Three post-CES goals for Microsoft

This weekend, following the Consumer Electronics Show 2010, is when Microsoft executives should reassess the company's New Year's resolutions and reevaluate marketing and product development strategies. CES hasn't been particularly great for Microsoft, although it wasn't terrible either. Windows 7 Mobile was, once again, largely a no show. CEO Steve Ballmer's keynote failed to dazzle with exciting new products. Still, Bill Buxton, Principal Researcher for Microsoft Research, offered real vision discussing natural user interfaces. NUI is a great marketing concept, too.

I suggest three goals Microsoft should set for the next six months, until the end of fiscal 2010 on June 30 (I originally planned five but decided the post would be too long). They are presented in no order of importance.

1. Set shorter marketing and product development goals. Microsoft isn't keeping pace with Internet time. Meanwhile, Google sets a rapid pace -- in little more than a year going from nowhere to somewhere with Android (21 percent of U.S. consumers plan to buy an Android phone within three months, according to ChangeWave) and Chrome (three Windows versions released in about a year and v4 in beta). Both products launched in autumn 2008.

A longstanding Microsoft strength is executing on long-term plans, whereas many public company competitors set quarterly goals that change too often. The Microsoft that released three versions of Internet Explorer in about 18 months during the late 1990s executed tactically while keeping long-term plans in place.

What Microsoft really needs to gain from short-term goals is increasing mindshare -- that the company truly is innovating. Innovation sells, imitation smells. The company should seek to field from its various "labs" or Microsoft Research one truly aspirational product each quarter. Work-in-progress is OK, as long it generates chatter. Nokia Labs is a good model to follow. However, any buzz that stops at Channel 9 is a failure. Microsoft must reach more mainstream users.

But mindshare gains are only a starting point. Microsoft has to keep pace, or partners will leave it behind. Ballmer showed off the HP Slate prototype during his Wednesday keynote, but, whoops, there will be an Android model, too. Yesterday, long-time Microsoft partner Intel made a strong pitch for smaller, faster devices -- and not necessarily running Windows. Today, Scott Fulton writes: "If you're a 2.0 GHz quad-core notebook PC running Windows 7, the place you do not want to be showing yourself right now is the Consumer Electronics Show."

Two Decembers ago, I publicly encouraged Microsoft to launch an applications store, something I had privately encouraged the company to do years earlier when working as a JupiterResearch analyst. Intel isn't waiting around for Microsoft, and its new app store is case in point. Microsoft must pick up the pace, or partners will leave it behind.

2. Keep asserting that Google can do evil. Yesterday, Bloomberg reported Robbie Bach, president of Microsoft's Entertainment & Devices division, as saying it would be "very, very difficult" for Google to sell a phone that competes with partners. "Over time you have to decide whether your approach is with the partners or more like an Apple approach that is more about Apple. Google's is an interesting step. We'll see how people react."

Bach raises a very good point, at least from a creating FUD -- fear, uncertainty and doubt -- perspective. Android has enough momentum that Nexus One probably won't turn off too many hardware manufacturers. But the FUD is great countermarketing, particularly with Android stealing partners and customers from Windows Mobile/Phone, which is stuck in the mud. Anything bad about Google's phone strategy is good for Microsoft while it struggles to get Windows Mobile/Phone back on the road.

The FUD isn't without merit. Two days ago, I went looking for a phone case at the local T-Mobile store. The sales associate recognized the Nexus One right away. I asked if T-Mobile would be selling the Nexus One. No. Nor will T-Mobile be able to support the device, even though it runs on the carrier's network. The sales associate seemed concerned about customer service, which Google will provide.

Google competition with partners is inevitable, as the company grows -- as it was for Microsoft in the 1980s and 1990s. For today's Register, in post "Google to mobile industry: 'F*ck you very much!' -- Winners and losers from the great Nexus shafting" Andrew Orlowski writes:

If networks are surprised that Google can turn around and shaft them ??"- then they can't have been paying close attention to company strategy in recent times...The evidence was already abundant that Google envisaged a value chain without operators or ISPs. In Google's vision of the future, there are no $80bn-a-year turnover giants like Vodafone. Instead, masts are merely a dumb transmission network, most likely operated by a monopoly incumbent (such as Arquiva for UK TV and radio), which must be regulated (out of necessity) by an equally dumb transmission network regulator.

I've been beating this partner competition drum for some time. In September 2008 post "Google Eats Its Young," I asked: "Who says Google can't do evil? Chrome is it." Suddenly, the company would compete with developers like Apple and Mozilla, which default search had benefitted Google so much. In November 2009, I asked: "How would you write Google's '10 Things' -- with "You can make money without doing evil" perhaps being most well known.

No company partners like Microsoft. Timing is right for Microsoft to remind everyone how well it partners and how much Google increasingly competes with its partner.

3. Hold smaller, more-intimate product events. Other than perhaps Lady Gaga's appointment as Polaroid creative director, this week's most interesting news came outside CES. For starters, there are the persistent rumors about Apple's rumored tablet, which may or may not be announced during a January 27 event. Today, The Loop's Jim Dalrymple predicts there will not one but two Apple tablets. Speculation about the rumored product stole much buzz from CES announcements.

Then there was Google, which preempted CES with launch of the Nexus One handset -- the so-called Superphone. But Google didn't stop the CES buzz killing there. Yesterday's "Near me now" announcement supercharges local search. The feature makes Google's U.S. mobile search page location aware on smartphones running Android 2.0.1 or later or iPhone OS 3.x. Google's John Eric Hoffman and Jussi Myllymaki explain in a blog post:

For example, you may want to know what other customers think about a restaurant before you go inside...or what they have been raving about on the menu before you order. By selecting the 'Explore right here' option, you can find out more about a place 'right here' with just a few clicks... Imagine that you emerge from the subway station and you want to grab a coffee, but you don't see a coffee shop around you. You can simply search for all nearby coffee shops by using 'Near me now.'

Microsoft should learn from Apple and Google about maximizing buzz without investing in big events. Sure, Microsoft makes ongoing product announcements outside of tradeshows, but most of the events it participates in or holds are big. Microsoft should hold more intimate events for bloggers, customers, enthusiasts, news media or partners. I'm not talking about the ongoing marketing and sales roadshows Microsoft already does, but invitation-only gatherings. They will generate buzz, particularly if the target audience doesn't officially include bloggers or journalists (but they can get in with a little prodding).

Intimacy is hugely important to any relationship. It's easy for anyone with a keyboard to write bad things about an amorphous, distant corporation. It's something else when those same people meet and interact with real executives and product managers. Personal contact changes everything. Walmart is a good example. Those greeters at the door aren't just there to be friendly. Walmart has learned that people who identify the store with a real person, the greeter, are less likely to steal.

Before some commenter balks that Microsoft does hold some intimate blogger meetings, I'll acknowledge knowing that. Microsoft should hold more intimate gatherings of at least two kinds:

• What Apple does for some new product announcements -- there the goal being to generate buzz and even excitement.
• Invitation-only events with evangelism through more intimate relationship with executives or products being the primary objective.

Microsoft's January 2009 Retail Experience Center launch or annual look inside its Research labs are examples of good smaller events. But they would be better shrouded in more mystery. The quest for pageviews has every tech blog or news site reporting on every conceivable rumor. Let them chatter by saying less.

Microsoft should make being more mysterious and more intimate among its top marketing goals for the decade.