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Internal, Financial, Prospective Problems at Microsoft

Posted in Finance, Google, Hardware, Microsoft, Steve Ballmer at 5:08 pm by Dr. Roy Schestowitz

Man in money

The previous post focused on one particular problem with a product, combined or associated with a known corporate culture problem. The following accumulation of news from the past week will hopefully shed light on the problems Microsoft as a whole is facing. It is well deserved.

Scandalous Bonuses

The economy is slowing down, Microsoft’s financial reports have disappointed for two consecutive quarters, but this does not prevent people at the very pinnacle from rewarding only themselves.

Some days ago we wrote about the bonuses kerkuffle, which a prominent Microsoft blogger found outrageous.

Now it turns out that even departing executives are rewarded handsomely. Here’s the news about Johnson, whose departure we last mentioned a month ago.

Ex-Microsoft exec gets big bonus after joining Juniper


Johnson was set to receive a $5 million signing bonus when he arrived at Juniper earlier this month and a base salary of $800,000 a year.

More information is available here.

Johnson owned roughly 1.5 million Microsoft shares as of Sept. 5, according to the filing, which would currently be worth roughly $39.3 million.

They sure have a reason to buy back the stock then. Personal reasons, too. Steve Ballmer’s pay is now being revealed, specifically here and here.

According to Steve Ballmer, profitability is a priority in some areas of business where the company loses money.

Ballmer: Microsoft Is Up-Front About Its Money Motive

There, he said it. Microsoft is interested in making money. That’s what CEO Steve Ballmer said in reference to Microsoft’s motivation in the mobile space.

There are sour grapes and a continued desperate attempt to obtain stronger grip on market segments outside desktops. They now attack the iPhone, for example, through legal or verbal means. For Microsoft, the mobile unit performs badly (previously mentioned in [1, 2, 3]) and shipments of Windows Mobile have recently missed expectations.

Pay for Use

Rather than charge for use of its products, Microsoft seems to be paying out in search of greater market share (or just “in search”), i.e. it relies on deep pockets to compete. Moreover, as noted below, Microsoft uses its little “bribery” scheme also to ‘punish’ or to elbow aside competing Web browsers. Spying on the user (harvesting) is part of Microsoft’s ‘hidden’ income.

More Microsoft Live Search Bribery


Just using Microsoft online services isn’t enough to get your ticket punched, though. You must run Internet Explorer (6.0 or higher) when you use those services. Even visiting getsearchperks.com with Firefox or Opera is a futile exercise; you will have to start IE to see what goodies the site has to offer. Oh, and if you sign up you’ll have to install the Perk Counter toolbar to let Microsoft keep track of your tickets.

Here is another new example of Microsoft ‘incentives’ at play:

Microsoft Adds Incentives to Small-business Program

Microsoft has given small and mid-sized business customers more ways to earn cash to buy its software through partners by adding new products and product groups to its Big Easy program.

Legalised Bribery?

“Legalised bribery,” also known as “lobbying,” is a very serious issue. Large companies (mega-corporations) behave as though they own and run the country. Microsoft is among the very worst offenders/culprits in that respect.

As far as the bailout is concerned, Microsoft of course intervened in the name of its own interests (again pretending it’s “for the ‘little people’ or the public”).

The four representatives that Microsoft Corp. lobbied earlier in the week after the House of Representatives failed to pass a massive Wall Street bailout bill did not change their votes today as a revised bill sailed through Congress.

This is also covered here and here. Without delving into economics and politics, it’s worth emphasising that Microsoft promoted a scheme that defends ‘fat cats’ like itself while harming poor taxpayers the most. This gets more interesting when considering Microsoft's tax breaks.

Other risky or damaging sources of influence are actual employees, not just lobbyists, who may be hired just temporarily. A company called Lighthouse1 has just appointed as its CEO a former Microsoft executive.

Lighthouse1 has named former Microsoft executive Jeff Young as its president and CEO.

The company is unlikely to be GNU/Linux-friendly then. Why are Microsoft executives leaving anyway?

Internal and/or Financial Problems

There are a lot of headlines out there about a serious Microsoft leak claiming that its workforce is already affected negatively. This IDG report suggests that Microsoft’s pain is showing more than before.

Microsoft hiring freeze? From recession to depression

Confusion arises over Microsoft’s hiring plans. The company issued a memo that hinted at a freeze, one employee said, but a spokesperson denies a freeze.

Here is a more extensive report about this (also from IDG).

Microsoft has instituted a hiring freeze, likely spurred by the worsening economic conditions in the U.S., according to a source close to the company.

Microsoft denies it, but its denial is weak. It’s more like damage control. Here is a summary.

Yesterday, Microsoft (NASDAQ: MSFT), the world’s largest software company, said it was taking a look at hiring. That is probably code for the firm saying it plans to cut or level out expense growth.

According to Reuters, Microsoft said, “Given the current economic environment we are taking the prudent step of reviewing our hiring plans and will make some adjustments as appropriate.”

The Microsoft-adjunct press has had its own take, though it’s as biased as always. Spendings at Microsoft may be suspended too, according to some other reports.

The axing at Microsoft, which was mentioned recently on at least a couple of occasions [1, 2, 3], could have a wider effect, according to this op-ed that alludes to Ensemble Studios.

Is Microsoft’s Xbox 360 studio Rare next on the chopping block?

A couple of days ago I wrote a story about how Microsoft announced the closure of one of its first party studio, Ensemble Studios. The stated reason behind this decision to close one of its studios was due to lack of scalability. In other words, Microsoft execs felt that Ensemble as a venture could not grow profitably. This raises an interesting question; could the same fate fall upon Rare as well?

This was followed by this report from the same site.

Xbox 360 fans angry at Microsoft studio Rare for not listening to them

Microsoft’s first party studio Rare has been in the video game news recently due to some criticism it has received by Peter Moore, former head of Microsoft Game Studios.

The press still covers the Ensemble Studios shocker.

It’s hard to believe that any developer making a game based on Halo could be shut down for financial reasons, but that’s the fate awaiting Dallas-based Ensemble Studios.

Emphasis is to be put on “financial reasons.” Previous posts about this subject contained more examples of discontinued or shut-down Microsoft products and services.


Problems with XBox run deeper and there was a prolonged outage last week.

An unplanned outage hit Microsoft’s Xbox Live service starting Tuesday night, leaving online gamers unable to connect.

There was downtimes for Zune as well. This is not a way to market Microsoft products. It inspires no confidence as the LSE downtimes repeatedly show.

Iffy Outlook

According to the following report from India, Microsoft is poised to lose billions of dollars.

The cut in the IT budgets of the revered investment banks like Lehman Brothers and Merrill Lynch due to their failure may lead industry giants like U.S. based Microsoft and California based Cisco to lose $4.3 billion in orders next year. While Cisco earns about three percent to four percent of annual revenue from the U.S. financial industry, Microsoft accounted for 22 percent last year.

Even some analysts are not entirely optimistic, to say the very least.

Microsoft will be hurt by financial crisis, RBC analyst says

The devastating U.S. financial crisis will hurt software giant Microsoft Corp.’s bottom line this holiday season as shoppers tighten their purse strings, RBC Capital Markets says.

Cash Cow (Office) Under Fire

One of Microsoft’s few profitable products (and the most important one too) meets another challenge from Google.

Does Google Apps pose a threat to Microsoft? No way, said Microsoft CEO Steve Ballmer in April 2007. He made his point clear to attendees at the USA Today CEO Forum: “[Google has] come out with what I might call—what’s the politically correct way of saying it?—they’ve come out with some of the lowest functionality, lowest capability applications of all time.”

The room filled with laughter.

Ballmer—for one—is not laughing now. That hubris and short-sightedness is coming back to haunt him.

Microsoft is now taking the threat from Google quite seriously: In July 2008 COO Kevin Turner was dispatched to consumer-products giant Procter & Gamble to dissuade P&G from moving to Google Apps—and ditching Microsoft.

This further justifies Microsoft’s fear of Google, which it constantly attacks.

Weakening Market Grip

Not many flattering reports have appeared in these difficult times. Tech Radar asks whether Microsoft has lost it and Salon, which is typically ultra-pro-Microsoft, writes to say that “Microsoft doesn’t matter anymore.”

Rejected by Yahoo!, outgunned by Google and humiliated by Apple, Microsoft is fighting for its very survival


Yes, Microsoft has made a truckload of money on smart business decisions in the past. But these days, it seems like its just pissing its future away by releasing products that no one is actually interested in. If this is the brilliant strategy that Steve Ballmer is planning on using to take on Apple and Google as Gates fades into the sunset, he might want to reconsider.

Another article says that Microsoft struggles to innovate or lead in the Web era. The Register presents an example of a new struggle.

Earlier this year, when Microsoft was making a play for Yahoo, I observed that the Internet is not in Microsoft’s DNA. Ballmer’s acknowledgement of Microsoft’s slow move into search, and Mundie’s demonstrations at EmTech indicate that it continues to struggle to establish itself as a true leader in Internet innovation


Microsoft’s Hotmail hybrid struggles to life

The long-awaited merger of Microsoft “classic” and “full” Hotmail services has got off to spotty and painful start.

Microsoft is not as invincible as it wants you to believe. The hype in the press can be hugely deceiving and possible financial fraud [1, 2] puts an eternal grey cloud over Microsoft’s extravagant claims.

“There is such an overvaluation of technology stocks that it is absurd. I would include our stock in that category. It is bad for the long-term worth of the economy.”

Steve Ballmer

The Return of Vista Collusions: Will Ballmer be Deposed Soon?

Posted in Bill Gates, Courtroom, Europe, Law, Steve Ballmer, Vista, Windows at 3:29 pm by Dr. Roy Schestowitz

Direct link to deposition video | Full set of the deposition videos (including Ogg Theora versions)

There are several interesting developments around Windows Vista at the moment and below is a summary.

Vista Trouble

A great proportion of Windows users not only neglect or reject Vista at times of computer purchase; some of them do it after repeated disappointment, so Microsoft has just extended — against its will — the duration of XP availability, proving that the backlash continues almost 2 years after RTM and many months after the release of Service Pack 1, which Microsoft said would Fix Everything™.

Partners originally had up until January 31 2009 to provide the Windows XP Professional recovery media with machines running Windows Vista Business or Windows Vista Ultimate. Now they have until July 31, 2009, a Reg reader has informed us.

According to the survey which is covered here, even in one of the most Microsoft-receptive countries in the world (United Kingdom), only 4% of the businesses have adopted Windows Vista. That’s how bad it is.

More than half (58 per cent) of businesses using Microsoft technology are “exploiting” Windows XP compared to just four per cent for Vista, according to the ‘reality checkers’ research by the Corporate IT Forum (Tif), seen exclusively by silicon.com.

The Vista Lie

Class action over the Vista collusion is proceeding and the following development sure is interesting.

Lawyers want Windows Update used to push ‘Vista Capable’ lawsuit notices

Lawyers in the “Windows Vista Capable” class-action lawsuit against Microsoft have asked a federal judge to force the company to use its Windows Update service to notify potential class members, court documents filed yesterday revealed.

In a motion submitted to U.S. District Judge Marsha Pechman, lawyers for the plaintiffs laid out a notification plan that would include print ads in publications such as USA Today, banner ads on sites including Yahoo.com and MSN.com, and a message that would be delivered to Windows users by Microsoft’s automatic update service.

There is also an article about it in Linux Journal.

“Lawyers in the Windows Vista Capable lawsuit against Microsoft want a federal judge to force the company to use Windows Update to notify potential class members of the suit, according to court documents.” This is the opening paragraph in an article in ComputerWorld.

That may be only the beginning. Previously, it was the now-retired Jim Allchin who got called in for this investigation. He was not alone, either. Now it goes all the way up to the top as Microsoft’s CEO is called in and Microsoft fights to prevent a deposition.

The only thing CEO Steve Ballmer knew about Microsoft’s Windows Vista Capable marketing campaign was what he was told by subordinates, and he should not have to testify in the class-action lawsuit that accuses the firm of deceiving customers, the company said Friday.

Might Ballmer be deposed?

Microsoft tries to avoid Ballmer deposition in Vista suit

Microsoft Corp. Chief Executive Steve Ballmer is the subject of a new legal squabble in a lawsuit over the company’s Windows Vista marketing practices.

Despite these excuses (yes, Ballmer himself struggled with Vista and knew about its flaws, as we noted and also showed before), the press remains skeptical.

Lawyers representing Microsoft in the “Windows Vista Capable” case filed a declaration by Microsoft CEO Steve Ballmer today, in which Ballmer says he was “not involved in any of the operational decisions about the Windows Vista Capable program.”

This is not over yet, so the court’s decision will be important. Did Microsoft’s chiefs decide to deceive? If so, how high up does this decision go?

Speaking of “misleading”, Roy Fielding has just thrown a fit at Microsoft, among others.

IBM, EMC, Microsoft blasted for ‘REST rip-off’

IBM, EMC, Microsoft and others have been blasted by the father of Representational State Transfer (REST) for making “misleading” and “idiotic” claims about a proposed specification for applications to talk to different vendors’ content management systems (CMS).

Picking on last month’s over-hyped Content Management Interoperability Services (CMIS) Specification announcement, Roy Fielding has said he’s getting tired of big companies making “idiotic claims about REST and their so-called RESTful architectures”.

Dishonesty might lead to ‘success’, but dishonesty is not a quality.

The Free Software Foundation No Longer Interested in .NET Cloning?

Posted in Free/Libre Software, FSF, GNU/Linux, Microsoft, Novell, Windows at 12:22 pm by Dr. Roy Schestowitz

.NET Slipping through

A bad penguin -- Novell

This year’s list of high-priority Free software projects excludes DotGNU, which was there before. An article from last year explained the controversy surrounding this.

The Free Software Foundation’s ‘High Priority’ List: A Key Guidepost


# DotGNU:
GNU/Linux already has a partial implementation of Microsofts .NET (AKA C#) language in the Mono Project. However, many people in free software are concerned that Mono could face patent attacks from Microsoft. Just as importantly, some view Mono with suspicion, especially since it is sponsored by Novell, Microsoft’s chief partner in the community. DotGNU is an effort to provide a technical and political alternative.

AVRS2 is not hurried in jumping to conclusions. Yesterday he clarified that “it could just have fallen down because it works well (don’t know) already.” Dan O’Brien writes: “maybe because of Mono.” Either way, it’s not there anymore. Looking at readers of Linux Today, some people vehemently dislike Mono and several other people begin to understand a Mono injection vector called Moonlight, so there’s no happiness.

I won’t even install mono on my system.
If a site is built using silverlight, it will get the same treatment from me as any site that caters to IE-only: I will not use it.

Further, says Jeff Cobb:

I agree with the above poster and the article which states that Linux will always be behind the curve WRT Mono/MS version compatibility.
What I find disgusting though is the reasoning behind why we should do it: because “everyone else is doing it”.
Doesn’t this make you glad that Linus, RMS, et al didn’t share Miguels casual moral attitude?

Mono is not a wise way to proceed given things that we already know. What GNU/Linux is in danger of is ending up with a poor man’s .NET (Mono) and poor man’s Visual Studio (Novell’s MonoDevelop). It makes it a follower, inferior and subjected, to the merciless hand of Microsoft. One person has just called this “ignorance”.

i guess miguel still does not realize that linux will always be a second class citizen when it comes to M$.. if it was up to M$ linux would even be a citizen….. so the fact the you do have to WAIT for MS to throw you a bone with specs tells you that you will always be playing catchup.. and the day the M$ decides that they no longer need to satisfy any antitrust deals.. your out of luck…… MAN.. i just can;t understnad how this guy can be completely ignorant of this..

Moreover, based on an interesting recent post, those Microsoft licences are a menace.

So where does this leave us? GNOME has been encumbered with Microsoft patents. Microsoft clearly has no regard for anyone’s intellectual property, albeit their own, and will stop at nothing to gain control or draw the life from new innovations in order to keep afloat their failing ideal. What can we do about it?

Abandon Microsoft entirely, abandon their attempts at ‘open source’ and give complete non-compliance. Through all their underhanded tricks and lies there remains one feature inherent to all capitalistic business…

This warning comes at a good time because Microsoft has doctored and begun spreading GNU/Linux-hostile licences. One reader wrote to say: “Maybe I read this wrong, but this strikes me like the scenario we were trying to warn the pro-mono folk about. As long as Microsoft is in the mix, free isn’t going to be free for long.”

“Value your freedom or you will lose it, teaches history. “Don’t bother us with politics,” respond those who don’t want to learn.”

Richard Stallman

IRC: #boycottnovell @ FreeNode: October 4th, 2008 – Part 2

Posted in IRC Logs at 4:34 am by Dr. Roy Schestowitz


Enter the IRC channel now

Read the rest of this entry »

IRC: #boycottnovell @ FreeNode: October 4th, 2008 – Part 1

Posted in IRC Logs at 4:27 am by Dr. Roy Schestowitz


Enter the IRC channel now

Read the rest of this entry »

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