Apple Isn’t Hurting Microsoft, Microsoft is Hurting Microsoft

Harry C. Marks / October 29th, 2013

We always hurt the ones we love, and nobody loves Microsoft more than Microsoft. In a recent blog post, Frank Shaw, the company’s Corporate Vice President of Communications, took aim at Apple’s October 22nd keynote–specifically the part where Apple made its iWork suite of productivity applications free for new Mac and iPad/iPhone buyers.

Now, since iWork has never gotten much traction, and was already priced like an afterthought, it’s hardly that surprising or significant a move. And it doesn’t change the fact that it’s much harder to get work done on a device that lacks precision input and a desktop for true side-by-side multitasking.

There are many parts of this post that read like Shaw wrote them half curled up on his bathroom floor, slowly rocking himself back and forth, so it’s entirely possible he couldn’t see the differences between his company and Apple. I’ll try to spell them out.

Apple is not a software company. It is a hardware company that makes software. Want to know why Apple didn’t release a cheap-o plastic iPhone running lower-end hardware for the Chinese market as so many tech pundits wrongly assumed would happen? Margins. And because Apple derives so much of its profits from hardware, it’s able to give away its operating system and first-party apps without taking a significant hit. In fact, it may help boost sales of desktops and laptops if potential customers learn they won’t have to shell out money every time they need to update.

On the other side of the coin, there’s Microsoft, which obtains a solid chunk of its revenue through software (Windows and Office), as well as through its enterprise deals. There is no right way or wrong way here. Both methods are completely valid as long as one knows what one is doing. This is where Microsoft starts to fall apart.

Since Jobs’s return to Apple in the late nineties, the company has been primarily a consumer electronics company. The iMac, iPod, iPhone, iPad, MacBook, and all the rest were designed for average consumers (read: non-enterprise customers). That’s not to say businesses haven’t benefited from these devices, but they were not the original targets. Apple knew that in order to penetrate the business sector, it had to become a hit with consumers first, which it inevitably did and led to a massive increase in the BYOD trend.

Unfortunately, Microsoft hasn’t had as much success in the consumer market since the early 2000s. What was once a major player in the smartphone arena pre-2007 lost out on market share and customer loyalty when the iPhone hit the scene. The soon-to-be-ex-CEO’s arrogance at the time also did not help things. Microsoft introduced tablets in 2002 and they went very few places except certain industries, like engineering and medicine–and they weren’t even that widespread there, either. It wasn’t until Apple unveiled the iPad, complete with its own App Store, that non-business consumers saw the benefit of a personal touchscreen slate device.

It’s not the nineties anymore. Microsoft can’t rest its laurels upon its ubiquity, especially in the new areas being dominated by Apple and Samsung. In the phone and tablet markets, Microsoft is, sadly, irrelevant. But why? Where did it go wrong? It wasn’t just because it skipped a few cycles and emerged on the scene later than it should have. And it’s not because Microsoft isn’t capable of making good hardware. It comes down to one simple problem that has held the company back for a long time: Microsoft refuses to choose.

Apple chose to focus its products on the consumer market. Even its Pro desktops and laptops, which are used in high-level industries like video and audio production, are accessible enough for customers of all types, not just professionals. Its operating system, Mac OS X, is a one-size-fits-all regardless of your needs (servers excluded). There are no versions for “Home”, “Business”, “Home Plus Except on Weekends and the High Holy Days”, et al.

Microsoft, however, tried to have it both ways. It wanted to retain the grip it had on the consumer space in the 1990s, while also catering to its loyal business users and what it got was an operating system and a tablet/laptop (tabtop? laplet? tabletoplet?) with an identity crisis. By refusing to make a decision as to which direction the company should go–consumer vs. business–it alienated both segments equally.

Windows 8, specifically the RT version, doesn’t know what it wants to be. Is it a touchscreen OS? If so, why does the user have to access legacy Windows to run certain apps? And if old-style Windows is there, why doesn’t it run regular Windows applications like Windows 8 proper does?

As for the Surface, Microsoft can pretend its creation is a tablet all it wants. Frank Shaw’s imagination certainly hasn’t slowed down:

And it’s why the Surface is the most productive tablet you can buy today. We also knew that it would make our competitors take notice. That as consumers got a taste of devices that could really help them get things done, they would see alternatives as being more limited.

If you watch the video Tim Cook introduces about 62 minutes into the keynote, it really drives home the fact that the iPad is as productive as its owner wants it to be. The device is not limited by an extra attachment, nor must it be situated in a single position in order to be useful. Would combine operators be able to manage their machines if they had to balance their tablets on their laps with a flimsy keyboard attached? Are desktop tap targets still as tappable when you’re trying to see them while navigating a shipwreck? How long will you be able to hold a Surface one-handed while drawing plays on the sideline so the rest of your team can see?

The reality is the Surface tries to be a laptop and it tries even harder to be a tablet, but it doesn’t accomplish either particularly well. The running joke among the tech press has been that Microsoft’s “no compromise” approach is actually one big compromise. The sad reality is that it’s not a joke. The other reality facing Microsoft is that one of its two major cash cows is no longer the reason people buy its devices.

[The Surface and Surface 2] come with full versions of Office 2013, including Outlook, not non-standard, non-cross-platform, imitation apps that can’t share docs with the rest of the world.

You used to buy a Windows PC because everyone had Windows PCs. All the major programs were written for Windows and it became the de facto standard for almost every office and home on the planet. Windows ran the world and because of its wide reach, we all grew accustomed to the Office suite of applications. Writing a report? You used Word. Needed to do a presentation on plant life in the rainforest? PowerPoint and its atrocious sound effects were there to add glass-shattering emphasis to that clip art on slide two. Your email was stored in Outlook and your numbers were crunched in Excel and there was nothing you could do about it because nothing else came close to the power and reach of Microsoft Office.

Then came the iPad.

Netbooks all but died out. PC sales declined. Customers opted for small and lightweight vs. big and cumbersome. And all the while, PC makers and Microsoft assumed customers would come crawling back because the iPad was for fun, not work.

While Apple may not have the most capable productivity software suite around, its App Store has opened the gate for independent developers and larger software houses to fill the gap left by Microsoft’s absence. No one seemed to care that Microsoft Office was missing and they certainly weren’t won over when it finally arrived for only the iPhone and as a subscription service.

As for the other work you’re able to get done on the iPad, name an industry and you’re sure to find an app (or six) that perform the work as easily, if not more so, than their desktop counterparts.

Apple chose to attack a market it knew it could penetrate by creating beautiful, focused products that ran easily accessible software. Does Apple make the best software? Not always, but the user experiences afforded by its devices combined with fabulous third party software more than make up for its shortcomings.

Microsoft chose to hit two different segments at once. Windows 8 promised the same great taste people have enjoyed for over 20 years with the new shininess of Metro. Its refusal to commit to one OS, or at the very least one OS per form factor a la Apple, left a sour taste in customers’ mouths. They were confused and angry and Microsoft was forced to back-pedal on some of its more “egregious” decisions. Businesses are just starting to upgrade from XP to Windows 7 and it doesn’t look like Windows 8 is even on their radars.

On the hardware side, the Surface hit the same flat notes as Windows 8 did. Customers didn’t want a heavy, widescreen tablet with a bulky cover they couldn’t operate with one hand. Oh, but it has Office? How about OmniFocus? Editorial? GarageBand? The countless niche apps one may need to perform certain specialized tasks? Microsoft has yet to learn that productivity does not begin and end with Office.

So, with Microsoft’s dominance waning and its software sales slipping, where does it go from here? It could prove worthy competition for Android in the low-end smartphone market, but it will still continue to struggle against Apple in the high-end. But other than that gamble, there’s nothing about the company’s current consumer strategy that’s hope-inducing–and yours truly is doing his best to remain hopeful. Some might chalk it up to a lack of focus or too much focus on the wrong things, but Microsoft’s biggest challenge right now is making up its mind.

Its dominance in the business sector is still relatively unchallenged, but times are changing and the Surface isn’t generating the numbers it needs to thrive with consumers. Which market does Microsoft want to focus on? Until it’s able to answer that question with anything other than “both”, it will continue to stumble along. The question then becomes for how long?

Harry C. Marks

Harry Marks is a novelist and web columnist from New Jersey. He owns and operates CuriousRat.com and has written for various publications, including The Magazine, The Loop Magazine, and Macgasm.
  • Mauryan

    It is all about timing. Apple’s philosophy did not work in the 1980s and 1990s. Microsoft’s did. At that time PCs were new to the market and many were still using IBM type writers and wrote by hand. Technology was only beginning to develop. Only towards the late 1990s PCs had begun to proliferate into all walks of life, thanks to the arrival of the internet. So Microsoft boomed during that time period. That boom consolidated their position in the corporate sector. Once the 21st century dawned, cellular phones began to grow and wireless technology advanced. Laptops became the de facto devices everywhere. People like the portability. Microsoft still thrived because the same software could be ported into laptops. Apple was still recovering. It had entered the consumer market with its iPod and iTunes system. And then the paradigm shift came. The iPod now became a phone. It could play music, take pictures and videos, act as a phone and took away many functionalities that people had been relying on their laptops for. A small and sleek device could double up and do many of the day to day functions that people really liked. The smart phone arrived. Samsung and Google saw the benefits of it and rapidly caught up with Apple. Microsoft miscalculated at this juncture about how the smart phone industry was going to go. They still believed that the PC and the laptops were the centers of human activity, like they were in the late 1990s and early 2000s. And then Apple introduced the iPad which eroded deeply into the laptop functionalities. Now there is a tablet that can double up as a book reader and web browser. It also had another advantage – long battery life compared to laptops. It was light weight, easily portable, elegant and the app industry took off. These changes happened too rapidly and Microsoft found itself like a brontosaurus, being unable to adapt quickly. For the past decade, the industry has shifted in a direction where Apple’s philosophy works – simple, focus on user experience and customer delight. Apple was ahead of its time in the 1980s and 1990s. So it had to wait for the right time. Microsoft did not do anything. It’s business model worked for a couple of decades. Now it has to change itself completely or it will go the way of the dinosaurs – too huge and too slow to adapt.

    • steve_wildstrom

      Apple did fine in the 80s. It was in the 90s that they got into trouble, but their problem wasn’t philosophy: It was poor products, terrible execution, and an inability to create a successful replacement for an outdated operating system.

      • N

        I would argue only the latter (OS). The hardware was amazing. My Power Mac 7600 served me for six years — thankfully since I was broke starting a company for the last two and could not afford a new computer.

        • N

          Whoops! Power Mac 7100, which is even more impressive.

  • “Apple is and has always been a consumer electronics company.” FALSE.
    Apple courted the enterprise in the 1980s. Heavily.

    • True – I was speaking from the point at which Steve returned to the company in the ’90s. Probably should’ve made that clearer in the piece.

  • AhmadZainiChia

    When I saw the Surface 2, I was reminded of the Zune. I didn’t follow tech in that era (was only a teen then), but what I’ve read is that the Zune kept chasing the previous year’s iPod. The Surface 2 was a good improvement over the surface: (very, very slightly) lighter and thinner, much much faster, and better resolution. If you look at the specs of the Surface (I hate just looking at specs, but it gives us some idea), it competed well; with the iPad 4. That was barely a couple of months before the iPad Air, and now the iPad Air has jumped another huge leap in front, again. On hardware they’re already a huge step behind; take the app ecosystem into account and it’s just sad.

    It is quite clear that Microsoft STILL has not understood the appeal of the iPad. Just look at the commercials of it’s Surface; 90+% percent of the time, it’s being used with a keyboard, in ‘laptop’ mode. Just look at it’s aspect ratio: at a 16:9 aspect ratio, it’s awkward to use in portrait, and heavier to use one handed in landscape mode (moments of a force; remember, anyone?). All this totally, WILFULLY, ignores the fact that iPads are (1) used almost entirely without keyboards, (2) used quite a lot in portrait (3) used one-handed.

    So to add on to this piece: yes, Microsoft is hurting themselves more than anyone else is hurting them. But the reason is perhaps because of one simple thing: they just don’t have the ‘liberal arts’ DNA in their company. They look at the Surface and really DO honestly think that it’s great; to them, it provides more capabilities, hence it’s better. To them, more features is better; how those features are used are less important. Apple is the exact opposite, and that’s why they’re so strong in this Post-PC era. As Tim Cook said, the Post-PC era plays to Apple’s strengths; and sadly, this era shows up Microsoft’s weakness as well.

    • Woochifer

      The Surface 2 (like the Surface RT) is really on an island by itself. At least the Surface Pro can fall back on its backwards compatibility with desktop Windows applications. It has an audience, though its weight and battery life make it less-than-ideal when used primarily as a tablet.

      People forget that the iPad took off the way it did because Apple had already laid out the groundwork for its success with the iOS ecosystem. Anyone buying an iPad could simply activate the device, link it to their Apple ID, and load up all of the apps and settings that they already use with their other iOS devices.

      And even the iPhone needed the foundation (and painstaking transitional work) that Apple built up with OS X and iTunes.

      WRT the Zune, yes you are right that the Zune was in constant pursuit of the iPod, yet always a generation behind. By the time they introduced the Zune, the standalone media player market had already slowed down, and the smartphone was starting to ramp up as the new growth platform.

      Consider that the original Zune, which copied the iPod Classic, came out two months before Apple announced the iPhone and effectively turned the entire market upside down. And then, Microsoft announced the their first flash-based Zune (which copied the iPod Nano) right after Apple released the iPod Touch. Microsoft didn’t have a touchscreen Zune until late-2009 (more than two years after the iPod Touch came out).

      At that time I thought that the only way that the Zune could succeed was to not only match the iPod spec for spec, but it had to be compellingly better or WAY cheaper — and the Zune failed on both counts. MS simply thought that that if it matched specs, added an extra feature (like song squirting or FM radio tuner), and undercut on price by a few dollars, they could make inroads on the iPod. But, Apple was not just selling a device, they were selling an entire ecosystem with the iTunes Store and a wide range of third party “Designed for iPod” accessories. And when the iPod touch came out, MS had no answer for that.

      The parallels with the Surface lineup are definitely there, except that the Surface Pro does have the advantage of tying into desktop Windows applications. The problem for MS is that the consumer market does not necessarily want the tie-ins with Windows.

      • Defendor

        iPad didn’t really launch with a rich app ecosystem. Apple did a horribly job of presenting iPhone apps on the iPad (possibly on purpose).

        What Apple did, was present a clear/credible story that both users and developers believed. Both rushed to the platform, users to buy it, and developers to support it.

        Microsoft instead gave us a confused message that neither users, nor developers are really getting(is anyone, I still don’t get it). No one is rushing to buy or support the platform.

        Still Microsofts message is confused at best. It really looks like the are re-inventing the laptop with a touch screen, instead of giving us a compelling tablet story

  • Woochifer

    I think the contrasting philosophies of the two companies come out in bold relief with Windows 8, and the brief video that Tim Cook showed at the beginning of his keynotes last week and at WWDC. Apple highlights the thousands of no’s before they arrive at yes, and years earlier Steve Jobs stated that he was just as proud of what they chose NOT to release.

    Windows 8 comes across as the outcome of a process where nobody could say no, and anything and everything got crammed into an all-of-the-above, designed-by-committee product. Yet, while much attention has focused on the dual personality of Windows 8, even earlier versions of Windows showed signs of nobody making actual choices about how things should work, instead just throwing a bunch of features into the mix without regard for the user experience. Just as an example, look at the myriad of options for accessing the network or file settings. They sort of point to the same thing, but don’t work exactly the same way.

    And architecturally, Apple and MS have gone about things in almost an exact opposite way. Even though iOS and OS X have distinct user interfaces and function very differently, much of the underlying code base is shared. iOS is really a subset of OS X, yet Apple treats desktop and touch computing differently with distinct data inputs.

    With Windows 8, MS has finally unified the underlying code base, but they also went the extra step of trying to unify the user interface with a one-size-fits all “modern” interface for desktop and mobile devices. And it’s this failure to recognize the distinct requirements for different use cases where the wheels fall off. Back when MS was the primary game in town for productivity and networked computing, they could release this kind of half-baked crap and the users would just take it. Now that networked computing devices are mushrooming into whole new classes of devices, MS can no longer treat the user experience as some trivial nuisance. They actually have to think things through with an attention to detail that has never been ingrained into their corporate culture. That’s the challenge that lies ahead.

    • steve_wildstrom

      It’s not really correct that iOS is a subset of OSX. The two systems share a common kernel (the BSD-based Darwin) and a lot of APIs. But there are APIs that are unique to each. iOS, of course, has a lot of telephony and radio management stuff that OS X doesn’t need. And the OS X Cocoa and iOS Cocoa Touch application layers are significantly different, each optimized for the platform it runs on.

      • Woochifer

        You’re right, I should have been clearer about that. My point was simply that OS X and iOS share a common core, yet the layers on top of that (particularly the pieces that relate to the UI) are distinct and tailored to the use case for each type of device.

        Until MS unified the code base with the release of Windows Phone 8, they had an opposite situation in which their mobile OS still used the CE kernel and the desktop OS used the NT kernel — yet both OSes shared the Metro interface.

    • AhmadZainiChia

      “Windows 8 comes across as the outcome of a process where nobody could say no, and anything and everything got crammed into an all-of-the-above, designed-by-committee product.”

      This is absolutely true. And the problem is: they don’t see this as a problem. To them, more is better. Just look at iWork vs Office (in all fairness though, Office is still better in some respects as it has some useful features that iWork doesn’t have. But the point remains) and you can see that. I’m waiting for they’re ‘touch first’ Office; if it still shows a ‘cram as many features as possible’ approach, than Microsoft is in really big trouble.

  • N

    Thank you for your analysis. No comment on the substance but as a recent Insider subscriber (and publisher/editor at my day job) I feel I can say — don’t use “on the other side of the coin” ever again. That’s not just a cliche but an old one that writers avoid. Instead, just use “conversely.”

  • gayblackandproud

    “The ability to use apps and documents side by side, allowing the comparisons, analysis and synthesis that happens frequently during content creation.”

    He has a point here. And typing long documents on a touch screen that obscures what your writing is not a great experience.

    I am considering a Surface even though I love my ipad. Would love a device that combined them-ipad app support, with surface kickstand and type cover. Awesome.

    • voteforpedro

      Are you kidding? The Surface is garbage. Go back to the ghettoes!! How did you learn to walk on your hind legs and type?

    • qka

      A number of third party case & keyboards exist for the iPad. Also, Bluetooth keyboards work with the iPad. If that is the reason you are considering a Surface.

  • Nangka

    Microsoft greatest fault is not giving up Windows. Almost everything they have been doing or tried to do is tied to Windows – server, mobile, tablet, Office, Zune. The one product that’s not is a debatable success – XBox. As long as they keep hanging on to their past, they can’t break through to the future.

    “Give up Windows? They’ll have to pry it from our dead cold hands!”

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  • Amy Green

    Great article read! Lots of great information here, AND funny! Great job!

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