How the Sidekick fiasco is Microsoft’s fault

By Felix Salmon
October 12, 2009
Dave Methvin:


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Is there an M&A lesson to be learned from the Microsoft/Danger/Sidekick fiasco? Here’s Dave Methvin:

Any $500 million acquisition usually comes with some technical due diligence. When Microsoft bought Danger, didn’t they have someone take a look at how the company ran their servers? During the more than 18 months since the acquisition, didn’t anyone review how Danger was operating?

The implication here is that the meltdown would have happened if Microsoft hadn’t bought Danger, and that Microsoft’s biggest mistake was not managing its acquisition more diligently. But Danger seemed to be perfectly good at cloud computing until Microsoft bought it — and then buried its founders so far down the org chart that one could easily forgive them for becoming somewhat demoralized.

It’s pretty obvious that company founders aren’t going to act with the same drive and sense of ownership when they’re a tiny part of a monster organization as they did when they owned and ran their own shop. Microsoft should have been on top of what was (and, more importantly, what wasn’t) going on at Danger, and been alert to defections and any hints of dissatisfaction in the team. Instead, it’s managed to deliver the single largest blow yet to the whole concept of cloud computing. And there’s lots of indication that Microsoft is at fault here:

Microsoft’s takeover of Danger almost two years ago should have given the software giant the time to fortify and secure Danger’s online operations. Instead, it appears the company actually removed support to cut costs…

Microsoft’s accountability in supporting its acquired SideKick support obligations with T-Mobile was also shirked… Microsoft could get more money from T-Mobile for their support contract if T-Mobile thought that there were still hundreds of engineers working on the Sidekick platform. As we saw from their recent embarrassment with Sidekick data outages, that has clearly not been the case for some time.

That indicates that Danger’s high profile cloud services failure didn’t occur in spite of Microsoft’s ownership, but rather because of it.

It’s not just that company founders lose zeal once they’ve been acquired; it’s also that executives at the acquiring company are often suspicious of what they’ve bought, especially when that company used to be a direct competitor. If you’re going to be spending billions of dollars on acquisitions, you should certainly invest a chunk of time and money ensuring smooth integration. That clearly didn’t happen here.

Update: Andrew Leonard has another idea:

Maybe we should consider this a Machiavellian shot across Google’s bow? What better way to defend the Windows/desktop franchise than to create a sense of fear, uncertainty and doubt concerning the fundamental security of cloud computing?

7 comments

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Ordinarily Dave’s word is gospel with me. But I’m with Felix on this one.The problem is not due diligence. It probably has a lot to do with trying to force Danger’s infrastructure into some architecture that 1) has Windows server at its core, not whatever Danger was using and 2) is part of some technology roadmap and grand vision that merges the mobile services platform, the adserving platform and the online services platform sometime in 2014, and called for a greatly hobbled Danger from 2009 to 2011, with millions of unhappy customers, because for some reason that perfect, Microsoft-centered vision called for Danger to discontinue its storage architecture two years before its replacement was in place.Actually, I know the “some reason.” The architects want to replace the Danger storage infra with something more awesome-ier, but if they actually pay to extend the Danger system’s life and support Danger’s customers until they are ready to transition in 2012, they have to cut features from their due-in-2014 awesome-y stuff. They can’t bear to do that, so it’s time for cold turkey!Those Danger customers should have just bought a Windows Mobile phone, and then they wouldn’t have this problem.

Posted by Dollared | Report as abusive

Microsoft has lately had a string of failures, and it’s reasonable to ask why. After all, MS was the dominant technology company in the US as recently as ten years ago. All I can see, broadly speaking, is that they’re all management failures– Microsoft doesn’t lack talented and knowledgeable engineers, but assets and goals don’t seem to be lining up in a rational way.

Posted by MattF | Report as abusive

everybody talks about backups. Backup, schmackup. I make backups of my code daily. But, I learned a lesson several years back when I made a big mistake in code and tried to restore from my latest backup. It didn’t work. Backups are important, but nothing matters until you have actually restored data from a backup and PROVED that your backup system works. I suspect that is what happened here: at the most basic level, nobody had recently proved that they could restore from backups.

IMO, permalink is likely correct. Danger was a vendor of mine for three years, and they were understaffed and lacked professional level debugging of systems and procedures. They built stuff and did not test that the entire loop actually worked without a glitch. It surprises me something this huge did not happen sooner.

Posted by sidekicker | Report as abusive

All sidekick users deserved it, they were just so annoying back in high school, trying to look cool (I am not complaining). They distracted me so much with their chitter chatter typing, so now no service means no proper device functionality.

You think you’ve got problems. Microsoft is a total waste of time now. All it’s programs are giving an error when shut down by the user, not recognising the shut down as a normal part of operating a computer. Please, someone, buy Microsoft and trash it.

Posted by Peter Potter | Report as abusive

For a multi-billion dollar company like Microsoft not to have a redundant backup is simply unforgivable and inexcusable! Whether Danger failed to make a backup before its upgrade or Microsoft’s oversight http://www.microsoft.com/en-us/office365  /, this incident is a total disaster especially for its customers.

Posted by MichaelHost | Report as abusive