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  • Microsoft Remains Divorced From Reality

    November 10th, 2008

    It’s not easy for a company that’s number one in its market to admit that its efforts to spread its dominance to other product segments have not succeeded.

    Whenever Microsoft is mentioned, the fact that they own over 90% of the personal computer desktops on the planet often accompanies the reference. That and consistent high profits surely auger well for their continued success, but it has been hard for them to come to terms with the fact that they don’t do so well when they stray beyond their core competency.

    Take digital media players, where Apple long ago rose to the number one spot and remains there. Microsoft first tried to parlay their PC operating system market share advantage and set up a standard for other digital players to follow. It went through an identity crises, but was last known as PlaysForSure. Except Microsoft realized they couldn’t succeed with this strategy, so they double-crossed their partners and created the Zune, which hasn’t done so well either.

    Their efforts to extend Windows to the handheld market have done all right, I suppose, but, after 15 months on the market, the iPhone is doing better. In fact Apple’s smartphone bettered the RIM BlackBerry in the last quarter too, so two companies were embarrassed as a result. Only Nokia does better in that segment than Apple, and they’ve been in the wireless handset business a whole lot longer.

    It’s not as if Microsoft truly realizes it is being battered and beaten by smaller companies. CEO Steve Ballmer will continue to rant and rave about how well they’re doing, and what little chance the competition has to beat them at their own game. Certainly Ballmer didn’t take the iPhone seriously.

    Of course a lot of Ballmer’s trademark bluster may be manufactured. As politicians do during a campaign, you tear down your opponents in highly inflammatory, exaggerated ways in order to gain the upper hand and emerge victorious. Sometimes it works and sometimes it doesn’t, but having the facts on your side would certainly add to the credibility of the message.

    That’s where Ballmer perennially comes up short.

    For example, the latest maneuver to escape the Windows Vista tragedy is warmed over version, called Windows 7. Now Vista had some major and sometimes confusing interface changes when compared to XP — and for that reason among others, many PC makers and their customers want to downgrade.

    So does Microsoft repair the damage by undoing some of the alterations? No, they’re making even more changes using the logic that user interface testing — make that focus groups — helped guide them to a solution. Thus they came up with a rejiggered taskbar that looks for all the world like Apple’s Dock.

    All this comes from the very same company that pleaded with the U.S. Department of Justice and European Union authorities for the right to continue to innovate. Microsoft’s concept of innovation has mostly been to take an idea, imitate it to some degree, add a few half-baked ideas that seem to emanate from a PowerPoint presentation filed to the gills with bullet points, and pronounce it something new and different.

    This is not to say that imitation is bad. Certainly many good ideas are influenced by what came before, and some manage to take that inspiration and meld it into something with its own unique character.

    Certainly there were attempts at graphical computer interfaces before and after the Mac appeared. Microsoft, with smoke and mirrors and clever marketing, blasted most of them out of existence, although the Mac carried on.

    Today, Microsoft’s executives must know that the old ways, the machinations practiced in previous decades, no longer work. Yet their public posture appears to be the same. They want you to believe that everything they do amounts to a momentous event in the tech industry, and that they have the skills and determination to make even a half-baked product number one in its class.

    Yes, every single syllable uttered by Ballmer is breathlessly quoted by some still-fawning members of the tech press. They somehow believe that all of Microsoft’s silly product ideas are destined for huge success, whether its the Zune or that absurd Multi-Touch coffee table, the Surface.

    Even if Windows 7, now in pre-beta form, actually contains all the refinements Microsoft promises, does that mean that it’ll fare any better than Vista? Well, assuming it has the same enormous system requirements, certainly today’s PCs, built to address Vista’s needs, will run about the same, or maybe better, if Windows 7 can be optimized or even trimmed down a hair.

    But does that mean that Apple’s huge gains in market share will suddenly vanish overnight? Microsoft has no right to remain number one, as much as they might prefer to think otherwise. Their browser share continues to erode, and there’s little reason to think that their operating system advantage won’t decrease too over the next few years.

    Will the Microsoft of 2013 or 2018 still be as dominant a force in the tech industry as they are now? I don’t think so, but maybe Ballmer and crew don’t realize that yet. Or maybe they do, which is why they want to spend their extra cash on a stock buyback so they can laugh all the way to the bank however it turns out in the end.



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