Greg's Bite: Scott Forstall, CEO of Microsoft
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Greg's Bite: Scott Forstall, CEO of Microsoft

By Greg Mills

A few columns ago, I mused that Scott Forstall could likely fix the Windows Mobile operating system and make it play nice with Windows for the PC. There aren't that many people in the world with the skill set to design and manage the development of an entire mobile platform.  

Scott is one of those people. With his abrasive personality (at least it's abrasive when it suits him) he could get rid of the dead wood hanging around Redmond simply drawing large pay checks and could actually make innovation happen there again. However, he ought to be CEO, not just a vice president.

It is clear that current CEO, Steve Ballmer, is just riding Microsoft's momentum down hill and needs to "retire" with a cheap commemorative Timex watch warmly presented by Bill Gates.  He should also get a get nice ceremonial plaque for his 10 years of cunning guidance of what used to be the world's largest company. Then he should then get 10 minutes to clean out his desk and get an escort out of the building by security.

Some years ago I took an Emergency Medical Technician course. We learned that in the medical world when someone is brain dead, keeping them on life support eventually becomes expensive and meaningless.  So it is with high tech companies that lose their way. The high tech market is brutal and fast moving. The cascade effect finally hits the tipping point and it is all over. The company's intellectual property is put up for sale and the real estate is sold off.  

The corporate "failure to thrive" decline really begins in the CEO's brain. Fortunately, companies can replace an under-achieving CEO and hire a new one, while it is "game over" for brain dead people. Forstall is soon going to be available and would be a strong replacement for Ballmer.  

Forstall could then hire Ron Johnson away from J. C. Penney to do for the Windows stores what he did for JPN. Or he could just shut them down as the Steve Ballmer "follow the leader" nonsense that they are. Those who follow the leader never get to the front of the line.

While there are a number of former major corporate players in the electronic high tech industry right now also circling the drain, the biggest corporate "dead fish swimming" is certainly Microsoft. Ten years of  basically level stock market value and a declining Windows PC industry are setting Microsoft up for collapse if nothing drastic is done. (See http://www.huffingtonpost.com/larry-magid/microsofts-future-looks-g_b_2207903.html?utm_hp_ref=technology .)

Balmer has clearly run Microsoft into the ground. Once facing monopoly-busting action from the US Justice Department, that stranglehold on the computer industry seems to be quickly loosening. Not only are Ballmer's pet projects repeatedly failing to make it in the market place, the great cash cow, the Windows PC OS franchise, is getting long-in-the-tooth.

Half the operating system releases over the last 10 years have been severely panned by the PC industry itself and, especially, by business users. Thus, into the vacuum comes the rise of the superior Mac and iOS devices into the business world. RIM and Microsoft's loss is Apple's gain.

The Mac OS and the mobile iOS platform are gaining the ground in the business market for good reasons. Only the Microsoft XBox franchise is doing very well, and it may die out in the long term due to game consoles losing out to the mobile gaming trend. Apple basically just backed into the mobile iOS gaming juggernaut through putting a good mobile platform together and enabling thousands of independent developers to create the content.  

Microsoft realizes that developers vote by choosing the platforms to develop for -- and Windows Mobile is way down the list, well below Apple's iOS and Android.  Launching proprietary platforms is a very tricky business; just ask Nokia and RIM.

While missing the mobile computing trend is regrettable, allowing the Windows PC OS "money making machine" to flounder is something far more devastating.  According to reports I have seen, sales of new PC hardware running Windows 8 are very sluggish right now, and Microsoft's "partners" are laying the blame right where it belongs, at Balmer's feet.  The Microsoft, Intel and PC hardware industry known as the Wintel triad is quivering due to a combination of the bad economy and the rise of mobile computing. (See http://www.businessinsider.com/wintel-monopoly-2012-9 .)

People don't like the new Windows 8 user interface being forced upon them. It is too confusing and contradictory with both touch and mouse driven actions all within one dysfunctional system. The mere size of the Windows Mobile 8 OS eats up so much Ram for lunch and leaves little memory left over for apps.  

Laughing off Steve Job's statement that the PC era is over was characteristic of the CEO of Microsoft. He famously declared the iPad challenge to the Windows PC as only a "rounding error" in the projected numbers Microsoft was expecting. I have not heard that statement repeated lately. For the first time, PC numbers have been falling long enough to see a seismic change taking place. People are discovering mobile computing in droves and Microsoft still isn't there yet.  

Elsewhere I read speculation that the price point of the Surface touch screen matching iPad was a disastrous mistake, as it falsely raised the expectations of buyers that they were getting a device of equal value to the iPad. When you drop that much money on a new computer and it crashes, doesn't have enough meaningful software available for the platform, and physically breaks where it bends, you return it and mention the disappointment to your friends.  

Product return rates for the Surface computer are really more meaningful for the actual success or failure of the new device than the puffed-up sales numbers Microsoft constantly alludes to without actually posting exact sales information.  The Kin phone sold okay; it was the returns that killed the product. So it appears to be with the Surface computer. Watch for a price reduction and eventual discontinuation of the Surface. Further new models are also likely to suffer the same fate.  
 
Microsoft needs to think differently and time is not on their side. I would change my position on Microsoft stock from sell short to go long if Ballmer took the long hike to the exit door and Scott Forstall took over. I think the stock market would explode and see the long dormant Microsoft shares spike. There is a long way to go to turn Microsoft around, but getting rid of Ballmer must be the very first step.  Replacing him with someone capable of real innovation comes next.  

That is Greg's Bite.

 

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