All Entries Tagged With: "Strategy"

Can Someone Please Explain Microsoft’s Consumer Strategy?

When you have a company as large and as expansive as Microsoft, you’re bound to have areas where you excel and then areas where you are held back by the levels and levels of bureaucracy which exists. Recently, we’ve seen Microsoft take some major leaps forward with regards to its desktop OS. Its latest version [...]

Yahoo Stabilization Could Be a Positive for Bing

The newest numbers from analysis firm comScore suggest that Bing owned 11.7 percent of the U.S. search engine market in March, while Google came in at 65.1 percent and Yahoo posted 16.89 percent. Those numbers represent an incremental month-over-month rise for Bing, which had an 11.5 percent market share in February–and a slight dip for Google, which previously had 65.5 percent. As my colleague Clint Boulton points out, Yahoo also managed to gain slightly after 13 consecutive monthly declines.

A few days ago, I posted Experian Hitwise’s numbers, which calculated that Bing had dropped from 9.70 to 9.62 percent between February and March, a 1-percent dip replicated by Google, which also fell from 70.95 to 69.97 percent. Experian Hitwise also found that Yahoo posted a gain of 3 percent, from 14.57 to 15.04 percent of total searches.

Yahoo’s the interesting statistic here. If its market share is truly evening out, then it could give analysts a better idea of how much market share Bing stands to inherit once Microsoft becomes the back-end search platform for Yahoo’s various Web services. In turn, that gives a better idea of the competitive profile that a ‘roided-up Bing will present vis-à-vis Google heading into 2011.

As Boulton points out, analysts at FBR Capital Markets are predicting that online advertising will grow at least 13 percent this year, with leaders in search and video. In turn, this means a larger share of revenues to fight over for Google, Microsoft, Yahoo (which keeps insisting that its user-end Web pages, bulked with new features over the past few months, are more than enough to keep it as a viable, independent online entity), and others in the space.

Microsoft’s strategy within this paradigm, apparently, is to cede ground in traditional keyword search to Google, while focusing on gaining market share via nontraditional areas such as event-driven tasks and commercial queries. In what could perhaps be construed as validation for that strategy, Experian Hitwise’s numbers showed Bing gaining strongly in verticals such as Health, Shopping, Travel and Automobiles. Google’s strategy, of course, is to leverage its incredible mind-share and market-presence to maintain its huge lead over its competitors.

Given the titanic forces involved, however, it’s unlikely in the short term that there’ll be any drastic movement in these market shares. Still, I’m curious about what sort of event will shake the paradigm enough to see some real change.

Google’s Chrome browser goes live for the Apple Mac operating system

Filed under: Competitive strategy , Google , Apple Inc Google is shaping up to be quite a competitor to once-friend Apple .

Microsoft’s New Problem: The French Military

Yes, the above title was not some sort of catastrophic typing error on my part. In addition to having to deal with the likes of Google and Apple, now Microsoft finds itself taking flak from another front: the French military.

(There are so many jokes I could make at this juncture, but I’m refraining. For at least another couple of paragraphs.)

Specifically, the French Ministry of Defense made the executive decision to switch to Mozilla Thunderbird, an open-source e-mail platform, from Microsoft Outlook. According to a Reuters article on the topic, Mozilla’s open-source design allowed the army to create security extensions, something it allegedly couldn’t do with Microsoft’s system.

Thunderbird, along with a modified variant called Trustedbird, currently runs on about 80,000 French military computers, according to the article. Other French ministries are also apparently adopting open-source software for some of their own systems.

When queried by moi, a Microsoft spokesperson offered a curt, “We are not commenting on this topic.”

The newest version of Mozilla’s e-mail platform, Thunderbird 3, includes features such as filtered search and tabbed e-mail. Rated as compatible with Windows, Mac OS X and open-source platforms, Thunderbird 3 is built on the Gecko 1.9.1 rendering platform, which gives it the same security enhancements and Web Standards support as the Firefox browser.

Microsoft recently lost one of its key open-source advocates when Sam Ramji, the company’s senior director of Platform Strategy, officially left to become interim president of the CodePlex Foundation on Sept. 25 (although considering that CodePlex is Microsoft’s open-source software project hosting repository, I’m sort of confused as to how Ramji “left Microsoft”). In a blog post at the time written by Bill Hilf, general manager of Windows Server Marketing and Platform Strategy, Ramji had pushed a vision of Microsoft coexisting peacefully “in a heterogeneous IT world.”

Hilf also suggested that an open-source software strategy was being increasingly embraced within many of Redmond’s divisions.

There have been a few recent areas of contention between Microsoft and the open-source community, however. On Dec. 9, Microsoft posted a revamped version of its free Windows 7 USB/DVD Download Tool (WUDT), a couple of weeks after being forced to yank the program over allegations that it improperly copied open-source code. Microsoft claims that a third-party contractor assigned to the project had integrated the code, which came from a CodePlex-hosted GLPv2-licensed ImageMaster project, without properly acknowledging the source.

In a Dec. 9 statement posted on Port25 (which bills itself as a communication portal for the open-source community within Microsoft), Peter Galli–open-source community manager for Microsoft’s Platform Strategy Group–did not directly acknowledge the code-lifting, but said the WUDT had now been released under GNU GPLv2 (General Public License Version 2).

There’ll be arguments on both sides as to whether Microsoft has indeed become friendlier to the open-source community. But one thing’s for sure: The French government evidently wanted an e-mail system modified beyond what Microsoft will allow–and if France did it, then other governments or large corporations could conceivably follow in its footsteps. The city of Los Angeles already chose Google over Microsoft for its 30,000 municipal employees’ e-mail.

My point is, Microsoft faces a potential danger here in maintaining its traditionally large market share within large enterprises and governments–particularly if those enterprises and governments start demanding specially modified capabilities. But I’m betting the executives in Redmond are already devoting a great deal of thought to that very issue–along with how big of a private army they’ll need to raise in order to invade France.

Microsoft to Launch Zune Internationally, Without Zune HD

If you wanted proof that Microsoft’s strategy for its Zune brand involves veering away from the actual Zune HD device, look at its plans for Europe and other international markets: Starting tomorrow, Xbox owners in some 18 markets (including the United Kingdom, most of the European Union and Australia) will be able to stream Zune-branded movies to their televisions.

Microsoft’s emphasis on associating Zune-the-brand with cloud-based entertainment services, as opposed to the actual Zune HD device, seems to suggest two things, at least to me: a) Microsoft really is serious about its “three screens and a cloud” strategy for porting its products onto a variety of devices, and b) Microsoft realizes that Apple and other companies are unlikely to be overtaken in the portable media player arena.

Let’s break these out.

Microsoft Chief Software Architect Ray Ozzie has spoken often of the “three screens and a cloud” strategy, which seeks to port Microsoft content onto PC screens, phone screens and TV-sized screens. Sounds good, no? But if you’re going to be zipping content around something as nebulous as the cloud, it helps to group that content under a single branding umbrella; in Microsoft’s case, that brand would be one it already wants associated with media, Zune. That Microsoft is doing this with the Zune name, but not actually releasing the Zune HD to international markets, suggests the relative importance of the consumer-cloud concept to Redmond’s overall strategy.

(Using the Xbox 360, which has sold an estimated 34 million units worldwide, basically guarantees Microsoft an audience for the new Zune service.)

If you want a sign that Microsoft is ceding the portable-media-player market, though, its refusal to release the Zune HD internationally may be as good a sign as any. Almost exactly three years ago today, when Microsoft released the Zune player on Nov. 14, 2006, Microsoft CEO Steve Ballmer suggested that, “The market will have two big [music] players for a long time, us and Apple,” and that, “We can beat them, but it’s not going to be easy.”

Hyperbole aside, a Piper Jaffray analyst at the time estimated that Microsoft would take between 5 and 10 percent of the portable-media-player market in the first year of the Zune’s release.

But that never happened; a recent NPD Group report suggested that for the first nine months of 2009 the Zune owned about 2 percent of the market. When the Zune HD was released in September, it attracted a fair amount of media buzz but relatively low initial sales–which is unfortunate; I thought it was a perfectly worthy competitor to the iPod Touch.

Microsoft is intent on creating a cloud-based music/video/games apps ecosystem, and for now the Zune HD will remain a part of that strategy–but I’m betting that, unless sales of the device pick up, Redmond will take steps to progressively marginalize the device, eventually phasing it out entirely.

But then that leaves Microsoft in somewhat of an awkward position. After all, execs are calling it the “three screens and a cloud” strategy for a reason–if the Zune HD is no longer an essential part of the ecosystem, what picks up the slack on the mobile front? It could be Windows Mobile 7, due for release in 2010, but Microsoft’s steadily eroding mobile OS market share makes that an uphill battle at best and a Waterloo in the making at worst.

Microsoft could decide to go back to the proverbial drawing board and release another portable media player; but for branding purposes, any such device would likely need to be marketed under the Zune name–which just places the company back at Square One; it might as well pour all that money into promoting a new version of the Zune HD. And despite the marketing dollars spent on the Zune HD so far, it hasn’t been able to gain much traction with regard to public mind share.

In sum, Microsoft’s international Zune strategy shows its progressive thinking with regard to cloud-based services and media ecosystems–but it also shows, glaringly, a potential Achilles heel for Redmond in the months and years ahead.