Microsoft late to the innovation party, again

Screen shot 2010-12-15 at 11.48.26 Almost a year after Apple's launch of the iPad, and several months after Android-based tablets from people like Samsung, Microsoft are finally arriving at the tablet computer party. Reports suggest they will announce plans for a “slate” device in January. The problem for them is that the party is in full swing. All the best food and drink has gone. And everyone has a dance partner. Microsoft is the geeky kid in the corner all on their own, that no-one wants to talk to.

Microsoft actually presented a tablet computer 8 years ago (see CEO Steve Balmer on the right). But they didn't bring it to market, and got beaten to the punch.

Poor old Microsoft. They have made a horrible habit of becoming bit players in new growth markets, despite having a head start.

Does anyone remember the Zune, their iPod clone? Their Bing search engine is still miles behind Google, despite millions of marketing spend. And they have a puny 3% share of smartphone operating systems, despite launching in 2001, seven years ahead of Apple who have 17% and eight years ahead of Google's Android system, who have 25%. In all of these markets they are a weak "Follower brand".

Screen shot 2010-12-15 at 12.03.22
Why do they keep repeating the same mistake over and over again?

1. Struggling to stretch

The good news for Microsoft is the performance of its core business, the Windows Operating system. Here they are the clear Leader Brand, with a 90%+ share. This business helped the company actually do very well in the latest quarter, with revenue up 25%. As Chief Financial Officer Peter Klein said “Windows 7 continues to be a growth engine".

But you wonder if the importance of Windows, along with the Office productivity suite, means that other newer businesses such as Zune and Windows Phone struggle for resource and budget. In contrast, at Apple each new launch looks like the pet project of Steve Jobs, and so gets all the attention it needs.

2. Techno-obsession

I get the feeling that Microsoft are much less close to what people really want, and more intent on features and gizzmos. The new Windows Phone system has these fancing moving "panels" on the front showing the status of different tools such as Twitter and Facebook. But so what? I'd rather have all my key services visible like on the iPhone. Bing has more bells and whistles on its homepage than Google, but this makes in more cluttered, and so on.

3. Lack of product design wow

Microsoft is not a product design business, its a techinical software company. When it makes its own products, like the Zune they look clunky. And when it uses partner companies, the results are not much better. Look how old fashioned that Windows phone looks next to an iPhone.
The exeception in the XBox. That is pretty cool. And I wonder if this is because it is treated as a separate company within a company, with its own culture and way of working?
Perhaps the way forward is to spin off these newer businesses, such as phone, MP3 players and search engines, allowing them to step out of the shadow of the Windows/Office business?
Anyway, it will be interesting to see if the Microsoft tablet does any better than the Zune and Windows Phone. In my view, it will be the first candiate for a "miss" when we do the 2011 Hit or Miss survey 😉