Archive for January, 2008

The Scorecard: Apple, Dell, Google and Microsoft

January 21, 2008 13 comments

Last week I attended MacWorld for the very first time. I was the only attendee running Windows Vista on a Dell notebook. I had to avoid Jobs just so I didn’t get kicked out of the event. If he’s quick to tell a fan how rude they are for requesting a picture, imagine what he would have told me if he would have seen me with a Dell!

The Jobs Keynote was absolutely awesome. One of my favorite announcements was the major upgrade to Apple TV with HD Movie rentals. To me, this completely eliminates the need for either HD-DVD or Blu-Ray. The MacBook Air was also a phenomenal product. Unbelievably thin!

But the MacWorld event was far from perfect. In fact, when compared to Microsoft events it was the worst event I had ever attended. I have been to quite a few Microsoft events including PDC, TechNet, Mix, WWPC and several internal events and I had never seen anything as poorly organized as the MacWorld event. Everything from the MacWorld web site, to event guides, schedules, registration, food and staff was the worst I had ever seen. Considering how insanely great Apple products are, I was expecting an Apple-like quality to the event, which did not exist. The event was so amateur in flow and feel that a typical Microsoft event attendee would have guessed this was the first event of its kind. Even then, it would have been inexcusable.

That triggered me to think about a scorecard for four of the main tech companies in our industry: Apple, Microsoft, Dell and Google. Each of these companies is exceptional at something, but none of them are great at all. Without any scientific data to back my claims, here is how I would personally rate the best company in each category:

Apple, Dell, Google and Microsoft

Operating Systems – Apple’s Tiger and Leopard both outshine Vista for a number of reasons: performance, overall system responsiveness, included user apps, system stability and better search. As an operating system, Apple’s OS X is clearly better than Vista.

Notebooks – If Apple’s notebook designs, magnetic power cords, slot load DVDs, weight or ultra small size had not won you over, the fact that each of Apple’s notebooks outperform the others in their class should get you to notice. The MacBook Pro was named the fastest Windows notebook reviewed by PC Magazine! There’s no question Apple makes the best Notebooks.

Desktops – Although Apple’s desktop offerings are somewhat limited with the iMac, Mac Mini and Mac Pro, there aren’t comparable systems that come close in packaging, size and performance in any of the categories. Dell’s XPS All-in-one is a blatant copy of the iMac. It’s too little too late.

Servers – Dell’s server line still outshines Apple in filling the variety of needs as well as beating Apple on price and the badly needed services for high-availability.

Hardware Variety – Dell is the hands down winner in providing the largest variety of hardware. Ironically, this could be a double-edged sword for them making it much more difficult to improve a product line that contains hundreds of products vs. just dozens.

Hardware Configurability – Again, Dell comes out ahead of Apple on configurability, but once again, this is a double edged sword. While it’s great that Dell offers 10 different video cards, the lack of focus ensures a hit or miss when it comes to drivers.

Product Aesthetics – I don’t need to comment on this one. Most companies couldn’t spell Aesthetics until Jobs came back to Apple.

Web Applications – Google is the clear winner when it comes to web applications for a variety of reasons: super fast pages, no clutter, ads that you don’t mind, always available and free. Microsoft’s MSN and other web offerings have always fallen short on all of those criteria.

Developer Tools – There’s no question that Microsoft takes the cake on this one. The Visual Studio product line has been a slam dunk winner with developers, thanks in large part to Scott Guthrie. Scott is one of the only remaining executives at Microsoft who gets it, but the rest of the world is catching up fast and Scott is fighting an uphill battle with the rest of gang at Microsoft.

Developer/Partner Programs – Microsoft again clearly has the better developer and partner programs with Empower ISV, Certified and Gold partnerships. They also have a longer history of being relatively nice to partners when compared with Apple (or even Oracle). Even Steve Jobs admitted that Microsoft has always been better at partnering that Apple. The shaky iTunes partnerships are a great example of Apple failing to keep even large partners happy.

Conferences & Events – If you’ve ever been to a Microsoft event, you know that registration is fast, organization of class schedules and web site management of individual schedules rocks and the abundance of food, drinks and snacks are nearly overboard. By contrast, I have nothing good to say about the MacWorld logistics and with the exception of the MacWorld keynote, the rest of the contents are on par.

Innovation – Apple is the most innovative large company in existence today. They are the only company that doesn’t shy away from building everything that goes into their products, both hardware and software. Google and Microsoft have stuck with software while Dell has stuck with hardware and even with the focus, none of them have done a great job.

Customer Service – This was a tough one. Microsoft and Google are clear losers in this regard. For me, the race was between Apple and Dell. On the consumer side, Apple wins hands down because Dell has outsourced its support to an incompetent company. On the business side, if you have the right account, Dell win beats Apple, but since Dell only wins IF you happen to be a valued customer, I had to give it to Apple.

Customer Comes First – Microsoft is the only company that puts customers first at all cost. They clearly listen to their customers and they react fast. None of the other companies come even close. Google and Apple are too closed from the outside to put customers first and in Apple’s case, they have clearly shown they don’t mind slapping a few customers here and there. Dell does a decent job as witnessed from the variety of computer lines they offer.

Return Policy – Dell takes the prize on return policies. No hassle, 30 day returns. In contrast, if you take a brand new computer back to an Apple store that you bought earlier that day, they’ll want to charge you a 10% restocking fee. Not cool.

Warranty Policy – Again, Dell’s warranty is significantly better and they actually send you replacement parts to fix your computer. Apple expects customers to send back their machines. Please!

Corporate Transparency – Microsoft is by far the most transparent of the companies with the most employee bloggers and for the most part, they are free to say what they want. Microsoft even has dedicated staff that participate in user forums, help user groups and other communities around their products. None of the others come even remotely close.

Employee Accessibility – Again, Microsoft’s employees are the most accessible. They are the most likely to return an email, escalate an issue or even take your phone call.

Passion – The measure for a company’s passion has to come from the users of their products. Clearly Apple has the most passionate users who often would be willing to part with a limb than with their Apple products.

Environment – This was a tough call. With Google actively promoting green technologies, using solar power for 30% of their electrical needs and subsidizing the purchase of hybrid cars for their employees, I could have easily called it a tie with Apple. However, I decided Apple has a much more difficult job of being environmentally friendly and they have taken a very proactive approach to the issue with their products, designs, packaging and even an environmental activist on their board (Al Gore).

Overall – If I could just own 1 product from any of the above companies, my decision would only be amongst Apple products. Nobody else would even get a consideration. It’s an easy choice to pick Apple as the overall winner amongst tech companies who are doing [most] things right.

So if you’re wondering why I still walk around with a Dell notebook, the answer is I was waiting for MacWorld to make sure I purchase the right product. My MacBook Pro is on its way.

Marketing is the Product’s Job

January 14, 2008 2 comments

Fiji water travels more than 5,000 miles to get to your handsThere is a view in the business world that “a great salesperson can sell ice to an Eskimo.” I used to think this was absurd, until I found myself sipping water from a bottle of Fiji. With a little research, I realized that this $15 billion industry known as “bottled water” didn’t even exist 20 years ago. 20 years ago, everyone was content with water that flowed from their faucets and drinking fountains, but all of the sudden we have a preference for water that travels more than 5,000 miles to reach our hands and we’re willing to pay hundreds of times more than a glass of water from a reverse osmosis filtered faucet (equally good in quality).

Wow! I’m an Eskimo buying ice.

The business wisdom that “a great salesperson can sell ice to an Eskimo” speaks the truth. Here is a product that requires zero R & D. Any one of us could make equally good bottled water in our own homes as the multi-billion dollar counterparts and yet a company out in Fiji or France or half-way across the country is successfully selling this product to us. How can that be?

An even worse example of this type of successful salesmanship is of the millions and millions of people (myself included) who have bought PCs that were preloaded with Microsoft Windows when they already had a license of Windows they intended to use. In fact, most software developers I know wipe out the operating system that ships with their machine and install their own licensed copy. I have personally paid for at least 15 or 20 copies of Windows XP Home Editions that were pre-installed on Dell machines, even though I have never ever used Windows XP Home Edition on any machine.

This is like selling ice to Eskimos for the purpose of throwing it in the ocean. Except, I guess, that I had a choice when I paid for that bottle of Fiji water, and I didn’t have the choice of buying a computer with no OS from Dell.

Of course, these extreme examples of gaming the consumer are rare, hard to plan for and eventually, they die out. With environmental issues becoming more important to Americans every day, buying water from half-way around the world is becoming less and less appealing. Eventually, it will end.

And while Microsoft is working hard to create the image of “innovator” and a “fair competitor,” more than 20 years of forceful salesmanship has finally caught up with them. The technology veterans of our industry are more skeptical and negative towards Microsoft’s efforts now than they have ever been. It will take a while before the tech industry forgives Microsoft.

Companies That Earn Respect

Over and over I’m finding that the companies I respect the most and and get excited about are those that build products that market themselves. Just about everyone who has played the Nintendo Wii in the past year has become a spokesperson for the company. Google’s marketing budget in its first 5 years was virtually non-existent. YouTube became a household name before it even knew how to spell marketing. Before anybody had ever seen a Toyota Prius ad, there was a waiting list to buy the car.  For 7 years in a row, owners were marketing the car as if they were getting a kickback from Toyota.

So, is it possible to sell ice to Eskimos? As absurd as that sounds, yes it’s possible. But given the choice, why would you choose to swim upstream and work really hard at “selling”? Yes, it’s even possible that with the right strategy, timing and square packaging, you might even be able to do extremely well with a product that needs a lot of marketing. But you might find that putting that energy and effort into building a product that can sell itself will be a better investment and create more loyal customers.

Create a company and a product that earns people’s respect and you will find your marketing is already at least half done.

Categories: Business

Lessons from Microsoft: Innovation and Competition

January 7, 2008 18 comments

Innovate to Create Better SoftwareWhile I was at Microsoft, they had programs like “Sun Down” and “Beat Oracle” that took direct aim at competitors Sun Microsystems and Oracle. They provided the sales teams with talking points and when it came to larger deals, everyone was available from devs to PMs or even Steve Ballmer, if it meant killing the competition — even at a loss.

Microsoft plays to win. Yes, to a fault.

Killing the Competition

I’ve been paying attention to the software business for the last twenty years or so, and in that time I’ve watched Microsoft nearly wipe out WordPerfect, Lotus, Stac, Apple, Novell, Netscape, AOL and Sun just to name a few. They’ve had their market success, not by innovation, but rather with the strongest showing of competitiveness, and a willingness to do whatever it takes to win.

So, if winning meant OEM deals that bound hardware vendors to not install other OSes on any machines they sold, so be it. If winning meant making deals with ISPs that disallowed the distribution of Netscape, while including IE as an “inseparable” component of the OS, so be it. If winning meant copying every innovative aspect of Java (like virtual machine, byte code, garbage collection, etc. almost to the letter) with the introduction of C#, so be it. Who can argue the success Microsoft has realized by placing competitors into the middle of their crosshairs and firing.

They do an incredible job when they focus on beating a competitor. It has been a main driving force of the company since its earliest days.

When your main driving force is beating the competition, what do you do when you’ve actually beat them? That’s what happened to Microsoft by the late 90s. They had beaten virtually all of their competitors. They had beaten Apple so bad that they were willing to give them $150 million cash to help breathe back some life. Netscape was all but destroyed.

By 2000, Microsoft’s market share of Operating Systems and web browsers were both in the high 90% range. In 2001, Microsoft put out Windows XP, it’s best version of Windows to date and Internet Explorer V6, the best browser at the time.

Then, Microsoft seems to have had no idea what to do next. There were no more serious competitors to pummel in these areas, so it shifted its focus on to Java and Oracle (which happened to be during my time at the company). In 2001, everywhere you went (inside of Microsoft), you’d hear Sun, Oracle, AOL and LAMP (the collection of Linux, Apache, MySQL and PHP). By this time Google was well on its way, but no attention was being given to Internet search. Microsoft believed that AOL’s strategy of locking in Internet Users and shoving content down their throat (as AOL had done with its acquisition of Time Warner) was a good strategy that needed to be copied and a competitive threat that needed to be beaten. So the focus was on AOL rather than Google or Yahoo.

Ballmer is famous for looking for billion-dollar market opportunities and in 2001, Google wasn’t a billion-dollar competitor. In order for a market to be worth a billion dollars, it has to already have some major competing players. That’s where Ballmer is short-sighted. If the year was 1979 again, Ballmer wouldn’t bother with the OS business, because it would have been to be worth only a few million.

Vista and IE 7

After the release of Windows XP, it took Microsoft another 5 years in a scrambled effort to put out another version of its Windows operating system. 5 years of work on a world-class OS wouldn’t be so bad if Microsoft had nailed it with Vista, but it was obvious that Vista missed the mark in a big way. First, some major compelling features were dropped in the final year to get Vista out the door. Second, it was plagued with all kinds of bugs from device drivers to missing features. Third, there were definite signs of “borrowing” from Apple’s now resurging OS X.

Internet Explorer had a similar 5-year absence. It wasn’t until Firefox started to make headlines capturing 10% of the browser market that Microsoft started to take note. Again, it was a quick push to fight off the competition. So after 5 years of intensive development on IE 7, Microsoft gave us tabbed browsing. As Microsoft had predicted, the “WOWs” started coming in 2007. Except, it wasn’t what Microsoft had hoped. Instead of “Wow, I can’t believe how awesome Vista [or IE 7] is,” it was “Wow, I can’t believe how lame Microsoft has been all these years and I’m just starting to realize it now!”

Microsoft’s focus on competition has made them one of the most successful and profitable companies in the world. It’s hard to argue with that. There is no other company in our industry that comes even close to adding $16 billion in profits with the passing of each year. In 2008, Microsoft will make another $16 billion or more in profits — more than Apple, Google, Sun and Oracle combined. But 2008 will also mark a turning point for Microsoft. It will feel the heat from the innovation machines at Apple and Google more than ever before.

Years of being competitive-driven, rather than innovation-driven have caught up with Microsoft.  A negative, anti-Microsoft sentiment was planted in the tech world about 10 years ago and it’s coming into maturity.  The tech elite have a beef with Microsoft and rightfully so. It’s not always about profits.

Focus on Competition and You’ll Kill Innovation

The lesson here is not to ignore your competition. On the contrary. Microsoft has shown us that at the very least, it’s important to know your competition. You can’t ignore competition. But like everything else in life, there needs to be balance. Microsoft has been historically overly focused on competitors and therefore, it has been plagued with an image that lacks innovation. It’s not just an image, it’s true. That’s why no matter how much they spend on PR, it’s a lost cause.

Their lack of innovation has been proven with 5 years of nothingness from the OS and IE teams during a time when there was virtually no competition. When the competition started to innovate, Microsoft’s OS and IE teams woke up, not with innovative new features of their own, but simply playing catch up and copying the innovation that was coming from competitors.

Now Microsoft is paying the price. OS X is making huge gains in market share and Firefox’s momentum continues. 2008 will be the year of Apple. Before the year is over, Apple will have double-digit market share and the sea of switchers from a Windows-only PC to a Macintosh will seem unstoppable.

Microsoft, Apple and Google are clearly the giants of our industry. Most of our projects pale in size comparisons, but there are clear lessons to be learned by watching the giants dance. If you find your project’s requirements read awfully close to the feature set of a competing product, your project is lacking innovation – it’s a Microsoft-like project. If you spend more of your day worrying about what your competitors are doing vs. thinking of new ways to solve your customer’s problems, you’re spending too much time on the wrong stuff.

Companies that release mega-hit products generally share one thing in common: a different approach. Put another way, they share the drive to innovate. They focus little on having another checkbox next to a feature to make their product look as good or better than a competitor. They let the marketing department worry about the checkboxes. Instead, they spend their time building a solution in a way that has never been built before. That, in itself is the best possible way to market the product. Innovation creates dedicated, loyal and sometimes evangelical customers who go out there and sell your product.

Don’t worry about your competitors. Innovate.

Categories: Business, Development
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