EFTA00665052.pdf

From: Steven Sinofsky To: Jeffrey Epstein <jeevacation@gmail.com> Subject: theory Date: Sun, 12 May 2013 18:22:33 +0000 Importance: Normal I am still mystified what exactly it is that they think I would say or do. I can't decide if it bums me out or it makes them even crazier than I think. Here's my theory on your Windows 8 question: • There were doubts already. People anxiously awaited sales numbers. It was the biggest change to the single most used product on earth, and there is a memory of the last big change gone crazy (Vista). • Ballmer had told people "Windows 8 is the riskiest bet Microsoft has ever made". It was an off the cuff remark in Korea (ironic) widely picked up. Dumb. This was a long time ago but basically every story about Windows 8 carried this statement. • Microsoft announced 60MM copies sold in January. That surprised people. Then people realized that is the PC sales rate anyway. • PC sales were down a lot (April). IDC/Gartner had double digit declines. One analyst said it was because of Windows 8--no new evidence cited. • ValueAct invested in Microsoft. This made people think differently. All of a sudden the street valued the Windows business at effectively zero and magically the rest of the company was worth the share price. • Then came earnings and the numbers were better than expected. But many folks felt there was something fishy but didn't know what. • Microsoft announced 100MM copies sold. This was not a good number even though it was big. Steve pushes for these momentum numbers. People then realized the 60MM number wasn't what it should have been and was a bit fake. This depressed folks. (Last week) This got tied back to the decline in PC sales and the cause being Windows 8. • With a blog post and conference, Windows announced the 100MM number and that "Microsoft is listening to feedback". This started a whole round of stories on "new coke". The killer stories were the FT ("Microsoft makes a U-turn") and the Economist. • On stage at the conference, Julie did not say anything about drastic changes. Then after appearing there was a blog post all about humility and learning from customers. All well done. A bit coy about how much would change but fine. • Then Frank Shaw did a rancid post going after the press about their view. He did the worst possible thing which was "I am not a crook" by saying "Windows is not a soft drink". I mean seriously he did that?! So my sense is that this is all a sequence of small failures and no new data. Same product. Same transition. iPads still real as ever. As far as what I could say, I bet more than anything they would like me to say "it is my fault". Of course Julie led the design. That's steve's problem. he would still almost certainly say "We put in new people better at listening to customers" (hardly dispragement directly) as his keynote announcing the next version of Windows in June. We should get assurance he would not point at me in exchange for me saying something they want :-) All while this is going on he is going to demote Julie after just promoting her. He's making up a crazy org. That's why people keep reaching out to me. EFTA00665052 Sent from Windows Mail EFTA00665053