

Alan 16 Jun 06

Microsoft will not engage in large-scale layoffs. There is no rational reason for it. Most of their operating segments are showing consistent earnings growth; even the Xbox segment made a dramatic turnaround with 360 Live and is going to be profitable this year.

It’s not as if Microsoft does not let people go. Their internal review system is designed to weed out a certain percentage of underperformers every year. There was some commentary on the Mini-Microsoft blog that perhaps this percentage wasn’t high enough, or it was tilted too much towards non-managers, or legal was urging keeping some people around longer than necessary, but regardless, the forced turnover rate can easily be cranked up. There is no reason for mass layoffs. The company is in nowhere near the situation IBM used to be in, with an ingrained non-competitive atmosphere that needed to be regularly shaken up. Microsoft’s internal employee politics are still very competitive (some have commented that they are competitive to the point of empire building and excessive backstabbing) and not at all like IBM’s old culture.

At the corporate level, reliance on MS products is increasing, not decreasing. For instance, Sharepoint is becoming ubiquitous and perceived as a necessity, not a luxury, in large companies, and Office 2007 is calculated to increase this lock in. Corporate job postings for .net programmers are now slightly more common than Java postings, and the momentum is on .net’s side.

The only area where MS is failing to execute well is their operating system division, but that is a solvable problem.

Drol Doog 16 Jun 06

M$ still generates $1B in profit every month! Cut the product line indeed…

Rich 16 Jun 06

Below is a snippet from this article in information week;

http://www.informationweek.com/outsourcing/showArticle.jhtml?articleID=189401657

�Microsoft is jockeying for position as software changes from being a desktop and server-based resource and moves to the Web, where it�s consumed as a service off large Internet servers. Microsoft has lagged on that front, after a false start in offering its applications as services. It�s also fallen behind leading Web technologies, such as Ajax or Ruby on Rails, which produce quick applications with an emphasis on Web interactions with users.�

Myron 16 Jun 06

You seem almost gleefull at the prospect of all those people losing their jobs.

Andy Brudtkuhl 16 Jun 06

There’s no need to downsize when they need to compete with Google. All that is needed is horizontal realignment.

Bernie Aho 16 Jun 06

Microsoft makes a good portion of its money off of development software..Thats the hidden gem. Once everyone has the windows operating system, companies will need to develop for it. Thus you need visual studio tools, MSDN, .net, blah blah…This is not what the general consumer sees. The office products and OS are not extremely profitable with the channels and OEM taking their cut..They are just enablers to make more people use their product only to have more developers buy their tools…..Anyone else recently price out a development with a team, and sql and all that jazz??

J 16 Jun 06

Perfect example of why MS needs to get lean:
Microsoft readying Apple iPod rival. 60,000 people and 71 billion and they’re still *readying* the rival. “It is unclear when Microsoft plans to launch, they said.”

See, MS has no sense of urgency. None. You don’t have a sense of urgency when you have a huge workforce and 71 billion. And that’s when you get complacent.

The iPod is 6 years old now and MS is still “readying” the rival.

MS is not hungry.

Fat Joe 16 Jun 06

>I know a number of people, who have run their fairly large companies into the ground by trying to implement the Built to Last philosophies.

Would love to hear some more details here…

e!ia 16 Jun 06

They probably need a _Japanese diet_! ;)

Chris Carter 16 Jun 06

How quickly people forget MS versus Netscape.

Yes, Microsoft is bloated. Yes, Vista looks to be a software Vietnam for them. Yes, Microsoft got their asses kicked in the Search sector.

But this is America folks - you’d be surprised at what 1 BILLION DOLLARS A MONTH can do when you’re trying to compete.

You say that Microsoft has underestimated Google et al? I say don’t underestimate Microsoft, or the absurb amount of money they make from revenue streams that aren’t going anywhere for the next 5 years.

Don’t forget Netscape. Don’t forget that Microsoft went from non-existence in the web arena to total domination in 5 years. And for the love of god quit assuming that being agile and being small equate to business success in the large market segments (this goes out to everyone, not targetted at any specific person).

Don Schenck 16 Jun 06

… and YOU, sir, were one heck of a wide receiver!

Mario 16 Jun 06

(Sorry if this has been said already….no time to read all comments)

What M$ should become is an umbrella corporation. Keep everyone on staff. Keep spending. But break things down into autonomous components. Best of both worlds. There will be losses, yes, but there would also be some phenomenal gains and innovation. M$ employees are VERY smart people stuck in a very stupid structure. Free the engineers to do what they already know is best and you will see ridiculously good products.

But of course, that’s a threat to management, including Bill Steve and Ray, because when share holders realize that the real waste is in management, they’ll agree with JF and cut their budget by 20% by laying off management.

At least that’s what *I* would do.

Don Schenck 16 Jun 06

Since we’re all experts …

What *I* would do is cash in and retire. Surf, golf, kayak, mountain bike, play hockey … it’d be a wonderful life.

That’s what I would do. :)

Dave 16 Jun 06

On a personal note, I think what the Gates have done is really amazing. He, with little government assistance, created a successful, if cut-throat, company which made him the richest man in the world. Now he is using his intellectual and financial resources to help the disadvantaged children of the world.

I know many of you dislike him and will not want to believe this, but if the Gates manage to continue in their philanthropic ways, I honestly believe that 100 years from now they will be looked back on as two of the most respected and influential people of the 20th and 21st century.

Dave 16 Jun 06

On a personal note, I think what the Gates have done is really amazing. He, with little government assistance, created a successful, if cut-throat, company which made him the richest man in the world. Now he is using his intellectual and financial resources to help the disadvantaged children of the world.

I know many of you dislike him and will not want to believe this, but if the Gates manage to continue in their philanthropic ways, I honestly believe that 100 years from now they will be looked back on as two of the most respected and influential people of the 20th and 21st century.

Mike Swimm 16 Jun 06

Dave.

I couldn’t agree more.

Will 16 Jun 06

I agree with Dave. Through his foundation, Bill Gates is definitely exercising the great responsibility that comes with great power. Kudos to him.

Mario 16 Jun 06

I dislike Gates, and I know full well about his “good intentions” for the poor. While we’re all busy praising the foundation for their generous donations and work, let;s not forget that Gates also opposes the UNs program to have a computer for every child ($100 laptop) and MS is actively pursuing litigation against poor countries for using Linux to enter competetively in the IT field.

So yeah, I dislike him.

Neil J. Squillante 16 Jun 06

Why would the most successful company in the world (have you ever looked at Microsoft’s operating margins?) lay off 20% of its workforce? That would absolutely kill morale.

Microsoft has never excelled outside of its core competencies. Few companies ever do (GE is one notable exception). If Microsoft feels it needs new sources of growth, it should solicit business plans from its employees and fund the 25 best projects as separate companies with the founders getting an equity stake. Microsoft could very well reap more innovation from those 25 companies than it would from its R&D facilities.

Ian Waring 17 Jun 06

I think 20% workforce cuts are fine. Huge corporations reward mediocrity, so if you get rid of the 20% who are below mediocre, that�s a pretty good start right there.

In my humble experience, the mediocre middle layers get rid of the non-conformists and settle their own scores with any mavericks. And the first over the ship’s side are the good swimmers.

So unless someone manages to carve out “fat” in one take, the skills base will plummet. I’ve seen it happen personally at least four times (out of four). So, probably the last thing MS will need…

As to Ray Ozzie, i’d respect him more if he stopped taking all the credit for inventing Lotus Notes - and corrected people who say this.

Ian W.

Daniel Lynch 17 Jun 06

I love Bill Gates. I love Anders Fogh Rasmussen. But most of all I love Microsoft. Greatest company ever. Truly.

Daniel Lynch 17 Jun 06

Actually, I hate Anders Fogh Rasmussen - but the rest was true..

Riel Roussopoulos 18 Jun 06

With all that money, they can affoard to be slow to move.

However once they do, they generally have the plan and the power to change the playing field in any vertical that they decide to get into.

The Netscape browser war showed that, xbox also.

As much as I’m not a MS fan, you can’t help but keep them on your radar and watch the moves they make… when the giant moves, it changes the landcape with every step.

Drol Doog 18 Jun 06

One other thing… The market would like to see M$ broken up. Historically, integrated companies do, in fact, get higher equity returns as separate entities — sort of the opposite of merged companies doing worse. The shareholders suspect M$ would do the same, overall. That’s not to say that some of those entities wouldn’t fail. But that’s only in the short-term. Long after the smart investors will have cashed in their earnings from the break-up, the synergies from the formerly-related companies would quite simply fall away.

Keith Burnett 18 Jun 06

Microsoft broken into separate companies? I hope the OS company looks out because if the Applications company released Office for Linux….

Daniel Lynch 18 Jun 06

..no real person would use Linux anyway because it’s a tedious and really poor mess.

All while Windows XP is still the best OS out there. Though a few odd fanboys here and there have too much quasi-independence pride to ever admit (nor realize?) it.

Did I say this article was rather poor? It was to me.

ceejayoz 18 Jun 06

Though a few odd fanboys here and there have too much quasi-independence pride to ever admit (nor realize?) it.

Oh, the irony.

mj1531 18 Jun 06

I hope Microsoft makes no real changes and stays the course. We’ve had about 20 years of the 1 Microsoft Way (which happends to be their street address). Do we all really want 20 years more of the same stuff that produced the mess that we’re in right now?

Let someone else have a crack it at. Hopefully that someone will have a soul. Apple, I’m looking in your direction.

AndyToo 18 Jun 06

I absolutely agree with Dave - say what you like about Bill Gates, but he is using his wealth to have a far bigger impact on the world than MS has through incredible charity work.

His position as the founder of the world’s most successful software company will be a sidenote compared to what he has planned to do with the money he has personally made (which includes donating 99% of his personal fortune to his charitable foundation on his retirement. He has already donated several billion dollars to this foundation.)

Yes, he is a very rich and powerful man, but he’s now using this to persue his own goals of making the world a better place and helping to save the lives of thousands of people that die every year through disease and poverty. Say what you like about him, but he will be remembered more fondly by history that any US president of the last 100 years. My ‘prediction’.

The $100 “laptop” thing? I agree - the idea, while admirable in theory, is ridiculous in practice. It’s a rich white man’s view of what poor people need to fix their lives. Why not hmm, just give each any every poor person $100 dollars instead? Let them - ooh, I don’t know- build a house or a hospital with it. The people targeted by Negroponte have far bigger problems to solve than not having a computer in thier lives.

street 18 Jun 06

Whether its Kigali, DC, Darfur, Paris, Mogadishu, Moscow, Phnom Penh, Cleveland or Beijing, the problem with the poor is that they are ignorant. If those dumbasses only knew..

A full belly and an empty head are the best way to keep the peasants working for us. The $100 laptop is incredibly dangerous.

g�k�en 19 Jun 06

i’d rather like to see microsoft empower, because competition will increase the quality of the services we get.

on the other hand, ray ozzie -yes very smart guy- and he is a web guy. he sold his groove networks to microsoft couple of years ago, and now microsoft is making him “chief software architect”, ray’s promotion will bring fresh blood to microsoft and of course a web perspective which microsoft lacks.

Tom Greenhaw 19 Jun 06

Like ‘em or not, you gotta take notice when a guy with that kind of money publicly states that he has too much money.

Shortly thereafter he announces plans to work full time giving it away to save the lives of children.

I would be proud to make even a small fraction of the positive impact this guy is making on the world.

Tom Greenhaw 19 Jun 06

Microsoft will have to adapt to a changing business environment.

I don’t think it can be debated that Do-Everything-For-Everyone bloatware monopoly heyday is passing.

They will continue to sell large applications to big companies, but when there is real money to be made in offering simple web based applications - look out. They can outspend any entrepreneur. They can handle extreme scalability issues. They can buy superbowl ads out the wazoo and mass market their products with the best of them. They aren’t going to cannabalize their existing market, but when online office automation products catch on, they give functional equivalents away on Office LIve.

I predict that they get bigger - much bigger. I predict that SQL Server will be recognized as an alternative to Oracle. I predict you’ll see Microsoft cash registers all over the place. I predict many people will begin using their accounting software. These things will occur while they retain the majority of their existing market share.

As for layoffs - that’s not gonna happen. Good people are hard to find. Go ahead an place ads and start interviewing people and you’ll discover that skilled employees are a very valuable asset in the computer world.

What Microsoft should do is make it easy for people buy, use and get help with their products. They should rebuild their organization to foster communication and teamwork. They should get their employees excited about working for Microsoft, and then open up communication to their customers to provide world class service.

Swingin’ the ax would be the last thing I’d ever do…

Tom Greenhaw 19 Jun 06

As for the impact on Bill Gates leaving Microsoft, you have to look at what he’s done for the company.

He’s a technical guy. The changes seen will be about the type of products they make and how they are designed.

He’s not an operations or marketing guy. Major visible marketing and business aspects of the company are unlikely to change at all due to his departure.

Because their kind of products take years to develop, we won’t see a change for quite some time. We may not ever notice the change…

z 19 Jun 06

A full belly and an empty head are the best way to keep the peasants working for us.

The $100 laptop is incredibly dangerous.

by the way, why $100? where did this magic round figure come from? why not $50? or $200?

i can’t even begin to explain (not that i’m an expert anyways) what needs to go into elevating level of education of some of these countries. probably should start with breeding educated elite that cares about their people, then empowering them to bring the rest of population to their level. raising awareness of political aspects, social life, oh man, dont get me started. $100 laptop is not going to start doing any of that.

ultimately it’ll take more globalization and setting environment in the developing world to be favorable for businesses so they invest in local economies. it doesnt take too long, 15-20 years and you’ll have a generation of educated young motivated people.

do you really think $100 laptop will contribute to this process?

i guess my point is, sure, cheap quality computer is a good thing, but positioning it as a solution to poverty in developing countries is at best nearsighted.

BG didnt endorse $100 laptop idea i think because he can see that it has low probability to yield the desired benefit and there are other ways to achieve the same general goals more reliably and efficiently.

Mario 19 Jun 06

I.T. is exactly what they need. An I.T. infrastructure allows people to educate themselves about whatever they need to know. Gates opposed the laptop because it would use Linux.

Frankly, deciding all out that poor people just can’t benefit from technology is is offensive.

It’s like the old saying “give a man fish, he eats for a day. teach him to fish, he eats for life”. It’s just taken a step further: you could keep giving people food and water, and you could keep trying to hurdle them into schools to teach them, or you can give them the tools to teach themselves, on their own terms, in their own time.

The welfare state should always be viewed as temporary. The goal should be to make people independant as quickly as possible. I can’t imagine a better way to do that then to give people access to I.T. Keeping people dependant on us is exactly what capitalists do: spit up crumbs and demand total obedience. Giving people laptops is indeed dangerous, because it means people start to become independant.

The question is really one of goals: Do we want a future where a small group of elites dominate, or do we want a future where there is no longer a need for top-down hierarchies, where everyone is equal? To me, I.T. has always promised the latter. Governments and corporations have always tried to hold it back (via censorships, patents, and other insane laws).

John S. Rhodes 19 Jun 06

So many negative comments. There’s a lot of bad press on MSFT right now. Most of it has been covered above. All of this makes me think one thing: Time to Buy Some Shares.

MSFT is far from dead and has so much going for it. I’m certainly not pro MSFT, but as a (small) investor, boy, it sure seems like a good time to grab some shares. What sayeth others?

Dave 20 Jun 06

Z, I am pretty sure that laptops will contribute to the process of educating people in these countries.

Don’t get me wrong, I don’t think technology-centered solutions are the way to go, but I guess I just have faith that MIT would put adequate research into the educational value of these laptops in developing countries. I highly doubt they would just develop these laptops without first performing in-depth education analysis and user studies.

z 20 Jun 06

Mario,

i couldnt agree with you more. the difference is, you think the $100 laptop is equivalent to teaching a man to fish, and i think its much closer to giving him a fish. think about it, we’re forcing a particular solution on people without due consideration.

Dave,

noone created a $100 laptop for India, yet they are thriving today, life improving literally daily. would you rather have that or hand out a bunch of laptops, which in large number of cases will be traded for food.

wouldnt it be better if markets were created which then generated demand for whatever computers are needed and subsequently commercial suppliers would supply the demand in an environment of healthy competition?

aks yourself a question, who and why chose linux (vs windows or beos or osx) for this laptop and for these people? it very well may be a better solution, but why make that choice _for_ the people, depriving them of choice? is that fair?

ask yourself a question, why do you need a special $100 laptop? why not let free market answer demand? i’ll tell you why. there is a bunch of beaurocrats sitting somewhere hiding behind some very noble sincere people who will make careers and boatloads of money around this project while wasting valuable resources and excersising zero consideration towards peoples they were meant to help.

once again, i think that $100 laptop idea is noble at heart, but as many good intentions (like communism) is destined to pave the path to hell. and i’ve tasted enough of communism to smell it a mile away… and i for one dislike that stench with passion.

Mike 20 Jun 06

There is no reason for mass layoffs. The company is in nowhere near the situation IBM used to be in, with an ingrained non-competitive atmosphere that needed to be regularly shaken up.

Agreed; and even if they were, it still wouldn’t spell doom. IBM may make plenty of hardware even now, but it’s worth remembering that IBM is really no longer about business machines. For all the painful changes they made in the 90s, their net profit’s doing pretty darn good - $8b last year alone.

The office desktop as we know it is evaporating, and for it Microsoft’s in a lot of trouble. But I hardly see how mass layoffs improve corporate intelligence and responsiveness — if I cut off my leg, does that mean I’ve become “lean”? — nor do I see Microsoft being wiped off the face of the earth. It’s silly to suggest otherwise.

FYI, I keep a Microsoft-free machine at home; I’m not defending them or their practices.

Robert Cantoni 20 Jun 06

Living in the Seattle area, I’ve known quite a few Microsoft employees, and for a while it seemed like most of them worked on projects I’d never heard of and/or projects that never came to light. But I don’t consider that a problem for Microsoft. Taking risks with products and investing in R&D are good ways to spend your money.

Microsoft’s big problem, to my mind, has been the delay of Vista. Second to that would be security concerns. Competing with Google comes after those two concerns.

Meanwhile, Office 2007 looks great, Vista will have some good features, and Bill Gates will finally devote himself full-time to using his considerable fame, money and influence to find and implement solutions to serious problems in education and global health.

@ John S. Rhodes: Yes, it does seem like a good time to buy MSFT. The question is whether Vista will get pushed back once again, at which point the stock price could sink further. The release of Office 2007 + Windows Vista is going to make next year really big for Microsoft.

Uncle Paul 20 Jun 06

To use a familiar analogy, Microsoft is a huge freakin’ ship that takes a lot of spins of the wheel to get to move in a different direction, no matter how slight.

Ballmer is staying on the bridge and, despite a monkey-boy video to the contrary, his movements are fairly predictable. This a long established culture and it’s not going to change radically. MS is still dependent on Office and Windows for its monstrous profits. Period. Nothing else it does makes money like that. Nothing. Nada. Zip.

Let’s play the layoff scenario for a moment. If huge layoffs were to take place, the class action lawyers would be lining up outside the gates in their limos waiting for anyone they saw walking to their cars carrying a cardboard box. You think people were PO’ed when they had to start paying for medical benefits while MS sits on all that cash, imagine the outrage if they start handing out pink slips.

This is why I must respectfully disagree with a lot of people in this thread. I’ve been around a long time and I have a long memory as to how MS came about, what they’ve done, and what they continue to do. I find their products to be cumbersome and lacking in comparison to the rest of the field.

Rebranding and theming of old, buggy software ideas ain’t going to pass muster with me.

Dave 21 Jun 06

Z,

Your points about demand are very valid. But I think these principles only apply if these laptops were to be used by the general population, which they are not.

“One Laptop per Child (OLPC) is a non-profit association dedicated to research to develop a $100 laptop�a technology that could revolutionize how we educate the world’s children. “

This implies that the laptops are to be (a) given to children and (b) used primarily for education.

Your comments would make Ayn Rand proud, but like many objectivists, I think one aspect you overlook the education of children. I agree that free market demand should dictate many things, but I think education for children is not one of them. These kids are born into a less affluent part of the world, but that does not mean they should be given less of an education or a chance to succeed.

Many of these kids could become the next Howard Roark, but don’t because they never get a basic education. So while a more naturally intelligent, harder working, more capable person never learned to read, thanks to the country he was born in, a lazy, rich, moderately intelligent, well-connected American leads a large corporation and makes decisions which impact millions of people.

Just my opinion.

AReader 21 Jun 06

So Microsoft has become the IBM of today. Big and slow. Next thing you’ll be saying is they’re getting out of the software business and going only services. Yeah sure.

Jonathan Mah 21 Jun 06

When a company gets to a certain size, the 80/20 rule seems to apply fairly well to everything that it does.

1. 80% of the workforce is not productive
2. 80% of the product lines is generating 20% of the revenue
3. 20% of the product lines (Windows, Office, Xbox) is generating 80% of the revenue
4. 80% of Bill Gate’s time is spend on something other than the core MS business (hence leaving soon)
5. 80% of Balmer’s time is spent on yelling at employees

6. This is the BIGGIE: 20% of the MS workforce is productive and only 20% of that is keeping the MS momentum going but only 20% of that (down to 0.8% now) actually does enough to innovate for the company

Jeff Carr 25 Jun 06

If you want to know about a company, look at its founder. Microsoft has excelled in mastering through sustained development, analysis and re-development. Borrowing from Survivor, it out-plays and out-lasts everyone else. It’s founder is a Scorpio, a Fixed sign.

37Signals has excelled in designing and implementing innovative approaches to web-based software. It’s founder is an Aries, a Cardinal sign.

Cardinal signs excel at innovating, at launching new projects. Fixed signs excel at following through, and overcoming challenges.

Expecting either company to become more like the other simply isn’t going to happen. Change at Microsoft will continue to occur like it always has, slowly but surely.

Free Reseller Hosting 19 Sep 06

Well, and this time appears that Google+GNU take momentum. Especially the new Firefox.