Friday, June 15, 2012

Can Microsoft Cross the River?

A few weeks back I lamented in a post that Microsoft had not done much to compete with Apple in the tablet computer space.  The problem, I stated, was that without competition, the costs (in my opinion) for the tablets available are too high.  Only Microsoft has the size, clout, and capital to compete with Apple at this point.  I want competition because it increases innovation and lowers prices.  If you don't believe that, email me and I'll show you how mankind has always made the most technological progress during times of war.  But getting back to the Microsoft tablet, here is an article in Computerworld referencing the big news release coming on Monday:

In the interests of advancing the free market I really want Microsoft to be successful.  But history says that Microsoft will have to clear some hurdles in order to be successful.  Before I get into that, I want to write out a quick fable that I'll use as an analogy to this situation.  Called "The Scorpion and the Frog", this ancient fable has been told under many different variations.  In essence, here it is:

One day a frog was standing by a river getting ready to cross.  Just as he was about to enter the water, up walks a scorpion.  The scorpion turns and says, "Mister Frog, would you please carry me across the river to the other side?  I need to make it across and as you can see, I'm unable to swim."  The frog thought about that for a second and said, "Mister Scorpion, if I let you on my back you will sting me!"  The scorpion said, "Think about it.  Why would I sting you out on the river?  Then we would both drown!"  The frog considered the logic of that and, after deliberating for a bit agreed.  It seemed logical.

Halfway across the river the scorpion whips back his tail and 'Zap!', stings the frog right in the middle of his back.  As they both sink under the water, the frog wails, "Why, why did you do that Mister Scorpion?!?  Now we are both doomed!"  The scorpion calmly replied, "I couldn't help it; it's in my nature."

The point of using that fable is to highlight what Microsoft is, and is not.

Microsoft Is:
  • A software company that develops very useful applications, but rarely gets them right the first time.
  • A very cash-rich company that has the resources to do great things.
  • Strong management and an excellent talent pipeline.  Their human capital is one of the strongest aspects of Microsoft and seemingly one of their best kept secrets.  They've got great people spread all over the globe.
  • A company that, through its XBox product, is beginning to really understand the importance of personal user experience.
  • An international company with a vast supply chain.
  • A brand with one of the oldest, widely dispersed products in computing history (Windows brand)
Microsoft  Is Not:
  • A company that owns a multimedia channel like iTunes where it can create a partnership with customers that locks them in and keeps them from shopping elsewhere.  When you compete against the iPad the fight is as much against the iTunes App Store as it is the hardware.
  • A company that is typically cutting edge.  They tend to acquire innovation rather than create it. (Some would argue this point but look at the past 10 years of product development history)
  • A company that has a strong handle on quality control.  As an XBox owner, I have had no fewer than six (6!) consoles give out on me for one reason or another.  And I'm not the only one - several years back Microsoft had to take a one billion dollar write-off to deal with quality issues on the XBox specific to the "Red Ring of Death" occurrences.
  • A company with strong relationships with international governments and manufacturing partners.

Given both what Microsoft is and is not, there will be some immediate challenges for them to be successful in the tablet market at a level that is competitive with Apple.  They can't just show up with a tablet and essentially say, "Here we are - love us!"  That means that whatever they deliver has to be functional, "boot up" quickly, and be tightly integrated.  Consumers will in no way, shape, or form accept a product that needs several iterations or lifecycles before it reaches its potential (yes, I'm talking about you Windows ME and Office 2007).  Also, they will need to rapidly develop a strong, vibrant marketplace for consumers to find music and applications.  Microsoft will either choose to do its own thing or more probably look to tie into the Android universe.  And finally, quality must be paramount.  The devices that they sell should never break down and that means both hardware and software.  If they struggle here, Apple will eat their lunch.

For a consumer who likes choices, I really hope that  Microsoft makes it across the river.

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