Datamation content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More.
What’s interesting about the Mac vs. Windows advertising campaign is that Apple was able to segment out their product from the PC group and then disparage the majority of the products that remained.
But in so doing, they not only made the problems with the current pool of Windows-based PCs very visible, they focused Microsoft on fixing those problems.
The end result will be a set of events that will pull Windows PCs out of this pool and forever change the PC as we know it, I think for the better. But many (like the PC OEMs) may not agree.
Let’s talk about that today.
Mac vs. PC
The Mac vs. PC campaign did a substantial amount of damage to Microsoft and its partners over an extended period of time by pointing out aspects of Windows and making Microsoft appear petty and clueless.
It had one significant flaw however, which may have been intended to avoid Microsoft litigation: it never really called out Windows generically and instead focused on Vista.
This means that when Windows 7 ships Microsoft should be able to sidestep much of the negativity that has surrounded Vista. However, they clearly have to deal with the lingering impressions that Windows isn’t reliable.More important, Microsoft was clearly losing market share and needed to respond.
The first part of the response was to increase their marketing spend and bring on board a new agency. Currently, in advance of the Windows 7 launch, they are focusing on value.
This is because Apple maintains unusually high margins for a PC manufacturer, which means a consumer should get substantially more hardware for the dollar by buying a Windows box. This campaign hits at a time when, thanks to the economy, people are focused on being frugal.
However this campaign doesn’t address the perceived problems with reliability and user experience. Apple is able to mitigate these problems by owning the solution. Apple specifies the hardware and software load on each of their machines and, while not perfect, does give them the ability to better assure the result.
The Dysfunctional Ecosystem
The industry problem, and this goes beyond the Apple attack – which didn’t create it but only made the problem more visible – is that the existing partnership between Microsoft and the OEMs is broken.Neither owns the customer and both point to the other as the cause of the lack of growth over the last decade.
The PC OEMs seem to only focus on competing on price which destroys their margins and makes it nearly impossible to afford demand generation marketing in line with what Apple does. Microsoft feels like they are carrying most of the weight for the industry while also getting most of the blame for problems they neither created nor can effectively mitigate.
Like a bad marriage, both sides seem to believe the other is inept and both sides have good evidence they are right. But only one side has the power to decouple from that relationship and that’s Microsoft.
Finally, both sides effectively cheat on the other. Microsoft already has a hardware business in the Xbox that the OEMs are locked out of and most of the OEMs are both doing Linux and cutting deals with Google for Android.
The word “dysfunctional” seems so inadequate at the moment.
Microsoft has waited most of the decade for the OEMs to change their behavior and create a counter trend to Apple.That wait was in vain and now Microsoft is moving to make its own correction.
The Microsoft Store
In the Microsoft Store, Microsoft will use the same process of selecting hardware and software that Apple does.In other words they will specify the hardware and software that goes on each machine and take ownership of the user experience that results.
The end result should be much more reliable machines and a much tighter feedback loop, through the stores, from consumers with regard to what is (and is not) working.
The store layout came out of advanced work originating in the most advanced retail lab focused on PC purchasing that exists in the world. This lab was created by Microsoft to help retailers’ better lay out stores but evolved into a template for this Microsoft store concept.
Location of the stores will largely be next to or near Apple stores because Apple did an excellent job in site selection. And a lot of retail stores are in trouble making it comparatively easy for Microsoft to buy out leases.
I do expect Apple will move to block as much of this as they can however by threatening to remove their own stores or even buying in to Mall ownership if it looks like things aren’t going to go their way.
The PC OEMs Become PC ODMs
The impact on the eco system over time should be pronounced. Increasingly Microsoft will own the solution and the OEMs will have to build what Microsoft wants or lose the related market share to a more cooperative competitor.
In effect they become ODMS [original design manufacturers, which both design and build, unlike the classic OEM, which only builds]. But since ODMS often make the hardware that OEMs sell into consumer and small business markets, it isn’t hard to imagine that at some future point that Microsoft will choose to eliminate the OEMs and contract with the ODMs directly and create store brands.
While I certainly don’t expect this to happen quickly, more on the 5 to 10 year timeframe, still the path is clear and the choices the OEMs have to mitigate the related risks increasingly difficult to implement.Once fully on this path it will be difficult if not impossible to change the course. And while consumer will be first, the advantages are pronounced enough to suggest that corporate would follow.
Corporate Impact
At the core of the Microsoft software load and hardware selection criteria will be the massive amount of information Microsoft now collects on what products, hardware and software, are breaking their platform.That same information when applied to a corporate build could substantially reduce the breakage there as well.
While this wouldn’t apply to custom products those products could be contained in virtual OS layers so that when they did break they would only break the portion of the OS related to them.
This would suggest a service where Microsoft, who likely already has a relationship with IT, serves as an agent acquiring the hardware that IT wants, preloads it, delivers and owns the result in a way that the PC OEM currently cannot. And the result should be both less expensive (Microsoft would be able to aggregate bids to get even lower prices) and more reliable. This last is because there would be no OEM middleman to slow down the problem identification and resolution process.
Wrapping Up
As Microsoft takes control over both the hardware and software we get to buy, the end result will be a better product because one company will own the solution not a graphics company, a processor company, a hardware company, and a software company.
That should result in a better solution but it will reduce substantially the amount of control each of the players will have in that future market.This could, for instance, benefit AMD, which has enjoyed a closer relationship to Microsoft. It might hurt Intel, for instance, and Microsoft will also increasingly have the major vote over which hardware OEM is the market leader.
I expect it will take 10 to 20 years for this trend to fully mature and there still is a chance for the PC OEMs to step up, stop their insane pursuit of who can survive on the lowest margin, and create premium experiences at affordable prices.But, if this change does come about, it will be because Apple triggered it – though I doubt if Apple will like the result any better than the other PC companies do at the end.
