The have become what they despised

tjb.

Posted to Business on Thu Jul 12, 2012 at 07:22:55 AM EST (promoted from Diaries by port1080). RSS.

Vanity fair has a teaser for an upcoming story about the "downfall" of Microsoft over the last decade that has piqued quite a bit of interest in tech circles.

I probably shouldn't comment too much on this for a couple of reasons, but I do think the article is being a bit unfair in one big way and one small way.

The big one is the "downfall" part.  In 12 years, Microsoft has quadrupled their annual net profit from $5.6B to $23.4B, which is an astounding accomplishment for a large and entrenched business under any circumstances.  They have also made a big winner (popularity-wise, if not financially) out of the Xbox, managing to gain huge share in a large market where they started from zero.  Sure, they have had a bunch of flops too and their stock price has inexplicably (to me, anyways) stagnated, but the money train has kept right on rolling.

The smaller unfair point is about stack ranking.  Every large tech company does stack ranking.  Intel does stack ranking.  Google does stack ranking.  Amazon does stack ranking.  Apple does stack ranking and used to serve it up with a side of random firings by Steve Jobs whenever he had a temper tantrum.  Nobody particularly likes stack ranking - managers hate it, engineers hate it, executives are well aware of its shortcomings - but it is very difficult to effectively rate 1000s of employees among a large organization without using some form of stack ranking.  Without the curve, every manager is claiming that 50-80% of his team is a top performer and needs special consideration.  Even when that might be true, it is simply a recipe for allowing expenses to go wildly out of control unless limits are placed on the amount of compensation increase that is available and the number of employees that can get special consideration.  Microsoft may be doing their stack ranking poorly, but they are hardly an outlier here - their competition is doing the exact same thing.