Posted by: Steve Hamm on September 29
Microsoft CEO Steve Ballmer is a very smart guy, so why does he sometimes say such strange things? I’m referring to a comment he made during a recent interview with the New York Times, blogged about here by the Times’ Ashlee Vance. Ballmer criticized IBM for bailing out of a number of hardware businesses—including PCs, disk drives, and networking gear. Here’s the quote:
“I.B.M.’s footprint is more narrow today than it was when I started. I am not sure that has been to the long-term benefit of their shareholders,” he said.
Vance point out that over the past decade, the period during which IBM has been shucking low-margin hardware businesses, IBM’s share price has increased by 30% while Microsoft’s has decreased by 30%.
While Ballmer is slamming IBM, other big tech companies seem to want to BECOME Big Blue—which has shifted from being predominantly a hardware business to leading with software and services. HP bought EDS to make a bigger play in the IT services business. Dell bought Perot Systems last week, and Xerox announced a deal to buy ACS this week. Even Larry Ellison, seldom a fan of IBM, now calls it his model for building Oracle into a tech behemoth.
But, notice something. While HP, Dell, and Xerox are expanding their services businesses, IBM is already well along in the process of taking the next step in its evolution. It’s combining consulting, scientific research, and analytics software to help re-engineer complex systems—including transportation, health care, and the electric grid.
So while HP, Dell, and Xerox are aimed at becoming IBM circa 2000, IBM is aimed at becoming IBM circa 2020.
Where does that leave Ballmer and Microsoft? As usual, they’re playing catch up, too—in their case with Google, Facebook, and Salesforce.com.
I would welcome a response from Microsoft.
There eponymous adage known as Hanlon's Razor which states "Never attribute to malice that which can be adequately explained by stupidity".
Why is it assumed that Steve Ballmer is so intelligent?
I haven't seen any evidence of it.
He consistently makes bad business decisions and blames the outcome on other people when they fail.
Sometimes things are exactly as the seem.
Maybe those crazy statements actually indicate a person who is really isn't so smart after all.
Better focus on one thing and do it right, then have a large footprint and do everything mediocre
better if balmer took care of his own house. Vista was a major flop. Windows 7 is an improvement, but an improvement over a poor basis. Ms Corporate databases and servers are a no go area. people keep on complaining
about daily crashes, but MS darkest corner is pricing and contracting, most especially within state run orgs, such as local, regional and national government institutions. Such muted dark criticism points out to the compairing pricing with linux and other open-source solutions, and a sticky smell lingers all over the atmosphere. That's very bad both for state employee work bioshpere and to MS corporate image towards society as a whole. The problem is that people tend to compare with IBM-runned systems (such as the I-series) that are ubiquious with private runned businesses. Maybe there's your 30%, Mr.Balmer.
MMartins-Portugal
Mr Hamm, great insight on IBM for 2020. We all need a smarter planet, and IBM knows that. And with the aging baby boomers we also need more efficient and improved health care system. With the focus on privacy in health care, if you were a hospital administrator, who would you trust your medical records to? Microsoft or IBM? If Microsoft didn't lose them to a security bug, they might extract and sell them through their media player. The fatal mistake the Microsoft makes again and again are their proprietary tendencies. Did the world need a new music format? Wasn't MP3 good enough? Did we need a new movie format? Wasn't MPEG good enough? Did we need Active Directory? Wasn't LDAP good enough? Did we need a new XML standard from Microsoft? IBM learned their lesson in the 80's and has fully embraced open standards. The proprietary focus must remain in the patent office, and not the corner office.
As an IBM employee, I take great offense to this... This also shows how ignorant and isolating Steve Ballmer can be. IBM has almost 400,000 employees world wide.Wouldn't you want to say kind words about this company so maybe they will purchase Windows 7 off of you? The business strategy from our CEO Sam Palmisano has been proven successful. Our stock is up over 40% just this year. While Microsoft's stock is barely up 6%. Who has the better business plan? Ballmer polks holes at IBM and Apple's business models, but never points the finger at himself for an awful Windows Vista product, absolutely poor sales of his Zune mp3 player, and security flaw after security flaw released in their products. Wake up Steve, the MS board of directors cut your pay 5%, you should be like the automobile companies and work for free until you show positive results for a change.
As an IBM employee, I take great offense to this... This also shows how ignorant and isolating Steve Ballmer can be. IBM has almost 400,000 employees world wide.Wouldn't you want to say kind words about this company so maybe they will purchase Windows 7 off of you? The business strategy from our CEO Sam Palmisano has been proven successful. Our stock is up over 40% just this year. While Microsoft's stock is barely up 6%. Who has the better business plan? Ballmer polks holes at IBM and Apple's business models, but never points the finger at himself for an awful Windows Vista product, absolutely poor sales of his Zune mp3 player, and security flaw after security flaw released in their products. Wake up Steve, the MS board of directors cut your pay 5%, you should be like the automobile companies and work for free until you show positive results for a change.
I think the recent acquisitions by HP, Dell & Xerox have shown that focusing only on developing Windows based hardware is a race to the bottom that no one will win.
Netbooks at Wal-Mart for $299? Laptops for $499? There are no margins to see here folks, move along please.
MS complaining about footprint??? How narrow can it be, focussing around a memory guzzling OS... Welcome to the year 2000, we'll see you in a Smarter Planet in 2020, when IBM is probably planning for 2050.
MS & IBM work friendly. Keep your thinking on very high level. Thanks. Yours Deepnarayan Choubey

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