How to Turn Microsoft Around: A Primer, Part 1 - Page 2

Rob Enderle

Microsoft, the Bad Years: Servers and Confusion


Unlike with PCs, many of the OEMs had a server business that consisted of software largely subordinated to hardware that was either proprietary or UNIX-based. Microsoft rolled out Windows NT Server in direct competition with these platforms. I can recall one meeting I had as an analyst for Giga with Hewlett-Packard's senior management; they wanted me to try to explain to Microsoft why they couldn't do with Windows NT what Microsoft wanted because HP had too much invested in HPUX. We clearly had a fractured relationship because no vendor should be forcing its customer to do something they don't want to do, yet this was the problem HP was describing.


What the OEMs needed, because they were badly fragmented, was a centralized UNIX. But Microsoft provided something different -- a product that came from inside Microsoft that appeared to completely ignore its primary customers, the OEMs. Conflict resulted. Microsoft then went around the OEMs and created demand for this product with the OEMs' customers, the IT businesses with which the OEMs dealt. The OEMs effectively went from being customers of Microsoft to being its vendors and competitors, but the vendor relationship (building servers for Windows Server) was never finalized and remains largely in flux. In short, the vendors should have become ODMs, which design and manufacture products for another company, with the servers carrying Microsoft's brand, because Microsoft, not the OEMs, was calling the key shots.


Many customers also had wanted a better UNIX. This disconnect between what the OEMs wanted, what the customers wanted, and a customer/vendor relationship in flux created a fertile breading ground for an alternative offering, and Linux was born. Still, this wasn't ideal because it, too, fragmented. It didn't throw off much profit or marketing and seemed to fuel outsourcing, which left the door open for Google and its public cloud, Android and ChromeOS efforts. Microsoft and industry growth slowed substantially on all fronts.


Office separated from Windows and ran just fine on older hardware. Windows Vista and Windows 7 were sold as a way to extend the life of older hardware. Xbox competes with PCs for dollars, and Zune abandoned the OEM approach for a consumer-centric one. This showcases a company caught, and partially stuck, in a transition from one that is a vendor to others to one that is a solutions provider itself.


Customer/Vendor Confusion


Therefore, I maintain that at the core of Microsoft's problem is role confusion between Microsoft and its large partners. For example, during the Windows Vista launch, Intel expressed concern that its imbedded graphics processors wouldn't comply with the "Vista Capable" logo program. It was treated like a customer and the program was adjusted, resulting in breakage and litigation. Had Intel been treated like another vendor, which is what it actually was, Intel would have had to make the adjustment and no litigation should have resulted.


This doesn't suggest that vendors should be ignored, only that they be made subordinate to customer needs and that related conflicts be resolved favoring the customer. Whoever the "customer" is. And Microsoft is in flux with regard to who that customer is.


Wrapping Up


In my next post, I'll write about how to fix this, but I leave you with a brief definition of what I think the problem is.


Microsoft has four groups that are being treated in balance, but that should be in a hierarchy. They consist of end users, OEMs, IT and critical partners (Intel, EMC, Cisco, AMD, Nvidia, etc.). The resulting confusion over ranking results in products that are not really focused on any one of these groups, largely incomplete or counter-strategic from the perspective of any of them, and that generally underperform their market potential. Apple, Acer, IBM and EMC all seem to have a much tighter focus on who their customers are and appear better able to expand their companies and maintain higher customer satisfaction as a result. Microsoft has one question it needs to answer: Who is your primary customer? Its answer of "all of the above" is currently getting the company a "C-minus" on the test.

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Add Comment      Leave a comment on this blog post
Jan 4, 2010 6:02 PM a. asdf a. asdf  says:

I think the number one issue at Microsoft is that they either don't use their own products on a daily basis, or they use Microsoft software differently from everyone else on the planet.

For example, what would compel them to put 2 selectable power plans on the Windows 7 taskbar when it was 3 power plans in Vista? People have been used to 3 power plans and set up their usage habits accordingly, why would they change this? Or putting the docking options in the Windows 7 tablet input panel 2 levels deep, when it was just 1 level deep on Vista. And I have yet to see anyone who is pleased with the Office ribbon interface.

With each iteration, Microsoft software becomes more unusable. In IE6, I used to be able to set up menus and browser button locations any way I pleased, it all changed in IE7, IE8. Now they are all locked. So now I just use FF, and can move toolbars and buttons anywhere. And the security zones in IE are unusable since there is no way for me to see which subdomains are being blocked and which need permission. So, now I just use FF with Noscript.

It's not just UI changes either, core OS issues like Superfetch and ReadyBoost are another symptom of this. There are no justifications for these services. All they do is stress computer hardware, use up battery/electricity with very little performance improvements.

If Microsoft doesn't even understand how to effectively manage the UI of their software, understand that their core software features are way behind free products on the market, or understand that useless services slows down their OS, things like customer/vendor confusion are moot. This is very evident in Microsoft products like Vista, IE7, IE8, and Windows Mobile, which all have lost market share to some extend or another.

Jan 6, 2010 1:07 PM Rob Enderle Rob Enderle  says: in response to a. asdf

I think this still comes down to not knowing who they are building for.   Each change often comes from some internal or external source but because these sources are different the result seems whacked to all of them.  

Jan 6, 2010 2:45 PM a. asdf a. asdf  says: in response to Rob Enderle

Even if Microsoft can't figure out if it's software is intended for the 60 year old computer beginner or the 15 year old computer whiz, I don't see the reasoning behind random UI changes with each Windows release. Or why a core feature of Microsoft's flagship product (IE security zones) still not working properly when comparable free Firefox plugins do the job better and are easier to use.

Jan 6, 2010 3:31 PM Rob Enderle Rob Enderle  says: in response to a. asdf

Changes appear random because the justification behind those changes isn't consistently sourced. That's a customer focus problem.  And we are talking a customer range not of age or sex but of type and title.  From users, to IT professionals, to vendors, to retailers, to regulators.  Nothing consistent there.

Jan 6, 2010 5:50 PM a. asdf a. asdf  says: in response to Rob Enderle

Who's wants these UI changes? I'm pretty sure no IT professional wants these changes. The last thing he needs is calls from 50 people asking how to change a setting to something because he can't find it on the new Windows OS. The same goes for vendors, retailers, OEM's. They would have to retrain all their support staff and have to deal with increased tech support calls. And I don't think regulators would impose that all taskbar icons to have double click action removed starting with Vista.

Jan 6, 2010 5:53 PM Rob Enderle Rob Enderle  says: in response to a. asdf

I'm not saying IT did, they would have liked it if we'd stayed with DOS.  IT is about as anti-change as you get.  But the change could have been driven from an OEM, partner or someone inside Microsoft.  When you don't define the customer you can't prioritize changes and the loudest voice tends to get the attention.  Someone drove this change, that someone is likely happy with it, that someone was likely not the right someone. 


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