Microsoft Needs To Stop Thinking Like a Marketing Nerd

Last Updated Jun 28, 2010 2:00 PM EDT

On Friday afternoon, Frank Shaw, Microsoft (MSFT) vice president of corporate communications, posted a numeric defense of Microsoft on the company's official corporate blog. It was a slap at skeptics and such competitors as Google (GOOG) and Apple (AAPL), but was ultimately flawed because it focused on reason and the present, not emotion and the future. And those have been the twin problems of Microsoft for a long time. It's the literal and mechanical thinking you'd expect from a stereotyped nerd.

In the post, Shaw laid out a series of figures to show how Microsoft is still dominant and other notable companies simply don't stack up to Microsoft's pre-eminence:

  • He compared 150 million shipped copies of Windows to one projection of iPad sales at 7.1 million a year and estimates of 58 million netbook sales compared to 355 million PC sales in 2010.
  • Shaw noted that as of last year, 98 percent of U.S. netbooks ran Windows, compared to ten percent the year before.
  • There were 10,000 paying customers on Azure this month, with 700,000 "students, teachers and staff using Microsoft's cloud productivity tools in Kentucky public schools, the largest cloud deployment in the US."
  • Microsoft has 23 million Xbox Live subscribers, compared to 16 million people who subscribe to the largest 25 newspapers in the U.S. or 14 million Netflix subscribers.
  • Bing added 21.4 million new search users in a year.
  • Apple sold 8.8 million iPhones in the first quarter of 2010. Nokia sold 21.5 million smartphones in the same period, which was not quite half the 55 million that sold.
  • Gmail has 173 million users. Yahoo (YHOO) has 284 million. Windows Live Hotmail has 360 million users.
  • Looking at their various fiscal 2009 results, Microsoft has more net income than Google and Apple and saw its revenue jump from $23 billion in 2000 to $58.4 billion in 2009.
Some of the data and its use is the sort of misdirection you might expect in corporate communications. For example, Windows 7 has sold well in part because people needed upgrades from Windows XP and Vista was such a code dog. Azure may have 10,000 paying customers, but how does that compare with offerings from Amazon (AMZN), Google (GOOG), and others? (Google alone has tens of millions using Google Apps and Docs.)

Comparing Xbox Live and newspaper subscriptions is silly, because they're completely different types of services and audiences. You might as well compare sales of soda and red wine. Nokia may well have sold far more smartphones than Apple last quarter, but as I've pointed out, both Apple and Google will soon sell 80 to 100 million units a year.

All that said, Shaw had a point. Microsoft is far stronger and more pervasive than people like to think. Assumptions that the company is "over" are foolish, if for no reason other than inertia. It would be difficult for any such an entrenched business entity to disappear overnight.

However, Shaw not only embraced Microsoft's numbers culture, but also its penchant for literal and narrow perspective. All the numbers refer to the state of the company today, ignoring signs of change. HP (HPQ) and Dell (DELL) have both made moves away from Microsoft and toward Google for a netbook operating system. Is that an immediate concern? No, of course not, but it shows that the past dominance of PCs doesn't necessary predict the future.

Shaw even avoided confronting the future. Notice that discussion of cell phones was an attempt to belittle Apple at the expense of Nokia, not to note that Apple and Google are at the front of a movement that could lead away from PCs, at least for mobile users. Where is Microsoft in all that? Far enough back that Shaw wouldn't want to quote unit sales. Technology, by its nature, focuses on innovation and the future. To point to the current state is really to cite the results of history. Microsoft's market dominance of the past does not assure its future.

As importantly, when it comes to marketing and positioning, emotion is key. Rightly or wrongly, many people perceive Google, Apple, Facebook, and others as moving intelligently into the future. Even if Shaw's collection of numbers was predictive, it would still come across as angry and petulant because the public at large didn't agree. Microsoft needs to learn how to woo and not wail if it wants to maintain is accustomed market position, or something even close to it, going forward.


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    Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.