Comments on: Why it's hard for Microsoft to catch the next wave

It's hugely challenging to jump from one wave to the next even when you see it coming with perfect clarity. The next wave may even be bigger in terms of customers, revenues, and everything else. But there's a trough in between.

[whas8020]

There is a lot to this post, as far as pointing out a structural challenge that exists for the incumbents in one category to "jump to the next curve" (as Guy Kawasaki calls it).

I would contend that with MSFT (and possibly any other company in a similar position), it's really much more a psychological rather than a factual problem. here's why:

It really isn't the case (and hasn't been in the past 13 years) that MSFT is in any way strapped for cash or other resources to tackle the next wave. Their problem has been that they've just been trying to resist the next wave with hands and feet and tens of billions in cash. Everything they've done with their Internet properties, from the branding on up, has been designed to say: Don't do Internet, stay with us... And none of it has worked.

Just think, with IE's market dominance after the browser wars, they had the ultimate distribution platform for pushing their stuff (not to speak of the installed Windows OS base). Has that made any difference? Hardly. Notice that Firefox has taken back quite a bit of market share in the last 2 years since MSFT hasn't really done anything interesting with IE.

So it must be in the way that MSFT does things, and here the trap is the following: Rather than the installed base exerting a tyranny in a true sense as described in the post, it's that internally, the divisions that are still bringing in all of the money get to override or at least unduly influence decisions that they shouldn't be influencing.

And of course it is almost impossible to argue against these things in company meetings. After all, the incumbent brand has all of the perceived power and money on its side. Problem is, it's in the older category, that really isn't relevant to the current "Internet Category".

What follows is typically brand dilution (read Ries & Trout on that), that undercuts the very effort of creating a new outpost at the core. When consumers are confused about what you a re doing, almost no amount of money will solve that. Yahoo has much the same problem from its failed portal strategy BTW.

MSFT wanted to name everything else "Microsoft", even when it had little to with its older business lines. "MSN", hasn't worked. "Windows Live", hasn't worked. "Windows Live Hotmail", a branding abomination. If they could only get over themselves, things might have worked much differently.

This is why some have argued (Henry Blodget of the Silicon Alley Insider), that it would be much better for Microsoft to spin off its internet division into Yahoo plus e.g. $10B in cash for a 51% stake. That way, there might actually be some focus brought back to things, and MSFT's money could actually be put to productive uses again.

And one could argue that MSFT would have actually been much better off as a split-up company circa 2000. Each previous division focusing on its core business with renewed hunger and nimbleness...

[http:// BTW, where do these comments actually go? Why is the write area so small. CNET could really learn a bit about Web 2.0 etiquette. If you really want reader/user participation, prove it. |http:// BTW, where do these comments actually go? Why is the write area so small. CNET could really learn a bit about Web 2.0 etiquette. If you really want reader/user participation, prove it. ]

[ghaff]

I generally agree. Although I would say that division, group, or manager at any company--even Microsoft--thinks that it has all the resources it could possibly need or use. That said, in this case at least, the issues are more of culture, focus, priorities, urgency etc. than of--at least theoretical--ability.

[cheezr]

enjoyed the article, hopefully you will fix the link to "marketing myopiia" as it takes me to a spanish parking lot with a message that i believe says 'file not found'

[ghaff]

Oops. I'll look at.

[Melekai]

Try this http://www.dallascap.com/pdfs/MarketingMyopia.pdf

[t8]

In short, Microsoft is screwed no matter what. I agree. It is downhill from here.

Another point to mention is the power of branding. The Microsoft brand is synonymous with Windows and Office. Google is synonymous with the Internet and search.

If Coca Cola got into the hamburger business, then they probably wouldn't be a success. Likewise Microsoft think they can do all things, but they are stretching their brand too far and people will lose sight of what they mean and their core products will and are suffering.

Google is Internet, plain and simple. Microsoft is OS, software, zunes, dot net, keyboards, mice, Internet, and arrogant. Hell they might as well add coke to their product line for all I care.

[jolysmoke]

When MS learn to produce OS more virus free and easier to use than Apple and Linux, then they will recapture market share. It's as easy as that! And remodelling their image to be seen as customer-friendly rather than money-grabbing and monopolistic would help out too.