Microsoft should have ended the year 2000 on a triumphant note: after preparing its customers for a future of software services, it shipped its first .NET deliverables---beta versions of the .NET Framework and Visual Studio---and its first beta of Whistler, a coming major release of Windows. Instead, Microsoft entered the holidays on a dour note by announcing that its original financial guidelines for the quarter ending December 31, 2000 were off by 5 to 6 percent.
“We believe, like many other technology companies, that the current weakness in worldwide economic conditions is resulting in a slowdown in PC sales, corporate IT spending, and consumer online services and advertising,” Microsoft CFO John Connors said in a press release. “While our short-term results will continue to be affected by the current economic environment, our long-term outlook on the information technology market and the PC industry remains positive. We have a lineup of new products and technologies that are receiving rave reviews from customers, and we continue to be very excited about the progress we are making across all our businesses.”
The reaction to this downturn was decidedly more negative internally. And it must have been a shock to Microsoft’s employees when they all received an emotional email message from CEO Steve Ballmer on December 14, just as they were heading off on their annual holiday break. He was tired of all the complaining about .NET and needed everyone on board and focused.
"Since we announced our .NET strategy, a number of [Microsoft employees] have remarked that our business seems a lot more complex than it used to be,” he wrote. “Is there just one thing people need to do well? Is it just .NET and transforming software into services? Or are we a conglomerate of many largely independent businesses?”
“The strategy we are on is actually pretty straightforward. Everybody in the company has two priorities. The first priority is for people to stay focused on what they're doing to serve customers well in our key businesses. The second priority is for people to help deliver on the broader platform efforts of the company. Our company is ultimately bigger than the sum of the parts because we bet strongly on a common platform. We make our products work better together---where it makes sense---and this offers customers more than they could hope for from products and services from multiple companies. This ‘whole-is-bigger-than-the-sum-of-the-parts’ approach has characterized our success for years (MS-DOS and languages, Windows, and Office). This is the way we are approaching .NET. All our businesses have goals that depend on .NET, but they also have goals independent of .NET. We will drive forward around .NET, but not, for example, instead of making Windows PCs simpler or MSN broader and more capable.”
.NET, Ballmer argued, had the capacity to transform the computer industry and to benefit Microsoft’s customers in t...
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