Feeds

Microsoft chairman John Thompson: Redmond looks 'like IBM in 1990'

Will new CEO Satya Nadella be Microsoft's Lou Gerstner?

Reducing security risks from open source software

Microsoft's new chairman, ex-IBM vice president John Thompson, has said that he believes Microsoft's corporate culture needs to change if it is to remain competitive.

"I would argue that there are some attributes to Microsoft today that do look vaguely like IBM circa 1990," Thompson said in an interview with Fortune published today. "The Windows monopoly is in fact under attack, and therefore we're going to have to change or think differently about the management systems and the associated culture of the company as time goes on."

Thompson was tapped to chair Microsoft's board earlier this month when the previous chairman, Microsoft founder Bill Gates, stepped down to take a more hands-on role as mentor to new CEO Satya Nadella.

Prior to joining Microsoft's board in 2012, Thompson was CEO of Symantec, a position he held for 10 years. Before that, however, he was a 28-year veteran of IBM, during which time he led such diverse efforts as sales, marketing, and software development, and served as general manager of IBM Americas.

Thompson told Fortune that he sees Microsoft in a position similar the one IBM found itself in at the start of the 1990s, when its former dominance of the PC hardware market had waned.

"I think one of the things IBM learned was when their monopoly ran out and they had to compete with a bunch of smaller, more agile companies, they needed to have a different rate and pace of change," Thompson said. "And Lou Gerstner coming into IBM certainly brought about a sense of urgency that some would argue the company didn't really have at that time."

Gerstner is widely credited with rescuing IBM from the brink of bankruptcy and returning it to profitability. Microsoft isn't in quite such a precarious position just yet, but it clearly isn't as dominant as it once was, particularly given the decline of the PC market and the corresponding rise of smartphones and tablets.

Similarly, by the end of the 1980s, PC clone makers had all but pushed IBM out of the market it created, and Microsoft was the leading operating systems vendor. IBM's latter-day attempts to regain its footing, including the PS/2 and OS/2, were flops.

Gerstner's genius lay in recognizing that IBM's focus on desktop PCs was a mistake. He consolidated IBM's divisions, unified its branding, and set Big Blue on a path to becoming the world's largest provider of technology integration services, rather than just another PC seller.

It's a lesson that Microsoft and its new CEO Nadella should take to heart. For all its efforts to diversify, most of its business still falls under the twin tent poles of Windows and Office, and the latest versions of both products have not been particularly well received.

But Gerstner's turnaround of IBM wasn't painless. More than 100,000 IBM staffers lost their jobs to layoffs under his tenure and his management style was notoriously tough. It's difficult to see Nadella, a 22-year Microsoft man, making such hard choices, particularly with Gates peering over his shoulder.

And probably we won't. To hear Thompson tell it, we shouldn't expect anything drastic or sudden out of Redmond in the near future.

"You don't change a company's culture overnight," he said. "It's more about the subtle influences and the consistency and predictability of those influences that over time drives that subtle behavior change that we call culture." ®

Eight steps to building an HP BladeSystem

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
White? Male? You work in tech? Let us guess ... Twitter? We KNEW it!
Grim diversity numbers dumped alongside Facebook earnings
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.