Feature: Brand Microsoft

How do you measure the success of a brand? The acheivement of original objectives? Huge profits? Market dominance? Global ubiquity? Awards and recognition from the likes of the Queen and Time Magazine? The highest charitable giving status for a private company in the world? By all these measurements Bill Gates’ Microsoft Corporation has undoubtedly transcended rival corporations, technology related or not. With the recent launch of Vista operating system and comfortable predictions that 70% of all computers will be using Vista by 2011 surely Brand Microsoft has little to worry about – it’s market dominance would seen assured.

According to Forbes Magazine, it is this continued future earnings potential that justifies it being named the second most valuable brand in the world. But it’s not as simple as that in the erratic world of technology brands. Microsoft should recall the way it destroyed Apple, Amiga and Netscape in its early years if it wants to continue to be the world’s super brand and avoid any overnight upsets of the type it imposed on its early rivals.

First, a brief history. Formed in 1975 by Harvard dropout Bill Gates, together with some college buddies, by the early 80’s Microsoft employed 400 people and had released its first operating system, Xenix. The company floated in 1986 and in March 1992, Microsoft released Windows 3.1 along with its first promotional campaign on TV; the software sold over three million copies in its first two months on the market. By 1993, Windows had become the most widely used ‘graphical user interface’ operating system in the world. Fortune Magazine named Microsoft as the "1993 Most Innovative Company Operating in the U.S." Even better was to come.

In late 1995, Microsoft released Microsoft Windows 95, a new version of the company's flagship operating system which featured a completely new user interface, including a novel start button. More than a million copies of Microsoft Windows 95 were sold in the first four days after its release. Many people forget that Windows 95 was originally released without an internet browser because Microsoft was genuinely shocked by the uptake of the internet. Determined not to be outflanked, Microsoft soon established its MSNwebsite as a direct competitor to AOL, as well as MSNBC and political affairs website Slate.com. Windows 98 and Windows XP, released in 2001, went on to achieve huge sales and global popularity. An expansion into the games console market followed with the release of the Xbox.

This brings us conveniently to today: the launch of Vista. Vistahas been five years in the making and has involved 10,000 people with an estimated price tag of £10bn. The question now is whether Vistacan inspire users like previous operating systems. The president of Microsoft International, Jean-Philippe Courtois, certainly thinks so, recently commenting: "Vistais the biggest launch ever" in Microsoft's history, more important than Windows 95. The problem is that many technology commentators view Vistaas a success and accomplishment, but not a breakthrough in the way Windows 95 was.

According to George Colony, chief executive of technology consulting firm Forrester, some users will move to Vistafor security reasons but most will do so because Microsoft is forcing them to upgrade. Vistawill be a success, but the question is whether this is due to some amazing technological breakthrough that it can offer consumers. The likely answer is no. It’s flashier and more secure, but not revolutionary.

Consumers will upgrade, most likely when they can buy a new machine that can run Vista, because they trust the brand, know what they’re getting and dislike rival alternatives like Apple, which clearly aren’t as user friendly to the average user. Meanwhile, corporate users will choose to upgrade because they are locked into the Microsoft Windows architecture. 

The main problem for Microsoft is that the main technology developments are no longer taking place in the operating system or desktop software sphere. Think about it: what have been the main technology developments in the past five years while Microsoft scientists have been casually putting together their latest instalment? There is the seemingly endless rise of the iPod and digital music downloads. Internet based telephony (Skype) is starting to have an impact on traditional telephony. Blogging, and the rise in ‘social networking’ from websites such as My Space and Face Book is transforming teenagers approach to the internet.

Websites such as You Tube have gained users at an astonishing rate and contributed, along with social networking, to the idea that the internet is much more than a research tool but an intrinsic part of the most personal aspects of our lives. And of course, did anyone pay much attention to Google five years? Not really, yet today each share is worth $500 and the company, despite been barely over 10 years old, is bigger than many of the most established companies in American capitalism. So, a lot has happened, which, frankly, Microsoft has not been a major part of.

Another issue for Microsoft is that there is growing speculation that one of the major search engines is about to launch a range of user friendly open source programmes that could be accessed from the net. The traditional problem with open source software, such as Linux, has been that users end up counting on a community of software developers for updates rather than an established business with a consumer base and brand reputation at stake. However, if a successful open source programme was to emerge from a reputable search engine it could easily negate the need for Windows. After all, why would consumers pay if they could get a better alternative free?

There is even the question of whether consumers still trust Microsoft. Anti-monopoly allegations and concerns over the security of Windows XP have obviously had their impact if a 2005 poll is to be believed. Forrester, a US research agency, found that while Microsoft has some the highest brand adoption in the US, in terms of brand trust it was ranked 20th out of the 22 companies surveyed. Time will tell if Vista regains that trust.

Despite these figures, projections indicate that Microsoft will continue to dominate the operating system and desktop applications market for the foreseeable future. But Microsoft should be wary. It destroyed Netscape Navigator in the late 1990’s, reducing its share of the web browser market from 80% to virtually nothing, and the same kind of ‘overnight revolution’ could happen to Microsoft if it doesn’t stay one step ahead of its rivals in other technology areas.