Thursday, September 06, 2007

The trouble with being a copycat...

Its not true that Microsoft does not innovate, they take other people's ideas and add little innovative ideas to them. This formula has worked very well for MS for many years, especially in the Corporate world. The thing about corporations is that they make decisions based on, shall we say, facts and logic. For example, a company will consider cost, existing employee skill set, security etc before making a purchase. Companies also only upgrade their infrastructure when it fits in their budgets (am sure this is very obvious).

In the consumer world, things are very different. Users care more about ease of use, security, design and the elusive the wow-factor. This is the market that Microsoft is now determined to dominate. The problem here is that Microsoft's strategy of copying to innovate is not serving them well at all. Add to that the fact that they cannot bully consumers into buying MS products and things do not look all that rosy in Redmond.

Let me look at a few sections where MS is struggling to innovate in the consumer space:

Windows Live Hotmail: Microsoft bought Hotmail just when web mail was taking off. Fortunately for MS, Hotmail already had millions of users. Microsoft simply sat on hotmail for years until Gmail came along and introduced vast free storage and an Ajax (Web 2.0) interface. Soon to follow Gmail was Yahoo with their excellent Ajax offering. MS had to do something and they decided to also add more user storage (less than Gmail's) and move to an ajax based UI. It may not be obvious to some but Hotmail is not as popular as it used to be. Ask yourself this, how many people with first email addresses (or even second) do you know have a hotmail account?

Windows (Vista): In the 80s and the 90s, computers were mainly work horses for word processing, spreadsheets and in order to succeed, a company had to sell to the big companies. Come the 2000s, companies matter but consumers are king. And consumers care more about lifestyle applications such as photos, videos, sharing and social networking more than they care about spreadsheets. Apple saw (started) this trend when it launched OS X with its iLife suite (iPhoto, iMovie, iDVD, iTunes)in around 2002. Microsoft tried to copy this a little with Windows XP but more obviously with Vista. The problem for them once again is that they are copying previous work - OS X Leopard is due out in October with iLife '08 and already looks to be years ahead of anything offered by Vista.
The result, more and more poeple are now buying Macs for their homes.

Search: This is one market that nobody, especially Microsoft, saw coming. Google has made millions, if not billions, from the simple concept of advertising through search. Microsoft entered this market first with the failed MSN search and now with Windows Live Search. Haven't heard of it? Thats how well its doing!
Also worth noting that MS currently has websites to compete against YouTube, MySpace and Facebook.

Xbox/360: Needless to say that the Xbox failed miserably against the Playstation even though it was a more powerful games console. Microsoft decided to launch the 360 before Sony could release the PS3 so that they could get some sort of a lead into the next-gen console market. Now the 360 is probably Microsoft's best effort in the consumer space and Sony has shot itself in the foot so many times that really, the 360 should be quite a way ahead. They however didn't count on one thing - the Nintendo Wii! Cheaper, more innovative and yet less powerful than both the 360 and the PS3, the Wii has sold more units than both of them put together!

Zune: Microsoft has been trying to challenge the iPod for years through its PlayForSure partnerships with the likes of Creative and Toshiba. This got them nowhere so they decided to create their own mp3 player called the Zune. The Zune took the form factor of an iPod and added nothing to the experience except for buggy software, brown as a user-selectable color and, oh yeah, crippled wireless music sharing; welcome to the social indeed. Now am not saying for sure but, looking at the new iPod lineup, MS has definately got its work cut out. Look at the Zune, and then look at the iPod touch below. Need I say more? No wonder MS is throwing money at Universal to pull its content from iTunes (you read it here first).

So as you can see, the above does not paint a pretty picture of Microsoft in the consumer space. Take into consideration that the Xbox360 and Zune are both loss-leaders (every unit is sold at a loss) and that the WIndows Live department is yet to produce a profit for the software giant, one has to wonder just how deep Microsoft's pockets can run.

Don't get me wrong, my point is not that MS is about to go out of business, it still rules the corporate world with Windows, Office etc installed on ridiculous amounts of PCs, but in the consumer space - Microsoft needs some true innovations to keep up otherwise it will always be a step (or more) behind. They may have some deep pockets over at Redmond but they can't afford to put out any more loss-leaders, can they?

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I know which one I would choose....Just my 2t.

3 Comments:

Anonymous Anonymous said...

I agree with you completely on the lot. Apple has always done the lifestyle choice better than Microsoft. At least for new users, out of the box.

I think when it comes down to it - when buying an Apple, it's like buying any luxury item. Your choices are made with the right side of the brain, whereas commercial businesses need to make a more 'right sided' choice.

Apple do a far superior job of appealing to passion, and hence the wallet :)

1:07 PM  
Blogger Unknown said...

It comes to mind that fat wallets cant always get the job done!

2:31 AM  
Blogger Unknown said...

the touch does not compare to a hard drive MP3 player
compare the zune to the classic.
Bigger screen,
wireless syncing
and all the old zunes get the new zunes features
1 point for MS

5:45 PM  

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