Cool is a ludicrous aim for Microsoft – Telegraph Blogs

Monday 17 March 2014 | Blog Feed | All feeds

Ian Douglas


Cool is a ludicrous aim for Microsoft

The rather desperate-looking Seinfeld/Gates advert for Microsoft speaks
of a very serious problem for the company. They're hugely successful,
but they want to be something they're not.

Bill Gates throws a shape

Apple is currently celebrating gaining a larger market capitalisation
than Google ($142.8bn to Google's measly $141.6bn), and Microsoft is
spending $300m on new adverts which, it hopes, will give them some of
the desirability that Apple seems to obtain without effort. It's a vain
hope, and misled. Microsoft's market cap ($240.6bn) dwarfs its
competitors and it makes more profit than Apple, Google, Yahoo, Dell
and Sun Microsystems combined.

Easy tech pundit bluster says that the cloud is where all the
applications are going to be quite soon and Microsoft is having its
territory invaded by Google. I'm writing this blog post on Google Docs,
just as I do all my writing. It lacks a little in functionality but the
collaboration facilities more than make up for the loss of endless
menus I never explored. it's free, which is always attractive, and I
can access my work whether I'm at home or in the office. Great. Cloud
computing is a very attractive proposition that I'm sure more people
will adopt in the near future and Microsoft isn't the market leader at
the moment.

Microsoft isn't barred from cloud computing though. Office Live is much
better than people think, and prices will no doubt come down to an
acceptable level as soon as people and businesses become unwilling to
pay so much. That's the way the market works. They've been offering
web-based email since they bought Hotmail in 1998 and, even though Live
Search is awful, not everyone has to do search well. Google makes its
money from advertising, not search.

But what about advertising, say the lazy pundits, lying back on their
sofas and taking another swig of fizzy pop. Google's dominating there,
and Microsoft's hated so much they couldn't even buy Yahoo for an
inflated price. Yahoo are busy ripping themselves apart rather than
sell out to the evil empire.

It's no doubt true that Google have built a huge and extremely
successful business based on search advertising and Microsoft lag
behind. Steve Ballmer has declared that 25 per cent of Microsoft's
business will come from advertising in the future, which seems unlikely
as that would not only entail catching up with Google but overtaking
them by some margin. So let's assume that 10 per cent is a more
achievable goal. $4 billion of profit from search advertising, assuming
some growth in the market, is not unreasonable. Markets diversify away
from the one or two original providers as they mature and Microsoft is
growing its advertising business quite nicely, thank you. They're not
in a hurry, they have Office money to keep them going.

Taking a few minutes away from scratching themselves and looking at, the pundits stir and mumble a few words about
the failure of Vista, the clear superiority of Apple's OSX and the rise
of Ubuntu Linux as an operating system for the home user.

There is evidence that Vista is a rare choice for business users, and
that some manufacturers are still selling computers with the
now-unsupported Windows XP rather than Vista, but still it outsells
Macs by a long margin. I don't have figures for other websites but I
can tell you that visitors to break down as 69 per cent
Windows XP, 16 per cent Vista and nine per cent Mac. Linux puts in a
low but respectable showing at 1.1 per cent, just below Windows 2000
and about twice as popular as the iPhone.

A disliked new product such as Vista would be a problem for any
company, but much less of a problem than it might appear. Strong XP
sales are still money in the bank for Microsoft, and Windows 7 is
already edging its way closer to the shops. They'll survive.

Windows Mobile is still popular with those who want a keyboard with
buttons, and is now really not bad (as opposed to versions before 6.0,
which were all awful), and at least Exchange works, after a fashion,
which MobileMe is still failing to do.

I say this as someone who uses no Microsoft products voluntarily and
has a house full of little white boxes with Apple logos on them:
Microsoft is still the most successful technology company on earth and
will continue to hold that position for many years to come. That
they're not seen as cool by the sniffy, spoiled tech press is of
supreme indifference to the huge majority of people who use them, and
makes such a small difference to their corporate accounts it's really
not worth their time.

Spending hundreds of millions of dollars on an attempt to imbue
themselves with a little hipness would have been bad enough if it had
been successful, but employing someone who was very famous more than a
decade ago (probably the last time Bill Gates had any time to watch
television) to make a nonsensical short film about shoes with someone
else who doesn't work full time for them any longer just makes them
look foolish.

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