Now, there are some positive things which could come out of this, but if history is anything to go by I'd be surprised if anything positive did come out of it.
And LinkedIn aren't to blame. Ok, their stock price may have taken a large tumble recently, and they seem to have run out of ideas.
But $26.2 billion. Just think about what else could be done with that much cash.
My problem with this stems not only from being aghast at the huge amount of money Microsoft have just spent on what I feel is a bit-part player, an also-ran, but because everything else Microsoft have touched over the past decade or so has turned from gold into dust.
The first questionable purchase I can remember was aQuantive.
Microsoft aQuantive - The purchase which didn't help Microsoft rule the online advertisement realm. Image from vr-zone.com.This cost Microsoft $6.3 billion in 2007; by 2012 Microsoft were taking a $6.2 billion writedown on this purchase after losing money hand over first in their online ad revenue venture.
Then in 2011 Microsoft acquired Skype. At the time Microsoft promised to "accelerate Skype’s plans to extend our global community and introduce new ways for everyone to communicate and collaborate". Well that hasn't happened. In fact, if anything, Skype's service has become worse since Microsoft's purchase.
Microsoft and Skype - Have Skype's users benefitted from Microsoft's purchase? Have Microsoft's users benefitted from this purchase? Image from softpedia.com.
And the integration of Skype into Microsoft's other offerings has been risible. It now comes pre-installed on Windows 10 - and this was after Microsoft forced onto Windows users a lacklustre app version which they've since discontinued - alongside a "Skype Video" application which is so poor it feels like a pre-release version by a hobbyist trying to build their first app. That's what Microsoft have achieved in 5 years of owning Skype. And meanwhile, the rise of apps like Snapchat, WhatsApp, Viber, et al, has meant that Skype no longer occupies the essential slot.
And what of Yammer? They started out as a Twitter competitor with an enterprise focus, then Microsoft acquired them and... they've almost disappeared. I'm sure that someone somewhere is still using Yammer and I see that it's available inside Office365 but it's been several years since I last saw anyone use Yammer - and even that was a failed attempt by my last employer to get the staff talking on it. Was Yammer really a good way to spend $1.2 billion?
Microsoft Office, well everyone's heard of that; SharePoint, lots of enterprises run on this web platform; Lync? y e a h . . . it gets used; Skype? Everyone knows of Skype. Now what's the last name? Image from insideris.com.
And then came Nokia. Oh dear. How embarrassing for them.
More recently Microsoft paid between $100 million and $200 million for Wunderlist, a fairly simple to-do app. Since then, nothing seems to have happened between Microsoft and Wunderlist, while at the same time other to-do apps (or 'productivity' apps) such as Slack and Trello have overtaken Wunderlist. What's more, Microsoft has their own Planner inside Office365 which doesn't appear to have any link to Wunderlist. And furthermore, how many dollars have Microsoft since spent developing this to-do app?
Has your world been turned upside-down since Microsoft handed over between $100 and $200 million for this to-do app? Image from mspoweruser.com.
But it's not just Microsoft's purchases which go awry, it's frequently their own home-grown ideas which are stillborn. Here follows a list which I could think of just this morning:
This Reddit user describes how the Microsoft Band 2 is not fully compatible with Windows 10 - that's virtually all that the Microsoft Band needs to do.
Music and video streaming services: Microsoft's offering is the poorest of the lot (i.e., Apple Music, Google Play Music, Amazon Prime, etc.). And while others have offered set-top boxes and media streaming services, Microsoft haven't. They just don't seem bothered enough to make a good service which would stop Windows users spending their money elsewhere. Instead they build a token effort.
OneDrive: Instead of standing still, this service has actually gone backwards over the past couple of years. The OneDrive syncing in Windows 8 offered more features than does Windows 10's version. Microsoft have explained that they've had to strip the code back, consolidate separate code-bases into a single, unified service, and that they'll eventually get back to offering the same services with OneDrive that they used to. But why is this rebuild even needed, why does this have to happen while the paying public are using it, and why has this taken so long?
I remember going to a presentation back in around 2006 or 2007 where one of Microsoft's Technology Evangelists was demonstrating a new service which I had been hearing about. It was called Windows Live Mesh, came as part of Microsoft's old 'Windows Live' feature pack (Messenger, Photos, a video-editing application, and so on) and it was basically a folder which would synchronise over the web. We were shown how a file or folder could be dragged in, then a few seconds later would show up on another computer.
The Technology Evangelist finished up by saying something like "This will probably be baked into the next version of Windows but right now it looks like Microsoft doesn't really know what to do with it." As it turns out, the next version of Windows was Windows 7, and there was no Live Mesh. It looks like Microsoft never figured out what to do with it.
And then along came Dropbox. And as if to fully steal Microsoft's thunder, Dropbox is now offering the functionality on Windows which OneDrive used to offer but then removed.
Here's an article from November 2014 in which the step backwards is explained, but where the author, noted Windows blogger Paul Thurrott, explains how Microsoft have promised that more features will be added back in after the launch of Windows 10. Here we are at the end of June 2016 and those features are still missing-in-action.
Cortana. I'm sick to the back teeth of Microsoft spending so much effort adding features to Cortana, then taking up large portions of launch events talking it up. Aside from most people being too embarrassed to talk to their computers, my real problem with Cortana is that it's only available in a few of Microsoft's markets.
Here's a video - from July 2015 - where one of the lead engineers on Cortana explains why Cortana cannot be simply spoken to in just any market, that Cortana needs a deep knowledge of the market in which it's being used.
Lead Cortana engineers Marcus Ash and Susan Hendrich discuss what it takes to bring Cortana to a new market. Why didn't they just do the same as all other voice assistants, then more people could use it? [Video from blogs.windows.com]
But is this to Cortana's advantage or detriment? Cortana has been available for a couple of years now, and at the point of writing this blog post is still only fully available (i.e., not to those running pre-release software) in 8 languages across 11 markets. I myself have never had the opportunity to use Cortana, despite being a native English speaker and living in Western Europe in a country whose official languages are all supported by Cortana in other markets. Yet Microsoft haven't deemed it necessary or worthwhile to switch on Cortana in my market. Yet still I have to put up with Microsoft continually talking it up and rubbing in my face their lack of thinking outside North America.
Cortana running on Windows 10 - if you have this opportunity then consider yourself lucky; whether you use Cortana is another matter. Image from mspoweruser.com.
With such inherent restrictions Cortana was always going to face an uphill battle for widespread adoption.
Although I'm no fan of talking to a computer, I can at least try Siri and Google Now, and that's a lot more than I can say for Cortana.
Microsoft's focus on bringing services to competing platforms: I bought into Windows Phone. In fact, I bought three of them and persuaded my girlfriend to switch to Windows Phone too. Again, I'll avoid getting bogged down in the whole Windows Phone mess but what I want to add here is my frustration that while being a paying customer, Microsoft decided to stop offering new software to me and instead to bring these services to Android and iOS users. For example - and following the previous point - English speakers in the US who haven't even paid for a Windows device can use Cortana, yet I can't. That's right, Microsoft believe it's better to offer Cortana on iOS and Android in the US for free before bringing it to the rest of the Microsoft-paying world. I stopped getting updates to Windows Phone around the same time Microsoft started bringing an increasing amount of Office integration to competing platforms.
How about Microsoft's Next Lock Screen for Android?
Or how about Microsoft's Arrow Launcher for Android?
Or the Word Flow keyboard for iOS? In fact, you can take a look here and here at the plethora of apps which Microsoft has sprinkled on those users who've decided to spend their money elsewhere - many of those apps aren't even available on Microsoft's own platform.
Why are Microsoft taking the money I paid them to buy into their eco-system and using it to build features for people who've turned their back on Microsoft? Maybe I'm being naïve but I find this baffling; what incentive is there to stick with Microsoft's first-party devices?
Bizarrely, by Microsoft's own hand, if you want the best Microsoft experience it seems that you should now buy an Android or iOS device.
Edge - why bother?
In case you aren't aware - and there's no great reason why you should be - Edge is Microsoft's latest browser. They've ditched Internet Explorer (though not its logo) and built a new browser from the ground up. But whereas most other software vendors build an application which can match the features of its competitors, then add their own feature incentives on top, Microsoft instead launched Edge without many features which people have become accustomed to in their browser - namely, browser extensions/plugins/add-ins.
Lack of interface customisation options
Adding and changing search engines is more difficult than it should be
UI inconsistency with the address bar on a new tab - instead of offering an address bar it offers something more akin to Google's homepage.
All other browsers highlight secure URLs in green. Not Edge - it uses yellow, halfway between green (secure) and red (warning).
Its history features are basic - not searchable
No tab history or the option to go back/forward multiple pages
No user profiles
Change your default search engine from Bing to anything else, then highlight some text for which you wish to search, and the only search option is to use Bing, not your configured default
The Share functionality only recognises apps - let's say I have the full desktop version of OneNote installed; why would I want to share some details only with the 'modern app' version of OneNote?
The right-click menu offers about half the features I see in other browsers
But more generally, as surprising as this might sound, I'm not all that clear on why Microsoft feel that they need to offer a browser at all. Why get into this embarrassing state of affairs whereby they're pushing a feature-lacking browser when everyone knows they can use Chrome, Firefox, Opera etc.? Why put all that effort in to producing a browser with a tiny percentage of users?
Internet Explorer's and Edge's logos - they're clearly very different, but don't be confused as to which you're using: if it has functionality then it's probably the older Internet Explorer. Image from microsoftedge.us.
Microsoft have stores just like Apple. Not that I've ever visited one. Or even seen one... because they're only in North America.
Windows Phone. Uh-huh. I won't say much about this here because I've already written about how Microsoft's lack of effort with Nokia was like the blind leading the blind. Windows Phone is now recognised as being a dead-end, a mobile OS which Microsoft are only continuing to develop at a snail's pace because they sold it to enterprise with the promise of it being maintained.
Windows Phone had so much potential but with the lack of effort that Microsoft put in we can now see that it was dead-on-arrival. And Microsoft were recently spotted offering a buy-one-get-one-free deal on their latest 'flagship' phones - they're now giving them away.
I still have basic problems with Windows 10 which I never had with Windows 8. For example, when I start my laptop while it's connected to external monitors, Windows 10 frequently places the taskbar on the wrong monitor; Windows 10's support of high-DPI screens is still not correct (ok, this isn't Win10-specific because it's never been great with Windows); when I mute/unmute the volume, the speaker icon in the system tray doesn't change unless I close and re-open the system tray; about once every couple of months I'm told that Windows was unable to install an update, and I have to go through these steps; colleagues often have problems with Windows changing the default speaker/headphone configuration, which is just a mess.
Given more time I could produce a long list of inconveniences (i.e., bugs) which pervade Windows 10.
Microsoft, either do it all or don't bother. Don't try to compete with the other major players by offering something only in your backyard, half-hearted or a token effort. We see this with their distribution of stores, with Cortana, with their intention of replacing Internet Explorer with a new default browser, with their music service... These are indicative of all of Microsoft's consumer-facing efforts: half-hearted and lacking full commitment.
So let's recap:
Their music service, Groove, is lacking features and feels little more than a token effort, as if they're merely ticking an obligatory box.
Despite demonstrating the first cloud-syncing file mechanism, Microsoft are now not only falling behind competitors but have also fallen behind what they were offering a year ago.
Microsoft's oft-touted voice assistant, Cortana, has seen only minor adoption, probably because Microsoft have hamstrung it by greatly limiting where it can be used.
Microsoft's services, for what they're worth, can frequently be accessed just as readily on competing platforms, offering no incentive to buy into Microsoft's own devices.
Microsoft's new browser, and I'll be perfectly candid about this point, was launched before it was ready, such is it lacking so many basic requirements of a browser in the year 2016.
Who else would launch a browser in 2015 which was so lacking in basic features, and make it the default browser?
Their attempt at a mobile OS was doomed from the start due to their lack of conviction.
Testing appears to have been abandoned when they started working on Windows 10. Given Microsoft's reputation for flaky code, you'd think this 'best ever' edition of Windows would have prioritised that.
Why do they bother?
Now here's something to consider: It looks like Microsoft is building a new photo organiser. Just like everyone else has. But given the points I've raised above you've really got to wonder why they're bothering. Why do Microsoft feel that they also have to build a photo organiser? Ok, if they have an idea that they think will disrupt all other photo organisers then give it a go but judging by recent efforts Microsoft will end up launching a service which lacks basic features, offers differing levels of access across platforms, and then in about 2 years they'll change course and roll it into Windows, losing some functionality and users in the process, yet having spent lots of money.
This is now becoming the established Microsoft pattern.
So if Microsoft can't satifactorily build consumer-facing applications, and they can't even buy successful consumer-facing applications and integrate them into their existing suite of products, what can Microsoft do?
Devices and services
Microsoft were clearly caught off-balance by Apple's one-two punch of the iPhone being quickly followed by the iPad. Former Microsoft CEO Steve Ballmer was famously derisive of Apple's devices. But by 2012 Ballmer was reconfiguring Microsoft into a "devices and services" company. They were going to make phones, they were going to make tablets... they've since launched a laptop... Ballmer also spoke of offering "high value" devices as well as a family of devices.
And then Windows Phone crashed and burned. Furthermore, Intel recently put a dagger through Microsoft's mobile device intentions by retreating from mobile chips, which Microsoft were banking on.
Current CEO Satya Nadella has effectively dismissed Ballmer's "devices and services" mantra and has switched focus to productivity, frequently talking about Microsoft empowering people where they need them to be. But my concern here is that people need software in every moment of modern life, so where does it stop? Does "empowering people" mean Office on a phone, tablet and desktop, or does it mean offering every possible service that consumers and enterprise users will ever need?
Nadella has also repeated the phrase "mobile-first, cloud-first", and it's easier to see this being implemented by Microsoft.
History repeating itself
Who amongst us remembers Windows Vista?
And who amongst us remember Vista fondly?
Aside from Vista's protracted development which took twists and turns - some great ideas in there which never reached fruition (although, to be fair, some great ideas which did) and which I'll return to later - but the biggest problem with Vista was (1) that it was bloated down with a ton of other features that its users never asked for, rarely used or even needed (a typical Microsoft activity which even Windows 10 has suffered from), and (2) that Microsoft failed to adequately educate people about Vista's advantages. [Microsoft's marketing failures are a recurring feature in its history.]
The Mojave Experiment - a 'Candid Camera' moment when Microsoft unveiled the new features of their upcoming, Vista-replacing OS. We got to see the surprise and relief on users' faces, then surprise as they were told that they were actually looking at the poorly-marketed Windows Vista after all. Image from arvino.typepade.com.
After the perceived failure of Vista, Microsoft simplified things and went back to basics with Windows 7. And it was a runaway success. So much so that even after almost 7 years since its launch Microsoft still has problems persuading people to leave Windows 7 for Windows 10.
Microsoft went from a bloated OS which tried to be all things to all people, and went back to what it does best. And they won that battle.
So why do we now see a Microsoft which is trying once again to be all things to all people with a half-hearted music service, a voice assistant that only a subset of users can talk to and which cannot be easily extended (but is baked into everyone's installation of Windows and continues to be heavily pushed); they sell a fitness band which doesn't fully talk to their mobile OS which has itself proved a major failure, their syncing client is devolving, they've forced users from the most-used browser onto a browser which wasn't ready for release, they've proven time and again that while they have the cash to buy whatever they want they make questionable acquisitions and then fail to integrate with any effectiveness, and their latest OS was apparently released without adequate testing.
The solution seems obvious: Microsoft need to strip the wheat from the chaff and go back to doing what they're best at.
File systems, kernels, server OSs...
I mentioned that Vista's development took some interesting turns and that there were some great ideas in there. One of these was WinFS, a new type of database-driven file system. It was Microsoft's failure to bring WinFS to personal computers that Bill Gates revealed was his biggest regret from his tenure at Microsoft. WinFS was started in 1999 to replace the file system which had been ported over from Windows NT (NTFS). This means that Microsoft perceived 17 years ago that there was room for improvement, and here we are in 2016 still using NTFS. Or to give it another perspective, Microsoft refer to Windows 10 as "the last version of Windows", meaning that this will iterate and evolve over a longer period of time than has previous versions of Windows, and that by the time it has run its course Microsoft will have left Windows behind altogether. But the file system they chose for this was already earmarked for replacement back in 1999.
So Microsoft know that their file system is over-ripe and should have been replaced before now. Which begs the question, why are they spending so much money on acquisitions which history shows will probably never return the investment instead of paying developers to build a shiny new file system? This is why back in January 2015 I listed a new file system as the first thing I wanted to see in Windows 10.
WinFS was so well worked-upon that there was even marketing literature for it. swimmingpooldotnet.wordpress.com.
[For what it's worth, Microsoft's main competitor, Apple, has recently unveiled a new, work-in-progress file system.]
I also wished for an updated kernel, one which could compete with other modern kernels. Apparently this wish wasn't granted either which is frustrating not only to me but to Microsoft's own developers who, anecdotally, are discouraged from making improvements in this area.
Microsoft could (with the right project managers in place) build an exemplary new kernel and/or file system. They just choose to focus on other things, such as building a voice assistant which is so tightly integrated into the local market that it can't be run anywhere else. Or building yet another photo organiser. Or very slowly bringing their new browser into the 21st century.
So here's what I think Microsoft should do: get back to their core business. It might be controversial but I think Microsoft should either stop or hive off all consumer-facing activity that isn't core to Windows' viability. That includes a new photo organiser. It even includes their music service, Groove: sell it if they can find a buyer but otherwise just stop working and spending more dollars on it. Many aspects of Microsoft's consumer-facing business are never going to offer a return on their investment but instead act as a stick with which to beat Microsoft.
Sell Skype. They probably won't get as much for it as they paid for it but that just proves my point. What need did or do Microsoft have for owning Skype? Skype will build a client for Windows anyway. Microsoft have tried and failed to integrate it, and even if they had achieved this, what's the advantage? Skype is just a distraction, another complication, and it doesn't bring anyone new to the Microsoft platform.
I even think Microsoft should branch the Xbox off. I believe this makes money so they might want to retain a majority shareholding, but I just don't see what benefit Microsoft gains from owning a games console platform. This is currently a burgeoning topic because Microsoft is putting a lot of effort into building Windows 10 into a gaming platform, so a lot of people will point to the synchronicity of having these two running the same underlying software; I'd say this is chaff. To me, it doesn't matter whether you want users buying your games console or buying games on your desktop OS, this is just diluting Microsoft's forte. Consumers switch console platforms more readily than they do OS platforms so I don't see owning a gaming platform as a big draw to the core business of Microsoft.
To be clear, I'm not suggesting that they shut down the entire Xbox program, I just don't think it should be under Microsoft's stewardship.
Ditch Windows 10 Mobile. If they still feel that they need a mobile OS presence - and I think they should - then buy Cyanogen and move to an Android foundation. With Continuum, Microsoft are on a hiding to nothing; virtually no-one is interested in this, but it must have taken thousands of hours by highly-paid developers.
And one thing that Microsoft should absolutely avoid is social media. Microsoft have to realise that they will never produce anything which 'the kids' will latch onto, feature-rich or not. Apple have tried it and failed; Google+ only has a presence because Google force user data into it.
I don't even feel that Microsoft should necessarily build a browser.
In case my logic isn't clear, Microsoft should become the enabler and not the end product; Microsoft should be the airline, not the holiday destination - whenever they position themselves as the destination they just disappoint: there's building work still going on, the tourist sites aren't as they were billed, everyone else's hotel looks and runs better than yours and although you were sure you'd paid for breakfast, the kitchen is never open, they said they'd provide transport from the airport to the hotel but the driver doesn't recognise your ticket.
So let me be clear what I mean when I say that Microsoft should become the enabler: There are aspects of Microsoft which they do brilliantly, like security (yes, security), Visual Studio (for software development), Office, Azure (their cloud hosting platform) and DirectX (for games development). The pattern here is that these are all behind-the-scenes services which people use to produce something else; it's when Microsoft provide something for consumers that they disappoint. This is why I wrote that they should be enabling developers to write in Swift using Visual Studio.
Everything else that Microsoft does is just a sideshow, frequently lacking in quality and which detracts from the reputation that the above services should have.
I included Office in that list of Microsoft's positive aspects, but I'm not convinced that Microsoft should keep hold of it. Were I in the top job at Microsoft, I think I'd be looking at spinning it off as a separate corporate entity. There's perhaps another blog post in this topic but I find Office365 a lacklustre offering, not in terms of value but quality.
In short, I would decouple Microsoft's services, leave the bare operating system as the core offering, with their other offerings existing behind the scenes, enabling developers to provide their services. And the reason is because Microsoft have proven time and again that they can't offer anything vital when it comes to consumer-facing products.
The elephant in the room
Microsoft's major concern is Google.
PC sales have been falling year after year while Chromebook sales are on the rise. Ok, Chromebook sales are currently a tiny percentage of Windows PC sales, but this isn't just an emerging trend. Chromebooks used to be seen as 'just a browser' but now they're much more than that: Google are actively courting enterprise. And just as alarmingly for Microsoft, while their own effort of a cross-device universal app platform is still struggling to gain momentum, Google are now bringing their massive marketplace of Android apps to Chromebooks, thus nullifying any advantage that Microsoft could have had, had their Universal Windows Platform ever taken off.
Windows is still the dominant operating system across the board but the addition of the Google Play Store to Chromebooks will have massive implications over the next few years.
Retreat back to their stronghold
It's going to be very, very difficult for even a fast-acting, bug-free, glossy Microsoft to fend off the enterprise-baiting Google, but in their current level of fitness I just can't see Microsoft doing it. I've been a Microsoft supporter for a long time and don't want to see Microsoft struggle, but this is a battle which I doubt they're going to win.
There's something that comes to mind every time I see a new product or service from Microsoft: how much did it cost? Microsoft's developers are in one of the most costly software development locations in the world, and despite the lack of quality in the finished product, these are highly-qualified, highly-capable, talented developers - I read a lot of blogs by and have watched videos featuring Microsoft's development personel; these people don't come cheap.
I work with Microsoft's Azure platform and it's great - exemplary, even; The .NET Framework is a brilliant piece of technology and its most recent changes put it firmly ahead of the competition. And yet still Microsoft keep churning out lacklustre services like Groove and Edge. Even analysts believe that Microsoft's future lies in their cloud platform.
At my work we've had continuing problems with Office365, we've probably spent hours on the phone to Microsoft support, and there's no solution. Now, Office is Microsoft's bread and butter, if they can't get Office working what can they offer us? Microsoft still make a lot of money from Office but I wonder how many people choose Office and how many of these licenses are purchased by IT departments who see advantages in things like maintenance support costs instead of user satisfaction.
So this is why I think Microsoft should cede some areas of their market to their competitors, stop slugging it out and spending more and more money. I don't see why Microsoft should be expected to compete across the entire field of both enterprise and consumer computing.
Surely this would mean that Microsoft could downsize if they're focussing only on their core. On the one hand, their stock value may decline on the back of news that Microsoft were to pull out of some areas, but people - Microsoft in particular - have to realise that the technology world has changed since the days of Windows XP and Microsoft are never going to become a leader again - even if they were technically capable and were launching class-leading, bug-free software, Microsoft will never again be the company they were in the 90s for social reasons. Microsoft have to acknowledge this and stop wasting money and damaging their reputation.
Microsoft have even been beaten in the enterprise by the iPhone. They really - really - need to realise when they've been beaten and stop wasting money on developing products or services which go nowhere.
And surely the future of computing isn't even apps, it's the web. In this light, does it make sense to have such a heavyweight desktop OS?
Many have pointed out that Android is the new Windows, so if the future is Google's then where does Microsoft fit in? They have to establish a new niche for themselves, one which doesn't put them in the middle of someone else's war. Watch this fascinating video regarding the financial clout of technology's biggest players - notably, Microsoft doesn't feature.
Scott Galloway discusses the four biggest players in technology and how much they dominate the market. Microsoft is no longer one of the big four.
I'll wrap up with this quote from Satya Nadella. One can easily understand the difficulties he's facing shepherding Microsoft into a future where they're no longer as essential as they once were. I just don't believe that Microsoft's current direction - including paying $26 billion for LinkedIn - is the correct direction.
Microsoft caught the technology trend and rode it very well, but what I’ve come to realize is it’s one thing for companies to catch inflection points and ride them – whether it’s Amazon, Facebook, what have you,” he said. “The real test when that wave ends. The wave you caught that made you successful will come to an end. The question is what’s the next act.