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Microsoft's Apple strategy

March 17, 2006

Twenty-two years ago, Apple Computer aired its famous "1984" commercial during the Super Bowl. The ad's message was clear: By giving power to the individual, Apple's decentralized computing technology would bring an explosion of personal creativity that would demolish the oppressive control represented by IBM's traditional, centralized computing technology. As Ted Friedman explains:

With the 1984 ad, Apple identified the Macintosh with an ideology of "empowerment" - a vision of the PC as a tool for combating conformity and asserting individuality ... It turn[ed] the confusing complexity of the Information Age into a Manichean battle of good vs. evil. There's the bad technology - centralized, authoritarian - which crushes the human spirit and controls peoples' minds. Read, IBM. But we can be liberated from that bad technology by the good technology - independent, individualized - of the Mac.

Yesterday, Microsoft launched an assault on IBM using a very similar message. Microsoft, said CEO Steve Ballmer, offers "people-ready" computing. "Our innovations facilitate the power of people," he went on, drawing a direct comparison with IBM: "Their pitch is to let IBM help your company with its innovation. Ours is to empower your people to innovate. The two approaches are striking in their contrast." IBM is The Man - the hidden power behind the hegemony of the centralized, spirit-crushing Corporate IT Department - and Microsoft, like Apple before it, is going to help you stick it to him. "People, people, people," boomed Ballmer, in case anyone missed the point.

But Microsoft's Apple strategy goes deeper than its marketing message. Apple promoted the "integration" of its technology as a core strength. By maintaining a closed system, combining proprietary hardware and software, Apple could offer, it claimed, a better "user experience." You didn't have to worry about the technology - it just worked - so you could concentrate on doing your work and being creative.

Microsoft, which built its dominance in PCs on an open architecture, is now taking the Apple approach here as well. It's saying that its integrated platform of corporate software, from the operating system to the desktop application, offers a better user experience - again freeing the individual to innovate. Microsoft's Jeff Raikes argues, according to Business Week, that Microsoft "provides additional capabilities by integrating its products. 'A combination of Microsoft technologies will always have more impact,' he says."

Will Microsoft's strategy work? Will it erode IBM's hold on corporate computing? I don't know. But it's worth remembering how the earlier Apple-IBM tussle turned out. The victor was neither Apple nor IBM. It was a third company that, at the time, both Apple and IBM viewed not as a competitor but as a benign partner. The company's name was Microsoft.

Comments

Nick, IBM is its own biggest competitor. The services group "the other IBM" has become so big (half of $ 90 biliion revenues) that it a) increasingly drives behavior around software and h/w - which means more marketing/proposal support than real R&D. b) it is mostly overpriced, "utility" services so a big target as people look for innovation budgets.

You may enjoy two recent posts of mine on IBM

http://dealarchitect.typepad.com/deal_architect/2006/03/_90_billion_doe.html

http://dealarchitect.typepad.com/deal_architect/2006/03/ibms_research_j.html

if the two top innovation and R&D execs at IBM are defensive what can we expect from the average consultant -

As it was in 1984, it has become a $ 90 billion symbol of IT "entitlement" spend. If Microsoft looks sluggish compared to Google, think of IBM.

Posted by: vinnie mirchandani at March 17, 2006 09:54 AM

I'm glad you found my piece on the introduction of the Mac useful. I have to say, I have trouble envisioning Microsoft as any kind of underdog rebel. But I certainly see the logic of making the Windows experience more Mac-like by improving the integration of hardware and software. Microsoft's been aping Apple's design innovations with great success for two decades - why stop now?

If you enjoyed the Mac piece, you may be interested in my new book, Electric Dreams: Computers and American Culture, just released from NYU Press. It traces the cultural history of computers from Babbage to blogging and beyond.

Posted by: Ted Friedman at March 17, 2006 05:58 PM

who is going to take over is it google

Posted by: who at March 17, 2006 09:23 PM

'Always' is a long time

Posted by: Dennis Howlett at March 18, 2006 06:57 AM

Microsoft might squeeze more out of this campaign if they attacked the idea of Google being the centralized computing. Google indeed is turning the entire innovation clock back to 30 years by introducing the concept of thin clinets (browsers instead of green dumb terminals like Mainframe) and their centralized servers controlled and operated by group of so called smart people. It reminds of me USSR..it looks and feels great/strong intially but has to crumble eventually.

The challenge is to find information in real time from a multitude of adhoc machines, but what is smart about the contrary.

Further, IBM is indeed eroding the idea of software being sold as a product by supporting open source and betting that only services will make money. That is indeed at the expense of some of their own software division. The Microsoft campaing might help all software companies including Apple.

Distributed.

Posted by: Distributed at March 19, 2006 02:09 AM

Notwithstanding the juvenile point-scoring, Microsoft and IBM have been at war for two decades, with Microsoft generally prioritizing users and IBM targeting IT departments (an overgeneralisation, of course, but basically true -- look at PROFS, SAA, Notes etc).

Microsoft Word (graphical version), Excel and Microsoft Office all appeared first on the Mac.

Successful revolutionaries tend to become the status quo for the next generation, and Microsoft is just taking the next logical step in becoming (in a phrase from Cringely's book) "the IBM of software". But just as IBM extended its reach into what was a revolutionary new PC business, Microsoft is also trying to extend its reach into the revolutionary new Web business, with Live etc.

But it's not all bad. Life is better with an IBM of software (Microsoft), an IBM of chips (Intel), an IBM of comms (Cisco) etc etc than it was when IBM was the IBM of everything. ;-)

Posted by: Jack at March 20, 2006 05:54 AM

IT'S ALL A LOAD OF CRAP! IBM HAS LOST IT... MICROSOFT HAS LOST IT T0O- WHAT HAVE THEY REALLY INVENTED OF THEIR OWN IN THE LAST NUMBER OF YEARS?
MICROSOFT TALKS ABOUT IT-'EMPOWERING PEOPLE"'...
JUST AFTER RUNNING A CAMPAIGN THAT SHOWS PEOPLE (THEIR OWN CUSTOMERS) WEARING HEAD MASKS OF DINASAURS... AND CALLING THEM DINASAURS - WHILE THEY CONTINUE TO USE MICROSOFT TOOLS... SOME OF THE WORST ADVERTISING I'VE EVER SEEN AND WISH IT TO GO AWAY AND BE EXTINCT!......
THEY CAN BORROW APPLES THINKING...."You didn't have to worry about the technology - so you could concentrate on doing your work and being creative."
BUT APPLES THINKING RUNS THROUGH THE CORE OF EVERYTHING THEY DO...FROM THE PRODUCTS, TO THE SERVICES, THE STORES TO THE PACKAGING....TO THEIR BRAND CULTURE.
MICROSOFT STILL SELLS PRODUCTS THAT GO 'KLUNK' IN THE NIGHT. THEIR STUFF GETS HACKED AND SPYWARE RUNS WILD.... LET THEM FIX UP THIS STUFF FIRST... THEN MAYBE I WILL BELIEVE.
MICROSOFT HAS NO 'FEEL' FOR PEOPLE... THEY ARE TOO TECHNOLOGY / MONEY DRIVEN....HAVE BEEN FOR AGES...
NOW COMING ALONG AND SAYING WE EMPOWER PEOPLE IS A BUNCH OF TALK....SHOW US THE GOODS FIRST AND LET US CONCLUDE FOR OURSELVES AS CONSUMERS, WHERE WE SIT. WHOEVER MICROSFT HAS BEEN USING TO SELL THEIR 'BRAND'OR MAINTAIN IT- SHOULD BE SHOT!
M
SIMPLICITY IS KEY.

Posted by: MARIO FROMOWITZ at March 20, 2006 10:20 PM

Mario, you're right. Microsoft really needs to fix their public perception: http://www.msversus.org/node/175

Although, they need to fix their software first.

Posted by: veridicus at March 21, 2006 03:20 PM

I don't buy it. Based on my experience last year as part of a team renegotiating enterprise agreements with Microsoft for operating system and office software for a site with 5,500 desktops, my view is Microsoft is taking the fight over software purchases and cost control issue out of the CIO's office and into the executive suite. For years top executives pushed cost control for software on to the CIO's desk. Microsoft had no way to break out of that box. The firm is now bypassing the CIO and appealing directly to top executives on the basis of value rather than cost. This is nothing more than a shift in marketing focus based on the assumption top executives might be an easier sell. Who knows, Microsoft could be right. From the view inside the trenches, StarOffice8 at $50 a pop looks pretty good compared to Office 2007 at $300 a pop for all bu the most demanding personal computing environments. My estimate is we could put StarOffice8 on half or more of our desktops and no one would miss any functionality. I sure as hell am not going to recommend we start buying 64-bit PCs with high end video boards and 1 Gb of ram just to do email, travel expense reports, and the occasional memo. Of course, this is over simplification, but the challenge will be for cost conscious top executives to see through the marketing smoke screen and keep the CIO's office engaged in crafting enterprise agreements with Microsoft.

Posted by: Dan Yurman at March 25, 2006 10:41 AM

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