Wednesday, May 28, 2014

Microsoft: A Consumer Company?

Microsoft CEO Satya Nadella's address at the Code Conference was reported in the Wall Street Journal. We're going to focus on a few points.  Here's the first BIG one.  Mr. Nadella says,
We will always be this company that spans enterprise and consumer markets."
We've addressed this issue at length in a widely read 2013 post with the short title, "The Good, Bad and the Ugly."  Especially within the siloed, political, entrenched, labyrinthine culture that is Microsoft, it is highly improbable that there could be a company that could understand and serve CIOs as well as needy, finicky, and fickle consumers.  

Here is a significant data point from the news of the week: Microsoft's launch of the Surface Pro 3. Against the analyst and tech industry reporters grain, we were an early admirer of Microsoft's research and product development process that produced the Surface. Watching my sister, an HR executive, work on it, typing effortlessly suggested that this might be a tablet on which real work might be accomplished, as opposed to downloading movies or watching playoff games. 

The Wall Street Journal's reporter gives a very positive review to her working experience on the Surface Pro 3.  She writes,
"But the Surface Pro 3's greater appeal is as a laptop replacement. In fact, it's one of the most portable PCs ever made. Microsoft has remarkably crammed all the high-power guts of a laptop—in the case of my $1,300 review unit, a Core i5 processor, 8GB of RAM and 256GB of solid-state storage, though sadly only one USB port—into that thin magnesium case. Even the MacBook Air is almost double the thickness and weight." 
 Here's what reinforces my thesis about the company being tone-deaf to consumers:
"Not only did Microsoft not do enough to perfect the Type Cover, that very thing that makes the Surface a laptop, but it still isn't included in the box. It's a $130 add-on. That's like buying a car without tires."
This comment has been made by every writer, blogger, Tweeter and social media dude since the introduction of the first product.  Did the company listen? Of course not.  This is Microsoft, kings of monopolies, profits and cash flows. As Nike suggests in another context, "Just Do It!"  Give consumers what they want.  Make them happy. Sacrifice a little gross margin to buy their loyalty to your innovation.  Not the predatory Microsoft of the Ballmer era. 

For all Mr. Nadella's good intentions, and for his gesture with Office for iPad, it will be very difficult, nigh impossible, for a company that serves, not merely spans, enterprises and consumers to flower from the current organization.  

No comments: