Tim Ferriss has an interesting post on his blog about Rick Smith, the founder of World 50 and the author of the new book LEAP. Ferriss’ post focuses on Smith’s deconstruction of the myth of Bill Gates as a risk-taking entrepreneur. And that got me thinking about Microsoft in general.
Microsoft is actually high on marketing folk’s radar right now. Their recent “I’m a PC” campaign has been lauded as their first successful advertising campaign in years (although some of that praise may be due to the sheer awfulness of the Seinfeld-Gates campaign). While negative advertising based on pricing, as your USP is certainly not innovative it can be effective. And with the first Windows 7 ads beginning to run (With the same cute little girl from the previous campaign. Again, no points for innovation Microsoft), the general public will also be talking about the Redmond giant.
(Full disclosure, here. Zemoga is a Mac shop and we’re all big fans of Apple products. We also practice a policy of being “platform agnostic” and use open source software for our clients whenever we can. So we definitely don’t enter in to any conversations about Microsoft without a bias.)
There’s a perception in the digital and interactive space that it’s easy to hate on Microsoft, that complaining about Redmond is like complaining about the government. And it’s true that the libertarian, individualistic nature of many innovative technologists and designers makes them naturally inclined to distrust large organizations. That’s why Apple and Google are starting to see some of the same kneejerk responses to their corporate strategies that Microsoft is accustomed too. But there’s a big difference between Apple, Google and Microsoft.
Last year, Microsoft spent just over $9 billion on R & D. Google spent $2.1 billion. And Apple spent $1.1 billion.
In the past two months, Google has announced development of the Chrome OS, Fast Flip and about a hundred other new products (or at least it seems that way). Apple just announced the debut of the Nano video, following up from its earlier introduction of the iPhone 3GS. They also just introduced a new update for their OS and regularly update consumer apps like iTunes. Microsoft’s latest announcements? The Zune HD and a new version of Windows Mobile aren’t exactly setting Tech gossip blogs on fire.
To be fair, a lot of Microsoft’s business is in backend technologies that aren’t sexy to the average consumer. But there is definitely an innovation gap (both real and perceived) between the world’s largest software company and it’s competitors. After the epic failure of Vista, Windows 7 really needs to knock it out of the park. Or Microsoft runs the risk of becoming irrelevant in the personal technology space (and anyone who thinks the Windows monopoly can last forever should talk to Kodak and Polaroid about how technology can change a business overnight).
The burning question remains why Microsoft can outspend it’s competitors by billions and still not be able to develop successful or even innovative consumer products. A recent article on the Time Compression site, cited a study from Strategy& that investigated this question. What Strategy& discovered was that tight alignment between R&D and business strategy was more important than spending. Apple (and to a slightly lesser extent, Google)’s understanding of end user needs is a game changer that allows them to consistently usurp their larger competitor’s superior brain and spending power to create products consumers love.
It’s probably the most compelling example of a philosophy we’ve espoused numerous times in this space. Users need to dictate design and companies need to create ways to listen to their customers so that they can effectively identify those user needs. If they don’t, then all the money in the world won’t help them create and sell successful products.
So perhaps we need to change our view of Microsoft. Maybe it’s time to stop holding them up as the model of success and instead see what we can learn from their failures. If Microsoft, took that attitude in their internal audits it could benefit everyone. If they could more effectively use that $9 billion R & D budget, it might result in a technology boom that would benefit their end consumers and even their competitors. And wouldn’t that be something to see?
Is your company a Microsoft? Are you creating products without considering your business strategy? How effectively are you using the resources available to you