There are no
two opinions that the phenomenal growth of Apple led iOS and iOS devices and
Google led Android OS and Android devices have dealt a significant blow to the
dominance of Windows as a once-monopoly operating system, and also started
raising questions on the rigid coupling between computing devices and Windows
software. This challenge to Windows and Microsoft hegemony has not been helped
by Microsoft’s inadequate response to the mobile smartphone revolution in terms
of delayed development of Windows (or any other OS) for mobile devices.
Microsoft’s exclusive tie-up with Lumia for dedicated Windows based phones and
the subsequent acquisition of Lumia mobile devices business have not helped in
any dramatic manner either (as yet).
There are
always critiques who try to predict the end-of-the-road for monopoly
technologies and inflexible business strategies which have been slow to
recognize the changing ecosystem. Such firms, instead of changing their
strategies and products (or services) to cater to the new ecosystem, try to
defend the established business models and product offerings but eventually
fail to stem the tide. As version after version of Windows is developed and as
the new Microsoft devices (whether the Lumia smartphones or Surface tablets) continue
the attempts to make it big, the question is whether Microsoft is immune to the
risk of business model decadence. The question assumes even greater
significance as the latest version of Windows OS, Windows10, is getting ready
to be launched.
The new Microsoft
Ever since
Satya Nadella has taken charge a little over a year ago as the new CEO of
Microsoft, there has been a palpable change in Microsoft strategies. Some of
these relate to announcing of unlimited free cloud storage on Office 365, development
of connectivity between Dropbox (a Google product) and Office 365, and offering
of more effective and productive Office Apps for Apple’s iPhone and iPad. Azure,
the cloud based software has been set for continuous development while Skype
and other apps are also actively developed for all devices. The new Microsoft
under Nadella has started recognizing its major competitors as likely
unintended partners in its new quest for device-agnostic software acceptance.
Clearly, in the new strategy, higher pricey software sales has become less
important than more open acceptance of its once highly proprietary software.
Microsoft’s
devices and tablets business has also been doing better, with the smartphone
business focusing on the low price endpoints with multiple Lumia smartphones
and the tablet business focusing on high end Surface tablets. Microsoft is also
trying to broaden its appeal to youngsters and gaming addicts and virtual
reality fans who may not care about Windows and Office at their stage of life.
Building on its organic success of Xbox, Microsoft has moved inorganically too
with the purchase of HoloLens and Minecraft with an eye on the future. HoloLens
is the futuristic 3D holographic virtual reality headset, compatible with all
systems. Minecraft is more than a game; it is a cross-platform community with a
huge cloud component. In addition, despite
the virtual failure of Windows Vista and lukewarm success of Windows 8, the new
Microsoft has not drawn back from launching its most audacious software
development ever, Windows 10!
Windows 10
If Microsoft is
to be believed, Windows 10 is more than just a major software upgrade; it is a
transformative operating system for Microsoft. Technology magazines are agog
with 10 top features of Windows 10 that are announced (and another 10 top
features not announced!). From all this promotional material, one can identify
certain unique characteristics of Windows 10.
Primarily, it is cloud-centric, pan-device and cross-platform. It is touch
(new Start menu) and speech sensitive (improved Cortana), with an inbuilt
ability to adjust itself to different types of devices (Continuum); from
smartphones to desktops and 2 inch screens to 84 inch screens. New browser
(Spartan), new Outlook and new Xbox applications are also proposed. Commercially,
with these features and more, Windows 10 is proposed to be offered free, at
least for Windows recent version users and for the first year to start with.
More than all
these features, the attempt by Microsoft to convert phones operating on Android
system to a version of Windows (in association with one device manufacturer,
initially) is an interesting play. Potentially, this may be extended to iOS.
While it is too early to comment on what IP and patent related issues, this is
a bold new stride; from offering Windows Apps like Office and OneDrive to
Android and iPhones to convert alien operating systems into Windows own.
Whether the convertibility option is superior to encouraging device makers to
offer Windows based phones is for the future to judge but in the realms of contemporary
business play the convertibility strategy is certainly a novel option. This is
not without its risks, however, there is no guarantee that it can fit all
devices smoothly and seamlessly, and also that the costs and experience will be
any better. Apple and Android may not plan a counter-strategy given the low
share of Windows OS devices but the risk would still remain.
Convertibility strategy
The
convertibility strategy has probably some similarities to the strategies
adopted by retailers of multi-brand and own brand franchising. It has also some
parallels in after-sale service. In manufacturing and products, broadly
speaking, there is no history of convertibility option as proposed for Windows.
It could be outlandish and over-expensive even to think of it in such domains;
like one automobile maker retrofitting its “superior” engine in another
competitor’s automobile! The larger issue here, probably, is the attempt to
draw users to a larger unified ecosystem. Whether it should be done through the
way Microsoft now proposes or through the integrated elegance route of iOS and
iOS devices as Apple has always done is a moot point at this stage. Microsoft
has little to lose but a lot to gain by the convertibility strategy.
That said, as
the importance of operating systems in products grows, the possibility of
convertibility strategy could increase. As automobiles become driverless and
self-navigated, Microsoft, Apple and Google could be the three players pitted
against each other to control the new generation automobile development. The
success that may be scored by Microsoft in the Windows 10 conversion strategy
may hold some pointers to future successes in other more challenging arenas.
One may think of home appliances, audio and video equipment, and remote home
management systems as potential areas for the convertibility strategy. The
convertibility strategy may bring to the fore once again the risks and benefits
of open source versus proprietary operating system development and the defences
against portability without restraints.
Competitor as customer
At a more
philosophical plane, the unravelling Microsoft strategies bring forth the
concept of ‘competitors as customers’. The advantages of the philosophy are
that it provides economies of scope for key functions such as R&D and
manufacturing, and also helps in the development of hybrid components and
systems that integrate the superior systems of competitors. While firms may be
initially dismissive of this concept, there is no reason why this cannot be a
viable concept at least in the maturity and decline phases of the industry
players. As an example, the two truck makers of India who are battling out for
decades with independent designs from bolts to drivetrains but with little
change in the market share over the long decades may opt for internal
convertibility to bring down costs dramatically.
Domestic
airlines, which are in the fragmented and declining phase, could also benefit a
lot by making planes, aircraft maintenance and ground services portable across
the carriers. Rather than drive down fares to completely unviable levels to
boost capacity utilization of individual planes and routes of carriers, the carriers
can operate at viable fare levels and have infrastructure portability to serve
the customers better. While excessive collaboration amongst competitors may
raise cartelisation fears, oversight by regulatory bodies and metrics of
customer satisfaction could be certain moderating factors. In fact, there could
be a counter-hypothesis as to whether competition without tangible
differentiation is not worse than a monopoly with robust product specifications
and service characteristics.
Indian ubiquity
While examining
the Microsoft convertibility strategy, one may marvel at how India offers a
fascinating spectrum of commonplace convertibility or portability; call it
Jugad or otherwise. We have a mobile micro-sim card being precision-cut with
scissors to convert it into a nano-sim card for the new generation phones! You may
find a Maruti car spare part being customized for a Hyundai small car in a
workshop specializing in the service of Toyota cars!! More (intellectual) options could come up in
the Indian context, in future. Indian higher education system is famous for
certain overarching brands; Indian Institute of Technology, Indian Institute of
Management, Indian Institute of Information Technology, Indian Institute of
Science Research and Education, for example. While the admission to each
Institute is governed by a specific common entrance test, once admitted in a
particular location-specific institute the student would have to stay with that
institute all through. There could be convertibility options across locations
and branches under each overarching brand, something which a Harvard and
Stanford can never hope to achieve as they try zealously to defend their
distinctive identities!!!
Lighter vein
discussions apart, the current and likely commonplace examples of India suggest
the great Indian intellectual ubiquity; an openness to accept any proposition,
an enthusiasm to deliver on anything and a willingness to fit into any culture.
This ubiquity, if channeled in intellectually constructive modes focused on technology, quality and compliance, could deliver
from and for India a host of Microsoft Windows 10 like or even superior
convertibility options. This is because, the operating system convertibility is
not a software challenge; it is a strategic mindset shift (it is a moot point
if Satya Nadella being an Indian has helped in this new flexibility at
Microsoft). If Windows convertibility is viewed as a mere software issue, we
have already many App developers who straddle multiple platforms and devices,
the latest being Star India’s mobile application, Hotstar, which achieved 10
million downloads in just 40 days, and is claimed to be capable of running on
as many as 7,000 variations of operating systems and screen sizes. What matters
is the strategic mindset that enables a firm develop a universal and
standardized ecosystem for the customer that promises to the customer a true
hassle-free convertibility and portability of low-cost and high-value user
experience.
Posted by Dr CB
Rao on March 22, 2015
No comments:
Post a Comment