Summary: Microsoft's spin after an exodus is explained and shown; Microsoft has begun suing Windows users for money and further limiting the available options

Last week we saw another wave of Microsoft exodus [1, 2, 3] (rumours of more layoffs exist too) and Microsoft uses "reorg" is a typical euphemism, as we previously explained in [1, 2]. Whenever large numbers of major departures are announced, the word "reorg" comes up. The term is usually being used by Ina Fried and other such PR folks (same two years ago when the mobile unit was abandoened). Here are more new examples of "reorg"/"reorganize"/"reorganization" in new headlines [1, 2, 3]. The term which Mary Jo Foley uses in her headline is "org[anisation] chart".

"Shake-Up" is the word Murdoch's press uses in the headline and the same word is used in the headline of John Carroll from Microsoft (he stopped working there) and an article by Microsoft boosters like Preston Gralla (maybe his editor changed the headline). They are spinning it as through it's a good piece of news rather than a disaster for Microsoft.

Here is another example of the word "shakeup" being used in the headline:

Microsoft Shakeup Ballmer's Last Chance?

[...]

Microsoft CEO Steve Ballmer put his credibility, and possibly his career at the software maker, on the line Tuesday with a bold reorganization of the company's struggling hardware unit.

It's not just about Ballmer. We'll come to this in a moment.

When many departures are announced at the same time and the company fears investors' wrath that's just the type of reaction one ought to expect. It's called "damage control" and the above is just a survey of headlines. The side blog of Murdoch's press calls this a "reboot", which is a term Ballmer used on various occasions, e.g. to describe post-Longhorn Windows development.

Microsoft's stock fell some days ago after Barclays had lowered its views on Microsoft.

Microsoft (MSFT) is trending modestly lower in afternoon trading, down 1.08%, after Barclays Capital cut its target price on the stock while maintaining its "buy" rating.

Here are some other negative articles about Microsoft's stock [1, 2, 3], coming at roughly the same time as when it fell behind Apple in terms of market cap. Some pro-GNU/Linux sites celebrated this. Other sites went further [1, 2, 3], with the headline of a longtime Microsoft watcher saying: "The Windows era is over".

Here is a chart comparing Apple and Microsoft (MSFT). Apple customers will spend a lot of money on Apple's stuff, whereas some people won't pay Microsoft anything and they would pay absolutely nothing if Microsoft forced them to because Free software like GNU/Linux is available (Apple's customers are people who choose by price tags and labels). In terms of market share, thanks to the less wealthy countries, GNU/Linux might already be ahead of Mac OS X. Here is Steve Ballmer's presentation slide from last year (referring to desktop):

Let's go back to the main topic though. More "reorg" reports are appearing. It's that euphemism again.

Microsoft Ready To Reorg Marketing Big Time, Analyst Says

Evidently, Steve Ballmer, Microsoft's chief executive officer, has had enough. Maybe that's why Microsoft in February appointed David Webster chief strategy officer, and Gayle Troberman chief creative officer, -- both new roles -- after somewhat of a reorganization earlier this year.

Webster was previously general manager, brand and marketing strategy. Troberman serves as general manager of advertising. Both report to Mich Mathews, senior vice president of corporate marketing. The new appointments and strategy will allow marketing team to work across campaigns to unify the message for the Microsoft brand.

Microsoft's mobile business is a disaster and it's not entirely clear who will take over and how. There is a big vacuum. Novell had similar problems in the channel before John Dragoon took over it, just like Steve Ballmer does in this case. It's not just a couple of departures because this chain goes a while back (Enrique Rodriguez [1, 2] for example).

Might Microsoft just cancel some more of its products? It seems possible, based on CRN.

Microsoft has problems in its mobile business, but it's clearly not afraid of jettisoning the old way of doing things and starting over with an entirely new approach.

Microsoft tried "an entirely new approach" with Sidekick and with "KIN". It failed miserably. IDG has the following new articles:

● Microsoft Admits Windows Phone 7 Slide Was Wrong

● Microsoft Risks Becoming Mobile Market Also-Ran

Redmond has its share of problems in the rapidly evolving consumer tech market. While Microsoft continues to dominate in its two core, and highly profitable, software markets with Windows (desktop operating systems) and Office (productivity software), it has failed thus far to match the success of key rivals Apple and Google in the mobile arena.

● If You Have Multithreading in Windows Phone 7, Do You Need Multitasking?

Microsoft’s decision to block multitasking for Windows Phone 7, at least in the initial release, unleashed complaints from some developers and pundits. It was a step backward! The Apple-fication of Windows Mobile and so on.

With multitasking lacking, how can Microsoft even compete on technical grounds?

Here is another new report: "Microsoft May Cut Zune Streaming Music Price, Executive Says" (is anyone even using it?)

Microsoft Corp., the world’s largest software maker, may cut the monthly fee it charges for streaming music on its Zune portable player, senior product manager Terry Farrell said in an interview.

CNET's corner for Microsoft boosters ("Matt Rosoff is an analyst with Directions on Microsoft") has this headline: "What should Ballmer do with Zune?"

“Some sites are trying to personify the problem by naming Ballmer, but it's not a one-man failure.”Zune too is a dead/dying product, but "KIN" might depend on it now. Looking around at some other devices, Vista 7 keeps failing in tablets [1, 2, 3] and this new article states: "Microsoft: No Windows Phone 7 Tablet Devices Planned"

So how are they going to compete?

Some sites are trying to personify the problem by naming Ballmer, but it's not a one-man failure. In fact, a lot of people in this team have been shown for their abuses. Getting rid of Ballmer, as some new article suggests, would not solve the behavioural problems of Microsoft. It's a cultural issue in a changing landscape that injures this monopolist and leads to layoffs.

One author asks, "Why Does Steve Ballmer Still Have a Job?" [via]

Sure, Microsoft still has a dominant market share in PC operating systems and office applications, but it’s managed to take that massive competitive advantage and waste it everywhere else over the past decade.

Ballmer's mistake is that he is a bully and a liar. He even shows this, unlike Bill Gates who was doing the same things but at least hiding it. Here is Ballmer spreading the counterfeiting lie that Microsoft uses whenever it's down. Ballmer did this last week (original report here).

Microsoft CEO Steve Ballmer is scathing of ongoing, rampant piracy in China in his latest comments, saying: "India is not perfect, but the intellectual property protection in India is far, far better than it would be in China." He added that "China is a less interesting market to us than India, than Indonesia".

Ouch.

These comments come on the same day that US Secretary of State Hilary Clinton and Treasury Secretary Timothy Geithner are actually in China, which may put pressure on both Governments to address this issue once again, as it potentially loses Microsoft, and numerous other US companies, hundreds of millions of dollars.

There is a lot of poor reporting, which is not analytical and is just echoing Microsoft's use of words like "piracy", along with unsupported, un-backed claims about "damages".

"It's easier for our software to compete with Linux when there's piracy than when there's not."

--Bill Gates

Extreme sensationalism is being used by InformationWeek ("Microsoft Says China Piracy Killing Thousands Of U.S. Jobs"). Microsoft is just chasing old business models where this notion of counterfeiting still exists. It's all about artificial limitations:

Microsoft says a Parallels virtualization product, aimed to help users upgrade their systems to Windows 7, will cause users to violate their software licenses in most cases, according to CNET.

Microsoft should sell services, not licences to merely run some binaries. Digital abundance cannot be fought against for much longer. That's why Microsoft's Encarta died and Microsoft's software may be next. Windows is no longer free (gratis) in China and this is probably going to drive China to GNU/Linux even faster. Microsoft was suing Chinese businesses for using Windows, but it's bouncing back at Microsoft's face:

Internet café fires back at Microsoft over lawsuit

A Chinese Internet café group being sued by Microsoft for using pirated software is accusing the US firm of attempting to shore up money in its intellectual property lawsuit.

The accusation comes about two weeks after Microsoft said it would nearly triple its compensation claim in regard to the café group's use of pirated Windows operating systems, bumping the damages sought to 1.58 million yuan ($231,000).

This Internet café is likely to just use GNU/Linux after the incident. The government in China has even begun encouraging this, but it's claimed that there is in-built surveillance in the distribution/s the Chinese government approves/endorses/enforces. There's nothing GNU/Linux can do to prevent them from doing this, but users can fetch/compile their own distribution of choice if they are permitted by the totalitarian regime. Microsoft is "enabling tyranny" in China and Ballmer defended this policy last week as well. To Microsoft, it's still all about money. ⬆