Defend & Extend leads to mistakes and missed opportunities - Microsoft
This week Microsoft's CEO Steve Ballmer said the company would get out a tablet soon, and that it would be a big success. Do you believe him? You have good reason to be doubtful. When it comes to new products, Microsoft has been a big dud under his leadership. But I'm not the only one complaining. Mediapost.com ran an article quoting some very well respected sources who are very, very skeptical. Below is part of the article. You can read the whole thing here:
"Of course that's often the case with Microsoft," notes Digital Daily. "The problem is, it doesn't always manage to do things really right. Certainly, it didn't manage it with Windows Vista. Or Windows Mobile. Or Zune. Or, more recently, Kin. Who's to say this time will be any different?"
"As it stands now, Microsoft's lack of details on the upcoming Windows tablets is not encouraging, despite Ballmer's promises," concludes PCWorld.
Seemingly overwhelmed by the rapid innovation and successes of rivals like Apple, Google, and even Facebook, Fortune calls Ballmer "a train wreck," and "a salesman whose only answer to technological change seems to be the operating system he inherited from Bill Gates."
Thinking of Microsoft as an "innovator," however, will leave you disappointed every time, Jefferies analyst Katherine Egbert wrote in a note Friday morning. "If you stop thinking of Microsoft as an innovator and start thinking of them as a fast, low cost, mass market follower, you'll stop being disappointed in their inability to divine new markets and realize they are staring at some of their largest growth opportunities ever."
Microsoft is too focused on its core business to do new things correctly. Long ago Mr. Ballmer took a Defend & Extend approach to the business. The company doesn't do much scenario planning to determine how markets can be disrupted - in fact they hope the opposite. They do very little competitor analysis, because they view themselves as market dominant so beyond having to study competitors. They ignore fringe competitors - including upstarts like Apple and Google. Internal disruptions are verboten, and politics abound. And there is no white space where teams can violate old lock-ins to develop a new success formula that will compete better with the likes of Apple, Google and Cisco.
Focusing on your core can get any business in trouble (read Forbes article "Stop Focusing on Your Core Business" here). Even one with a near monopoly. Over time, all markets shift. When they do, the least prepared are the ones who think they "dominate" their industry. Maybe Mr. Ballmer should have lunch with Mr. Wagoner of GM to learn what happens when you take your industry position for granted.