Scobleizer Weblog

Daily link Thursday, July 08, 2004

A few of my readers have been asking my thoughts on Microsoft's recent cost-cutting measures.

First of all, the usual disclaimer. This is my personal weblog. These are my own opinions and perspectives. They do NOT represent anyone else's opinions or perspectives. This topic has lots of legitimate points of view on all sorts of different sides.

Tonight there was an article in the Seattle Times with quotes from "unnamed employees" that got my goat.

Let's go back to my pre-Microsoft times. At UserLand I helped run the business and I was an employee. I did the books and had to lay myself off. So, I'm a bit sensitive to both sides of the business equation.

Here at Microsoft I'm an employee, not a manager. I make less than $100,000 a year. So, every dollar taken out of my pockets hurts.

That's one perspective on this cost cutting. There are others, let's explore them.

One perspective is that if you invested $14 in Apple back last April you would today have about $30. If you invested the same $14 at the same time in Microsoft, you would have something around $16 (and that's assuming you got the 15% discount that employees used to get).

See, I'm a shareholder of Microsoft too. And, while it bums me out to lose some benefits it bums me out FAR MORE that the stock price hasn't kept pace with the markets in the past year. Microsoft's stock didn't move all year.

Another perspective? Would you like to talk with my wife? She was out of work for 18 months. It isn't easy to find a job. Or, talk with Maryam's brother. He had a job for a few weeks (was out of work for more than two years) but then they lost a big contract and he was on the street again.

Another perspective? At NEC I worked in a cube. At Microsoft most employees have an office with a door (and even if you have to share an office, as many do, it still beats working in a cubefarm by a mile). And my health benefits are FAR BETTER than they were at NEC (or at any other company I've worked at, for that matter). And that's AFTER the recent changes in Microsoft's health benefits.

Another perspective? I get paid a little more than I made in Silicon Valley. But, my home cost $295,000 and is twice as nice as my brother-in-law's $650,000 shoebox in Silicon Valley.

In Washington State gas for my car is $.10 to $.25 a gallon cheaper than it is in California. And, I don't pay state income tax, which saves me more than 8% on my income.

Another perspective? Microsoft's benefits include a gym membership. That gym is quite unlike most I've ever been in. You should see the difference between that and NEC's gym (and, at other companies I've worked at there wasn't any gym benefit).

Another perspective? The cafeterias I eat at have a great variety of food. At most of the Silicon Valley companies I worked at there wasn't any cafeteria (Winnov, for instance, doesn't have one) and at NEC the cafeteria was about 1/8th the size of one of ours.

Another perspective? Microsoft's customers are complaining about the high prices they pay for our products. Our most-hyped competitor is actually giving away their product for free and they don't pay their contributors at all.

So, what got under my skin about that article? Here's a rundown:

""I had heard from a number of people that it was getting harder and harder that a single person could make a positive difference," said the executive, who asked not to be identified. "

Hmm, come over and talk with Channel 9. Five guys. $500 video cameras. Tell us we haven't made a difference.

Or, go talk to any of the guys over in Microsoft Research. You'll see how they are making a difference. One person at a time.

Or, go visit the Tablet PC team. One guy did the drivers. A very small team did the software.

Go talk to Christopher Brumme about how many people did .NET. Hint, it wasn't very many. More have shown up to some of my geek dinners.

Or go talk to Chris Pratley. He, and a small team, got OneNote out the door (against big odds) and it's turned into a great product.

Then compare that to my NEC experience. There one guy or one team could barely even get noticed, much less change the world.

How many companies let their employees blog? (Heck, no one above my manager ever even talked with me about mine). If you aren't allowed to blog, how can you rally people to get behind your ideas?

Go talk to Gary Starkweather, inventor of the Laser Printer. In my interview with him the other day he told me that his bosses didn't even care about his invention (even at Xerox PARC, he told me, they didn't know how to use it).

Ask him if he can't make a difference at Microsoft. Go ahead. I'll wait for you to get the answer.

"One employee, an analyst, said he's exploring other job options not because of towels or soda pop, but the cultural tone set by the changes."

I want this employee to go visit a typical Silicon Valley company someday and see how spendthrift they are. I've visited Laszlo and Winnov and worked at NEC, UserLand, Fawcette. Close family members or close friends work for Apple, Intel, Oracle, Cisco, LSI Logic, and others. Their expense-to-employee ratios are far lower than Microsoft's are. Yes, cube farms are cheaper. Yes, they have cheaper health-care programs (I know, I did comparisons for UserLand).

So, what is the cultural tone that was set before these changes? And what is the cultural tone being set afterward? To me, the tone that I'm hearing is one of "be more careful with your expenses." That brings us in line with the rest of the world.

Another thing I hear is "but Microsoft has $60 billion in cash." True! But that money isn't mine. It belongs to our investors. It's business 101. We either add value to the world and give our investors a good return (which increases their happiness and encourages them to invest even more in us) or we don't provide a good return (in which case investors will start selling our stock). Again, compare Apple's investor's happiness over the past year to our investor's happiness.

Anyway, am I happy when money disappears from my pocket? No. But, as a shareholder I am happy with these changes and already in the past few weeks I notice that the stock price has ticked up a bit. Is that worth giving up towels or stock purchase discounts for? I think so!

1:40:18 AM    comment 

Over on Channel 9 people are posting fun sites on the Internet. Good diversion.

12:24:52 AM    comment 

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© Copyright 2005
Robert Scoble
My cell phone: 425-205-1921
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Last updated:
5/11/2005; 12:55:48 AM.

Robert Scoble works at Microsoft (title: technical evangelist). Everything here, though, is his personal opinion and is not read or approved before it is posted. No warranties or other guarantees will be offered as to the quality of the opinions or anything else offered here.

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