Techcrunch put up an article yesterday entitled "Microsoft's Real Problem: Facebook is the New Outlook, and Other ways that Redmond is not listening to Generation Y"
The article is written by Dan Kimerling who was a Techcrunch intern not too long ago and who is in the very age group he's referring to. He starts off by saying...
What has really thrown Microsoft off, is that other companies have shown those consumers both most willing to try new technologies and most willing to open their wallets for technology, the consumers of Generation-Y, that they do not need Microsoft. Companies like Facebook, Apple, and Google, have changed the way that young consumers consume, and therefore purchase, technology. And that is a very dangerous position for a software company to be in, especially one that is not known for being nimble on its feet.
We're already starting to see the holes in this argument. The truth is, Microsoft makes very little money off the consumer when all is said and done. Their bread and butter profits come from corporations who still buy software about the same way they always have. Truth be told, Apple and Google have continually worked to get behind the corporate firewall to no avail. Moving on...
Another example of Microsoft’s inability to understand younger users, comes in what I can only call their software design philosophy, which I can summarize as “Throw in More Features”. Yet, that seems antithetical to those products which are selling most successfully in the market place, especially to young people. Microsoft Office is the clearest example of this. The myriad number of options buried in Word 2008’s ribbons, will rarely be used by most users. And in Excel 2008, some users might need pivot tables, but vast majority of those that use spreadsheets will never ever need to use them, nor will they ever write a macro, or script in Visual Basic. What is clear from the success of Google Docs and Zoho, especially amongst college age students, is that people want tools that are simultaneously powerful and simple to use. And that is why not only are web based office replacements, which focus on ease of use,facilitating collaborative exchange, and being able to publish in digital environments, but also iWork and Star office, are gaining traction.
The problem I have with the above quote and really the whole article is that the author has no facts to back up his contention that these other products are "a success". Neither Zoho nor Google Docs are huge hits right now (and I sincerely doubt Google Docs is even profitable). There's been no mass exodus to these applications in companies and honestly I don't think there's even been one among students. As someone who knows a fair amount of College students I can tell you almost none of them use online office applications to do their school work (though most do use pirated versions of Microsoft Applications).
I've said this before and I'm sure I'll say it many times again: conclusions are worthless if you are willing to make up your own facts. That said, I don't entirely disagree with the article. In my mind Microsoft has one major problem right now.
They don't hedge their bets anymore
I said this in my post last week about Bill Gates...
To really appreciate the beauty of these innovations you have to look at all the things Gates missed on the technology side. He backed OS/2 over Windows, he focused on the Mac instead of the PC, he even handed the original IBM OS contract over to another company because he didn't initially see the advantage of controlling the PC Operating System. But in each case his business acumen created an environment where he could still succeed. He kept Windows going even as he proclaimed OS/2 the way of the future, he developed DOS versions of Microsoft Office even though he thought the Mac was the way of the future and he quickly found an OS to sell to IBM once Gary Kildall dropped the ball back in his lap.
That's really it. That's how Microsoft has stayed alive all these years even when they often missed the boat. But the trick to that way of doing business is that you can't have "visionaries" who call all the shots and have the company strictly adhering to their "vision" of the future.
Gates was never that. He'd play the visionary role when giving interviews but behind the scenes he was always a shrewd business man who acknowledged he couldn't predict the future and bet on the opposing side just in case. Gates was never what Ray Ozzie clearly wants to be which is a guy who plans products around some grand vision he has for the future.
Microsoft should be hedging their bets and that means they should have a full fledged competitor for Google Docs/Zoho in the market already ALONG WITH their current Office applications (they invested in Facebook so that's sort of irrelevant). They can certainly afford to do both and doing that means they're covered no matter which way the wind shifts.
That's the Microsoft Way!