Can Microsoft Ever Recover? Windows 8, Windows Phone, Xbox One, Surface, etc.

coip

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I'm all in on the Microsoft train. I've got an Xbox One, a Windows Phone, a Surface RT, a 2-in-1 Windows 8.1, and another Windows 8.1 laptop. I use all their services: Outlook.com, Bing, OneDrive, Office 365, Internet Explorer, etc. I think they make the best product and, as I'm so invested in their ecosystems, I want them to succeed. But, I'm starting to fear that they may never be able to recover.

COMPUTERS
There bread and butter, Window, is facing steep competition. While I love Windows 8.1, it's clear that it's being panned in the media as another Vista. Consumers are avoiding it. That's not good considering the PC market is drying up. They they're facing increased competition from Apple, with their MacBook Airs and whatnot. Even Google is making a dent with their awful Chromebooks. Sure, nearly 90% of the PC market is Windows, right now. But if you go to any college campus, you'll see more than half of students waling around with MacBooks.

TABLETS
The situation is even worse in the tablet realm. Android and iOS dominate the market. The Surface RT (which I own) was unfairly mocked and misunderstood by media journalists and consumers alike and didn't sell as well as it deserves. App developers still make apps first for iOS and Android, and everyone makes fun of Windows RT. Their tablet market share is in the single digits.

PHONES
Same as tablets. Android and iOS dominate and that'll be hard to change. While we've seen some growth in Europe and Latin America, in Asia and North America, Windows Phone's market share has been stuck at 0-5% for years now. Even now with the release of Windows Phone 8.1, which makes an already superior mobile OS even more superior, all the tech journalist reviews parrot the same non-sense: "Now Microsoft has finally gotten some features iOS and Android have had for years, but they are still dismally behind in the App store, so we say 'don't switch'".

GAMES
Xbox One is doing well, but the PS4 is outselling it, by a lot despite the fact that Xbox One has way more features and way more games. Even worse, the perception among consumers and game journalists is that the Xbox One is inferior, yet overpriced, ignoring all the extra features it has, they are myopically focusing on minute graphical differences, greatly exaggerating them and convincing mainstream consumers that the PS4 is better. I spend a lot of time reading comments on the bottom of articles on major gaming sites, and the bias is so incredibly lopsided. They lampoon Microsoft for the Kinect (which I think is awesome), for the graphical output capabilities of the consoles, how Sony always has better games (which, ironically, if anyone looked at the X1 vs. PS4 lineups would see is the opposite of reality), etc. It's really frustrating trying to respond to them.

SERVICES
Google Search and Maps dominate Bing Search and Maps in market share, even though personally I think Bing is better. Google Docs has significantly eaten into Office's market share. Same goes with Chrome and Safari, to Internet Explorer. The grand majority of people under 40 are completely subsumed in the Google or Apple ecosystems. They have Gmail email addresses, that get them to use Google Docs, YouTube, Google Search, Google Drive, and Google Chrome. This has made it nearly impossible for Microsoft to gain traction in these sectors they used to dominate.

PERCEPTION
Worst yet is the negative perception that everyone has towards Microsoft and their products. I was in the university computer lab the other day and had a problem with OneDrive's click-to-run integration with Office. Tech support came in and isolated the problem as an Internet Explorer problem. "Generally, we advise everyone to not use IE," they said. "In fact, you're pretty much the only student I've seen on campus that even uses IE. Most of the time it's 60-year-old professors." I've had other friends mock me for using Bing, for switching to Outlook.com instead of using my old Gmail account, for using OneDrive instead of Dropbox, for using IE instead of Chrome, etc.

I just feel like there is this impossible mountain for Microsoft to climb because, for some reason, the entire tech world seems biased against them. Every major brand and service they have is scoffed at. Young people use Google and Apple. Even their coolest brand, Xbox, has been destroyed since their "Xbox One DRM" PR fiasco last year (which, by the way, I was on board with their original policies).

Please cheer me up and tell me that Windows Phone will rise to glory, as it deserves; that people will realize Windows 8 is, in fact, much better than Windows 7; that Xbox One is the most ambitious and innovative console to hit the market ever; that IE, Office, OneDrive, and Bing will get the proper respect they deserve, and that public perception of Microsoft as somehow being less cool than Google and Apple will change.
 

anon(8657436)

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YOU want US to tell YOU that it will get good. Better ask Cortana! I think it may gain up but very slowly as Microsoft is switching to a touch optimized environment and web dependent and low on resources infrastructure and that is what most people don't have or aren't familiar with and it pisses them off. But it should be fine I think.
 

TonyDedrick

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First, I think ultimately people will use the products they want. If Microsoft wants to change any preconceived notions about their brand (which I don't know if its that egregious outside of the tech world), then its time to get off the pot and start doing some real marketing.
 

mikeofthegarden

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Wait until the "hipsters" start using Microsoft products because they are uncool. Then mainstream catches on and everyone starts using them.

Joking. Anyways, the market ebbs and flows. I'm sure they will come back.
 

HeyCori

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I agree, things look bad.

They sound much better.

And the average consumer doesn't hate Microsoft products as much as the internet thinks.

Yes, Microsoft has a long way to go to become the undisputed king of all things computer.

But things could be a lot worse.

Sony isn't close to being the powerhouse it once was.

Not with selling office buildings or dumping stock to make a quick buck.

Bing is on track to break even and continues to gain marketshare.

I promise, Microsoft is FAR from a dying company.
 

Jas00555

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I dunno Coip, some of those things that you describe don't align with the real world numbers.

Computers- 1.5 billion people use Windows. Even if people think of Windows 8 as Vista, if people adopt Windows 9 like they did Windows 7, and Windows 9 uses the same app store that 8 does, then that'll be enough users to get to parity.

Tablets-to be fair, they were late to the party, but tablet sales are increasing and with Windows now being free on cheap tablets, it goes head to head with Android in that market.

Phones - also to be fair, they were very late to phones with a decent OS. On the bright side, there are 5 billion people that don't own a smart phone that Microsoft can tap into.

Games- The two consoles literally just came out 5 months ago and the only reason that the PS4 is winning is because it's selling in 4x as many countries.

Services- outlook.com has almost as many people as Gmail. I think Outlook has 260 million while Gmail has 280 million. OneDrive has literally twice as many users as Google drive (250mil vs 120mil). Internet explorer has just as much market share as Google chrome. The people that claim that no one uses office online are the same people that said that office for iPad was too late (and we all know how that turned out). I agree on Bing though.

I think it's time to take a step back from the comment sections.
 

A895

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It takes time for anything. More than anything though it takes Mindshare. Microsoft unlike BlackBerry or Sony though has a LOT of money and patience. They have always played the long game. I would be more concerned about why aren't there more Windows Phone announcements when they gained like 10 partners.

Posted via the WPC App for Android!
 

tgp

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PERCEPTION
Worst yet is the negative perception that everyone has towards Microsoft and their products. I was in the university computer lab the other day and had a problem with OneDrive's click-to-run integration with Office. Tech support came in and isolated the problem as an Internet Explorer problem. "Generally, we advise everyone to not use IE," they said. "In fact, you're pretty much the only student I've seen on campus that even uses IE. Most of the time it's 60-year-old professors." I've had other friends mock me for using Bing, for switching to Outlook.com instead of using my old Gmail account, for using OneDrive instead of Dropbox, for using IE instead of Chrome, etc.

I think a lot of this comes from the fact that some of Microsoft's products, like these, don't offer a compelling reason to switch. Internet Explorer, for example, might be as good as Chrome or Firefox, but it's not better. If you're already using something else there's no good reason to switch. IE had fallen behind the competition and that's why users switched from IE to alternatives in the first place. I've realized from first hand experience that a lot of IE's current user base is simply because it's the default browser on a PC. I'm surprised at how many of our customers use an alternate browser when they barely know how to turn on a computer. Chrome and Firefox have offered the sync feature for a long time. Google is the go-to for search, so much so that "Google" has become a verb. It got there by filling a need that had previously been unmet.

I like to see Microsoft under pressure. For a long time they coasted along under their monopoly, but now they have to earn their user base by providing compelling products.
 

anony_mouse

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Interesting post - here are my thoughts:

COMPUTERS: Microsoft still dominate the PC OS and office application market, and will do for the foreseeable future. But it is a market in decline, people wait longer and longer between upgrades, and it's not where the innovation is. PC's are not going away though. I can't see how I could do my job without my laptop, and I don't expect that to change. I can't use a hybrid laptop/tablet - it would be either too small for a laptop, or too big for a tablet. I will avoid Windows 8 - in its current form, Metro and touch are of no use to me.
Businesses can manage decline and still make a lot of money. This decline will be very slow, and may well reach a plateau at some point. Microsoft will still make a huge amount of money, and there are opportunities for them elsewhere - see below.

TABLETS: Microsoft should be well positioned with hybrid laptop/tablets, but I don't see these getting a big market share for the reasons above. Anyway, how many people really want a tablet that's also a PC? Is there really much chance for Microsoft to get a worthwhile market share against iOS and Android? And in the end, I don't see that tablets really matter that much to Microsoft. Unless you are Apple (and maybe even if you are Apple), it will be a very low margin business.

PHONES: Same as tablets, but even more so. Now that Microsoft are giving away WP, it's hardly even a business any more. Of course, they are about to become a hardware manufacturer - an industry which, for the most part, is dominated by a few very strong companies, and is plagued by ultra-thin margins and high costs. Nice one Steve!

GAMES: xbox is interesting as it's Microsoft's only successful consumer business. I expect many people will disagree with that statement, but I don't see Microsoft as a consumer company (although they clearly think they are). Relatively few people directly buy Microsoft products. They tend to get them bundled with a PC, or provided by their employer. As for xbox, it's rather independent from the rest of Microsoft. They could keep it or sell it - I don't see it matters much either way.

SERVICES: To be honest, I question the whole business model behind much of the services industry. Google do very well out of it as an advertising company, but is there much prospect of Microsoft making any money? Can and should Microsoft become an advertising company? E-mail at least is 'sticky' - it's hard to swap from one address to another, but can money really be made from it? Cloud storage will really be a race to the bottom. I changed from one free cloud storage provider to another this morning. It took less than a minute of effort, and less than an hour of syncing. Customers using the free service tier cost the provider money, and customers who pay for the service can swap easily when a better offer comes along. For browsers - again, does IE really benefit Microsoft in any way? They need a browser of course, but wouldn't it be better to adopt one of the open source cores? A name change would help. Whatever your views on IE as a product, it's a seriously damaged brand. And search - again, what do Microsoft gain from Bing over just using Google?
There are a few exceptions, though, and Microsoft could do well from these. Office apps as services will be necessary to keep customers as the world moves beyond PCs, and their offerings here are quite strong. They won't have the market to themselves any more thanks to Google Docs, but they can probably get a higher proportion of their customers to pay something for the service.
Otherwise, services are really a way to keep people within a particular ecosystem. The problem for Microsoft is that not many people are in their ecosystem. They are strongest in the most open part of the market - the PC - where any provider can offer a service equally (this is a major disadvantage for users of Windows 8 - Microsoft's services get preferential treatment, but they are not what people use!). Microsoft either need to a) open up their services in a big way for use on all platforms and try to build some scale; or b) abandon the costly and futile free versions, and concentrate on providing the best services to those who will actually pay for them. I think b) is the only way that they will make any money.

ENTERPRISE: strangely, this was missing from the original list. That's a shame. Enterprise business software is a great business for Microsoft. They are well established, have generally good products and are growing at a good rate. It won't be as profitable as the old desktop OS and office software businesses as there is more competition, but those businesses were once-in-a-lifetime situations, and it's unlikely Microsoft will ever dominate a market in the same way again.

PERCEPTION: as Microsoft move away from the consumer business, perception is less important. Businesses tend to make decisions more objectively than consumers. Consumers don't have much perception about, say, IBM or Oracle, and that doesn't hurt them. Enterprise is the future for Microsoft!
 

dkediger

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Interesting post - here are my thoughts:
.....
PERCEPTION: as Microsoft move away from the consumer business, perception is less important. Businesses tend to make decisions more objectively than consumers. Consumers don't have much perception about, say, IBM or Oracle, and that doesn't hurt them. Enterprise is the future for Microsoft!

Generally in agreement with this entire post....just snipped it for brevity.

CONSUMER: The consumer/personal space was "fractured" with the iPhone/iPad, and I really doubt if it will ever coalesce again around one dominant vendor. BUT - it is a huge space, so there is opportunity for the right product at the right time. And it also is a "gateway" to overall product familiarity and of course to services. It is something Microsoft will have to stake out a presence in until it just doesn't work for them anymore. Frankly, I think they need to get Xbox Music/Videos to a really, really good place. Like yesterday. This could do more for their consumer perception than anything else at this point

ENTERPRISE/SERVICES:
I think too many in the tech and financial press focus on Enterprise devices, applications, and services as distinct, individual, and separate products. Those of us on the applied side of the IT world know that's not the case. From my own perspective, killing off XP in my organization, we took the easy route with Win7 and forklifted desktops. We've had some limited forays into all forms of mobility, but they've been more distraction at this point - largely due to third party lack of support (poor web design or lack of dedicated apps.) With the XP extinction largely over, I'm really looking forward to revisiting the whole question of what do we need to have, or what can we have in front of/in the hands of our people. We are switching to O365/Exchange Online closer to the end of the year when our Google Apps contract ages out. We need a high degree of Office format compatibility with several business partners. Paying for Google Apps AND standalone Office installs just doesn't hold up from either a cost or efficiency standpoint anymore. Not to mention the enabled device flexibility with O365.

So, for Enterprise/Business - I think (projecting from my situation) that there will be tremendous growth opportunity in services, but at the expense of their traditional licensing model. Their timing is pretty good to do well here. Devices will be a big huge toss up, but if they really wanted to do one thing to keep us in the fold - I would suggest rolling a Terminal Services/RDP/RDS client access license back into the OS license, or at least into the server CAL.
 

Speedygi

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I'm pretty excited now that Windows phone 8.1 has found its way in users' hands and possibly Surface Mini will be coming this year too. Lots of things to get excited about Microsoft's offerings in my opinion.
 

coip

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Those are all good points. I didn't include Enterprise because the average consumer doesn't think about that and my original post was mostly posted out of pent up frustration of continually getting mocked by others for using Microsoft products and services--something I don't quite understand because I see most Google and Apple users as lemmings, particularly because I really think that most of Microsoft's products and services are better.

Being on a college campus daily and seeing half the students with MacBooks, and 99% of the students with iPhones or Samsung Galaxies, and 99% of the students with iPads and Nexus tablets, and 99% of students with @gmail addresses, and 99% of them either using Chrome or Firefox or Safari, and pretty much all of them raising an eyebrow when they see me using @outlook and IE and enjoying Windows 8 and Xbox One (I seriously don't get the hate for Xbox One online--it really is way better than PS4: more features, more games). I started getting depressed about it all because it suddenly seemed that the only reason Microsoft was successful right now was because of businesses (using Windows and Office) and old people (using IE because they don't know anything else is available). And then I thought, in 10-20 years, all these college and high school kids who are almost exclusively not using any Microsoft product will become the norm and Microsoft might not recover.
 

A895

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Those are all good points. I didn't include Enterprise because the average consumer doesn't think about that and my original post was mostly posted out of pent up frustration of continually getting mocked by others for using Microsoft products and services--something I don't quite understand because I see most Google and Apple users as lemmings, particularly because I really think that most of Microsoft's products and services are better.

Being on a college campus daily and seeing half the students with MacBooks, and 99% of the students with iPhones or Samsung Galaxies, and 99% of the students with iPads and Nexus tablets, and 99% of students with @gmail addresses, and 99% of them either using Chrome or Firefox or Safari, and pretty much all of them raising an eyebrow when they see me using @outlook and IE and enjoying Windows 8 and Xbox One (I seriously don't get the hate for Xbox One online--it really is way better than PS4: more features, more games). I started getting depressed about it all because it suddenly seemed that the only reason Microsoft was successful right now was because of businesses (using Windows and Office) and old people (using IE because they don't know anything else is available). And then I thought, in 10-20 years, all these college and high school kids who are almost exclusively not using any Microsoft product will become the norm and Microsoft might not recover.

Microsoft has more staying power than most they are one of the worlds most valuable tech companies. They have money and patience. Your post makes it seem like Microsoft is BlackBerry. I enjoy Xbox, and Windows 8, but I use chrome for tab sync. I still have a @hotmail address. Only difference being I use android now instead of WP. Microsoft has compelling stuff, it takes time to do something different in a crowded market.

Sent from my XT907 using Mobile Nations mobile app
 

dba415

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Phones and tablets it's Microsoft's fault for being late to the party so they deserve to be sitting at 0-5%.

Games it's also Microsoft's fault the DRM fiasco killed any momentum and no one cares about Kinect so it was useless to bundle it in and have people pay another $100.

Bing? again, Microsoft was late to the party Google dominates everyone knows that.

Windows 8, also Microsoft's fault for forcing on a UI that people didn't want.

The trend here is, Microsoft is the only one to blame for royally screwing up almost everything in the last decade. Apple and Google were just opportunistic and have been run 10x better.
 

smoledman

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I think the key thing right now is for Microsoft to deliver these things as fast possible:

- Cortana to all other MS platforms(XBox & Windows)
- Action Center to all other MS platforms(XBox & Windows)
- Surface Mini that ships with a Windows 8.1 Update 2 that incorporates the above 2 in addition to having the right ergonomic(4:3) and a hardware rotation lock.

If you take an average customer doing comparison shopping, they look at an iPad and if you don't have notification center & digital assistant & the right form factor than you lost that customer to Apple. Microsoft has to get their *** in gear.
 

smoledman

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PERCEPTION
Worst yet is the negative perception that everyone has towards Microsoft and their products. I was in the university computer lab the other day and had a problem with OneDrive's click-to-run integration with Office. Tech support came in and isolated the problem as an Internet Explorer problem. "Generally, we advise everyone to not use IE," they said. "In fact, you're pretty much the only student I've seen on campus that even uses IE. Most of the time it's 60-year-old professors." I've had other friends mock me for using Bing, for switching to Outlook.com instead of using my old Gmail account, for using OneDrive instead of Dropbox, for using IE instead of Chrome, etc.

I just feel like there is this impossible mountain for Microsoft to climb because, for some reason, the entire tech world seems biased against them. Every major brand and service they have is scoffed at. Young people use Google and Apple. Even their coolest brand, Xbox, has been destroyed since their "Xbox One DRM" PR fiasco last year (which, by the way, I was on board with their original policies).

Please cheer me up and tell me that Windows Phone will rise to glory, as it deserves; that people will realize Windows 8 is, in fact, much better than Windows 7; that Xbox One is the most ambitious and innovative console to hit the market ever; that IE, Office, OneDrive, and Bing will get the proper respect they deserve, and that public perception of Microsoft as somehow being less cool than Google and Apple will change.

How is this just unfair bias? IE is a dog compared to Chrome. It sucks horribly. The UI is worse, the "add ons" are pathetic compared to Chrome extensions and the overall lack of account sync is just ridiculous in 2014. IE does feel like the browser for grandpa. I only use it at work because it works better for certain legacy apps. Microsoft has done a good job with mobile IE and metro IE as they seem to be built from the ground-up. But desktop IE needs to be scrapped and re-written. First copy everything Chrome does well and then figure out how to differentiate.
 

Michael Alan Goff

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How is this just unfair bias? IE is a dog compared to Chrome. It sucks horribly. The UI is worse, the "add ons" are pathetic compared to Chrome extensions and the overall lack of account sync is just ridiculous in 2014. IE does feel like the browser for grandpa. I only use it at work because it works better for certain legacy apps. Microsoft has done a good job with mobile IE and metro IE as they seem to be built from the ground-up. But desktop IE needs to be scrapped and re-written. First copy everything Chrome does well and then figure out how to differentiate.

How is the UI worse? Why would an account sync matter when the only devices that have it are ones that can either already sync tabs or are getting the ability real soon?

Rewriting desktop IE isn't an answer, by the way. People act like you can just hit the rewrite button.
 

Calorypher

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COMPUTERS
There bread and butter, Window, is facing steep competition. While I love Windows 8.1, it's clear that it's being panned in the media as another Vista. Consumers are avoiding it. That's not good considering the PC market is drying up. They they're facing increased competition from Apple, with their MacBook Airs and whatnot. Even Google is making a dent with their awful Chromebooks. Sure, nearly 90% of the PC market is Windows, right now. But if you go to any college campus, you'll see more than half of students waling around with MacBooks.
In the USA, true. Here nobody buys Apple, except for rich people who like showing off. The only competition is Linux, which is an option only for very tech-savvy people with a lot of time and patience on their hands.
TABLETS
The situation is even worse in the tablet realm. Android and iOS dominate the market. The Surface RT (which I own) was unfairly mocked and misunderstood by media journalists and consumers alike and didn't sell as well as it deserves. App developers still make apps first for iOS and Android, and everyone makes fun of Windows RT. Their tablet market share is in the single digits.
Should have done some advertising. If I weren't visiting tech-oriented websites, I wouldn't have known that the Surface even exists.
PHONES
Same as tablets. Android and iOS dominate and that'll be hard to change. While we've seen some growth in Europe and Latin America, in Asia and North America, Windows Phone's market share has been stuck at 0-5% for years now. Even now with the release of Windows Phone 8.1, which makes an already superior mobile OS even more superior, all the tech journalist reviews parrot the same non-sense: "Now Microsoft has finally gotten some features iOS and Android have had for years, but they are still dismally behind in the App store, so we say 'don't switch'".
WP can easily overtake iOS (it already did in some European countries), but I think that Android is nearly untouchable, unless Google does something horrifically. It will keep its dominance the same way desktop Windows does now. That is - everyone is using it, because everyone is using it.

There's also the issue of a ton of features being available only in the country in which WP has the lowest market share. Cortana? 'MURICA ONLY! Xbox Music? 'MURICA ONLY! Bing search results on par with Google? 'MURICA ONLY! The same applies to Xbox One.
GAMES
Xbox One is doing well, but the PS4 is outselling it, by a lot despite the fact that Xbox One has way more features and way more games. Even worse, the perception among consumers and game journalists is that the Xbox One is inferior, yet overpriced, ignoring all the extra features it has, they are myopically focusing on minute graphical differences, greatly exaggerating them and convincing mainstream consumers that the PS4 is better. I spend a lot of time reading comments on the bottom of articles on major gaming sites, and the bias is so incredibly lopsided. They lampoon Microsoft for the Kinect (which I think is awesome), for the graphical output capabilities of the consoles, how Sony always has better games (which, ironically, if anyone looked at the X1 vs. PS4 lineups would see is the opposite of reality), etc. It's really frustrating trying to respond to them.
Sorry, but the Xbox One is simply inferior to the PS4 in every single way I can think of. It costs more, has worse hardware, and all features that would justify buying it are only available in the USA.
SERVICES
Google Search and Maps dominate Bing Search and Maps in market share, even though personally I think Bing is better. Google Docs has significantly eaten into Office's market share. Same goes with Chrome and Safari, to Internet Explorer. The grand majority of people under 40 are completely subsumed in the Google or Apple ecosystems. They have Gmail email addresses, that get them to use Google Docs, YouTube, Google Search, Google Drive, and Google Chrome. This has made it nearly impossible for Microsoft to gain traction in these sectors they used to dominate.
This is what you get for being chronically late to the party. Google Docs was released, what, three years before Office Online?
PERCEPTION
I just feel like there is this impossible mountain for Microsoft to climb because, for some reason, the entire tech world seems biased against them. Every major brand and service they have is scoffed at. Young people use Google and Apple. Even their coolest brand, Xbox, has been destroyed since their "Xbox One DRM" PR fiasco last year (which, by the way, I was on board with their original policies).
I agree. Being a Windows Phone advocate is hard. In a lot of people's perception, WP is a steaming pile of horse ****, because it's Windows. They don't even need to know what it looks like to tell. It's made by "micro$hit", therefore it's crap.
 

smoledman

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I agree. Being a Windows Phone advocate is hard. In a lot of people's perception, WP is a steaming pile of horse ****, because it's Windows. They don't even need to know what it looks like to tell. It's made by "micro$hit", therefore it's crap.

Instead of whining about the perception of crappy products, Microsoft should fess up to it's history of making crappy products and promise to deliver innovation from now on. That would go a long way in the consumer mind to healing.

Microsoft has rightly or wrongly traumatized millions of people with ****ty software. Those people have been buying up Macs and iPads for the last 5 years in massive quantities. They are happy as clams now fully ensconced in the Apple ecosystem. Those people are lost forever, but not everyone has done the full ecosystem switch. Microsoft still has a chance to redeem itself.
 
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