Can Microsoft Be Saved?

June 2nd, 2008

All right, I recognize that the title of this article is apt to inspire a number of strange responses. After all, Microsoft is still laughing all the way to the bank, with great profits and rising sales. However, there have been troubling signs for a number of years now, although the forces of inertia just keep them going.

And, no, I do not intent to compare them to the “Energizer Bunny.”

You see, it’s perfectly clear from this vantage point that Microsoft is having more and more difficulty getting people to take them seriously. The Windows Vista rollout was an unmitigated disaster, and you almost feel that they promoted it with half a heart.

Now in the entertainment business, a movie company will keep a known clunker from the critics, boost marketing expenses, and hope that enough people will see it before they begin to talk about how bad it really is.

Microsoft, however, wouldn’t even invest in a large-scale marketing plan to launch Vista. Yes, there were TV ads, and billboards and such, but can you remember them in the way you remembered the Windows 95 rollout that featured The Rolling Stones?

In those days, people lined up to buy the latest and greatest version of Windows. Vista got a collective yawn, even from supposedly known Microsoft fanboys who complained about its sluggish performance and the woeful lack of driver compatibility.

Now Microsoft, after putting out some ridiculous spin that Vista really is a success, despite the ongoing campaigns to keep selling XP a while longer, is taking the wraps off Windows 7.

The known features, such as a touch capability and a Dock-like taskbar, seem to have been so obviously cribbed from Apple that you wonder just what Microsoft was thinking.

On the hardware front, I suppose the Xbox 360 is doing all right, but the Zune is losing what little sales momentum it had. A recent survey from the NPD Group gave them 4% of the music player market, behind SanDisk, which had 11% and Apple’s iPod, at 71%.

Indeed, Microsoft couldn’t even match the sales of the former partners it double-crossed when the Zune was introduced.

Now the Zune isn’t a bad player. In fact, it’s probably fairly decent, but it strikes you as nothing more than an attempt to imitate the iPod of two or three years ago, and tack on a few extra features to convey the illusion that it is really superior.

This is, however, pretty much what Microsoft has done all along. First promise the moon, then deliver something more down to earth with the claim that the next version will be a whole lot better.

Unfortunately, for far too long, the tech press and customers alike believed Microsoft, or they were willing to accept a product that was almost as good, even though the superior version was already on sale from another company — Apple.

When it comes to embracing the cloud, Google gets it, Microsoft doesn’t. In fact, their efforts were so pathetic they actually believed that buying Yahoo would somehow turn things around. What a colossal waste of money! Yes, the effort to make this transaction happen have failed so far, but never say never.

But who is responsible for Microsoft’s also-ran status when it comes to innovation? Well, with BIll Gates essentially gone, you have to place the blame squarely on the shoulders of Steve Ballmer, who easily conveys the impression that he has lost most of his senses.

He can scream, cajole, and boast, but he has no clue about innovation, and it seems to me that most of the members of Microsoft’s senior management simply don’t have the smarts to turn the company around before it begins an inevitable decline.

Beneath the executive levels, I’m certain that Microsoft has thousands of brilliant engineers and marketers who would be able to deliver incredibly compelling products if only given the chance. The question is whether the leadership can prove the leadership they need to harness their creativity, rather than build more overpriced junk.

Surely, after squandering billions of dollars, Microsoft’s management must understand something is wrong in Redmond and that things need to change to keep the ship on course. Large corporations go through ups and downs over the years, and it is certainly possible for the world’s largest software developer to take a new direction and become a true competitor, one that can win in the marketplace, rather than with deception, with bait and switch.

The question is whether Microsoft will wake up and realize something is wrong, or will continue to fiddle while everything around them goes up in flames.

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11 Responses to “Can Microsoft Be Saved?”

  1. Dana Sutton says:

    Your most insightful comment is that Microsoft needs to understand how much of a problem they have before they can start fixing it. Well, do they? We get sort of mixed signals on one key issue, which may be an index of their somewhat shaky relationship to reality. Every now and then Ballmer will say something about seriously considering extending the life of Windows XP in response to customer demand. Then he or somebody else will turn around and deny that’s under consideration. Seems we’ve been through this cycle at least twice now. So do they know that in Vista they have a catastrophe on their hands or don’t they? And the pressure on Microsoft to get real and fix itself, but in the meantime to sort of ditch Vista and keep on with XP, isn’t just coming from end-use customers, even big government and corporate ones. It’s coming from computer manufacturers like Dell and HP who have OEM arrangements with Microsoft, and who advertise “downgraded to XP” computers as if that were some sort of plus (which it is). The last thing in the world these manufacturers want is to be put in a position where they have no choice but to sell their boxes with Vista pre-loaded, they know that will kill off sales. So it’s not hard to imagine they’re giving MS an earful, whether anybody is listening very carefully or not. But what ray of sunshine does MS give is customer base and business partners to hang onto? A very wierd Alice in Wonderland-like dog-and-pony the other day introducing Windows 7, which was all about touch technology but nothing else at all. This is not what the world wants to hear right now, and I’m sure it reassured nobody.

  2. Ken Sherman says:

    The question is, why would anyone want to save it?

  3. Flynn Miller says:

    Good article. I would think however that it’s hard to radically change when making tons of money. Apple is agile, in large part, because of years spent on the abyss. Steve, himself, was fired and had to start over. Could you see Microsoft chucking it’s code base completely and start over with Unix?

  4. David H Dennis says:

    Actually, I think Apple is agile because Steve Jobs’ focus is ALWAYS on making the most compelling possible products. His first priority is to make sure people love his stuff. After that, it’s figuring out how to get the price points right for his customers. I’d say that’s pretty much it. Make people love his stuff, and make it reasonably affordable.

    Microsoft’s focus is all over the map, but it seems most comfortable kowtowing to media companies and OEMs than creating a great user experience. Let’s just say I’m firmly on the Plaintiff’s side in the Vista Capable lawsuit.

    At the time of Vista’s introduction, I was thinking the deliberate plan to deceive the customer was really, really bad. A brief look through Dell’s web site back then told me what they were doing and that it would result in furious customers. It was almost impossible to determine how to buy a “Vista Premium Ready” computer as opposed to a “Vista Capable” computer, and impossible to tell the difference without going to Microsoft’s site and wading through enough verbiage to clear a small forest.

    Another example would be the Zune’s DRM system, which requires the re-purchase of previously owned Microsoft DRM music. Apple has always been trustworthy with their DRM schemes. Love or hate the idea of DRM, trust in the company providing it is vitally important. Steve Jobs understands this, Steve Ballmer is willing to stomp on it to get a momentary tactical advantage.

    In short, whoever Microsoft’s focus is on, it’s not on the end user. A customer focused company would not blatantly lie to the customer, saying the hardware they are buying would still be supported when it was not. A consumer focused company would not, under any circumstances, run a DRM system that would cause people to lose their music.

    Those are definitely not things that give me confidence in the company, its products or its business ethics. As a result, I do my level best not to do business with them, and I’d recommend that policy to anyone.

    If enough people feel that way, Microsoft could indeed be doomed, or at least have a tough road ahead.


  5. Al says:

    How to fix Microsoft:

    1. Fire Ballmer. Kill Zune. Kill Xbox*.

    2. Spin off the apps division, tell them to write software for any platform they wish.

    3. As for the OS division, tell them to write a modern OS from the ground up and not worry about legacy apps or protecting MS Office’s monopoly.

    *Here’s the problem with Xbox: If your console is a loss leader and you plan to make money from game software, then why sell hardware at all? Why not just port your games to all the gaming platforms out there?

  6. Companies begin to die long before their lifeless bodies strike the earth. You can argue that Ford began to die when it decided that saving the cost of a 17 cent part was a better option than saving people’s lives, resulting in Pintos exploding and burning their drivers to death. It’s the bean counter effect when everything comes down to “the cost of everything and the value of nothing” equation. Detroit may be doomed not because of labor costs, but because the “Big Three” can’t see past this quarter’s P&L sheet. There is no vision in this quarter’s P&L sheet.

    Microsoft exists as a giant because another giant, IBM, had no vision. Remove that simple fact and Microsoft would probably be a division of Borland now, or Lotus. It is a company with talent but no vision, a brawler but not a tactician and never, ever a strategist. Thus, it will die sooner than later, although its vast wealth may carry it forward a long, long time, dead but unaware of it, a meaty ghost lumbering across the landscape slowly bleeding money until it drops.

    I predict Microsoft will eventually become a division of Google, or Apple (which would close it), or possibly Walmart.

  7. John says:

    Steve killed the iPod mini when it was the best selling iPod and replaced it with the iPod nano. No company driven by financials would ever do that. If they had a winning product they’d milk it for all they could.

    There was a good point in the article when it mentioned the thousands of talented engineers. The problem is they can’t accomplish much if they aren’t organized. It is like heart muscle cells. If they all fire randomly the heart fibrillates and the patient dies. If they all fire together the patient can run a marathon.

    Try looking up the video parody (by MS employees) of what an iPod package would look like if it were designed by MS. It is really funny but educational as well. It shows the effect of the ossification of the bureaucracy.

    MS could still recover. They have fantastic resources (financial and human). It is a matter of management.

  8. KenC says:

    MS cannot change its spots. Never have never will. It’s just that now, the tech media can see the emperor has no clothes.

  9. Being the Devil says:

    MS, give ’em enough rope…

    But, really. MS needs to die. Let the scorpion that it is, sting itself to death.

    Let its spirit (the talented engineers) and lifeblood (stockholder money) bring life to other entities. Let real competition, and innovation rise from the ashes of Microsoft’s corpse.

    Yeah, yeah — that comes off quite esoteric (or goofy).

    But, consider the ‘Real world’ effects in that bit of Karmic perscription.

    KenC is correct. MS can’t, and WON’T change.

  10. Ilgaz says:

    Just reading this article, MS showed Windows 7 with “multi touch interface”. Even the most vocal supporters of them started rioting that they should give up photocopying Apple and concentrate on improving business features.

  11. Chad says:

    At bare minimum, Microsoft should pare back its product lines to single, affordable SKUs of Windows, Office, Zune, 360, etc. Do consumers really need 5 editions of Windows, when the competition (Apple, Linux Distros) only focus on desktop and server versions? Does the 360 really need 3 SKUs, when the single SKU Wii is kicking its trash?

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