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Ballmer’s Last Stand: Cloud Chief Taking Over Microsoft

1/31/2014 02:05 PM EST
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zewde yeraswork
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Nadella
zewde yeraswork   1/31/2014 2:55:13 PM
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Who knows whether Nadella's appointment is a matter of time or a matter of speculation at this point....It certainly seems like he is popular with Microsoft employees, and woould not represent a major disruption being a company guy. Whether or not this means there will be more of a focus on the cloud also remains to be seen. Although that's his background, Nadella also has strengths in other areas and would ultimately be there to run the company not the datacenter business.

AZskibum
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Re: Nadella
AZskibum   1/31/2014 4:04:26 PM
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"Industry analysts are giving Nadella high praise for his work as the cloud chief, but there is some concern about how he would handle decisions on tablets, smartphones, and other areas where he has no experience." One wonders what those same analysts would say if the new CEO were someone from a different industry, like a former auto company exec.

junko.yoshida
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Re: Nadella
junko.yoshida   1/31/2014 4:45:09 PM
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@AZskibum, of course, they would hate it, and talk about their "concerns"!

JimMcGregor
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Re: Nadella
JimMcGregor   1/31/2014 5:35:10 PM
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Actually Junko, I think bringing in an outsider with a fresh perspective would be a good move that would likely bring discipline and focus to the company. However, knowing what path to choose when your background is from a different industry could be a challenge.

junko.yoshida
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Re: Nadella
junko.yoshida   1/31/2014 5:37:09 PM
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@Jim, I understood. Sorry, I was being sarcastic.  

CKent
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Bye Bye to more US jobs
CKent   1/31/2014 6:04:09 PM
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If Satya Nadella from India becomes CEO, you can be sure that the jobs in India will be growing while the jobs located in the US will be shrinking. What jobs exist in the U.S. will be filled via H1B visas.  Does anyone understand that we are in an economic war and China/India is winning?  It amazes me how U.S companies allow themselves to be taken over.

Bert22306
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Re: Bye Bye to more US jobs
Bert22306   1/31/2014 7:56:05 PM
Does anyone understand that we are in an economic war and China/India is winning?

Heh. The problem happens because "we" can refer to different people and/or organizations. Corporations are in a war among one another. They will do whatever it takes to win. Corporations aren't countries.

You have to be cynical about these things, not because being cynical is fun, but because the cynical view is simply more accurate. Microsoft would move any aspect of its operation offshore, if they see a net market advantage to doing so.

Years ago, when I was just starting out, an older and wiser colleague told me that one doesn't owe any special loyalty to the company one works for. Why? Because if it's in their best interest, they will lay you off in a heartbeat. I thought he was being overly pessimistic, at the time, but over the years, I have seen that this is so.

daleste
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Re: Bye Bye to more US jobs
daleste   1/31/2014 10:20:03 PM
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Good point Bert.  I have seen it many times.  The company will keep you as long as they feel that you are giving more than they pay you.  As soon as they feel you are being paid more than you are worth to the company, you are at risk.  It is a lot of fun to be good at what you do, but if it is not profitable for the company, you may still lose your job.  I know people that are losing their jobs now despite what the president says.  Times are tough and jobs are hard to find.

rob18767
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Re: Bye Bye to more US jobs
rob18767   2/6/2014 8:32:30 AM
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I would suggest it is even tougher than that. If the company can pay someone even less for doing your job, even if that someone is making a profit for the company, then firing the more costly worker will increase profits.

Hence the outsuorcing of software to India. 


Globalization has changed the world. I suppose we can re-erect the barriers. However the main problem is that goods, services and, most importantly, money flow across borders with ease while people cannot.  

DMcCunney
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Re: Bye Bye to more US jobs
DMcCunney   2/6/2014 2:04:08 PM
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@rob18767: Globalization has changed the world. I suppose we can re-erect the barriers. However the main problem is that goods, services and, most importantly, money flow across borders with ease while people cannot. 

Indeed, protectionist barriers have been tried time and again through history, and are still being tried.  (A good bit of the problems in the Eurozone revolve around countries that tried to do that as politicians attempted to protect consitutent workers and industries from competition from elsewhere.)

Ultimately, all such efforts do is delay the inevitable.

And there is a larger and more direct problem.  When you erect barriers to protect local workers from foreign competition, you raise prices for all locals.  Wages are a component of cost-of-goods-sold, and higher wages result in higher prices for the goods those workers make and the services they perform.

Consider the computers we use as tools of our trades.  Lots of folks decry the outsourcing of consumer electronics to China to get lower labor costs.  What would they cost if there was a legal requirement that all steps in the process be done here by US workers?   (And would you ban import of gear made by foreign manufacturers not subject to those requirements, offering equivalent gear at prices half what a US vendor would have to charge?)

And if you try to do that, forget generating revenue through export - the rest of the world won't pay those prices.

seaEE
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Re: Bye Bye to more US jobs
seaEE   2/1/2014 12:13:22 AM
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Don't be so sure everything is going to China and India.  Per this reuters article, Foxconn is eyeing factories in the U.S. and Indonesia:

http://www.reuters.com/article/2014/01/27/us-foxconn-taiwan-idUSBREA0Q01F20140127

DMcCunney
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Re: Bye Bye to more US jobs
DMcCunney   2/1/2014 10:18:26 AM
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@CKent: What jobs exist in the U.S. will be filled via H1B visas.  Does anyone understand that we are in an economic war and China/India is winning?

We are all in favor of competition when it benefits us in terms of lower prices and greater choice.  We are less thrilled when we must compete.

Value is relative.  Something is worth what someone else will pay for it.  That includes the worker's labor.  If another worker can do the same job you do as well as you can, and is willing to do it for a lot less than you charge, tell me why an employer should pay you your desired rate?   (Hint: there is no reason.)

Work flows to where it can be done cheapest.  The growth of the Internet has vastly accellerated that process.  With instant high speed communications, many jobs that don't have to be performed in a particular location, like software development or engineering design, can be done from anywhere in the world, and increasingly are.

In the world we are moving into, if it can be done by machine, it will be.  If it can be done somewhere else by someone willing to do it cheaper, that will happen too.

The challenge for any worker is to provide value the customer is willing to pay thier desired rate to have done.  For technologists, it's the Red Queen's Race: "Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!"

The usual response to cries about competition from China and India are protectionist. and call for government regulation to protect US jobs.  The problem is, it will at best delay the inevitable.  There is constant pressure to lower costs and increase productivity, and those pressures caused the work to migrate where it could be done cheaper.

We all look for the best deals we can get on stuff we buy, and the Internet provides tools to help us find them.  The flip side to protecting US jobs is higher prices.  How much more are you willing to pay for what you buy to have it produced in the US by US workers at US wage scales?  Half again what you pay now?  Double?  Because that may be the price of what you seem to want.

 

 

 

dt_hayden
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Re: Bye Bye to more US jobs
dt_hayden   2/6/2014 1:08:21 PM
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"Work flows to where it can be done cheapest.  The growth of the Internet has vastly accellerated that process.  With instant high speed communications, many jobs that don't have to be performed in a particular location, like software development or engineering design, can be done from anywhere in the world, and increasingly are.

In the world we are moving into, if it can be done by machine, it will be.  If it can be done somewhere else by someone willing to do it cheaper, that will happen too."

 

You forgot the disclaimer excepting management and boards of directors.   For some reason those "jobs" must be done in the US at top wages. 

resistion
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Technology globalization
resistion   2/1/2014 11:00:06 AM
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The effect is technology globalization, and the cause is technology originally developed by the US has become very difficult to continue and improve in the traditional way, as mobility puts more emphasis on carrying data around compactly or storing it in the cloud, rather than hardcore computing. Sometimes new technology development even requires international collaborations. Particularly anything related to Moore's law, extending or going beyond its limit. As a result, other countries are able to catch up. China (SMIC) will be able to do 28 nm very soon. That will level the playground like a bomb, as the leading players struggle with FinFETs.

TarraTarra!
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Re: Bye Bye to more US jobs
TarraTarra!   2/3/2014 12:45:53 PM
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"you can be sure that the jobs in India will be growing while the jobs located in the US will be shrinking"

 

You are completely off-base here. There is no correlation between the ethnicity of the CEO and out-sourcing. It is all about growing share-holder value. The microsoft board is making a decision on the effectiveness of the incoming CEO with that in mind.

 

Steve Jobs out-sourced most manufacturing and assembly to China not because he was secretly Chinese or had a soft-spot for Asia, he needed that to be competitive.

Syed Hussain
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Re: Bye Bye to more US jobs
Syed Hussain   2/4/2014 6:18:02 AM
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The logic "Bye Bye to more US jobs" is utterly wrong practically. In my experience Indian CEO or group heads are more cautoius about out sourcing to India than the US managers. I think he is going to prevent out sourcing to India and put more sourcing to China. After all CEO's are absoulutely focussed on making share value higher. So the way company will benefit that road will be followed.

dt_hayden
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Re: Bye Bye to more US jobs
dt_hayden   2/6/2014 1:18:14 PM
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"Steve Jobs out-sourced most manufacturing and assembly to China not because he was secretly Chinese or had a soft-spot for Asia, he needed that to be competitive."

 

Actually it was out of the insatiable greed by sociaopathic coporations, which their stockholders demand.

http://ycharts.com/companies/AAPL/profit_margin

DMcCunney
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Re: Bye Bye to more US jobs
DMcCunney   2/6/2014 2:51:09 PM
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@dt_hayden:  Actually it was out of the insatiable greed by sociaopathic coporations, which their stockholders demand.

The more I read these forums, the more convinced I become that an elementary course in economics and finance should be a course requirement for any engineering degree. 

The one constant is change.  The one thing we can say for sure about tomorrow is that it will be different than today.  We do not know (and likely cannot know,) how it will differ - only that it will.

A business is like any other creature in an environment.  Before anything else, it wants to survive.  It wants to be around to open its doors tomorrow to do more business with its customers.

Surviving and prospering tomorrow requires that the business change.  It will have to stop doing some things it currently does, start doing some new things, and do some of what it continues to do differently than today.  To make those changes, it must invest in the business.

Your business is unlikely to have the money lying around to make the necessary investments.  It is likely fully invested.  To get the capital needed to invest, you must get it from outside the business, as Other People's Money.  You may get it in the form of equity, by selling stock, or debt, by getting loans.  Either way, that capital will have a cost.  Investors buy stock because they expect a return.  Lenders expect to be repaid with interest. 

How much your capital will cost will be a function of how healthy you are perceived to be.  If you are perceived to be healthy, you will have a high stock price and have to sell less stock to get the capital, or you will get a lower interest rate on the loans you take out. because the lender sees less risk in your ability to repay.  If you are perceived to be unhealthy. capital will cost a lot more because those who might supply it will see greater risk, and want a larger return in consequence.

The usual question asked by companies that ought to know better is "What is the maximum profit we can make?"  It's wrong.  The correct question is "How much profit do we have to make, to survive?"  The answer is simple: "Enough to cover our marginal cost of capital."  For some companies, the most optimistic answer to "What is the maximum profit we can make?" is lower than the answer to "What must we make to survive?", and they're in trouble.

The problems in high-tech industries are exacerbated because they are capital-intensive industries, and by the nature of their business, the amount they need to invest is far greater, with greater attendant costs and higher profits needed to cover those costs.

This isn't sociopathic corporations responding to greedy sharehaolder demand.  It's a rational response to an environment. Different businesses have different capital requirements and costs, and different ways in which success is measured.  There's a reason why a high-tech outfit like Apple might consider a 22% margin lower than they want to see.

If you get an opportunity, sit down with the guy in your shop responsible for coming up with the money when investment is needed, and see how the world looks from his chair.  It should be an eye-opener.

betajet
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I shall survive
betajet   2/6/2014 3:07:00 PM
I really doubt that the CEOs of a lot of USA companies care if the company survives.  They care about how much money they make personally.  Sure, if the company survives and remains healthy they stand to accumulate more money, but if they have to choose between their own riches and the long-term health of the company and its employees I suspect they'll look out for #1.

JMO/YMMV

Max The Magnificent
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Re: I shall survive
Max The Magnificent   2/11/2014 1:29:31 PM
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@betajet: I really doubt that the CEOs of a lot of USA companies care if the company survives.  They care about how much money they make personally. 

Oh so cynical for one so young :-)

rob18767
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Re: Bye Bye to more US jobs
rob18767   2/6/2014 3:10:35 PM
I think the point being made that companies behave like sociopaths because this is a rational response from their perspective. 


A lack of empathy is vital for survival in a globalized capitalist world. This bypasses the need for social responsibility. 

rich.pell
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Re: Bye Bye to more US jobs
rich.pell   2/6/2014 3:22:24 PM
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"This bypasses the need for social responsibility."

So providing goods and services to consumers and businesses that want/need them - and, not incidentally, creating jobs in the process - is somehow "sociopathic" behavior?

rob18767
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Re: Bye Bye to more US jobs
rob18767   2/7/2014 7:45:58 AM
That's a strawman argument. My point was solely to do with what businesses are required to do in order to survive. 

Businesses, at times, need to lack empathy for humans, even the ones who have made them profit, in order for those businesses to compete. That's not a judgment, it is a raw and harsh fact.  

betajet
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Re: Bye Bye to more US jobs
betajet   2/7/2014 9:36:48 AM
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rob said: Businesses, at times, need to lack empathy for humans, even the ones who have made them profit, in order for those businesses to compete. That's not a judgment, it is a raw and harsh fact.

IMO, businesses that get a reputation for treating their employees like Kleenex have a hard time recruiting the best talent.  Similarly, those that treat their suppliers and partners like Kleenex have a hard time with future partnerships.  It may save money in the short run -- which benefits the current CEO -- but they'll eventually get wiped out by a competitor who was able to attract better talent and forge better partnerships.

["Kleenex" is a reference to Nuns on the Run (1990) in which the gangster boss says "We use them and we throw them away -- like Kleenex".]

rich.pell
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Re: Bye Bye to more US jobs
rich.pell   2/7/2014 10:04:51 AM
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"That's a strawman argument. My point was solely to do with what businesses are required to do in order to survive."

My argument was with the use of the derogatory - and innacurate IMO - characterization that "companies behave like sociopaths." Operating in one's self interest - which may include making decisions that sometimes do not benefit certain individuals or groups - does not automatically equate to "sociopathic behavior."  If it did, it could apply to all other societal entities as well, including individuals and governments.

krisi
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Re: Bye Bye to more US jobs
krisi   2/7/2014 10:36:20 AM
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Companies do operate only for their own self interests and maximization of profits. It is a basis of the capitalistic system we live in. It is as simple as that. There is just nothing else...Kris

rich.pell
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Re: Bye Bye to more US jobs
rich.pell   2/6/2014 3:10:58 PM
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"...an elementary course in economics and finance should be a course requirement for any engineering degree."

+1

In fact, it should probably be a course requirement for almost any degree.

HardwIntr
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Re: Bye Bye to more US jobs
HardwIntr   2/7/2014 4:11:52 AM
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"In fact, it should probably be a course requirement for almost any degree."  

frankly, i don't need a degree in economics to understand whats happening and whats coming for us in our so called developed countries. Corporations, banks and governments don't absolutely care about their people. Their only motto is outsourcing, immigration, fiscal optimization. It's up to normal citizens to contribute to all the taxes. Governments are very creative in that domain. 

Eventually, the ultimate goal is just to create jobs in the US and Europe but with chinese salaries. When they do, it's with great fanfare like Apple did recently with their Mac Pro. That's just what their New World Order is about.

dt_hayden
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Re: Bye Bye to more US jobs
dt_hayden   2/6/2014 3:35:15 PM
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The more I read these forums, the more convinced I become that an elementary course in economics and finance should be a course requirement for any engineering degree.

...

The problems in high-tech industries are exacerbated because they are capital-intensive industries, and by the nature of their business, the amount they need to invest is far greater, with greater attendant costs and higher profits needed to cover those costs"

 

Insult aside, your argument is full of holes in response to my comment about Apple supposedly needing to move production offshore to be competitive.   That 22% net income is after expenses are paid.   When is Apple going to invest that $150 billion cash hoard?  Spending $8 billion a year in capital investments, it will take a while.  Their shareholders are demanding that cash hoard be given to them. 

http://www.forbes.com/sites/connieguglielmo/2013/12/04/carl-icahn-wasnt-joking-about-that-150-billion-stock-buyback-by-apple/

Corporations are sociapathic by nature.   Shareholders are finnicky and greedy, rarely keeping long term investment in a less than stellar performing company.  It's a symbiotic sociapathic relationship lacking a sense of moral responsibility or social conscience.  

 

ddnkkb
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ddnkkb
ddnkkb   2/2/2014 9:16:40 PM
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yes l know..thanks for this info

 

Kaos Bayi

Fredo3
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Ballmer's Bonkers Presentation
Fredo3   2/3/2014 12:11:20 PM
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Steve Ballmer's 2006 Microsoft presentation will forever haunt me as the most bizzare performance I have ever seen.

zewde yeraswork
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It's official
zewde yeraswork   2/4/2014 9:44:09 AM
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Now that Microsof thas made the news of Nadella's appointment official, how do you think he will fare as the next Microsoft CEO?

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