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.

REMEDY

- 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.

JOHN OWEN, DEPUTY CHAIRMAN, DARE

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.

REMEDY

- 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.

MICROSOFT STATS

$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.

?

Discussion

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

Latest

Oasis #springasmile digital campaign gets people doing good deeds
Coca-Cola: 'Don't approach bloggers with a fait accompli'
Tesco CMO Matt Atkinson: 'It is so important not to stereotype mothers'
McDonald's gives Ronald a new look ahead of global 'Fun times' social media push
In pictures: BrewDog opens first craft beer shop BottleDog for 'beer aficionados'
Facebook ad revenue leaps $1bn as it invests in targeting
Malteser or Maltesers? Mars takes Hershey trademark dispute to court
Apple Q2 profits top $10bn as iPhone sales soar
Lynx tells men not to leave love to fate
HBO captures awkwardness of watching sex scenes with parents
Primark to open first US stores with Boston chosen as flagship location
Marketing spend on the up but a reality check is needed before celebrating
Top 10 ads of the week: Jackpotjoy and BT Broadband fend off Kevin Bacon
Lidl beats Tesco to 10m Facebook fans
Center Parcs ad banned for encouraging parents to take kids out of school
Coca-Cola, Cadbury and Amazon named top brands for targeting youth market
Leaked document shows Nokia to be rebranded as Microsoft Mobile
Nike lays-off hardware staff in move that casts doubt on future of FuelBand
Greenpeace says save the bees or humans will die
What brands need to know about changes to VAT and online downloads in 2015
Jimmy Savile victims urged to claim compensation in new ad campaign
UKIP launches biggest  ad campaign and stirs up 'racist' accusations
Apple boss Tim Cook provides voiceover on ad touting firm's renewed green commitments
John Lewis walks consumers through its history to celebrate 150 years of business
Waitrose boosts content strategy with 'Weekend Kitchen with Waitrose' C4 tie-up
Hottest virals: Cute puppies star in Pedigree ad, plus Idris Elba and Fruyo
Amnesty International burns candles to illuminate new hope
Tom of Finland's 'homoerotic' drawings made into stamps
Toyota achieves the impossible by calming angry Roman drivers
YouTube reveals user habits to appeal to 'older' marketers