03 November 2005

Microsoft Lives (or Dies)

My favourite monopoly announced two new services this week - Windows Live and Office Live. Depending upon your point of view, these are either re-hashed initiatives that will also fail, or a serious attempt to redefine the company and fight the challenges it is now facing from the likes of Google.

Apart from whether Microsoft can pull it off functionally, more in a minute, my basic question is whether users will ultimately be willing to become even more tightly dependent upon one behemoth that has in general treated them shabbily when it comes to security, and extracting money. More worryingly for them is that while a move to services - some of which may be free by being ad-supported - may indeed be THE way forward, there is going to be a LONG transition whereby customers are going to be paying for licenses, paying for services AND getting ads bombarded to them. Whether MS intends that or not, that will be the reality. And my gut feeling is that people will not like that. Whether you like Google or not (I generally do, though I'm becoming wary of an all-dominating Google), you know where you are with them. You can make your choices about whether you use their service(s) and how much you use it by whether it gives you benefits for the trade-offs in what they do with the information about you they pick up along the way. Because all the services (today) are free, it's a pretty easy decision. You also accept that Google has to make its money from somewhere, so as long as it's free to me, then I'll accept those trade-offs (until for me the service gets degraded by Google having to meet too strong demands from the advertisers)

But with Microsoft, it's not the same. Many people already resent them for making so much money on the back of very average, hard to use, insecure software. Everyone of us - even most Mac users - pay the MS tax every year for some part of our computing experience (well, ok, there are some Linux people and a few Mac users who manage to avoid it). Now, just how many of these people are going to welcome giving MS another revenue stream in services AND having ads thrown at us left, right and centre. It's a much harder decision to make. And, given that MS cannot really lock this stuff in without setting off down the road to the courthouse, people WILL have a choice this time around (or am I being too optimistic?).

And then there are the internal issues. The company cannot walk away from software licenses - indeed it needs them massively. Most of its employees are involved in that side of the business. There are therefore too many powerful internal forces at work to ensure that this is anything other than a permanent catching up exercise. By its very nature, it cannot do a "paradigm shift" even if its customers bought into its strategy.

There are other worrying signs too (for MS). The presentation was truly awful. Thanks to a few pointers from my usual sources for the link to this critique of the Powerpoint presentation used. These are basic mistakes. And, as usual, I hear the demo failed half way through when the wireless network went down. Plus ├ža change.

It was also the first time I'd got to see a photo of the XBox. It is ghastly - a typical "box" with no reason for it's shape and from what I could see of the colour, not something that you'd be wanting to put next to your new flat screen tv, even if the kids are happy with it in the bedroom. Now, I am not a gaming expert - indeed I am at the luddite end of the spectrum in this area. But I had briefly held the view this week (after reading this Ars Technica piece that out of the 3 protagonists (MS, Sony, Nintendo) MS would take the crown, with Nintendo taking the second place through pure gaming focus and price. Given the mistakes Sony seems to be making on everything it comes out with, maybe that's still the view, but I do think MS could have come up with something a bit better looking that people would be proud to use as a MCE (Media Center Extender) and make it the trojan horse into the living room.

What all these failings point to is that MS does not take DESIGN seriously. It does not design it's slides to communicate; it does not design it's products to be intuitive, and does not design it's boxes to be "must-have" gadgets.

Until it takes design more seriously (find and empower the next Jonathan Ive?), it will fail to wow people. If it can't wow people, then the resentment of paying license fees AND service fees AND being pestered with ads will surely drive an inexorable decline for the company. We had the years of conglomerates in business and they've pretty much been consigned to the graveyard of business theory. A conglomerate in software and services, even starting from a monopoly position, is just as doomed.

Microsoft's Lives are in fact its dying gasps.
(edit corrected spelling mistake!)

1 comment:

Ian Hobson said...

Tim emailed me the following comment

"i agree with you thoughts on Microsoft, but wanted to comment on your note on Google, given today's announcement of Google Base and a stock nearing $400/share. how long will it be before Google offers the same basic suite of products Microsoft offers, with more limited functionalit,y but completely integrated with your phone, email, music and videos?
i think their model will have a devastating effect on Microsoft, but will take some time. we are still at the early stages of advertising funded services and software products. i will enjoy the convergence of technology and consumer need/wants as companies like Google eat away at Microsoft's market share"