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0 pointsgonehome5y ago0 comments

Arguably the stock price is a prediction of future success, not current revenue.

The fact that it sagged under Ballmer and is now up under Nadella aligns with how I'm framing things. I suppose you could argue that's entirely PR, but I don't think that's the case.

People thought MSFT under Ballmer was trending down, now they think it's trending up. I'd argue that's due to strategic shifts that happened once Ballmer left.

I've mentioned in other comments that revenue (while good) isn't the whole story.

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jariel5y ago· 2 in thread

That's a good point but it wasn't really 'Ballmer' - it was the existential changes in the industry.

I believe if Ballmer had of hung on for a few more years, that change would have happened eventually.

Investors eventually would realize 'This is not just Windows and Office'.

gonehomeOP5y ago

I think this is our core disagreement distilled down.

I think Ballmer couldn’t have done it, he was too tied up personally in windows.

Some of the examples you mention under Ballmer are more examples of strategic failure under his watch. Xbox is the easiest example, the Xbox One’s launch was awful and focus on cable boxes was bad.

I don’t think it took a while for investors to realize, I think investors had an accurate model of what was going on. When Ballmer left things improved.

jariel5y ago

We have hindsight: the changes Ballmer made to increase revenue were not 'one offs' they were substantial.

1) He reconstituted Windows and Office distribution, sales, put office on the cloud.

2) He launched XBox and more notable Azure.

So if you think 'Desktop is dying' (desktop sales were plateauing) then 1 seems like it's going away and cloud isn't a huge business then 2 doesn't matter.

But the prediction was wrong:

A) Even with flatlining desktop sales, Win + Office continued to thrive. Even to this day. It's not a 'legacy business' it's a 'healthy ongoing business.

B) XBox, in particular Azure are huge. Azure makes more money today than Windows generated in revenue when Ballmer took over Microsoft.

Ballmer's failures were mostly Search and Mobile ... both of which were sad, but also they were up against Google Search and iPhone, the best products of our era. XBox and Azure are in very difficult areas, and are doing well.

In hindsight, Ballmer did quite well, there's not a lot to debate unless someone things that Search/Mobile success should have been imminent, but I don't think that's true.

He massively grew and adapted the baseline businesses, and started a few new, huge businesses. Glorious profits all around.

Satya hasn't yet quite made the kind of decisions that will have the lasting impact Ballmer has had, in his defence, he's in an era were the 'new fields of competition' are less obvious.

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perl4ever5y ago

>Arguably the stock price is a prediction of future success

Sure, the stock price is always a prediction of future success. But it can change overnight, and when it does, it's not because reality or the "facts on the ground" changed overnight (usually) it's because perception changed. Often if not always because a catalyst made people aware of something that was building for a fair amount of time.

>strategic shifts that happened once Ballmer left.

I'm not saying this is wrong, but I don't think it's appropriate to treat the stock price as evidence of it.

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