Microsoft – Page 3 – Tech.pinions

Microsoft’s Bing Is Bad Strategy

There’s been a lot of talk, of late, of Microsoft possibly abandoning Bing. Lets’s set aside the reliability of those rumors, the political intrigue involved and the practicality of implementing such a plan and look, instead, at the overall strategy that underlies Microsoft’s Bing.

In my opinion, Bing is, and has always been, bad strategy, plain and simple. Here’s why.

Money Instead Of Strategy

In warfare, if the commander values his troops, he expends brains instead of blood. Likewise, in business, if a CEO values his profits, he expends brains instead of cash.

Microsoft’s ironic problem is that they have far too much money. It’s just easier for them to throw money at a problem than to think it through. It’s been estimated that Bing has cost Microsoft as much as 17 billion dollars. There isn’t another company in the world that would have been willing to lose so much money without re-evaluating their strategy. Microsoft is like a despot that has unlimited manpower. They just keep throwing their troops (money) onto the spears of their opponents in the hope that they will, eventually, blunt those spears.

Attacking Where They Are Strongest

In war, the way is to avoid what is strong and to strike at what is weak. ~ Sun Tzu

Well, “duh”, you’re saying. Of course one wants to avoid attacking where one’s opponent is strong.

But isn’t that exactly what Microsoft is doing with Bing? Google search is where Google is at its best. Attacking Google Search with Bing is like marching one’s troops directly into the mouths of the enemy’s cannons.

Siege

A siege is the most uneconomic of all operations of war. ~ B.H. Liddel Hart, Strategy

Thus the highest form of generalship is to balk the enemy’s plans; the next best is to prevent the junction of the enemy’s forces; the next in order is to attack the enemy’s army in the field; and the worst policy of all is to besiege walled cities. ~ The Art of War

In my opinion, Bing vs. Google Search is the equivalent of a weaker army besieging a stronger army. It makes no sense.

Don’t get me wrong. It’s not pleasant for Google. They have lost some market share. But it’s far worse for Microsoft. Microsoft is bleeding money while Google goes merrily along doing what Google does best. Google is sitting behind its moat and its walls and they are laughing all the way to the bank while they watch Microsoft fruitlessly bleed themselves by banging their heads against Google’s impregnable walls.

Attrition

Attrition is a two-edged weapon and, even when skillfully wielded, puts a strain on the users. ~ B.H. Liddel Hart, Strategy

Microsoft is losing bucket loads of money on Bing and they’re gaining absolutely nothing in return. They have no hope of unseating Google in search. They’re not causing Google to lose any appreciable profits. Their strategy is not only backfiring, it’s actually counter-productive because it’s HELPING Google.

If Bing didn’t exist, Google would almost certainly be facing anti-trust and monopoly scrutiny from governments around the world. By subsidizing Bing with 17 billion dollars, Microsoft is actually HELPING Google by removing the onus of monopoly from their shoulders.

Some strategy, eh?

Conclusion

I seriously doubt that Microsoft is going to abandon Bing. They’re a proud and stubborn company. But as far as pure strategy goes, I can’t see it. It makes less than zero sense. It’s both a negative for Microsoft and a positive for Google. It’s not a strategy — it’s the antithesis of a strategy.

So, what do you think? Agree or disagree? Let me know in the comments, below.

Postscript

I often use quotes from my twitter stream in my articles. If you’re interested in following me, you can find me @johnkirk. I look forward to seeing you there.

Why Microsoft will regret not doing MS Office for iOS

I was rather intrigued by the comment made by a Microsoft executive after the iPad was announced that basically stated that Apple’s iWork is not for real work or productivity. For that, he says, only Microsoft Office is a true productivity tool. I took personal offense to this remark since I use many of the iWork tools for productivity and it meets the majority of my needs. In fact Keynote is actually a better presentation tool for us at Creative Strategies then Powerpoint. Pages has become a very robust word processor allowing us to do all of our newsletters and client Perspectives documents in this rich and graphically oriented word processor. We also do almost all of our charts in Numbers, the third product in Apple’s iWork tool kit. So if I read Microsoft’s executive’s comments correctly, I do not do real work–I apparently only do pseudo work or productivity since I use iWork.

Of course, his comment was just silly posturing and made him and Microsoft just look clueless. I continue to be amazed that Microsoft still does not give Apple the respect it deserves and from this comment it suggests that they still don’t take Apple seriously even if the iPad has taken close to 100 million PCs out of the annual PC buying cycles. Three years ago we sold close to 400 million PCs a year. In 2013 we will be lucky if we sell 300 million. That means 100 million less PCs are sold each year that could use MS Office than in the past. Yet, Microsoft has still not created a version of MS Office for iOS!

I believe that it is actually too late for them to do MS Office for iOS for three major reasons-

1-Apple’s new iWork suite of tools is now free. Knowing Microsoft, if they did do a version of MS Office for iOS I highly doubt it will be free. In fact it would probably be at least $60.00 to match the yearly fee of MS Office online. Perhaps 5-7% of iOS iPad users might be tempted but given the quality of iWork tools today, free always beats paid for software and if productivity on iOS 7 is needed, the majority will opt for iWork.

2-iWork will only get better. Apple never stands still when it comes to improving their software. You can expect that Pages, Numbers and Keynote will gain even more features and give users even greater controls over the next 18 months, trumping anything that Microsoft might deliver in an iOS version of MS Office. Also iWork in the cloud is so much better than Office in the Cloud already and it too will only get richer given Apple’s laser focus on apps and services.

3- I believe Apple has a killer productivity device in the works that could be even more disruptive to the PC market than the original iPad. If you think the iPad has had a detrimental impact on the PC market to date, just wait. Although Apple has not done any serious push for the iPad for use in business and the enterprise, the iPad has emerged as a very rich productivity tool in its own right. Add a Bluetooth keyboard to the iPad and in many ways it replicates the laptop experience in a much smaller, thinner and lighter physical platform. The iPad Air makes the iPad even thinner and lighter and is already in high demand in many IT accounts I have talked with recently.

There is a reason Apple named the new iPad the iPad Air. Some think Apple will do an iPad Air Pro and others think they will do some type of hybrid. They may be right but I suspect Apple has something else in mind that may have elements of these two ideas but in a different package. Of course I am just speculating here but I sense something big is up and if they do create an iPad that is optimized especially for productivity, I predict it could take at least another 30-50 million PCs and laptops out of the yearly PC pipeline by the end of 2015.

Had Microsoft brought out a version of MS Office for iOS 7 within a year of the iPad being on the market, it would have been a big success and serious money maker for them. Now it is too late. You also can’t count out more and more people moving to Google’s productivity tools. I recently found out that a major national newspaper just moved everyone over to Google Docs and away from Office. I have heard that same thing happening at other big firms and big government accounts too.

With a shrinking PC market and a looming larger iPad/iOS market continually growing along with new productivity tools from Google and others, MS Office will have a hard time attracting new buyers and I am afraid that this franchise will only recede instead of grow in the future.

Beware Geeks Bearing Hybrids

Anyone that has been paying attention to the evolution of OS X and iOS will have at some point noticed that the two operating systems are slowly acting more like each other. ((All article excerpts are from: “MacPhone Air: Mark Shuttleworth predicts Apple will merge Mac and iPhone“))

Agreed.

Mark Shuttleworth, founder of Canonical who recently attempted to crowdfund the Ubuntu Edge phone that would double as a desktop PC … predicts Apple will merge Mac and iPhone hardware one day soon, creating a device similar to the Ubuntu Edge.

Vehemently disagree.

…Shuttleworth said that though his company’s Ubuntu Edge didn’t reach its crowdfunding goal, it drummed up enough interest in a phone that doubled as a desktop PC, and other companies would adopt the concept as their own.

Yeah, right, You failed miserably, so now everyone is inspired to be you.

“(Shuttleworth pointed) out that the Cupertino company specifically labeled the phone’s A7 SoC as a “desktop-class processor.” Shuttleworth thinks Apple specifically chose this nomenclature as a way to hint at the future of its hardware, stating that it was a “very clear signal” that Apple would merge the iPhone and MacBook Air into one device.

Yeah, right, because Apple just LOVES to give hints (eye roll).

OS X and iOS have been on a collision course for some time now, though both operating systems are traveling in slow trains.

Collision course or parallel courses? There’s a big difference between the two.

Who knows if Shuttleworth is right in predicting that Apple would converge the two devices….

Oh, me, me, me!

I’m sorry — was that supposed to be a rhetorical question?

Shuttleworth’s analysis is as wrong as wrong can be. Here’s why.

Jobs To Be Done

“To forget one’s purpose is the commonest form of stupidity.”~Friedrich Nietzsche

If a device isn’t doing a useful job, it won’t get hired. If it’s doing an unmet job, then it will be staggeringly successful.

Tablets are stealing jobs from keyboard-based computers in a steady war of attrition~Horace Dediu (@asymco)

What many fail to realize is that mass market consumers are using tablets in the SAME ways they used to use PCs. And then some.~ Ben Bajarin (@BenBajarin)

As one teen said to another: “I love my iPad. I can do so much more on it than on my laptop.”~ Horace Dediu (@asymco)

If you don’t think that the tablet is doing its job, it’s because you don’t understand the job the tablet is being hired to do.

Design

Design isn’t a matter of building, it’s a matter of taking away. It’s like Michelangelo taking a block of marble and chipping away at it until it reveals David.

Perfection is achieved, not when there is nothing left to add, but when there is nothing left to take away. —Antoine de Saint-Exupéry

Tech Geeks (like us) v. Real People (like them)

I define the word “Geek” as, well, pretty much anyone who is reading (or writing) this article. We’re not like real people.

(I mean, c’mon, you know I’m right.)

The way we see the problem is the problem.” ~ Stephen Covey

— Real people look for solutions;
— Geeks look for problems — and find them.

In most aspects of life, too much of something is just as bad—and often much worse—than too little.~Dr. Mardy’s Aphorisms

— Real people focus on what it is.
— Geeks focus on what is missing.

I’M NOT FINISHED.” —Edward, Edward Scissorhands

— Real people say: “What can I do with it?”
— Geeks say: “What can I do to it?”

In all human affairs, the wisest course is to be passionate about the role of reason and reasonable about the role of passion.~Dr. Mardy’s Aphorisms

Geeks are passionate about reason. They need to also be reasonable about the role that passion plays in our lives.

The brain and the heart are like the oars of a rowboat. When you use only one to the exclusion of the other, you end up going around in circles.~Dr. Mardy’s Aphorisms

Using reason to evaluate a product is like rowing with one oar. Only if we view a product through both its utility and its appeal to human emotions can we truly make any progress.

Geeks Simultaneously Think That The Tablet Is Fabulously Successful And Fatally Flawed

Most people look at the growth of the tablet and say: “Wow, the tablet must be doing something right.”

Geeks look at the growth of the tablet and say: “Yeah, sure, it’s doing well and all…but what would REALLY make the tablet great would be if it were a hybrid!”

Touch Input And Pixel Input Are Inherently Incompatible

DESTINY! DESTINY!  NO ESCAPING THAT FOR ME!” —Dr. Frederick Frankenstein, Young Frankenstein

Contrary to geek wisdom, Frankenstein’s monster was not a shining success, the creation of life from inanimate matter. It was, well, a monster, a sort of hybrid.

— A telescope is good for big things. A microscope is good for small things. A Tele-Microscope is good for nothing.

— A Microwave cooks fast. A stove cooks slow. A Micro-Stove Oven leaves us cold.

This was the genius of the iPad. It was a mediocre notebook computer, but it was a great tablet. This was why, after 10 years of failure, the tablet took off. We still haven’t learned the lesson. Geeks still want the tablet to be a combination of a tablet and a notebook despite the fact that the market clearly prefers tablets to be tablets.

Listening To The Market

When I was in law school, they taught me that when the Judge was agreeing with you, you should shut up and sit down.

Fine, fine advice…that I never took. But that doesn’t mean that you shouldn’t heed those wise words.

The public is the only critic whose opinion is worth anything at all.~Mark Twain

In technology, the market is the Judge. And when the market is shouting you down…

…shut up, sit down and enjoy the ride. That’s what the vast majority of consumers are doing. We would be wise to do so too.

Microsoft Sinks Beneath The Surface

Dogs chase cars, but that doesn’t mean they know how to drive.

Microsoft is chasing the tablet market, but that doesn’t mean they know how to take control of that market and drive it.

Microsoft’s Flawed “Vision” For Tablets

I was walking down the street wearing glasses when the prescription ran out. ~ Steven Wright

Microsoft has lost their vision. They see everything through the lens of “Windows”. It’s distorting their outlook and it’s destroying their tablet strategy.

We don’t see things as they are, we see them as we are. ~ Anaïs Nin

If The Surface Is Microsoft’s Answer To The iPad Then They Are Asking Themselves The Wrong Question

The Surface is supposed to be the answer to Apple’s iPad. It’s nothing of the sort. It’s much, much more of a laptop than it is a tablet.

The Surface Pro ain’t a blockbuster, true. But it is the best-selling Windows laptop model among those that cost $800 and above. ~ Harry McCracken (@harrymccracken)

That’s not a GOOD thing, that’s a BAD thing. The Surface is competing as a LAPTOP. It’s supposed to be competing as a TABLET.

Follow this link and take a gander at how Microsoft is advertising the Surface 2:

Youtube Video Commercial

Not once during the commercial – NOT ONCE – is the Surface used as a tablet.

After seeing Surface 2 ad, I’m more convinced than ever Microsoft has zero clue why iPad is selling in the tens of millions. ~ Tom Reestman (@treestman)

Honestly, what are they thinking? Picasso said that “Good artists copy, great artists steal.” Not only isn’t Microsoft stealing the great tablet ideas of their competitors, they’re not even capable of COPYING them properly.

Microsoft won’t make a tablet if it’s the last thing they don’t do. ~ Alex Dobie (@alexdobie)

Neither Fish Nor Fowl

The problem with the Surface is that it’s a laptop with no keyboard and a tablet with no apps ~ Benedict Evans (@BenedictEvans)

Microsoft claims the Surface Pro is the best selling product in its class. What class is that? ~ Avi Greengart (@greengart)

Microsoft has the Windows RT market all to themselves. ~ ßen ßajarin (@BenBajarin)

Unfortunately for Microsoft, having the Windows RT market all to themselves is the equivalent a sailor having the bottom of the ocean all to themselves.

Denial Ain’t Just A River In Egypt

Surface 2. Why? ~ Sammy the Walrus IV (@SammyWalrusIV)

Because the only thing better than writing off $900 million is doing it twice? ~ Brad Reed (@bwreedbgr)

Microsoft’s Surface Strategy 1) Make mistakes 2) 1) + some more mistakes 3) Go to 1) ~ chetansharma (@chetansharma)

The Job It Is Not Being Hired To Do

Microsoft has improved the hardware, but made no fundamental changes to the software. ~ Avi Greengart (@greengart)

So Microsoft thinks the problem with Surface was specific flaws that are fixable, not the broader 2-in-1 strategy. ~ MattRosoff (@MattRosoff)

There’s something comical—almost deserving of pity—in Microsoft still claiming you can’t “get things done” on an iPad. ~ Tom Reestman (@treestman)

It would probably help Microsoft immensely if they were to understand the things that people wanted to get done on their tablets. But maybe not.

Same ol’ marketing message that iPads can’t do real work and a Frankenstein hybrid is the answer. ~ Tom Reestman (@treestman)

The ingenuity of the device blinds us to its utter uselessness. ~ Anonymous

Damn The Market, Full Speed Ahead

If someone is going down the wrong road, he doesn’t need motivation to speed him up. What he needs is education to turn him around. ~ Jim Rohn

Not only isn’t Microsoft changing their tablet strategy, they’re doubling down, literally accelerating their progress down – what I think is- the wrong path.

It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change. ~ Charles Darwin

Fini

Sometimes I lie awake at night, and I ask, ‘Where have I gone wrong?’ Then a voice says to me, ‘This is going to take more than one night. ~ Charlie Brown

It might take one a long time to explain exactly where Microsoft went wrong. But it doesn’t matter anyway. Despite all the evidence to the contrary, Microsoft is convinced that they’re in the right. And so, inevitably, we can expect Microsoft to sink much, much further beneath the Surface before they even begin to attempt to reverse their course and try to save themselves.

And by then, it might well be too late…

It is not necessary to change. Survival is not mandatory. ~ Peter Drucker

Apple vs. Microsoft: The Value of Strategic Thinking

Having a strategic plan and following it doesn’t guarantee corporate success. There’s always the possibility that the strategy is bad and fated to fail. But you can rest assured that the lack of a strategy will doom any enterprise to failure–and why I worry a lot about the future of Microsoft.

As Ben Thompson at Stratechery and my Tech.pinions colleague Ben Bajarin point out, Apple’s iPhone 5c and 5s announcements this week were logical steps in the careful execution of a mobile strategy that goes back at least to the original iPhone introduction in 2007. Apple’s plan is simple to state, though difficult to execute: Provide an outstanding customer experience and focus your energy on dominating the high–and profitable–end of the phone and tablet markets.

The strategy has no lack of critics. It leads to product choices that are predictable and a bit dull, endlessly disappointing tech writers who live for novelty. And Wall Street simply hates it, applying its “past success is no guarantee of future results” disclaimer to Apple with a special vengeance.

Apple doesn’t care; it has its vision and it is sticking to it.

A key element of executing a strategy is knowing what not to do. Despite its latest explosion of iPhone variants, Apple offers amazingly few products for a company of its size. And it will sell no product before its time, much preferring doing it right to doing it first (Wall Street and tech writers hate this too.) Yes, it has had its failures–me.com and Ping were recent ones–but it has had an astonishing percentage of hits over the past 15 years.[pullquote]A key element of executing a strategy is knowing what not to do. Despite its latest explosion of iPhone variants, Apple offers amazingly few products for a company of its size.[/pullquote]

Contrast this disciplined approach to the chaos swallowing Microsoft these days. All of Microsoft’s major businesses face serious threats: Long-term shrinkage of the PC market and thus the PC software market seems inevitable, attempts to turn Windows into a tablet operating system and to become and integrated producer of tablet hardware and software are sputtering, competition for Apple and Google is driving the cost of consumer-grade software to zero, and on and on.

A real strategy would force Microsoft to take a hard look at its lines of business and decide what is savable and what is worth saving. I’ve made no secret of my preference–that Microsoft should focus its efforts on business software and be prepared to let consumer-facing products go.

The acquisition of Nokia makes it clear that this is not Microsoft’s choice. But it gives no clarity whatever to what choices Microsoft will make. To attempt to defend everything is ultimately to defend nothing.

Strategic choices are difficult and usually painful. A strategically focused Microsoft, whatever focus it picks, will at least initially be a smaller company. But for Steve Ballmer in his remaining months or his successor to fail to make these hard choices will jeopardize the entire enterprise.

What Will Microsoft Do With Nokia’s Feature Phones?

There are many things curious about this deal. Particularly, the things Microsoft did get and the things they did not get. By not acquiring the totality of Nokia, Microsoft got a steep discount in order to acquire the parts they did. But looking over at the way the deal was structured, it is logical to assume that Microsoft did not have to include the feature phone business from Nokia and could have let that business run its course.

So the key question is what why did Microsoft include the feature phone business. Let’s explore some scenarios.

First, if you subscribe to the theory that Microsoft acquired Nokia because they were going to lose Nokia as a partner, either to Android or to bankruptcy, then it would make sense to not leave a bit of hardware business to Nokia to continue making devices that they can chose to switch to Android. The deal instead states that Nokia can not use the Nokia brand name on any device until the end of 2015. So technically, Nokia could again start making hardware in 2016 but can not use the Lumia name since Microsoft owns that as well. At the outset it seems unlikely that Nokia will make hardware again in the future. However, should things go south over the next few years with this deal with regards to the Nokia assets, name, brand, etc., the door is still open. But by absorbing the feature phone business, Microsoft ensures that by this time next year there are no Nokia Asha handsets running Android in emerging markets or elsewhere.

So what to do with it?

Nokia still sells a lot of feature phones. Even though it is declining, every quarter the industry still sells several hundred million feature phones. Last quarter over 200m feature phones were sold with 12-14% approximately carrying the Nokia brand.

Take a look at the chart below which shows global handset vendor market share by sales to end users.

Although on a downward trend, Nokia still held 14% respectively, of all phones sold over the past two quarters. Again the vast percentage of those being non-smartphones like their Asha line.

Here is another chart showing global mobile phone OS usage share as measured by web usage.

I bring up this chart for reason. Nokia’s Asha brand running the S40 operating system is practically a smart phone. It runs Java apps, has an app store, has a UI that feel smart phone like but few consider it a smartphone. This phone targeted emerging markets exclusively and strategically was the device that would be used to transition emerging markets from feature phones to Nokia smart phones.

By keeping this group Microsoft could simply bring Windows Phone to all hardware, including Asha, and keep the low-price points the same in those countries and within a few quarters garner double digit global market share for Windows Phone. Believe it or not many in these countries buying these low cost Android phones have no preference of OS yet. This is why I’m convinced in markets like India, Africa, and even parts of China if Microsoft just put Windows Phone on the very low end the would get market share.

Market share alone may not be enough to build the ecosystem out. I try to remind our readers that market share is fine but it is more important to have the right market share. It is yet to be seen if these low end consumer contribute any real value to ecosystem. But if Microsoft can get some of these customers early in their maturity cycle then it will at least be a start.

A Suspicious Angle to Microsoft’s Acquisition of Nokia

Not long after Microsoft and Nokia did a deal for Nokia to back Windows Mobile and Microsoft exec Stephen Elop moved over to become its CEO, I mentioned to some of my colleagues that I thought this was a set up. In fact, I wrote a Techpinions piece on Aug 15th, 2011 that literally said Microsoft WOULD buy Nokia in time.

If you look back at this period in which Nokia was Microsoft’s major Windows Mobile vendor and Elop got serious experience being a CEO of a multi-national company, one has to wonder if there was not some type of grand plan put in place between Ballmer and Elop from the beginning. Surely Ballmer knew even then that his days might be numbered and that while Elop was a natural successor to him then, he needed responsibility as a CEO before he would be seriously considered as a successor.

I have known Ballmer since 1985 and over the years have watched as he has aged and the pressure of running Microsoft was catching up with him. During this time his kids have all grown up and I am sure he looks back on the missed times he had with them during their most formative stages of life. Regardless of his performance at Microsoft, I have felt for a couple of years that he was ready to step down and allow someone else to try and bring Microsoft into the post PC era.

While it is true that Elop’s tenure cannot in itself be considered a success, let’s be honest. He was handed a highly wounded Nokia from the beginning and he gets street cred for just keeping them alive and competitive given the beating they were taking from Apple, Google and Samsung. And Nokia became the #1 vendor of Windows Mobile phones and, as research stats have shown, Microsoft actually gained ground in a lot of international markets where Nokia already had a large place in those parts of the world.

While Microsoft and Nokia have no chance of rising above Apple, Google and Samsung in terms of units sold, together they can clearly become the third option in a smart phone market that is still in its early stages of growing and will sell at least 1 billion units per year for the foreseeable future. And even at #3 there is a lot of money to be made if they execute well and aggressively at a competitive level.

If you read many of the news stories about the Microsoft/Nokia deal, most of them suggest that Stephen Elop is now considered the #1 candidate to replace Ballmer as CEO of Microsoft. At the moment, he will be running Microsoft’s recently announced device division and will focus on helping Balmer in the short term achieve Microsoft’s One Vision goal of being a hardware, software and services company.

I believe that this will be a short-term role. I doubt that Ballmer will stay the full year and would not be surprised if Elop is in place as the new CEO by Dec 1, 2014.

But the neatness of Microsoft now buying Nokia to anchor their device division, at a discount no less, seems to me to be less happenstance and rather part of a grand scheme hatched a couple of years back. And if Elop does become the new Microsoft CEO, it would come full circle and be looked at as one of the more interesting premeditated corporate purchases of all time.

Microsoft is at a Fork in the Road

Many of us have caught the news that Microsoft’s CEO Steve Ballmer’s tenure is up. Over the next 12 month’s Ballmer will work to transition a replacement. This replacement will be faced with extremely hard decisions about Microsoft’s future. Whoever he or she is, I hope they are ready.

In my opinion the crux of Microsoft’s fade into irrelevance is their complete ineptitude to understand consumers. I believe Bill Gates, Steve Ballmer, and the rest of the crew at Microsoft understood a business user but I don’t believe for a second that they had any genuine understanding of consumers and consumer markets. On the flip side Steve Jobs had an amazing understanding of consumers. This was who Steve Jobs built products for and unfortunately in the early days it almost killed the company. The reason for this was because there was no true consumer market for PCs there was only a business/enterprise market. Bill Gates and Steve Ballmer and crew, built solutions that they understood–business and enterprise focused solutions. And during this time it was exactly what the market needed to grow. However in the early 2000s things changed. A pure consumer market emerged for computers and Microsoft was not prepared to compete against a company whose focus and passion were consumers.

The Fork in the Road

So Microsoft finds itself at a fork in the road. I find it very hard to believe in todays global marketplace that a single company can compete effectively in both consumer and enterprise markets at the same time. I believe Microsoft must choose to focus on business/enterprise customers OR consumer customers. They cannot do both.

Not much need change in the way of Microsoft’s outlook and strategic direction should they choose the enterprise focus. However, I don’t believe this is the path they will choose. RIM was in a similar position and chose to go after consumers and it killed them. But I believe the allure of a giant, yet not always profitable, consumer market will entice Microsoft to go this route. If this is the case, a lot must change at Microsoft.

The new CEO must change the culture first and foremost. Microsoft needs an agile and forward thinking group of executives with a vision of the 20 year future and Microsoft’s role in that future. Microsoft needs to focus more consumer oriented RND and innovation efforts. But perhaps most importantly, Microsoft needs to bring executives to the forefront who actually understand consumer markets. Things like the whats and why regular consumers buy things. This is not easy and only a few companies even remotely do this well.

The other expertise Microsoft needs to acquire if they choose the consumer path is regional expertise. Consumer markets in each region outside of the US like Asia, India, etc., will all behave differently. Gaining consumer intelligence is key but so is gaining that insight for the nuances of each region.

Without question Microsoft’s new CEO will be faced with a gamut of challenges. Even a new CEO does not guarantee Microsoft’s future security.

Leadership Matters More Than Market Share

A leader is one who sees more than others see, who sees farther than others see, and who sees before others see.
– Leroy Eimes

In studying the technology industry, the markets that encapsulate it, and the consumers who drive it, I am less interested in how much money a company is making, or how many devices they sell, or what a platforms market share is. Those are all interesting data points. What matters, in my opinion, is whether or not companies playing in this arena are advancing computing.

Apple’s Demise

It seems as though the popular “Apple is doomed” narrative will never go away. While this is a deeply naive statement filled with flawed pre-conceived notions, it is often thrown around publicly by those with an agenda other than genuine truth.

For some illogical reason, many are just waiting for Apple’s dominant reign to end. This line of thinking forgets that the only market Apple has dominated for a length of time was the MP3 player market. Apple may never secure a decade plus of device or category dominance like they did with iPod again but that does not mean that they do not have a healthy and profitable business that will last decades. Yet all too often ebbs and flows of markets, cyclical innovation patterns, and global adoption cycles, seem to fool people into missing the big picture.

I hear a subtle tone frequently whispered among analyst peers that Apple has had their day and it is time for someone else. That time may certainly come, but it is not today. I hold this view confidently because I am yet to see the emergence of a new leader. I see platforms gaining market share leadership. We may see devices become sales leaders, but without question Apple is still the envy of the industry. ((Being the first with a spec or some technological gimmicks does not qualify as leadership))

The Secret to Growth

“The real act of discovery consists not in finding new lands but in seeing with new eyes.” – Marcel Proust

We can debate until we are blue in the face whether the biggest growth opportunities like smartphones and tablets are saturated. But whether this point is true or not both markets will inevitably become saturated at some point. Growth will someday peak and only disruption can restart the cycle.

The key for a companies growth lies in new opportunities. Sometimes you have to create those opportunities and other times you can capitalize on opportunities others have created. But in either case vision and leadership are key.

Perhaps the next growth area is wearable computing, or the digital home and car. Perhaps it is something we have not thought about yet. This is what makes this industry exciting. The point remains, who leads these new opportunities is the key thing to watch.

Leading also means you often take some arrows in the back. It is hard and not all can handle the scrutiny. As I stated earlier, I am not naive in thinking that Apple will always be in a leadership position. But I’m yet to see another holistic leader in computing emerge.

Microsoft’s Windows 8 Blunder

When I first saw the direction Microsoft and their partners were looking to take Windows 8, I was optimistic. Metro sounded good in concept, as did some of the features and functions built into Windows 8. But then as the time got closer, it became very clear that this version, more so than any other, was going to depend a lot more on hardware than any previous version.

Prior to Windows 8, Vista was a hardware hog. In fact, I would argue that had more companies been more intentional about adding chips with better graphics, either discreet or integrated, that Vista would have performed better on early hardware. But Vista looks like a raging success compared to Windows 8 at this point.

As Patrick noted in his column the other day, it is ironic that we are in a position where the hardware is necessary to save the software. Building touch into notebooks and desktops is now the only way forward for Microsoft and partners. Microsoft has gone down a path of attempting to condition the market to not only be comfortable using touch on their notebooks and desktops but to desire it. I remain doubtful this will happen.

The primary reason is proximity and context. When we use notebooks or desktops we do so at arms length. This is the most comfortable position when the device is on your lap or on a table. Even though our arms are likely slightly bent while resting on the keyboard, the screen in most cases, is a full arms length away. Sometimes quite a bit more with a desktop.

Adopting a New Posture

While I was at Microsoft’s build conference last week, I decided to make a point to keenly observe those attendees who have embraced touch on notebooks and watch how they use them. The plus to being at a Microsoft conference was that I saw more touch notebooks, and Surfaces for that matter, in one location than I have ever seen out in one place.

What I observed was interesting. Those who had adopted touch on their notebook would type with the device at arms length, but then move their body and face closer to the screen as they sought to use touch input. In essence to use touch they actually leaned in, performed the action and either stayed or leaned in to scroll a web site for example, and then leaned back to start typing again.

Interestingly, Surface owners had adopted an entire experience built around leaning in. I can only speculate that this is because the screen is so small that staying leaned in closer to the screen makes it easier to read the text, etc. Surface owners would even type with arms bent significantly more because of how close they were to the screen.

My key takeaways from these observations were that to use a notebook, or an aspiring hybrid like Surface, adopting touch as a paradigm is one necessary component, but so is adopting new body language to operate it in a useful and efficient way.

So the question we need to ask ourselves is this: Is this better? Does touch bring so much to the notebook and desktop form factor that we should consider this new, somewhat un-natural required body posture worth the effort?

Let’s look at it this way. Is adding touch as a UI mechanism to something like a desktop or notebook a more efficient input mechanism? In notebook and some desktop form factors, I would argue that it is not.

I absolutely condone touch on smartphones and tablets. In these devices touch is natural, and the best and most efficient input mechanism for the use cases they are best at. This is because they are truly mobile and you use natural motions to touch the screen to navigate. But notebooks and desktop are different beasts that succeed at very different use cases for very different reasons.

WHY TOUCH?

What I’ve tried to bring out, both in public and in private, is this: does using touch as an input mechanism on a notebook or desktop make me more efficient in my workflow? I’m yet to find that it does.

When you sit behind a notebook or a desktop you are prepared to get work done. In this context speed, efficiency, and ease of use are keys to make these devices the best tools for the job. So for touch to be compelling, it must be better at the above experiences than a solid trackpad or external mouse. Does it do this? The answer is no.

Take the trackpad for example. My hands have less distance to travel for me to reach the trackpad on all installations. To use a trackpad I bring my hands closer to me a very short distance (maybe 2-3 inches). Contrast that with using touch as an input mechanism and rather than bring my hands in a short distance I must reach for the screen (approximately 5-6 inches). This requires more effort and more time than using the trackpad and is more tiring to the arm, by keeping it fully extended to operate. Unless you hunch over or lean in, which is also uncomfortable for any length of time. I concede that for some the amount of time and effort may not be considered much difference by some, but it is still a key point.

When I discuss this with those who advocate touch screens on notebooks, they propose that touching the device for input is a preferred mechanism to the trackpad. My counter point is that this is because most trackpads put on Windows PCs are downright terrible. Sometimes I wonder if Microsoft pushed OEMs to do this on purpose to make touching the screen seem like a better experience, simply because the trackpad is so bad, that it makes touching the device appear to feel like a better alternative.

I’d like to quantify this sometime by having a race with a Windows user and challenge them to a similar task, like creating a few slides and graphs in Power Point. Them on their touch notebook and me on my MacBook Air. We will see who can finish the task the quickest.

THE BLUNDER

So what is Microsoft’s blunder? Well, in my opinion, they made the strategic error of believing that what they did in Windows 8 would be the shortcut to help them compete with tablets from competitors. When in reality, to compete with other tablets, what they should have done was bring a version of Windows phone to the tablet form factor. Doing this would have done several things.

First, it would have significantly helped the Windows Phone ecosystem by way of apps. Quality and long tail apps are so dramatically void from the Windows Phone ecosystem that several carriers have specifically told me it is the reason for the abnormally high return rates of Windows Phones to their stores. By bringing Windows Phone to to the tablet form factor, it would have spurred more developer attention for phone apps and most likely tablet apps as well. Apple has lapped Microsoft in this area many times over.

The second thing it would have done was position Microsoft better for small screen tablets. Windows 8 is overkill in my opinion for what consumers want and do with smaller screen tablets. Windows Phone is positioned well for portrait mode use cases, which is the dominant orientation for consumers with small screen tablets.

Microsoft is at least 3 years or more behind in mobile. Windows 8 has and is doing nothing to help catch them up in mobile and realistically is only leading them down the path of being more behind. They have spent the bulk of their resources focused on areas of computing that are declining not growing. Tablets and smartphones are the growth segment and should have been the top priority. I would argue Windows Phone innovation and focus should have been a higher priority than Windows 8. I would even go so far as to make the case that Windows 8 should have been more evolutionary to Windows 7 and the revolutionary attempt should have been with Windows Phone and a specific tablet version of the Phone OS.

It would be hard to argue that an evolutionary version of Windows 7 would not have sold well running on the powerful, all day computing, thin and light hardware we are seeing enter the market this fall. You certainly could not make the case that we would have sold less Windows 7 devices in 2013 that’s for sure. In fact, I’m pretty sure I could make a compelling case that had Windows 7 or an evolutionary flavor of it, been the OS for 2013, that we would have sold more notebooks and desktops than we have and the PC market wouldn’t be off as much as it is.

To be clear, the blunder was thinking they could turn the ship by taking a PC approach instead of a post PC approach by focusing more on smartphones and tablets.

Who knows, maybe Microsoft will prove me wrong and announce some brilliant unification strategy with Windows 9 that solves the problems outlined above. I’d have an easier time believing this possibility if Microsoft had a better track record at getting things right the first time.

On a side note, notice that Apple has NOT introduced a touch based laptop. I believe Apple, who is very picky when it comes to user interfaces, knew that touching a screen on a laptop is completely unnatural and instead made the Magic Trackpad to emulate touch in a way that does not disrupt that natural motion of hands placed on a keyboard. I remain skeptical you will ever see a touchscreen based laptop from Apple.