What happened to the classic "Bill Gates" strategies?
I'll put a disclaimer out here off the bat. I'm a windows developer by trade but I don't "love" Microsoft as a technology company. I like them as an empowering company that has democratised computing for everyone not just rich "first world" nations. And I love what Gates is doing for charity and respect him massively as a business man, probably the greatest business man tech has ever seen. But as a "technology" company MS has in my time, NEVER been anything to look at or aspire to.
Which is fine! Thats what I expect from them, technology that isn't cutting edge but cheap enough for everyone to get on board.
However this is also the reason why MS has lost its way completely. MS is not meant to be the "future of technology" company. They have always been the company that brings technology to the masses cheaply. They "democratise" tech. That to me has been the mission statement from way back. They never needed to have the best product, just the best product for your average joe. With the right marketing and timing they sold products cheaply and got their foot under the door and moved from there. That is classic Microsoft. That was what Bill did all the time.
But now its all messed up.
No.1 When has Microsoft ever won any battle with a more expensive or equally priced product? NEVER
Xbox was £100 cheaper than PS3 and came out a year earlier.
PC's are always much cheaper than Macs.
Even when it came to "allowing" the distribution of pirate Office or Dev software MS was always the cheaper and good enough alternative, allowing it to get its products mass acceptance.
The fact is Microsoft has never been a premium product in any category they've competed it. Not in the consumer space, not in consoles, not in databases, basically no where.
So what on earth has changed?
I don't know, call it delusions of grandeur or "Sinfoskyism" (focussing on a core project so intensely that one forgets what your really trying to do, i.e. sell products not "manage" the perfect project) but at some point the guys at Redmond stopped reading the script the Gate wrote and started doing their own thing.
They look at Apple and think, we can compete with them at their own game and sell premium equipment at similar prices. We have enough new tech etc..mag pro, car door flaps etc… to stand out. We can do it.. blah blah.
All Microsoft had to do is actually ask a real premium brand company i.e. BMW, LMVH, Chanel, Mercedes etc.. and ask them how it works and they will tell you this:
Premium brands take YEARS to build and are based on HISTORY. You have to establish a rapport with the customer as a premium brand and get the company to trust your wares. Just like how some rich people take their kids to the same tailor as their parents took them to for their first suit. The tailors brand is built on history and trust over a number of years. If a new tailor just turned up next door and started selling £5K bespoke suits who would trust him vs the guy who's been doing it for years? No one!
Apple is the "tailor" that has established the brand of over 30yrs being innovative and delivering the most innovative computing products. In fact the story has even more resonance because they nearly went bust doing it. You have the classic "we'll be the best even if it kills us" rhetoric of Jobs that has made the brand legendary. Even if IT ISNT EVEN TRUE ANYMORE. Maybe they don't make the best products, maybe Samsung does etc.. Who cares? The brand is established now. Maybe Mercedes don't make the best cars anymore but how do you even begin to communicate that to the public? You can't. The public will go with the brand thats established all the time. Unless they have a reason not to.
And that reason is price! Which is why BIll ALWAYS focussed on being cheaper than the competition. He also focussed on giving the public an OPTION in every market as soon as he could. Internet Explorer wasn't great but he put it out to give customers the question, Netscape or IE? Neither was Xbox 1 better than the competition. Or Windows, or any other product. He put out what I'll call a "cock blocker" (something that has no real value but is there just to stop the other person getting the deal) first and then he priced a next version much lower than the competition.
These are two strategies Microsoft has FAILED to do in mobile / tablets.
The first failure was not releasing a version of Windows Phone a few months after announcing it (they ended up releasing it right at the end of the year). They should have had a cock blocker out before summer. FAIL.
Secondly, they should have had a tablet out 6 months after the iPad by using the Windows Phone software. Anything to cock block Apple and give themselves a fighting chance. FAIL.
Thirdly, why the hell is Surface or any Windows RT product the same price as the iPad? Who is going to buy a untested brand over a premium brand no matter how good the features are meant to be? FAIL
Samsung and Google are now doing what Gates did. Releasing cock blockers and then dropping prices to stay in the game and present the customer with a real choice. They either pay the premium or get a cheaper version and use the rest of the money to buy some jeans or something. That is a REAL strategy. That is how you fight a premium brand. RT products should be at least £150 less than Apple's to even compete (which is what Google and Amazon understand completely).
I suppose the real issue for Microsoft is that Tim Cook has figured out that buying in bulk and developing your own technologies in house rather than buying off the shelf components for everything means you can make your stuff cheaper than anyone else can. Now Apple can match prices for lower end goods and are practically suffocating OEM's and by extension Microsoft. It seems like even the only real strategy MS have ever had of pricing things cheaper than the rest is being taken from them from Apple. Which comes back to why I never really liked MS as a technology company… because if it isn't significantly cheaper, what important new, game changing and industry defining technology has Microsoft ever released before their competitors? … I'll wait for an answer to that one .
(and please don't say Kinect.. its cool, but its hardly changing the direction of any industry right now).