Why Paris Hilton Could Take on Microsoft Better than IBM-Linux or Apple

The media darling understands the value of combining approaches, unlike the single-minded moves by Apple and IBM.


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This morning I was trying to figure out how to nicely say that neither the latest IBM-Linux latest IBM-Linux initiative nor the Apple Snow Leopard enterprise desktop moves would be very successful – despite the fact that Microsoft is the most vulnerable it’s been since the 1980s.

Lo and behold, Paris Hilton’s response to the John McCain ad that used her as an attack vehicle against Obama showed me the way. Yes, I had to work that into a column.

Let’s open with the opportunity that both Apple and IBM (which is the Linux attack leader) are targeting, and then wrap in the Paris Hilton response to explain why they won’t be successful. The core reason: because neither is truly willing to do what it takes to move against the opportunity Windows Vista has created.

In essence, both will repeat the same mistake Microsoft made in going after UNIX, and the result is that both will fall short as a result.

The Vista Opportunity

Microsoft made a common mistake that is often made by a dominant vendor. Once dominant, a vendor tends to become inefficient, but, still needing to grow revenue and profit, will pull back marketing expense and increase product price.

The end result is value goes upside down and the product will stall and/or a competitor will merge. By saying the value goes upside down I mean that folks feel they are overpaying for the product and rather than wanting it they feel they are forced to buy it.

In a nutshell, at least in the enterprise, that is the net of the problem. The market views the offering as having too little value for its price and feels forced to deploy it and, I should add, is clearly in a position to say No. This market is now clearly looking for something else and – creating an opportunity that both Apple and IBM are shooting for.

Now, be aware, that until there is a shift, the entrenched vendor could still fix the core problem by either (or both) lowering cost (and I include perceived migration cost which is actually the bigger number) and increasing value (generally attributed to marketing but could include bundles of other things).

Microsoft has hired a new agency and put what is believed to be several hundred million dollars aside to address this. So the opportunity should decline somewhat as a result of this effort.

Also, if there is any significant success Microsoft could still aggressively move to protect their base. But often, the entrenched vendor moves too late and after too much damage is done – so a competitor should always make their move.

Why Microsoft Failed with UNIX

Rather than jumping in to pointing out why IBM and Apple won’t go far enough, let’s instead look at how Microsoft didn’t embrace the UNIX opportunity, which largely fueled Linux in the first place.

UNIX was also very exposed in the 90s; it was fragmented and its value, which was largely based on a comparison to mainframe costs, was drifting down sharply because of the increasing capability of Netware, initially OS/2, and eventually Windows Servers.

UNIX was, and we can clearly see this in hindsight, incredibly exposed but to take advantage of this exposure Microsoft needed to embrace UNIX and provide a higher value alternative. Note I said and; Microsoft saw this as an or. And while they created a higher value alternative they never embraced UNIX, resulting in the creation of Linux – which was a higher value alternative to UNIX and it embraced the core attributes that UNIX represented to the decision makers (and actually expanded on some of them, like Open Source).

Microsoft, to its credit, has fought to parity on servers in terms of balancing the advantages of its platform against the different advantages of Linux. But with a vastly larger budget and resources, Microsoft is actually close to equilibrium because they have yet to fully embrace the core UNIX concepts (but you could argue much of their recent success is largely due to the fact that they are drifting closer and closer to open source).

This was their bridge too far.

Why Apple and IBM will Fall Short

There are three ways I know of to displace a dominant product. One is but take over control of the company that owns it; two is to obsolete the market conditions that support it (mainframes to client/server); and three, to embrace and extend the offering with sufficient resources to move the existing base on a refresh cycle to your offering (Microsoft Office vs. Lotus Notes).

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Tags: open source, Linux, Microsoft, Vista, Leopard

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