Steve Ballmer recently issued a mea culpa when he admitted that Microsoft bit off more than it could chew when it embarked on its Vista upgrade that was to change virutally everything about Windows. Unfortunately, though, he went on to say that Microsoft will succeed by going in many directions, and being a “multicore” company. He’s got that exactly wrong.
The real root of the Vista problem is that Microsoft is trying to get into too many businesses, and because of that, it’s lost focus on what should be its primary purpose: To write operating systems and application software.
Now it’s in the gaming business, the search business, the services business, the hardware business, the portable media player business, the entertainment business…what’s next, the apparel business?
Getting into so many different businesses obviously takes away resources from its core business. But even worse, it requires that Microsoft become a large, show, old-fashioned corporation, one that’s not particularly well-suited to the kind of quick changes and innovation required in the tech world.
Ballmer, though, doesn’t appear to have learned that lesson. Instead, he said the company would have many “cores” and be in many different businesses simultaneously.
“There really is a Sony that lives inside us, and there is an aspiring Yahoo or Google that lives inside of us,” he said at a recent analyst meeting
I’m hoping this is bluster, and that he eventually sees the light. I want great versions of Windows and Office from Microsoft. I don’t need an MP3 player from them.


While I am not trying to defend Microsoft, it seems like wall street could really be blamed for this. Companies have to keep increasing the profit margin even when they are at the top of their game. This means businesss diversification, and while that may make investors happy in the short term, it does not bode well for the original business the company started with.
I could not disagree with you more. The business/software model is changing. For example, Microsoft's core is under threat of extinction - I.E., Linux, OpenOffice and a disconnected but connected world powered by the internet and mobile devices. In short, we are going down the road of services. I strongly believe that MS is going to have to deliver a free version of windows in the next couple of years. With that said, their core business may not be from windows or office. It is essential that Microsoft is looking into the near and distinct future and building the necessary foundation to support these emerging business opportunities. I don't think they have a choice.
Are you really surprised at this? Here's the cycle of business. The company saturates it's market and sales start to decline. Some smart person comes in and says "We've got to expand into new markets". There is a flurry of activity as things ramp up. Pretty soon it becomes obvious that the company is spread too thin into markets where they aren't making a profit. A new smart guy comes in and says "we've got to focus on our core busines". All the marginal stuff is closed down or sold off. Lather, rinse, repeat. Microsoft is in the expand stage and will soon fall back into the collapse stage. Give it a year.
I actually have a Microsoft shirt.
Maybe the apparel business is next.
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