It came as no surprise to many analysts that Microsoft has had a disappointing few months, with very slow holiday sales of its Surface tablet and continuing tepid-at-best reviews of Windows 8. PCs and Windows software are in trouble – so much so that Microsoft is investing billions to prop up one of its channels to the market – Dell, and some predict a Kodak-like demise of Microsoft.
It also comes as no surprise to anyone who, like me, turns on a Lenovo Think Pad (or any other PC) and resumes Microsoft Windows. Depending on how I exited my computer, I may have to wait as long as 5 minutes before it is usable. A similar delay occurs throughout the day when my computer falls asleep.
Consider that my employer (IBM) has 400,000+ workers across the globe experiencing these delays every day, every week, season after season, and year after year. Now think about all the other corporate giants with PCs.
Now think more broadly about how many IT Help Desk people are needed at most PC-using companies because user issues with Microsoft Windows and PCs are not easily self-addressed.
So Microsoft, how about propping up PCs and the Windows experience to deliver a better end-user experience? Companies might finally upgrade their Windows software and PCs.
The time frame for Microsoft to change its broken business model is short. Apple – offering a faster and less frustrating computing experience – is making corporate inroads, with Samsung in hot pursuit. Google’s acquisition of Motorola Mobility creates the potential for a mobility juggernaut.
Personally, I wished Microsoft avoided the easy route of investing in Dell and instead bought HP. “Microsoft with HP” could build a more compelling brand and offer faster, lighter, easier to learn and trouble shoot products that provide end-to-end computing solutions for the many workers who work at stationary desks or need something more than a tablet for their work while traveling.
Add in Microsoft phones, SKYPE, great collaboration software, rationalized HP-Microsoft enterprise servers, cloud solutions, and new Microsoft tablets and you’d having a winning suite of enterprise technology for IT leaders who would love to regain control over data security in the “bring your own device to work” world.
A lot of big companies acquire other big companies to keep profits growing – consolidating an industry while not delivering any additional value to customers. Management wakes up the next quarter to face an even higher growth hurdle with no additional fuel for generating growth. This fiasco is what happened in banking and pharmaceuticals, with break-ups recommended by some analysts for more than regulatory reasons.
In the case of Microsoft and HP, the consolidation would in fact create the opportunity for better customer value, not just shareholder value. Together the companies would have more growth prospects. Apple proved decades ago that aligned software and hardware dramatically improves customer experience, which is where brand value rests. Combining software and hardware can also improve IT leaders’ experience.
Here’s another reason why HP is better partner for Microsoft’s partner than Dell: HP is one of the few brands with strong consumer and business brand attributes. From 2001 to 2012, it’s remained in the #15 slot on Interbrand’s rating of brand equity, despite all the public airing of HP dirty laundry and some product failures. Dell over the same period fell from 32nd to the 49th position.
Yes, HP’s market cap is about 50% higher than Dell’s. But Dell never built end-user brand loyalty. Its only differentiation when it entered the market was its direct-to-enterprise channel business model. And of course that matters less now that customizing computers has lost its cachet and competitors are smarter about channels and supply chains. Plus, Dell lacks any strong franchise compared to HP’s printer business.
Every company must face the music of category maturity. Listen up, Microsoft … do what leaders of other mature categories do. They leap across industry boundaries to create solutions that work better for customers. As a lifetime Apple user before joining IBM and the PC world, I sure hope you’re listening. Do this work – if not with HP, then with Dell.
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