Stop being a punching bag Microsoft! Start fighting back!

We really live in a world where reality doesn’t seem to matter and people(financial analysts in this case) who do not actually make anything have an unfortunately huge sway on the fortunes of a successful and immensely profitable company like Microsoft. What I’m specifically talking about is the share downgrade by a Goldman Sachs analyst from “buy” to “neutral” that sent the shares tumbling down by about 1.7%. I have written about this topic once before, but what infuriated me even more was reading the various related articles to the story on techmeme and commentaries that elicited such hatred towards the company and parroted the prevailing  notion that Windows Phone 7 has to be “immediately successful” for for Microsoft to have a chance and in fact, it would be better for them to exit the mobile space all together. You never heard these people advance similar sentiments when the iPhone or  Android came out amidst the domination of Symbian, RIM and Microsoft to some extent. Even the hapless (IMHO) Meego  OS gets better coverage in terms of potential than WP7!

I have always been skeptical of the Kingmaker status given to these analysts who reside in ivory towers and I loathe the power bestowed upon them to be able to send a company to ruin by the issue of a single edict. While companies  like  Microsoft, IBM, Apple e.t.c provide actual products and services which naturally results in good and bad decisions being made in regard to what cause of action to take, the analysts have the luxury of sitting around crunching numbers, “pushing paper” and making millions of dollars on pure speculation (my simplified version of what consider their jobs to be.)It is a free market after all and I will always defend it, nevertheless, it is a pity the balance of power favors the “paper pushers” instead of the producers.

As this wasn’t enough, Microsoft has to contend with hostile media and tech journalists who also hold a great influence in the general public’s awareness and perception of all things technology. Their opinions in turn color  the mainstream’s media (your local news) reporting of the latest and greatest products. Case in point this story about how Apple dominates news coverage. The argument is always made that Apple makes higher quality products, but so does Microsoft but worse still, Apple’s flaws are always covered up as part “design” or just wait for the next IOS version  X.0 when it will be improved while anything Microsoft does is always tempered with a heavy dose of suspicion, by Jove! don’t you remember that they killed Netscape?

Google or Apple could announce the introduction of a blank piece of paper with their logo on it and it will be reported as the most innovative product that will revolutionize our lives forever! Just take a look at the news stories of Apple TV and recently Google TV. To the casual observer, you would assume that these are the only two options that exist while in fact, Microsoft (though admittedly partially their fault) has two great solutions in the Xbox 360 and Windows Media Center that compete fairly well in that area.

So what does Microsoft have to to?

Right of the bat,  they have to totally overhaul their thinking about marketing their products and become more proactive. Find ways pierce through the dense smoke created by the media and the Wall Street overlords to reach the consumers. You always hear people complain that Microsoft Office is over priced right? Did you know that if you purchase the retail disc Home and student version  for $150  and now only $99 at Amazon you could install it on up to 3 computers? That breaks down to $33.33 for Word, Excel, PowerPoint and OneNote per PC! If you want to get even more technical, you are getting a fully featured, industry standard Word Processor, Spreadsheet, Presentation software and a Note taking and organization software for $8.40 per program! Couple that with the new Windows 7 (3 user) family pack for only $140 at Amazon or approximately $47 per PC and you have a pretty good upgrade deal.

To top it off, add the much improved Office Web Applications, the recently released Windows Live Essentials Suite, the excellent and free Microsoft Security essentials and finally Zune desktop client and you pretty much have all the software an average consumer needs for a paltry sum of $240 or just $80  per computer! Microsoft should sell –shout it from the rooftops- significantly market this combo family package of the Windows 7 and Office Suite including a disc containing the free complimentary applications this holiday and highlight the outlined cost savings. I believe it would go very well with consumers especially in these tough economic times.

Secondly, Microsoft should shore up their presence in physical locations where most consumers frequent. I will make this argument until I am blue in the face that the most effective way for consumers to experience and make a decision on a gadget is by actually touching and interacting with a real and functioning device. Since Microsoft doesn’t have enough stores to go around, they should set up booths in Best buy like Apple does, Target, Wal-Mart, Malls, local electronic stores and wherever possible ,manned by knowledgeable personnel to reach consumers first hand. WP7 devices, Kinect and Windows Media Center boxes need to be experienced first hand and no kind of review can match it. No more dummy devices locked behind glass cases.

Thirdly, their advertising campaign should be focused and direct about how the new OS fulfills the everyday consumer needs effectively and how it contrasts with the current line of competing smartphones. No more ambiguous or “artistic” spots that look cool but never really say anything.

This last point was echoed in a conversation I had with a friend a few weeks ago. Now, I always make a point of casually inquiring from friends or people I come in contact with what kind of phone they have and what they like and dislike about them. This particular friend had a Blackberry Storm 2 which she liked because she could open and read MS office documents on the go, keep a calendar, listen to music, text message and access her social networks. She wasn’t that much into technology so having thousands of apps wasn’t a must have.  What surprised me the most was that she was considering getting the Kin (she didn’t know it had been discontinued)but the TV and online promotions for the device had actually reached her, an average consumer!

Microsoft therefore needs to fight back and go all out as they have promised with Windows Phone 7, Kinect (and hopefully WMC embedded devices and Zune HD2 when they come out) on the air, online and physical locations and they will be in good shape when it is all said and done.