I have recently been reading about the rise of Apple and Google against the once-dominant Microsoft. The story began with the return of Steve Jobs to Apple, at a time when Apple was losing market share and was running out of cash. Jobs made a lot of changes, including changing the DNA of the corporation that he co-founded, setting it on a path to eventually become the giant that Apple is today. As a purely theoretical exercise, I’ve begun to wonder what Steve Jobs would have done if he had taken over Microsoft instead of Satya Nadella.
Usability is Key
In 2005, Apple was starting to rule the music world with iPod (Apple rarely calls it “the iPod”, giving the device some personality) and iTunes. Steve Jobs was presenting another highly choreographed event, showing off the latest Apple innovations and partnerships. Apple was working with Motorola; Jobs picked up a Motorola phone to demonstrate some music playing.
Then he was “interrupted” by a phone call. The music stopped, the phone rang and Jobs ended the call, expecting the music to start playing again. It didn’t (see the 19 minute mark in the video). Jobs was embarrassed; He believed that a phone that played music should work perfectly. The user experience shouldn’t be dodgy and he didn’t like being associated with it. And so was born the iPhone (actually, the project started in 2004), which has gone on to earn Apple billions of profit every quarter and driven the company to become the most valuable corporation on the planet.
Jobs believed that Apple’s unique selling point was the ability to engineer a superior user experience. People associate the phrase “it just works” with the Apple brand.
That’s not quite the case in the Microsoft world. In the enterprise space, we continue to see one disastrous cumulative update and update rollup after another. The recent Update Rollup 5 (UR5) for System Center once again introduced bugs that should have been stamped out during testing. But instead of fixing UR5, Microsoft released an elective patch that must be manually downloaded, assuming you know to get it in the first place, to fix the issue.
In the consumer space, things are a mess. Let’s be honest, the only successful brand that Microsoft has in the consumer space is Xbox, and that might not even be a profitable business! While on the subject of Xbox, Microsoft went to great lengths once to tell us how amazing media playback would be on Xbox 360 from a Windows 7 PC. I tried it, and the experience was awful; it was slow to navigate and the playback often froze. We now have Xbox One with a built-in video player. While the performance is fine, navigation is still awful and the player still cannot remember where I last was in a video file. Meanwhile a $50 Roku with the Plex streaming service on Windows gets more attention in my living room than a $500 console.
These sorts of experiences would not get past Jobs. He had a reputation of being a tough boss that involved himself in product review. None of this would have passed Jobs’ attention and the culprits would have paid. Sure, Apple has a much smaller catalog, but maybe that is something that would be good for Microsoft too.
Streamline the Catalog
There have been 10 models of iPhone since it was released in June 2007. Some of those are variations, but when you are buying an iPhone in the store, you are typically buying the iPhone. Yes, there are different specs of that iPhone but it is still the iPhone. How many models of Lumia phone do you think there are? There have been 17 models of Lumia since it was introduced in November 2011. How come that Apple can dominate the market by releasing one or two models on a near annual basis and Nokia/Microsoft have been releasing around 4 a year and have maybe 2% of the market?
I’ve heard comments that it’s difficult to get a rep in a phone shop to sell you a Windows Phone. They seem to want to sell you the latest Samsung or iPhone. I would too if I was them. Think about it: You’re on a low salary job and you’re under pressure to make commission and hit targets. What do you do? Take half an hour to show a customer a dizzying array of Lumia handsets that even you can’t differentiate, or do you show the customer the one Samsung handset or the one iPhone? Obviously you go with the path of least resistance, and you sell what you can learn quickly and sell quickly.
One of the first things that Steve Jobs did when he rejoined apple was slash the catalog. Apple made a large number of different devices and appliances. Jobs looked at the catalog and reasoned that to be excellent, Apple needed to concentrate on a few devices and to market those. If Jobs took the reins at Microsoft today, he would pull a Surface Mini on the rumored launch of four (!) new Lumia handsets. When you have 2% of the market, can you really afford to be adding four new devices to the catalog, with the cost of manufacturing, shipping, marketing, and stocking of these new variations in addition to existing stock? And there isn’t even a flagship being launched!
Speaking of confusing – I’ve spent most of my time since last August evangelizing about Microsoft Azure to Microsoft partners. Customers and resellers get the concept. But the biggest obstacle hasn’t been loyalty to traditional practices, technical knowledge, trust in Microsoft, the cost of Azure, or fear of the cloud.
No, the biggest obstacle to adoption has been the difficulty in pricing solutions. If you want to run some VMs in the cloud then you’re going to need pricing for:
- The hourly VM instance
- Storage capacity
- Number of storage transactions per month (good luck there!)
- Quantity of data leaving Azure
- A virtual network gateway for site-to-site networking
I don’t know of a Microsoft web page that lists all of those requirements. I have to teach people to search for three pages, none of which link to each other. And even then, they have to guess how much egress data and the quantity of storage IOPS that their new application will generate. Sure; these are micropayments but it raises uncertainty, which leads to fear, and that prevents business being done. I don’t care if this is similar to Amazon Web Services – how they sell or don’t sell is their own issue. In my scenario, a zombie Steve Jobs is running Microsoft and wants some brains. Hopefully those brains will realize the just because someone else does it, it doesn’t make it right. That’s how Apple thought then they created iTunes, the service that changed the music industry. Jobs knew being a revolutionary would work, and even fooled the music head honchos during negotiations because they thought he was foolish.
Bring Focus to the Channel
One of Steve Jobs’ early hires was Tim Cook, the now CEO of Apple. One of Cooks first missions was to overhaul a decrepit distribution network that was costing Apple money. Product wasn’t moving where it was needed, and stock was sitting on shelves for too long. Cook completely changed how Apple produced, shipped, and distributed stock to market.
Microsoft has a pretty fragmented approach to the market, and that’s being kind. Microsoft might have a very slick machine for getting traditional software licensing into the hands of customers via resellers of different types, but they’ve messed up by trying to go exclusively direct with some products. It has taken years for Office 365 to get over some of the logistical and design limitations that were due to the initial direct-only model (known in the channel as MOSP). Only last August did Microsoft start to sell Azure via Open licensing (to hit the breadth market via resellers) and that is currently facing the same issues. And I have previously talked about how sales of a business-ready device such as Surface are being damaged because Microsoft stubbornly withholds the device from normal into-business sales channels.
Part of this is Microsoft headquarters’ lack of understanding of the market. Microsoft does a good job at talking to Fortune 1000 companies because they have the staff to do that. But the “breadth market”, which is something they don’t deal with directly, is a market they completely misjudge. Microsoft thinks that most SMEs have fully up-to-speed and highly qualified IT staffs … or they’re so small that they don’t have any servers at all and moved to the cloud; I don’t quite get how those two visions gel! And this leads to some very odd design and marketing decisions at Microsoft.
I think Jobs would have put someone in a position to understand Microsoft’s market and how they sell to it. He would have rationalized and instructed all product groups and divisions to align to that strategy. One common approach for designing, shipping, selling and using product would have emerged, making it easier for resellers to provide customers with the devices, services, and software that they need.
One of Microsoft’s biggest flaws is that many of their products only work in a few markets. Bing and Cortana suffer from what I call The Curse of Zune. Zune was only available in the USA – even the website was unavailable to non-USA IP addresses! Bing is actually a good search engine … in the USA and a handful of countries. In most of the world, Bing is pretty poor, offering none of the richness that draws me to it when I’m visiting America. Microsoft whoops and hollers about Cortana at every chance, failing to mention that she only works in the USA and a couple of other countries. To this day, I still cannot interact with my Xbox One using voice because even that is restricted. And before you joke, Ireland (my home) is home to one of Microsoft’s data center regions and one of their larger development centers for user interface.
What’s the point in producing something that is only available to maybe 4% of the world’s market? Jobs was quick to sell his hardware around the world via a well-managed channel. Services such as iTunes were quickly licensed to sell and distribute all kinds of content around the world. Meanwhile Windows Phone didn’t have built-in podcast sharing for most of the world until the release of Windows Phone 8.1 … because of “content licensing issues”. Microsoft just doesn’t get that there are 6.7 billion people living outside the USA. Europe, a wealthy continent, has a larger population than the USA. India and China make up around one third of the global population and have growing economies. How come features that drive desirability haven’t been driven to all of these markets? I don’t think Jobs would have let those decision makers survive too long.
The Importance of Design
We all know that Apple makes pretty products. Apple’s Senior Vice President of Design is Johnathan Ive. In the book Digital Wars, by Charles Arthur, Ive is reported to be a fan of the design approach used in the construction of satellites – what you choose to leave out is more important than what you include. Microsoft has tried to be all things to all people, in terms of variety of product and inclusion of features. This does not work. Generalists are never very good; only specialists can excel. Ask yourself this: how many products do Microsoft make that the general consumer or business person actually desires?
If Jobs took over Microsoft, he would probably shut down half of the business, which wouldn’t be great for the economy of Seattle and it’s neighboring cities. But it would allow Microsoft to concentrate on what it is good at. Much of what Microsoft does is great … up to the last piece of the experience which is where things get a bit ragged at the edge. That is not acceptable to a person like Ive. Product doesn’t ship if it’s not ready. Beauty leads to desirability. Desirability leads to profit because people will pay that bit more for something that is desirable, even if it has less functionality. Market share actually fell for the iPhone recently despite the crazy profit numbers that Apple is generating. That’s because they make more profit per device than their competition.
The Need for Good Marketing
Some people mistakenly view Steve Jobs as a technology genius. That’s not quite correct. Jobs hired those sorts of people. Jobs was a marketing genius. He had quite a bit of luck with the iPod, originally intending the new business to be an accessory for the Mac, and not for music to become Apple’s biggest business at the time. Jobs saw a market filled with MP3 players and realized that there was a gap in the market. He drove excellence in design and usability and then he put that device everywhere. From famous actors and athletes all the ways to Oprah’s allegedly favorite things. Sales soared. Some cleverly negotiated exclusive supplier deals nailed the coffin shut on inferior competitors, but Jobs made sure that everyone knew what iPod was and wanted it. To this day, Apple makes adverts that stress the usability and desirability of their devices. Contrast that with dancing keyboards from Microsoft!
Microsoft has made huge changes in their corporate marketing but little has really changed at a global level. Marketing is either poor or non-existent. I’m pretty sure that Jobs would turn Microsoft upside-down, starting with understanding the market, designing to those needs, and then creating desirability to drive sales.
Satya Nadella has changed Microsoft’s culture quite a bit since his appointment as CEO. This is reflected in stock value and market advisor opinions. But I do wonder what would be if Microsoft made some of the same sorts of changes that Jobs once did at Apple.