commentary
The key to stopping Microsoft encroaching on your customer territory is clearly customer loyalty.Customer loyalty is a funny thing. Keep someone happy with a product, and they'll return to buy further products. Annoy them once, and you're probably looking at a lost customer and some bad word of mouth. For certain large companies, of course, those rules don't entirely apply; I've lost track of the number of people I've heard from who'll swear at a Microsoft product but continue to use them for a variety of reasons, not all of which make sense. Microsoft as a company continues to expand its presence in the software and hardware arenas, and in most cases it's capable -- either financially, through bundling or by other methods to make a solid dent in the markets it moves into.
Conventional wisdom says that when Microsoft wanders into your particular software territory, you're better off cutting a deal with the Redmond boys -- preferably one involving cheques with lots of zeroes in them -- than continuing to fight. For particulars, see for example, WordPerfect or Netscape. Yes, both products do still exist and continue to be improved incrementally, but they're the kings that used to be, unseated by Microsoft's own Office and Internet products. It's not all doom and gloom, however, if Microsoft decides to launch a product within your product sphere; all it takes to survive is a product that happens to be good -- it doesn't necessarily need to be the best in its class, even -- and a customer base that happens to like your products. That product loyalty is probably your best bet for survival, as far as I can see.
While Mac zealots are one obvious area where Microsoft has only a little traction, there are areas that haven't been traditional MS strongholds where despite spending big, Microsoft is just a player, rather than the whole landscape, as it arguably is in the desktop PC, Internet and Office application area. Before you start flaming me for that statement, I'm not saying that it's a good or bad thing that Microsoft has that dominance; it's just the way it currently happens to be.
Microsoft's spent a small fortune (and then some) taking Sony on in the console arena, with results that are only now starting to show fruit. A press release landed my way recently touting the fact that for the first time, Microsoft's Xbox console outsold Sony's PS2 in the Australian market.
The tone seemed to indicate that the tides may be turning in Microsoft's favour, but that'd be ignoring what I like to call the "everybody's already got one" theory. Sony's sold an absolute ton of PS2 consoles in the Australian market since launch, and I'd think that a fair number of people buying Xboxes were purchasing them to sit alongside PS2 units. That's especially likely given the brutal price war that has seen both consoles drop to the price of around 2.5 games -- and figures suggest that the average console gamer buys more than 2.5 games to go with their consoles.
There's no doubting on a technical level that the Xbox beats the PS2 in every category that counts, so it's not even a case of Microsoft putting out a worse product and playing off an established monopoly, as it did with IE; the PS2 had an early market lead, but more importantly, it had an established and fiercely loyal customer base.
The Xbox battle is a relatively recent one, but in another personal computing area, Microsoft's been plugging away against another market leader with still only mixed results so far. I'm talking here of PDAs. Many predicted the death of Palm when Microsoft came into the market, but Palm's still here, and as of last week, still launching new units -- the Zire 72 and Zire 31. The 31 plays to Palm's traditional marketplace -- budget PDA users who just need a simple digital organiser -- while the Zire 71 attacks the one area where Microsoft has traction, in higher-end PDA units.
Palm's early survival in the battle was an easy one to pick, as the early Windows CE devices were, to a man, awful. Later versions of CE were better, but speaking as someone who owns a couple of them, they still weren't much to write home about. The switch to Pocket PC/Pocket PC 2002 saw the MS-based PDA market improve massively, and it forced Palm to improve its own product base as well. Since then the two have jostled with products, but Palm's userbase still continues to use and buy its PDAs. I'm sure that's not a question of pure bloody-mindedness, however.
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