The recent news that Apple surpassed Microsoft in market share is an obvious symptom of an acute problem Microsoft is facing: it’s not innovating in the eye of the consumer.
I’m not anti-Microsoft, and I don’t think all Microsoft software is bad. Far from it. But I do observe that Microsoft seems to be standing still in a world that is changing rapidly around it. We live in a time when people expect constant, incremental improvement with technology. Microsoft may be delivering this to developers but not consumers.
Microsoft’s harsh reality is in the market share numbers. When you have close to 95% of the market share in the desktop market, you’ve really got nowhere to go but down. If Microsoft’s user base begins shrinking as tablet computing overtakes traditional desktop computing, it will spell trouble for Microsoft—a company that has essentially be abandoned by HP and other companies making tablets to compete with the iPad.
And as the cost of PCs continues to fall, so too will profit margins. The idea of spending $200+ on a copy of Windows for a machine that costs that amount or less will seem increasingly silly to the common consumer–those who essentially use their computers to check email, Facebook, and browse the web. I don’t think we’re far from a day when we will pick up tablet computers off of Target end caps for less than $50.
Shrinking margins coupled with shrinking sales volume is a nasty cocktail that Microsoft will have to swallow or somehow do a major, major reboot of their system and change its current image as a non-innovator. If they don’t, Gen Y, born and raised on Apple mobile hardware, Google web apps, and Facebook connectivity will think of Windows as the OS their parents used. To them, using Windows to take care of daily web activities will seem like using a rotary phone to make a call.
Something has to give, and it’s not just on the consumer front. I was recently talking with a friend of mine who is a principal of an elementary school. He filled me in on the cold reality many schools are facing right now. A major education funding crisis is now in full effect. Schools are getting no help from governments, and PTA groups can only do so much.
And as bad as funding problems are today in schools, challenges are likely to increase–particularly in the realm of technology. There are legions of Windows-based PCs sitting in schools that will decay away in the next few years. Forget about buying Windows 7 licenses and upgrading hardware; just supporting the existing machines is becoming cost prohibitive.
Barring a major reversal of events, schools will have to make very difficult decisions as to how to keep technology in their classrooms. One solution could be to install free operating systems like Ubuntu or the future Chromium on the aging hardware. Believe me, principals who have to choose between ditching Windows or increasing classroom size will be open to any alternative offered. So it’s not hard to imagine that a significant number of school children will gain experience in non-Windows operating systems and non-Microsoft software in educational settings.
When you’re at the top, there’s nowhere to go but back down… unless you create a new top. That’s what Apple has done in the mobile space: set a new peak to climb—one that rises into a vast white space that was previously unknown. Google is doing a good job of keeping pace, but Microsoft seems content to stand at the bottom and watch—perhaps hoping that others will fall to their death—or simply fall back to the present, which looks more like the past every day.
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I tend to agree with you. I don’t think Steve Ballmer is the guy to do get Microsoft moving again. He has proven already that he lives in fear of the competition. You don’t get irate with an employee who brings an iPhone into a meeting. You take hold, analyze it, dissect it, get inside your employees head and find out what he does with it and why. You don’t instill an environment where employees hide their non-Microsoft products or make company policy to only reimburse employees buying phones running Windows.
It’s classic Sun Tzu “If you know the enemy and know yourself, you need not fear the result of a hundred battles.”
Microsoft should try using non-Microsoft products at work – everyday until they forget the “Microsoft way”. Then at that point go back, cold turkey, load up Windows or Office and be able to see it from a new perspective. Perhaps they’ll sit and stare at the screen and say “WTF is this?”, but they’ll be at a point to make it better.
95% of the whole world is still 95% of the whole world. Just as Apple does OK in 10%, there’s plenty of room for Microsoft. There is an obsession with growth, in part because it’s easy to measure, but much more difficult to understand. 400% growth on 5% sounds good but the absolute numbers are small. 50% growth on 95% is just impossible.
Microsoft just needs to concentrate on making the transitions easier for their customers and they can go any direction they like. Unfortunately, Microsoft has never had to do that and will probably never build a culture capable of doing that.
Apple on the other hand has changed CPUs several times, seamlessly. Something Microsoft could never do, much less painlessly. It’s in Apple’s culture and just not in Microsoft’s culture.
How does Apple ‘grow’ its market? Apple can afford to give away their OS and applications to schools. Sure you get Mac OS ‘free’/included when you buy a Mac, but Apple should be providing OS, Apps (including iLife, iWork, Pro Apps) and server software updates freely to schools, to keep them up to date and thirsty for the latest Apple hardware.
Oh, were we trying to improve Microsoft? Windows 7 was a step in the right direction. Make the user experience better and the transitions smoother. That was the surface approach and it nearly worked. Microsoft needs to look deeper to improve their process and culture so that user experience goes further than skin deep. It needs to go to the marrow of the company and unfortunately, it’s not compatible with the cutthroat ‘whichever group gets it working first, that’s the way we go, damn the incompatibilities’ approach that’s ruled so far.
Great comments. It will definitely be interesting to see what role the market casts MS in if MS does not take an active role itself. In the 1990s and the early part of the 21st century, Windows *was* computing. It was really the only choice in most people’s minds (myself included). It was ingrained as the OS of choice for productivity. But I feel like little has changed in the core design of certain MS products since the 1990s. I summarized my main thoughts on this in an older post.
But for me, since Windows hasn’t changed much–while other platforms have changed and stepped up to fill needs better than Windows (for me)–Windows has become a niche tool. I basically maintain a copy of XP in a virtual machine just in case I need to do something Windows-specific.
The irony here is that Apple was a niche player until very recently. So for me, purely from my consumer point of view, MS and Apple have traded places. I don’t necessarily claim to be representative of the general public, but I can see a similar thing happening with others. If you look at what the typical consumer does with a computer–and if I’m allowed to categorize mobile phones as computers–there is little need for the power of Windows. Jobs’ has said that the future of mobile is low-power computing. I tend to agree. Consumers need devices with long battery life that essentially interact with servers in the cloud. The cloud is where high-power computing will occur.
So if this plays out, there are two questions: 1) Can MS convince the market that high-power computing still has a role in day-to-day affairs and 2) Can MS succeed as a niche player in this new regime?
Personally, I’d like to see MS try to innovate in the mobile realm by creating their own unique mobile OS, not a ported version of Win 7. They can offer a different perspective than Apple and Google, and diversity is always a good thing. But right now, MS seems to be holding out hope that change won’t come and that the status quo is maintained. I don’t see that happening under any scenario.
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