Microsoft is in the midst of rolling out System 7, the newest generation of
Windows operating system. The company is betting much on the success of this
system, particularly after the lukewarm reception it received to Vista. What’s
more, System 7 is seen as the base of future generations for the software —
leaner, more secure, more capable and easier to use.
For enterprise-level organizations, System 7 is everything they could ask
for — a bridge between the more functional Windows XP and the system corporations
want and need.
For the rest of us, System 7 is a nightmare. Not because it is a bad system.
Not because it is a resource pig that will need upwards of 16GB of RAM to run
well. But because Microsoft’s marketing departments just aren’t
doing their job.
The company that built its reputation on savvy marketing and out-maneuvering
competitors would rate no more than a C-minus for its efforts. Sure, the company
does a great job of promotion, and has its distribution networks in place and
functioning. But marketing is a blend of four elements — product, price,
promotion and distribution. If the “mix” of these four elements
is wrong, it doesn’t matter how good the product is. And Microsoft has
the wrong mix.
Here’s what I mean:
- The product has too many versions. As of release time, there are six different
versions that include Windows 7 Starter, Windows 7 Home Premium, Windows 7
Professional, Windows 7 Enterprise, and Windows 7 Ultimate. Windows 7 Home
Basic will also be sold, but only to emerging markets. A seventh will be added
for European customers. Even if you can figure out which of these to buy,
nearly all will come in both 32-bit and 64-bit configurations. Awk!
- The Windows product names are alphabet soup. We’ve noted before the
goofy ways in which Microsoft confuses consumers by using the same name for
different products. Explorer, for example, being the name of both your file
system manager and web browser. With Windows, the problem is that they can’t
use a consistent naming scheme. It was Windows 1, 2, 2.1, 3, and finally 3.11.
Then, it leapt to Windows 95 and 98, followed by the incredibly forgettable
Windows ME, then back to years with Windows 2000. And then, the went back
to the alphabet again for Windows NT and XP, followed by the art department
deciding to express themselves and call it Windows Vista. And now, we see
a new naming scheme, Windows 7. Surely there is a better way.
- The product costs too much. Sticking it to your customer base is hardly
a way to build customer loyalty, and by keeping the price of each new system
so high (Windows 7 will carry an upgrade price of more than $200, while the
competitive Mac OSX 10.6 “Snow Leopard” will sport an upgrade
price of $29). All that this pricing strategy has done is to push more consumers,
including small businesses, to software piracy in an effort to keep using
Microsoft products and stay current. This has then forced Microsoft to resort
to increasingly bizarre and draconian efforts to stop piracy that end up punishing
users who have actually paid for their software.
- This pricing strategy cripples product distribution. If Windows 7 follows
the standard Microsoft pricing strategy, it will offer the initial product
at an astronomical price, and then drop the price over time according to how
sales are going, how the product is received, etc. This strategy trains consumers
not to use the system when it is first released (surely not what the company
intends). In fact, the mantra for Windows operating systems is now to wait
until the first service pack is released. Microsoft’s product pricing
strategy therefore encourages customers to help drive up the distribution
costs by forcing Microsoft to essentially scrap the first generation of its
products in order to replace them with new products that incorporate the service
The danger for any company of the stature of Microsoft is that it begins to
believe its own press releases. Far from being the marketing wizard it once
was, the company appears to be sitting on its marketing laurels, doing things
the way they have done them in the past with no real understanding of how the
marketplace has changed in the past 25 years.
They will change, eventually, as new blood comes to the company or sales continue
to decline. But that’s not what we want from Microsoft, and that is not
what will best serve accountants who use its products.
A compendium of ideas, products, rants and raves from the viewpoint of
The author has no financial interests in any of the products mentioned.
Feel free to
disagree, or to share your ideas by sending them to email@example.com.
– User Discussion Groups. In a world grown fractious
See inside October 2009 issue
5 Keys to Effective Marketing & Branding
Please join me in a thought experiment. Think of the name of your favorite restaurant. Just think of the name. Try not to think about the food, the service, the ambiance or the dessert. For me, it is impossible to keep it just to the name. As soon as I think of the Flea Street Café, I can’t help but think of all the attributes (tasty, organic, caring service, friendly) that make it a great place to eat and my favorite in the bay area.