Monthly Archives: August 2013

Windows of change at MSFT – Ballmer announces his retirement

So the winds of change, or should I saw the Windows, of change are coming to Microsoft. Today Steve Ballmer, bombastic and often demonized, CEO of the software giant will be leaving once his successor is found. Clearly the changing of the guard at the technology giant.

As Ballmer points out in his internal memo (see below), he points to some

After hearing that the Surface and Bing weren't doing so well

After hearing that the Surface and Bing weren’t doing so well

impressive statistics of the company when he started and how he is leaving it. Of course he isn’t the only driving force behind this…a certain Bill Gates also has a few finger prints on this success.

Many who have been in the technology world have their opinions on the MSFT CEO. In a nutshell, to me he was an arrogant and pompous blow hard who thought he was the greatest thing since sliced bread. Then again are those characteristics so foreign for someone running one of the largest and most dominate brands in business? From what I have heard, from anecdotes, he appears to have been an inspiration to some of his employees, wasn’t a tyrant (for the most part) and was able to guide Microsoft effectively enough to maintain its lofty status. So net net I would say he was a good CEO for Microsoft. Did he make mistakes and miss opportunities? Of course. But which leader bats 1.000? None.

So now what for Microsoft?

  • Bring in a CEO from outside. Ballmer had been there for a long long long time. Get some fresh blood.  It does not necessarily have to be a tech giant either…why? Because…
  • This is a great time to “break” up the band. Microsoft, and it sounds like they are moving in that direction, is shifting focus. Well take the opportunity to bite the bullet. Does not mean sell off parts, but rather start managing MSFT much like a GE. Have separate and autonomous divisions that might have nothing to do with one another. For example: split off a corporate division, one that could restart talks with acquiring an SAP type company. MSFT already does a lot in areas such as supply chain and business intelligence. Make this a separate group. You could potentially have this division manage services – the consulting arm for MSFT. Spin off  consumer division, stick the XBox in that group. That group would be ideal to look at acquiring assets such as Yahoo! as it almost did a while back. Create a mobile division – go after the likes of Android and IOS – allow them to really push the Surface see what is there. Maintain a Windows and office division. Just milk that cash cow and prepare to continue battling Google for control of the desk top.
  • By doing this the new CEO would be looked at to manage these disparate groups and divisions. Much like Jack Welch at GE. The new CEO would be asked to check her ego at the door and allow these sub groups to run autonomously, at times acting as peace maker or ensuring the buck stops with them. Innovation and new directions would be expected to come from the sub teams, not from the top.
  • Microsoft needs to do something to shake things up. They are woefully behind when it comes to devices (tablets, phones etc). They have no social play nor are they in the app game. Their assets such as Bing, Hotmail, Surface and XBox do not seem to be able to crack the nut of Google, Apple, Facebook, Twitter or even capture buzz like did the Wii.

Not sure if this will happen. There were rumblings that Microsoft had debated spinning off Xbox in a consumer centric group. Time to go all in with that concept and allow the parts compete.

The parts are more nimble than the whole.

Memo from Ballmer:

I am writing to let you know that I will retire as CEO of Microsoft within the next 12 months, after a successor is chosen. There is never a perfect time for this type of transition, but now is the right time. My original thoughts on timing would have had my retirement happen in the middle of our transformation to a devices and services company focused on empowering customers in the activities they value most. We need a CEO who will be here longer term for this new direction. You can read the press release on Microsoft News Center.

This is a time of important transformation for Microsoft. Our new Senior Leadership team is amazing. The strategy we have generated is first class. Our new organization, which is centered on functions and engineering areas, is right for the opportunities and challenges ahead.

Microsoft is an amazing place. I love this company. I love the way we helped invent and popularize computing and the PC. I love the bigness and boldness of our bets. I love our people and their talent and our willingness to accept and embrace their range of capabilities, including their quirks. I love the way we embrace and work with other companies to change the world and succeed together. I love the breadth and diversity of our customers, from consumer to enterprise, across industries, countries, and people of all backgrounds and age groups.

I am proud of what we have achieved. We have grown from $7.5 million to nearly $78 billion since I joined Microsoft, and we have grown from employing just over 30 people to almost 100,000. I feel good about playing a role in that success and having committed 100 percent emotionally all the way. We have more than 1 billion users and earn a great profit for our shareholders. We have delivered more profit and cash return to shareholders than virtually any other company in history.

I am excited by our mission of empowering the world and believe in our future success. I cherish my Microsoft ownership, and look forward to continuing as one of Microsoft’s largest owners.

This is an emotional and difficult thing for me to do. I take this step in the best interests of the company I love; it is the thing outside of my family and closest friends that matters to me most.

Microsoft has all its best days ahead. Know you are part of the best team in the industry and have the right technology assets. We cannot and will not miss a beat in these transitions. I am focused and driving hard and know I can count on all of you to do the same. Let’s do ourselves proud.

Steve

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Filed under Current Events, Game Console, IT, Smart Phone, Tablet

Why your supply chain needs to be concerned about Egypt

Many in the West expressed some irrational expectations when the “Arab spring” was happening. To many, it was looked upon as a wave of democracy that was about to sweep through much of the Arab world. And with it the promise of greater cooperation with the West? At least that is what the pundits expected…or hoped for. I will not dive into the politics of the revolutions, maybe another time. One thing we can take out of the Arab spring is that the region remains volatile. All one has to do is watch what is currently taking place in Egypt. After the election of Morsi, there was an uneasy tension in the nation. The recent actions of the military to both over throw Morsi and now crush any protests, has made Egypt the focus of much hand wringing. Clearly this has become a very unstable and dangerous situation.

And your supply chain needs to be concerned. Why? Two reasons.

  • The most obvious one is that 8% of global trade, and probably a piece of your supply chain, passes through the Suez Canal. Any historians will remind us that the Suez has been shut down in the past due to conflict, nationalized by Egypt, attacked by Franco-British troops and blockaded by the Egyptians themselves. By no meanSuez_Canal-600x0s do I believe this will happen any time soon…but who is to say the violence and turmoil does not impact the operations of the canal. What if it gets shut down for a week, or a month? In our world of lean supply chains what if goods cannot pass through the canal?
  • The second is the potential spill over the violence may have in the region. Egypt has always been one of the Arab nations that has steadied relations in the area with Israel, okay not always but recently. Yes I am aware of the Yom Kippur and Six Day wars. If Egypt spins too far out of control what will this mean for the region? Will the turmoil carry over, destabilize the region. Oh and let’s not forget this region provides the bulk of global oil. That could have an impact on your supply chain.

So what can one do? Not much when it comes to what is happening on the ground. That is in the hands if governments and the international community. What this does remind us and our supply chains, is that we are still at the mercy of physical choke points – the Suez. As well as geopolitical events. These factors must be part of any risk management scenario. When it comes to supply chains we think about a promotion that does not work, or inventory misplaced, or not having the right tanker truck at the terminal – all variables we have some control over. Yet it is these types of events – geopolitical or acts of God – that also have to be taken into account. While we cannot control them, we must plan for contingency plans to deal with them. If and when they happen.

All the software, big data, in memory computing etc etc have made supply chains more nimble and more powerful. But do not neglect your history, political science and geography when it comes to your supply chain.

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Filed under Current Events, Supply Chain

Blackberry the death knell

No surprise, the latest news from Canada is that the once mighty smart phone manufacturer is exploring strategic “options.” Not really a surprise. Since the rise of Android as well as IOS, Blackberry has seen its market share take a nose dive. Add to the mix Microsoft who has resurrected its own mobile business and you have the perfect storm to seeing Blackberry taking a nose dive.

Another major shift that has taken over the smart phone market is the move away from email. Blackberry made hay with the best email platform, really the first provider who came out with email. For some time there were others in the space like Palm with their Treo (I had one before I migrated to the Blackberry). But Blackberry cornered the market by providing a secure and powerful email platform combined with handhelds geared specifically to email. Yet with the rise of SMS and social media (twitter, facebook, instagram…) we have more communication vehicles outside of plain old email. Combine this with our smart phones becoming our hub for banking, entertainment, gaming, travel, news etc etc and you have the perfect storm for a handheld designed for email but not for much more.

BB10...the last stand

BB10…the last stand

So now we have reached what feels like a final chapter in the history of Blackberry. It felt like the release of

the Blackberry 10 was a last gasp effort to try and right the ship. While it showed some early mild success, that path was short lived. So who would want to acquire the Pontiac of the smartphone?

I do not think any company will look to acquire Blackberry as a complete entity. Here is a list of the assets available – click here to read WSJ piece. I think that a private equity firm will swoop in and acquire the firm.

  • Leverage all that cash to pay themselves a nice dividend as well as leverage the company to fund the acquisition.
  • I could see BBM set free, allow them to try and compete with the other IM platforms. They already have a decent following and by all reports have a good system – we know it is secure!
  • The Blackberry 10 platform is not going to be acquired by MSFT or Nokia or Samsung…but why not Oracle or…gasp SAP? Why? These two technology giants could leverage the mobile platform to tie into their supply chain solutions, ERP, CRM or various other applications. One thing that no one would question about Blackberry is their security. Seriously, when secret service agencies such as the Saudis cannot hack your system…you have a good security system.
  • The hardware might be sold to the lowest bidder…may
    Biding their time...

    Biding their time…

    be someone who is looking for ready made hardware to get into 3rd world markets. But that will not be a cash deluge by any means.

  • The patents might be hidden assets that companies could be interested inpicking off.

Unfortunately for Blackberry the vultures are circling. It is a matter of who purchases the carcass and strips down the assets and sells the parts. Feels like what happens with stolen cars and chop shops.

How the mighty have fallen.

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Filed under Current Events, Mobility, Smart Phone