Microsoft and Its Many Brands
June 26, 2009
Business Week from its Olympian perch in Manhattan has broken new ground. News is no longer what the New York media mavens “do”. News, in case you missed the Iran story, is now in the hands of those with mobile devices. Reportage is the way to track events. Analysis is now where the Business Week type of publications claim purchase. “Microsoft Defends Its Empire” was an fascinating read for me. The premise of the business school type write up was:
The Internet has thrown even the mighty Microsoft back on its heels. No longer able to impose its will on the computing world, the Redmond (Wash.) software giant is scrambling to catch up with all the changes the Web is unleashing. Over the past few years, CEO Steve Ballmer has come to two conclusions about the future of his business. First, Microsoft needs to move away from selling software and toward renting it out, in order to compete with cheap or free Web alternatives. Second, it must revamp its programs to satisfy customers’ desire for more Internet-based collaboration. Now, Microsoft is putting those ideas into action, overhauling not only what it makes but how to deliver and charge for it.
I remember a long ago logic class in which “warrants” played a large part. The idea was that a “sign” could support a line of reasoning. I am not sure why this dusty idea crossed my mind. I think I reacted to the blend of open source, cloud computing, and “unified” communications. Each of these plays a part in Microsoft’s business actions.
Two ideas bubbled up. First, I don’t think any of these ideas is at the root of Microsoft’s present situation. For example, Microsoft has so far not been able to diversify its revenue streams. As a result, Microsoft is vulnerable to perturbations in a couple of the cash cows on which its cheese and milk depend. As most organizational development wizards might point out, the deeper management structures play an important part in this ossification. Related is the cost of maintaining the baggage train. For instance, Apple upgrades and insists that its customers shift to a newer chunk of software and hardware. So, Apple does not invest so much in its older software and compatibility with those programs. Microsoft has a built in “cost friction” and I think the cost problem is exacerbated by piling more stuff on the baggage train. Powerset, Zune, Xbox, multiple accounting software, etc.
Second, Google is more of a problem than any one of the factors that I noted in the Business Week write up. Here’s why:
- Google exerts gravitational pull on Microsoft, its customers, its competitors, its developers. The gravitational effect stretches the fabric of the Microsoft environment. Gravity is hard to see and harder to explain. But it is present and leaving it out of a discussion of larger environments can misrepresent reality. A bridge can collapse. Period.
- Google does not have to do too much to cause Microsoft to demonstrate a reflex action. In fact, Google can roll out a minor tweak to Google Apps and Microsoft reacts. Google showed a demo of a modest dataspace function and in my opinion upstaged Bing.com. Spending $80 million to get my dad to use Bing.com seems to be quite a reflex.
To wrap up, I wonder if the shift from news to analysis will be enough to keep the business magazines in tall cotton. Low cotton means backbreaking work at a low wage. In the meantime, will the giant Microsoft be moved by technology thunderstorms or the more pervasive force of gravity?
And what about brand? I don’t think this write up was about brands.
Stephen Arnold, June 26, 2009
Comments
-
- Subscribe to Beyond Search
Feature archive
News archive
-
