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What the Surface 2 reveals about Microsoft: It can’t let go of losing ideas

Microsoft is in the news again as the company unveiled the Surface 2 at the start of the week, a device that promises to extend whatever agony the first Surface engendered.

I personally like the device but have no real desire to own one. That said, I have no real desire to own any tablet. I do have an Acer Iconia, which other family members use more than I do, and a Nexus 7, which I've actually lost in the house and can neither find nor care to find. It will turn up eventually.

This brings me to an interesting Seeking Alpha article that asks: "Will Microsoft Ever Grow Again?" It seems to be a major topic of discussion in the industry. I've been advocating that the company should bust itself up since the 1990s.

Over the years I've modified my bust-up architecture a few times, but I still hold the same overall opinions. Microsoft is a bloated, somewhat-disorganised, always-dysfunctional, uncreative behemoth that does a few things well, a lot of things well enough, and too many things poorly.

I got more insight into the problems at Microsoft when I met a couple of employees intending to set me straight about exactly how Microsoft's stack ranking works. In the process they both told me that when Steve Ballmer resigned almost everyone at the company, group by group, actually had champagne cork-popping parties. This has never been reported but I believe it. All the employees thought Ballmer was a hindrance to the future of Microsoft, which apparently is bottled up in the Microsoft labs.

Other observers of Microsoft say if you knew what was being developed in the labs, you'd see Microsoft much differently. This is what employees said, too.

I'm reminded of Xerox PARC, once considered the premier research company in the US. Incredible inventions came from PARC but very little was commercialised by Xerox.

For example there was Postscript and Ethernet. The WYSIWYG concept was perfected there – and also the desktop metaphor. The GUI, and dozens of inventions exploited by others. The laser printer seems like the only thing the company absorbed.

Microsoft seems stuck in this same rut. It spends millions on R&D, while letting the developments languish, only to be exploited by others.

While I've always supported Ballmer because he knows how to milk the cash cow, he has flaws like everyone else – his main flaw being that he thinks he can sell anything if he tries hard enough. He won't let go of clear losers.

I witnessed his stubbornness first-hand in his pre-CEO days when he was promoting the MSN information utility up against AOL. MSN was simply crappy by comparison and all the fixes and changes during its early years were incredibly dumb. But Microsoft persisted. There was zero chance it would ever be a real success, but the company has actually kept the brand alive and it still exists at as a junk news site with horoscopes.

MSN should have been put down like a horse with a broken leg years ago. Combined with Bing and other products within the online services division, the company bleeds millions each year. So what is the point of throwing all this money away? It's not even an effective loss leader. Who goes to the MSN site?

This brings me back to the Surface 2. This device could also be an albatross product, much like MSN. Meanwhile, cool new stuff remains bottled up in the labs, lost much like my Nexus 7. And nobody at Microsoft seems to care, except the workers.