The Virtuous CIO  

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July 18, 2012 — What Can Microsoft Be Thinking?

After a flurry of activity a couple of months ago, news about Windows 8 has subsided. The discussions became more active the other day when Microsoft unveiled the beta of Office 2013 (or whatever they choose to call it). I'm dealing with second hand information because I'm on the road and don't have access to the resources to play with the program, but initial reviews are positive.

A few enterprising souls have installed the beta on Intel based tablet PCs running Windows 8, and have inhaled the full Microsoft experience. And it's not completely good.

Let me say this, Microsoft badly needs to succeed with its tablet efforts. We are rapidly moving into the post-PC age, and the markets are rapidly maturing. Without a credible effort, the company's end-user space is going to wither away. Microsoft has built its business on the desktop, and is still largely anchored there. For the first time a couple of years ago, the Office Suite business generated more revenue than Windows. That's good news for the Office team, but it must be sobering for the executives.

Microsoft has done an excellent job of building enterprise business lines. Its server and app businesses look good. It is rapidly developing the cloud business with Office 365, but it's too early to tell how that will play.

Back on the end-user side, Microsoft has announced its Surface Tablet. It appears to be an attractive and innovative piece of hardware. Considering the lack of innovation in the OEM space, Microsoft had to do this, and it was a smart move. I look forward to seeing the production examples, in particular the Windows RT versions.

We can safely assume that Microsoft understands what it is facing. It is moving quickly and aggressively to meet the challenges. Their strategy of pushing the GUI towards touch is a good one. Their track record assures us they will keep plugging away at things until they get it.

The problem they face is with Windows 8 itself. I question whether they can sustain another failure. Windows Vista was a carefully and consistently designed, and it failed on execution. They recovered the fumble with 7 and did well. Now we see Windows Phone circling the drain, and it may pull Nokia down with it. This is a disaster of the first magnitude. This increases the pressure on Windows 8. Unfortunately Microsoft doesn't have just an execution issue. There appears to be some conceptual design errors which create serious usability issues in the product.

Microsoft is focused on Windows RT in the ARM tablet space, and that's fine. They need to. The Windows 8 desktop experience is apparently an afterthought and it shows. There will be guilt by association because both products are named Windows 8. There is a real risk customers will stay away from the RT tablets because of the stench of the desktop version. And that would be sad.

The people who run Microsoft are not stupid. They are very smart business people. But, they've always had trouble thinking out of the box as a group. As a result, I believe they are systematically destroying their most valuable brand. By attaching it to everything they can shovel out of the door, it loses its cachet. Brand management is destructive when companies forget the meaning of the brand. What is Windows? I don't really know.

Using the Surface brand for the tablet was brilliant. Tying Windows to it was stupid. Windows touch is a failure. It's been a failure for ten years. Just keep calling it Windows Touchscreen and let it continue to serve in the niche markets. They can probably milk revenue from the desktop for another ten years.

Sell the RT tablet as the "Surface" tablet with the "Surface OS." Create a new brand. Windows is tired. Will Microsoft build market share against Android and iPad? I don't know, but I have no confidence in the current strategy.