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Microsoft, customers and innovation

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As I was checking the MSFT price this morning after the big announcement on stock buy back yesterday, this article on Microsoft was at the top of the list on moneycentral.

https://moneycentral.msn.com/content/invest/extra/P89813.asp

Here's the two blurbs that got me irritated:

The fact that Microsoft's biggest news events in the past couple of years have been about its legal travails and its financial maneuvers says a lot about the state of the company. It hasn’t announced an exciting, category-creating, innovative product or service in ages -- no iPods, no Blackberries, no eBays. At this time, it seems the only way its managers believe they can definitively boost shareholder value is to settle its disputes, bury its hatchets and send people money.

Anderson said the distribution is essentially an admission of failure to increase shareholder value through an acceleration of its product units’ growth rate. “You keep seeing Apple hitting home runs, with its new operating system, the iPod, iTunes, iMovies -- creating new markets -- and you wonder why can’t Microsoft? The reason is that it messed around with the interactive TV world for too long and completely missed what customers really wanted. Microsoft has focused on platforms, and Apple has focused on customers. And it’s the customers that matter.”

Wow, has this person been completely asleep?

I'd say Tablet PC was as innovative as any of the above, and has been a huge success. Customers want handwriting and speech recognition. Customers want a more natural way to interact with a computer. You may see a day when every laptop that is sold just has tablet hardware built in because it makes that experience so much better.

XBox? Xbox is 2.5 years old now. a 733 mhz proc and a 8gb hard drive not ground breaking? 125 million polygons per second? There is nothing even close to the xbox spec wise.

Smartphones and Pocket PCs? I'd say that smart phones and pocket pc's are well on their way to delighting customers in their respective markets. palm was light years ahead, but every pocket pc vs palm article I read now say it's a toss up on which one to buy. Simplicity vs. Power? You want to watch video and listen to mp3s? You want expandability via SDIO or CF? You get a pocket pc because it is powerful. It can do way more than a palm can. I use my Dell Axim X5 with a bluetooth cf card and a bluetooth GPS receiver for car/motorcycle navigation and geocaching. (www.geocaching.com) You want simplicity and ease of use? Get a palm.

How about the Media Center PC? I have one of these set up in my home, and it does way more than a TiVo, and I have no subscription fees.

Ever wish you could take that desktop computer into the living room with you, but not have to move it? Smart Display!

iPod and iTunes are very popular, no doubt. iPod has a great user interface, and they got an exclusive agreement on super small 10GB hard drives, which let them build a great form factor. But there were and are dozens of other hard drive based music players. I have a 20GB RioRiot, and I love it because it looks great mounted on my motorcycle in a way that an iPod never would. iTunes, yep, selling songs for $.99 is smart. I remember back when I was a kid, and I had a stack of 45s because they were less than a dollar for a single. CD singles and Cassette singles never took off (manufacturing cost or just perceived value issues, you tell me), although they were available, but the price was always around $3. I bought an album from iTunes two weeks ago because I was looking for some hawaiian music, and the other sites didn't have Bruddah Iz (Israel Kamakawiwo'ole). I don't know what's wierder; that on the uniquely popular list at Amazon by Microsoft employess is Facing Future by Iz, or that Amazon can actually track that this is uniquely popular compared to the rest of the US population....(https://www.amazon.com/exec/obidos/tg/cm/browse-communities/-/211569/music/ref%3Dcm%5Fpc%5Fdp%5Flisting/104-4814109-9355950)

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The final bit about customers is probably the most frustrating. I do get that customers count! I listen to customers daily: I read the newsgroups, answer when I can, and I regularly do family and friend technical support (and I have a huge family). I've disinfected my mom's computer and a friends computer from the nastiness known as kazaa. Is it a microsoft product? No, but it makes your windows experience horrible. It took two hours to completely remove it via Remote Assistance (how cool is that feature! my mom is in LA and I can get to her desktop from anywhere in the world to help show her how to create a rule in outlook, help to remove a virus, etc.)

As a front line manager, I interact with engineers in this company on a daily basis, and I meet with GMs, VPs, Senior VPs on a daily to monthly basis. One thing that is obvious once you meet any senior manager at Microsoft is that they care deeply about customers. Do we want every person in the world who has a PC to be running windows XP? Without a doubt. Would Microsoft make money because people upgraded? Sure. But it's because we want their experience with windows software to be the best it possibly can be, and we know that XP is the best desktop operating system we've ever built.

Customers are having issues with security. Black hats out there continue to make spyware, virueses and worms that target windows because it's on so many machines. SP2 of XP has been in the works for some time (https://www.eweek.com/article2/0,1759,1624962,00.asp), and last week everyone in the company was asked to install the release candidate of SP2 on their machines to help test it. XP SP2 has great features that improves on the 'secure by default' theme that was the driving force on changes between 2000 server and 2003 server. We are spending millions on improving the security in XP (and yep, that's taking time away from working on the next version of windows) because we do care that customers have a great experience with what they've already have.

In my division, we have a program where we ask every person in the division to spend at least 1 hour per week interacting with customers. It's not about mining data on competitive products or finding out what features we should build next, it's about helping customers be successful today with the tools they have. It takes away from our focus on shipping software for an hour, but it helps everyone be more customer focused the other hours of the week.

I care about customers; Microsoft cares about customers. There's a tricky balance between getting quality, features and time to market right, and customer focus along with customer transparency is the key to nailing the sweep spot between them all.

Comments

  • Anonymous
    July 21, 2004
    Microsoft is the best - and your post is exactly the reason why!

    Amen brother!
  • Anonymous
    July 21, 2004
    Tablet PC isn't seen as "a huge success" by anyone I've heard from. Not a failure but nowhere near the level of "huge" anything. When version 3 comes out, you may be looking at a huge success. Right now you have a good product marketed badly.


    Xbox? I hear Halo is great. Haven't heard anything else good about the xbox. "Spec-wise" isn't exactly the measure of success most people are looking for. Seriously.

    Smart Phones should be great in a year or so. Pocket PCs should be gone shortly there-after. This would probably be #1 on my list but MS hasn't proven themselves yet.

    Media Center PC. Heh. Maybe next version. We'll see. Not if they continue the path they're on now. I personally think WebTV was more innovative than Media Center. I don't think I can name an innovation in Media Center PC, actually. The remote control would be my fave thing about it but that was in WebTV. The OEM-only availability of this OS should have guaranteed that all systems would work correctly, but I have heard otherwise.


    Smart Display? Dumb Idea! Are these still around?

  • Anonymous
    July 21, 2004
    Don't forget Portable Media Center - check out gartenberg's blog today for more on it.
  • Anonymous
    July 22, 2004
    TabletPC is definitely cool and category-creating enough to count -- but it's also clearly not selling like iPods are.

    Xbox and PPC are just MS-PS2 and MS-Palm. I happen to like PocketPC better than Palm these days, but it's not an obvious category-dominator like the iPod or eBay. Ditto for Xbox, which is a distant second place to Sony in its market.


    SmartPhone clearly isn't dominant on phones; Treo is the category king for powerful phones.

    Media Center is, really, competing with TiVo, and obviously not the category leader there, either. (Although I do think Media Center has the potential to be a breakout product, as people invariably move toward home media servers and smart networked A/V centers. But we're not there yet.)

    And as for Smart Display, I didn't even realize it was still a product. I thought that was one of those cancelled initiatives.


    The writer of the article is being unfair to Microsoft, because it's made some great products recently (XP, PocketPC, Windows Media, the entire .NET development space, and Office are all clearly best-in-class products), but it's fair to say that there aren't any new, mass-market product areas where Microsoft is the undisputed first-place brand.

  • Anonymous
    July 22, 2004
    iPod, despite the hype, is not a mass-market product, it's an enthusiast product. It has had recent clever marketing, but they've sold just 3 million units worldwide in 2.5 years. And they own 30% of the market. The market is growing, but it's not mass-market yet.

    Despite XBox's 2nd place in the market, it has 15 million units sold in the same time period, and now has 1 million subscribers to xbox live which launched just 1.5 years ago.


  • Anonymous
    June 05, 2008
    As I was checking the MSFT price this morning after the big announcement on stock buy back yesterday, this article on Microsoft was at the top of the list on moneycentral. http://moneycentral.msn.com/content/invest/extra/P89813.asp Here's the two blurb
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