Sunday, February 15, 2009

Microsoft goes retail

These days we are all bombarded by announcements of Microsoft going into retail. And coincidently, these days Microsoft seems more vulnerable than ever. Apple is reaching again a double digit market share with everybody’s astonishment, a market share that is mechanically and universally attributed to the ipod … while nobody is entirely convinced of this attribution. Also Android is also making some inroads beyond its original mobile phone incarnation and is being perceived more and more as a valid Windows CE replacement.

However, beyond its actual marketing problems due to a large extent to its recent pitfalls in areas such as Vista or Zune, we can consider why its innovation model doesn’t manage to create enough buzz in the industry.

In fact Microsoft has chosen a split model for its main products. MS develops the software and many other partners develop the hardware. This model has succeed in creating an ecosystem of partners and in promoting innovation for decades.

However, what about the adoptants? What about the customers? There we have seen how many innovations that the company has been pushing for, have failed to be adopted by a large enough segment of public, most notoriously the tablet pc. It can be a failure in execution, sure! But it also can be that the segment is mature enough and in mature segments, interfaces are hard to move. For example, nobody wants a car with 5 wheels or even it is widely know that the shift gear has a better place located in the steering wheel, it remains located where it always was, etc… Of course, part of it is a network effect and the difficulty of retraining that we all face, but also part of it is that the interfaces, although not optimal, are part of our vision of the world.

My point is that in a world of mature products where complexity has been reduced by standardization and modularization of products, there, an integrated approach probably works better. Apple is an integrated approach, so it is the Xbox.


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