IBM and Microsoft
As I was watching all of those Watson ads on TV this weekend during the Masters golf tournament, I thought to myself “well look at that, IBM has built the first big AI brand.”
And that is coming from a true dinosaur of the tech business.
Even more impressive in many ways, is what Satya Nadella has done at Microsoft. He slayed the Windows Everywhere albatross that was holding Microsoft back for most of the post Gates era and has made Microsoft relevant again in the world of tech. Windows is enjoying a resurgence, the Office app suite is finally and successfully moving to the cloud, and Microsoft’s cloud offerings are strong and getting stronger. The stock price tells the Nadella story as well as anything else. Here is how the stock has performed since Nadella took the helm of Microsoft in early 2014:
So what’s the point of this post? Well I think it’s worth pointing out that older tech companies can be relevant and competitive in the age of Google, Amazon, and Facebook. It just takes good leadership and the right strategy. As is the case with all companies.
IBM is a master at productizing technology and marketing it in ways that maximize customer adoption. That is their core strength. They do it over and over again, across various technology cycles like e-business, blockchain, AI, etc.Microsoft’s core is very engineering-driven, and backed by deep research. They are very patient and systematic. They keep trying if they originally fall short of market acceptance. Actually, I’m currently liking Outlook better than Gmail on my smartphone especially their integration with Calendar, Contacts and Documents; and was thinking of deleting Gmail as an experiment to see if I can live with Outlook only.Contrast to HP who has had bad leadership since Lew Platt left in 1996 and continues to disintegrate into oblivion.
How about HP’s acquisition of Nimble Storage…? Is that a smart move considering companies like Amazon AWS, Google Cloud, etc…? Just curious about your thoughts.
I’m not very familiar with that one, but one good step doesn’t negate 20 previous bad steps.
My recollection is that mobile Outlook was an acquisition. I have to use desktop Outlook at my work and find it nearly unusable. I just stopped managing my work e-mail altogether, we’re now using Slack for a lot of the important communication anyways.
Your experience is mirrored by many as regards to Slack.
Contrast to HP who has had bad leadership since Lew Platt left in 1996I know people want to castigate the CEO or deify the CEO but there are a million moving parts to a success or failure. It’s not the movie version with a Steve Jobs who comes in and saves the company by brute ability. I think Jobs comes the closest to being an object to worship if there is one as far as business turn around. Since Apple was practically dead at the time.Sure the CEO hires people and is the final decider. But along with that is the best help and brains that money can buy. Don’t forget this. And that help and the quality of it, and the knowledge and effort that they bring, is key to any transformation. In the case of a huge company like IBM or Microsoft they certainly have the money to do it the right way and not have to cut corners or pinch pennies. That cash pile buys the best help and brains that are out there.
True, but Carly Fiorina single-handedly decimated the HP company culture, and it started to go downhill from then on.
Leadership is a term we use often and sometimes sounds as a cliché. It isn’t.I find it easier to sense leadership (or lack of) in the small details.I was walking by the Apple 5th avenue store which is under construction now. The famous glass cube is surrounded with a green (bad green) fence and the glass cube is dirty and hardly transparent.My only thought: this would never happened when Steve Jobs was CEO.
seems more people are reading, internalising and enacting Clay’s work.
and they’re still very undervalued. One day we’ll some kind of Surface phone, or whatever form it will be, that we will be the next phase of mobile.
We have a number of people in our office (most of which are under 32) who are really liking the new touch screen computers. As Apple gets worse and more expensive, it presents a very interesting opportunity for a new generation of users who haven’t been brought up with Steve Jobs as the helm.
new strategy. Macrosoft.
Being awash in cash allows you to make mistakes.
Not being awash in cash forces you to be disciplined about the mistakes you let yourself make.
True. As a startup, instead of going after several lines of business, do the one with the biggest pain point and quickest return first. Grab your beach head and build. The cash from that beach head allows you to make a mistake. Make a mistake without it and you are gone.
For the sake of discussion (and not to diminish your point which is also correct) I could take the other side of this issue. What you are saying is also called putting all of your eggs in one basket. So ‘going after several lines of business’ could also allow you to identify the line that has the best opportunity going forward.As one example, Microsoft when it started did not intend to sell operating systems until the opportunity knocked one day as a result of Bill’s mom knowing the head of IBM from her days on the board of the Red Cross. In no way at the time did he know what the future would hold. Sure he knew it would be a good book of business but impossible that he thought it would become the core of the company instead of programming languages which is what he started out to do iirc.
Uh, the programming language business and the PC operating system business have a LOT in common. So, by being in one of these two, already have a big start in the other one.Similarly for the “all eggs in one basket” concern: That one basket likely has a lot in common with other baskets could pivot to if want/need. So, the one basket is not really all there is or all the work that has been done.
Yes, there is a lot of work in projects that end up being infrastructure that may serve another initiatives. The same applies for the team, people that go through large processes emerge on the other side as better professionals or scientists, more qualified and experienced. Even if the projects fails, they may be less prone to repeat the same mistakes.This is natural and evolutionary.
It is true in many cases
“Gentlemen, we have run out of money. It is time to start thinking.” — Sir Ernest Rutherford
forces you to be disciplined about the mistakes you let yourself make.The saying ‘it takes money to make money’ applies.Because mistakes are only mistakes in retrospect. So being able to make more of them allows you to spread the risk and increase the chance of success as a result of a correct decision. Having money doesn’t mean make stupid choices.This applies both with investing (and all types of investing) as well as running a business.
I didn’t say having money means making stupid choices.I said not having money forces discipline.Mistakes will happen whether you have cash or not. The discipline tightly bounds the edges of the downside you are exposed to.
I think what I am reacting to is the concept that not having money is some kind of wonderful benefit  ie ‘forces discipline’ and makes you understand what it’s all about ‘making good decision’. Most companies that get to the point of having small amounts of cash, at least the ones that I have observed, end up dying because they can’t easily segue into something else or figure it out. Both large and small companies. Panic sets in. Customers and employees flee.Additionally while having a big bank account can make you lazy and unmotivated having no cash can create a great deal of anxiety and overthinking that can easily cause the brain to not be able to make the right decisions.Since companies are people and since this is true for people it is true for companies. And the impact on morale and hiring is probably measurable.Mistakes will happen whether you have cash or not. But if you have cash the mistakes don’t matter anywhere near as much. Having cash helps greatly with cleaning up the mess that a mistake makes. Along the lines of ‘no my handicap is actually good and has made me a better person’. Like a rationalization of what would generally be considered undesirable.
Again, it was not a normative statement.1. Not having cash is not some kind of wonderful benefit….and don’t let anybody tell you otherwise.2. Not being awash in money forces discipline.The above two statements are not mutually exclusive.Your statement – | Having cash helps greatly with cleaning up the mess that a mistake makes.Think about this at second level, and you’ll see its the same point I am making. (The company’s leadership are smart.. and know the above point just like you do. That knowledge then influences behavior. Invert that now).BTW, bad things happen that are NOT anybody’s mistake in the organisation. 2008 happens. Having Cash can be the critical difference between one company surviving when another goes under.
“It was an inversion of the earlier comment after agreeing with it.”…I am a Spicer fan too. 🙂
Let me refine your statement if you will :-)Acting as if you are not awash in cash lets you be disciplined.Having the cash to push in when needed makes you successful.I’ll use a poker analogy. When you are the short stack you have to be very disciplined but if you are the big stack and you are disciplined and you know when to out muscle the short stack you will win.This is very hard to do especially if you are not a founder.
Agreed.The point about having cash to push in when needed is critical. Cash is the ultimate optionality.People sometimes interpret Buffett’s “Be greedy when others are fearful” to be about Courage – viz. having the courage to strike when others are afraid.Well, you actually need both the “C'”s – Courage and Cash.Courage without Cash doesn’t get you anywhere.
I will also say this. Most businesses that are awash in cash do not have the discipline not to spend it like the proverbial “drunken sailor”So given the choice of being poor or spending like a “drunken sailor” I will take the being poor. But the best is being poor and knowing to push in because you are rich.It is so hard, especially with employees that don’t think it is their money. I’ve seen it. $2k reception chairs that has had someone sitting once in three years? $5k light fixture that nobody notices because it is in the back? LE will argue that some people want to work in that atmosphere. I don’t want them.But I’m with LE in that if you have no money you can make dumb decisions. It’s expensive being poor.
LE will argue that some people want to work in that atmosphere. I don’t want them.Hah! Never advocate pissing away money. But everyone is different on what ‘pissing away’ means.  As someone running a small operation if corners were not cut and shortcuts were not taken would never earn a living. I bought 2nd hand chairs for one of my rental units (Steelcase) and the tenants ‘loved them long time’.But being able to work in a less desirable working environment doesn’t make you any more of a programmer or dedicated employee than not caring about your surroundings. I think the evidence is pretty clear that having a nice workplace pays off. As long as you carefully don’t waste money where it doesn’t matter. For most companies a $5k light fixture would be wasteful for some maybe not. I think it depends on the money they have or their business model.My dad would 100% agree with you btw. He ran a small wholesale company with a shitty office. Would say it doesn’t matter. Also very clear that there is a bit of keeping up with the Joneses with office. Large companies put a great deal of effort into offices, furniture and so on. They aren’t all stupid and wasting the boss’s money. There is, I am sure, more evidence than my anecdotes to point to paying for a nice environment. My way of thinking is it saves you money in the long run with employees and I am sure there is research to prove that somewhere.I think things that any employee considers when deciding to work somewhere (arbitrary order) are:a) The job they will dob) The future potentialc) Who they will work withd) The location of the job relative to where they live (commute)e) The work environmentf) The pay Remember the heavy duty wood (iirc?) you put on your rear deck that the contractor (iirc?) thought you didn’t need?
We agree more than we disagree. No you can’t just have shitty offices, no you can’t just penny pinch to the point you get crappy service.Yes you need to spend on stuff that counts. Being cheap is expensive. High quality things cost money. It saves money long run.Doing things on the cheap costs money. Yes, spending twice as much on the deck wood is not expensive it is cheap.Yes when my Dad needed to get a sewer pipe replaced this week and the plumber could spend $2k patching it or $3k replacing it, it is a no brainer.One somebody looks at and says I need to redo, the other somebody says that was done right.Computers and great multiple monitors?Yes. Herman Miller Chairs and Stand Up Desks? Yes. Wood floors and LED lighting? YesSoda for everyone? Yes.But let me promise you this. If you let people go amok, they will spend money on shit that doesn’t matter and projects that don’t count, and people that only serve the purpose of looking good having meetings.
Better to have the discipline of a cash strained company while actually being flush. Unfortunately, human nature quite doesn’t work that way.
Very true. Microsoft’s windows and office monopolies kept the cash flowing, allowing them to keep trying new things following a disaster of a decade starting in the early 2000’s, when they completely whiffed on mobile, social, search, and everything else over that decade. Throw in a cultural disaster of a decision, stack ranking, which killed collective productivity. ( http://www.vanityfair.com/n… )That combination would have killed any other company, but since the cash kept flowing, they could keep surviving until they turned it around.
One of the things I learn as I go from startups to big companies is how much momentum big companies have.
Exactly. MSFT survived the screw-ups because of three reasons: a) the decline in windows franchise on PCs and on-premise MS office was gradual, not precipitous, unlike say, Blackberry or Nokia. b) While some bets were bad (Nokia, Windows Phone, etc.) they also made some good bets (cloud) that paid off big, and c) >$100b+ in cash was a lot of buffer and the company never really went into any type of distress.The combination of a), b), and c) gave them sufficient cash to power through and overcome the missteps.
Jack Welch said being CEO of GE was waaaaay easier than being a startups CEO.’We have the cash to fail once or rwice…..”
pointsnfigures:All companies “awash in cash” can’t afford to make mistakes.Leadership is important as the post outlines.To list a few of following companies once “awash in cash” can’t afford those mistakes no matter how good the PR.1. Jawbone2. Foursquare (USV)3. Zynga
Reading your post yesterday about AI in the boardroom – I could not shake the image of Watson from the Masters commercials – sitting in chair. “David, your return to shareholders needs to be improved by 4.3%. And your Board falls 11.3% below the average Diversity Score”
i’ve worked with both a lot during my career.Microsoft today is inexplicable to the company I knew very intimately as a partner over the years.
“It just takes good leadership and the right strategy”…and a BOAT LOAD of money.It also doesn’t hurt that some of their competition has started to fall off a bit for one reason or another (e.g. Microsoft has finally caught/passed Apple in many hardware/OS aspects).Regardless, Watson *has* been something special to watch…IBM put serious time and resources into it and have been patient and dedicated to building it into something real (HUGE bets EARLY in the world of A.I.). It will be interesting to see if it turns out to be the “right” A.I. path, or if it doesn’t how steadfast they remain in their approach.
Ai path adopted both ibm and microsoft are. with logic and mathematics.There is inadequacy . language, near to human mind is spoken one.The inference here through language is more near to intelligence.some time i imagine,i do not know any language.it is difficult to show intelligencey.It is unthinkable think with out language.Human mind and machine are different.Suiting to the machine and mass adoption is requirement.Mass adopts nearer to the mind that is language.suiting to machine is beyond doubt.VR vadoothker
We are not doing any mistake.we are adopting new path.
Totally agree that the older tech companies, like Microsoft, are relevant. Microsoft is keeping Amazon busy with Microsoft Azure competing with AWS. We recently integrated Blockstack with both platforms and could sense that the competition makes them move faster and they’re more open to innovation and new technologies. Similarly, even though Facebook and Google have won the “identity war”, Microsoft is not giving up and can shake up the landscape by capitalizing on new technologies, like blockchains, faster — they’re already taking the lead there.
I tried Hololens at MS Reactor on Mon. The experience definitely isn’t as good as this marketing.The headset is ugly. The graphics delay is obvious. The layout of the folder directory to get to apps and the point+click with your finger to open folders etc is a bad UX.https://m.youtube.com/watch…
They are part of the tech M A F I A – MicrosoftAppleFacebookIBMAmazon
I think of Tesla passing GM and Ford in Market cap, and it’s about a fresh start. In my head at GM and Ford (and likewise older tech companies), I imagine rooms full of old technology, abandoned projects and in general more corporate gunk that decreases the ability to be nimble. Amazon, Google and Facebook are probably starting to build up gunk while Microsoft and IBM are trying to remove the gunk or ignore it.
Was putting Watson on Jeopardy all those years ago the best AI related PR move ever?
If a business does not have a strategy for developing and coexisting in an ecosystem they will be toast. Technology is a commodity, good leadership is not.
> Technology is a commodityOften? Yes.Always? No.Can this difference be significant? Yes.So far commercial examples are not so easy to find, but military examples are clear — e.g., the F-117 stealth that in Gulf War I flew all the missions over Baghdad and never once got even a scratch.Maybe some of the smaller details of microelectronics lithography from, maybe, Applied Materials, has some crucial technology that is not a commodity. E.g., the guys selling the extreme ultraviolet sources may have some technology not a commodity.In pharmaceuticals, the technology is not always a commodity: A new drug, especially effective, and protected with a patent, is often not a commodity.Although Silicon Valley has not figured this out yet, e.g., believes that all software and everything behind it is a commodity, it’s possible to stir up some original applied math for manipulating data to produce some more valuable results. Original applied math, not published, is easily not commodity. Moreover, implemented in software well protected in a server farm, the ideas are quite safe and can provide one heck of a technological advantage and barrier to entry — just some original applied math. And the entrepreneur has an advantage because math has by far the best methodology — mathematical proof — that lets an entrepreneur have uniquely good information about the power of the work quite early on. Since Silicon Valley has not caught on to this point yet, and really, are not good at stirring up good, original applied math (really need a good, well focused Ph.D. to know how to do that, and there are nearly no such people in Silicon Valley and universities produce only a tiny flow of such people), the flip side of the Silicon Valley situation is an opportunity.With high irony, the US DoD has long understood in very strong terms the power of original applied math (high end versions of sonar, radar; stealth; the Pratt and Whitney engines in the SR-71; etc.; the geometry problem the fat boy in North Korea is struggling with) and really was the reason Silicon Valley got started, but Silicon Valley in their commercial work has forgotten the lesson.
A fun story. My grandfather was a general surgeon. Back in the early 50’s he started buying IBM. He accumulated and held it until he died at the age of 96 in the late 80s. Buy and hold, it really works! 😉
Particulry for one’s heirs!
Both IBM and Microsoft have missed out big time for decades.E.g., with Prodigy, IBM should have done as well as Facebook.E.g., with Bing, Microsoft should have done as well as Google.Currently, I have to doubt that IBM is making significant money from Watson. E.g., today I got via e-mail an ad from IBM about using SPSS. Sure, SPSS, Statistical Package for the Social Sciences, was, and no doubt still is, a nice statistics package from …, gee. let me think, …, way back there when my wife was writing her Ph.D. dissertation, processing survey data, evaluating the social science hypothesis that people become more conservative as they rise in responsibility in organizations. Result: Likely not very much!Gee, one computer site I led, as an MBA prof and Chair of the college computer committee, had a copy of SPSS. From a lot of medical data I had, wanted some first cut descriptive statistics, and a student assistant used SPSS to print out a big stack of nice stuff.At one time I was at GE’s Information Systems unit developing, documenting, and supporting applied math, numerical analysis, numerical linear algebra, solutions of ordinary differential equations, polynomial curve fitting, other curve fitting, multi-variate linear statistics, statistical hypothesis testing, the fast Fourier transform, etc., and, there, sure, statistical software was quite popular.Okay, IBM seems right up to date in statistical packages as of some decades ago.But, more can be done: E.g., resampling, actually a relatively good way to use more processor cycles! So, this is stuff from B. Efron and P. Diaconis, last I heard, both at Stanford! I do suspect that one paper I published is much the same in the basic math; I suspect I put the math on a better, more solid, and more general foundation. So, I did some with some measure preserving ideas, e.g., as in ergodic theory.Mathematica likely has some software that improves on SPSS. R has become quite popular. Similarly for packages for Python.Generally SAS, that is, Statistical Analysis System, has long been regarded as better than SPSS.As much as I like statistics and regard it as powerful, for making money with it need, as is common, to make it a must have for paying customers and to find ways (A) to make getting the input data collection, cleaning, and converting (e.g., maybe something as simple as getting all the times and dates converted to, say, US EST with leap years and daylight savings time handled right) the input data, (B) selecting a doable problem where good results will be a must have, (C) getting the results, (D) having the results in a form that lets the customer see and get the value. Typically this work is more of a consulting job, that is, labor intensive, in person, deep into the politics of the customer’s organization, etc. Really, (A)-(D) is not an easy way to make much money.Lesson: Statistics can be powerful, valuable stuff, but need to use it in a way that avoids the mud wrestling of (A)-(D) and is really easy for the customer to like, use, and value. E.g., maybe sell a system, maybe even cloud based, for monitoring server farms and networks to detect zero-day anomalies. Even that is not easy; requires a customer to do too much. Maybe some statistics could be the crucial core of some software and system for medical diagnosis — maybe, since there are plenty of land mines along the road of selling into medical care.Or, for an analogy, don’t sell apples; instead sell apple pies, apple fritters, or apple sauce! E.g., don’t sell fresh fish; instead, sell fish, no heads, bones, fins, guts, nicely breaded and ready to eat after 15 minutes in a microwave oven. Sell something the customer can easily use right away, like a lot, find valuable, regard as a must have, and, as powerful as statistics is, SPSS is not such an offering.For Microsoft, sure, Office is just crucial for a lot of people. But there is a lesson: I do a lot of computing; I have an old copy of Microsoft Office; but I rarely use it. What do I use instead? Really, my favorite text editor. For text of wide variety, it is the computer software version of the two best tools for a good cook — a cutting board and a good French chef’s knife. For high quality word whacking, I use D. Knuth’s TeX, and trying to get Word to do that is an unanesthetized root canal procedure. For spreadsheets, I find it easier just to write some procedural code and, then, for a graph, pull the resulting data into Excel. If Microsoft would document it’s graphics API instead of keeping that crucial information nearly secret, that is, poorly documented (I suspect that often still have to use the old 32 bit code Microsoft wrote for, say, Windows NT) for decades, then I’d write little chunks of code for my graphs. But, typically I want only simple graphs, and I can get what I want, say, once each six months, after about three hours of screaming at Excel about the wildly obscure UI to get the font sizes up, WAY up, and bold, really dark, get all the lines much darker, convert all the colors to just black and white, get the axis annotation right, get the output in a file or on paper, etc.With Word, it was a total pain in the back side to get a table of contents. In TeX, I just took out a pleasant afternoon and wrote my own TeX macros for tables of contents. MUCH easier.Maybe Microsoft has improved on Word. Okay.But as important as the work of Office is, Microsoft should long since have come up with other, similarly important uses of computing.Microsoft long had a serious problem: In a fundamental sense, their code and software don’t mean anything. The meaning has to be communicated with good writing in a natural language, e.g., English, but there the Microsoft software development culture long got a grade of D-. They just would NOT learn to write English, that is, document their software. There is evidence they tried, but they continued to make big, elementary mistakes: (A) They insist on using acronyms without links to definitions, motivations, explanations, examples, etc. (B) They can’t describe the purpose of the parts of their APIs (application programmer interfaces, that is, often, libraries of software subroutines and functions) — they are a little like people selling rubber boots without making it clear that the boots are useful in rain and snow; sure, nearly everyone knows about boots, but there’s no good way without digging and mud wrestling to know what the heck is the purpose, utility, etc. of Microsoft’s Presentation Foundation, Model-View-Controller framework, etc. And how the heck to write text to a window for, say, printing on a laser printer? Wandering in the documentation shows the graphical programming interface, GPI or some such, but that’s no way to put text on a windows if only because there is no good control over line length — no doubt Firefox uses something else, but what is seems to be a huge secret in Microsoft’s documentation. It goes on this way: Microsoft needs to learn to write documentation to document their work.There has been some good technical writing in computing from, e.g., Knuth and HP.It does appear that Microsoft is trying hard to have its software, e.g., the .NET Framework, bridge to the worlds of Linux and Android. Okay.My view of IBM is that they look at small companies that are growing quickly, select some to study, and hope to make big bucks by buying out a few such companies and putting IBM’s marketing force behind them to grow sales by big multiples quickly.My view of Microsoft is that they have made so much money from Office, Windows, Windows Server, and SQL Server that they are comfortable not trying very hard.In both cases, a lot of crucial innovation in computing is left to startups!PS. This just in! VMware just bought Wavefront, a computer and network real time monitoring company. So, right, there can be some money in computer monitoring.At IBM I worked in applying AI to such monitoring and then cooked up some original applied mathematical statistics that totally knocked the socks off the AI work we were doing. I doubt that anything in AI has even started to catch up with the work I did. Yes, it’s published, and while there is a good, intuitive view, the math is a bit much for the computer monitoring community.
Rare and worthful comment
Nailed it. So true. If I had to bet one over the other, my money would be on Microsoft right now. Tremendous turn-around… a reboot in many ways. Watson is pretty amazing but typically requires a multi-month, 7 figure engagement. Glad they are out there creating the market awareness though!
BIG SHIP HARDER TO TURN.HARDER NOT IMPOSSIBLE.
You coming out with more art work anytime soon? I truly love these.
ME DONE SOME LATELY.https://www.flickr.com/phot…
HMMM… EMBED NOT WORK ABOVE.THIS ONE RECENT, LOTS OF HUMANS LIKE IT.https://uploads.disquscdn.c…
Context i could not make out. if it scince, particularly computer,it is not impossible
CONTRIBUTORS:It appears the older tech behemoths create a culture that eventually becomes their achilles heal from tweaking it on the fly.A company should never be having a solution seeking a problem verses having a solution that fixes existing problems.
Also interesting is that Microsoft is way ahead of other BigTechCos in the blockchain space.
I’ve wondered why Google/Facebook haven’t been more active in the blockchain space, especially considering the potential threat to adtech (BAT, etc.). Are they bearish on the technology? Taking a wait and see approach? Or is it a consumer vs. enterprise tech thing?
CONTRIBUTORS:is anyone intending on attendingThe 20th Annual Milken Institute Global Conference “Building Meaningful Lives”April 30 – May 3, 2017 | Los Angeles?Over twenty years.Talking about changing a persons narrative in life. (Michael Milken)http://www.milkeninstitute….
You should name the IBM CEO……
I applaud MSFT’s strategic pivot but I’m still cautious about their future – most of the previous big bets have fallen miserably short of strategic success and they absolutely need the next foundational technology to create real distinction.
Microsoft is making two big bets right now: Azure and Dynamics. I think it’s safe to say that they’ve both already reached a degree of strategic success. Azure is stealing market share from IBM/AWS/Google and Dynamics is the only legitimate contender against Salesforce in the enterprise space. It doesn’t hurt that Office 365 and the Surface line are kicking ass also.
Those are great revenue lines but I believe they are relatively small overall – Microsoft’s Commercial cloud, which includes Office 365 commercial, Azure, Dynamics 365, and other cloud products is about $14 billion annually. if you set a constant growth rate at 15%, that’s still a low number…I view those assets as commodities, where prices never rise only fall.I’m really interested in what they go with AR and their plans around LinkedIn which is a real social platform – potential to compete step for step.
First of all, we did $6.73b in cloud revenue last quarter, so that $14b number is definitely dated. We aren’t aiming for anything near as low as a 15% growth rate on Dynamics or Azure. For this fiscal, it’s more like 50% in a lot of relatively mature segments/districts. I don’t think it can be viewed as a commodity, either, given the constant investment in expanding its capabilities into growing fields (IOT, field service, unified service desk, etc.). If you’re interested in the LinkedIn acquisition, you should be particularly interested in Dynamics, also, given that Satya has said the buy was largely about differentiating Dynamics and its social selling capabilities. Azure is growing even faster…we’re opening something like 50 data centers this year, alone. Azure grew 93% YOY for Q2. AR is exciting and Hololens is genuinely cool product, but internally it doesn’t get nearly the attention of Office/Azure/Dynamics, but maybe that’s just because it’s still so early.
Q3-2017: Azure up 93%/Surface down 26%/Windows up 5%; pretty good and some real bright spots. The process of remaking Microsoft is impressive, thanks for sharing your insights above.
Hey! I work for Microsoft! Amongst Satya’s successes has been a massive cultural shift. Internally, people seem excited about the company’s direction. “One Microsoft” is the real deal. I had the fortune recently of sitting in a small meeting with Satya and he made an interesting comment in response to a question about Netflix and Uber not being major Azure customers. We’d love to have them, he said, but we don’t need to sit with the cool kids…we need to make everybody else cool. In other words, not only can older tech companies be relevant and competitive again, but we can help make other juggernauts like Ford or P&G make big strides through digital transformation. Fun to see people here get excited about it, as well as our customers, and I think it’s going to translate to long-term growth for MSFT.
This same attitude fits for cities – they can be the organizers of brilliant technology hubs, regardless of their current state; cities with major universities will have an advantage.As @falicon:disqus mentioned, you do need boatloads of money – though I believe it’s possible to bring on different parties into alignment to allow the plan to succeed.
>“well look at that, IBM has built the first big AI brand.”Well they definitely have built the brand for Watson. But, according to a friend who is on the Watson sales team, they are selling hot air. They are having a hard time finding useful use cases for Watson to deliver. Coming from the ad world, I’ve seen this time and time again. I feel startups really need to pay attention to the power of marketing and brand building.
Seem to me we’re just seeing a resurgence of the corporate R&D that gave us the transistor, laser, etc. Applied technology that is too expensive and too long term for the VCs to fund, and too near-term for the NSF and DARPA and universities.Or perhaps just the end of the 20-30 year process of commercializing those university projects, as I fondly recall seeing the self-driving van on the Carnegie Mellon campus back in the early 90’s, the voice recognition systems, and the predictions of the post-PC era.
Machine change is must.many problems need to addressed.particularly thermo dynamic.with 35% ability machine how long we are going to bear.ultra low level resolution is answer.atleast thrmodynamic side we can arrest global warming.Imitation of nature is right perception.
i really should chat and say down with ibm and and reign with microsoft.