The key difference between Apple and Microsoft

John Gruber had an interesting observation today about the departure of Apple’s Scott Forstall:

Forstall was an obstacle to collaboration within the company. Now he’s gone, and his responsibilities are being divided between four men who foster collaboration: Ive, Mansfield, Cue, and Federighi.

This, in a nutshell, is why Apple is the world’s second most valuable company and Microsoft, even after today’s announcements, is circling the drain.

Microsoft is organized as a loose federation of largely individual companies, all competing for the same resources. Each division at Microsoft has its own P&L statement, literally its own bottom line. Why does the new Microsoft Surface tablet only come with a half-assed “desktop” version, and even that only the Home & Student license, meaning it can’t be used for commercial use?

I don’t have any sources inside Microsoft telling me this, but I’ll bet dollars to donuts it’s this: because the Office group doesn’t see any percentage in their offering more. They don’t know if Windows 8 is going to be a hit, so they haven’t invested their own resources into a native Windows Store version of Word, Powerpoint and Excel. And Home & Student was all the Windows group could afford, given that they have to pay the Office division for every copy shipped while not allowing that cost to drive up the price of the Surface past being more or less competitive with the iPad.

A very large part of the Surface’s problems can be laid squarely at Steve Ballmer’s feet, and for one very simple reason. He, as CEO, didn’t force the Office division to do what was necessary to make Surface a winner for the Windows division. Surface will fail because there isn’t one Microsoft, there’s several, and they’re all trying to kill each other. Eventually, they will succeed.

Now, compare this to Apple. Apple has one P&L for the whole company. They have different teams, but everyone quite literally contributes to the same bottom line, and everyone is answerable to the same boss, Tim Cook. Apple’s new boss is quieter, more cerebral than Steve Jobs, but he’s even more ruthlessly efficient at running his company. And when he saw that Forstall, the man who has guided iOS from the very beginning, who came over to Apple from NeXT with Steve Jobs, was getting in the way of moving iOS forward, he showed Forstall the door and split his duties among proven team players. No one team within Apple will ever be allowed to threaten the well being of the company as a whole.

Steve Ballmer would do well to learn from Cook’s example.

One thought on “The key difference between Apple and Microsoft”

  1. I think you are spot-on with your appraisal of Microsoft and their new operating system. Proving, once again, that pretty much everything does revolve around the almighty dollar, whether we like that fact, or not.

    I’m reckoning that the smarty pants at Google are thinking along the same lines, which is why they are steadily turning everything Google into one massive eco-system that will work as a single, cohesive unit. All working towards the common goal, and the good of the whole. And, as they do so, it just makes my life easier and easier. Gotta’ love that.

    Oh, and I’m enjoying your writings. Cheers.

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