Saturday, February 14, 2009

City of Redmond to Add High Levels of Lithium to Drinking Water

Apple has kicked Microsoft's butt for years with their clever marketing.

I personally remember the first Apple advertisement I ever saw: A full page newspaper ad welcoming IBM to the personal computer market.


Very clever ad. Did not do the trick. In very short order IBM, Microsoft, and an absolute army of wannabes crushed Apple and left them with a microscopic share of the market.

Why? Three primary reasons account for this:

1) Price. Part of Apple's strategy is to control the entire experience. That means no cloning and no competition within their little universe. PC price wars started six minutes after the PC was introduced and continue today.

2) Flexibility. For every business related application that runs on a Mac there are 7,952 that run on a PC. This wasn't always true, but evolved over time. For example, in the world of manufacturing, it is easier to buy a box full of microchips and write your own programming language than it is to control a machine with a Mac.

3) The people who SELL this stuff also like to play with it. They like to take it apart, upgrade this, adjust that, overclock the processor, stuff RAM up it's nose. You can't do any of that with a Mac. You can open it. You can dust the inside. But the number of cool things you can do with it don't fill an afternoon.

In the end, all of these come down to one huge weakness: Absolute Control Freak behavior at Apple.

So anyway, . . .

Then out of nowhere comes the iPod.

Awhile back I wrote about Daniel Pink's book A Whole New Mind. The iPod is a perfect example of how Pink's theory works. Style. Sizzle. Superb functionality that is literally wrapped in perfect presentation.

The iPod was technical perfection in your hand. It just worked. It had no controls that made any sense to anyone with any computer experience. But everyone knew how to use it as soon as they touched it.

Apple became an MP3 maker with a side business building computers. I'm not exaggerating here.

Then came the iPhone. Instantly, it became the standard against which all phones are measured. Hard core anti-Apple people found themselves buying iPhones. $500? No problem. What? Cutting the price of my phone in half right after I bought it? No problem. What? I need a new iPhone six months later for $500? No problem.

Apple sells crack in a phone-shaped container.

and on a much smaller scale . . .

Apple has successfully beat up Microsoft in the P.R. game. The whole I'm a Mac/PC thing kicked Microsoft's butt.

Microsoft's attempt to come up with something even remotely good resulted in making them a laughing stock among their partners, vendors, resellers, and employees. Their stupid ad campaign can be summed up as: What the hell was that?

- - - - -

Reality check:

Apple has a market capitalization of $88 Billion on revenues of $33 Billion. Profit is $11 Billion.

Microsoft has a market capitalization of $170 Billion on revenues of $62 Billion. Profit is $49 Billion.

Stop. Think.

Would you have guessed that Apple is more than 50% of the size of Microsoft?

But Microsoft has more than four times the profit.

Good news or bad news? It depends on which numbers you look at.

Unfortunately for those of us in the business of supporting small businesses:

1) We don't really have any viable options for 90% of our clients. We sell Microsoft operating systems and software.

2) Microsoft's leadership is focusing on the wrong things.

First, Microsoft's leadership is obsessed with Apple's ability to look good, have great products, and own the P.R. market.

Who cares?

Microsoft should NOT be in the MP3 player market. You can't do it right. Get out now. Go compete at what you do very well: Building great software.

"Boo hoo. Apple has a better ad campaign than we do."

Who cares?

1) Apple has never taken market share because of their ad campaigns. Clever award-winning campaigns have nothing to do with making people buy stuff. Clever award-winning campaigns help marketing companies compete for shiny glass marketing industry awards. That doesn't make you money!

Everyone at the top tiers of Microsoft needs to read The New Rules of Marketing & PR by David Meerman Scott. Then please have them fire every single person remotely related to marketing.

Look at history. Welcome to the PC market, IBM.

Apple has clever, ineffective marketing. Who cares? Microsoft shouldn't.

2) If Microsoft focused on making SOFTWARE and pushing it through the CHANNEL, they would have nothing to worry about.

I used to be able to answer the question about what Microsoft does. But not anymore.

Their so-called leadership has become depressed and obsessed with Apple.

Apple: On a good day, 10% of the market.

Apple: Proprietary, closed, over-priced systems that cannot compete in 80-90% of businesses in the world.

Apple: A company that will probably disintegrate when Jobs is gone.

Apple: A hardware manufacturer that makes most of their money in the telephone and MP3 player business.

Apple: The company that threw away their own operating system in favor of a Linux flavor. Like Tivo or Novell.

I'm sure the leadership at Apple is happy when they eke out another .01% of the market. But I'm also sure they don't obsess about it. Apple understands the business they're in. They don't compete with Microsoft.

Microsoft does not understand the business they're in. They think they compete with Apple.

As someone with a great deal at stake with Microsoft, I really want them to focus on what they do well and what they can do well. Focus. Focus. Focus.

- - - - -

I used to think that petty personal bickering and corporate penis envy was limited to small companies.

But Microsoft has demonstrated over and over that they are completely obsessed with personal competitions with the folks at Apple and Google.

The latest example:

Microsoft to Open Retail Stores

Every single person who hears this has the same reaction: Who's running that company?

Answer: People who are depressed and obsessed with Apple, and who have lost any focus on what Microsoft can do better than anyone else.

This is just another example of Microsoft playing Apple's game. And why? Ugh . . . well . . . we don't know.

This move is so bizarre, I don't know where to begin. The Dell Stores went out of business. The Gateway Stores went out of business. Circuit City went out of business. Egg Head Software? Long gone.

Hey, Microsoft: Did you hear that people are moving to the cloud? Yeah. They're going to be buying software online. I don't mean to crush your dreams, but you're a software company.

- - - - -

And so comes the Lithium.

I have learned that a secret meeting of the Redmond City Council was held last night. They voted unanimously to add massive amounts of Lithium to the drinking water in an attempt to overcome widespread depression on the Microsoft campus.

The goal is to help Microsoft's leaders slow down, think about the big picture, stop being depressed, and save their company before it is destroyed by irrational behavior.

My dear friends at Microsoft: If you see yourself as playing the game of creating the best software in the world, then you will realize that you are winning.

Let the guy with the turtleneck sell MP3 players. Who cares?



  1. I'm an Apple consultant (yes, we do exist), who also does Windows and Unix work. I frequently implement OS X Server, which in some ways is better than SBS (system imaging, multimedia support), and in some ways worse (the email and calendar sharing isn't as good as Exchange). 10.6 is going to be even better in that regard, and come out roughly the same time as Windows 7 - it'll be interesting to see how the media covers it.

    I have tons of people with Mac's who run Windows in emulation on top of Mac OS X. Works great. All those vertical market Windows apps are now available on the Mac. That advantage is pretty much gone - sorry.

    Hardware flexibility makes sense to a point, but frankly, when you're rolling out a whole office or lab of systems, you want them to be as identical and interchangeable as possible. The most common upgrades are RAM and hard disks, and putting them into a Mac is as easy as a PC in all but a few cases (HD's in iMacs and Mac Minis being the only exception).

    Yeah, if you're a gamer, you might want to slap a new video card in, which you can't easily do on a Mac. Or you could just buy an Xbox (I own both the original and 360), and not bother with upgrades for 4-5 years.

    Comparing Apple with Microsoft is kind of disingenuous - Apple is a hardware company, where in that department at most MS makes game consoles and peripherals. It would be better to compare Apple's numbers against say the merged numbers of Microsoft and Dell or HP. I'd bet they wouldn't be as rosy a picture as you paint.

    I'm with you on the perception game - Microsoft needs to get back to making good software (hey, I use MS Office for Mac all the time, and it isn't that bad), and not chasing shadows.

  2. Thanks for the feedback, zdw. I think we're mostly in agreement.

    Apple is, in fact, a hardware company.

    Microsoft has to come to grips with the fact that they are a software company.

    As for specialty applications: I've never seen a welder, cutting machine, or any other manufacturer equipment run on a Mac.

    And if there's one thing that doesn't work in virtual environments, it's the RS-232 port on the Mac (or PC) reliably emulated in a virutal environment.

    So "that advantage" will be here forever.

  3. For some background:

    This discussion got started during the all-star mega-chat that is the SPAM Show #3.

    It's available / streaming off on the right.


  4. Well said Karl!

    I am an SMB IT consultant and niche in Apple integration with Windows network, mostly SBS.

    I spent my former life in the print/reprographics industry which was Mac'd to the hilt. Still is mostly but I agree that software is king for Microsoft. Thats where I learnt to use mixed Unix servers/Windows office PC's and Mac creative machines. Pretty much old school demarcation.
    Things are more blurred now of course.

    Look at the software that professional Mac environments use.
    As zdw says, most Mac people have virtuslised Windows. Just a few years ago Mac evangelists would have thrown their MacPro's out of the window (sic) if they had know that. Mac people are very forgetful about trends because they can be. Apple leads, they follow.
    Adobe even brings out Creative Suite on Windows now before the Mac edition!

    Apple sells 'great' hardware to people who appreciate the 'kind' of hardware.

    Microsoft needs to design and sell GREAT software be it in the cloud or on the in-house network.

    He at the top must go!
    Maybe he could replace Jobs at Apple ;-)



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