Monday, July 25, 2011

Editorial: Microsoft's Marketing Backfire

No matter what the field, be it technology, foodservice, media, or even economic strategy, there are two kinds of companies that grow quickly and frequently overtake each other: the pioneers and those who learn from the ruinous mistakes of those pioneers.

First there was Microsoft, a seemingly omnipotent company with infinite potential and a bright, scintillating future. They essentially bridged the gap between the complex operations needed to use a computer and the less-than-complex technical skill of what we will here call the "average Joe". It seemed they could do no wrong, financially or as far as their legions of satisfied customers went.

Microsoft had invented a brilliant marketing strategy in which they approached companies like GM, ConAgra, and several banks, handing out free licenses of a half-baked version of their operating system which promised to solve what were then enormous logistical problems easily remedied by computers. A year later they would release the fully-functional, relatively feature-rich big brother of the freebie software and in a few short months they reaped their reward - a profit upwards of six hundred million dollars. In parallel, they'd loosed this new product, the now-archaic DOS, on the free consumer market and chunked on another eighteen or nineteen million just for kicks.

As if that weren't enough, before they'd even approached the large corporations they contacted a few software-development firms and gently proffered them a set of tools to write programs for a platform that hadn't hit the market yet - free of charge, of course. The confused but happy firms started pumping out enormous amounts of DOS software and, when the platform was introduced, made millions as well, only to find Microsoft knocking on their doors holding collection tins to remind them who'd thrown them the great idea in the first place. Not only did this make DOS a convenient platform upon its release, it basically forced people to use it do to the lack of good software available for other systems.

Microsoft's range of software products is all-encompassing and easy to use, the most prominent of which are Windows, which rose as a phoenix does from the ashes of DOS loaded with a shockingly simple user interface and several new streamlining features, and Microsoft Office, their more-than-globally-recognized suite of word-processing, presentation and spreadsheet programs. The attraction and success of the company is quite obvious when looked at by cross-section - so where did they go so badly wrong?

The answer is not simple. First of all, Microsoft has not completely lost its shining reputation as the most versatile tech giant on Earth, but the way everyone seeems to think of it in comparison with a few others like it has changed drastically. The reasons for that stem from Microsoft's habit of splitting their products into several versions and limiting the lower-priced ones. This is an extension of the marketing tactic they used to cause people to buy their software applied on a smaller scale - within their own product line. For any remotely computer-savvy consumer this is a blatant and disgruntling nudge to spend more money if you're already going Microsoft. But dissatisfaction in a customer is not enough to make them turn elsewhere. There must be a true drag of unpleasantness along with the wafting scent of a greener pasture to draw their attention away from where they've been comfortable since 1986.

The rest is for the reader to decide. Microsoft's ability to monopolize its users is most certainly losing its grip, and only time will tell what the reaction is going to be long-term.

By Or Bairey-Sehayek

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