The Microsoft Plan

Microsoft is changing. Everyone knows it, but no one is quite sure what will come out on the other-side when the transformation is complete. Having recently finished my finals and as I now get re-acquainted with my Xbox, I’ve been thinking about MS, Xbox and where the Redmond giant is going next.

“Services And Devices”

Which is fairly generic, in that they are saying they are going to sell time and stuff, which is the entirety of what you can sell in this world. Dig a bit deeper than that and it’s clear that the ‘stuff’ part is stuff that runs Microsoft software, and the ‘time’ part is selling Microsoft software as a service. So really, it sounds like they aren’t changing what they sell, just how they sell it.

Why are they changing? Simply put, their partners left them high and dry. From my outsider’s perspective, it seemed like MS partners were seeing a race to the commiditization (not a real word?), so they either played that game (Dell, HP) or they tried to use PC sales as a platform for other sales (Sony, IBM).? This left PC devices stagnant in a time when they could have been rapidly evolving. Then mobile hit, and MS had Windows Mobile, but it was built to partner specs, trying to give their partners a platform to build upon.

This is where things like TouchWiz and Sense were born. They were mostly annoying, laggy, and bug-filled attempts by device makers to not be selling commodity phones… while still selling commodity phones. The bugs, carrier pricing and lack of powerful hardware ensured they didn’t make sense for consumers. Then the iPhone happened.

You probably know what happens from here. Smart phone sales explode. Android shows up. Phones get cheaper. Smart phone sales continue exploding (it’s a long explosion). iPad mania happens, Android tablets show up. Now for $100 you get 80% of the functionality of your $500 laptop. PC sales are declining. Windows 8 misses the mark. People start grumbling that Microsoft is dying. Then Ballmer announces he’s stepping down and no one is yet picked to take his place.

The sinking ship’s captain abandons ship!

Awk-ward…

So where does it go from here? One idea is to borrow a few pages out of its competitors playbook and combine them with its playbook that got it to the top. Amazon Prime… Microsoft Prime? Well they have the prime cards already Image But more seriously, it’s time to consolidate all the subscriptions into one mega service “subscription.”

Microsoft Prime Lite:

Xbox Live Gold + Xbox Music + {Some sort of streaming service} + Office 365 + ‘lifetime’ tech support on purchases from MS store + Virus Protection + 10% discount at MS store + 50 GB Skydrive + Skype Premium.

Microsoft Prime Plus:

The same as Prime Lite, but lets customers pick from a list of partners for each service and have MS as the default. Call it an App Store for Services:

Pick one from each set {Xbox Music, Pandora, Spotify} + { Netflix, Amazon, Hulu Plus } etc.

Microsoft Prime Platinum:

All of the above, plus a new device (tablet, pc, smartphone) free every two years. Again with MS devices as default and partners devices available. Also with premium devices available for an additional fee.

Conclusion-> Consumers! Consumers! Consumers!

And with that, Microsoft could realize its plan to sell its software as “Services and Devices.” Or maybe Microsoft really just plans to copy Apple’s business model. Either way, they need to focus on the end customer first, and partners second, if they are going to claw back into consumer mind-share dominance.

 

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