I’m going to give some personal history here and hopefully provide some insight into why Microsoft misses every consumer opportunity outside of gaming.
In 2000, I co-founded a company that would provide online news formatted into a familiar form, one that looked like a newspaper. In its initial conception, the “newspaper” arrived as a PDF that aggregated from a wide variety of sources to build customized news in a tight format that any big city publisher would love. When we showed it to an executive at Hearst, not only did he love it, he called it the “Napster of News.” Unfortunately, “Napster” was already a dirty word and we went back to re-think the concept. Re-thinking involved an inquiry to Microsoft, and we ended up sitting across the table from Microsoft veteran Michael Cooper, showing our concept on a laptop.
Cooper had no interest in our news aggregation, nor did he want a product that delivered a PDF, but he did see that we had built a formatting engine that could deliver a magazine or newspaper. Cooper was looking into software for an unannounced product category, the TabletPC, with the goal of producing periodicals formatted for the device. At the time, the TabletPC was a bit more awkward than today’s devices, due to the technology available at the time, and the OS was little more than Windows with a pen interface. Touch screens were not a commodity item, which helped push the price up. They also required a pen. Cooper’s idea would revolutionize the publishing business at a time when they were struggling with the transition to digital. And yes, they are still struggling.
We agreed to re-design our software for the TabletPC, dropping PDF for a browser-based environment, requiring a lot of redesign and development to fit the browser content into a page-like format. Once this was done, we began producing The New Yorker on a weekly basis, and did prototypes for The Financial Times and other publications. The New Yorker looked beautiful, almost as good as the magazine itself, and retained all their design elements. Cooper’s idea that someone could download the magazine at home (at the time, public wi-fi was more idea than reality) and read it on their way to work, on a park bench, or over coffee was realized. Ads were flash-based and much more dynamic than ads in the print version. Microsoft called it ePeriodicals.
The holy grail had arrived. A device that let consumers consume, easily, on a device smaller than laptops of the time and without a keyboard. Sound familiar?
Then Gates introduced the TabletPC, in 2002. The TabletPC was announced, typically for Microsoft, as a business tool. Although The New Yorker was shown at the introduction, the emphasis was on business productivity software, from Groove, Autodesk, and even Microsoft, for its Office suite. The consumer was missing from the audience for the device.
Despite the Microsoft emphasis, one publication – eWeek – ran an article that said ePeriodicals was the “killer app” (remember those?) for the TabletPC. Oddly, they said this designation came from Microsoft, which it didn’t – it came from the reporter. And despite the article and similar acclaim for ePeriodicals, Microsoft killed the project after the TabletPC was moved into the desktop Windows organization.
And with that, the TabletPC was consigned to history. Rather than deal with the absence of a business market for the TabletPC and re-focus on consumers, Microsoft essentially put the TabletPC on a back burner forever, and missed out on one of the two biggest trends in consumer devices in the past decade. With just a little more persistence and some changes in strategy, Microsoft could have been leading the tablet parade as technology evolved. Instead, they still have no product. And enterprise-only computing platforms continues to be a shrinking category.
This reflects Microsoft’s strategy in general, with one exception that I will get to in a minute. Their position the phone market is precarious, held up only by the relationship with Nokia. The same attitude towards the tablet a decade ago creates a similar neglect of consumers. I attended a Microsoft mobile developers’ conference about four years ago. The entire emphasis was on business phones, and many attendees sat at the conference tables with two phones in front of them, one of which was either a Blackberry or iPhone. In one breakout session I attended, the speaker acknowledged that people wouldn’t want two phones for different usages, and also acknowledged that Microsoft didn’t “get it.”
And now, on to my last perception of Microsoft’s failure to “get it” with phones. Microsoft finally came out with a great mobile OS, abandoning the past Windows-based UI and delivering something that is both different and easy to use. It’s a great alternative to the iPhone and Android, but Microsoft got stuck, again. They named it “Windows Phone.” How hard does Microsoft have to look to see that “Windows” is not a strong consumer brand, it has been damaged in the marketplace. Yet Microsoft owns a great consumer brand, in the only area where the company seems to have broken out of its enterprise/SoHo mindset. Xbox. A strong consumer brand with virtually no negatives.
Obviously Microsoft didn’t ask me to help with naming “Windows Phone.” And they don’t seem to have done any market research. A product called “Xphone” or “Xbox phone” would be selling far better than Windows Phone. Sure, they were late, but the phone market is so dynamic that an exciting product from an established supplier can quickly grow into a major player.
Microsoft didn’t learn from the lessons of the TabletPC. In fact, they don’t seem to have realized there were lessons to learn from its failure. And the future of consumer computing devices (except for game consoles) is in the hands of Apple, Google, Samsung, along with a number of other CE hardware companies.