Worries That Microsoft Is Growing Too Tricky to Manage
By NICK WINGFIELD

SEATTLE — At a time when many people in business believe the number of products at Microsoft should be getting smaller, it is about to become a lot bigger.

Microsoft’s $7.2 billion acquisition of Nokia’s handset and services operations, when the deal closes early next year, will increase the company’s head count by 30 percent and add a big, new hardware unit to a dizzying variety of businesses — an unusual situation in an industry where focus is often prized more than breadth.

It’s a concern to everyone from academics to Microsoft alumni. A list of missed opportunities and disappointing investments at the company in the past decade in areas like smartphones, tablets and Internet search have led to the belief that a more focused, nimble collection of mini-Microsofts could respond more effectively to the never-ending flow of disruptive technologies nibbling at its foundations.

“It is very hard to be a broad-based tech conglomerate,” said David Yoffie, a professor at the Harvard Business School.

Thirteen years ago, Microsoft’s competitors and a federal judge demanded that Microsoft be split up because of its market power. But trying to do too much rather than wielding too much power is the issue now.

Microsoft already has a video game console, the No. 2 Internet search engine, a major Web portal, an enormous corporate software business, an operating system for personal computers, cloud computing services and applications software. The company is a mash-up of the businesses in which competitors like Google, Yahoo, Oracle, Apple and Nintendo specialize, putting an enormous burden on the company’s chief executive, Steven A. Ballmer, who has announced plans to retire within the next 12 months.

Microsoft’s complexity will make its search for a replacement for Mr. Ballmer more challenging, since the job will require a person with an uncommon array of skills, including fluency in corporate and consumer markets, hardware, software and Internet services. Mr. Ballmer recently announced a sweeping reorganization of the company intended to improve its agility, though its huge portfolio of products will remain intact.

 “It makes it harder to manage, which is a challenge for Microsoft no matter who the successor is,” said Mr. Yoffie. Long before Mr. Ballmer announced his retirement, he and Bill Gates, the Microsoft chairman and co-founder, had both quietly acknowledged that identifying a new leader for Microsoft would be hard. A person who spoke to Mr. Gates several years ago on the subject of succession recalls the Microsoft chairman saying he would support replacing Mr. Ballmer if he could think of someone who could do a better job.

Similarly, another person said Mr. Ballmer himself said a few years ago he would step aside if a better chief executive could be found. These people spoke on the condition that they not be named because the conversations were private.

Larry Cohen, a spokesman for Mr. Gates, did not respond to a request for comment. Frank Shaw, a spokesman for Microsoft, also declined to comment.

In 2000, when Microsoft’s business was simpler than it is now, Thomas Penfield Jackson, a federal judge, ruled that because of violations of antitrust law, Microsoft should be split into two companies — one focused on Windows and the other on applications. An appeals court later threw out the breakup order after deciding Judge Jackson had tainted the legal proceedings by making comments to the press about the case.

Pundits, business professors and alumni of Microsoft have spent years pondering whether, in hindsight, such a breakup might have given the resulting “Baby Bills” the agility to compete better. Several of Microsoft’s businesses would be substantial stand-alone companies, with Windows accounting for $19.2 billion in revenue for the fiscal year ending in June, and its business division, dominated by its Office applications, at $24.7 billion. A third business, servers and tools, had revenue of $20.3 billion in the period — compared with the $27.5 billion in software revenue at Oracle in its latest financial year ending in May.

One argument in favor of such a situation is what some people inside Microsoft call the “strategy tax,” a tendency for the company’s product groups to make decisions that favor other Microsoft products, whether they’re the best decisions or not.

An oft-cited example of this is the reluctance of the Office applications group to release complete versions of Word, Excel and other software for iPads and Android devices. That decision, in theory, could help Microsoft tablets that run Windows, though it hasn’t yet.

Vivek Wadhwa, a fellow at Stanford Law School, has advocated for a Microsoft breakup because he doesn’t think its consumer and corporate businesses can coexist harmoniously. “The strategy for each of those needs to be completely different,” he said. “Because it’s trying to protect its enterprise market, it can’t act freely in the consumer market.”

While there are many successful conglomerates, including General Electric and Berkshire Hathaway, there are fewer that perform well in technology. I.B.M. is often held up as an example of a technology conglomerate that has adapted well to the times, in part by shedding its personal computer business nearly a decade ago. While it has many products and services, Mr. Wadhwa said, the company’s focus on corporate customers has made it easier to manage.

An even broader conglomerate is Samsung, which is in areas as varied as electronics, life insurance and petrochemicals. But each of those businesses is run with a high degree of independence from the others. The company supplies screens and semiconductors for Apple, even though Apple is the main rival to Samsung’s mobile phone business.

Investors have clamored for Microsoft to get rid of its money-losing or less profitable businesses, seeing them as a drag on the stock price. Richard Sherlund, a longtime Microsoft analyst at Nomura Securities, believes the Xbox video game business and Bing search engine are good candidates for spinoffs.

Mr. Sherlund has speculated that Microsoft could give Facebook, with which Microsoft has an existing partnership, control of Bing, in exchange for a share of revenue from the additional traffic it would drive to Facebook’s site. Mr. Sherlund estimates that Microsoft has accumulated losses of more than $17 billion in the search and online business.

Still, while it has sold off or spun out smaller businesses in the past — the travel site Expedia originated at the company in the late ’90s — Microsoft has shown no interest in jettisoning major products.

In its defense, Microsoft notes that its long line of products yields many synergies. Xbox uses a variation of the Windows operating system, while Bing provides search services that are tightly integrated with Windows, Xbox and the Windows Phone mobile operating system.

Further, it could be argued that Microsoft’s competitors are recognizing that, like Microsoft, they need to develop products in areas once considered outside their expertise. Google bought Motorola Mobility to help it get into the hardware business. Apple has been on a start-up acquisition binge to improve its online mapping service. And Amazon, once entirely focused on consumers, has become an important supplier of cloud services to businesses.

Even with those changes, Mr. Yoffie of Harvard said Microsoft’s big rivals are still more focused than it is. “I think the fundamental question for the next C.E.O. of Microsoft,” he said, “is, what is his vision of Microsoft?”

微軟併諾基亞 包山包海被唱衰

紐約時報報導，明年初微軟正式併購諾基亞手機與服務部門後，員工總數增加三成，新增的硬體部門會讓原已龐雜的產品線更加複雜，可能會讓微軟大到難以管理。

微軟產品包括遊戲機、世界第二大搜尋引擎、大型入口網站、規模龐大的企業軟體業務、個人電腦作業系統、雲端運算服務與應用程式軟體。這些分別是Google、雅虎、甲骨文、蘋果、任天堂的強項，微軟卻一手包辦，微軟執行長鮑默可說是肩負重擔。鮑默最近宣布將在一年內退休。

哈佛商學院教授尤菲說：「一家業務包山包海的科技公司很難經營。」

由於微軟產品龐雜，尋找鮑默接班人相當不簡單，這個人既要熟悉企業與消費者市場，也要了解軟、硬體和網路服務。

微軟的幾項業務大到足以自成一家公司。視窗作業系統在今年六月結束的會計年度營收達一百九十二億美元（約台幣五千六百億元）；以Office軟體為主的企業部門，營收達兩百四十七億美元（約台幣七千三百億元）；伺服器與工具營收達兩百零三億美元（約台幣六千億元）。

史丹福大學管理理論學者瓦德華認為微軟應該分拆業務，因為消費者客戶與企業客戶無法兼顧，「微軟想抓住企業市場，就無法在消費者市場放手一搏」。

雖然商場不乏奇異公司等企業集團成功案例，但科技業的典範幾乎都是專精而非龐雜。IBM之所以能成為科技集團適應變局的著名案例，部分是因為它近十年前出售個人電腦業務，專心服務企業客戶，變得容易管理。三星業務範圍雖廣，從電子產品、壽險到石化製品都有，但每一項業務都相當獨立：三星可以為蘋果製造螢幕和半導體，蘋果卻是三星手機業務的勁敵。

投資人早已要求微軟出售賠錢或獲利不佳的業務，如Xbox遊戲機與Bing搜尋引擎。不過微軟似乎無意這麼做，理由是產品多樣化又互相整合，可產生加乘效果；另一理由是微軟的競爭對手逐漸體認到，應該學習微軟，因此Google、蘋果和亞馬遜近年都發展新業務。

原文參照：
http://www.nytimes.com/2013/09/09/technology/worries-that-microsoft-is-growing-too-tricky-to-manage.html

2013-09-10．聯合報．A18．國際．編譯李京倫