Thursday, October 28, 2010

Microsoft FY11Q1 Results

How about some FY11Q1 Microsoft earnings!

My usual suspects for earnings discussion:

Once more, with feeling.

I expect that we'll have yet another break-out quarter, a better idea that Kinect is poised to be a great seller for the holidays (sell-out pre-orders and screaming Oprah audiences can't be too wrong), and some glow from reasonable WP7 reviews (oh, and yes, we all realize that it doesn't have copy and paste - and yet the apocalypse will not arrive).

So this seems like a do-over with more good news from the last quarter. Will Wall Street react with the same "Meh?"

An interesting pre-earnings release article: Sleepy in Seattle - Microsoft learns to mature.

Again, not much love for Mr. Ballmer. So, since the last quarterly earnings, Ms. Friar at Goldman Sachs dropped a bomb on Microsoft and there's been serious concern that Mr. Ballmer is clearing the executive bench at Microsoft. Or is it cleaning house? Since we're unable to criticize any mistakes our departed leaders have made, it remains a big unknown.

iPad, iPad, iPad!

Once it was "Google, Google, Google." Now it's Apple's iPad meant to be Microsoft's undoing. First of all, major props to Apple's continued success. It's been a long journey for Steve Jobs and Apple - especially for those of us who read The Journey is the Reward back when it was new. I like my iPad. It's fun. It's also no notebook replacement. I'm not even going to use it for writing tweets on Twitter, let alone writing emails. It's for screwing around, and I like screwing around... so I like my iPad. I'm blessed that I've got the spare cash for such a luxury device and the spare time to play with it.

It's a new, quick consume experience that our Tablet vision failed to realize because our Tablet vision (like all visions of that time) was so firmly shoved up the Enterprise's butt we didn't care for consumers who'd pay good money to have a fun device to facilitate their screwing around.

We continue an expensive lesson in enlightenment. And spanking: Microsoft's consumer brand is dying.

And goodness help us if Apple TV takes off. Our inability to string together a coherent TV strategy (despite having been in the TV realm for over a decade) is yet another dropped pants embarrassment waiting to happen and represents the anxiety that Wall Street has about our future despite having successes in the present.


Cost cutting's slippery slope continues. I'm sure if we don't talk about continued overhead management (people, benefits, etc) that it will be an analyst question. I still believe we need to chuck about 15,000 positions (and half of our super-ballooned contingent staff) rather than continue the slow squeeze around the company that's making this an ordinary job with some extraordinary wonderful people who just haven't given up on the company. Yet. I hope that the analysts realize that continued, consistent bloodletting because a negative for hiring, and (allow me to be pro-hiring for a moment) if we can't bring in deep-talented new blood to replace the departed dead wood, our future is doomed to mediocrity.

And that doesn't get you a good dividend.

New Talent

And we're losing the battle for hiring new talent. If you review who we're losing to, it's a big surprise. You look at who is ahead of us in preference and you say, "Really? Graduating students think they are a better place to work than us?" It's a cold splash of reality that makes me - they guy who said we've turned things around and things are going great for our major initiatives - wonder if things are worse outside of the Microsoft bubble than I thought.

Frank, you're fighting an epic battle.

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