SAP Should Give Microsoft Crowdsourcing Ideas

(MoneyWatch)  Microsoft is making a lot of hay about using customer inputs to improve Windows 7. CEO Steve Ballmer made repeated allusions to the influence of customer feedback, which he said during the Windows 7 event in Manhattan Thursday resulted in "intense collaboration between our own engineering organization and our partners -- and our customers."

The result? Windows 7 has opened to solid reviews. Then again, as David Pogue admits, so did Vista. Whether it deserved its reception is a whole other story, but the fact is that customers found a lot wrong with Vista that reviewers didn't.

Why such a dichotomy? It happened because reviewers simply can't replicate the number of boots, potential simultaneous applications, hardware and software combinations, missing device drivers, and insufficient memory in the lab that you get when tens of thousands of people try a new product.

In the hopes of averting another false start, which it could ill afford with Windows 7, Microsoft decided to involve customers in the design and testing process earlier than it had in the past. The question is whether it did so early and consequently enough; it's one thing to gather requirements, and another to allow outsiders to contribute code. From everything I've heard from Microsoft, it did plenty of the former and none of the latter.

This isn't a matter of crowdsourcing for the sake of boosting its Web 2.0 credentials -- it's a matter of rescuing Microsoft's inability to innovate. How is Microsoft, for all its vast resources, going to compete in the long run when it's so clearly already run out of ideas, unless it reaches out to customers in a truly meaningful way? (Its stunning loss of market share in the smartphone market is a direct reflection of how poorly Microsoft innovates in a dynamic market. Microsoft has gone from dominance to irrelevance in a few short years because it simply has no new ideas to offer, while Apple, Research in Motion, Google and Nokia have created platforms that allow customers and partners--like app developers on the iPhone platform--to innovate on their behalf.)

You might argue that selling third-party apps is a lot different than allowing outsiders to mess around with your source code, but here's where Microsoft could learn from the example of SAP, a proprietary software vendor if there ever was one, which has found a way to actually get meaningful collaboration from its customers without giving away the keys to its kernel. According to Dan Woods, CTO of technology consultancy Evolved Media, SAP has married workflow processes to social media to "bring people in, in a variety of ways, to collaboratively participate at a greater scope in those sorts of design processes" than ever before.

While Microsoft takes input from its developer network and other partner channels, Woods told me, SAP has a much more deliberate approach to "bringing people in to their product design process in a formal way." So much so that in some cases, customers "actually have to sign intellectual property agreements" to protect SAP.

Not much seems to have changed at SAP, at least not from the perspective of most outside observers. It's as sluggish in delivering new products (like Business byDesign) as it was in rolling out R/3, its flagship applications suite. But it may be able to address some of the biggest criticisms leveled at its existing products -- the complexity and forbidding nature of its user interface -- with an assist from the outside. That could go a long way towards helping it sell more licenses to existing customers while it sorts out future product development processes.

Microsoft seems unsure of how far to go here, but if its failures in the mobile market are any indication (and I think they are), it will never innovate quickly or successfully by going it alone, and it will certainly never match the innovative capabilities of vendors who whole-heartedly embrace the suggestions of their customers and partners. Microsoft should take advantage of its relationship with SAP and learn more about its crowdsourcing technique.

[Image source: Miriam Olsson via Flickr]