By Rob Enderle, Enderle Group
If you match Apple’s resources against Microsoft’s you see a huge imbalance. Microsoft earns more revenues, generates more cash, and its power is heavily leveraged through massive partnerships with PC and Server OEMs and service providers. Apple is a product company whose power is offset by its partnership with AT&T. However, if you talk about mindshare, the reverse is true. Apple is driving most every popular client platform. It has enjoyed nearly unmatched growth in value, and its CEO was Fortune magazine’s executive of the last decade while Microsoft’s CEO is under increasing pressure to leave.
This showcases the fundamental difference between the two companies: Apple leads with perception and executes adequately with products, and Microsoft leads with products while executing inadequately with perception. Apple understands that perception is reality for most people while Microsoft, like most companies, doesn’t comprehend this internally. In some ways, it is likely similar to the inability of some generals and admirals to understand the value of air power in World War I and tanks in World War II. This discrepancy is defining both firms, and it was also evident last week when Microsoft’s TechEd and Apple’s World Wide Developer’s Conference had an uneven fight for mindshare.
WWDC: Defined By Keynote
If you stepped back and thought about Steve Jobs’ WWDC keynote, not only was it bad in terms of being visionary, it sucked at promoting the conference. However, in the larger war for hearts and minds, it had most of the media folks at Microsoft’s event furiously working to cover it. The converse wasn’t true.
Jobs’ keynote was mostly a commercial about the new iPhone, which people were clamoring to cover. This allowed them to pull the media air from the Microsoft event. As a result, one of the most common questions asked at TechEd (and this is anecdotal) was whether Microsoft was relevant anymore. This was in face of the reality that more worldwide value is created and consumed, by several magnitudes, on Microsoft technology then on Apple’s.
TechEd: In Search of Story
The opening TechEd keynote by STB President Bob Muglia was a better keynote, as we define them, for an event like this. It led into sessions the people at the show should attend, and it provided a laundry list of Microsoft offerings that spanned the different divisions funding the event. In kind of a metaphor for Microsoft, it was strong in function but weak in form. There was no overarching story, and it wasn’t clear if anyone was truly responsible for creating one.
There were fascinating individual parts, any one of which, like Azure or the new Windows Phone 7 platforms, might have provided the foundation for something that could compete for the massive mindshare that Apple captured. To make it successful would have required some pre-marketing, but by trying to make every group happy and not creating a compelling overarching story, Microsoft failed to generate the interest it could have and looked anemic and uncompetitive compared to Apple.
Strategic Analysis
Microsoft should have avoided overlapping with Apple’s WWDC unless they were willing to fully step up to do battle for attention. If the two events hadn’t overlapped, Apple’s ability to easily pull all interest from Microsoft wouldn’t have been as pronounced. Since they did overlap Microsoft’s pre-event marketing and keynote content should have analyzed and addressed Apple’s weaknesses, including the lack of anything new or surprising (the new iPhone had been leaked), the problems surrounding the AT&T relationship (and the likely lack of Verizon on stage), and the absence of any real business-oriented offerings or messaging. All of this could have been crafted in a way to either allow the result to be more balanced between the two firms or allow Microsoft to stage a PR coup.
With Microsoft’s CEO under substantial pressure to step down, a more focused TechEd would have had the potential to lessen or eliminate much of that pressure. Not only was the opportunity missed, the pressure appears to have increased due to this mismatched battle.
Wrapping Up: Apple vs. Microsoft
These two events are metaphors for both companies and showcase well their respective strengths and weaknesses. Apple is strong on simplicity and message. Microsoft is strong on product breadth, partners and ecosystem. Apple is weak on partners, business ecosystem, product breadth and developer relations. Microsoft is weak on message, marketing and image management. Both companies are vulnerable, but Apple’s WWDC showed they could better take advantage of Microsoft’s vulnerabilities while Microsoft appeared not to even be aware that a fight was taking place.
Sometimes small battles can define wars. This one touched a lot of people, and the lesson is: if you don’t intend to fight, you should avoid the field in the first place.
© 2010 Enderle Group, Inc. All rights reserved.
About the Enderle Group
The Enderle Group (www.enderlegroup.com) provides an unparalleled look underneath breaking technology events to identify the core reasons that buyers and builders of technology should care.
This piece first appeared in the Pund-IT newsletter.
Pund-IT ( www.pund-it.com) emphasizes understanding technology and product evolution and interpreting the effects these changes will have on business customers and the greater IT marketplace.