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> push by Chief Executive Satya Nadella to transform Microsoft into an AI-first company

Why can't we have a 'user-first' company. Maybe think about the user of your products a wee tiny bit. But no, it is not to be.

Go explain that to the board who assigns you. They all know about AI and FOMO it. Anything non-AI will be burried and thrown away. Trend is not close to reversal yet. We need more AI-driven disasters before rejection of AI-centric course will be a socially acceptable course of actions.

Plus. Who cares about users? Stock evaluation of the mag7 has few to do with the users and the products.

The 3.3% paid conversion is not great.

Believe it or not, the Recon Analytics trend is actually worse primary usage among Copilot subscribers dropped from 18.8% to 11.5% since July while Gemini climbed past it.

People who paid are leaving.

That's a churn problem.

The tell is buried in the article: workers who have access to Copilot, ChatGPT, and Gemini side by side choose ChatGPT and Gemini at higher rates.

Some companies are using 10% of their paid seats. Microsoft's CMO of AI says growth is "unlike anything we've seen before" but won't share the numbers.

That's the "we're thrilled with preorders" of AI.

This is the Ballmer story all over again.

  - Massive distribution advantage
  - Captive enterprise base
Somehow still losing to the thing people actually want to use.

Windows Phone had carrier deals too.

The problem is the same: you can't mandate delight.

This part is laughable, can't believe it leaked:

  > "About a year ago, Nadella sent a frustrated email to Rajesh Jha, 
  > executive vice president of experiences and devices, detailing an incident in which 
  > Nadella had asked the enterprise version of Copilot on the Edge browser 
  > to help with a public webpage he was on, 
  > but it couldn't fulfill his prompt"
Meanwhile three different orgs inside Microsoft all own something called "Copilot" and none of them talk to each other.

Meanwhile, Anthropic ships Cowork after 10 days and it just explodes with the market.

> growth is "unlike anything we've seen before"

This says nothing about where the growth is going

  > but it couldn't fulfill his prompt"
Not surprised. Copilot censors queries to the point that it is often useless.

Another reason to use ChatGPT.

Don't worry, after a decade or two of having Windows reinstall and re-enable it every couple weeks against their users' wishes I'm sure they'll get the market penetration they're looking for...
Maybe Microsoft needs to fix the cart before they put the jet engines on top of it and try to kill the horses off.

Go back to fixing what’s wrong with Windows, then worry about the AI software running on top of it and where you can add a value proposition, because right now the Windows value proposition is continuing to go right down the shitter as everyone flees Windows 11.

Microsoft's fumble here is pretty spectacular.

Back in early 2023, the state of google search was abysmal (despite that their leaders insisted it wasn't, it had become nearly unusable for me and I don't think was that unfounded of an opinion). Microsoft rolled out a new version of bing, which became bing chat - search worked for me again for a very brief window of time.

They could have pounced on this opportunity to take a big chunk out of google's search, because google didn't really catch up there til the AI overview was rolled out, and even that is notorious for having issues. Eventually chatGPT seems to have carved out some of this search space with web-search being native to the tools now.

But microsoft was way ahead of everyone here for a brief period! Instead they just rolled everything into bloatware vaguely called "Copilot" and called it a day.

It cost them (as a guess) -1T of market cap..

In other words they still got rewarded by the market despite all the missteps. I don’t agree with this reality but here we are.

>it had become nearly unusable for me and I don't think was that unfounded of an opinion

this is an extremely unfounded opinion, and pointing me to other people on hackernews that agree with you is not evidence. Google search quite literally was and continues to be the most successful and profitable product in the history of humanity. None of your comment interfaces with reality at all.

Nadella himself wrote:

"2026 will be a pivotal year for AI. [...] We have moved past the initial phase of discovery and are entering a phase of widespread diffusion. We are beginning to distinguish between “spectacle” and “substance”."

Customers are not buying the spectacle and investors are wondering why there is no substance.

[1] _ https://snscratchpad.com/posts/looking-ahead-2026/

There were six versions of Windows Mobile before the iPhone hit and they still couldn't do anything.
I think the plain ordinary chatbot behind the Copilot on the desktop is fine, it seems like a skin around ChatGPT-5 in the "Smart" mode and in the "Search" mode it compares to Google's AI mode.

When it comes to anything multimodal it is an absolute disaster. Show it a photo of a plant for a plant id? Forget about it, just take a picture of the screen on your phone with Google Lens. If you ask it to draw something or make a Microsoft Word document you'll regret it.

For advice about how to do things on the command line or how bootstrap works or how to get out of a pickle you got yourself in Git it is great. It writes little scripts as well as anybody but you can't trust it to get string escaping right for filenames in bash scripts which is one reason I'd want help. For real coding I use Junie because I'm a Jetbrains enthusiast but other people seem to swear by Claude Code.

I do dread the day though when Microsoft decides to kill Copilot because I will miss it.

The reality is that Copilot’s laughable performance is almost entirely unrelated to AI models not being good at X.

Every single thing Copilot does has been solved much better by other products.

However, Copilot fails in extremely ridiculous ways, at very basic tasks which such a product absolutely must nail.

Copilot should not have been released. A large majority of people involved have failed. People like managers, product managers etc should probably be fired. Technical leads equally so.

For everyone who has been building similar products it is immediately obvious that Copilot is sloppy, unfocused and unprofessionally executed.

People hate it, and for hood reason.

It just boggles the mind how they would go and release it, or that it even exists in its current form.

Those devs and managers rake in hundreds of thousands of dollars each, producing garbage that has been done better by dozens or hundreds of other teams

Bah

It is remarkable how during the last 25 years (approximately), Microsoft has been improving their ability to deliver first (or be among the first), followed by messing up the whole process so that late comers end up taking the crown jewels.

PDAs, mobile phones, tablets, tablets with detachable keyboards, managed OS userspace, HoloLens, the XBox mess, and now AI.

There certainly other examples that I failed to address.

This is what happens when divisions fight among themselves for OKRs and whatever other goals.

But still, Microsoft is the most diversified of the big players - they have Windows, Office, Enterprise, Xbox, Azure, Surface - they can survive a mess like their current copilot mess and still generally thrive
The biggest issue I see is Microsoft's entire mentality around AI adoption that focuses more on "getting the numbers up" then actually delivering a product people want to use.

Most of the announcements I hear about Copilot, it's always how they've integrated it into some other piece of software or cut a deal with yet another vendor to add it to that vendors product offering. On the surface there's nothing wrong with doing that but that just seems to be the ONLY thing Microsoft is focused on.

Worse yet, most of these integrations seem like a exercise in ticking boxes rather than actually thinking through how integrating Copilot into a product will actually improve user experience. A great example was someone mentioned that Copilot was now integrated into the terminal app but beyond an icon + a chat window, there is zero integration.

Overall, MS just reeks of an organization that is cares more about numbers on a dashboard and pretty reports than they are on what users are actually experiencing.

I have Copilot buttons sprinkled everywhere on my work computer, and every time I have tried to use them I get something saying "Oh, I can't do that". It's truly baffling.

Copilot button on my email inbox? I try "Find me emails about suchandsuch", and get the response "I don’t have direct access to your email account. If you’re using Outlook (desktop, web, or mobile), here are quick ways to find all emails related to...". Great, so it doesn't even know what program it's runnning in, let alone having any ability to do stuff in there! Sigh.

A whole new toolbar appeared in Outlook on my work computer with nothing but a single button to open a copilot chat window. I tried asking it a few simple questions and it completely failed at all of them. Copilot didn't even know if I was using the web or desktop version of the very app it was embedded in!

Wasting UI space for a useless tool it's just a waste of time, it actively makes it harder to get work done. But I guess the important thing is the number of times that AI button gets clicked is going up on some PMs telemetry dashboard.

I expect this is the crux of the problem.

There aren't any "AI" products that have enough value.

Compare to their Office suite, which had 100 - 150 engineers working on it, every business paid big $$ for every employee using it, and once they shipped install media their ongoing costs were the employees. With a 1,000,000:1 ratio of users to developers and an operating expense (OpEx) of engineers/offices/management. That works as a business.

But with "AI", not only is it not a product in itself, it's a feature to a product, but it has OpEx and CapEx costs that dominate the balance sheet based on their public disclosures. Worse, as a feature, it demonstrably harms business with its hallucinations.

In a normal world, at this point companies would say, "hmm, well we thought it could be amazing but it just doesn't work as a product or a feature of a product because we can't sell it for enough money to both cover its operation, and its development, and the capital expenditures we need to make every time someone signs up. So a normal C staff would make some post about "too early" or whatever and shelve it. But we don't live in a normal world, so companies are literally burning the cash they need to survive the future in a vain hope that somehow, somewhere, a real product will emerge.

To be fair. MS Office product defects should be regarded just as harmful as hallucinations. Try a lookup in excel on fields that might have text.
For coding,ai is amazing and getting better.

Spell checking is also good, grammar better then me lol

And pumping out fake news and propaganda, way worth it when you do it

MS actually changed their office.com landing page to a funnel that tricks you to into installing a copilot app. It used to be the dashboard for MS web apps. There are no links to the web apps, but they are all still there, you just have to know the subdomains. The app doesn’t have any of the functionality that page used to offer…
They boosted copilot numbers by renaming office to copilot. No I'm not joking.

Musk could learn from this to boost his FSD subscription numbers for his bonus payouts.

Excel integration is amazing, saves me hours a week and helps me write complicated formulas in seconds.
CEO has only delivered failure, and in trying to avoid that, they brought it
I really don't know what it does other than respond to emails in Outlook.
Copilot in Word and PowerPoint is complete slop. Claude Code is better with PPT.
I just attended a training about AI Foundry today and they advertised thousands of integrations and support for like 50 different models. There is no way in hell all that stuff is tested and working properly. Microsoft seems to just be trying to throw as much chum as possible in the ocean and seeing what bites.
They should be trying to convince people it is something they want rather than forcing it on people. Alas that would mean making a product people want and Im not sure they are there.
Yeah did they test any of this? Did they run a pilot and ask 1000 users did you use it? Did you like it? Is it better with this than without it?

It's as though they think some "AI revolution" will come, and all they need to do is just make sure that by the time it does, they will have sprinkled enough AI pixie dust on their products and services. And then they added some KPI's in the organization and called it a day.

Most of all the whole strategy feels extremely faceless. Who is the visionary here? Where are the proud product launches and visionary blog posts about how all this happens?

Sounds almost like every manager just covers their ass by formally doing what is expected core top-down idea is "AI is a future, thus make it everywhere".

Anyone who would try to say "let's not do AI" would be a white crow, will be eaten by other managers in reviews and discussions.

Bad leadership, bad management.

So it's FOMO, formalism and conformism.

This is the bad side of things like OKRs. They push you away from user satisfaction since that harder to measure, coupled with go consequences for missing them. People just force adoption without taking the product signals that come from users rejecting your changes.
I wonder if there is somebody here high up in the MSFT stack who understands the tech/code but also oversees more stuff to be able to opine.
They really dropped the ball on this - they are down ~12% for the year.

When they first started, they seemed to be firing on all cylinders and looked like they were going to be big winners, but the strategy has just been a slow motion car crash.

I wonder if Satya is the right person for Microsoft.

> ...they are down ~12% for the year.

Given how unstable stock prices typically are over the short term, and given that we're currently something like thirty-five days into the year, I don't consider that fact to mean much.

Also, wow, your comment is almost exclusively metaphors. I've not seen the like since the last all-hands email from the CEO.

Ouch, keep it civilised
I have. That you think a plain, neutral statement of fact is uncivilized suggests that you're in similar social circles as CEOs (and other managers) that write messages that are almost exclusively metaphor.
I mean, Apple is at ATH from basically waiting out and picking the winner from its throne. Everyone clowned them, but it also made them not waste money until things are a bit more clear.
Microsoft's focus was making it so that AI could allow unskilled workers to replace skilled workers. The hope was that everyone but sales/management could be offshored to SEA/India/etc and AI would somehow make up for the skill differential.

The successful AI companies are making it so that skilled workers can use AI as a tool to be more productive and efficient.

Yeah, my experience is currently pointing towards AI replacing the cheap workers instead of the expensive ones.
Is there a readable link to this article? The workarounds posted in this thread so far seem all to have stopped working.
For whatever reason that title has reverted to the original

Microsoft's Pivotal AI Product Is Running into Big Problems

...maybe to not imply copilot is having any kind of technical problems

.

   x=AA1VBKdf
   { echo "<meta charset=utf-8>";
   (printf 'GET /content/view/v2/Detail/en-in/'$x' HTTP/1.0\r\n'
   printf 'Host: assets.msn.com\r\n\r\n') \
   |busybox ssl_client assets.msn.com \
   |grep -o "<p>.\*</p>"|tr -d '\134'; } > 1.htm

   firefox ./1.htm
No Javascript, no CSS, only two HTML tags: <p> and <a> with href attribute; 1.htm can be viewed in _any_ browser, no matter how old or unpopular, firefox is just one example
I always remember the pointless integration of Google+ into YouTube that simply annoyed everyone. There's surprising willingness to damage an existing successful product to try to save a new struggling product.

Microsoft has also tried hard to push Edge, annoying nearly every Windows user on the planet, with no real success.

It is rather interesting how dead-focused Microsoft is on AI. Even if you look at their recent statements "We now admit there are AI problems with Microsoft-related products." (e. g. Win11 in particular), it seems to me that they really have no way back now. It's turtles down all the way; once the train is moving, it is hard to stop.

It's definitely not what many users wanted or expected from Win11; nonetheless, and this also surprised me, more than one billion devices run on Win11. That's also strange - AI is not a big reason for most of these folks then, right? Probably neither positive or negative (or they may not even know about it).

Product leaders should really measure internal usage as a litmus test for whether or not people actually want these things. It's honestly shocking how much MS's brand has diminished in the last few years because of them pushing the copilot brand into everything.
The Copilot they have integrated into Azure is absolutely useless. Every now and then I'll get frustrated at which one of the thousands of menus some switch is under and I'll ask their chatbot and it will spend a lot of time "Identifying the problem..." and "Gathering information..." only to give me links to generic help articles, have some sort of error, or give me flat out wrong information.

These days I try to interact with Azure through the command line and asking Claude, which works pretty well most of the time but there are some things their API cannot do and you are forced to use their crazy Azure UI. It's not as bad as the AWS console UI, but still bad.

It's amazing to me a company that spent so much and invested so much in OpenAI has such a terrible product and got almost nothing out of it. Even standard ChatGPT is way better at giving you directions on what to do than their useless Copilot.

Copilot is basically ChatGPT after Microsoft hit it on the head with a pipe hard enough and long enough to drop it about 20 IQ points.
Copilot is such a typical MS product.

It checks all the correct checkboxes on a feature list in comparison to the competition but it just sucks to use.

It's like Sharepoint - the deathpit of all collaborative software

Microsoft has access to all the OpenAI/ChatGPT tech. How is their chatbot so awful? Seems like they are trying their hardest to screw this up.