Steve Ballmer was an underrated CEO

The specific technologies that were successful is irrelevant. Microsoft has and continues to invest in nearly every computer related technology that may come around the corner or they got late on.

The problem with Microsoft was everything went through Windows. The entire company was designed to promote Windows.

This was the fundamental flaw with Microsoft that Nadella changed. He quickly not just made Windows just another part of Microsoft’s business, to a great extent he actively devalued it.

The fact that Ballmer invested in Azure, etc before Nadella would all be irrelevant because under Ballmer Azure would have remained a red headed step child to Windows, so it’s unlikely to have seen much success under him anyways. Same goes for pretty much everything else Microsoft is doing right now.

Granted, Ballmer made the mistake of putting Terry Myerson, who headed up the failed Windows Phone effort, in charge of Windows but that's another story.

I keep hearing praise for Nadella but all he is doing is alienating a lot of customers with his terrible decisions.

Google realized that if they want to stand a chance in catching up to the iPhone, they need to shove android in people's faces, and lure in devs.

Microsoft entered the game (WP8) when android already had a foothold, making it even harder. They started with a mostly empty app store, and while they were clever enough to make sure the most widely used apps would be available by effectively bribing those big companies to develop windows phone apps, they pretty much gave the middle finger to all the small indie devs. I remember when android 2 was around I just downloaded android studio and played around a bit, making a simple scrobbler app for my Samsung device. Sideloadong was king back then, but even up to this point I had to pay zero bucks and jump through no hoops to try this out. I don't remember what putting this on the Google play store would've cost me back then, but not much.

The windows phone experience was: sign up for a dev account to download visual studio with WP support. Start up VS, asked for your account again. I think in the beginning this was actually a paid account, probably because apple did it that way and again, you're Microsoft so act like you already own the place. But later in they reversed course here at least and you could log in with a free account.

So you start building a small test app and then you want to run it in the shipped emulator but surprise! Your laptop only shipped with windows 8 home which doesn't include virtualization features, so tough. So the only way to test the app was to push it to your phone, which was another overly complicated mess where your phone had to be in developer mode and you could only "sideload" one app at a time, iirc. The result was an app store with mostly tumbleweed. Whatever small utility or gimmick you wanted, when on android a search would give you dozens of results, on WP, there was maybe 4, and 3 of them almost unusable and abandoned.

I'm not blaming ballmer for having decided this specifically, but holy hell how did this pass any meetings with the higher-ups? You're uo against two tech giants who have a head-start of a few years, you try to get people to switch to your platform by being pricey, having no apps, and being hostile to smaller devs?

The same played out with all the phone makers, who had to pay license fees for WP when android was free to use. Guess which phones were cheaper in the end. And when Microsoft bought Nokia, Nokia had the unfair advantage of getting WP for free, making it even less attractive for others to compete in that sector.

And let's not get into the botched Nokia acquisition because I also don't think this can be blamed on ballmer that easily, or primarily.

Very good point, but please stop using this phrase.

This is something that Microsoft still struggles with. Some things have improved, but a lot of the dev experiences on the Microsoft side are still cumbersome and not aimed at small time devs.

My experience here is with browser extensions and publishing these for both old Edge (pre chromium) and the newer Edge. The entire publishing dashboard is/was overly complex and assumes you are either a single person or a big organization with (azure) AD set up. With Mozilla AMO you can just add individual developers to your extension by mail, and with Google it is as easy as setting up a group.

With browser extensions specifically (and Edge as well) you can also clearly see where it is still a dedicated motivated internal team setting things up and where things were handed over to more general teams and support was also outsourced to somewhere else.

Anyway, my main point is that even now, many years later, Microsoft still struggles in this area making me think this is more fundamental to the company culture and way of operating.

The user hostility have made me move me to Linux systems.

...and nowadays Windows is designed to promote their cloud subscription services while local features get axed.

If Google is not allowed to link directly to Maps, there is no way Microsoft can be allowed to advertise their paid services everywhere in their OS.

You also need a plan. How would Windows Phone displace either Apple or Android?

Windows doesn't even make up 1/5 of their income, and in contrast a bit over half of their income is Office and Cloud*

The real money is in enterprise IT and cloud services. The average consumer doesn't keep their prebuilt computer long enough to buy another version of the OS. They don't need to keep a niche within a minority (privacy-oriented customers who would buy an OS) happy with Windows to continue drowning in revenue.

It seems like he has done a fantastic job, if the goal was to decouple their fortune from Windows.

*Based on googling and a lazy reluctance to dig through their earnings calls

They've been quite clear about this. The one platform/OS was Windows. The new platform/OS is Azure/Cloud. It's almost like saying Google doesn't make any revenues from search, only from selling ads.

Sure, the investment was quite sensible, although I don't think they can change it for their ambitions too much.

Microsofts conquest against open source was of course a wrong strategy of Balmer.

Azure has good parts, auth with Microsoft is perfect for software in the office world and goes beyond the usual LDAP Active Directory. But on the other hand it is quite slow to a degree that it really affects productivity. The damage is probably in the billions/trillions for their many customers. That is the real price of office cloud versions.

cool, how much money have you paid to Microsoft to use those?

Except for Github (which they bought, by the way) probably not much. And github has some serious competitors (Gitlab which is just great and to a lesser extent, bitbucket).

For many people in the 90ies it was like the brand "AOL" was a synonym of "internet".

[1] context: https://www.youtube.com/watch?v=kX8oYoYy2Gc

If Windows phones would have had an emulated x86 mode, many people would have bought it instantly due to the momentum that now steadily decreases.

There can be solid business revenue if you are "just" #3 and the experience with development is very valuable. Although it is true that Microsoft and hardware has always been turbulent, with partners or without. Sometimes they simply created the best products in their class with a lot of margin, sometimes they basically sold scrap.

So I see VS Code as a slight moat, also in its promulgation of dotnet-isms. So I think VS Code drives some revenue Microsofts way in a pretty diffuse but real way.

I was at Microsoft for the last couple years of Ballmer and the first few years of Nadella. He definitely did change the company and I remember at the time feeling that he handled the change really well, but from where I sat he spent the first part of his tenure evolving Ballmer's final push to move focus from Windows to developers. Everything Microsoft did prior to LLMs was to bring developers over, from VS Code to GitHub to WSL.

Now the company seems fully baked I to LLMs with everything they do chasing that. It would even make sense if the developer push was driven in part by the need to build up training sets for the eventual LLM work, though I really have a hard time believing that Microsoft was so well ahead of the game that they started grooming developers to provide data more than a decade ago.

they are way better at buying and selling software than ideating and creating it.

successful microsoft products are acquisitions.

Them along absolutely everyone else. ChatGPT was an iPhone moment.

MS Office is the real moat, as is Windows XP/7. Everyone use MS Office because Google Slides/Docs/Sheets is a silly contender to the MS Office suite. Windows XP/7 because that's what a huge percent of the human population using computers grew up on today, so they're most familiar with it. And let's be honest, that's not going away, even as MS enshittifies Windows 11, simply because no Linux build can apparently mirror the Windows XP/7 UI (for some reason, not even Mint) while Apple is hell-bent on doing its own thing on the sidelines.

The day MS breaks Office suite is the day Microsoft goes down, but that's unlikely because the current crop of devs at MS don't even know how to get started. Microsoft could literally not do anything and still make tons in revenue.

Windows already has a de facto monopoly in desktop OS. They don't need to be nicer and give it for free to get more market share. They have all market share they every will.

Exactly this. Today I can switch from Linux to macOS to Windows and 99% of what the average users does can be done in the browser. Worse, in a smartphone.

So it was very smart of Microsoft to realize Windows was going to stop being a hard requirement for most use cases.

It’s cute that we now have image and video gen AI. Also we have now Turing test passing chat bots (Id say). But although they are very impressive, and I know lots of people who use them for various tasks, I haven’t seen a “killer app” yet.

For iPhone the killer app was making calls. It was the best phone you could get. Then it had apps. It was undeniably better.

LLMs are good at a lot of things, but they don’t seem to excel any particular task - yet. I’m not sure they are a revolution yet.

I’d say they’re more of Macintosh moment. A hugely useful technology no doubt - but useful for what exactly? For Mac it was desktop publishing.

Had they made it open source, it would have been a different story with Android and Windows Phone fighting to win the OEMs.

But that ship has sailed. Unless there's a paradigm shift in smartphones (doubtful), we're stuck with Android and iOS for the foreseeable future.

The killer app on the iPhone was not "making calls" — I suspect instead it was Safari, the other 1st party apps, the touch screen and the slick integration of all of that to make it a no-brainer device that even my mom and dad could use (they were approaching their 70's when the iPhone debuted).

Your analogy that ChatGPT (or LLMs generally) are more akin to the Mac feels close to the mark to me. Your comment about the Mac's killer app, desktop publishing, suggests that LLM's killer app will follow, just hasn't arrived yet.

The analogy is a little shaky though since, some would argue, it was the laser printer (plus the Mac) that kicked off desktop publishing.

In 90's and 00's "everything Windows" made loads of sense for a company so being hard on any competition was the right thing. Also I don't see people saying it about MacOs you cannot do software to this day for MacOs or iOS without having actual device and operating system from Apple.

What changed for MSFT was that operating system in 2010's and forward became irrelevant. Cloud is where the money is and now MSFT is "all in Azure or nothing company", entire company is designed to promote Azure and O365.

To properly promote Azure they need to run Linux on that cloud and they need mind share of developers that will develop products using Azure - earlier they could force developers to use Windows because that was where software was running.

That pain existed under macos and linux as well, but to such a lower extent as you could do so much more locally.

While Jetbrains does it too, VSCode being strong guarantees it stays a viable path in the future.

We are a mostly Windows+Linux shop, but we need Macs to build and test iPhone apps, investigate issues with Safari on iOS, do certain iPhone support tasks, etc.

For LLMs, the "killer app", for me, is already here. And there's two of them right now.

The first is the chatbot (like chatGPT or Pi or Claude). Having someone who you can just ask for any kind of information, from book recommendations to hypothetical space travel situations to advice about birthday gifts, and to get answers that are better than what I'd get from 90% of real humans, is huge to me.

The second one is the coding assistant, in my code copilot. It has made me at least twice, if not thrice as productive as I was before.

Windows 10/11 does a really bad job at emulating XP/7 UI. It is about as foreign to XP users as Debian or whatever.

I made a XP VM the other month to run some insane software I had to run at work.

I felt so much at home. It was so nice. Everything was awesome. The control panel was awesome. The distinct buttons were awesome. The start menu was awesome. The 'My computer' at desktop root was awesome.

All in muscle memory, still.

Then I am back out to 10 and can't figure out where my app shortcuts are without knowing their name or what of the 3 or 4 different control panels I am supposed to use.

I think, up to a point, and especially in the US where antitrust is pretty lax, it's a very safe investment to just buy other already sucessful companies.

Nice analogy. My sense of things is that the iPhone was a win for all of its users. While ChatGPT may make some/many of its users more productive (see Ethan Mollick's work), the driving force behind 'AI! AI! AI!' in the corporate world is an executive hope that complacent AI can replace expensive people. That's not a win for all of its users.

What?

Making calls was the killer app for Nokia brick phones in the late 1990s.

The killer app for the first generation of smartphones (Windows Mobile, Blackberry, etc.) was email and calendar.

The killer app for iPhone and Android was the capacitative touchscreen combined with the ability to run 3rd party apps (yes, I'm aware there was an extremely brief moment in the history of the original iPhone where Apple opposed this), and 3G mobile internet (yes, again, I realize this came a year after the initial iPhone release). Mobile web browsers and Maps/GPS got the party started.

And then further the phone was a distraction for all of the other teams who were expected in someway to provide some software that would work on there as well as android and iPhone.

I agree that the phone would have been great … at some point. But in an MBA world, it was a liability

It's also a bit strange that the success of Windows was based on the ubiquity of clone PCs rather than single vendor, yet Microsoft instead tried to follow Apple here and let Google become the "clone PC" (Android phone) OS supplier.

I can't fault Balmer for at least trying to get a slice of the pie by belatedly putting out me-too products like Bing and Azure, but it's precisely because of Microsoft/Balmer missing the importance of the internet that it was put in position of being follower rather than leader.

Microsoft is really a bit like Intel in having totally dominated a product category, but then having missed on most of the major industry trends they might have been expected to lead on (for Microsoft, internet, mobile and AI; for Intel mobile, gaming and AI). They are lucky to have had a second chance with Nadella who seems much more in tune with industry trends, willing to rapidly pivot, and who seems to have made a masterful move with their OpenAI partnership in buying time to recover from an early lack of focus on AI/ML.

I would not say it was by any means one or the other CEO "insightful" choice but it was more of market choosing on its own. Microsoft had to make own cloud or die that was the choice and better to put loads of investment in that. Ballmer started Azure because Amazon of course was first and Google did the same so Nadella was just playing cards he was handed by the world.

Coding doesn't do that, because the demographic interested in coding is not huge compared to the rest of the population.

Chatbots don't do it either because they're too unreliable. I never know if I'm going to get a recommendation for something the LLM hallucinated and doesn't exist.

There's also huge cultural resistance to AI. The iPhone was perceived as an enabling device. AI is perceived as a noisy, low-reliability, intrusive, immoral, disabling technology that is stealing work from talented people and replacing it with work of much lower quality.

It's debatable how many of those perceptions are accurate, but it's not debatable the perceptions exist.

In fact the way OpenAI, Anthropic, and the others have handled this is a masterclass in self-harming PR. It's been an unqualified cultural disaster.

So any killer app has to overcome that reputational damage. Currently I don't think anything does that in a way that works for the great mass of non-technical non-niche users.

Also - the iPhone was essentially a repackaging exercise. It took the Mac+Phone+Camera+iPod - all familiar concepts - and built them into a single pocket-sized device. The novelty was in the integration and miniaturisation.

AI is not an established technology. It's the poster child for a tech project with amorphous affordances and no clear roadmap in permanent beta. A lot of the resistance comes from its incomprehensibility. Plenty of people are making a lot of money from promises that will likely never materialise.

To most people there is no clear positive perception of what it is, what it does, or what specifically it can do for them - just a worry that it will probably make them redundant, or at least less valuable.

I thought it was a bad mistake to bow, kneel and surrender the smart-phone market space. Today, I am fully convinced it was a critical, life-threatening mistake as more folks move to the Apple ecosystem - buying both iPhones, Macbooks and Apple Watches because of a fully-integrated ecosystem. The funny thing it was Microsoft who popularized Continuity, but after they gave up due to lack of willpower, it was Apple who took over, executed better and won. Really frustrating to see the state of Windows OS and device market today.

I'd be pretty intrigued but they're still struggling to nail the tablet market imo.

It's quite clear to anyone who's tried it (at least since Win10), that Microsoft does not care at all if you pay for Windows.

A Blackberry moment, perhaps. There appears to be something there, some groups are latching onto it and deriving value from it, but we haven't yet seen the iPhone come along to transform that initial interest into something that sweeps the world.

Old guy here, but it feels more like a Netscape moment than an iPhone moment. We'll end up with our pets.com of the LLM age, the whole thing will implode, and the few companies that were actually doing useful stuff with LLMs will survive.

With Satya he had much broader vision.

Nadella de-prioritizing Windows was the right thing to do for the business because it had a monopoly, so after PC sales saturated the market the best they could achieve was treading water, but also because the strategy of tying everything to Windows assumed the Windows team would continue to execute well and these things would all be mutually reinforcing. In the 90s Windows did execute well but by 2010 that had stopped, and so the tying strategy also had to stop. A better CEO than Ballmer could possibly have turned the Windows situation around and avoided the need for the disconnection, but instead it was left to drift.

with enough money, you can fund your investments to strategically take down every mom and pop.

amazon can’t take on every consumer vertical simultaneously, but they used their funds to drive diapers.com into the red, because as a parent you’re scrwed either way and comparing food to diapers, will buy the cheaper diapers instead of the cheaper food.

amazon wanted diapers.com

diapers.com said, we’re good this isn’t a billion dollar enterprise, but it pays the bills.

amazon bought it after making sure they couldn’t actually use it to pay the bills.

I don't think they missed AI boat. Their culture would not have allowed them to create OpenAI, but they were fast to leverage their moat and push AI into their office and windows suites and azure. Hell, they are even trying to catch up with search using AI and are trying to push Azure for various AI startups and stuff.

MSFT rarely leads on anything - arguably even Windows is something they created being inspired by something else, while not going deep into hardware. Which what became the undoing of IBM. They are much better at being second. Azure - they were behind AWS, but not as late as Google.

I bet with Satya, even with mobile they would have grabbed Nokia much earlier and pushed Windows Mobile before Android took off.

AWS missed AI boat though.

That would have necessitated open sourcing Windows

For a while, all OEMs had 3D TV models, and it seemed their ubiquity was inevitable by sheer force of manufacturers ramming the products down consumers throats (like AI). The only debate was over which solution was superior: active or passive. 3D movies are still with us, so the tech didn't completely disappear - only from the consumer space.

What comes back to the old data-inefficiency of machine learning. There hasn't been visible improvement on this, and it is looking more and more as a fundamental limitation of AI.

You nailed it! Having spent significant time (as low-level minion) under both Ballmer and Satya, it certainly feels like the old Ballmer-time meme is coming back with the AI!

Also with it, the forced-curve ranking that Satya disbanded is being re-instituted under a different name.

I don't know the contractual basis of the relationship, but it seems this has to be pretty long term and strategic. A significant part of the competitive advantage of one AI vendor over another comes down to inference cost, which in turm comes down to customizing the model architecture for the hardware it is running on, which in this case either is, or will be, Amazon's home grown Graviton processors.

I don't know if Satya predicted it or not, but their push into open source and Github acquisition were very helpful for AI.

"The killer app is making calls" is me quoting Steve Jobs on the Iphone 1 presentation. I get that it doesn't sound true now, knowing all we can do. It's true Iphone was a lot more, but that was his conviction at the time, and I think it makes sense. Their aim was to make the best phone in the world.

I also think yeah, it is a bit like Macintosh in the sense that this is a new general purpose technology, and I'm not sure we've really figured out what's going to the most transformative about it yet.

anyone who really wanted a windows license could get one, but most of the staff used Unbutu, with some AD and other stuff on the backend

I do remember the initial visual voicemail implementation being very appealing of course. Especially since it seemed they had enough leverage to get the carrier/s (just one at the beginning) to do whatever they needed.

These days it seems like anybody can throw "AI" into their company name (even if it's complete BS) and it has the same effect as adding ".com" to a company name did in the late nineties.

IMHO AI is a .com-like hype cycle that's orders of magnitude larger and more irrational than anything that happened post-iPhone.

That's not to say that there aren't good businesses in there (the same was true of .com, of course), but there's a lot of junk that's getting a lot of money thrown at it.

I don't agree with you, and I believe the Ballmer era did wonders for Windows and was a turbulent period. The new era of MS now is quite stable because of this.

Of course it could be better, but of all companies it seems that Microsoft managed to monetize best - sice copilot gets integrrted to the MS Office package

I think we agree. All I meant is, yes LLMs seem to do a lot of things, but nothing quite perfectly. Yet.

Even now, Microsoft has a great advantage over Google and Apple in getting meetings with the procurement people in those organisations.