If you are a stockholder of Microsoft from the year 2000 to 2013, you are out of luck. If you got in on Microsoft during that period of time, your money just basically went to sleep. This is sad news because if you invested before 2000, you might have seen your money double. Microsoft was that hot and in fact, the stocks split so much that you’d think it’s a pregnant rabbit- every few years it would double. That’s how awesome Microsoft was as an investment. This is not surprising because Microsoft owns the operating system market and has many niche software markets all sewn up.
So what happened? Well, the technology world continued to evolve and as Microsoft got bloated and slow like with anything else in life, if your competition starts much faster and evolving much faster, you’re the serious competitive disadvantage. For a long time, Microsoft was able to hold off the competition because it controlled the platform. Due to the rise of the internet mobile technology, Microsoft has pretty much lost control of certain key areas of the technology marketplace.
Many of Steve Ballmer’s critics claim that the period between 2000 to 2013 is Microsoft’s lost decade. Be that as it may, investors are now increasingly becoming impatient. Some investors want a turnaround expert to be the next head of Microsoft. Turnaround experts are few and far between because the ones who are able to turn around companies would rather stay with the companies that they have turned around. More importantly, they are rare because turnarounds rarely happen. This is not a big surprise because if you are such a huge company and you’re trying to turn it around and take a new direction, there’s going to be a lot of internal politics, bureaucracy and internal processes that slow down the turnaround campaign. It’s not going to be easy as it’s like trying to reform a government. It will take a change in culture and personnel and it can take a long time. Unfortunately, Microsoft doesn’t have the luxury of time. It has already let the mobile technology revolution slip out of its hands and it already has missed the boat on several key technologies and the best it can hope for right now is to find a gradualist CEO with a turn around agenda.
The problem with quick fixes is that they’re very easy to understand in a shareholder’s perspective but unless you step into the shoes of Steve Ballmer or somebody who will replace him, you will see the magnitude of the problem. Microsoft is a bureaucracy- that in itself needs to be addressed before any talk of a turnaround is seriously addressed.