How Microsoft Got Its Groove Back (and Is Putting Apple in the Rearview Mirror)
Back in 2010 at the Consumer Electronics Show (CES), then-Microsoft CEO Steve Ballmer stood before a packed crowd to unveil what he called the new ‘Slate PC.’ (He never was known to be a branding genius.) In the much anticipated announcement, Ballmer highlighted ‘new form factors that are coming this year’ (Video) while holding a mock HP unit for all to see.
“Microsoft and HP to Reveal Slate PC Ahead of Apple,” read a New York Times headline that helped make Ballmer’s big announcement the buzz of CES 2010. At the time, Apple’s iPhone was destroying Microsoft on the smart device front. The Slate PC was seen by many as an Empire Strikes Back move to reclaim the mobile space.
But as we all know, Microsoft squandered this lead and watched Apple launch the iPad three months later. A market Apple continues to dominate – for now.
Later that year, we called for Steve Ballmer’s resignation in our Top Ten Predictions for 2011. Either something went terribly wrong in manufacturing or Microsoft had announced Vaporware. The tablet and smart phone fumble were just one of many factors that led Nucleus Research to believe Ballmer was a detriment to the company.
Others began to call for Ballmer to step aside in 2011, especially after Apple launched a second-generation iPad while Microsoft sat on its hands with no product entry. It wasn’t until October 2012 that Microsoft would even get into the game with it’s first Surface unit. And those early versions were rough around the edges.
In fact, the most popular feature from Microsoft Surface back then was the snap-on keyboard. I did purchase one of those early units but after a short period of time I became frustrated with its performance and it ended up a glorified clock for a few months before being added to my pile of discarded laptops.
Ballmer finally stepped aside in February 2014, roughly four years and a month after he held up the fateful Slate PC mock up. Since then, Microsoft has been slowly transforming, with promising results overall. CEO Satya Nadella seems to have brought more predictability and a renewed focus on strategic products to Microsoft. Most would agree the company is significantly better off today than it was in 2013.
I purchased a Microsoft Surface two years ago and I’ve been mostly happy with the performance of that device. Each new generation seems to be adding significant value and I’m generally very optimistic about Microsoft for the first time in more than a decade.
Interestingly enough, the company that had successfully challenged Microsoft is now starting to slip. Apple became the industry juggernaut, surpassing Microsoft in market capitalization in 2010, just a few months after launching the iPad. Today, Apple is still larger than Microsoft and continues to have an almost cult-like following. But there are serious signs Apple is shifting from leader to follower.
First, Apple has a bad case of Shiny Object Syndrome. You know, when a company is always distracted by the next big thing so they never finish what’s on the dock. Think Google! Apple recently announced it will spend $1 billion on creating new content. So rather than the conduit for TV, movies and streaming content, now Apple becomes an actual studio. Taking on Netflix, Amazon, Hulu, Disney, Columbia Pictures, 20th Century Fox. At a time when Apple products are not exactly at their best.
Which brings me to the iPhone, Apple’s biggest current star. I haven’t seen anything of great value for several generations. Changing to the lightning port – especially for the headphones, was not customer friendly. I’ve yet to hear anything promised for iPhone8 that would make me consider it. In fact, I say save your $1,200 or whatever the price creeps up to and do good. Feed a dog for 2.5 years.
The touchbar on the MacBook Pro has been a bust so far. In fact, I’ve only seen incremental benefits in the current generation of Macs and laptops. It would seem that Apple is not that interested in Macs or laptops these days anyway. In fact, Apple has been touting a laptop that can run three-programs concurrently. Multitasking! How 1995!
Interestingly enough, Apple now promotes using an iPad as your primary computing device by connecting it to a – wait for it – keyboard. Funny how Microsoft’s snap-on keyboard that was so lackluster in 2012 is suddenly Apple’s big idea in 2017.
Seven years is a long time in computing. It would seem that’s all it took for Microsoft and Apple to switch roles. After Ballmer chased Apple like Captain Ahab and the great white whale, now we see Apple following Microsoft.
That’s not to say that Microsoft has returned to its glory days of the 90s. It’s definitely not the Bill Gates era, but Microsoft is starting to lead again and if I had to bet on one horse today, I’d take Nadella’s Microsoft over Cook’s Apple.
Ian Campbell is the CEO and founder of Nucleus Research, an industry analyst firm that delivers the cold, hard numbers that drive decisions. You can also follow him on Twitter @IanInsights
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7 年Good article Ian, I agree with you. Here is an interesting observation: both Apple and Microsoft were built by visionary leaders, Jobs and Gates,. Then they both got what i would call operationally-focused CEOs. Both are brilliant but both are numbers guys. Tim Cook joined apple as VP of operations, while Ballmer was in sales. I was in a few meetings with Ballmer. He is incredibly smart and a good leader. Under his leadership Microsoft grew substantially in revenues and profits. But he was no Gates. Microsoft evolved from their operationally-led era to a new era with Satya Nadella, who is more pragmatic and more visionary. His approach to the market is new and fresh. He understands numbers don't tell the whole picture. No Microsoft cloud business is at a $20 Billion annual run rate. Investors, consumers and the market like his vision, and that is sometimes more important than numbers. Financial performance is a consequence of good leadership. Now it is Apple's turn to evolve from being led by a numbers guy to being led by a visionary again. Someone who can bring innovation to the iPhone beyond making the screen larger then smaller again and removing interfaces. It won't be easy. It will be risky. But it is the only way they can ensure their future and a void a decline. My guess is that such a change is still a few years out. iPhone sales will start declining, Apple will slip further in the ranking of most admired companies and top brands. The stock will start declining. Unfortunately, this is needed to prompt action from the board. It will continue to be fascinating to watch
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7 年I'd still place my bet on Apple for foreseeable future of PCs and similar. They certainly are in a trough currently but they've always struck me as a more self-aware organization than MSFT. MSFT has made great strides recently, but that seems to be more catching up than leadership. I remain hopeful Apple finds a fix for its current lackluster PC lineup before the new year. Otherwise, I'd start to think strongly about moving my money to MSFT. End of year product releases will likely set the course for the next 5 years.