Throughout Ballmer’s tenure as CEO of Microsoft he has been accused of running a bureaucracy that cannot even get out of its own way in addition to running the company in a follower capacity. Looking over the products that have come out (in the consumer market) from Microsoft since the departure of Bill Gates we can see this pretty clearly. Microsoft has attempted to enter several markets without fully understanding them (including the phone and personal media player market). Although it is true that Microsoft had a commanding lead on the mobile market with their Windows Mobile OS, it was their attempt to create their own hardware that was a complete failure. Then, even with an excellent hardware design in the form of the ZuneHD Microsoft’s failure to understand the market caused that to fail too. This was despite having a much better (money wise) music service from Zune Pass.

These items show that Microsoft often makes reactionary moves to their competitors (Now named as Apple by Ballmer) without a full understanding of what they are getting into. Windows 8 and Windows RT are exactly that. Microsoft saw that Apple has a hold on the market in the form of their tablets (they are not worried about Android because they make money off of most of those products through patent licensing) and wanted to find a way to get a piece of the action. So they looked at a limited amount of data (their customer feedback data) along with a few surveys that stated that people wanted the same experience on their tablets as on their desktops (more than 60% said this). They cobbled this together and used it to fit their own designs and what they wanted to present (which is what most statistics are used for).

However the problem is that due to the bureaucracy in place once the die was cast there was no going back. Windows 8 and RT with Metro UI was set in stone. Microsoft had created what they wanted to believe was the next big computing eco system all in response to what Apple is doing. Instead of doing it right we are going to be getting a knee jerk reaction that has the very good possibility of failing because Microsoft (and in particular Ballmer) just does not get the market. There is a reason that Windows Phone has a 5% market share, just as there is a reason that the iPhone has a 48% market share. But the foolishness does not stop there. Microsoft knows that their phones are not big sellers and that the Xbox is a loss leader. They wanted to do things backwards in the hope of bringing the other two along. The thought process is this;
We make the desktop and tablet the same as the phone, so people will buy the phone to have a consistent experience across all platforms just like 60% of the people said.

The illogic of this is astounding, but we will not go into that right now. Microsoft has also decided to lower the base cost of the OS in the hopes that they will pick up a continuous revenue stream from their cloud services like Office 365. In fact Ballmer specifically mentioned the consumer cloud in an interview with CRN;

The problem with the consumer cloud is that it is fast becoming an excuse to mine consumer data. People are waking up to this and cloud subscriptions are starting to show the effects. By tightly integrating their cloud offerings into Window 8 many are seeing the new OS as limited in scope and not much more than a way to provide a continuous source of money to Microsoft. In fact to give you a very good example of this Microsoft is now allowing their partners to bundle Office 365 in their OEM bundles. This means that many Microsoft devices will ship with that as the primary office function and dupe more than a few unwary customers into using Microsoft’s cloud office solution through a “trusted partner”.

We see the comments made by Ballmer as a desperate attempt to calm partner fears (including partners that offer their own cloud services). Unfortunately he has not done a great job of this and we expect to see their OEM partners move even more cautiously into Windows 8, after all Microsoft has just proven they will compete head to head with their own partners in the tablet market, what is to stop them from making desktops, laptops and of course phones? Considering that Ballmer wants to compete with Apple so badly we honestly would not put it past them to do this.

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