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Microsoft Makes Apple Eat Humble Apple Pie

Microsoft Makes Apple Eat Humble Apple Pie

The very idea of Apple beseeching Microsoft to lighten up on its laptop hunter ad campaign is hard to swallow. That's apparently what happened, though, and if Microsoft is reacting with glee, it's understandable. After all, Apple is the company that knows how to brilliantly market its brand and devastate the competition while it's at it, right?

By Rob Enderle
07/20/09 4:00 AM PT

There's generally more attention on the fight between Microsoft and Google this decade than on the fight between Apple and Microsoft. That's because Google seems to represent the future, while Apple and Microsoft are often seen as anachronisms from a prior age.

However, these two clearly aren't ready for the tech old folks home yet -- both have done some amazing things over the last few years. The difference is that Apple, because it's marketing-driven, typically gets more credit for its activities than Microsoft does. That has changed recently, and Microsoft has been kicking a little Apple buttusky. That's what I'll focus on here.

I'll close with my product of the week: a Linux-based electronic office in a box from Sutus. It gives a small company almost everything it needs, from phones to email.

Apple's Unique Advantage

Apple is a marketing-driven company -- something unique in the technology segment -- while Microsoft has largely been engineering-driven. During the 90s, this was actually more of an Apple liability than an asset, because Apple was being run by people who clearly didn't get Apple's unique capability. Steve Jobs returned Apple to its roots, and the company came back.

What makes a marketing-driven company is that products are created in line with marketing programs. In effect, they are designed to easily fit marketing messages and campaigns. In Apple's unique case, it is Steve Jobs himself who assures this link; he starts thinking about how he will introduce a new product right from its conception. This is part of what creates the magic when he presents something like an iPhone. His passion has helped define the product, and his pride in the result comes through when he introduces it.

I've recently been referring to him as the "Artisan CEO," and I believe that the tech market would benefit if more CEOs took this kind of personal interest in their products and could, with similar pride, introduce, protect and promote them.

For Apple, marketing is strategic, and top marketing people would like to have Apple on their resume. They get a lot of support, and they get to work with products that are relatively easy to market well.

Microsoft's Typical Problem

Microsoft -- and Google has also become a poster child for this -- is an engineering-driven company. This means that products are built based on requirements that are largely set by the engineering teams building them. They do use customer information, but they're generally far removed from those customers, and the information they're working from is often inaccurate or untimely. Their goal is to get the product out the door. Only after the product is crafted does marketing, which is often led by engineers, assume responsibility for selling it. It then has to scramble to figure out how to present and promote the offering.

CEOs at technology-driven companies tend to focus on major investors, large customers, and operations; they delegate the product responsibilities to others. They're often viewed as generic. It isn't uncommon to see engineering-driven firms hire their CEOs from completely different industries -- something Apple did with John Sculley with bad results -- because the role is perceived to be more management than product-related.

This tends to result in very complex products that are often incomplete from a customer perspective -- and very difficult to market. Given that marketing teams are typically neither very experienced, nor very well supported, nor particularly strategic, great marketing campaigns for wonderful products are few and far between. This is largely why Apple has been kicking Microsoft butt for much of the time since Vista launched.

Microsoft Strikes Back

However, anyone you pound on long enough will eventually respond, and Microsoft eventually did. Microsoft brought marketing experts on board, hired one of the most creative advertising teams in the world, and created the "I'm a PC" ad campaign.

This happened during a time when Steve Jobs was incapacitated. While Apple did respond to the campaign, its response wasn't particularly effective, and Microsoft started taking share back. More importantly, Microsoft's image started to improve, and it started to do damage to Apple's image by painting that company as elitist and priced out of the market.

This was allegedly capped by a whiny call from Apple's legal department pleading with Microsoft to change its ads because Apple had dropped its prices by a measly US$100 in response to its sharp drop in market share. Granted, the news of this call came from Microsoft's own COO Kevin Turner. However, the fact that Microsoft even mentioned this is unusual, while it's easy to picture Steve Jobs on stage relishing such a call from Microsoft, had the companies' positions been reversed. Turnabout is fair play.

The success Microsoft's campaign is enjoying -- and the very high visibility of this success -- may well change Redmond for the better in one fundamental way. It should make marketing more strategic, which means that Microsoft will be able to attract better people -- and that marketing will have more say regarding what and when products come out the door, resulting in more complete, elegant (simple) products.

Wrapping Up

I don't expect this change in marketing focus will happen overnight for Microsoft, but I do think this is a lesson most tech companies should take to heart. Done right, as Apple and now Microsoft have demonstrated, marketing can substantially improve margins, increase market share, and help create products the firm, the firm's stockholders, and the firm's customers can be proud of and lust for.

One final thought: If Steve Jobs is truly back, it won't be long before Apple uses a more capable competitive attack, but Microsoft has shown it may now be able to go toe-to-toe with him. Kevin Turner may turn out to be its secret weapon, and he's ex-Wal-Mart. This time, it could be a battle royal that results in better products that are nicely marketed from both companies. And that, my friends, would be a very good thing.

Product of the Week: Sutus Business Central 200

I'm in a nationally syndicated TV show called Tech Close Up, and I do a tech review segment called "Fast Forward." As a result, I get to review a lot of products and pick the ones that stand out to be in the show. One of the more interesting was from Sutus and what made it interesting was that it seemed to combine in a small box the critical components to a business.

Designed for offices with up to 20 people, this product provides advanced VoIP and POTS (plain old telephone service) with advanced features, an internal file server, a Web server, firewall, wireless router, access point, VPN, backup server and email with calendar -- all in one box with a starting price of around $2,200.

Based on Linux done right (you don't see the complexities of the OS, you interface with an easy to use custom interface) for small business, this one product could actually supply most of the needs for the average fledgling company at an affordable price.

It currently uses Polycom VoIP phones, which are extra, but it is one of the more interesting Swiss Army knife-like products I've ever seen, and an impressive offering for its target market. That's why the Sutus Business Central 200 is my product of the week.


Rob Enderle is a TechNewsWorld columnist and the principal analyst for the Enderle Group, a consultancy that focuses on personal technology products and trends.


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