Is Microsoft a Dying Consumer Brand?

[Jason Dunn]

<div class='os_post_top_link'><a href='http://money.cnn.com/2010/10/27/technology/microsoft_pdc/' target='_blank'>http://money.cnn.com/2010/10/27/tec.../microsoft_pdc/</a><br /><br /></div><p><em>"Consumers have turned their backs on Microsoft. A company that once symbolized the future is now living in the past. Microsoft has been late to the game in crucial modern technologies like mobile, search, media, gaming and tablets. It has even fallen behind in Web browsing, a market it once ruled with an iron fist."</em></p><p><img src="http://images.thoughtsmedia.com/resizer/thumbs/size/600/dht/auto/1288304430.usr1.jpg" style="border: 1px solid #d2d2bb;" /></p><p>This is your typical link-bait article in some ways, and I'm complying by linking to it, but I felt it was worth discussing. Windows 7 is selling like gangbusters, and it's the best OS Microsoft has ever released, so it's hard to blindly say that somehow Microsoft is losing in the consumer space...but I think the author has a point that Microsoft has no answer to the next wave of consumer computing: instant-on appliance-like devices. I don't own an iPad, but I understand what that device represents and why it resonates so powerfully with an increasing number of people. <MORE /></p><p>Many of us in the industry have been telling Microsoft for years that Windows was a poor basis for a touch computing experience, but year after year they kept hoping that advances in hardware would enable Windows to become fast and responsive on small devices - much of Microsoft's history has been littered with Moore's Law-based planning.</p><p>It took a lot of corporate guts to start over with Windows Phone 7, but I think Microsoft was/is in the same sort of denial when it comes to touch-based computing on larger devices. They know they have no good answer to the iPad or Android-based tablets; you can see that in every video where Steve Ballmer is pressed on the issue - he's distinctly uncomfortable with it (which gives me hope that he gets it). I sincerely hope they're already 12+ months into working on an answer to iOS/Android on a slate; whether it's a port of Windows Phone 7 or an x86 variant designed with a completely new GUI, something new is required.</p><p>If Microsoft is hoping that Moore's Law will prevail and somehow, magically, Windows 8 will run nicely on a thin slate, it really is game over for them in this space. In the same way that Apple got so far ahead in the MP3 player space it was impossible for anyone to catch up, I fear the same thing may happen in the tablet/slate space.</p>

[marvi1]

In many respects, Microsoft does seem to be coasting in the consumer market. The main reason Windows 7 is selling so well, in my opinion, is because it comes pre-installed on computer hardware that is considerably cheaper than Apple products. From an innovation standpoint, Apple is kicking Microsofts butt. And I've been a Microsoft proponent for decades. My Windows 7 HTPC is great, but Microsoft doesn't seem to put much effort into development for this. Rumours abound that they will abandon the Media Center, or will remove a lot of it's best features (live tv, for one). And I put the blame for this on Ballmer. As the face of Microsoft, he is terrible.

[Sven Johannsen]

Microsoft has been late to the game in crucial modern technologies like mobile, search, media, gaming and tablets.

IMHO MS was actually to early in many of those areas. They dove into mobile (PPC Phone edition), media (Plays for Sure, Portable Media Center), Tablets (XP Tablet edition) before having the benefit of knowing what the other guy did wrong, or really, what the public didn't like. (Or was told they didn't like.) I think MSs failing in a lot of these fronts is not innovation or execution, but concept and marketing.

By concept I mean making software and letting OEMs screw up the hardware, producing underpowered devices, with subsets of features. That's the way the business model worked for Windows. It probably wasn't the right way to go for phones and media. I can't imagine anyone saying XBox isn't a success, and Zune is a great device. Phones are coming along with a new minimum hardware spec, and significant limitations on OEM software 'tweaking'. Lots of things I don't like about Windows Phone 7, but I loved my WM 6.5, and it is very different, and a 1.0 effort. It is a smooth and reasonably polished experience though.

By marketing I mean MSs failure to promote their own products. Again this stems back to the 'software to OEM' philosopy. People buy HP, and Dell, and IBM PCs. They don't neccessarily go in and buy a Windows PC. In most cases it is assumed that is what it comes with, unless you are in an Apple store, or the Apple area of Best Buy, which you can't miss BTW. MS lets the OEMs market, and they tend to push their brand, not what runs on it. That was true of Pocket PCs, WM phones, Media players that were designed to interface with Windows PCs, etc. People bought Dells, iPaqs, HPs, Samsungs and even Motorolas, all runing MS OSs. Many likely didn't even realize that and comparing the devices sure didn't make it obvious. I've often said that the only thing MS needs to steal from Apple is their marketing team.

[Eric Juillerat]

All good points above. If I may cast a different light on the subject that, IMHO, is significant to why MS is a dying brand. I just spent two days, seven people, two continents, and two case numbers to finally get told that if I wanted tech support on a software suite purchased on Tuesday, I would have to pay MS $259+TAX. Thing is, I only spent $174 on the suite! So now, I have new software that doesn't work - and doesn't allow me to remove my older software by MS that DOES work. So now I run two redundant suites? This is a shame. At this point in time MS should be bending over backwards to assist their paying customers. Especially on their own software products! I run Windows 7 and Mac OSX. Side by side, 7 is very good, but not OSX. This kind of behavior from MS is continuing to push me to Apple. MS dying, yes, and by their own hand.

[Fritzly]

Microsoft has been late to the game in crucial modern technologies like mobile, search, media, gaming and tablets.

IMHO MS was actually to early in many of those areas.

You nailed the issue using "was".
After Gates left the company ended up in the hands of bean counters and these are the results.
Indeed they also have a problem with "promoting": few years ago MS came out with a brilliant product: "Small Business Accounting". In spite of being release 1 it was years ahead of that relict of the past, piece of junk that QuickBooks is.
Instead of promoting it with CPA's and potential users highlightining the program potential they let it die just after three years. Same with "Response Point" etc.
S.&S. are the worst that could have happened to MS and it happened.

[ptyork]

I think the more apt comparison here is probably Xerox, not IBM. Xerox was in the 80's one of the most innovative companies out there in terms of R&D (with their PARC facilities), but one of the least in terms of bringing R&D projects into the marketplace. Executives went to a seminar and learned that R&D was important and pumped in money, but never realized that you had to actually move out of R&D in order to realize any profit or growth from the research. Simply getting "trickle-ups" from research is not acceptable in the high-tech world. They also went to a seminar and learned that you didn't want to deviate from your core competency (which is true in some cases), but were unable to bring anything out that didn't directly complement their core, business-focused document imaging product line. Microsoft seems to be adopting these strategic blunders en masse.

For me, the biggest exemplar of Microsoft's mobile-ineptitude in recent years is NOT Windows Mobile or even the ridiculous Kin, but rather Origami. Here, R&D comes up with some really good and innovative ideas for how to interact with a tablet-sized device. Instead of rolling this into a Windows CE-based OS, creating an SDK around this interface metaphor, and jumping WAY ahead of their competition, they release it as a fraking add-on to Vista for use on "ultra-mobile" PC's. A fantastically incompetent move. UMPCs were a horrible idea. Underpowered, oversized, pathetic mobile devices. "Gosh," says Balmer, "let's take these ridiculously bad devices and dump our hard-earned research investment into them. Maybe they'll suck just enough less that we can sell a few dozen."

Courier is another idea that is destined to make its way from incredible potential to lost add-on pack (or a patent chest). A great "revolution" for tablet pc + pen input, lost due to Windows division infighting and a lack of executive vision and/or cajones. Ballmer, here's a clue for you my big bald buddy: Windows does NOT work on every device size above a mobile phone!!! As Jason said, Moore's law just isn't fast enough to let you wait for devices powerful enough to run your bloated desktop OS on tiny devices. Companies that "get it" are eating your incompetence for lunch. Showing up two to three years late leaves you with crumbs.

I think that MS has definitely moved into cash-cow maintenance mode. And it may well be too late to resurrect the "brand" for what it was ever worth--as was pointed out above, Microsoft and Windows were just stickers on a real brand like HP or Dell. It may be time to spin off Entertainment and Devices and see if they can't create some kind of meaningful independent brand. Perhaps not a completely separate company, but a completely independent "skunk works" entity under MS that can leverage the resources of the parent, but operate completely on its own without the baggage and politics. With Ballmer's wallet--without his bumbling brain.

Note, I actually don't despise Ballmer, I just don't think he "gets" entertainment and devices. He's a competent leader for the Platform and Business divisions. But if they are going to compete in the mobile/media consumer space, he needs to step aside and let this area blossom on its own. Hire a visionary as CEO of this division and get out of the way.

[Jason Dunn]

I think...

Nicely said sir - nicely said. :)