Microsoft has 'become the thing they despised'

There's a new feature about Microsoft in Vanity Fair this month. It's called "Microsoft's Lost Decade." Uh oh.

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"Astonishingly foolish management decisions."

"[It] could serve as a business-school case study on the pitfalls of success."

"They completely blew it because of the bureaucracy."

Rough words for the folks in Redmond this month as Vanity Fair rolls out a feature on Microsoft's "Lost Decade" -- that heady period when it coasted on its successes and destroyed...well, everything that could continue them.

Using dozens of interviews and internal corporate records, Kurt Eichenwald pieces together life at Microsoft during the reign of chief executive Steve Ballmer -- who's still on top, I'll remind you -- and it's not altogether warm and fuzzy.

Lowlights:

  • The crippling effect of the management system known as "stack ranking" -- in which every unit must rate a certain percentage of employees as top performers, good performers, average and poor.
  • Microsoft had a prototype e-book reader in the can in 1998, but Bill Gates vetoed it because "it wasn't right for Microsoft" -- that is, it didn't run Windows.
  • It folded R&D groups tasked with pursuing future-thinking ideas into business units where profit was king.
  • Ideas about mobile computing were shot down if they didn't play nice with Windows and Office strategy.
  • Microsoft saw, and still missed, the instant message revolution because it saw them as frivolous.

"They used to point their finger at IBM and laugh," former Softie Bill Hill told Eichenwald. "Now they’ve become the thing they despised."

Good reasons to visit the old newsstand, I think. Until then, read our own Mary Jo Foley's " The three phases of Steve Ballmer's tenure at Microsoft " as well as her thoughts on the executive in his eleventh (now twelfth) year.