I smell fear

In a bygone age Microsoft was able to dominate its rivals by bullying, blustering or buying. In the online services market that is no longer the case and in fact I believe that Microsoft is running scared, without a good strategy to complete with Google.

Why do I say this? Very recently I have been approach by a number of larger SMB resellers asking me about Google in the SMB market. I knew from the questions they were asking the questions hadn’t come from the reseller but from Microsoft. Here is the first piece of evidence I have about Microsoft not having a suitable strategy. It is asking its partners in the SMB space how to compete and they don’t know either! What can you expect? These partners are now ‘old world’. They are not part of the new hip iPod generation where everything is delivered instantaneously from the Internet. They make their money from traditional means like selling software on DVD and hardware in boxes. Not many resellers like this even have an online strategy, so what good is it asking them? None what so ever.

Microsoft has traditionally sold its products through resellers, not directly to customers (although this is also changing) but that has now created a millstone around Microsoft’s neck when it comes to online services. How can Microsoft sell online services when these resellers aren’t skilled enough in these applications? Why would they bother selling online services if they can’t see the revenue return? The answer is – they won’t, period.

Now let’s examine how Microsoft has chosen to compete with Google. They do so mainly via email services and Exchange Server online. But guess what? Email services are simply a utility now. Email is just a product that is expected, and if there isn’t much perceived difference between the offerings of Google and Microsoft (which there isn’t as email is email) then all that is left is a decision by the customer based on price. At the moment Google is the cheaper option and it wins. Guess what? If Microsoft drops it price so will Google. In fact Google could afford to give it away and there ain’t a damm thing Microsoft can do because it now faces an adversary who is as big and rich as they are. That’s something it has never had to face before.

As any good strategist will tell you, never fight an adversary where they are strongest, on ground not of your choosing or at a time that doesn’t suit you. In summary, attack an adversary where they are weakest not where they are strongest. Is Microsoft doing this? Nope. They go after Google in search ( al la Bing ). They go after Google via Exchange online. Dumb, dumb, dumb. If they stopped and thought about things they’d realize they have the perfect weapon with which to compete with Google in the online space.

Not surprisingly I believe this weapon to be SharePoint. Not only is it a product that is far more feature rich and mature than Google Sites, it provides superior collaboration with products that most clients already have on their desktop like, Outlook, Word, Excel and OneNote. SharePoint has the flexibility to solve many common business problems. The value of SharePoint is what you can create with it. The value of SharePoint is that you can solve REAL business problems without overlaying complex technology and increasing costs. The value of SharePoint is that it is simple to use and implement. Yet I’m sad to say these benefits fail to resonate with most people (except fanatics like me of course).

If you ask most Microsoft resellers what SharePoint is, you’d be lucky to find some that knew and even luckier if you found some that have used it. However, if you take the email component out of Microsoft BPOS because it is simply a utility now, as I have discussed above, what is left? SharePoint. But how many resellers are comfortable selling that? Not many. So perhaps Microsoft should be promoting SharePoint more to its resellers and customers. Maybe it should be showing everyone the real benefits you can achieve with just a browser and the even greater benefits when you combine it with Microsoft Office.

Alas, it doesn’t seem to me that Microsoft appreciate this and they are too busy trying to go toe to toe with Google and that is simply dumb. For probably the first time they now face an adversary who is pretty evenly matched with them and yet probably, has the edge in online services. Microsoft have yet to implement an effective competitive strategy and in fact seem to be actually making their situation worse, if the BPOS product events I have recently attended are any indication (where they are pleading with resellers to sell Microsoft BPOS). If they are not careful the smell of fear is going to turn into a reek real soon!

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