In February 2012 I published a post urging Microsoft to purchase or exclusively collaborate with HP for control of their computer manufacturing business, at the time HP was breaking itself up to concentrate on following IBM into the enterprise business and spinning off their hardware business. See that post here. As well as my call for Microsoft to purchase Radio Shack here. Something I thought would jump start their business. That was a critical time in HP’s history with the demise of Leo Apotheker who in prior months was fired for proposing and preparing the company for the same change Meg Whitman who replaced him is calling for now. The HP Board surrounded themselves with cozy solutions that would not upset their Apple cart and reverted back to its outdated business model. Now more then three years later Meg Whitman is taking HP where they feared to go and is spinning off its hardware businesses. Meanwhile to the north Microsoft’s CEO Steve Ballmer was taking personal responsibility for Microsoft’s missteps following his “surprised by mobile” debacle. Ballmer started formulating the “One Windows” initiative and began the process of expanding their manufacturing business with its new phone partner Nokia for the handling Window phones while Microsoft independently produced their answer to the iPad their Surface pro along with the Xbox, great mice, Zune, keyboards etc. Like the HP board Steve Ballmer blinked like a deer caught in the headlights, this time even Bill Gates could not give Steve another chance. Which leads us to today with Satay in the hot seat.
The decision to develop and build tablets themselves signaled a sea change in thinking for Microsoft and consequently caused a lot of pushback from the traditional third party hardware partners , HP included. Still Microsoft moved forward seemingly willing to enter a new era. This is the exact point where Microsoft made their next blunder, faced with a crossroad moment Ballmer and therefore Microsoft in my view were crippled by his personal ego. Microsoft had the opportunity to purchase or at least exclusively collaborate with the computer manufacturer in an effort to change its trajectory. Both companies could have saved their future right there and then but both were held back by their lack of vision. Ballmer lacked either the courage or insight to seize that moment for the second time in his career. Hewlett Packard hamstrung by a sentimental Board that recently demostrated inability to accept change was afraid to take the steps to fundamentally change their business model a decision that would cost thousands their jobs and waste precious time, maybe locking them out of the enterprise business they desperately need now. Apple by positioning themselves with IBM stands to make strong inroads here as well. For Microsoft controlling the design and production of its own line of computers would have given it a strong opportunity to transition its company into the new computing environment hijacked by Apple. Unlike Apple, Microsoft had and has a lot to lose. They were and still mostly are in control of upwards of ninety percent of the computers in use in the world today, those computers sitting in offices all around the world are outdated both physically and software wise and are ready for replacement. Many of those enterprise computers will be replaced by a tablet. At this point only because of a perfect storm formed by the occurrence of a downturn in the economy and businesses refusal to upgrade hardware that was functioning satisfactorilly if not efficiently Microsoft still had a window of opportunity. Ballmer’s solution to this crisis was Windows 8 a committee designed solution if ever their was one, the idea was to give their millions of legacy clients two systems on their desktop a traditional one that was basically Windows 7 and the new Tile like interface of their Windows Metro used on the new surface tablets. This solution was typical of the thinking of Microsoft and Steve Ballmer and was an effort by Ballmer to say Microsoft is right in its business plan of a software driven model and we will continue on that path. The problem I think was that Steve Ballmer’s ego would not let him admit defeat by acknowledging that Apples model of a Hardware driven ecosystem was winning the day. This is the option Ballmer did not choose. Microsoft should have purchased or worked an exclusive deal with the computer division of HP to produce their own high end line of computers. By taking advantage of tightly aligning their software with consistent hardware and streamlining code bloat once needed to satisfy hundreds of diverse manufacturers Microsoft could develop a very compelling alternative to Apples line of hardware. Microsoft by taking control of their future could begin by producing an extremely powerful desktop mini class computer for their enterprise business customers a dynamite gaming machine for its loyal geeks as well as a sleek laptop for businesses professionals and students. Microsoft could and still can battled Apple utilizing their very strong the advantage of having a installed customer base. Faced with the failure of Windows 8 no one including Bill Gates could save Steve Ballmer’s reign, this again may have provided Microsoft and Satay Nadella another shot.
Today we see HP once again spinning off their Hardware division, Santay Nadella does not have Ballmer’s ego issues to deal with , he has shown the ability to lead in a new direction. Almost every move taken under his leadership has been perfectly executed. Computers are still selling and by providing quality machines Microsoft can produce the margins close to Apples. They have an ecosystem in place, a curated app store, music delivery, mapping, strong gaming division etc they also have a loyal fan base that has suffered under google and many are already Apple consumers. During his term he has made the changes needed to compete with Apple and Google, if the Gods smile his way there is a silver of hope that Google will continue to self destruct and provide the opportunity Microsoft needs. Can he move Microsoft to where the puck will soon be. Can Microsoft Windows 10 provide the faithful with the new platform they need, I truly believe its their last chance to win, I hope and trust that Santay knows it.