OpinionMay 15 2013

Losing your cool

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How do you avoid losing face from a volte-face? I am not sure you can ask Steve Ballmer, whose major contribution as chief executive of Microsoft so far seems to be to release an operating system, admit it is wrong, and then announce a planned ‘enhancement’ to remove much of the ‘new’.

Of course that is not entirely fair because many commentators would note that he had successfully altered (improved) the culture at Microsoft and refocused the business. That he might have miscalculated with his first major release should not, however, justify him being fired. But there are lessons to be learnt from this debacle and, also, important parallels that should not in this case be drawn.

I wrote about Microsoft and the reason it is an attractive stock (at the right price) a while ago. Unfortunately, it seems, no one at Microsoft read that article since the fundamental reasons underpinning its value – its broad corporate client base – were seemingly overlooked with the release of Windows 8. Rather than building an enterprise-quality, efficient and clean operating system, Microsoft instead offered a slightly more modern-looking version of Apple’s iOS – tiles, colours and everything you need to instantly see your friends’ Facebook status or the weather. But not so great for those of us who spend our lives in spreadsheets, Datastream and other such programs. Indeed, just finding a program got a whole lot harder than it used to be with the seeming disappearance of the ‘Start’ button. For a company that must have spent many millions of dollars hyping that ‘Start’ button with Windows 95 (I feel old remembering back to then) it seems quite amazing that it would make searching for the ‘Start’ button now feel like a game of Where’s Wally.

So what did Microsoft do wrong? Ultimately, it made the same error any middle-aged father seems to make when trying to appear trendy to his children – it tried to steal some of Apple’s ‘cool’ thunder by building a consumer-friendly and, indeed aesthetically pleasing, operating system.

But while Apple has carefully maintained segregation between iOS (tablet/phone) and OS X (desktop operating system), Microsoft effectively combined them into a riot of colour that was hardly suited to the average business user who values practicality over form.