Microsoft is staring in to the abyss

It’s difficult to overstate the challenges facing Microsoft at the moment.

A Gartner report out this week:

Traditional PC Market Predicted to Decline 7.6 Percent as Change in Consumers’ Behavior Drives Transition to Tablets and Ultramobiles

(Am I the only person who finds Gartner referring to themselves in the third person highly amusing?  Like that weird guy down the pub.  “Mike loves this”  Mike’s wife left him because he keeps referring to himself in the third person” etc.)

A changing market isn’t anything new, and is to be expected.  Microsoft saw this seismic shift coming late, and dismissed it when it was already underway.  This left them flat-footed.

But to their credit, they created a decent product in Windows Phone.  What they failed to do was create a cohesive strategy.  In a world where Facebook is touting “It’s not just mobile first, but mobile best” Microsoft’s approach with Windows 8 appears to be “mobile maybe”.  It demonstrates a lack of commitment and the absence of a clear vision.  It feels like Microsoft is at the beginning of a journey that Google and Apple have nearly completed.  Not to mention the Windows RT vs Windows “Proper” mess that not even retailers understand.

This failing is beginning to show.  In the mobile space, Windows is still losing share year-on-year and barely growing currently.  And there’s a storm approaching:

Microsoft could then face the vicious circle where developers considering which platform to develop apps for look at those with the largest user base – and that that will not be Windows.

The Gartner report linked earlier suggests that within four years the number of iOS devices shipped with be on parity with the number of Windows devices shipped. And that’s not including OSX which is growing far faster than Windows on any platform.

The vicious cycle talked of in the Guardian article quoted above works in other ways as well.  Consumers are aware of ecosystem lock-in.  The smartphone market is mature enough that users know that an app bought on iOS won’t work on Android, and an app bought on Android won’t work on Windows.  This leads to risk-averse device purchases.  More informed consumers know that every penny the spend on apps and content is an investment, and they want to be investing in a platform and ecosystem that will be around for a significant period of time.  Poor sales and prices being slashed do not give that impression:

Prices of Windows RT devices have started falling, signaling an attempt by PC makers to quickly clear out stock after poor adoption of tablets and convertibles with the operating system.

Where does Microsoft go from here?  Many people point to enterprise usage and their movement towards subscription models.

The problem with enterprise adoption is that IT departments are increasingly finding that they are having to support iOS and Android phones and OSX laptops and desktops.  BYOD programmes are in place in many companies, enabling people to choose the machine they work with every day, rather than being stuck with the Dell laptop the IT department dumps on them.

Azure?  As a cloud offering Azure has to be two things above all to win over customers.  Reliable and secure.  I’m not aware of too many security breaches but there have been numerous well-published Azure outages since it’s launch.  It would also appear that sales are not exactly setting the world alight, else Microsoft would be touting them, no?

What’s particularly interesting is that Microsoft is clearly trying to meet these challenges head on.  They are trying to address the mobile market, albeit in a cack-handed way, and they are addressing the move to SAAS and PAAS, again in a not altogether convincing way.

A- for effort, D for execution.  Must try harder next time.