Magazine article Variety

Entertainment Will Be Key to Shaping Microsoft

Magazine article Variety

Entertainment Will Be Key to Shaping Microsoft

Article excerpt

MICRO MANAGEMENT

Steve Ballmer's replacement will need to connect device strategy with content opportunities

The next CEO of Microsoft will have one tough question to answer: What is Microsoft these days?

Under Steve Ballmer's leadership over the past 13 years, the company has evolved into a confusing collection of divisions that pump out everything from a suite of Office software to the Windows operating systems that power PCs and mobile devices, data servers and cloud computing centers, while selling hardware like the Surface tablet and Xbox videogame console.

It's certainly done well doing all that: Revenue tripled and profits doubled under Ballmer.

But Microsoft's flaws have never been more exposed.

At a time when companies like Apple, Samsung and Google have clearly established a strong emotional connection with consumers - by doing a little bit of everything, too, that is - Microsoft is turning into the next IBM, a well-respected but staid brand whose products are hard to get excited about.

The main problem has been a lack of focus on what consumers now want. And today, that's entertainment.

Microsoft missed, if not ignored, a drastic shift in consumer behavior over the past decade. They no longer passively accept the latest devices the computer and electronics industries offer.

The not-so-secret formula to Apple's success was turning its screens into platforms for music, movies, TV shows and games. Microsoft, a company built on the demands of the business community and productivity, missed that train.

Its attempt to catch up to Apple's iPod resulted in sluggish sales for the Zune music player. Microsoft also was late to embrace smartphones, with sales of devices with the well-designed Windows 8 Phone software trailing those powered by Google's Android or Apple's iOS.

Its other brands have been playing catch-up as well. The Surface is a powerful and impressive tablet, but was late to the game and too expensive. A cheaper second generation is about to hit the market. Bing struggled for years to find its footing as a search engine against Google and Yahoo, but has finally turned the corner with redesigns and a strong branding push.

The Xbox 360, meanwhile, has been a huge hit for the company as a console not just for videogames but for all forms of media, offering more than 130 apps. The Xbox One aims to become an even more important hub for programming in the living room with the addition of live TV paired with social features. …

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