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The tale of two Steves- Bee and Jay

Posted in Computing and Operating Systems, Device Platforms by Manas Ganguly on August 28, 2013

The two Steves- Bee and Jay have been vanguards of technology – and yet the difference between them couldnot have been stark. Everything Jay was Bee wasn’t. Bee’s accomplishments are an antithesis of the achievements of Jay. This is the follow up on my earlier post – Microsoft’s lost decade and it looks down upon (Literally) on Bee’s big judgement errors….

Bee and Jay

A good part of the 90s and early 2000s will be remembered as Microsoft’s decade – and Microsoft was the most dominant force in the technology space, the Alpha-male in technology. The ubiquitous Wintel partnership as it was then however fell behind the Moore’s law and grossly underestimated the migration from desk stationed devices to handhelds. Even while Microsoft had launched its Windows Mobile in 2000 and brought out the first tablet in 2000, Gates, Ballmer & Co misread the shifting sands in personal computing and were unable to capitalize on both these fronts. On hindsight, Microsoft did not open up to the eco-system effects and benefits – and were more happy selling proprietary licenses – A lack of flair and foresight there, which precipitated into a losses that we see today. Put simply – The world has moved faster that Microsoft’s licensed software business model could respond (Analyst Ted Sandler)

Here’s comparing how the two Steve’s measure up on different and yet common device, technology and platform initiatives-

Apple versus Microsoft - the story of two Steves

The list doesnot quite stop there – There’s Microsoft’s wasteful effort on Bing versus Google and its advetures with XBox and Kinect versus Playstation. To me Xbox and Kinect were ideal innovations – but Microsoft and Bee failed to push it… across platforms. Microsoft worked across disparate platforms and was never able to integrate the customer experience across devices and platforms. And then again, projects such as Microsoft courier never saw the light of the day – the plug pulled out through half way.

Bluntly put – Technology is one thing – the ability to conceptualize the portfolio, integrating the services in a manner of user experience that is engaging and habit forming, a layer by layer structured format of business allowing scalability of services and devices into different domains is something that Ballmer missed upon very completely. Take an Apple for instance – It started with an iPod, created a layer of services around it (iTunes), scaled the device into new form factors , upstaged the Music industry, leveraged the design into a smartphone (iPhone), scaled up another service layer (Application Store), upstaged the industry and leveraged it yet again for new device/dimension (iPad) and upstaged the industry all over again – there is this continuity in design, form factor, service, portfolio and monetization streams. Instead Microsoft had a Windows media Player, a Zune, a Zune Media Store, an Xbox and a Kinect, a Surface – they are all great pieces plagued by a discontinuity. The best examples being xBox and Kinect – good innovations, mind numbing possibilities and yet these innovations have struggled to give Microsoft worthwhile mileage.

What they said ... when Steve was asked to retire is not all that great!

What they said … when Steve was asked to retire is not all that great!

Steve (Jay) put the Microsoft problem in a neatly worded statement: “ The trouble with Microsoft is they have no taste. They have no taste and I don’t mean that in a small way, I mean that in a big way.” Absolutely right Steve! Ballmer’s successor clearly has an awful lot of work to do….

Surface RT: Writing down Microsoft

Posted in Device Platforms by Manas Ganguly on July 16, 2013

Microsoft has been in mobile since Windows CE for PDAs in 1998. Inspite of 15 yrs of presence, the latest reports don’t inspire any much confidence at Microsoft writes down huge losses on its ambitious Surface RT tablets

Microsoft-Surface-RT

1. Microsoft’s Surface tablet generated $853million revenues in 8 month period (Launched late October 2012 to End of Q2, 2013). However, Microsoft has written off $900 on the Surface line – thus re-iterating that the whole premium pricing strategy was to no vain.
a. To put the $853 million in perspective, Surface revenue equaled about 5.5% of the Windows Division’s $16 billion in sales in the last three quarters, and just 3.3% of the $25.8 billion that Apple’s iPad generated in the same period.
2. Microsoft cut the price of Surface RT by as much as 30% in July 2013 and given that the number for the $899 Surface Pro have been poorer, there could be another inventory write down of Surface Pro over the next few quarters
3. Surface RT has also seen a huge attrition of OEMs which starts with HP & Toshiba (Committed to Surface RT- but never launched a device), Samsung (Which cited lack of demand for ditching the platform in January 2013), Acer, Lenovo and Asus (Mid July 2013).
a. There may be a few backers in terms of Qualcomm, Nvidia and Dell – But the fact remains – Windows RT is challenged and OEMs are simply not interested in RT.
b. This could be a spanner in the works of Windows RT 8.1 – It already is out of all momentum.
4. Microsoft has the choice of continuing on the Surface RT Tablets – but it is very highly unlikely that they would be able to turn the platform around. Keeping Surface RT alive would be a game of diminishing returns and would bleed Microsoft.

Microsoft may have deep pockets – but that really doesnot justify the undying faith on Windows RT.

On retrospective- Was Windows8 dead on arrival?

Posted in Computing and Operating Systems by Manas Ganguly on April 18, 2013

As Microsoft twiddled and twaddle Windows’ future of computing – Android has chugged ahead and going by the drop in PC shipments (the post PC era) and increase in the number of Android tablets and smartphones coupled with Windows8’s less than lukewarm acceptance – Microsoft has a problem. A big one. To complicate things, besides Windows 8.1, Cannonical (Ubuntu), Mozila (Firefox), Google (Android/Chrome) are also making bets in the shrinking PC/laptop space. Microsoft hasn’t really fired it in the tablet space – and is yet to find a toehold in 150 million/ $64 billion Tablet industry with the Surface!

When Windows8 was being conceived it was seen as “more like a living organism, made partly from familiar bits that have evolved over the last two decades, with several new strands of DNA tossed in”. A better and a continuous experience on multiple devices was key to the rise and spread of Windows8. It was due to be updated for more often, and was a part of a much larger hardware-apps-services ecosystem that is also changing quickly.” However, if one were to refer to the numbers – Windows8 usage has been Windows Vista when compared month to month. At similar points in their roll-outs, Vista had a desktop market share of 4.52% compared to Windows 8’s share of 2.67%. Underlining just how poorly Windows 8’s adoption has gone, Vista didn’t even have the advantage of holiday season sales to boost its numbers.

Vista versus Windows8
Windows 8 usage can’t even keep up with Vista/s poor numbers.

• Thus, on a retrospective count, Windows8 Metro (refreshingly new as it were) failed to cut the ice – possibly because it was too abrupt a jump from the Windows7 Desktop UI to a “want to be a touch interface”.
The interface was great for a tablet – but then again, Microsoft is way behind Android in terms of economies of scale – and the higher pricing served as significant entry barriers.
• Volumes not coming through, key OEMs such as Samsung dropped the RT platform.
• The $500-$1200 price tags on Windows8 made it uncompetitive in an economy that’s still not moving forward quickly.
• Microsoft also did not marry its traditional UI with the Metro UI successfully enough and the unfamiliarity was daunting.

Windows8
Windows 8, and its relatives Windows Phone 8 and RT, make no impression at all in the smartphone and tablet markets.

All things put together, Microsoft doesnot seem to have moved any further with its Windows8. Microsoft is betting all its chips on the silly notion that Metro will be the one true interface for its entire PC and device line. But the numbers indicate that 8.0 hasnt really taken off. Alternatively it would have soured its relations with key OEMs who would see Microsoft’s ambitions in the device space as a threat to their own positions. Alternate OSs vieing for Microsoft’s 3rd spot in the OSs for the future is also seeing a lot of action and churn.Going back the Windows7 route is out of question – one only hopes that Microsoft is able to crack the business and user case with Windows 8.1.(Else it’s the doldrums.

Microsoft yet to find a toehold in 150 million/ $64 billion Tablet industry with the Surface!

Posted in Industry updates by Manas Ganguly on April 15, 2013

ABi research reports that the tablet market will grow this year by 38% to 150 million units. But the Microsofts and Blackberrys will contiunue missing the boat! With 3% of the current Tablet markets globally, Microsoft, Blackberry and other unidentified OS implementations don’t show signs of significant growth.

The ABI Research report says that an estimated 150 million tablets will ship in 2013, worth an estimated $64 billion.The total number of tablets will grow by a projected 38% over 2012, and the total revenue will grow a projected 28%. Last year, according to ABI, 60% of tablet used iOS, 37% used Android, and the remaining 3% was made up of “others”.

App publisher Animoca recently calculated the top 12 Android tablets, based on app usage, and it found that five of the top six are 7-inchers- and with iPad Mini touting the 7″+ form factor – Tablet markets in the foreseeable future could look to stabilize at 7″ form factor.

Theoretically, that could bode well for Microsoft, because the company is said to be at work on a 7-inch Surface tablet. Surface tablets haven’t sold well, but perhaps a less-expensive and smaller form factor would help. A possible winner would be a 7-inch Windows tablet that takes advantage of Microsoft’s partnership with Barnes and Noble and taps into B&N’s vast book repository and growing video offerings, as well as into Microsoft’s successful Xbox-based gaming ecosystem.

Still, if ABI Research numbers are right, Microsoft so far hasn’t been able to tap into people’s growing desire for tablets, and won’t in the foreseeable future.

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Microsoft’s biggest strategy shift can leave it in the middle of no-where.

Posted in Mobile Devices and Company Updates by Manas Ganguly on October 10, 2012

About 3 months back, I had been musing about the change that was afoot at Microsoft – The 30 year old OS centric company was for the first time shedding its old feathers to look, feel and compete with the new kid on the block – Google and a resurgent old rival – Apple. Ballmer’s letters to Microsoft share holders clearly signals that Microsoft is moving away from its make the OS & the service, let the partner handle the device model, which is what Ballmer terms as “significant shift, both in what we do and how we sees ourselves”. This is clearly necessitated by Internet and cloud centric business models, which puts the Microsoft traditional server, desktop and OS centric model. Given the momentum that Apple has now in mobile workforce and cloud space and the initial cold shrugs that Microsoft’s high price tablets have seen, Micorosft will take more batter before they get better. Also, the head start that Apple and Android have in the mobility space can be hard to overcome. Microsoft has to play the game changer and it needs its OEMs to support it while it does so. However the device route would mean that it will expend itself trying to integrate things into the user experience and the device. May be Google and Apple are doing this bit – but Microsoft will have to really execl to take the game away from Google and Apple.

The Windows centricity still remains as per Ballmer the intent to “firmly establishing one platform, Windows, across the PC, tablet, phone, server and cloud to drive a thriving ecosystem of developers, unify the cross-device user experience, and increase agility when bringing new advancements to market.” With Windows8, Microsoft is pushing to have unified messaging across all platforms. More than just sharing the same name, the various versions of Windows for different devices will now share a common foundation. It’s a move not dissimilar to what Apple does with OS X and iOS and its an essential part of making it easy for developers to target specific platforms.

Ballmer closes his shareholder letter by noting that “it truly is a new era at Microsoft ” and that the company has “an unprecedented amount of opportunity for both this year and the long term.” However given the number of competitors that it has to contend with, and the umbrage of the OEM makers who see Microsoft’s device designs as a challenge to their own competencies – it will be a complex equation, making the revenue and profits strategy work in a dynamic environment. Already the new game that Microsoft is playing itself is hurting itself as it suffered its worst loss ever in its 26 year old history in April-June quarter 2012.

However, it does make sense for a possible take over a beleaguered Nokia by Microsoft. Doesn’t it?

Microsoft Surface means more than just a tablet – its Microsoft’s departure from the OS led business model

Posted in Mobile Devices and Company Updates by Manas Ganguly on June 19, 2012

XBox and now Surface – Microsoft’s device philosophy is changing. ironically, it is possibly Microsoft’s ode to Steve Jobs

Microsoft Surface is remarked departure from Microsoft’s  decades-old business model to sell OS licenses to companies like HP and Dell, and rely on them to make and sell the hardware. Yes,times have changed.The quintessential OS maker has now ventured into devices. More than anything this move is possibly Microsoft’s tribute to Steve Jobs.

 

Apple has proven that the best computers — which rely on tight software integration more than ever before — are made when one company is in charge of designing both the hardware and the software, so they’re built in harmony and just work. Microsoft seems to have figured this out, too, via the Xbox and now this Surface tablet. That’s why the Surface is able to ship with a cool cover with a built-in keyboard. Such integration couldnot have been left to any other ODM. Microsoft has also learned that the best business model in today’s mobile industry — tablets and smartphones — is to the sell the actual hardware to consumers, not just license an operating system. Given today’s economics, the only way to potentially earn a profit of more than $100 per tablet is to sell the actual tablet. There’s no way Microsoft could earn that just selling Windows licenses to HP. Especially as it’s primarily competing with Android, which is sort-of free.

Will this thing be a hit and make Microsoft a lot of money? Enough to compensate for any potential decline in the Windows-for-PC business? Who knows. Would people opt for a Windows Surface in the face of a higely popular iPad. Perhaps some will, especially if they think Office means something to them. But I expect the iPad to continue its dominance of the tablet industry. But it sure looks like a better strategy for Microsoft than only trusting the Samsungs of the world to design great Windows tablets, and only trying to generate mobile revenue from Windows sales.

Sure, Microsoft may now alienate some of its Windows partners by competing with them. But as those partners have gone into the mobile industry, they’ve already strayed from Windows to Android, anyway. Windows8 is already a great option for Android ODMs given the Google-Moto acquisition. Plus, competition or not, as long as Dell wants to make PCs, it’s not like it has any real OS alternatives to Windows.

Microsoft is unquestionably late to this market, though it didn’t intend to be. But the interesting thing is that Microsoft is evolving with the times, both in terms of product design and business model. It may fail, but it’s at least learning to play the right game.

Microsoft, Apple and the Tablet form factor evolution

Posted in Industry updates, Mobile Devices and Company Updates by Manas Ganguly on June 19, 2012

Microsoft was a company of the past with its vice grip on PC shipments and from the new spate of devices that Microsoft is getting around it is the company of the future. Steve Ballmer missed a few steps on the “present” but Microsoft now seems to be making a successful transition from its legacy laden desktop centric past to its “converged” future in time. Its inaction in the present meant that it lost the title of the No.1 selling OS on computing devices to Android.

Between the technology Triumverate, Microsoft was third in smartphones and until yesterday lagging Android and iOS by a few generations both in smartphones and tablets. However, the Surface announcement yesterday finally heralds the arrival of Microsoft in the tablet territory. Analysts are already betting on the future prospect of Microsoft beating Apple to take No.2 spot in smartphones by 2015 and Microsoft beating Android to take No.2 spot in tablets segment.

 

Interestingly here, the device evolution that Microsoft has followed is contrary to the Apple evolution. Both Microsoft and Apple followed their strengths in respective fields – Microsoft in computing and Apple in Mobility. So while Apple’s design was seeded in the iPod Touch which evolved into iPhone which then evolved into iPad (Touch being the cornerstone customer experience), Microsoft’s journey was from the Desktop computer which evolved into laptops and netbooks which then went the ultrabook way and finally manifests itself in the Surface with a keyboard. This is an interesting study of how different form factor and devices have evolved into the converged device category of the future- Tablets.

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