Microsoft struggles to keep pace with Apple and Google

Microsoft has dominated technology over the past decade. Earlier this month, however, Google's market capitalisation surpassed that of Microsoft for the first time, signifying a tectonic shift in the industry as the major players realigned themselves.

On 2 October a bump in Google's share price and a slight drop in Microsoft's gave Google a market capitalisation of $249.19bn, just ahead of Microsoft's $247.44bn.

So, from being the most valuable tech company in the world two years ago, Microsoft has since been overtaken by Apple and now Google.

This change has sparked many commentators to question whether Microsoft has lost its direction, and blame chief executive Steve Ballmer for the business failing to keep pace with its younger rivals.

In addition, in July Microsoft reported its first quarterly loss as a listed company after a $6.2bn write-down charge relating to its online adtech business.

One of the many criticisms levelled at Microsoft is that it is fighting on too many fronts, having a broad portfolio of enterprise and consumer products.

It is not giving up without a fight, though. A recently unveiled fresh brand identity is intended to usher in a 'new era' at the business ahead of what it describes as its 'most significant wave' of product launches; namely, its Windows 8 operating system (due to launch later this month), next-generation Windows Phone 8, and debut tablet, the Surface.

What can Microsoft do to ensure it better competes with rivals to drive future business growth? Marketing asked Ben Padley, global digital engagement director at Barclaycard, who, until last year, held a senior global marketing role at Sony Ericsson, and John Owen, deputy chairman of agency Dare.

DIAGNOSIS - Brand Health Check


BEN PADLEY, GLOBAL DIGITAL ENGAGEMENT DIRECTOR, BARCLAYCARD (ex-global VP, head of digital marketing and CRM at Sony Ericsson)

Microsoft has changed the way we work and live. However, while its products are an established part of my daily life, the roles played by brands such as Google and Apple, for example, continue to grow. Moreover, the tech start-up space provides ever-more innovative solutions to daily technology problems.

Search is a case in point - despite continued incremental growth and, arguably, a very strong product, Bing lacks true global penetration.

Launches such as the Surface tablet aside, Microsoft is perceived as stagnant in terms of core product.


- Innovation remains the key differentiator, backed by excellence in sales and marketing. Capitalise on the huge global installed user base of Windows, Hotmail and other key services by migrating as many iOS, Android and RIM users as possible toward a Windows-based mobile device via the cloud.

- Specifically, focus marketing on activities that integrate software with hardware technologies such as NFC, or contactless, to create innovative scenarios that appeal to the user.


Microsoft's 'fast follower' strategy, corporate, sales-led culture and overt focus on business success at all costs make it hard to love, so it's tempting to view its struggles as 'comeuppance', proof that its approach and values were 'wrong' all along, and Apple and Google are right.

More objective analysis suggests this is hokum. Microsoft stagnated because it is still dependent on the flat PC market for the majority of its revenues. This gives it not just a business problem, but also an image problem. Microsoft is seen as yesterday's brand.


- Put more distance between the marketing effort and immediate business needs. Market the future, not the present.

- Accentuate this in high-profile launches, such as Windows 8.

- Put serious marketing behind more peripheral, non-PC-centric innovations such as Azure.

- Engage with critics and developers, demonstrating a confidence and vision that people can buy into.

- Develop simplicity of design. It's key to the perception of brands as modern and future-facing.


$492m (£313.3m) was the company's net loss for its fourth quarter, ending 30 June 2012

$18.1bn (£11.3bn) revenues for the same quarter

Source: Microsoft.



Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Brand Republic Jobs

subscribe now


Virgin, Baileys and Camelot join the line-up at Media360
MasterCard renews Rugby World Cup sponsorship to push cashless message
Lynx unleashes £9m 'Peace invasion' campaign
Social Brands 100 Youth: Pizza Hut most social youth brand in UK
Cheryl Cole is wild and arresting in new L'Oreal work
Morrisons told not to show alcohol ads during YouTube nursery rhymes
O2 head of brand Shadi Halliwell departs after 23 years at company in restructure
Tesco hit by further sales decline as it turns to digital Clubcard and social network
Branding guru Wally Olins dies aged 83
Duracell short film captures epic Transatlantic voyage
Ash runs Tinder experiment to show smokers are less desirable to opposite sex
British Airways teams up with Gerry Cottle Jnr for summer of rooftop film screenings
Arklu says 'girls can be superheroes too' with doll design competition
Coke enters squash market with Oasis Mighty Drops
Virgin Galactic signs up Land Rover as space flight sponsor
Motorola marketer Andrew Morley departs as Google gears up for sale to Lenovo
US Airways apologises after tweeting obscene image at a customer
Mumsnet admits users' emails and passwords accessed via Heartbleed bug backs 'rubbish' mobile app with TV ad
Powerade launches global World Cup campaign
Subway considers taking fast food to fast lane with F1 sponsorship
Burberry's flagship Shanghai store facade responds to weather changes
Ikea splurges 'grey' Belgium with colour
Grim outlook for Tesco boss Philip Clarke ahead of expected profits fall
Thomson to create first crowd-sourced wedding decided by Facebook fans
Currency wars meets origami in Alpari FX trading ad campaign
Amazon rumoured to launch 3D smartphone in September
Facebook to allow European users to store and transfer money on site, claims report
Unilever pilots multi-brand advertising with YouTube beauty channel
Lego, Coca-Cola, Net-a-Porter, Bitcoin and AOL: the digitally creative brands