Microsoft has been criticized as being bloated, with too many layers of bureacracy. Wal-Mart, on the other hand, has often been held up as a lean business machine. But an interesting new analysis holds that Microsoft is far more efficient than Wal-Mart.
Deo Melgaco, in an MSDN blog, calculates what’s called the added value per employee, which is really just a fancy name for net income per employees. He compares Microsoft, Wal-Mart, Costco, and Oracle.
The results are eye-opening: Microsoft get $177,450.70 per employee, while Wal-Mart gets only $5,938.95. Costco, meanwhile, comes in at $15,538.24, and Oracle at $57,235.45.
Clearly, high-tech companies will tend to get much more income per employee than low-cost retail outlets. When you buy something from Microsoft, you’re spending a lot more than 79 cents for lightbulbs.
Still, even taking that into account, the numbers are startling; the average revenue per Microsoft employee, for example, is triple that of Oracle.
Melgaco has some pretty interesting conclusions from his analysis, especially when comparing Costco to Wal-Mart. Wal-Mart is well-know for treating employees badly, and has a 40% turnover rate, compared to Costco’s better practices, and a 6% turnover rate. He concludes that the better you treat employees, the more efficient your company will be.
Amen to that.
It helps too that most PCs come preinstalled with Windows. So even if Microsoft does no marketing, billions keeps coming in from all the PC makers. Enough to subsidize everything else that MS's employees makes, which, with the exception of Office and Windows, are mostly LOST-MAKING ventures.
Heck, even the disaster that is Vista, is destined to surpass other OSes in market share in a few months. And its not because people are buying Vista in droves to install over their XP machines, its because it comes by default on most new PCs.
I say most, since even MS stalwarts like Dell, continue to install XP because of the bloat and incompatibility problems of Vista. It even took the unprecedented step of offering Ubuntu as an alternative.
So it is unfair to compare MS to those other companies. In all those other companies, the consumer made a CONSCIOUS decision to patronize their product and services based on the merits. With MS, its the default choice.