Speaker 1: Get in touch with technology with tech Stuff from how
Speaker 1: stuff works dot com. Hey there, and welcome to tech Stuff.
Speaker 1: I'm your host, Jonathan Strickland. I'm an executive producer with
Speaker 1: How Stuff Works, and I love all things tech, and
Speaker 1: today we're going to revisit an old friend of ours.
Speaker 1: You see tech Stuff listener Rob. That's that's not the
Speaker 1: old friend. He's just he's a listener. He's a friend,
Speaker 1: not an old friend. He asked me a while back
Speaker 1: if I could do a follow up episode or two
Speaker 1: about Microsoft, which of course is the world's largest software company.
Speaker 1: The last episode I recorded on tech Stuff about Microsoft
Speaker 1: specifically was The Microsoft Story, Part two, and that published
Speaker 1: back on July tenth, two thirteen. That was back when
Speaker 1: Lauren Vogelbaum was co host of tech Stuff, and the
Speaker 1: show has changed a lot since then, as has the
Speaker 1: company Microsoft. Today, I tend to go into much greater detail,
Speaker 1: uh whenever I do a story about a company than
Speaker 1: I used to do back in those days. So rather
Speaker 1: than just pick up where I would have left off
Speaker 1: back in I thought it would be valuable to give
Speaker 1: a quick overview of the company leading up to and
Speaker 1: then pick up in real detail from there. So I'm
Speaker 1: gonna give kind of a high level look at the
Speaker 1: history of Microsoft. It's not the same level of UH
Speaker 1: coverage I would give if I were doing this all
Speaker 1: for the first time, but it's more than just the
Speaker 1: the the summary. So Paul Allen and Bill Gates co
Speaker 1: founded Microsoft on April four, That was almost exactly one
Speaker 1: year before Steve Jobs and Steve Wozniak would go on
Speaker 1: to co found Apple. Bill Gates would actually drop out
Speaker 1: of Harvard in order to start this company. Allen and
Speaker 1: Gates started out by developing a Basic interpreter for the
Speaker 1: Alta eight hundred. Basic as in the programming language UH.
Speaker 1: The Altar eight eight hundred was a very early personal microcomputer.
Speaker 1: In fact, some people call it the first personal computer,
Speaker 1: and you would order it the back of a magazine
Speaker 1: and then kind of assemble the whole thing and you
Speaker 1: would have your own computer that was pretty limited in
Speaker 1: what it could do, but it was the first time
Speaker 1: that a microcomputer was widely available to people outside of
Speaker 1: you know, the engineers that were working in R and
Speaker 1: D labs. So Basic is a high level programming language.
Speaker 1: It was originally created back in the nineteen sixties as
Speaker 1: an educational tool over at Dartmouth College. So Gates and
Speaker 1: Allen didn't invent Basic, They just developed a version of
Speaker 1: Basic that would work on the ALTA eight eight hundred,
Speaker 1: and Basic was a pretty easy to grasp programming language,
Speaker 1: and college students who had been studying computers were already
Speaker 1: from the you're with it, so it was an attractive
Speaker 1: thing to have on your platform, and it made it
Speaker 1: possible for people who had studied computer science to own
Speaker 1: their own computers for the first time and to program
Speaker 1: on them. Now, Microsoft, which in the early days was
Speaker 1: hyphenated so it was micro hyphen Soft, was right there
Speaker 1: at the very dawn of the personal computer age, and
Speaker 1: the company had a dominant hold on implementations of Basic
Speaker 1: for different computer systems, including the Apple two that used
Speaker 1: Apple Soft Basic and the Commodore sixty four which had
Speaker 1: Commodore Basic. All of those came from Microsoft. The company
Speaker 1: also started producing hardware in nineteen eighty, so five years
Speaker 1: after it had been founded, and they created a computer
Speaker 1: card that users could install in an Apple too, and
Speaker 1: it would allow the Apple two to run the CP
Speaker 1: slash M operating system. That operating system was really important
Speaker 1: because there was a lot of business. The software applications
Speaker 1: that were built upon that operating system, they used that
Speaker 1: operating system and they wouldn't be compatible with the Apple
Speaker 1: TO operating system. So this was a great deal for
Speaker 1: both Microsoft and Apple because Microsoft was making a killing
Speaker 1: selling these computer cards and Apple was able to get
Speaker 1: its foot in the door in the business market. That
Speaker 1: was something that the company was having trouble. They were
Speaker 1: they were better able to get into education and personal computers,
Speaker 1: but they were having a bit of a difficulty getting
Speaker 1: into the business side of things where you had more
Speaker 1: established companies like IBM that were really dominating that space.
Speaker 1: Before Windows, Microsoft developed the Disk Operating System or DOSS
Speaker 1: for IBM. That's kind of being a little over simple.
Speaker 1: I'll explain more in a second, but IBM was launching
Speaker 1: its first personal computer. In fact, it was the company
Speaker 1: that defined the term personal computer or PC. IBM would
Speaker 1: offer up two different flavors of its PC, and one
Speaker 1: of them were was to run on the CP slash
Speaker 1: M operating system and the other was to run on DOSS.
Speaker 1: But the DOSS systems were significantly cheaper, and so people
Speaker 1: began to buy that version more than the CP slash
Speaker 1: M version. Uh which got into all sorts of issues
Speaker 1: later on. If you listen to my episodes about IBM,
Speaker 1: you know about how that story unfolded. Well before long.
Speaker 1: Microsoft doss was another industry standard, and you can learn
Speaker 1: more about that in that IBM episode. A lot of
Speaker 1: Microsoft success stem to run the company's dealings with IBM,
Speaker 1: which frequently favored Microsoft at the expense of Big Blue.
Speaker 1: I mean, the business deals favored Microsoft more than the
Speaker 1: favored IBM. Microsoft would also buy the rights for the
Speaker 1: operating system q doss from a company called Seattle Computer Products.
Speaker 1: Now this is what I meant when I said it's
Speaker 1: a little bit of a simplification as say that Microsoft
Speaker 1: developed DOS, because what they did was they found q
Speaker 1: doss that was developed out of Seattle Computer Products and
Speaker 1: said we would like to license that. We would actually
Speaker 1: like to purchase the rights to this software, to this
Speaker 1: operating system, and Seattle Computer Products said sure. Because they
Speaker 1: didn't know at the time that Microsoft had landed this
Speaker 1: deal with IBM. Microsoft kept that part secret because if
Speaker 1: Seattle Computer Products found out IBM was behind it, then
Speaker 1: they would have increased their asking price. So once Microsoft
Speaker 1: had the rights, they rebranded q doss as ms DOSS
Speaker 1: and they made truckloads of cash off it. And I
Speaker 1: suppose you could say a lot of Microsoft's business practices
Speaker 1: are both extremely aggressive and somewhat clandestine in nature. By
Speaker 1: night two, Microsoft was an international company, which was not
Speaker 1: bad considering it was less than a decade old. And
Speaker 1: in nineteen eighty three IBM cloned computers started to appear.
Speaker 1: Now Microsoft make money not just from IBM directly, but
Speaker 1: also from the manufacturers that made these clone devices. See,
Speaker 1: IBM had failed to create a proprietary machine. They had
Speaker 1: built their PCs from a lot of off the shelf parts,
Speaker 1: so that meant other manufacturers could copy the IBM PC
Speaker 1: designed by using those same components or components that were
Speaker 1: similar enough to function the same way. Further, IBM did
Speaker 1: not have an exclusive license with Microsoft, so other companies
Speaker 1: could then also licensed DOSS from Microsoft and build a
Speaker 1: machine capable of running IBM PC software. But their machines
Speaker 1: cost less than ibm s PCs did, which would eventually
Speaker 1: lead to IBM pulling out of the consumer space. But
Speaker 1: this was a huge benefit to Microsoft, because of course
Speaker 1: they were making licensing deals left and right. The first
Speaker 1: version of Microsoft Windows, the graphic user interface operating system
Speaker 1: that I'm pretty sure we're all familiar with at least
Speaker 1: on some level, would debut in the fall of nine five.
Speaker 1: That would be Windows one point oh. But the company
Speaker 1: would see real success in nineteen ninety upon the release
Speaker 1: of Windows three point oh. That signal to move away
Speaker 1: from Doss and toward the gooey or graphic user interface approach.
Speaker 1: It also meant more software companies began to develop programs
Speaker 1: that would work only on Windows because that's the operating
Speaker 1: system people were buying. So it made more sense for
Speaker 1: software programmers to focus on the operating system where the
Speaker 1: customers were rather than dedicate resources to develop software for
Speaker 1: less popular operating systems. And this made young Jonathan very sad,
Speaker 1: because young Jonathan much preferred Doss to Windows for many years,
Speaker 1: But that's a tangent. Microsoft also introduced a suite of
Speaker 1: productivity software around this time called Microsoft Office, which became
Speaker 1: incredibly popular. It would go up against a bunch of
Speaker 1: established giants in the productivity software space like word Perfect
Speaker 1: and Lotus one two three. Over time, Microsoft Office would
Speaker 1: become the most popular productivity suite in businesses, possibly because
Speaker 1: Microsoft made not only the programs but also the operating
Speaker 1: system that everyone was using in Microsoft unleashed a monstrosity
Speaker 1: on the world in the form of Microsoft Bob. This
Speaker 1: Friday's episode will be all about why that particular graphic
Speaker 1: user interface is largely considered to be one of the
Speaker 1: biggest turkeys in software. Also in ninety Microsoft made a
Speaker 1: deal with a company called Spyglass, which had created an
Speaker 1: Internet browser. Microsoft had not jumped on the internet bandwagon
Speaker 1: very early on, so the agreement was to license spyglasses
Speaker 1: browser as Microsoft Internet Explorer, and the deal was that
Speaker 1: Microsoft would pay Spyglass a royalty fee for every copy
Speaker 1: Microsoft sold. Only Microsoft didn't sell any copies at all,
Speaker 1: instead bundling the browser with Windows ninety five, so Spyglass
Speaker 1: didn't get any royalties. Womp womp. Windows was the first
Speaker 1: build of Windows to feature the start button, so int
Speaker 1: we got the start button, we would eventually lose the
Speaker 1: start button. People would cry out about it, and then
Speaker 1: we would get it back. In Microsoft announced a partnership
Speaker 1: deal with NBC to start a new cable news television
Speaker 1: station called MSNBC. Microsoft would divest itself of its ownership
Speaker 1: of the cable channel in two thousand five, it would
Speaker 1: maintain a stake in the website until two thousand twelve,
Speaker 1: in the U S. Department of Justice accused Microsoft in
Speaker 1: engaging in anti competitive practices, stating that by bundling Internet
Speaker 1: Explorer with Windows, it had an unfair advantage over other
Speaker 1: companies that were making Internet browsers. Further, the complaints state
Speaker 1: that Microsoft had tightly coupled Internet Explorer with Windows itself
Speaker 1: in an effort to disadvantage competing browsers. So for a
Speaker 1: while it looked like the U. S. Government was going
Speaker 1: to force Microsoft to break up into two companies, one
Speaker 1: of them would concentrate on operating systems and another that
Speaker 1: would create other types of software. But eventually Microsoft was
Speaker 1: able to settle the case and agreed to a policy
Speaker 1: that would allow PC manufacturers to include software from other
Speaker 1: companies on a brand new computer, not just Microsoft suite
Speaker 1: of programs. Have a little bit more to say to
Speaker 1: bring us up to but before I get into that,
Speaker 1: let's take a quick break to thank our sponsor. In
Speaker 1: two thousand, Bill Gates stepped down as CEO of Microsoft,
Speaker 1: and Steve Balmer, who had been a salesman with a
Speaker 1: company since nineteen eighty, took over. He would stress the
Speaker 1: importance of developers, developers, developers, and if you don't get
Speaker 1: that reference, you need to go to YouTube and search
Speaker 1: Steve Balmer and the word developers. You're welcome. Microsoft kept
Speaker 1: on trucking and turned out more versions of its operating system,
Speaker 1: like Microsoft XP, which was so incredibly popular that there
Speaker 1: are still people using it today even though it hasn't
Speaker 1: received any support for years. But the company also created
Speaker 1: some that were not as not received as enthusiastically, like
Speaker 1: Windows Vista that didn't do so well, then Windows seven,
Speaker 1: which did a lot better than Windows eight with its
Speaker 1: tiled metro approach that was intended to bring together traditional
Speaker 1: desktop experiences with touch screen interfaces. That product would end
Speaker 1: up getting mixed reviews, and then Windows ten, which decided
Speaker 1: to skip right over Windows nine, has done much better
Speaker 1: in general. Microsoft also waited into the smartphone market with
Speaker 1: Windows Mobile later known as Windows Phone, even purchasing Nakia's
Speaker 1: mobile division for about seven billion dollars back in fourteen.
Speaker 1: I'll talk more about how that turned out in just
Speaker 1: a moment. And Microsoft also got into console gaming with
Speaker 1: the Xbox console in two thousand one, and following that
Speaker 1: up with the Xbox three sixty and two thousand five,
Speaker 1: and the Xbox One in two thousand thirteen. I'll talk
Speaker 1: more about how that's going in these episodes as well.
Speaker 1: In two thousand nine, Microsoft introduced a search engine called bing.
Speaker 1: According to Statista dot com, which calls itself the Statistics Portal.
Speaker 1: Microsoft owned sites, including Being account for twenty of all
Speaker 1: search traffic, second only to Google, which has a dominant
Speaker 1: sixty three point five percent of the market. I was
Speaker 1: actually surprised to see Microsoft having that high of a percentage,
Speaker 1: to be honest. In Microsoft got into the cloud computing
Speaker 1: business with the launch of a new product called Microsoft
Speaker 1: Azure originally called Windows Azure or Azure if you prefer specifically,
Speaker 1: Azure is a platform for software as a service, platform
Speaker 1: as a service, and infrastruct as a service. So what
Speaker 1: does that mean. Well, software as a service is a
Speaker 1: model of business where the developer of the software hosts
Speaker 1: that software on web servers and customers pay a subscription
Speaker 1: fee typically to use that software, and you would use
Speaker 1: something like a web browser to access the software interface
Speaker 1: or maybe an app some sort of thinly designed interface.
Speaker 1: But everything's actually happening on the server side. So if
Speaker 1: you use something like Slack that's kind of a software
Speaker 1: as a service, or maybe you have a subscription with
Speaker 1: a streaming music service that's kind of the same thing.
Speaker 1: Platform as a service is similar, but goes one step
Speaker 1: further back. This is more for developers rather than end users.
Speaker 1: So let's say you've got a great idea for some
Speaker 1: software that you would love to run as a software
Speaker 1: as a service model, but you lack the foundation to
Speaker 1: develop and run your software. You could make a deal
Speaker 1: with a company that provides a platform as a service,
Speaker 1: and for a fee, you can make use of the
Speaker 1: system they've built out, so you don't have to build
Speaker 1: it out yourself. You don't have to test and then
Speaker 1: try and scale up and go through all that process.
Speaker 1: Other companies that have established themselves have already done all that.
Speaker 1: You just end up essentially leasing space from them, and
Speaker 1: then you build out your own software and you offer
Speaker 1: it up to users. Infrastructure as a service gets a
Speaker 1: bit more abstract. This approach typically uses virtualization to provide
Speaker 1: the actual infrastructure needs rather that some other entity requires
Speaker 1: in order to run its business, which could involve things
Speaker 1: like data partitioning, security measures, backup services, and more. Stuff
Speaker 1: like that so big broad things as opposed to very
Speaker 1: specific applications. In two thousand eleven, Microsoft bought Skype for
Speaker 1: about eight and a half billion dollars. But I I
Speaker 1: covered that recently in the episodes about eBay, so I'm
Speaker 1: not going to go through that again. In two thousand twelve,
Speaker 1: Microsoft produced some new hardware under the brand when those Surface,
Speaker 1: and this ends up being a little confusing for a
Speaker 1: while because the company had used surface to refer to
Speaker 1: a couple of different things, some tablet devices, and then
Speaker 1: they also use surface to talk about some high tech,
Speaker 1: extremely expensive smart tables. Ultimately, these devices are meant to
Speaker 1: be flagship products that other manufacturers can use as a
Speaker 1: model when they design their own similar devices that will
Speaker 1: feature Windows operating systems and touch screen interfaces. Today, the
Speaker 1: Surface line includes desktops, laptops, tablets, and larger devices like
Speaker 1: an interactive whiteboard called the Hub, and I'll talk more
Speaker 1: about that in our next episode. Then in two thousand thirteen,
Speaker 1: we got the Xbox One, like I mentioned a moment ago,
Speaker 1: and Microsoft's announcement of its intended acquisition of Nokia, which
Speaker 1: gets us up to speed with those older episodes of
Speaker 1: tech Stuff. Now we can turn our attention to what
Speaker 1: has happened to the company since that episode published, and
Speaker 1: a lot of stuff has gone down, y'all. Almost immediately
Speaker 1: after our last Microsoft episode went live, the company announced
Speaker 1: it would have a company wide reorganization, and this reorg
Speaker 1: would focus Microsoft on services and devices rather than software.
Speaker 1: This was something that Bomber was talking about. The reorgan
Speaker 1: dissolved some divisions and created some new ones, and grouped
Speaker 1: various products into new departments. In August, one month after
Speaker 1: our last Microsoft episode published, Microsoft announced that CEO Steve
Speaker 1: Bomber would retire within the following twelve months. So this
Speaker 1: is kind of typical for tech stuff. I do an
Speaker 1: episode about a company, and then a month after the
Speaker 1: episode goes live, something huge happens. Well. In his open
Speaker 1: letter to Microsoft employees, Bomber said that the company was
Speaker 1: undergoing a transformation into a hardware and services company. It
Speaker 1: started off as a software and operating system company, so
Speaker 1: this was a big shift in its strategy, and Bomber
Speaker 1: said there was need for a new CEO to guide
Speaker 1: the strategy for the long term. Company founder Bill Gates
Speaker 1: would end up playing a part in selecting Bomber's replacement
Speaker 1: along with the Board of Directors. To be fair, Gates
Speaker 1: was chairman of the board at the time. Now, Microsoft
Speaker 1: was still trying to pivot their mobile device strategy. At
Speaker 1: this point. They had started off with Windows Mobile, but
Speaker 1: that failed to gain real traction in the marketplace. Then
Speaker 1: they launched Windows Phone. It was kind of a reboot.
Speaker 1: The Verge would actually call it a painful reboot. That's
Speaker 1: a quote from the Verge. I can't dispute that description
Speaker 1: because it was not a smooth or seamless process. But
Speaker 1: this was when Microsoft hoped to unify the user experience
Speaker 1: across multiple devices with the touch screen tiled approach we
Speaker 1: saw on Windows eight. So Microsoft had seen how Apple
Speaker 1: users innately understood the touch interface on devices like the iPhone,
Speaker 1: the iPod Touch, and the iPad, and they said, well,
Speaker 1: that makes a lot of sense. Apple has created this
Speaker 1: interface that is the same across multiple devices, so if
Speaker 1: you use one, you understand how it works on all
Speaker 1: the others. What if we took that same idea, but
Speaker 1: we applied it even more broadly. It's not just for
Speaker 1: mobile devices, but for everything like laptops and desktops. And
Speaker 1: it seemed to make sense at first, if you went
Speaker 1: all in on Microsoft products as a user, you would
Speaker 1: have the same sort of interface, the same methods of
Speaker 1: navigating your computer as you use to navigate your phone.
Speaker 1: It just didn't really take off. Android and iOS were
Speaker 1: really firmly entrenched in the smartphone space, and enough people
Speaker 1: didn't care for the touchscreen interface on their laptop or
Speaker 1: desktop machines that it ended up derailing the strategy pretty
Speaker 1: early on. Several PC review journalists complained that this new
Speaker 1: direction on PCs actually made it harder to use the
Speaker 1: traditional keyboard and mouse interfaces. So they said, well, if
Speaker 1: don't want to use this tiled metro approach that Windows
Speaker 1: forces you into, and you switch over, you can use
Speaker 1: a mouse and a keyboard, but it's not nearly as
Speaker 1: easy as it used to be. It's actually making it
Speaker 1: more difficult for you to use your machines. So it's
Speaker 1: possible that Windows was pushing toward a jump in uniformity
Speaker 1: and user interface experience that the world just was not
Speaker 1: ready for. Or maybe you could argue that their implementation
Speaker 1: uh failed to live up to expectations, or maybe it
Speaker 1: was a combination of the two. Whatever the case, it
Speaker 1: didn't work. Speculation about who would be the next Microsoft
Speaker 1: CEO ranged from internal candidates like Tony Bates, who was
Speaker 1: leading the Business Development Division, two people from outside of Microsoft,
Speaker 1: such as Read Hastings, the CEO of Netflix. It would
Speaker 1: take the company six months to find a new CEO
Speaker 1: and to agree upon that new CEO. Bomber would stay
Speaker 1: in the position of CEO until his replacement was chosen,
Speaker 1: and that happened on February four, two thousand and fourteen,
Speaker 1: when the Board of Directors announced that Satya Nadela, who
Speaker 1: had been an executive vice president of Microsoft Cloud and
Speaker 1: Enterprise Division, would be the new CEO. And Nadela had
Speaker 1: been with Microsoft since nineteen two, so he had been
Speaker 1: with a company for quite some time. He was one
Speaker 1: of the people leading the charge to bring Microsoft services
Speaker 1: to the cloud, and as Balmer had mentioned in his
Speaker 1: retirement letter, that was sort of the direction Microsoft was
Speaker 1: heading in with more cloud based and service based businesses
Speaker 1: and fewer software packages. In two thousand thirteen, the Cloud
Speaker 1: and Enterprise Division had accounted for more than twenty billion
Speaker 1: dollars in revenue and more than eight billion dollars in
Speaker 1: operating income, so it was a clear leader in their
Speaker 1: company One thing I think is pretty phenomenal is that
Speaker 1: Satya Nodela would become only the third CEO in the
Speaker 1: history of Microsoft, which had been around for four decades
Speaker 1: at that point. So you had Bill Gates, Steve Bomber,
Speaker 1: and then Satya Nadela. Only a few companies have had
Speaker 1: their top levels of leadership remain as stable as that,
Speaker 1: and I'm reminded of companies like Nintendo, for example. Another
Speaker 1: thing that's phenomenal is that Nadela was only forty six
Speaker 1: years old when he took that position. He would end
Speaker 1: up shaking things up considerably. And uh, we'll talk more
Speaker 1: about those shakeups in just a second, but first let's
Speaker 1: take another quick break to thank our sponsor. The same
Speaker 1: day that Steve Bomber stepped down and Adela became the
Speaker 1: new CEO of Microsoft, the co founder, Bill Gates would
Speaker 1: step aside as chairman of the board and John W.
Speaker 1: Thompson would take over as chairman. Gates would remain connected
Speaker 1: to Microsoft as a technology advisor. Bomber, meanwhile, would remain
Speaker 1: on the Microsoft board until August and then he stepped down.
Speaker 1: Since really a year after announcing his retirement as CEO,
Speaker 1: he wanted to spend his time and effort focusing on
Speaker 1: a brand new purchase he had recently made, which was
Speaker 1: the basketball team, the Los Angeles Clippers. He bought the
Speaker 1: team for about two billion dollars. His Impulse Buys and
Speaker 1: my Impulse Buys are on two different planets and funding.
Speaker 1: Addendum to that, Steve Bomber said in September that he
Speaker 1: wanted the team to ban the use of iOS devices
Speaker 1: and switched to Windows based gadgets instead, So the idea
Speaker 1: would be that no longer would you see anyone on
Speaker 1: an iPhone on the Clippers team. Back to Microsoft. In
Speaker 1: July two thousand fourteen, so essentially half a year after
Speaker 1: he took over the role of CEO, Nodelo would send
Speaker 1: out a message to all employees saying that the company
Speaker 1: needed to drop the devices and services focus that Bomber
Speaker 1: had talked about just one year earlier. In that message,
Speaker 1: he said, quote, we will reinvent productivity to empower every
Speaker 1: person and every organization on the planet to do more
Speaker 1: and achieve more end quote small goal. He also proposed
Speaker 1: doing this by focusing on cloud services and mobile platforms,
Speaker 1: so getting away from this idea of devices and services,
Speaker 1: and he said we would still do some hardware, but
Speaker 1: we're not going to be a hardware company. It wasn't
Speaker 1: just a directive about the company changing focus, however, It
Speaker 1: also had some pretty tough news to come along with it.
Speaker 1: Microsoft was going to cut eighteen thousand jobs over the
Speaker 1: course of twelve months. Most of those cuts would affect
Speaker 1: people who had come over to Microsoft from Nakia. The
Speaker 1: company had also backed off of creating original streaming video
Speaker 1: content under the brand Xbox TV that was going to
Speaker 1: be a competitor to stuff like Netflix. A year later,
Speaker 1: things continued to change over at Microsoft. The mobile strategy
Speaker 1: just was not working. Stephen Elop, who had been part
Speaker 1: of Microsoft before moving over to Nakia to become the
Speaker 1: first non finish CEO of that company, had returned to
Speaker 1: Microsoft after the Nakia acquisition. But then Nadela led another
Speaker 1: reorganization and as part of that, Elop was let go.
Speaker 1: And he wasn't the only one. Several other executives were
Speaker 1: also shown the door in that reorg and then there
Speaker 1: were the rank and file employees. In July, the company
Speaker 1: cut about seven thousand, eight hundred jobs. Most of those
Speaker 1: were positions related to the phone business. The company also
Speaker 1: chose to write off seven point six billion dollars related
Speaker 1: to the Nakia acquisition, an acquisition that costs I remind
Speaker 1: you seven point two billion dollars, So they actually had
Speaker 1: to write off more than the acquisitions cost because they
Speaker 1: lost so much money on that deal. It didn't end
Speaker 1: in either. In sixteen, Microsoft would write off another nine
Speaker 1: hundred fifty million dollar impairment charge, specifically to cover severance
Speaker 1: payments that the company incur as a result of all
Speaker 1: those layoffs I just talked about right off. By the way,
Speaker 1: it's a business term. It's when you deduct the value
Speaker 1: of earnings by whatever the amount of an expense or
Speaker 1: loss happened to be. Companies do this by taking their revenue,
Speaker 1: however much money they made, and then subtracting expenses or
Speaker 1: losses from that revenue, and then they use that to
Speaker 1: report their taxable income. So it's similar to a deduction.
Speaker 1: Microsoft announced it would cut another one thousand, eight hundred
Speaker 1: fifty jobs from the phones division in May, and in
Speaker 1: July of that year, the company added another two thousand,
Speaker 1: eight hundred fifty jobs to the pile. In July, another
Speaker 1: three thousand jobs were cut. A few hundred more were
Speaker 1: cut in early eighteen and by then nearly all of
Speaker 1: the twenty five thousand Nakia employees Microsoft had brought on
Speaker 1: board after that acquisition were without a job, though there
Speaker 1: were a few who were in research and development that
Speaker 1: were retained and a couple in sales. But the layoffs
Speaker 1: also largely affected the general sales divisions at Microsoft, which
Speaker 1: we're continuing their transformation into cloud services, so there was
Speaker 1: less of a need for sales people who focused on
Speaker 1: software and hardware. Now, this all sounds like a company
Speaker 1: that's whittling itself down to bare bones, but that's not
Speaker 1: really the case. It's very misleading. We're talking about thousands
Speaker 1: and thousands of job cuts, but Microsoft has more than
Speaker 1: a hundred twenty five thousand employees worldwide, so it's still
Speaker 1: a really big company. Before I sign off on this episode,
Speaker 1: I want to go ahead and follow up with another
Speaker 1: bit about the mobile device part of Microsoft's history. Just
Speaker 1: kind of see that through because otherwise it'll just keep
Speaker 1: popping up throughout the next episode. So, unfortunately for Microsoft,
Speaker 1: Windows phone was never a strong competitor in the market.
Speaker 1: By January, their smartphone platform represented about point one five
Speaker 1: per cent of the market. So less than a percent
Speaker 1: point one the market worlds behind Google's Android operating system,
Speaker 1: the most popular smartphone OS in the world. They really
Speaker 1: saw that there was there was no support there. In July,
Speaker 1: Microsoft announced it would stop support for Windows Phone eight
Speaker 1: point one, which had launched. By January, Microsoft announced an
Speaker 1: end to push notifications support for Windows Phone seven point
Speaker 1: five and eight point oh, so not only were they
Speaker 1: no longer supported, now customers using phones running on those
Speaker 1: systems would no longer receive live updates or notifications, and
Speaker 1: the find my Phone feature would no longer. You know,
Speaker 1: find your Phone notifications still work on Windows Phone eight
Speaker 1: point one and Windows ten mobile devices, but the company
Speaker 1: had clearly moved away from mobile mostly now. I say
Speaker 1: mostly because as I record this episod sowed there are
Speaker 1: rumors of a device code named Andromeda that could at
Speaker 1: least contain some cellular phone technology and that includes a
Speaker 1: chip allowing the device to connect to the four G
Speaker 1: LTE network. Not much is known about this device as
Speaker 1: I record this show, but patents belonging to Microsoft show
Speaker 1: a foldable gadget that has two screens that can fold
Speaker 1: out to a tablet, or you could fold them back
Speaker 1: to back and turn it into a smartphone type form factor. Potentially,
Speaker 1: this could be a device that in one form factor
Speaker 1: is a smartphone you unfolded into a flat tablet, and
Speaker 1: then you could divide it in half again where you
Speaker 1: fold up one side it becomes a screen and the
Speaker 1: other side becomes your keyboard, and then it's sort of
Speaker 1: like a netbook. Now, in the next episode, I'm gonna
Speaker 1: run down some more stuff Microsoft has been doing in
Speaker 1: recent years, which will include exciting work and augmented reality
Speaker 1: and artificial intelligence, as well as the company's involvement in
Speaker 1: controversial work with you I had States Immigration Customs Enforcement
Speaker 1: Office better known as ICE. In the meantime, if you
Speaker 1: have any suggestions for future episodes of tech Stuff, maybe
Speaker 1: there's a particular company or technology you would like me
Speaker 1: to cover, maybe there's someone you would like me to
Speaker 1: interview on the show. Send me an email tell me
Speaker 1: what you want to hear. The address is tech Stuff
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