
CNN Money: Microsoft is a Dying Consumer Brand - DavidBishop
http://money.cnn.com/2010/10/27/technology/microsoft_pdc/index.htm?cnn=yes&hpt=T2
======
cryptoz
I firmly believe that most of Microsoft's failings in the consumer market come
from their fear of the World Wide Web. Microsoft does everything they can to
hide their users from the real power of the web, since everyone - including
Microsoft - knows that a ubiquitous Web means fewer sales of Windows and
Office.

Their logic in locking users to Windows-based experiences is old, tired, and
not going to work anymore. People like the Web. And right now, you can't have
a modern Web experience using only Microsoft products: no HTML5, slow
JavaScript and a terrible, terrible browser experience.

If Microsoft wants to become relevant again, they _must_ give their users the
best experience on the Web they can.

Also, note that Windows Phone 7 ships with a modified IE7: what garbage is
this? The phone will fail because it will suck at the Web.

~~~
alanthonyc
They're also scared of phones. Check out their Phone 7 commercials.

They appear to be catering to people who think people with phones are
douchebags who walk around staring at their screen all day.

I'm not sure how well this marketing strategy will work, because I am one of
those douchebags, but it doesn't make me want to get one.

~~~
recoiledsnake
The message I got from the ad is that Windows Phone 7 would allow you to see
if you had any updates on the homescreen itself, obviating the need for
fiddling with the phone for a long time to access the same information.

~~~
aboodman
That is the fundamental and sad misunderstanding of this ad.

People don't fiddle with their phones while walking because the phones are
hard to use. They fiddle because the phone is fun and addicting.

There's no desire for a phone that lets you get in and out quickly. On the
contrary. If they could come up with a phone that lets you be online all the
time without walking into things, they'd have a huge winner.

~~~
tpz
For some reason I find myself reminded of the whole RIM Playbook "coping with
family" faux pas. It is almost as if WP7 were being promoted on the basis of
selecting a phone based on wanting to _avoid_ something: in the WP7 case,
avoiding _using_ the phone, in the Playbook case, avoiding your _family_. Both
show a disconnect with reality and neither bode particularly well for the
companies involved.

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johnohara
As one of the largest software developers on the planet, MS has access to more
cool stuff than anyone can imagine. With all that cash, I'm sure it comes
across they're radar all the time -- and they do make purchases and
investments.

The problem is the minute they implement new technology it gets some
committee-driven marketing name that's so completely disconnected from what it
does that it takes million$ to explain what should be obvious from the name.

Examples: IIS, COM, COM+, Visual Studio, .Net, BizTalk, SharePoint,
MultiPoint, Windows Live, SilverLight, Zune, Bing, and now the latest --
Windows Phone 7 (dyslexic a fully name).

~~~
MortenK
IIS: internet information Services. It IS services for internet information.

COM: component object model. It IS an object model for components.

Sharepoint: a shared point for sharing information.

BizTalk: communication between enterprise (buisness) software.

Doesn't seem like disconnected marketing names to me. Zune, Bing, Silverlight,
yeah point taken. Still not much more disconnected than "iPod", "yahoo" or
"flash".

------
icegreentea
"Microsoft's attempts to build a social network through Windows Live have
failed to gain traction. It has no real answer to Facebook. "

I take issue with this. Pretty much no one has a 'real' answer to Facebook. In
fact, Microsoft didn't even really try. And whatever they did try, they
actually gave up on. As I remember, when explaining the Facebook integration
into the newest Windows Live "nobody wants another facebook".

It would simply be absurd to expect MS to "fight" FB. Waste of time and money
like the rest of the activities that the article seems to be criticizing.

~~~
ErrantX
There is something interesting here though. I investigate computer crime and
18 months ago forensic submissions would be looking for "Windows
Live/Messenger Chat". Now it is looking for "Facebook Chat".

It took about 3 months for the switch to really take note, and the forensic
tools took all of about a month to catch up.

Facebook had some serious market penetration very very quickly with that
product.

So in a way; it is not so much MS failing as Facebook attempts to build a chat
app succeeded.

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cwbrandsma
Since Bill Gates left his posts, Microsoft is being run by bean counters and
has no real tech leader to lean on; not one with enough power to tell the bean
counters -Balmer- to back off -- that was Bill Gates, and he was good at it.

As long as that continues, there will be issues.

------
brudgers
Saying "Microsoft is a Dying Consumer Brand" is somewhat analogous to saying
"Mitsubishi is a Dying Consumer Brand."

Though the structures are different, consumer products are only a part of
their portfolio. Both have successful industrial lines, and both have flagship
consumer lines that often draw flack. Importantly, both own highly successful
consumer brands e.g Xbox and Nikon, respectively.

What the article misses is that Microsoft has an asset that it's competitors
often don't: trust. Because of their B2B orientation, being trustworthy is a
necessary strategy...that's not to say they don't make mistakes, but by and
large they support they support their customers well beyond the typical three
year upgrade cycle companies such as Apple enforce. Companies like Google and
Facebook change their products in ways that are in conflict with the user's
interests even more regularly.

~~~
btilly
_What the article misses is that Microsoft has an asset that it's competitors
often don't: trust._

What technical person trusts Microsoft? I don't mean to be flippant, but the
reputation they have among technical people that I know is that their stuff is
poorly designed, insecure, and buggy.

Disclaimer: I got fed up with their poorly designed and buggy software in the
late 90s, and have had Linux as my primary development platform ever since.

~~~
contentvoid
XP, for example, has some level of support into 2014, so from a business
perspective one can trust that they'll provide support for quite some time,
that is something you won't get from Apple. How this has any bearing on a
discussion of Microsoft's consumer relevance I am not sure.

~~~
brudgers
I've been thinking about that lately. Consider the companies that the article
compares them to in the consumer market: Google, Facebook, and Apple.

Google and Facebook identify individuals, track personal details of their
lives to a degree beyond what most individuals can imagine, and then generate
revenue by using those personal details. Apple on the other hand, as a
hardware company generates revenue through planned obsolescence (and Apple is
moving more and more toward consumer data collection as a major source of
revenue).

For each of them one might argue that there is a misalignment between the
revenue model and important long term interests of consumer. The problem for
consumer oriented companies is that the easiest source of increased profits is
simply raising the price of your products (reduced operating expenses are
bounded by zero, increasing market share in mature markets is expensive, and
creating new markets is very high risk).

Conversely, to a large degree, Microsoft makes products and provide services
which contribute to their business customer's bottom line. This puts them in
an entirely different position in relation to the consumer market, because
their sales increase as with the economic expansion of their customers (a
unique advantage of B2B sales over consumer sales).

Unlike Chrome, Microsoft doesn't send every keystroke in the IE address bar
back to a server to be analyzed with the intent of targeting their customer.
When you register your copy of Office, you're not encouraged to list your
children with their ages and to post pictures of them on the web. And you can
load up your copy of Office 97 in a Win95 virtual machine on a new Windows 7
system. Their B2B revenue model requirement that Microsoft align its interests
with the long term interests of its customers carries over to their consumer
markets.

I see Microsoft in the unique position to differentiate itself as "the company
which protects consumer privacy." The requirements are not all that difficult,
some changes to Bing, a realignment of Internet Explorer toward user
anonymity, and proper positioning of WinPhone7. What's more, all these are
things which are in the interest of many of their B2B customers and none would
have meaningful negative impact on Microsoft's bottom line.

------
AmericanOP
The author of the Gervais Principle blog posts did a nice job of comparing
Apple's marketing culture (we have the best stuff, come get it) against
Microsoft's sales culture (personalized, i.e. Windows 7 was my idea). Thinking
about it though, Microsoft has completely failed to connect with any customer
persona despite their baffling product segmentation, other than personal vs
professional which Apple is soon copying. Okay Microsoft, Windows 7 contains
an everyman's idea, I'm genuinely interested, what is it? Not going to say?
Vapid and inauthentic. Okay Microsoft, you're going to hack my attention with
puppies and irrestibably cute things? Great PR stunt, but you failed to make
any kind of impression about the quality of your goods. Now we get these
ridiculous Windows Mobile 7 commercials.. once again, trying to sell to you at
an individual level by appealing to your phone addiction problem. Decreased
ease of use is a benefit? Well, I want the phone designed by someone who wants
to use a well designed phone, not by someone who has to have a differentiated
design for marketing reasons. Sell me that.

------
dstein
I hope Microsoft keeps doing exactly what they're doing. Microsoft's bad
reputation is very much deserved. The web, and the world, is going to be a lot
better off without this company.

Windows, MS Office, and Internet Explorer are examples of what happens when
Microsoft wins markets. They let their products languish, make no improvements
whatsoever in decade, while repainting the exterior and reselling it over and
over again. Consumers have wised up, businesses are just slower to recognize
when they're getting the raw end of a deal.

------
iterationx
Microsoft can afford to fail many times before succeeding. It beat Lotus
Notes, Borland C Compilers, Playstation, people continue to pay for Windows
even though Linux is free. You don't measure what's going to happen in the
future by taking a tiny slice of the present and projecting forwards.

~~~
cryptoz
> people continue to pay for Windows even though Linux is free

99% of that is only because Windows is available in stores and Linux typically
is not. I think this will all change in about a month when Chrome OS comes out
and is preinstalled on cheap computers in stores like Best Buy, Futureshop, or
wherever people buy computers these days.

Most consumers no longer _care_ that they are running a specific OS; they want
to type documents, read email, watch videos, look at pictures and use
Wikipedia. And Chrome OS will satisfy that perfectly. If stores decide to
stock Chrome OS devices, I bet you'll see a huge rise in consumer "desktop
Linux" usage.

~~~
kenjackson
Consumers nevered cared about a specific OS. They've always just wanted a set
of applications. The problem is that Chrome only answers one class of apps
that people must have... web browser.

But it lacks Office (Open Office and Google Docs are not replacements for most
people). Lacks a decent gaming ecosystem -- does it even have the Sims? And is
missing a lot of applications that users use along the long tail... such as
CS5 and iTunes.

Chrome is a non-player IMO. I think a low cost Mac and the evolution of the
iPad is a LOT scarier (by an order of magnitude) to Microsoft.

~~~
cryptoz
> But it lacks Office

Chrome OS will open Office files using Office Live, online. That seems like an
excellent solution to me, and given that the service is provided by Microsoft
I assume it works well with Microsoft documents.

> Lacks a decent gaming ecosystem -- does it even have the Sims? And is
> missing a lot of applications that users use along the long tail... such as
> CS5 and iTunes.

That is not the target market for Chrome OS. Google has said many times that
Chrome OS should not be your primary operating system; if you buy a machine
with Chrome OS you should use it as a portable, small machine to quickly
access the web with. There's still a place for full-blown operating systems
outside of Chrome OS.

The vast majority of users _don't_ run CS5.

> Chrome is a non-player IMO.

Chrome hasn't hit the market yet. I think it's a big mistake to take something
that Google is developing and say, "nah, won't work" before release.

~~~
kenjackson
Chrome hasn't hit the market, but plenty of us have used it extensively.

If Chrome's target market is the secondary web browsing machine then its
competition is iPad, and eventually Windows tablets (running on Oak Trail). I
think it may do decently, but it's not a real PC compete.

Regarding Office apps, opening in Office Live is fine if your competition is
iPad. Although Office Live is missing a lot of features, at least today, to
make it a real Office replacement.

------
parenthesis
I get the impression that Microsoft themselves are downplaying the `Microsoft'
brand, in favour of market/product-specific brands: Windows, Office, Bing,
XBox, etc.

------
mikeymo
I tend top agree...xbox excepted. I think Microsoft has worked very hard to
get their platforms and tools into the enterprise space....and it has largely
worked for them and been very successful. Has this been at the expense of a
"consumer story"...maybe.

With that said, they can still be a very successful and growth oriented
company but in the B2B/Enterprise space.

------
sdizdar
MS has some of the best engineering team in the world.

But MS does not have leadership with courage. That is the problem.

------
timwiseman
This article is overblown at best. Microsoft's core operating system and
office suites remain absolutely dominant even if competitors are rising.

While Nintendo Wii certainly moves more units than the xbox, the xbox remains
a successful competitive system with interesting innovations that largely
focused on a different segment than the Wii did. While Microsoft is way behind
in the phone segment, it is a bit premature to declare Windows Phone 7 a
failure in the consumer market.

What this is showing is not so much that Microsoft is dying but that because
other competitors are rising it is no longer the absolutely dominating force
it used to be. This in itself is significant, but a far cry from dying.

~~~
naner
_This article is overblown at best. Microsoft's core operating system and
office suites remain absolutely dominant even if competitors are rising._

Yes but are these business licenses or consumer sales? Go to any college
campus and see how many Windows laptops you see students using. Microsoft
sales are going to businesses (who are entrenched in MS solutions) and people
who "have always used Windows" (i.e. older folks who don't want to change).

Their brand is tarnished. I don't see them recovering from this easily.

~~~
MortenK
Its both business and consumer sales. Around 90% of the market share.

The large amounts of apple machines in colleges is probably more an indication
of students wanting to be fashionably correct, than it is microsofts brand
being tarnished in the general population.

------
bobf
I would actually argue that Microsoft has actually become a more consumer-
oriented company over time. Xbox was only released 9 years ago and the Zune
was only released 4 years ago. Prior to that, what was Microsoft's consumer
focus? Their primary products, Windows and Office, have traditionally focused
on selling to businesses (OEMs, VARs, etc). The majority of consumers do not
go out and purchase Windows directly -- it is included on their computer.

------
kmfrk
The place where I start to get leery is when Microsoft take a product like
Live Messenger, which had _finally_ become a near-perfect product, and bloat
it into a dreadful "social media" whizbang media applet interface aeroplane
control panel. I later found out (after copious reinstallations and attempts
at finding an earlier version at oldversions.com) that there's a tiny icon, of
which the chance to find is several orders of magnitude smaller than that of
the Higgs boson - that restores the bloated piece of crap to a an actual IM-
only client.

Of course, Microsoft also made the effort of cramming in more awful toolbars
(that can't be removed) and replacing all the emoticons with a new suite of
something even worse than what you would expect to find in a ten-year-old
version of ICQ.

This may sound silly, but _all_ chat clients on- and offline have _dreadful_
emoticons; emoticons are meant to disambiguate and diffuse in favour of the
sender and represent their mood and tone. _That is their purpose._ It really
makes interaction with friends and acquaintances much easier and joyous.
There's a limit to how you can stand out from other IM clients, and this is
perhaps the biggest yard stick.

Live Messenger had the best (the only good) set of emoticons, and now Windows
have thrown it all away while bloating the client even more.

I am fine with them throwing billions at something that may or may not work,
but why the hell are they destroying their biggest brand products in this
futile attempt to becoming relevant and cool?

I shudder at the thought at what Windows 8 will be like. Will they implement
Clippy in the terminal to compete with Mac OS?

------
mcknz
CNN nails it again. Next up: Year of the Linux Desktop.

~~~
DavidBishop
Actually, Apple is the one taking the consumer market. 1 in every 5 retail
computer sales is a Mac. Best Buy's CEO recently said that 50% of their laptop
sales have been cannibalized by the iPad - a 6 month old product. Apple is the
#1 technology company on the planet by market cap and recently attained the
3rd place in computers by market share. Their stock price has grown over 2000%
in 10 years.

Apple is the one poised to take over in the consumer market ... although the
consumer market will be less and less about computers in the future.

~~~
Typhon
OH GOD NO !

I'd rather have Microsoft's monopoly endure than have it replaced by Apple
domination. Perhaps they make better software, but they're also much better at
being evil.

~~~
DavidBishop
Now is that any way to talk about your soon to be computer overlords? ;)

I don't agree that Apple is evil, just rigid. They are very strict about what
they allow for the sake of a good user experience (and to avoid a black eye on
their account).

And with them being the #1 tech company on the planet, there have to be a
large number of people who really like their products. Actually, in recent
surveys they were - The number 1 sought after phone OS of those ready to buy
smartphones (at 38% just one point above android) - The number 1 in overall
customer service (86) by a fair margin (9 points) - The number 1 in smart
phone satisfaction (800 vs next in line 791).

~~~
Typhon
They are strict indeed :

 _"We do believe we have a moral responsibility to keep porn off the iPhone,"_
(Steve Jobs, quoted on the Wikipedia page about the AppStore)

Even though you bought the thing (and it's not exactly cheap), you cannot put
it to all the legal uses you'd like to. There is someone else deciding for you
that some things do not make for "a good user experience", and, as seen in the
quote above, they enforce their own moral standards about it.

I find that evil. Of course, that's just my opinion, but who knows which other
things they may feel they have a "moral responsibility" to keep off their
platforms ?

~~~
DavidBishop
They mean porn apps. You can get all the porn you want. The browser is wide
open.

~~~
Typhon
> _«They mean porn apps»_

That's not what Jobs said. And besides, it doesn't change the problem : what
counts as a "porn app" ? Is an app that allows you to download, among
thousands of E-Books, the kama sutra, (one of the cases discussed on the
wikipedia page) a "porn app" ?

------
scrrr
Was Microsoft ever such a big brand?

Google is, Apple is, Dell is, but with Microsoft it is more like many Brands:
Windows, XBox, Zune.. I think the main things that people immediately
associate with the actual word "Microsoft" might be mice and keyboards.

But, (at least in my perception) they are slowly beginning to address the
problem of decreasing user numbers. See their marketing at "Colbert Report"
and, recently, the How I Met Your Mother episode "Subway Wars", that was full
of Bing and Windows product placement. Again, not promoting the Brand
"Microsoft" directly, but rather its products. The shiny logo stands for
Windows, while in Apple's case the logo refers to a whole company.

~~~
Tyrannosaurs
As of October 2009, Microsoft Windows had a desktop market share of 91% (and
that figure is probably still about 88% today).

Office makes that look a little weak with a market share of about 95%.

You are kidding that people think of them as a mouse and keyboard company
aren't you?

Dell, one of your listed brands, by contrast have a market share of about
11.5%.

~~~
mfukar
I think a better way to put it is this:

When you hear "XPS" your mind doesn't immediately go to the Dell laptop
(probably).

When you hear "Microsoft" though, "Windows", "Office", "Xbox", all the jazz,
immediately go through your head.

------
known
Why IBM, Cisco, Intel are not rolling out smart phones?

~~~
oiuhjygtfghjnmk
Same reason they aren't building cars or aeroplanes.

~~~
known
Why IBM, Cisco, Intel are not building smart phones AND cars or aeroplanes?

------
richcollins
The article inadvertently hints at the reason why Microsoft is failing. It
mentions all of the markets where they lost to competitors. Perhaps they lost
in all of these markets because they didn't focus on dominating a single
market like the competitors that they lost to did.

Apple: Mobile Devices

Nintendo: Platform Gaming

Facebook: Social Networking

Google: Search

...

