Microsoft, A Tragedy: or, The Ruff Tuff Creampuff

I'm going to do something I generally ridicule, psychoanalyze a company. And the company, (why, yes, in fact it is Microsoft) will stand for a whole class of companies, and even for a whole class of human organizations. So I begin with both a mea culpa for this, and a link to the last article I wrote, more or less, about this. . I also liberally illustrate this piece with stolen (ahem, borrowed) links.

Vignette: Most mornings when I am in town I go over to the local Peets Coffee and hang out. There is a group of regulars in there with me; not everybody comes in every day, but pretty much the whole circus will rotate through over the course of a month. There are conservatives and liberals, real-estate zillionaires, tech dudes, women who like music, ex-particle physics PhDs who now run quant funds, bicycle people, profs at the local colleges (MIT, Harvard, Brandeis, Boston College) - an eclectic group that makes for good conversation. And then there are the occasionals, or the never-seen-before-or-sincers.

This morning I was sitting at Peets, reading the Wall Street Journal weekend edition, off by myself. The physics guy/money manager, who is a fellow Linux user, was sitting nearby - we had a small discussion about this and that, in the course of which he asked what I thought about the Skype/Microsoft deal. [full disclosure department: I am under NDA with Skype, and have been for a couple of years. I think I can disclose that I see stuff they make before it gets to the public. This dates back to my discovering a Bug In (Linux) Skype, as documented here. ]

Now, my feelings about Microsoft are well known; I regard it as one of the prime American victims of what I call 'clericalism' - the syndrome that prevents sufferers from seeing outside of their club. And I was fortunate enough to spend a few days in Europe with Skype developers and managers in 2009, and I have extremely high regard for them. As a team I put them right at the top. So the group at Peets, and this gentleman in particular, probably expected me to say something along the lines of "This deal is doomed," or "It won't take long before Redmond screws this up, but they're so big it won't be visible for years." Actually I did sort of say that. But then I qualified it by saying something else, like. "If this deal succeeds - which it might - it will be one of the great transformational stories in business." But I didn't say it with real conviction, at the time, nor did I feel it.

Now for another side note; a couple of the Peets regulars have kids with fairly profound special needs in the autism department. And sitting behind me at the time was a kid I hadn't seen before (Saturdays there is usually a bunch of the never-seen-before crowd who come in.) He was about 7, I guess, and he was playing a very involved game, by himself, with a bunch of stuffed animals. His mom was sitting one table away working on her laptop, so he wasn't by himself, but - and I might well be wrong, but I don't think I am - I immediately thought, "here's a kid who is in world of his own." A little like the autism kids, maybe. I smiled at him, and he smiled back, and went back to his game.

After I left Peets a few minutes later, I walked past the window where he was sitting. He looked at me again as I walked away, and smiled again. And went back to his game, again.

Now a 7 year old boy playing with stuffed animals is a little odd, and this struck me. I had a friend a few years ago in the midwest who had a phrase that covered this. "Stinky," she would say, meaning extreme cuteness meets pathos - you feel affinity for what pulls at the heart. This kid, if I am right, will have a much smoother path through life if he has a guardian. That sort of feeling. There but for the grace of God go I.

What (you are asking yourself) does this have to do with Skype, or Microsoft? Fair question; consider this.

Far from being omnipotent, Microsoft - the too-rich, well-born 'special child' - has become Steve Ballmer's inner child. And while it is a bully (because that is the behavior that a kid who has no guardian might well learn to lean on,) it is searching for some way out.

Microsoft (that is, Ballmer, and not to give a pass to the billionaire emeritus, Bill Gates) spent twenty years perfecting the art of the lock-in. That, in a nutshell, is their business.

Lock in. Can I get an #analretentive hashtag, please? (subliminally, you, dear reader, may flash that famous picture of Ballmer on the screen now.)

'Embrace and extend' has been the internal mantra the company mutters 'om' to when confronted with existential threats, like the internet. Example? Break HTML (and the web) with Internet Explorer. The list is so long as to be almost impossible to exhaustively delineate, and of course, the company, which I described in the earlier article I link to above as 'working really really hard to become the most hated company in America' has largely succeeded in squandering whatever goodwill they enjoyed among consumers, and businesses.

I'll skip past Microsoft's hidden funding and secret support for the anti-Linux lawsuits brought by their satrap SCO and Darl McBride, and simply say that, among the ethics community (and yes, one of the Peets regulars has an endowed chair in Business Ethics at the BC business school) - Microsoft is not exactly a byword for, well, ethical behavior.

And while this business model and behavior pattern has succeeded, in the sense that Microsoft has $45B in cash, more or less, and banks a few billion more every quarter, it has also made the company an anachronism. By and large (the Kinect excepted,) it's not hip. It's seen as stodgy and grabby. It's the Mr. Potter of the tech world. You remember him - he's the banker bad guy in It's A Wonderful Life. Ballmer even looks like him! (C'mon - look at those two pictures again..)

So the immediate reaction I have to the deal, with regard to Microsoft, is that, hmm, I've walked into the kitchen of somebody I know to be a rich, notorious (and nasty) drunk. All over the counter are shotglasses, martini glasses, booze glasses of all sorts, shakers, tonic water, salt and lemons, olives - and off the the side are neatly arranged long rows of bottles - tequila, gin, vodka - you get the picture. But! The drunk has recently sworn to a judge that he's on the wagon now. Really! This Time Is Different!

Who you gonna trust? Me or your lyin' eyes?

Now to Skype. I'll call them the Surfer Dudes. They ride the waves with effortless grace. They get the babes. They are everything that Microsoft wishes it could be. People love them! They're cool! They have their own drink! (Here I'm being served a millimallikas in Vienna.) Their stuff is a verb, and it's free, for chrissakes. And besides being cool, they actually really believe all this open platform stuff! Trust me, I know how much effort they've put into supporting platforms like Symbian, Linux, Android - to name but a very few.

(Back to that Bug In Skype video. Somebody at Skype saw it on Youtube and *called me up!* And **invited me to be a beta tester!!!** This is *definitely* not a Microsoft modus operandum.)

This past week, an excellent writer named Felix Salmon posted a scathing review on a Reuters blog of another antedeluvian business, the New York Times. He sums up in a phrase - "The hermetic and arrogant New York Times" - the syndrome that I call clericalism. The hermetic and arrogant cannot see out of their box. (The article is here.)

The Times (massively losing circulation, it hopes to stave off The End! first with a loan from the oleaginous Senor Carlos Slim, the only man on earth worth more than Bill Gates, and next, with a paywall! (ahem - drumroll, #analretentive, again, please) Microsoft is a lot stronger than the Times, and it's still strongly cashflow positive. But the two companies seem to me to be joined at the hip, fate-wise. And you can find many more examples of this hermetic mindset: the old FBI, who paid Whitey Bulger. The Catholic Church, who hid (hides?) pedophilic priests. The institutional Democratic Party, who blabber about social justice while indebting kids who can't vote - and aren't even born yet (sorry, as a libertarian I had to swing for my team at least once.)

Each of these examples might be able to survive, if they do some kind of intervention - and they periodically try to do just that, before reverting to form. Change is tough.

Ask yourself, reader, how rich do you have to be before you don't care what people think? How powerful do you have to be before the desire to be cool goes away?

In my humble opinion, that's a limit that is never going to be hit. Citizen Kane hit the bullseye.

The Guardian's take on the Microsoft/Skype deal is merciless. (yes, as a right-wing knuckle dragger, I do in fact read those guys) "Steve Ballmer, Microsoft's chief executive, might as well have put the money on a bonfire for all it's going to do for the company's share price...It's about Ballmer's long-term aim to make Microsoft back into a hit brand with consumers, a position that it last held with the launch of Windows 95 in August 1995."

I would have expected a bit more squishy psycho-babble from the Gruniad - perhaps they're feeling a bit abashed now that their own ethical trimming regarding taxes in the UK has hit the fan - but that's a good start. And I can finish the thought for them, in the best tradition of Transactional Analysis. For you whippersnappers out there, that was the book that butchered the language by popularizing the phrase "I'm OK - You're OK."

No - on second thought I'll turn to the master himself, R. Crumb, for the last word. Crumb drew one of the alltime great comix with the title The Ruff Tuff Creampuff in Despair Comix (sorry, a shot of the cover only is available here ) - the basic line is that Amerika is a musclebound weakling. Not dissimilar to my view of Microsoft here. But that's far from Crumb's only work that may apply.

Remember Ol' Uncle Uh-Uh? Man. He is Undesirable.

This deal is not about the finance. It is not about the money the US Government forces companies with foreign funds to spend abroad, lest it be subject to a 30% repatriation tax (Skype S.A.R.L., Luxemburg, being the biggest tech target in Europe.) It is not about enhancing advertising efficiencies (like Aquant - can you say, despite the $4B price tag, *bor-ing* ?)

No, with this deal, Microsoft/Ballmer has take a big toke off the bong of anti-historical-Microsoftism. It has huffed a pretty good proxy for the spirit of the net-focused business of the next 10 years. If Microsoft doesn't keel over from the infusion, it might work.

It better.

So, go on, Mr. Ballmer. Enjoy that millimallikas. Prove me wrong.