Does Microsoft Look Outside Their Walls?

I read a summary of Joe Belfiore’s appearance at D: Dive Into Mobile, and it was truly amusing to read what he said. The biggest take-away I got from this is that Microsoft designed Windows Phone 7 (WP7) inside a locked room with no windows, no Internet access and no TV. His claim of WP7 having “unique features” that have been available on existing smartphones (in some cases, for several years) makes me wonder how much Microsoft actually knows about the current smartphone market. I’ve worked briefly at Microsoft as a contractor, and I do know they can be very inward-looking. His responses seem to reinforce this isolated approach when building WP7, and sadly, what a lot of WP7 looks like is something developed partly from listening to traditional market research focus groups and their own engineers. Here is a platform that, while years in the making, is a subset of what is already out there. Basically, this thing is already years behind everyone else. Unlike their competitors, Microsoft won’t discuss sales numbers for WP7. Anecdotal evidence seems to suggest that sales started well in the first couple of days, but have trailed off significantly since. Some of the information I have found (here at and seem to bear out that WP7 is almost like the Zune all over again: lots of hype and noise, but no substance behind it.

The other issue I saw was their current approach to tablets, which is to continue to use Windows 7 as the platform. Windows 7 is not a mobile operating system, but tablets are a mobile device. A full-on desktop/laptop operating system is simply too much if you are looking for low memory and storage requirements, modest processing requirements, and long battery life. The platform still has too many security issues, and installing software is far more complicated and onerous when compared to iOS or Android. For a small number of users, mainly enterprise users, having Windows 7 on a tablet is useful. For your average retail consumer, it just isn’t that attractive an option. Again, I don’t think Microsoft has fully explored the tablet market, even though it is still fairly new, and they haven’t tried to understand what consumers of these devices are expecting right now.

Unfortunately for Microsoft, mobile devices are not shaping up to be the same environment that PC’s became. Part of that is because PC’s were, despite their name containing the word “personal”, largely driven by corporations first, and retail consumers second. PC’s started out as a retail/hobbyist product, but they didn’t take off until corporations started to include them in their business operations. Smartphones started largely as enterprise devices, but the biggest growth has been on the retail side. Tablets, in their current form, started as a consumer device. Unlike corporations, people seem to be more willing to take a risk on technologies. They are willing to experiment and try things out. Microsoft, like IBM in the past, succeeded because it was an easy decision: it was the defacto standard, so why pick something that few other companies use. Retail customers, however, are willing to try things out, and their purchase decisions can be driven by intangibles (like something being “cool”). Microsoft had several years to look at the market, understand it, and look for gaps where they could innovate. What they didn’t seem to do is understand what the minimum requirements to play were going to be. Instead, they built what they wanted, ignored the market, and appear to assume that because “they are Microsoft” they get to set the direction. They don’t carry that kind of clout in the mobile space.

At this point, I’m not sure what Microsoft should do. They could try to sell off their mobile technology (such as it is), but I’m not sure who would want to buy it. They could try again, and see if the market will let them have a do-over. Unfortunately, they are so far behind everyone else, their next attempt would have to be (to borrow Steve Job’s phrase) “amazing” beyond what all other current device to today. It would have to be beyond “amazing”, past “magical” and into some other realm where adjectives escape me. But given their size and their culture of safe and conservative, I just don’t see that happening. What I see is them staggering along, continuing to act as if they are relevant, but not really doing much to change the conversation.