The Vista Moneyline

April 9, 2006

In his March 28th ‘Tips & Tweaks’ blog at PCWorld Steve Bass includes a ‘Confidential’ Windows Vista e-mail from Brian Valentine. The Brothers fully believe that Valentine wrote this e-mail knowing that not only would it leak, but it would be forwarded to readers outside of Microsoft as fast as Microsoft’s Exchange servers could deliver it. Nonetheless it does provide an interesting look at when Valentine thinks his Windows team will finish Vista. According to Valentine:

It takes about a month or so for the Select DVDs to be produced, so given our RTM [Release to Manufacturing] date, those can start shipping by November and contain the ‘Pro/Business’ editions of Vista. Therefore, a customer who is licensed to receive select DVDs can begin installing machines with Vista at that time; therefore the launch to the ‘business’ segment at that time.

Given that it takes a month to produce the DVDs, and the plan of record is to get those DVDs into the hands of customers in November, the Windows team has to RTM in October. Give them the worst case scenario, and they have to RTM on Halloween—October 31, 2006.

But Valentine is likely basing his estimate on what his program managers are telling him, and most of them are likely playing ‘Schedule Chicken’ because they don’t want to admit to Valentine and other Microsoft managers just what the real state of Vista development and testing is.

Schedule Chicken

Dare Obasanjo and Jim Carson provide a pretty good description of ‘Schedule Chicken’:

Even when you’re brutally honest, spelling out all the things that must occur for you to meet a date, the dependencies get lost in the footnotes in the appendices at the end of the book. Management ‘pulls in the date’ to something ridiculous that they can sell to their bosses. Their bosses do the same. And so on.

Since everyone is using largely fictitious dates as part of a mass delusion, you would think no one expects to make them, no one will make them, no harm. This is sorta true. Each technical lead assumes that the other leads are lying even more about how long it will take them to deliver.

The ruse continues past insignificant milestones until just before something is actually due. The more seasoned managers will delay admitting to the obvious for as long as humanly possible, waiting for someone else (more junior) to ‘turn’ first. The one who does is the ‘chicken’, and is subsequently eviscerated by their boss and made a public example of all the incompetence in the universe.

After this ‘chicken’ has been identified, and summarily punished, all the other teams update their schedules with slipped dates that are slightly less than the ‘chicken’s’. The process may repeat itself a few times. Key point: You don’t want to slip first. Or last.

So to reiterate the key point, your schedule doesn’t have to be accurate as long as some elses is worse. If you don’t slip first, no one will ever know how unrealistic your part of the total schedule was. And even at this juncture you still don’t have to supply an accurate or intellectually honest schedule, you just have to gamble that some other feature’s schedule lie is worse than yours.

As Jim McCarthy taught the Brothers at Microsoft, when you slip, don’t replace a bad date with an equally bad date—but this is invariably what the Windows team does, because no one wants to tell their managers any bad news.

Predictive Markets Versus No Bad News

You don’t have to take the Brothers word for this, consider this item from a Business 2.0 article on the ‘Best Secrets’ of a number of companies including Microsoft:

If so-called prediction markets—betting pools in which shares are traded to gauge the odds of upcoming events’can call presidential elections and Oscar races with accuracy, why not use them inside companies to identify their next hit products? The answer: It’s a lot harder to tap into collective brainpower about a product’s market potential, and other key business questions, than it is to foretell the winner for Best Picture.

Microsoft, though, is trying to crack the code’and has been developing prediction markets as a serious alternative to blunt forecasting tools. Todd Proebsting, director of Microsoft’s Center for Software Excellence, began running a series of prediction markets in 2004 to better gauge how many bugs a new software application might contain and to make more accurate calls about product ship dates. In his first effort, Proebsting chose 25 programmers and quality-control testers from a team of more than 50 working on a new Windows testing application. Via an internal Web site, workers could buy shares for the month they believed the product would ship. Shares were valued at $1 apiece, and the engineers drew on accounts stocked with $50 each to fund their bids. Within minutes of the site’s launch, shares for a February ship date shot up in value while those for November, the scheduled release date, dropped to almost zero. That came as a shock to the project director, who had heard nothing but optimism in meetings and e-mail updates.

Now ignoring the obvious jokes about Microsoft having a ‘Center for Software Excellence’ and that Microsoft’s best secret is to make two of your products virtual monopolies, the key nugget in this item isn’t that Microsoft is trying predictive markets; it is that the project director had heard nothing but optimism about the scheduled release date in meetings and e-mail updates.

This confirms that Microsoft fosters a culture of ‘no bad news’. Before they had a chance to buy shares they knew the schedule was wrong—but no one wanted to admit it. This is because program managers who are willing to lie about schedule dates and play schedule chicken get better performance reviews, and therefore promotions and bonuses than program managers who stick to their guns an create a realistic and achievable schedule for their features.

After using the latest Customer Technology Previews (CTP) the Brothers truly believe that there will be another slip in the Vista delivery schedule. The Brothers never believed Vista would ship this year and frankly, based on the current state of the code, they don’t believe it can be done. Of course Microsoft will cloak any subsequent slips in the: “Customers tell us they want a quality product…” mantra, but bottom line, the Brothers don’t think even Business customers will get their hands on Vista this year. And now that they have missed the holiday shopping market, does it really matter whether customers get Vista on Superbowl or Easter Sunday? Either way, it will be 2007.

The Vista Moneyline

The Brothers think a variation on the predictive market approach to determining how much faith to place in Microsoft’s schedule would be to take moneyline bets on whether or not Vista will ship by Oct. 31.

Of course it goes without saying that the Brothers are asking this question for informational and entertainment purposes only, and as David Letterman often says on the Late Show: “No wagering please!”

The Brothers tried to find a bookmaker posting a line on Vista’s ship date by checking with Ladbrokes, which will take bets on the financial markets such as the London FTSE or New York Dow Jones, and special bets such as on the Eurovision song contest. At least online it does not appear Ladbrokes is taking any Vista related bets.

Bodog.com, which was recently featured in Forbes Magazine is located in San Jose, Costa Rica. Bodog does take business proposition bets such as:

Will Sony release the PSP2 by September 30th, 2006?

Any wagers placed after outcome becomes public knowledge will be graded as No Action. No Refunds. No Over limit Wagers. Sony must officially release the Playstation Portable 2 (PSP2) by September 30th, 2006 for all Yes wagers to be graded a Win.

The posted line on this proposition bet as of April 6th was:

Now if the Brothers are interpreting this line correctly then the current favorite is ‘No’ Sony will not ship on time. Sony is effectively the underdog; most betters assume Sony will fail.

The Brothers did a quick survey among interested parties asking: if the odds were equal would you bet ‘Yes’ Microsoft will ship Vista by Oct. 31, or ‘No’ Microsoft will ship Vista later than Oct. 31. Only one person out of ten was willing to take the ‘Yes’ bet. So if the Puli Brothers casino were going to post a line on Vista’s ship date, they would have to add a pretty big incentive to get bettors to take the yes side of the line. The Brothers base this assumption on the concept that bookmakers try to establish a line that will balance the number of favorite to the number of underdog bets, and make their money on the fee they charge to place the bet.

So it would seem the Brothers aren’t alone. Few people have any confidence in Microsoft’s ability to schedule software.