I retired from personal blogging in July 2008 but you can find me over at blog.xero.com
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Only a few years ago the Microsoft powerhouse was unstoppable. You couldn’t even imagine Microsoft could have a competitor and there were calls to break MS up.
Then two fronts happened. The Internet, which challenged the lock in of the desktop model, and Apple came back.
It’s a fascinating tech story that thousands of people commentate on. But this article was a bit of a wake up call as to where MS is at.
Can Hotshot Ad Guy Alex Bogusky Make Microsoft Cool?
Firstly this
Over the past couple of years, Microsoft’s already problematic reputation in some circles — as the soulless, power-hungry purveyor of lackluster products — has suffered a series of self-inflicted wounds. It spent two years and $500 million on the media blitz around the long-delayed Windows Vista launch, only to see the January 2007 “Wow” campaign, which likened Microsoft’s new operating system to Woodstock and the fall of the Berlin Wall, derided as arrogant and creatively void. Vista itself sold poorly, leading to price cuts of up to 40%. Worst of all, the flop bred a new generation of Microsoft haters. “Microsoft has really lost control of its image,” says Rob Enderle, an influential advisory analyst for tech companies including Dell, HP, and Microsoft. And with its two most formidable competitors — Apple and Google — boasting their own consumer cults, that’s the last thing Microsoft can afford to do.
I’m sure Microsoft strives to do better but the fact is as companies grow it is just hard to be nimble and the technology market allows new entrants to come in unencumbered and change the rules. In that climate long term brand demise is entirely predictable. But at the same time a cheeky challenger, smaller with a lot more focus, but big enough to make an impact has been accelerating that brand erosion.
Nothing is doing more to carve away at Microsoft’s reputation — and contribute to its loss of market share — than the assault launched by Apple two years ago in the form of the “Mac vs. PC” spots featuring The Daily Show satirist John Hodgman. The ads became immediate pop-culture fixtures, spawning more than 1,000 video spoofs on YouTube and taking home last year’s Grand Effie, the ad industry’s highest honor for effectiveness. “Nobody messes with anyone in the tech industry the way Apple has messed with Microsoft,” says Enderle. “It’s the first time I’ve ever seen a major national campaign that disparages a competitor, and the competitor just sits back and takes it. If somebody tried to do that to Oracle, you wouldn’t be able to find the body.”
It is so interesting to watch this battle on such a big and public scale.
Microsoft is reinventing itself. SharePoint is growing like a wildfire in the enterprise and the cash keeps rolling in.
Far from being complacent Microsoft has lots of smart people and lots of money. They know they’ve missed the market in a number of public areas and that has removed any corporate arrogance they might have been accused of a few years ago.
They will have learned a lot of the past few years, and especially over the last few months on the so far failed Microhoo bid and the unrestrained reaction from the community.
I expect Microsoft to reinvent themselves over the next few years. Now there is real competition and that leads to innovation. That is great for the industry.
What would you do if you were Microsoft? If big Steve tapped you on the shoulder and said, your turn?
Here’s my strategy …
- A lightweight operating system. Forget backward compatibility. Just needs to run Office v.next which has to be compelling. Make it not need a hardware upgrade. Less is more. Open Source it.
- Leverage the Office platform for a powerful Software + Services model. Collaborative Office has to be the goal.
- Win the Enterprise. That means double down on SharePoint, but make it a database, not a collection of objects.
- In fact promote everyone in the SQL Server team. The Enterprise is about databases.
- March out everyone in the Exchange storage team. Exchange is your corporate anchor. There has been no innovation for years. You need to port it over SQL Server immediately. Shoot anyone that stops you. Mail is a database application. Period.
- Clean sheet redesign or your mail client. Mail is broken at all levels and is the most important application.
- Buy a big Services company. Maybe HP. Microsoft has to be the new IBM. Straight partnering won’t cut it anymore.
- SilverLight has to win, or buy Adobe. Don’t let Apple get them or you’re done.
- Resurrect Internet Explorer for OSX. You’re going to loose OS market share in the short to mid term, at least have a chance to keep them in the browser.
- Lock in Dell. As computer hardware gets cheaper the OS becomes the biggest cost. They’ll go Linux unless you fix those relationships with a great OS. You need a tighter hardware/software partnership. Surely together you can build a stunning computer. Look at OLPC2.
- Significantly up your Open Source strategy across the board. That will win back the geeks.
- Win the SMB market. No one there yet and they already have Office.
- Do lots of small acquisitions to fill in the strategy.
- Platform as a Service (PaaS) .Net and Windows Server with compelling licensing.
- Sack all the existing design guys and hire a design dictator who overseas everything. Microsoft Web properties, packaging and applications are ‘over designed’. You need someone who understands less is more. Not Chris Bangle but like a Chris Bangle at BMW who drove design.
- Do a total redesign of the Windows Mobile interface. It is not a scaled down desktop computer. It is a handheld device. Hire some RIM guys to do it properly. Or buy RIM.
- Maybe use some cash to buy or lock in a global fibre network. Vertical integrate your Enterprise Software stack with the network layer. Then you can QoS connected applications and add value to the stack with Enterprise Messaging Services, off site back ups etc.
- Xbox/Media center has to be default lounge computer. Double down but really model user scenarios so it works as people want to.
It’s a big list but MS has a big team, the brains and the resources.
blog
19. Buy Xero now for what it will be worth in 10 years time.
Good post Rod and it raises lots of interesting issues. I would make these comments on points 6 and 15.
6 - if MS did this there would not be a market for our Ezidoesit software. I think there is a fundamental problem with email period in business (whether Outlook or any other software people use,and in how people use email. Users are being driven by their inboxes, suffering cognitive overload (deer in the headlights) leading to serious interruptions and a lack of productivity. We purposely designed Ezidoesit to be easy, visual and to need a minimum of keyboard action. It allows a user to work off their calendar not their inbox. And we do all of this in a program just over 2mb in size.
15 - Chris Bangle!! The man who has designed some of the most hideous cars in the last 5 to 10 years.
Good thoughts, but unfortunately for Microsoft, “not invented here”.
Re: Number 15. The comments about the design dictator and rebranding. Whilst I think it’s a great idea, it’s not quite that simple in reality. if you really wanted to rebrand Microsoft here’s what I’d do.
1. RENAME ‘MICROSOFT’ TO ???
Lets face it - it’s a lame name these days. And the name carries too much baggage - period! No amount of design will erase the memories of the past. It may take a decade or two of turmoil, but new generations coming through will appreciate and accept the new brand. And this is a multigenerational corporation so rebranding needs to be though out as such.
2. CHOOSE THE DESIGN DICTATOR WISELY! Trust them and step back!
Microsoft shouldn’t ’seek’ the designer. This would amount to ‘old thinkers’ choosing who to represent them - not a good idea. A third party should be appointed to find the designer. A hard task, and it could take some time, even years, but if this step is rushed, all could be lost - there would be one shot at this, so for the future of the company it would need to be the right person. Someone prepared to die for the company in order for it to live. Redesigning MS would be a few decades work so that’s a fair chunk of life to commit!
It can’t be a ‘Multiyear Contract Job’ for the designer. Look at Steve Jobs - it has their passion, nothing else - just that job and a pile of love!
3. DESIGN IS AS MUCH ABOUT CULTURE AS IMAGERY.
Let’s face it - Apple has great design, but also great culture. If Microsoft just rebranded, did a few screens and box shots (a few thousand…) all it would be is a facade. Cool people buy Apple Products. Nerds and geeks buy Microsoft products. Yes it’s a generalization - but 90% of the world’s population would probably agree. See the problem?
You can make cool products and branding for Microsoft but you’ll find it near impossible to shift entrenched Apple users from their stunning gear - this is because they love the gear, culture and Steve (God). So that means Microsoft would need to compete with Apple by not grabbing Apple’s customers, but rather taking their current users and trying to sell them ‘Cool Microsoft Rebranded Stuff’.
Hmmm.. Ever tried to make the nerd at school look good for the nightclub? He’s bright, he’s intelligent, he ‘does the job’ but despite putting him in baggy lowriders and a hoodie, he’s still a nerd. You can make a duck wear a tie, but he’s still a duck.
Or simply put, You can rebrand Microsoft, but you can’t reculture Microsoft users ;-)
4. VIRAL SPREAD
To be effective with a rebrand you need to impact the ‘design culture’ of Microsoft. Apple does so well partly because it releases a ‘cool toy’, their fans love it, buy it and most importantly ‘talk about it’ to other people. Great design spreads virally, but ONLY when the customers CARE about the design. Here’s the problem that reinforces my ‘Design Culture’ comments.
Ready? Here it comes…
“Apple users CARE” - “Microsoft users USE”.
For example; Rod loves his Apple gear so he blog about it, Twitters about it, Allows people in the street to touch it etc. This is Great marketing for apple - It’s free!.
Microsoft could rebrand but would they have the same viral spread? I’d bet anything that they’d have a lot less viral spread than Apple if the rebrand was good. But if it was bad they’d have a HUGE viral outlash, and worse - it’d be ammo for Apple who, as history tell us like to get the boot into Microsoft at any chance - good on them too! if MS had some balls they’d take a few decent shots at Apple!
IN SUMMARY…
These are some initial thoughts on the issue. I’ll sum up though by saying that I believe rebranding Microsoft has to happen at two levels. Firstly, start to change the company culture from within for a few years - shake up the business by taking shots online at Apple, then secondly (and ONLY when the culture starts to shift) CHANGE THE NAME AND BRAND - RELAUNCH THE BUSINESS! Not just the design! if done right, a relaunch of a company of this size could be the biggest thing to ever happen online! Once and for all it would lay the Microsoft baggage and histor to rest.
Question is… Who’s got big enough kahunas to make this happen?
Great post, Some of the BMWs aren’t my taste but this Bangle design is great;
http://www.sfconline.org.uk/models/coupe/coupe.asp
“Buy a big Services company. Maybe HP. Microsoft has to be the new IBM. Straight partnering won’t cut it anymore.”
This is significant to their long-term strategy. Microsoft needs to concede the next 10 years and build for 2020.
#1 to me: break themselves up - sending all that time trying to find synergy between divisions and then battling antitrust when you do - if what the OS guys make isn’t good enough for office and needs back doors then everyone else does too
- break out the UI from the OS - some people like XP and feel comfortable there - grandma still like win95 - for the rest VistaCorp have this cool new shiny box they’ll sell you (the KDE guys will give you the same thing for free)
- send the office guys packing - think of all the new markets they can sell into - me, I want word 5 (nothing later, word 5 had all I needed and ran really fast even though it was interpreted p code) - it was designed to be small - you can sell it to OLPC customers and it will actually fit and run there
- sharepoint sucks - what were you guys thinking releasing something that only runs on one browser, yours - you made a plugin for firefox but none of the others - all people do is gripe about it and go back to using wikis - if you want people to pay you when there’s free stuff around it has to be BETTER
- exchange would make a great separate company - if they had to compete they might fix imap so it didn’t suck so bad - I get better performance from my tired old P166 based imap server in NZ when I’m in the US than from the MS one in the next room
OK - so I’m projecting my frustration with the crappy MS software I have to deal with - but making their divisions live on their own and listen to their customers rather than the other MS divisions around them would suit me fine
[...] 25 May 2008 If I was in charge at Microsoft by Peter Rod makes some interesting observations and suggestions for Microsoft. While there is less chance [...]
Rod, that is a big list and lots of it resonates, but there are still a couple of gaps for me…
1) You talk about the PaaS, but what about the SaaS part of the strategy? There seems to be a race going on toward the web based office/productivity suite, and MS doesn’t appear to have a cohesive strategy at this time. Do you think this is important?
2) It is obvious now that search is an incredibly important (and lucrative) problem to solve. Search is our window on the web, and the context technology behind it is going to provide a revenue model for Google as they build out their web based productivity services as well. As the MS/Yahoo! maneuvering continues it seems that the Yahoo! search business is what MS really wants. Do you think this is important for MS’ future?
Cheers
Charles
Developer Division is executing, their work rate is pretty amazing these days, tools and platform are going to be one of the ways to win back developers. They need to regain the trust of developers though, and one way to do that would be to prove they can be a good citizen, and contribute to the community at large, compete on their merits.
If IBM could do it, there is absolutely no reason Microsoft can’t.
Windows needs a reset like Apple had with OS X, and get rid of legacy. Or at least, like I’m hoping Windows 7 will do, compartmentalize legacy in a VM, and keep native clean. The .NET framework showed us they can design clean APIs when they’re not burdened with legacy.
They need to hunker down and win back geek cred by doing opening up and working on pain points like performance again. Vista seems like the revenge of the ivory tower architects, they need to bring back some aggressive ass-kicking cowboys that they had in the 90s when they were powering through the releases.
You need a balance of guys who “get stuff done” and guys who take a step back and think about the implication, too much of either and you either end up with mediocrity or an unstable, bug ridden system.
Excellent article - however we can live in hope Rod!
Angling for the job, Rod?
@Charles Web office suites are cute but don’t really work. Multiuser Office would be a killer. See my link on that. On SaaS, kind of happy they haven’t gone there is a big way.
On Search. They need to reinvent search. I’m not sure what they do in the short term.
@Gordy. Nup too much fun at Xero, but looking forward to a peer relationship with Steve as we win #12
@Paul. Yes breaking up voluntarily was one I thought of but didn’t write down, glad you raised it.
Rod, you’re right about web office suites not (yet) cutting for the power users, but new technologies typically grow on new vectors by excelling at things the current technologies suck at…which, as you point out, is the collaborative side of things for Office. At work I am now using Google Docs a lot to collaborate on documents and spreadsheets, indeed it has amazed me how quickly this has become indispensable. As a non power user of MS Office, Google docs has gone beyond cute for me.
[...] http://www.drury.net.nz/2008/05/24/if-i-was-in-charge-2/ [...]
I was actually serious about them breaking themselves up - I don’t think it will happen until the old guard leave or there’s a big paradigm shift like the one that knocked IBM of their monopoly perch - it very nearly was the internet - maybe software-as-services might just be it - we’ll see. Owning the platform is so 1960s
You do see why everyone wants their DRM to win though - if they own the master key to the crypto everyone has to use they own the TV and that platform - it means we all get stuck with DRM though
@Paul Have you heard this talk Cory Doctorow gave to MS about DRM back in 2004? Great listen: http://www.kottke.org/04/06/cory-drm-talk
Point 7: Unisys would be the more logical option. It’s top heavy with management and lawyers who could be dumped, leaving a huge body of service staff in nearly every country in the world. I imagine that dumping all that dead wood would increase the profitability no end.
It also has some serious O/S and hardware people in the two mainframe lines.
And a big presence in the US federal space, airlines, and the European finance markets.
No amout of spin, strategising or repositioning or nice words from partners or attempts to woe the FOSS community will help unless they stop behaving like spoiled kids.
It’s really that simple but MS seem to think by employing the “right” people to help them speak the “right” words folks will stop noticing their behavior (and the hefty fines that keep coming their way as a result). This approach might work for some of the people some of the time but those subsets are getting smaller and smaller all the time.
MSFT share price reached $60 in 1999. It is now about $28. Inflation adjust that and you have a failure of God awful proportions.