How Microsoft Is Destroying Its Future
A March to Irrelevance
Source: JD Lasica
“We don’t believe in coming to market like Apple – high margin, high quality, high price. We believe in high volume and low price,” – Steve Ballmer
Most companies spend millions attempting to promote the first and abolish the second.
Even the poster child of bargain-marketing, Walmart, has been struggling for the past few years to move upmarket with in-house “designer” brands and higher end goods. Cutting costs mean cutting margins. It means living lean—and having no brand loyalty.
If you compete on cost, the moment a cheaper competitor comes along, there goes your market.
But on the low end, Microsoft is not going to outcompete Linux on the low end—and if they do, the Microsoft of now is not going to much like the Microsoft it’ll have to become to do so.
That leaves the mid-market. Which is nothing.
How many restaurants can you identify as “mid-market” restaurants? Usually, there’s only the cheap ones and the really expensive ones.
You eat at the cheap ones because you have to, and you eat at the expensive ones because you can afford to. There isn’t really a stopping point in the middle.
The only markets that do are ones where the climb up to “high end” is a huge portion of your income—like the market for cars and houses. Mid-markets exist when it takes too long to get to the high market.
Is a computer/operating system on the same scale?
But if Microsoft does suddenly decide to turn around and fight for the high-end market, that’s a war that numbers say that it has already lost.
Fighting for specific markets is a realm that Microsoft seems to not understand. Their current model assumes they simply have all of it.
Will MSFT disappear completely from the grid? I doubt it. But I also doubt that Microsoft, a few years down the line, will look anything like it does now—specifically, a company of significance.
