Why Microsoft Must Become Apple and Google

Can't beat 'em? Then join 'em. Microsoft's future may lie in stealing the strategies of its most bitter rivals.

The winds of change are a-blowin' through the PC industry, and those winds have left Microsoft clutching at its market share and searching for relevance. Windows 8 is Microsoft's first major effort to weather the tempest, but no operating system alone is enough. True salvation lies in adopting the strategies of enemies.

Indeed, to shore up its future and compete with Apple and Google, the once infallible software giant must become Apple and Google.

The need for drastic measures stems from the startling fact that Windows no longer rules the computing world with an iron fist. Sure, it still presides over the desktop; but thanks to the rapid rise of tablets and smartphones, Forrester Research estimates that globally Windows beats at the heart of just 30 percent of all consumer computing devices--a staggering 40 percent drop in just four short years. If it wants to stay relevant in the new normal, Microsoft needs to change something fast.

That "something" doesn't involve reinventing the wheel (though it has involved reinventing Windows). Instead, Microsoft should take a few pages from the playbooks of its uber-successful rivals.

Going Google

First and foremost, Microsoft needs to remember that it's a software company, not just a Windows company. Take another look at the chart above. If you include mobile platforms in your calculations, a full 70 percent of computing devices run an operating system that isn't named Windows. Recent figures from multiple research firms indicate that Android and iOS power more than 90 percent of all smartphones and tablets sold in 2012. Those crazy-high numbers represent hundreds of millions of users who are currently underserved by Microsoft.

In these days of rampant second screens and tertiary tablets, a software company leaves a bunch of potential customers outside its reach when it dedicates itself solely to the Windows ecosystem. Worse, an OS-specific company risks seeing its customers high-tail it to greener pastures--aka platform-agnostic software that works equally well across the multitude of existing devices. That's even true in the business realm, long a Windows stronghold, as more and more companies embrace the BYOD trend.

The cross-platform gold standard, of course, is Google, which shotguns its software far and wide despite owning two perfectly viable operating systems of its own in Android and Chrome OS. (Admittedly, Google hasn't developed many dedicated apps for Windows 8 or Windows Phone 8, but the company has said that it will do so if those platforms become popular.) Dropbox, Evernote, and Netflix follow a similar path: supremacy through ubiquity.

Microsoft has already dabbled in the cross-platform waters, releasing several apps for iOS and Android, but those apps have mostly been second-tier software, not premier programs such as the company's seminal Office suite. That could change soon. Mobile Office apps are said to be in the works, though experts expect them to be free apps tethered to a premium Office 365 subscription, in an effort to avoid giving Google and Apple a cut of the revenues. Bob O'Donnell, program VP for clients and displays at IDC, says that Microsoft can basically "start printing money" when it releases Office apps for Android and Apple devices--but only if it pulls the trigger before would-be users develop a taste for alternative productivity apps that are already available for mobile operating systems.

Juggling cross-platform software availability will be tricky for Microsoft. For example, how do you offer Office for the iPad without reducing the luster of Windows RT and Windows Phone 8, both of which tout access to free Office apps as a distinguishing feature? Nonetheless, as a software company, Redmond must have a presence on Android, iOS, and maybe even BlackBerry 10, as the world moves beyond the confines of Windows alone.

Et tu, Apple?

Windows still dominates the PC, and obviously Microsoft can't afford to let its flagship OS stagnate while it's busy expanding to other platforms. In fact, Microsoft should redouble its efforts to promote Windows 8 as more than just a 'tweener that straddles two disparate worlds. What's the best way to do that? Surface...lots more Surface.

There's no need for Microsoft to gulp down mouthfuls of Apple's Kool-Aid and completely kick its manufacturing partners to the curb, of course. No single supplier could satisfy the width and breadth of the PC ecosystem. But offering a wider range of Surface products would help Microsoft reduce its reliance on its hardware partners, and enable the company to take a direct role in molding the perception of Windows devices. This is what Google's Nexus devices do for Android. Hardware is just so visceral. It resonates in ways that software alone cannot.

That observation goes double in the case of Windows 8 and its finger-friendly modern UI. At CES, Windows business chief Tami Reller said that Microsoft feels the new-look Windows would have enjoyed stronger adoption out of the gate if more touchscreen devices had been available at its launch. And the Register recently ran a report (based on anonymous sources) claiming that Microsoft secretly blames its OEM partners' touchscreen qualms for Windows 8's less-than-explosive debut.

Regardless of whether Microsoft's hindsight is accurate, expanding the Surface brand would allow the company to strategically counter similar concerns in the future. An expanded Surface lineup would help Microsoft in another crucial area, as well: mindshare.

If Microsoft wants consumers to look at its operating system as more than a piece of preinstalled shovelware, Windows needs heroes. Windows needs shining stars. Simply put, Windows needs Macs--paragons of design that represent the perfect marriage of beautiful hardware and highly functional underlying software.

Few mainstream OEMs achieve reference-quality designs on a par with Apple's finest. But with the first wave of Surface tablets, Microsoft has proved that it can make hardware that's both thoughtful and attractive, and Microsoft's advertising budget is large enough to bring the company's products to mainstream attention--another feat that few of Redmond's manufacturing partners can accomplish. A strong Surface lineup could deliver a cohesive response to Macs and finally provide Windows with a true brand identity, lifting the OS above the usual free-for-all hardware hodgepodge.

The future is now?

Does this all sound crazy? It shouldn't: Microsoft's cloning efforts have already begun.

In addition to the device-spanning capabilities of Office 365's business offerings, Microsoft has released a slew of Xbox-branded apps for iOS and Android in recent years, along with dedicated apps for SkyDrive, PhotoSynth, Lync, OneNote, and Bing. The company even released an Android-exclusive--and excellent--app in the form of On{X} in 2012, and it plans to release native mobile apps for its business-focused CRM software later in 2013. We'll have to wait and see whether premier programs like the Office apps are truly headed for Android and Apple devices, however.

Microsoft has made no bones about its intention to continue making hardware going forward. In the company's annual shareholder's letter, CEO Steve Ballmer wrote, "There will be times when we build specific devices for specific purposes," as part of a continuing effort to "focus relentlessly on delivering delightful, seamless experiences across hardware, software, and services."

CFO Peter Klein put Microsoft's plans for the Surface brand even more plainly during the company's recent quarterly earnings call: "We're going to expand geographically; we're going to expand the product lineup; we're going to expand retail distribution and capacity."

Rumors of Surface phone tests and a 7-inch Xbox Surface tablet abound, and the Intel Core i5-powered Surface Pro tablet should be hitting the streets in a matter of days according to Microsoft's stated timeline. Bring 'em on, I say, and let the OEMs grumble all day long. The times are a-changin', and the very future of Microsoft may depend on Steve Ballmer and his band of merry engineers following trails blazed by their nemeses.

This story, "Why Microsoft Must Become Apple and Google" was originally published by PCWorld .

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