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 focus to businesses and then expanding that over time wasn’t just the right thing to do–Microsoft is a publicly held company, remember, it’s in business to make money, not for nostalgic purposes–but it was a rocket sled trajectory of growth.

I disagree with Ballmer on some minor points: Microsoft did make an incredible consumer push in the early 2000s, just as Apple was making a comeback and when Amazon, Google, and other companies were rising. We forget this, though we likewise seem to all remember the defeats. Things like Media Center, Windows Media Player, MSN Music, Zune, and so much else. And it’s thus clear that Microsoft was never going to be big with consumers, given the competition and how much more focused they were (and still are) on that market. But I love the guy’s passion, and his perspective on his time at Microsoft in that interview is incredible. I love that he tried.

Two related points.

When Steve Ballmer took over as CEO at Microsoft in early 2000, its market capitalization was about $510 billion, though that was an anomalous high possibly tied to the antitrust issues; it was roughly in the $200s of billions range for the next decade. When he left Microsoft 14 years later, it was about $315 billion. Today, of course, Microsoft’s market cap is $3.71 trillion. It’s an order of magnitude more successful.

What sunk Ballmer in many ways was the stock price. You can see how it flat-lined during his tenure as CEO. Microsoft had never been more successful, obviously, but he wasn’t moving the needle on the stock price, and that was one of several factors that led to him stepping down. Again, that interview noted above is insightful on this point.

Given all this, I’m surprised that Microsoft has any “fans” in the traditional sense: It doesn’t make almost anything of interest to consumers beyond Xbox/gaming. This is mostly organic, to be fair: As noted, it tried with consumers, but the enterprise push was so successful that Microsoft got boring and safe. But also big, and thus interesting. Like an electrical or water company. Essential, yes. But not exciting.

When I started moving into the career I’ve had for over 30 years now, I was not a Microsoft fan. But the maturity of Office, first, and then Windows 95, changed things. And there was a period of time, perhaps a decade from the early 1990s into the early 2000s, where Windows, and thus Microsoft, was personal computing. It was the conduit through which everything happened. We got the Internet and the web on our Windows PCs. We listened to CDs and then MP3s in Windows. We played games, burned our own music CDs, and even edited recorded video, all in Windows. Windows was everything.

Today, Windows is not everything. In some ways, it’s the smallest of the big three personal computing platforms, but the more important metric, to me, is engagement: Consumers are far more engaged away from Windows and PCs, whether it’s smartphones, iPads, TVs, whatever. Windows and PCs are for work. (Except for gamers, of course, which perhaps helps explain why Microsoft kept going with Xbox.)

So, yeah. We were super-engaged in that decade. A lot of us came of age at the time. Getting online for the first time with Windows was memorable, something etched in our brains. There is a nostalgic twist there, a vague desire for things to be like that again, when life was simpler and–perhaps inaccurately–“better.” But there isn’t a single Microsoft shareholder who would ever want to go back to that time. Microsoft shares the Big Tech stage with several other companies, all of which resonate more with consumers, and it is in some ways an also-ran in that space. It is also richer and more successful than ever before, and by a wide, wide margin.

I have always had an uncomfortable relationship with fandom. I’ve often said, as an example, that you will never meet a bigger Star Wars fan than me, but I’m also never going to dress up like Obi-Wan Kenobi and run around with a fake Lightsaber. In Microsoft’s case, my stance very early on was that I was not supporting or defending this company or its products. I was supporting and defending its users. This is an important distinction. I am not a fan of Microsoft or Windows. But I do support them, so to speak, by trying to support their users.

So I can’t help you with beliefs. I don’t believe this company cares about individuals at all. If it did, we wouldn’t be talking about enshittification all the time. And this hits hardest at the client level for multiple reasons. These products need to make sense in Nadella’s Microsoft. We as individuals are not Microsoft’s most significant customer base. It will always choose its broader corporate aims–which involve cozying up to enterprises–over us. We are nothing to Microsoft.

What I can try to help with is positioning this relationship correctly. And here, I have not changed. I don’t use or help others use whatever Microsoft products, mostly Windows, out of excitement or whatever. I do this pragmatically. It’s the best choice for me. And if it wasn’t, I would leave. Because the one thing I have in common with Microsoft, perhaps, is that I will do what’s best for me. And Windows continues to be the way I get work done. It’s what I prefer.

What is it that still gives you conviction about Microsoft’s future — especially when the direction feels more adrift than visionary?

Microsoft’s future is as assured as it can be, in the sense that it’s an economic superpower and it will drift successfully along with inertia. One of the side benefits of focusing on the enterprise is that its change averse nature means they won’t dump Microsoft lightly, or maybe ever at all. Microsoft is a known quantity, trusted, and it does what the enterprise wants. What’s not assured is the quality or existence of the products and services that you and I care about. Windows, Xbox, and so on.

Big companies are rarely visionary. The very nature of success and dominance ensures this. These companies get protective of their fiefdoms, they engage in anticompetitive practices to protect them, this leads to enshittification that hurts their own users, and they use their wealth to buy their way into new markets their younger selves might have innovated but their current form is incapable of. In this era, Microsoft is most notable for buying its way into AI leadership, multiple times, or at least trying. Nothing truly innovative in that space came out of Microsoft directly. But this company is worth $3.71 trillion as I write this.

Do you remember the Microsoft vision videos, where is that future?

The delta between what Microsoft imagined and what Microsoft did is vast. This was a future envisioned by people incapable of creating it at a time when a personal computing market dominated by other companies was unimaginable. That was what a younger, scrappier Microsoft envisioned. Today, it envisions a single percentage point of improved efficiency inside a part of the organization that is laying off workers and turning to the AI it created as the alternative. Microsoft is too big to be visionary. And it’s never going to create an exciting product for consumers because that is not its focus, and not the way it was successful.

We are still trying to understand Satya Nadella. I find him cold and robotic. He’s not a visionary, but he does appear to have a dangerous and possibly even destructive personality. He very aggressively killed businesses that he didn’t feel had a future, most notably Windows Phone. He bet the company on AI, through the chaotic OpenAI relationship and elsewhere, at great ongoing expense. And he spent $68 billion on Activision Blizzard, a business that is in no way core to Microsoft. None of this makes sense to me. I don’t see a cohesive thread, or even a real strategy, to any of this.

? Vaccines save lives

Sykeward asks:

This is kinda out of left field: A long time ago now, you talked on Windows Weekly about how your family was participating in a video project about childhood vaccination. You were being interviewed specifically about the impacts of your son’s early illness, among other topics, and it sounded genuinely interesting. I have no idea why it randomly occurred to me today, but did it ever come out? I don’t remember hearing where it all ended up.

I mentioned this over three years ago in a previous Ask Paul, and it took me a while to find the copy of the video we have. I believe this was on the Pfizer website for a time, I think. But I’m not sure whether it’s available publicly anymore. So I posted it to the Thurrott.com YouTube channel. You can find it via this direct link, but not on the channel itself, since it’s off-topic. I have a hard time watching this.

Reading list

SeattleMike asks:

Hey Paul, do you have any recommended books for the summer?

Yeah, I’m sure these will factor into whatever end of year reading list, but some I’ve read or am reading and can recommend for now include:

Fiction

Never Flinch by Stephen King. A new Holly Gibney story.

Non-fiction

Apple in China: The Capture of the World’s Greatest Company by Patrick McGee. Easily the best business book of the past decade or more.

Code: The Hidden Language of Computer Hardware and Software by Charles Petzold. A 2nd edition that was published in 2022.

Careless People: A Cautionary Tale of Power, Greed, and Lost Idealism by by Sarah Wynn-Williams. Meta/Facebook is an even worse company than we think. Much worse.

? Is Microsoft gaming Xbox fans?

brettscoast asks:

Given the uncertainty around the layoffs and more explicitly xBox’s immediate future around hardware consoles, games & the Activision Blizzard acquisition, shouldn’t Microsoft be more upfront with gaming enthusiasts, customers, and consumers regarding their vision for the platforms future? You have covered this subject quite comprehensively on FRD & Windows Weekly this week, and then there was some noise around Phil Spencer’s possible future in the division. he seems like a pretty straight shooter (pardon the pun) to me.

Knowing Phil Spencer from a distance, I feel like he desperately wants to be open and transparent but that his corporate overseers very much do not want that. I’ve seen calls for his dismissal, but Spencer is not the problem here. It’s Microsoft, for the reasons noted up top, and its maniacal focus now on making itself more efficient as an organization and aggressively cutting away what it sees as chaff. To be fair, this is probably necessary to some degree. But when you look at gaming specifically, it feels like death by a thousand cuts, something that just keeps happening like some horrible Groundhog Day experience.

This is one topic I am writing about at length, but the short version is that the layoff requirements came from above, not from Microsoft Gaming. And the vision, so to speak, for that business remains correct. I think that Xbox/Microsoft Gaming can be a successful game publishing business with real value for fans. Which we can’t say about anything else Microsoft does. But more on that soon.

? Spelling and grammar checking

helix2301 asks:

Thank you for doing asking Paul on the holiday weekend. I am working on a business book, and I have been using Grammarly the other day on FRD you said you do not use it anymore because it’s not that good anymore. Can you please tell me what you are using instead for spelling and grammar checking? Thank you Paul

I use and pay for a utility called LanguageTool, primary through its web browser extension, because I’ve found it to be superior to Grammarly. I’m a romantic, so I gave my wife a LanguageTool Premium subscription for her birthday. 😉 She prefers it as well.