Posted by Rob Koplowitz on January 22, 2009
In his inaugural address, Barack Obama told us it's "..time to put aside childish things." A country that once showed greatness through youthful exuberance is being asked to show greatness through measured maturity. It's a moment of realization. And a time of challenge.
Microsoft has announced that it intends to lay off up to 5000 employees over the next 18 months. For those of us who have chosen this industry as our career home, layoffs are nothing new. We live in a cyclical world and nowhere is the cycle more evident than in the computer industry, where companies are constantly appearing out of nowhere, growing, shrinking, acquiring and being acquired.
But this is different. This is the latest sign of a sea change in our industry. The best and brightest minds in the industry saw this coming. Steve Jobs saw it when he turned Apple Computer into Apple and turned tech into "tech fashion." Larry Ellison saw it when he began to acquire players that would make Oracle an indispensable piece of corporate infrastructure and at the same time established a more predictable maintenance revenue stream to Oracle.
And now Microsoft joins the crowd. Microsoft was always the company that did things a bit differently. They created an insular community up in Redmond. They nurtured a unique corporate culture. They have always been fierce competitors, but at the same time they were fiercely loyal to their employees. When others looked to cut costs by reductions in workforce, Microsoft resisted. Now, that luxury is gone.
Certainly, the economy is a driver. But, there is something else going on. Why is this downward cycle different than those of the past? Because this time, the downturn is hitting an undeniably mature industry. When Microsoft was young and growth opportunities were everywhere, they could afford to make lots of bets and hope that a couple paid off big. Now that the market is mature and the next multi-billion dollar opportunity is so much harder to identify, even Microsoft needs to act accordingly.
Microsoft will continue to be a (the?) major force in our industry. They will continue to make lots of money for their stockholders. They will now just need to do it the way it's done in mature industries everywhere. We will all miss our childhood and move forward.