The second coming of Vista: Microsoft strikes back

Posted by Rob Enderle, Principal Analyst, Enderle Group

Analyst Opinion - Unless you have been living under a rock, you already know that Microsoft’s latest operating system has not been a big success. Apple takes great pleasure in Microsoft’s struggles and has been rolling a competitive campaign that not only makes fun of the product, but appears to make fun of Microsoft’s founder as well, typically not in a very nice way. As you might imagine, Microsoft employees don’t find this situation pleasant and Steve Ballmer, who both runs Microsoft and considers Bill Gates one of his closest friends, is less than amused.    

While Microsoft moves slowly, getting the company really upset is not a wise strategy. Apple has been aggressively sticking a knife into the company and effectively twisting that knife with apparent glee. Microsoft is about as angry as I have ever seen the company and they are channeling that anger into both fixing Vista and planning to rub Apple’s face in the result.  To make this work, they need to fix Vista and promote the fix to change the initial bad impressions that surround this product.   

I believe the first part is largely done and Microsoft announced the $300 million second part at its partner conference this week. Let’s talk about the Second Coming of Vista and why pulling on Superman’s cape is a bad idea.  

Vista:  It’s better than XP

Let’s forget the whole Vista vs. Leopard thing and put forth the reality that the two products are so different from each other that a head to head comparison isn’t realistic.   But you can compare Vista to XP and now, post Service Pack 1 for Vista, Vista is clearly better than XP for most tasks, including gaming -  as long as you are playing on current hardware.  

This was made very clear to me last week when I taped a Cranky Geeks show (Episode 123) and several of us chimed in that our experiences with Vista had been really good for some time and that the Vista-is-a-dog-belief is out of date.  

I now regularly game on the platform and go to events where people using XP have a difficult time connecting to the wireless network.   While I do get application crashes from time to time, it rarely happens to Vista itself (less than once a month) and many of the recent updates and patches haven’t required rebooting.   

Even my wife, who really did not like moving to Vista, seems to be having a good time with the software and I seem to be playing tech support far less often (in fact, I find if I ignore the initial request the problem seems to resolve itself these days).   

My general sense is that Vista is finally at a point where it isn’t a negative. But to turn it into a positive, Microsoft needs marketing. Unfortunately, the only company doing marketing on Vista broadly has been Apple, and they have hardly been positive.

The Vista strikes back marketing plan

Microsoft recently hired one of the most creative advertising agencies on the planet and has freed up an estimated $300+ million to fuel the campaign.  To put this in perspective, the Windows 95 launch, arguably one of the biggest campaigns in Microsoft’s history, cost under $200 million.   With the right creative content behind it, $300 million can do some amazing things and one of them is clearly to take the fight back to Apple and assure both sides of the story are told.  

Typically, Microsoft would not attack a competitive product directly. But historically, when the company got really upset, the gloves tend to come off and if the agency is allowed to use their full creativity, something amazing could be the result.  I haven’t seen the campaign yet, which is why I can talk about it, but assuming someone sits on the bureaucrats that exist in any company of Microsoft’s scale, the opportunity to execute a legendary advertising campaign exists.  

Granted, and this is typical with big companies like Microsoft, the bureaucrats get the final vote and no agency can overcome institutionalized stupidity. And I know of several great campaigns that never made it to market because of short sighted and overly risk-adverse executives who appeared to prefer sure failure over possible embarrassment.   

It will be a few weeks before we know if that is the case here and I still shudder when I think of the Digital Joy campaign the firm shared with Intel a few years ago. However, I think Microsoft is upset enough for key employees to drive through something great this time.  We’ll see.

 
Wrapping up:  The mother of all marketing battles

Microsoft is going to war and Apple’s ability to pound on them without challenge should end shortly.  Apple is clearly no slouch and represents the most powerful marketing power in almost any market, but they will have to split their resources between an iPhone launch and the Mac.  The iPhone is already being challenged by Samsung, which is executing a very strong multi-million dollar campaign themselves with one of the most competitive phones. And Samsung will soon be followed by well funded campaigns by RIM and HTC.
   
Apple has the danger of having to fight on too many fronts at once, which should weaken them while Microsoft has to overcome their tendency to be overly risk-adverse and create well funded marketing junk.   Or Microsoft will be improving their game while Apple will be distracted allowing for what should be a very even match.   Jobs hang in the balance on both sides, Steve Jobs is famous for firing people on a whim and Steve Ballmer will likely transfer his anger to the marketing executive if he is disappointed.  Real battles often result when there is a balance of skills, funding, and risk and this one appears to be a balanced match for once.   

Let the games begin.  

Rob Enderle is one of the last Inquiry Analysts.  Inquiry Analysts are paid to stay up to date on current events and identify trends and either explain the trends or make suggestions, tactical and strategic, on how to best take advantage of them.  Currently he provides his services to most of the major technology and media companies.