Tim Culpan and Dina Bass from Bloomberg have got a scoop – Microsoft Said to Cut Windows Price 70% to Counter Rivals:
Microsoft Corp. (MSFT) is cutting the price of Windows 8.1 by 70 percent for makers of low-cost computers and tablets as they try to fend off cheaper rivals like Google Inc. (GOOG)’s Chromebooks, people familiar with the program said.
Manufacturers will be charged $15 to license Windows 8.1 and preinstall it on devices that retail for less than $250, instead of the usual fee of $50, said the people, who asked not to be named because the details aren’t public. The discount will apply to any products that meet the price limit, with no restrictions on the size or type of device, the people said.
It won’t require products that use the cheaper licensing to complete logo certification, a process that verifies hardware compatibility, one of the people said. Devices aren’t required to be touch-screen compatible, they said.
While the regular Windows list price was $50, some of the largest global computer makers paid closer to $30 after incentives such as marketing funds provided by Microsoft, the people said. Products that receive discounted license fees won’t be eligible for such marketing support and incentives, one of the people said.
Free always beats fee as long as the free product is good enough and Chromebooks are evidently good enough for a lot of folks. Microsoft could try to appeal to the carriage trade like Apple but are way behind on both low end apps and cachet. I don’t really think a price cut is going to give Microsoft much more traction.
Confirming the most recent rumors, Microsoft went inside and chose 22 year veteran Satya Nadella as the new CEO. Perhaps more interesting is that board member John Thompson becomes Chairman:
Thompson has been a member of Microsoft’s board for two years. He has also been leading Microsoft’s CEO search for the past five months-plus. (In a new video clip of Thompson, which Microsoft posted today, Thompson claims Nadella was the search committee’s “first and unanimous choice” after reviewing all the CEO candidates.)
True or not, it behooves them to say so.
He is the CEO of Virtual Instruments, a company that manages virtual-physical cloud migrations and an investor in a handful of early-stage tech companies in Silicon Valley. Thompson also served as CEO of Symanec for ten years, through 2009, and on Symantec’s board until 2011. Before that, he held a variety of management positions at IBM in sales, marketing, software development for a variety of products including (somewhat ironically), OS/2.
The irony is rich in the tech business. As for Bill Gates, he and Steve Ballmer are still board members and Gates has a new title of Founder and Technology Advisor with a reported commitment of a third of his time to meet with product groups. We’ll see.
Even as Microsoft is poised to name a new CEO — it has been reported that the company will name insider Satya Nadella, head of its cloud and enterprise group — the process leading up to the announcement has emerged as, quite literally, a textbook example of how not to do CEO succession.
This isn’t how it’s supposed to work. Microsoft is a corporate aristocrat, albeit an eccentric duke, for which succession should be smooth, non-controversial, and unsurprising. Instead, at least 17 candidates were publicly speculated upon; leaks from employees and some of the candidates themselves competed for advantage in the media; a few presumed candidates, some of whom may never have been candidates at all, publicly disclaimed interest in the job; and Isle of Man bookies offered odds on the eventual winner.
And after the circus leaves town, some lucky person gets to clean up the mess left behind. Well, I’m sure he will be well compensated.
Microsoft announced today that CEO Steve Ballmer will retire within a year as soon as a successor is named. The stock market treated this as very good news (courtesy Zero Hedge)
As always, I expect the traders got carried away by unwarranted exuberance. Mr. Ballmer may have been unable to break Microsoft out of its large company doldrums, but it isn’t obvious that the Microsoft board will find anyone who can.
“There is never a perfect time for this type of transition, but now is the right time,” Ballmer said. “We have embarked on a new strategy with a new organization and we have an amazing Senior Leadership Team. My original thoughts on timing would have had my retirement happen in the middle of our company’s transformation to a devices and services company. We need a CEO who will be here longer term for this new direction.”
Large companies always seem to believe they need slogans to inspire the troops (and shareholders) and "devices and services" is Microsoft’s current one. It will be interesting to see how long this slogan survives a new leadership and whether Microsoft can be rejuvenated short of a near death experience. For the moment though, Microsoft still has a sturdy herd of cash cows that can fund a lot of continued floundering.
In the meantime, here’s a reminder of happier days in Redmond: