Thursday, October 27, 2005

FY06 Q1 Results, SteveB Memo, and Non-Compliance

More quarterly financial results and a Steve Ballmer email to boot! Some quick lazy links thanks to Todd Bishop at the Seattle PI:

And some more...

Joe Wilcox has a take on the financial results: Microsoft Fiscal 2006 Q1 Results . It ends with a kicker:

Given Xbox 360's power--easily rivaling many home PCs--I would contend that Microsoft is a computer manufacturer, ala Apple.

Hmm. The Red Herring link up there ends with this bit:

The company also went through a reorganization creating three broad groups comprised of platform and products services, a business division, and entertainment and devices. The reorganization sought to realign various business groups and “speed up execution,” Microsoft said.
But the move got a thumbs-down from analysts who said it failed to tackle the bureaucracy and lack of agility that has plagued the company in recent years (see Redmond Reorg Skirts Problems).

That last link, Redmond Reorg Skirts Problems, is a good read. A snippet:

Mr. Cohan suggested Microsoft may need to look at radical solutions, such as splitting up the company, to get its mojo back. "If you split it up into smaller pieces, each of which can act as an entrepreneurial venture, then it could energize the company," he said.

(There's mojo again - is that an emergent term? Maybe if I had started this blog for the first time today I'd rename it Mojo-Microsoft.)

Alright, so how is the stock doing after hours. Is it (baiting my breath) taking off like a rocket like Google this past week, up 10% or more? Click... no, down to $24.45 (exhale / sigh). A general concern is being expressed about XBox 360 and Microsoft being able to sell enough units. People don't have a good idea how many units are going to be available for launch or through the rest of the year. Answering that would relieve some angst (Wall Street + Angst ==> Flat Stock).

Personally, I'm a bit worried about initial XBox 360 impressions. I sat down at the Company Museum and played with one (I'm sure I had a frowny face as I sat in-front of the money losing gift to the gaming community). First of all, the controller is fantastic. Secondly: I couldn't tell any difference in graphics and play from just a regular ole XBox game. Now, I know it wasn't a big huge screen or anything, but if you had started up the game and given me my old Duke controller, I would have been quite convinced I was playing on the good ole XBox. I hope the future games blow away this initial taste.

Given that XBox 360 is supposed to be one of the innovative firecrackers erupting out of our big-bang pipeline, Microsoft needs to do everything possible to assuage The Street that all is good and there will not be missed opportunities for the holidays. As of today, XBox 360 is getting marginalized by supply worry. Now is a good time for a dose of that Ballmer sunshine.

As for SteveB's memo today: I'd like to provide kudos on the last item in the memo: providing quarterly web casts about what's going on. That's great. Even if I'm saving my old wine corks to help shield my orifices from sunshine and smoke, I think the more upper management communicates with the rank-and-file the more the current communication gap we have starts to close. For instance, I wish every VP was as open as Chris Jones on http://blogs/ - the guy went and posted his commitments, for goodness sakes. More honest communication on a frequent basis is nothing but goodness.

One last thing: we all know the term "currency" as applied to building good will with external or internal teams. Something you build up with trust and loyalty and such. Well, we just went and blew our currency with the government and Judge Colleen Kollar-Kotelly over this dumb-ass "Microsoft Only" strong-arm tactic for music-player vendors. I love this snippet from the C|Net article:

An attorney for Microsoft, Charles Rule, said Microsoft regretted the mistake and that "a low-level business person" who was not fully aware of Microsoft's mandate was responsible.

Blame it on the newby flunky. First of all, fire everyone involved. You want to be serious about the credibility hit we just took? Fire the folks involved and let PR know it's okay to say publicly that we've eliminated those folks as part of being dead serious over compliance. And you know, this didn't just slip out with low-level persons coming up with this scheme on their own. This is worse than a demo crashing. This kind of mistake puts the company and the shareholders at major financial risk. The government might go ahead with a forced break-up and split us up into three smaller companies and - oh!

Oooo. I likie. Maybe there's someone working here that's a lot more devious than I can imagine.

(Two week cool-down complete. Comments are back on - enjoy and behave!)

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