Ask Paul: July 4 (Premium)

Happy 4th of July if you're celebrating, and happy Friday regardless. Let's kick off this holiday long weekend a bit early.
?️ It's not you, it's Microsoft
ianceicys asks:

With the constant strategic zig-zags under Satya, the never-ending layoffs, and what feels like a slow abandonment of Windows as the premier technology platform--- I’m honestly struggling to understand what’s left to believe in (and don't say Copilot and AI---a fun toddler at best compared to ChatGPT). So many of us who used to be die-hard fans now feel completely disconnected from the Microsoft we once admired.

The issue here is that, with perhaps one major exception, Microsoft is in no way focused on the consumer market. And so its focus, its overall strategies, and the way we perceive its treatment of Windows and other products and services that individuals use is skewed. We remember the Microsoft of the past, and Microsoft as it exists today feels off. Because it is off. From the perspective of someone who maybe championed Microsoft in the past.

Understanding this shift has become a major focus for me, as it turns out. As is the case with any history, it's not always clear while things are happening that everything is changing, and even when that is clear, the outcome is not. And so it often takes some period of time, years, to fully understand what happened.

I do know that I was aware of the changes as they occurred. I remember the shift at Office from individuals to businesses, and this growing sense that Microsoft Word, which was the obvious choice for any writer, had grown horribly complex and packed with features I would never use. I remember Microsoft's broader shift to the enterprise, with servers first and subscription-based licensing, and how that just grew and grew and became Microsoft's most important audience. Microsoft went from a two product (Windows, Office) company to a three product (Windows, Server, Office) company to a cloud supergiant. Some product lines (Server, Office) did well by that transition, while others (Windows) did not.

Two key resources for understanding this shift are the Stephen Sinofsky book Hardcore Software and the recent three-hour interview with Steve Ballmer, who remains deeply underrated as a CEO and was one of the greatest things that's ever happened to Microsoft. Both point at the moment in time that Microsoft shifted into what it is in this modern era, a gigantic, cloud-focused company whose primary audience and revenue source is enterprises with subscription-based licensing. And Sinofsky nicely spells out how Microsoft first focused on developers and enthusiasts, then on consumers/individuals, then on businesses, and then on enterprises.

In Ballmer's case, he regrets not pushing Microsoft harder on its consumer offerings when it made the shift to businesses, as he thinks the company should have focused on both equally and could have been successful with consumers. He also acknowledges that changing the...