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Microsoft's Rip Van Winkle Syndrome

Microsoft's Rip Van Winkle Syndrome

Microsoft seems to have been asleep for years. It still thinks customers will stay even though they have a lot more choices today. The company needs to wake up. My recommendation is simple: Offer the new, innovative Windows 8 for touchscreen computers and tablets; and offer updated versions of 7 and XP. Let users choose what they want. Then simply charge them an annual fee after a period of time.

By Jeff Kagan
07/25/13 5:00 AM PT

What the heck is wrong at Microsoft? It may be an important company, but it's an older company that has definitely lost its way. It can recover but doesn't see how. The solution seems so obvious from the outside. However, there is a sense that arrogance is getting in the way of clear thinking. It is keeping Microsoft from becoming great once again. So what's wrong, and what can it do to recover?

The world is continually changing. That means companies and products must change as well. Unfortunately, Microsoft's thinking has not changed, and that is the reason for its sour Windows 8 and Surface tablet sales.

Some companies change well over time. One example is IBM, which led many sectors over many decades. It understood the changing marketplace and transformed itself several times. That has kept it at the top, ready to jump on the next wave. Over the last several decades, its focus evolved from the Selectric typewriter to the Thinkpad computer to consulting and more. It is still growing and healthy today.

Others don't change well. Microsoft has never understood that simple winning concept. Of course it never had to worry about winning over customers in the past. It didn't have to. There was no real competitor in the past, so it just grew in spite of itself. Things are different today.

Microsoft prefers to steer. It thinks that everyone will always follow its lead, because they did in the past. However the real reason customers followed was simple -- there was no alternative. Things change over time. Today that old thinking no longer works. Today there is choice, and it is expanding. However, Microsoft still thinks and operates the same old way. Today that's a recipe for disaster -- as we are witnessing.

Microsoft may have had the market share and sheer drive to steer its own path a few decades ago, but today there is much more competition and choice from companies and technologies like Apple, Google, Linux, Mozilla and others.

Innovation and Choice

Another factor is that Microsoft doesn't get better with each update. Think about it. Customers loved Windows XP. They hated Vista. They liked Windows 7, but today they really don't like Windows 8. So what does Microsoft do right and wrong? Simple. It rewrites the entire operating system, creating a new version rather than just updating it. Sometimes it's a hit -- other times a miss. That's a mistake, and it has been for a long time.

What Microsoft doesn't recognize is that the marketplace has changed, and it is no longer in the driver's seat. With choice, the customer is in the driver's seat. While Windows 8 may delight some customers, it turns many off as well.

Microsoft seems interested only in moving forward -- not in taking care of existing customers, and that is the mistake. Today customers need to be cultivated continuously. Otherwise they will start looking to a competitor.

Microsoft can and should do both. Today many users like Windows 8, but many others would like to continue using Windows 7 and even XP. That means Microsoft is in a beautiful position to take care of every kind of customer. Instead, it's shutting down support of XP next year even though so many customers still prefer it.

Microsoft is in a unique and valuable position -- yet it is blowing it. If Microsoft doesn't earn new income from XP or from 7, why doesn't it simply charge an annual user fee after a few years of use for customers who want support?

That way, it could earn income from multiple operating systems and keep them alive for users. That would keep customers happy and Microsoft investors happy as well.

Why can't Microsoft keep several operating systems current? Its current path is burning customer relationships.

Granted, innovation is important, and I salute Microsoft for thinking outside the box with Windows 8, which is a new way to use the computer and the tablet. Customers who want this do actually like it. This is good.

However, Microsoft has told the rest of its customers who still like and use XP that they are out of luck. Sorry, folks -- that's it. That is the big mistake. Many customers don't want to change -- not yet anyway.

That puts customers off, and that is the last thing Microsoft should be doing. It is not coming at this from a position of strength. It is coming at this from a weak position and forcing customers to change. Doing things this way will just continue to make things worse for the company.

Build Bridges, Don't Burn Them

While many have used and liked Microsoft Windows for decades, and while they would have continued to do so going forward if Microsoft continued to meet their needs, this change to Windows 8 is pushing many away from the Microsoft camp -- and that's the last thing Microsoft needs.

WAKE UP, MICROSOFT! Think! Remember, you can catch more flies with honey than vinegar. Make it easier -- not harder -- to stick with you.

Individuals and companies don't have unlimited time to learn new operating systems and get their people to understand. They would prefer to stay put and simply do their own business -- not take a how-to-use-the-new-Windows-8 seminar.

So, my Microsoft recommendation is simple: Offer the new, innovative Windows 8 for touchscreen computers and tablets; and offer updated versions of 7 and XP. Let users choose what they want. Then simply charge them an annual fee after a period of time.

That would solve the Microsoft growth problem, and it would solve the customer acceptance problem. That would put Microsoft back on the growth path with happy and loyal customers. Doesn't that sound better than the path it is currently on? Focus on the customer. Get customers to fall in love with you. Give customers what they want. After all, without customers, where would you be?


E-Commerce Times columnist Jeff Kagan is a technology industry analyst and consultant who enjoys sharing his colorful perspectives on the changing industry he's been watching for 25 years. Email him at jeff@jeffKAGAN.com.


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