Technology: Microsoft’s Newest Challenge is a Store from Google

Almost everyone – including the company’s chairman – agrees that Microsoft missed the mobile computing boat and surrendered this market to its competitors, primarily Google. The California-based company, which started out as a simple search engine, is an aggressive and inventive company that has grown into a behemoth that dominates multiple heretofore uncharted markets.

Microsoft, on the other hand, has been around since the early 1980s and dominated the personal computer (PC) market for most of its lifetime. However, this is a shrinking sector and the company’s attempts at diversification – apart from the decade-old XBox gaming console – have been distinctly unsuccessful.

Microsoft’s brain trust is second to none and the company recognized the threat from Google a long time ago but, for a myriad of reasons, was unable to stop its advance. In the meantime, the start-up used its Android OS to gain a foothold in a number of aspirational markets and become a credible rival to Microsoft and Apple.

Over the past few years, Microsoft reinvigorated its focus on the mobile market and, late last year, announced a slew of new products directed towards this sector. The Redmond-based company also declared its intention to increase investment in and expand dedicated Microsoft stores.

These stores are particularly important because they give Microsoft an opportunity to change consumer perceptions about the quality of its products and horrendous after-sales service. This strategy dovetails nicely with the release of new products that can be showcased either as individual pieces or as part of a comprehensive suite in a positive environment by knowledgeable – and hopefully friendly – Microsoft employees.

The recent news that Google intends to open its own stores, therefore, will cause much consternation at Microsoft headquarters especially, given Google’s market share, existing agreements with major manufacturers and ongoing popularity among users and application developers.

While these stores will also impact Apple, their effect on its stores will not be as significant as on Microsoft’s. One reason is that Apple has its own customer base and while the company has recently faced some challenges, these are related more to expectation than to product dissatisfaction – as I noted in an earlier post. The second reason is that consumers can more easily transition from Windows from Android (and vice versa) than from Apple’s iOS.

This challenge is also an opportunity for Microsoft since its products are new and getting positive reviews. They can also be combined into a comprehensive suite of merchandise for both home and office for existing and new consumers. This is the true benefit of a dedicated store and one Microsoft is well positioned to exploit. It could also use its investment in Dell to showcase its products with those of Dell’s thereby increasing its visibility in the market.

Having said that, the company will need to ensure its products meet customer expectations (improving the products in its application store will be the key driver for mobile consumers), its service beats that of Apple and its price points are lower than Google’s and its manufacturers (this is the major question mark).

The bottom line is that Microsoft is late to the party and is, therefore, at a distinct disadvantage. However, the party isn’t over and there is no reason why people shouldn’t be just talking about Microsoft at the end of the night.