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Should Microsoft Be Broken Up?

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Caleb Kraft
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ms divisions
Caleb Kraft   10/15/2013 9:17:37 AM
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Doesn't seem like a bad idea. However I'm having a hard time wrapping my brain around what the divisions would actually be. Care to speculate?

JimMcGregor
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Re: ms divisions
JimMcGregor   10/15/2013 11:21:09 AM
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I admit that there are no clear lines. You could divide the company in many different ways. I would consider separating all the applications and cloud services into one unit, including Office. The OSs are best paired with the hardware systems, but this could be split further. While I think the handsets, Surface, and PC efforts probably belong together, the Xbox belongs more with the cloud services because of the long-term direction of the market. Separating MSN and bing may also be a good division to allow for an acquisition or merger to better position these internet offerings.

Some Guy
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CEO
If a headline ends in '?' is the answer No?
Some Guy   10/15/2013 12:00:41 PM
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Two movies here: break it up like Moto or Nokia, or double down like IBM under Gerstner. I wouldn't point to Nokia as the way to go, and I think the jury is still out on Moto, too.

The converse with IBM worked out, not because it was a double-down per se, but because Gerstner, with all his time at McKinsey, took the time to analyze what he really had, had the support of the board and was effective in leading IBM out of the morass it had created for itself. I can't imagine that being possible, however, if Thomas Watson were still hanging around on the board. That should give one pause for thought at Microsoft.

I expect in the end, MSFT will continue to muddle along innovating by acquisition until it all blows up or the board moves beyond its founders.

JeffL_2
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CEO
Wrong business model
JeffL_2   10/15/2013 12:42:33 PM
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Remember Microsoft was created on a PC-centric model where the hardware was "commoditized" and the money was supposed to be made on the software. In the market for "PEDs" (personal electronic devices, like smart phones and tablets) Apple and others have successfully turned the market on its head, making the money on hardware and leaving it up to a faithful developer community to write apps. In the game console market Microsoft has had moderate success in hardware with Xbox and especially Kinect but they're STILL on the wrong end because the big money here is in media (the games themselves, you need to be able to write one "blockbuster" after another to gain market share), and (outside of the "Halo" franchise) they haven't made much of a dent there either, they're certainly in no shape to go mano-a-mano against the likes of a TakeTwo Interactive. Add the acquisition of Nokia and this is a lot worse than just a case of "lost focus". It's going to take a LOT more than reshuffling the name signs on the doors on mahogany row to fix this, if it were a smaller company you'd probably take the company private and put it in the hands of a turnaround specialist THEN figure out how to reshape the remaining parts but this is WAY too big for that, I admit I don't really know how it could be done without causing major pain to the existing shareholders.

betajet
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Re: ms divisions
betajet   10/15/2013 1:27:03 PM
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Here is the result of the 1998-2001 United States v. Microsoft Corp. case according to Wikipedia:

On April 3, 2000, [Judge Thomas Penfield Jackson] issued his conclusions of law, according to which Microsoft had committed monopolization, attempted monopolization, and tying in violation of Sections 1 and 2 of the Sherman Antitrust Act.  Microsoft immediately appealed the decision.

On June 7, 2000, the court ordered a breakup of Microsoft as its "remedy". According to that judgment, Microsoft would have to be broken into two separate units, one to produce the operating system, and one to produce other software components [application programs like Office].

The remedies were overturned on appeal.  However, they were only delayed since Microsoft is slowly turning over its operating systems business to linux.org and gnu.org, and its application business to libreoffice.org :-)

JeffL_2
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CEO
Re: If a headline ends in '?' is the answer No?
JeffL_2   10/15/2013 2:21:42 PM
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Gotta respect the opinion of anyone savvy enough to choose "Reddy Kilowatt" as his blog picture. It was the promo symbol of a power company that I patronized many decades ago, long before we were politically bludgeoned into believing that our electrically spendthrift behavior would doom the entire planet, just so Al Gore could build up his media resources and sell them to a petroleum-funded Islamic news service. Reddy for President!

Sheetal.Pandey
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Re: ms divisions
Sheetal.Pandey   10/15/2013 2:35:14 PM
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Microsoft is a big giant on itself and after recent acquisitions they have variety of business that require different experience and vision. They may require few CEOs to take the company forward. The top boss may be the one who has grown with the company. Would be a challenging situation though.

j_b_
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Manager
I'm not so sure ...
j_b_   10/15/2013 5:21:17 PM
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Over the years the mantra is always changing between "diversify" and "focus on your core business". Obviously neighter is "right" just because somebody says it, both have their merrits. I would consider "focus on core business" when my resources were becomming so limited that I might loose ground or momentum there. But as long as the bank says yes I would rather keep my fingers in other waters as well in order to see upcoming business opportunities.

Now, there used to be a time when Microsoft was THE company when it came to software (IBM lurking mightyfull in the background). They had the money, got the talent, defined the rules. OK, unbelievably they failed to catch the search-engine train and they (probably) failed to get the smartphone train too. They helped Apple to recover (and I'm sure they make money out of Apples success) and Apple went PC hardware and BSD ...

BUT: The industrial and generally commercial PCs will continue to run Windows as long as MS doesn't go the Apple way and closes Windows down to non-AppStore software. They ARE moving in that direction, but is a car manufacturer going to put his assembly line control software through the AppStore for approval ? I don't think so. And I also don't think that Linux can replace Windows because Linux became such an incredible mess of 1000s of versions and philosophies - That's why Apple wins by offering just ONE package on a small number of hardwares. So in my opinion the major part of the professional market for PC operating systems will remain with MS. So they have money. They also own a lot of content and they cover a lot of ground concerning knowledge. So all they need is to grab the "next big thing" by the horns and nail it this time. I don't see why Google or Apple should always win.

So why split ? Only makes the parts weaker than the whole.

 

Bert22306
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CEO
What about Apple?
Bert22306   10/15/2013 5:36:02 PM
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That was my knee-jerk reaction.

There was a time when we used Microsoft for the OS, Smartware, Lotus, or WordPerfect for productivity software, Netscape for e-mail and web browsing, Norton for disk utilities, and so on. It bothered me to see our own company, and others, caving in to "all Microsoft" solutions, and even bragging about it. At the time I said, why are we bragging about this?

But see, here's the thing. When Microsoft managed to achieve this, everyone talks about breaking it up. (Not that I personally oppose that idea.) But when Apple creates a walled garden of hardware, apps, services like iTunes, this foerever-promised AppleTV, etc. everyone gushes about how great it is, and how everything "just works."

Hey, I thought that Apple was "the most valuable company." If that's the case, how come we aren't focusing on them? Or at least, *also* focusing on them?

jackOfManyTrades
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Re: If a headline ends in '?' is the answer No?
jackOfManyTrades   10/16/2013 5:21:59 AM
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It is very frightening that climate-change denial is such a powerful idea that even someone who reads ET can be suckered into believing it. Be under no illusion: climate-change denial belongs very firmly in the same camp as creationism, alternative-medicine etc. Take a look at the website of any reputable scientific institution (The AAAS, NASA etc) and see which camp they're in.

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