I'd actually heard rumblings about this right before the Xbox One launch, but I just dismissed it as fanboyism, and wishful thinking from some of the more colorful Sony crowd, but this is the 3rd time I've heard about it in the last 4 or so months.
I can understand Bing, that's just been fail since it arrived. Surface I thought started turning it around recently, but it's in the red atm. The Xbox bled money when it first game out, I thought recouped it with the 360, then started bleeding it again for the Xbox One and is currently falling behind to the Playstation 4.
What do you guys think?
http://www.washingtonpost.com/blogs/the ... d-surface/
I can understand Bing, that's just been fail since it arrived. Surface I thought started turning it around recently, but it's in the red atm. The Xbox bled money when it first game out, I thought recouped it with the 360, then started bleeding it again for the Xbox One and is currently falling behind to the Playstation 4.
What do you guys think?
http://www.washingtonpost.com/blogs/the ... d-surface/
Two influential Microsoft shareholders have been pushing the Redmond software giant to abandon what they view as non-essential product lines so that Microsoft can focus on its core strength: selling enterprise software to businesses. Nadella has spent the last seven months running Microsoft's $20 billion server and tools division, so he could be ideally suited to manage that transition.
Ballmer envisioned Microsoft as a "device and services" company and reorganized the company last year to better execute that vision. But now Ballmer is out — though still on the board — and with a new CEO come fresh questions about the fate of consumer tech at Microsoft.
Microsoft's Windows division has been facing shrinking profits; last year, the unit pulled in a net $9.5 billion, down from $11.6 billion in 2012 and $12.3 billion in 2011. Company filings suggest that the drop is largely attributable to declining demand for Windows among consumers, even as sales of Windows to businesses remain strong. The same division also reported a $900 million loss on unsold Surface tablets. The online services division, which oversees search engine Bing, reported a loss of $1.3 billion in 2013 — less than the previous year but still in the red.
Some investors have suggested that Microsoft spin off its money-losing consumer products and focus solely on the enterprise. Even the Xbox deserves to go, Paul Ghaffari, the wealth manager for Microsoft co-founder Paul Allen, said last year.
But Robert Bontempo, a management professor at Columbia Business School, is skeptical that Nadella will be able to chart his own course on the matter. "You're asking for Nadella to walk into a board meeting and look Ballmer and Gates in the eye and say, 'The decisions you've made over the past two decades are a mistake,'" said Bontempo. "That's going to take some serious strength of character."
ValueAct [holds 0.8% shares of MS] has been a critic of Microsoft's strategy and — like Ghaffari — wants the company to consider shedding some of its investments in consumer technology. ValueAct also reportedly wants the company to unbundle its offerings, such as Microsoft Office, so that they can be used on other platforms besides Windows.
"Microsoft has historically had a supportive board," said Bontempo. But with the addition of Morfit [representative of ValueAct], Bontempo said, "this is going to be an extremely toxic environment ... There's going to be a lot of tension."
That tension could come in handy for Nadella, who will need political cover to pursue broader changes at the company.
But there are some early signs that Nadella is interested in continuity with his predecessors rather than a radically new strategy. The Indian-born engineer asked — and got — Gates to step away as chairman of the board so that Gates could advise him on products and devices. Whatever Gates's qualifications for this job, it's clear Nadella recognizes his own weaknesses when it comes to consumers. It's also suggestive of Nadella's faith in the "device" part of Microsoft's "device and services" mantra.
Though no longer chairman, Gates will remain on the board of directors. Analysts say the programmer-turned-philanthropist has exerted a strong influence at Microsoft behind the scenes, even as he's kept a low public profile at the company.
