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Editorial - Steve Ballmer Addresses MS Employees About Apple

by , 1:25 PM EDT, July 24th, 2008

Microsoft, by all accounts, has been on a rough road with the attempted Yahoo! acquisition and the Vista rollout. After a top level reorganization, splitting the single Platforms and Services Division into Windows and Online divisions, Steve Ballmer turned his attention to the competition with Apple in an e-mail to employees.

The e-mail was obtained by Kara Swisher with All Things Digital and was dated Wednesday, July 23, 4:30 PM.

The e-mail opened with a focus on investing in the right opportunities, expanding presence with Windows and the need to drive end user excitement for MS products.

Referring to Apple, Mr. Ballmer wrote:

Apple: In the competition between PCs and Macs, we outsell Apple 30-to-1. But there is no doubt that Apple is thriving. Why? Because they are good at providing an experience that is narrow but complete, while our commitment to choice often comes with some compromises to the end-to-end experience. Today, we're changing the way we work with hardware vendors to ensure that we can provide complete experiences with absolutely no compromises. We'll do the same with phones -- providing choice as we work to create great end-to-end experiences.

Later in the e-mail, which appears to to be a back-to-basics kind of message, Mr. Ballmer confessed that "...Yahoo was a tactic, not a strategy. We want to accelerate our share of search queries and create a bigger pool of advertisers, and Yahoo would have helped us get there faster. But we will get there with or without Yahoo. We have the right people, we've made incredible progress in our technology, and we'll continue to make smart investments that will enable us to build an industry-leading business."

Even in corporate prose like that, it's hard not see an admission of failure and some revision of history.

In order to deal with apparent failures with both Yahoo! and Vista, Microsoft is splitting up its Platform and Services Division into two divisions, Windows and Online Services. Each division will report to Mr. Ballmer. Whether this is a tacit admission that the load on Kevin Johnson was too great is not clear, but Mr. Johnson is now off to become the chief executive of Juniper Networks.

Mr. Ballmer's comments about Apple suggest that there has been a realization that the quality and focus of the product is important to customers, independent of how big a company is.

Microsoft is planning to spend a reported US$300M in an advertising campaign to get their side of the story across on Vista - a response to Apple's "Get a Mac" ads. In the end, however, what Mr. Ballmer is doing is calming the troops with obvious ideas, reorganizing [the deck chairs] and spending advertising money to present an image, not solutions.

It's amazing to see a real salesman at work.

Observer Comments

Show: Subjects Only | Full Comments
View Name:Guest
Subject: Ummm, really? MS only spending 300 bucks?
View Name:Guest
Subject:
Close Name:rspress Posts: 29 Joined: 12 Nov 2002
Subject: Yeah Right

Ballmer is as clueless as his pit stains are big. I do think it will be funny to watch to see how bad he screws up being like Apple. I think it could really backfire on him and Microsoft. In trying to copy Apple, out in the open this time, they are admitting that Apple is better than Microsoft. I am sure that Ballmer cannot help adding his ideas to the plan.....that will assure that it will fail.

View Name:Guest
Subject: Commitment
Close Name:Fairly Posts: 25 Joined: 02 Aug 2007
Subject: Google?

Ballmer's scared by Apple? Apple step on his toes. Google are knocking him out.

Close Name:wilf53 Posts: 31 Joined: 18 Oct 2007
Subject: The walls are shaken...

Another sign of the times? I think so. Ballmer finally acknowledges that Apple is a competitor and although he tries (rather desperately?) to play it down with the old 1-billion-flies-canʼt-be-wrong-go-eat-$#!% argumentation, he has realised that it is not only about Google.

Looking at this article from Macworld and the graph it has, might explain why:

http://www.macworld.com/article/134655/2008/07/macsales.html

If their prediction for the fourth quarter is correct and if the trend will continue, Microsoft has all reasons to begin to take Apple seriously.

I think what we see now, is the walls beginning to tremble and shake and it is only a question when the pressure will be so intense that the levee will break.

What Ballmer does not understand, is that it will take a different kind of motivation to compete with Apple. They/he are/is motivated by being competitive by all means. Innovation comes second and is just another means to stay competitive. That is why Microsoft will never become a true innovator, not as long as Ballmer is at the helm, at least.

He tries. He mentions that they are going to change the world, but I doubt that he means it. I think that attitude, too, is another means to stay at the top of the competition. He is not interested in changing the world, but Apple is, so then it is a part of his strategy - to mimick them.

So, this makes me quite confident that we are going to see some huge changes rather soon now:)

The giant is desperate and scared.

Close Name:Tiger Posts: 970 Joined: 17 Jun 2003
Subject: I wonder if he remembers...

back when Bill Gates made the comment about Windows possibly not being in existence within just a few short years.

If so, it must bore into the back of his mind incessantly. He's been handed the reins of one of the major world corporations, but from the sound of that pep talk, he doesn't have any true vision of where it's going. Just some vague platitudes and a little bit of envy.

Close Name:xmattingly Posts: 214 Joined: 31 Jul 2007
Subject: Say what?

How is the experience with an Apple product "narrow"? Is it because they haven't had the experience of floundering with different partnerships & media formats with iPod/iTunes, or because you can do pretty much anything on a Mac that can be done on a PC, and in most cases better?

Obviously there are many pundits reading between the lines on this, and here are my two bits: I would trade the word "narrow" for "focused", or in other words, something M$ has not been w/ Balmer at the helm.

Close Name:geoduck Posts: 1797 Joined: 30 Dec 2003
Subject: Just a thought

Could it be that Bill Gates saw the decline coming and handed Microsoft off to Ballmer just before it happened? I mean Gates has all the money he can ever want, at this point he has to be thinking about his legacy and how history will remember him. By 'retiring' when he did he protected his reputation as the man who built Microsoft, and Ballmer will get blamed for running the company into a ditch. Who knows, maybe in ten years Gates might even pull a Steve Jobs and come back to Microsoft to save it. Maybe he's just waiting for the news reports about Microsoft to start using terms like floundering, struggling and beleaguered.

View Name:Guest
Subject: MSFT doomed
Close Name:geoduck Posts: 1797 Joined: 30 Dec 2003
Subject:

Quote
Guest wrote:
the only SLIGHTLY decent product MSFT has is the XBox and that's a sorry runner-up to Nintendo's Wii.

Of course there is that Red Ring of Death problem with the Xbox so I think that gets disqualified as well.

Close Name:deasys Posts: 269 Joined: 08 Apr 2003
Subject:

Quote
Guest wrote:
the only SLIGHTLY decent product MSFT has is the XBox


Nope, not even that--noisy, hot, and one of the highest hardware failure rates of any CE device ever.

View Name:Guest
Subject:
View Name:Guest
Subject: Great year
Close Name:randompro42 Posts: 220 Joined: 25 Sep 2003
Subject:

Quote
geoduck wrote:
Quote
Guest wrote:
the only SLIGHTLY decent product MSFT has is the XBox and that's a sorry runner-up to Nintendo's Wii.

Of course there is that Red Ring of Death problem with the Xbox so I think that gets disqualified as well.


dont get me started on that thing... i (somehow?) have never gotten the infamous rrod, but my 360 fails to properly boot about 2/3 of the time

"we at microsoft will preach security. the way we will be secure is by making your end user product a brick 2/3 of the time so it will not be able to be hacked 2/3 of the time you [try to] use it!"

my favorite "security" feature on the 360 is not being able to remove a credit card once used on the system

TRO

Close Name:jwarren2001 Posts: 64 Joined: 29 Jan 2008
Subject:

The loud fat man is scared.

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