Perhaps a better title for this post would be “Microsoft is NOT Market Orientated Yet…(and we sure hope they will be soon…). Firms that are market orientated have: (1) an incredible strong external orientation towards customers, (2) incredible strong external orientation towards competition (i.e., the market place), and (3) excellent inter-firm communication to capitalize and adapt to the information coming in from customers and competition keeping the firm ahead in the industry. This description has not been a fit for Microsoft in a long, long time. If we look back and think about the major trends in tech over the last 10 to 15 years, Microsoft missed the Internet (at first), missed search, missed social, and appears to be missing mobile. I could fill this blog on the reasons why this occurred but let’s stay on the market orientation theme for now.
John Gruber of DaringFireball summed it up well: when Microsoft was founded, it’s goal was “to put a computer in everyone home” and Gates, Ballmer and Co. did an incredible job with that goal in the late 1970’s and the 1980’s to become the colossus it became in the 1990’s. But once that goal was achieved and Mr. Gates stepped down from the CEO chair in the 2000’s, that same goal did not serve Microsoft as well. The goal should have been modified “to put a computer in everyone’s pocket” but competition in both hardware (Apple, Samsung, etc) and software (iOS, Android, App Store, etc) blew by Microsoft over the past 6 to 8 years and is now an “also ran” in everything that goes in the pocket.
Prior to Facebook’s acquisition of WhatsApp, the top conversation in tech was “How is Microsoft going to pivot under the new CEO Satya Nedella?” Not many feel Mr. Nedella will double-down and battled it through in an attempt to be relevant in mobile. Mr. Nedella rose to the CEO post from Microsoft’s cloud and enterprise divisions and that is everyone’s best guess to the direction Microsoft is headed. I hope Mr. Nedella will get the firm to be market orientated again, spending company resources (time and money) figuring out where Microsoft would be in 2016 as opposed to trying to pay catch-up in the markets where they are an “also ran” in 2014 (see downward sloping trend in this post).
On a final thought, the desktop is no longer the dominant computing platform worldwide, however, Microsoft still has a killer app: Microsoft Office. If Office were to become available for iOS and Android, that move could cement Microsoft “in everyone’s pockets” and provide even more cash to help fuel the Microsoft of the future. Mr. Nedella biggest challenge is to change the culture of Microsoft to think more of 2019, as opposed to 1999 – and it will not be easy as too much of the old guard like Frank X. Shaw probably listens to too much Prince music (see Frank’s quote in this post).
I still think this is the top story of the year to follow….
Associate Professor of Marketing
Stillman School of Business
Seton Hall University