Chapter 674: Ants Swallow Elephants

Steve Ballmer, CEO of Microsoft, has an office that is not as spacious and luxurious as many people imagine, and of course, it is not as sloppy as the offices of those tech-crazy engineers.

5202, this is the house number of Ballmer's office, which used to belong to Bill Gates. It is located at the corner of the Microsoft headquarters office building. There are large glass windows on both sides, and you can see everything outside, such as the beautiful Microsoft headquarters office park under the fog at this moment, and the rows of cars parked below.

The office is small, but the layout is very neat. There is a comfortable desk with a monitor, a phone, and photos on it, and the wall on the right is covered with various notes, but the most eye-catching are some old photos, among which you can find photos taken shortly after he met Bill Gates, which is 30 years ago.

This is a friendship described by Bill Gates as the greatest business partnership, but this friendship now seems to have faded a bit, and Steve Ballmer himself doesn't know when it started.

If he didn't feel this way when he just took over Microsoft, then over the past few years, he gradually realized that there would definitely be problems between him and Bill Gates, but he himself had never thought that these problems would come so quickly, so fast that he was almost caught off guard.

Microsoft is now facing a lot of problems, but in the final analysis, there is only one problem, that is, the market value of more than 600 billion US dollars at its peak has fallen to more than 200 billion now, which is unacceptable to all board members and venture capital companies holding Microsoft stocks.

But Ballmer obviously has no effective solution for the company's current situation.

As he said to Bill Gates and the senior executives of the board before, this opponent is very difficult to deal with, because this company, which has been established for less than ten years, has become the most successful conglomerate in the world. More importantly, this company is still developing at a high speed, and he has almost no signs of stopping to rest.

Yes, the number one competitor regarded by Ballmer is Leaf Technology!

The history of Leaf Technology's rise is known to the world. It started with a revolutionary Zeus phone, pioneered the trend of smart phones, and built the Android system into a mobile device with a market share of more than 90%. The company is now gradually swallowing up Microsoft's business, especially in the two pillars of traditional PC systems and OFFICE.

It can be said that on the day when Leaf Technology announced the launch of the Zeus Ultrabook, Microsoft's stock price fell sharply. Although it rose slightly afterwards, Microsoft's market value evaporated by one-tenth almost overnight, and in the following period, especially after the Ultrabook was launched and sold well, Microsoft's market value lost three-tenths.

What does this mean? Perhaps for ordinary consumers, they can't see clearly, but for investors, they can see very clearly that Leaf Technology is challenging Microsoft's dominance.

The board of directors held an emergency meeting to discuss how to fight back, but they were surprised to find that they didn't have a very effective way to deal with Leaf Technology, or in other words, Microsoft's containment of Leaf Technology has been going on since the birth of the company, but the more it is contained, the faster it develops.

OFFICE software does not support Android system, it doesn't matter, they acquired a company and made a free version of OFFICE, which directly led to a significant decline in Microsoft's revenue in the OFFICE field in the past few years.

Through a series of acquisitions such as Nortel Networks, Leaf Technology now has excellent strength in both software and hardware, but more importantly, they are very planned and have unparalleled foresight.

In 2007, Leaf Technology, which became popular because of the Zeus mobile phone, announced that it had poached a technical director Mark Lukowski from Google. At that time, no one would realize anything. Everyone just thought that this might be just an ordinary poaching, but Ballmer knew very well that this person was extraordinary. When he decided to switch from Microsoft to Google, Ballmer was so angry that he threw a chair at him.

He is the chief architect of Microsoft's WINDOWS system. He participated in the development of most of the kernel programs of the WINDOWSXP system and some other key core projects. He has won the title of outstanding engineer and is a very important technical talent of Microsoft.

Ballmer had a hunch at the time, but he didn't pay much attention to it. When Leaf Technology announced that the Android system would be ported to ultrabooks, almost the whole world was shocked because these were two very different fields. But Ballmer quickly thought of Mark Lukowski, who turned out to be the head of the Android PC system project and became an important member of Leaf Technology.

Four years ago, they started preparing for everything four years later. How amazing is this foresight? It can be said that they can predict the future!

Not only that, Leaf Technology launched Twitter, Weibo, WeChat, Facebook, and founded a series of Internet applications and companies such as Youtube. Although these seem to have little to do with Microsoft, they actually attract more and more users to approach and gather around them.

Watching Ye Ye Technology gradually engulfing Microsoft's business and market, Ballmer did not have any effective countermeasures, because Ye Ye Technology did not have much contact with Microsoft, and Microsoft even once attacked Ye Ye Technology. Tech has filed antitrust lawsuits, but they ended up being dismissed.

Just as some other companies have failed in their antitrust lawsuits against Microsoft, antitrust lawsuits are very nonsense whether in the United States or the European Union, because you can't define what field Ye Ye Technology is suspected of being a monopoly on, or in what way. In what ways do you use your monopoly advantage to harm users?

If these two points cannot be proven, all antitrust lawsuits will fail!

Steve Ballmer leaned back on the office chair. This chair was not the one he threw Lukovsky in. He had changed it, but his mood at this moment was worse. It was even worse back then. I sighed deeply, but my mind was thinking about a very serious question, which was how Microsoft should go in the future.

Ballmer seemed to have figured out a pattern from YeZi Technology. He felt that Microsoft must change its past philosophy of focusing on software over hardware, and must launch its own mobile smart devices as soon as possible, especially mobile phones and tablets. This market is amazing.

Leaf Technology's current cash reserves have reached an astonishing level. It is even revealed that their current cash reserves have reached more than 120 billion US dollars. If this continues, to what extent will they develop in the future?

It is conceivable that if you give them another year or two, acquiring Microsoft will not be a problem!

Just when Steve Ballmer was thinking hard and lamenting that he was supposed to be the captain who led Microsoft to ride the waves, but now he has become a conspirator hiding in the dark to make plans against the enemy, feeling helpless and ashamed. There was movement from MSN on the computer. Ballmer opened the video conference and found that senior executives including Bill Gates, Tony Bates, and Chief Legal Counsel Brad Smith were all online.

"Unfortunately, gentlemen, Ye Qiu, Chairman of Ye Zi Technology, has just announced through their website, Weibo, WeChat and other official channels that Ye Zi Technology has successfully acquired Nokia's mobile phone, map and patent business. This acquisition The total amount will reach 15 billion US dollars!”

Following the words of Brad Smith, the company's chief legal counsel, everyone in the video conference suddenly took a breath, and some even lost their voices in obvious surprise, because they knew very well that this It means that Yezi Technology will further consolidate its already strong competitiveness in the field of mobile devices.

"It's impossible, it can't be so fast!" Ballmer felt even more despairing. He didn't want to believe it.

"I'm sorry, Steve, this is true. We have also confirmed with Finland that they exchanged and signed the contract overnight last night. As long as the EU and US governments do not interfere in this regard, basically this will The acquisition is done!”

Listening to the analysis of the chief legal counsel, everyone present, including Bill Gates and Ballmer, was silent. It was obvious that they were all thinking about how to deal with Microsoft once Ye Ye Technology completed this acquisition. How big the impact will be, and it is obvious that it will be difficult for them to draw a conclusion in a short time.

"What do you think is the possibility that the EU and the US government will terminate the transaction?" Tony Bates quickly thought of this question. He felt that it was obviously too late to stop it now, and Microsoft did not have such strong financial resources. To compete with Leaf Technology, it costs a total of 15 billion US dollars. This is a huge sum of money for Microsoft, which has a market value of just over 200 billion.

Brad Smith shook his head, "Unfortunately, the situation in this aspect may not be as good as we imagined. They have made sufficient preparations for this before. Neither the Finnish government nor the European Union will block this acquisition. The U.S. government believes the same, but the Chinese government, I heard, may stand up to oppose it and initiate an antitrust investigation.”

"In addition, it is revealed that Google has basically completed the acquisition of Motorola, and the total amount is likely to exceed 10 billion. Some people even reported that it is 12.5 billion U.S. dollars. Once acquired, Google will own Motorola's Seventeen thousand patents, including many in the mobile phone field.”

All the executives participating in the video conference became even more silent. They were all surprised to find that their competitors were ahead of them, and they were a little late-minded about this kind of thing.

This may be a slap in the face to Microsoft's monopoly over the past few decades, reminding and telling all Microsoft executives that today's world is no longer the world of the 1980s. Today's world is full of all kinds of The change is that Microsoft is no longer the only company.

"I said that we can't always focus on software and ignore hardware. Now our competitors are ahead of us one by one. This is a painful lesson for us!" Steve? Ballmer said angrily.

Bill Gates became angry after hearing this. He is no longer the graceful young man he used to be. He is now old and even looks a little senile. "I don't think this is a tragic incident at all." Lesson learned, I am even less optimistic about them completing such a major acquisition. We only need to focus on our software research and development. I always maintain this view!" This is also the biggest difference between him and Ballmer.

"But you have to see that if we continue to maintain the current strategy, they will encroach on our market share step by step. Before you said that they could not enter the traditional PC field, but they have developed ultrabooks, and now their ultrabooks The sales of ultrabooks are no worse than ordinary notebooks, and the Android system is developing rapidly in the PC field! "

"Next they will take a step forward, continue to enter the field of personal PCs, and then enter the field of office computers, and in the end all we can do is that every time they take a step forward, we will take a step back, because we do not have any effective countermeasures against them. What else can we do but have a meeting here and say their acquisition is not going to work?"

Steve Ballmer is the kind of person who can't stop talking when he gets angry. Many people are used to this style of his, but in a video conference, his complaints brought about It’s other people’s dissatisfaction.

Because he talks as if he is right about everything and others are useless.

"Okay, Steve, what we want now is not complaining or accountability, but finding a solution!" Tony Bates knew the contradictions and conflicts between Ballmer and Bill Gates. Come out and make peace.

"What is ARM's current market value?" Bates asked.

After acquiring Nokia, Leaf Technology is in an absolute leading position in patents and technology in the field of mobile devices, and it is the kind that is far ahead, followed closely by the semiconductor intellectual property company ARM, which is a typical technology company , does not have its own factory, and more of its business is to provide technical services.

But don’t underestimate this company. Well-known semiconductor companies such as Qualcomm and Samsung all use ARM technology. The latter is called Intel in the field of mobile devices, which shows the technical strength of this company.

"After two consecutive waves of acquisitions, it may not be easy to acquire ARM now. It will cost at least more than 10 billion U.S. dollars, or even more than 15 billion U.S. dollars. Moreover, they are also a technology company, with a total annual revenue of more than 700 million U.S. dollars. US dollars, the profit is about 50%, and there is no acquisition value at all!” Steve Ballmer is very familiar with this market.

This small amount of revenue and profit of ARM is just a small profit for all big companies. But for this small profit, it has to pay a purchase price of more than 10 billion US dollars. This is very, very unfair. Cost-effective.

And even if Microsoft acquires ARM, so what?

Can you tell Qualcomm, Samsung, and Leaf Technology that I won’t license my patented technology to you?

If you dare to do this, they will definitely sue you directly, and many of ARM's technologies are not completely without substitutes. The main problem is that ARM has formed a situation of small profits but quick turnover. Everyone is greedy for cheap and thinks that instead of It’s better to rent ARM’s patents cheaper than develop it yourself.

So, in general, acquiring ARM is a very uneconomical deal.

Furthermore, ARM does not have much hardware capabilities at all. Leaf Technology is now investing heavily in research and development in this area. They rely on their extraordinary product sales to dilute this research and development cost, so no matter from which angle , even from the perspective of weakening competitors, the acquisition of ARM is not necessary.

"The official news announced by Leaf Technology this time also includes the announcement that in addition to launching a series of new products such as new mobile phones, tablets, ultrabooks, etc. at its annual new product launch conference in January 2012, it will also Some new smart devices will be announced, as well as the first generation of smart in-vehicle systems they have cooperated with many car manufacturers.”

When Brad Smith said this, he was obviously a little concerned about the emotions of all the executives participating in the video conference, and stopped because they all knew very well that the market for Leaf Technology was getting bigger, especially in their smart phones. The further you go in the ecosystem and the faster you develop, the greater the threat to Microsoft.

Why do you say that?

The reason is very simple. In the intelligent ecosystem planned by Ye Ye Technology before, there is obviously no shadow of Microsoft's operating system. In other words, they regard Microsoft's operating system as synonymous with the previous generation of non-intelligence!

After being silent for a minute or two, Bill Gates sighed deeply, "We really underestimated this company in the past. We missed the best time and the best opportunity! "

If Yezi Technology had taken advantage of Microsoft's giant advantage when it was in decline, or used the pressure from the government to forcibly acquire this company, then it would be Microsoft that was the one calling the shots now, but at that time Microsoft didn't take them seriously at all. .

In the marginal market, perhaps, many, many years later, the rise of Ye Ye Technology will be regarded as a model by countless entrepreneurs, because they have finally completed a rise from the marginal market, and finally performed the great feat of ants devouring elephants!

From Bill Gates' point of view, he feels that there is nothing wrong with his obsession with software, because software is Microsoft's core competitiveness and a key factor for him and Microsoft to become prominent in the world, so he does everything possible to maintain Microsoft's leadership in software. As an authority in the field, I don’t want the company to be more distracted by hardware. Is this wrong?

But look at the current Leaf Technology and their rapid development over the years. Am I really wrong?

Bill Gates has never been willing to admit his mistakes. He is called by his supporters as a role model who never makes mistakes and never fails, so he has no habit of admitting mistakes or failure.

"I'm a little tired, please continue talking!" Bill Gates used this method to withdraw from Microsoft's decision-making level. He was really tired, because he found that he really couldn't keep up with this era.

Perhaps, what made Microsoft successful was monopoly, but what caused Microsoft's collapse was precisely monopoly.

So, is monopoly good or bad?

Perhaps Ye Qiu, who is in Europe at this moment, will tell Bill Gates without hesitation, "Monopolies should be taken out and shot!"

The reason is very simple, he is monopolized QJ!