Microsoft's counter-attack against Windows 8 coverage makes it 'look weak'
Apple-esque communication strategy comes home to roost, argues analyst
Microsoft counter-attacked Friday, calling some media coverage of its plans to update Windows 8 sensationalist and an effort to drive website page views.
One analyst dubbed the missive by Frank Shaw, Microsoft's head of communications, as defensive. "It makes Microsoft look weak," said Patrick Moorhead, principal analyst at Moor Insights & Strategy. "Not everyone is going to be fair, but that's life."
In a Friday post to Microsoft's company blog titled "Staying centered," Shaw took swings at coverage that characterized Microsoft's plans for Windows "Blue" -- this year's update to Windows 8 and the first of what will be annual refreshes of the OS -- as a retreat, and that compared Blue to Coca-Cola's 1985 pull-back from "New Coke."
He decried negative coverage of Windows 8 in general, Windows Blue in particular. "Let's pause for a moment and consider the center," Shaw wrote. "In the center, selling 100 million copies of a product is a good thing. In the center, listening to feedback and improving a product is a good thing. Heck, there was even a time when acknowledging that you were listening to feedback and acting on it was considered a good thing.
"Windows 8 is a good product, and it's getting better every day," he maintained.
Windows 8 has been panned by many commentators -- bloggers and analysts -- as well as by the mainstream and technical press, starting even before its October 2012 launch. But Shaw seemed especially upset at the recent reaction to a mini-publicity campaign last week by Tami Reller and Julie Larson-Green, the CFO and head of development for the Windows division, respectively.
Both Reller and Larson-Green touted the upcoming Blue -- without revealing any details of its contents -- as Microsoft's response to customer feedback. "The Windows Blue update is also an opportunity for us to respond to the customer feedback that we've been closely listening to since the launch of Windows 8 and Windows RT," Reller said last Tuesday.
Some outsiders didn't see it that way, and instead interpreted Blue as Microsoft's tacit admission of mistakes and that it would backtrack from the radical "Modern" user interface (UI).
Shaw's rebuttal: "In this world where everyone is a publisher, there is a trend to the extreme -- where those who want to stand out opt for sensationalism and hyperbole over nuanced analysis," he said.
"What Shaw is doing is asking for patience," said Moorhead. "He's trying to set expectations. If people think Blue will be a 'swing you around the room' moment, it will not be that. Microsoft doesn't want people to get their expectations raised, and then have another cycle of maligning Windows 8."
But Moorhead also saw Microsoft's predicament as largely self-inflicted, the result of its communications choices coming home to roost.
"This is the result of a sub-optimal communications strategy that goes all the way back to Windows 7," Moorhead said. "Prior to Windows 7, Microsoft had a much more collaborative communication strategy with the press and analysts. But they saw Apple get traction with a much more closed approach, and opted for Apple's strategy. They started to create a more challenging relationship with analysts and the press."
But Microsoft, Moorhead said, is no Apple. "Microsoft doesn't make a good Apple," he said, repeating an argument he used last week, when he pointed out that Microsoft has a much larger ecosystem than Apple, with thousands of hardware partners, herds of resellers, a bigger pool of developers and both enterprise and consumer customers to keep in the loop.
What works for Apple, in other words, is not necessarily what works for Microsoft.
"Microsoft needs to return to their earlier Windows communications strategy," said Moorhead. "They were one of the biggest technology companies that pioneered social media, they were once very collaborative with the press."
But the world's changed since Windows 7, when Stephen Sinofsky took over as head of Windows development and brought the more secretive, closed communications approach he'd used when he ran Office development, to the OS group. Sinofsky was ousted from Microsoft last fall.
"It is an echo chamber," Moorhead acknowledged. "Users, bloggers and the press all have opinions they can easily express. But because Microsoft isn't as close to analysts and the press as they used to be, maybe the result [of last week's blitz about Blue] was a lot different, and more negative, than Microsoft expected."
Other analysts have also noted the changes in how Microsoft interacts with outsiders, including themselves, the press, OEMs and developers. How and what it communicated to OEMs and developers -- and when -- negatively affected Windows 8, they believe.
"The lack of high-quality apps is a direct result of their secrecy," said Michael Cherry of Directions on Microsoft, who knocked the Redmond, Wash. firm for not providing tools, documentation and testing systems far enough in advance of the launch, or getting OEMs on board with innovative designs for the operating system's 2012 debut.
"This wasn't the sole reason for Windows 8's problems," said Cherry, "but it is the price you pay for being secretive."
Microsoft sounds frustrated, Moorhead observed, that its broader business isn't put into perspective, but that outsiders are focused on the Windows division, which contributed 28% of the company's total revenue in the first quarter. The Business group, whose biggest money maker is Office, accounted for 31% in that same period.
"They have good growth in different divisions, and their gross margins and profit margins remain among the highest in the business," Moorhead said. "But Windows is behind the ball."
For the first quarter of 2013, Microsoft's gross margin -- sales minus cost of goods divided by revenue -- was 76.6% and its profit margin, or percentage of revenue remaining after fixed and variable costs, was 29.6%. By comparison, Apple's gross margin for the same quarter was 37.5% and its profit margin was 21.8%.
"With Windows 8, Microsoft is trying to shoot ahead of the curve," Moorhead acknowledged. "Metro is the best UI for large panes of glass, like wall panels and TVs. It's the best for voice and air-touch. But for other uses, it's a UI that looks ahead to 2015 or 2016. And for now, users are reacting to it negatively."
And that negative reaction isn't imaginary: Windows 8 has not sparked a resurgence in PC sales, as many, including Microsoft and its OEM partners, hoped. It has, however, given Windows-based tablets some traction, with estimates of shipments in the first quarter ranging from 3.7% to 7% of the market.
Windows Blue is meant to give the operating system another shot at driving PC sales for the back-to-school and holiday sales seasons, and increasing Microsoft's share of the tablet market with a shift towards smaller, less-expensive tablets.
Which made Shaw's dispatch all the more confusing to Moorhead.
"They're on the defensive here," said Moorhead. "I don't think there is anyone who read that memo that thought any differently. You only write a response like this when your back is against the wall to a certain extent.
"I don't think this had to be written," Moorhead said.
This article, Microsoft's counter-attack against Windows 8 coverage makes it 'look weak', was originally published at Computerworld.com.
Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is firstname.lastname@example.org.
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